SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) November 1, 1996
The Mead Corporation
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(Exact Name of Registrant as Specified in its Charter)
Ohio 1-2267 31-0535759
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(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
Mead World Headquarters
Courthouse Plaza Northeast
Dayton, Ohio 45463
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code(937) 495-6323
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) On November 1, 1996, Mead Oxford
Corporation ("Mead Oxford"), a Delaware corporation and a
wholly owned subsidiary of The Mead Corporation, an Ohio
corporation (the "Registrant"), acquired (the
"Acquisition") from Boise Cascade Corporation, a Delaware
corporation ("Boise Cascade"), substantially all of the
operating assets of Oxford Paper Company, a Delaware
corporation and a wholly owned subsidiary of Boise
Cascade ("Oxford"), for an aggregate purchase price of
approximately $637 million, subject to certain closing
and post-closing adjustments (the "Purchase Price"). The
Acquisition was consummated pursuant to the Acquisition
Agreement, dated September 28, 1996 (the "Acquisition
Agreement"), among the Registrant, Mead Oxford, Boise
Cascade and Oxford. The assets acquired consist of an
integrated coated paper mill located in Rumford, Maine
(the "Rumford Mill"), approximately 667,000 acres of
timberlands in the states of Maine, Vermont and New
Hampshire owned by Boise Cascade or Oxford and certain
related assets, including Boise Cascade's interest in
Rumford Cogeneration Company Limited Partnership, a Maine
Limited Partnership that operates a cogeneration facility
adjacent to the Rumford Mill (collectively, the
"Assets").
The terms of the Acquisition Agreement were the
result of arm's-length negotiations between the
Registrant and Boise Cascade. The source of funds to
finance the Acquisition was available cash and short-term
debt.
(b) Boise Cascade primarily manufactured
coated paper, high-value specialty grade paper and some
commodity grade paper at the Rumford Mill. The
Registrant intends to continue such use.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS.
(a) Financial Statements of the Businesses
Acquired. The Registrant believes that it is impractical
to provide the financial statements for the acquired
business on the date of this filing, and the Registrant
will, if required, file such financial information when
available but not later than 60 days after the date on
which this Current Report on Form 8-K must be filed.
(b) Pro Forma Financial Information. The
Registrant believes that it is impractical to provide pro
forma financial information reflecting the Registrant's
acquisitions on the date of this filing, and the
Registrant will, if required, file such financial
information when available but not later than 60 days
after the date on which this Current Report on Form 8-K
must be filed.
(c) Exhibits
2. Acquisition Agreement, dated September 28,
1996, by and among Boise Cascade
Corporation, Oxford Paper Company, Mead
Oxford Corporation and The Mead
Corporation. The Registrant agrees to
furnish supplementally to the Commission a
copy of any omitted schedule upon request.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned
hereunto duly authorized.
Dated: November 5, 1996
THE MEAD CORPORATION
By: /s/ W.R. Graber
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Name: W.R. Graber
Title: Vice President and
Chief Financial Officer
EXHIBIT INDEX
Exhibit
No. Description Page
2. Acquisition Agreement, dated September 6
28, 1996, by and among Boise Cascade
Corporation, Oxford Paper Company, Mead
Oxford Corporation and The Mead Corpora-
tion. The Registrant agrees to furnish
supplementally to the Commission a copy
of any omitted schedule upon request.
ACQUISITION AGREEMENT
among
BOISE CASCADE CORPORATION,
a Delaware corporation
OXFORD PAPER COMPANY,
a Delaware corporation
and
MEAD OXFORD CORPORATION,
a Delaware corporation
THE MEAD CORPORATION,
an Ohio corporation
Dated September 28, 1996
TABLE OF CONTENTS
Page
1. Definitions............................................... 1
1.1 Accounts Receivable............................. 1
1.2 Androscoggin.................................... 1
1.3 Androscoggin Stock.............................. 1
1.4 Assets.......................................... 1
1.5 Assumed Liabilities............................. 2
1.6 Balance Sheet Adjustment........................ 2
1.7 BCT Inc......................................... 2
1.8 Boise Cascade................................... 2
1.9 Business........................................ 2
1.10 Cleanup......................................... 2
1.11 Closing......................................... 3
1.12 Closing Statement............................... 3
1.13 Code............................................ 3
1.14 Cogeneration Facility........................... 3
1.15 Cogeneration Stock.............................. 3
1.16 Collective Bargaining Agreements................ 3
1.17 Companies....................................... 4
1.18 Contracts....................................... 4
1.19 Election........................................ 4
1.20 Employees....................................... 4
1.21 Entities........................................ 4
1.22 Environmental Laws.............................. 5
1.23 Environmental Liabilities and Costs............. 5
1.24 Equipment....................................... 5
1.25 Excluded Assets................................. 6
1.26 Facility........................................ 6
1.27 Facility Leases................................. 6
1.28 Final Balance Sheet............................. 6
1.29 Final Closing Statement......................... 7
1.30 Gulf Island..................................... 8
1.31 Hazardous Materials............................. 8
1.32 Historical Accounting Procedures................ 8
1.33 Historical Balance Sheet........................ 8
1.34 Industrial Revenue Bonds........................ 9
1.35 Intangible Rights............................... 9
1.36 Inventory....................................... 9
1.37 Joint Facility.................................. 10
1.38 Miscellaneous Assets............................ 10
1.39 Multiple Mill Purchasing Agreements............. 10
1.40 Net Book Value of the Business.................. 11
1.41 Oxford.......................................... 11
1.42 Pre-Closing Period.............................. 11
1.43 Preliminary Closing Statement................... 11
1.44 Purchase Price.................................. 11
1.45 Purchaser....................................... 11
1.46 Realty.......................................... 11
1.47 Release......................................... 12
1.48 RCC............................................. 12
1.49 Rumford Cogen................................... 12
1.50 Rumford Cogeneration Support Contracts.......... 12
1.51 Rumford Falls................................... 12
1.52 Rumford Falls Stock............................. 12
1.53 Rumford Mill Assets............................. 13
1.54 Shares.......................................... 13
1.55 Spare Parts..................................... 13
1.56 Straddle Period................................. 13
1.57 Straddle Period Return.......................... 13
1.58 Taxes........................................... 13
1.59 Tax Returns..................................... 14
1.60 Timberlands..................................... 14
1.61 Trucking Terminal Assets........................ 14
1.62 Additional Terms................................ 14
2. Purchase and Sale...................................... 19
3. Purchase Price......................................... 19
3.1 Purchase Price.................................. 19
3.2 Balance Sheet Adjustment Determination.......... 19
3.3 Purchase Price Adjustments...................... 19
3.4 Allocation of Purchase Price.................... 20
4. Terms of Payment....................................... 21
4.1 Closing......................................... 21
4.2 Final Settlement................................ 21
4.3 Overaccruals, Property Taxes.................... 23
5. Assumption of Liabilities.............................. 24
5.1 Assumed Liabilities............................. 24
5.2 Performance..................................... 25
5.3 Nonassumption of Other Liabilities.............. 25
5.4 Consents to Assignment.......................... 25
6. Representations and Warranties of Boise
Cascade.............................................. 26
6.1 Organization and Standing....................... 26
6.2 Authority....................................... 28
6.2.1 No Default........................ 29
6.3 Financial....................................... 29
6.3.1 Historical Balance Sheet.......... 29
6.3.2 RCC............................... 30
6.3.3 Absence of Certain Changes........ 30
6.4 Taxes........................................... 30
6.5 Compliance with Laws; Permits................... 34
6.6 Litigation...................................... 34
6.7 Contracts and Agreements........................ 35
6.8 Conditions of and Title to Personal
Property...................................... 38
6.8.1 Personal Property................. 38
6.8.2 RCC............................... 39
6.8.3 Rumford Cogen..................... 40
6.8.4 Inventory......................... 40
6.9 Real Property................................... 41
6.9.1 Schedule.......................... 41
6.9.2 No Assessments.................... 41
6.9.3 Ownership......................... 41
6.9.4 Use of the Real Properties........ 42
6.9.5 Access to the Real Properties..... 42
6.9.6 No Condemnation................... 42
6.9.7 Rumford Facility.................. 42
6.9.8 Utilities......................... 43
6.9.9 Native American Claims............ 43
6.10 Leased Facilities............................... 43
6.11 All Necessary Assets............................ 44
6.12 Intangible Rights............................... 44
6.13 Liabilities..................................... 45
6.14 Employee Relations.............................. 47
6.14.1 Labor Relations................... 47
6.14.2 Employees......................... 49
6.15 Products........................................ 49
6.16 Employee Benefit Plans.......................... 50
6.17 Environmental Matters........................... 50
6.18 Rumford Cogen; RCC.............................. 55
6.18.1 No Utility Status................. 55
6.18.2 Project Documents................. 56
6.18.3 Qualifying Facility............... 56
7. Representations and Warranties of Purchaser............ 56
7.1 Purchaser Organization and Standing............. 56
7.2 Purchaser Parent Organization and
Standing...................................... 57
7.3 Authority....................................... 57
7.4 No Default or Consents.......................... 58
7.5 Condition of Assets............................. 58
8. Real Property.......................................... 59
8.1 Mill Property................................... 59
8.2 Other Property.................................. 59
8.3 Permitted Encumbrances.......................... 59
8.4 Imperfections................................... 59
9. Covenants of Boise Cascade............................. 59
9.1 Operations...................................... 59
9.2 Corporate Examinations and
Investigations................................ 62
9.3 Permits, Consents, and Approvals................ 62
9.4 Accounts Receivable Lock Box.................... 63
9.5 Antitrust Approvals............................. 63
9.6 Disclosure Schedule Supplements................. 64
10. Covenants of Purchaser................................. 66
10.1 Permits, Consents, and Approvals................ 66
10.2 Antitrust Approvals............................. 66
11. Employees.............................................. 67
11.1 Transfer of Employees........................... 67
11.2 Obligation to Hire.............................. 68
11.3 Severance....................................... 69
11.4 Workers' Compensation, Medical Claims
and Retirees.................................. 69
11.5 No Third-Party Beneficiary...................... 71
11.6 Workers Adjustment and Retraining Act
("WARN")...................................... 71
11.7 Flexible Spending Account Plans................. 72
11.8 Incentive Plans................................. 73
11.9 Non-solicitation of Employees................... 73
12. Tax Matters............................................ 73
12.1 Section 338(h)(10) Election..................... 73
12.2 Tax Return Filing and Payment of Taxes
Responsibility.................................. 75
12.3 Transfer and Similar Taxes...................... 77
12.4 Tax Indemnification............................. 78
12.5 Procedures Relating to Indemnification
of Tax Claims................................... 79
12.6 Refunds and Credits............................. 81
12.7 Termination of Tax Sharing Agreements........... 82
12.8 Employee Payroll Information.................... 82
12.9 Survival of Tax Provisions........................ 82
13. Risk of Loss........................................... 83
14. Closing and Termination................................ 83
14.1 Closing......................................... 83
14.2 Termination..................................... 84
14.3 Effect of Termination........................... 85
15. Conditions Precedent to Closing........................ 85
15.1 Purchaser...................................... 85
15.1.1 Continued Truth of
Representations and Warranties.... 85
15.1.2 Performance of Obligations........ 85
15.1.3 Delivery of Closing Documents..... 86
15.1.4 Third-Party Consents.............. 86
15.1.5 Legal Proceedings................. 86
15.1.6 Condemnation...................... 86
15.1.7 Permits and Governmental
Consents........................ 86
15.1.8 HSR Filing........................ 87
15.1.9 Environmental Assessment.......... 87
15.2 Boise Cascade................................... 87
15.2.1 Continued Truth of
Representations and Warranties.... 87
15.2.2 Performance of Obligations........ 87
15.2.3 Delivery of Closing Documents..... 87
15.2.4 Legal Proceedings................. 88
15.2.5 HSR Filing........................ 88
16. Items to be Delivered by Boise Cascade................. 88
16.1 Closing......................................... 88
16.1.1 Title Certificates................ 88
16.1.2 Opinion of Counsel................ 88
16.1.2.1 Organization.............. 88
16.1.2.2 Authority................. 88
16.1.2.3 Absence of Conflict....... 89
16.1.2.4 Litigation................ 89
16.1.3 Certified Resolution.............. 89
16.1.4 Representations and Warranties.... 90
16.1.5 Consents to Assignment............ 90
16.1.6 Assignments....................... 90
16.1.7 Deeds............................. 90
16.1.8 FIRPTA Certificate................ 90
16.1.9 Forms 8023........................ 90
16.1.10 Additional Items.................. 91
17. Items to be Delivered at Closing by Purchaser.......... 91
17.1.1 Certified Resolutions............. 91
17.1.2 Representations and Warranties.... 91
17.1.3 Opinion of Counsel................ 91
17.1.3.1 Organization.............. 91
17.1.3.2 Authorization............. 92
17.1.3.3 Absence of Conflict....... 92
17.1.3.4 Litigation................ 92
17.1.4 Purchase Price.................... 93
17.1.5 Additional Items.................. 93
18. Press Releases......................................... 93
19. Claims and Litigation.................................. 93
19.1 Scope of Representations and Warranties......... 93
19.2 Survival of Representations and
Warranties.................................... 94
19.3 Indemnification by Boise Cascade................ 95
19.4 Environmental Indemnification by Boise
Cascade......................................... 95
19.4.1 During the Operating Period............. 96
19.4.2 During and After the Operating
Period................................ 96
19.5 Indemnification by Purchaser.................... 97
19.6 Limitation of Liability......................... 97
19.7 Procedure....................................... 98
19.8 Release of Hazardous Material Claims............ 99
19.9 Litigation Assistance...........................100
19.10 Treatment of Indemnification Payments............101
19.11 Presumption of Sale..............................101
19.12 Preservation of Records..........................101
20. Costs..................................................102
21. Corporate Identification...............................102
21.1 Motor Vehicles..................................103
21.2 Correspondence..................................103
21.3 Promotional Materials...........................103
21.4 Phone Books.....................................103
21.5 Advertising.....................................103
22. Notices................................................104
23. Transition Services....................................105
23.1 Computer Systems................................105
23.2 Transportation Services.........................106
23.3 Benefit Plan Services...........................106
23.4 Other Services..................................106
24. Bulk Sales.............................................107
25. Further Assurances.....................................107
26. Governing Law..........................................107
27. Entire Agreement.......................................107
28. Amendment..............................................107
29. Assignment.............................................107
30. Counterparts...........................................108
31. Severance..............................................108
32. Unconditional and Unlimited Guaranties.................108
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT ("Agreement") is made and entered into
this 28th day of September, 1996, among BOISE CASCADE CORPORATION, a
Delaware corporation ("Boise Cascade"), and OXFORD PAPER COMPANY, a
Delaware corporation ("Oxford"), MEAD OXFORD CORPORATION, a Delaware
corporation ("Purchaser"), and THE MEAD CORPORATION, an Ohio corporation
("Purchaser Parent").
The parties hereby agree as follows:
1. Definitions. For purposes of this Agreement, the terms
identified in this Section 1 shall have the meanings assigned to them
herein.
1.1 Accounts Receivable. The term "Accounts Receivable" shall mean
the obligations to make payment to Boise Cascade or Oxford by all persons
who have purchased products or services in the ordinary course of the
operation of the Business prior to the Closing, including intercompany
receivables, but excluding any such obligations which have been written off
the books of Boise Cascade prior to Closing.
1.2 Androscoggin. The term "Androscoggin" shall mean the
Androscoggin Reservoir Company, a Maine corporation.
1.3 Androscoggin Stock. The term "Androscoggin Stock" shall mean
all shares of Androscoggin common stock par value $100 per share, held by
Boise Cascade, Oxford, or Rumford Falls as of the Closing.
1.4 Assets. The term "Assets" shall mean the Rumford Mill Assets,
the Rumford Falls Stock, the Cogeneration Stock, and the Timberlands,
collectively.
1.5 Assumed Liabilities. The term "Assumed Liabilities" shall mean
all of the liabilities and obligations of Boise Cascade and Oxford relating
to the Business which Purchaser has specifically agreed to assume pursuant
to Section 5.1.
1.6 Balance Sheet Adjustment. The term "Balance Sheet Adjustment"
shall have the meaning assigned to it in Section 3.2.
1.7 BCT Inc. The term "BCT Inc." means BCT Inc., a Delaware
corporation, and a wholly owned subsidiary of Boise Cascade.
1.8 Boise Cascade. The term "Boise Cascade" shall mean Boise
Cascade Corporation, a Delaware corporation.
1.9 Business. The term "Business" shall mean the ownership and
management of timberlands in Maine, New Hampshire, and Vermont, the
harvest, sale, and purchase of timber therefrom and from other timberlands
in such geographic area, the production of pulp, paper, and electrical and
steam power at the facility located in Rumford, Maine, and the sale of such
goods and services locally and throughout the United States and in foreign
countries. The Business is conducted by Boise Cascade and Oxford directly
and through their subsidiaries and affiliates included in the definition of
the term "Entities."
1.10 Cleanup. The term "Cleanup" means all actions, excluding
asbestos abatement and PCB equipment removal, required to: (1) clean up,
remove, treat, or remediate Hazardous Materials in the indoor or outdoor
environment; (2) prevent the migration of Hazardous Materials so that they
do not endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; (3) perform preremedial studies and
investigations and post-remedial monitoring and care; (4) respond to any
government requests for information or documents in any way relating to
cleanup, removal, treatment, or remediation or potential cleanup, removal,
treatment, or remediation of Hazardous Materials in the indoor or outdoor
environment; or (5) perform any other remediation activities required by a
governmental order issued in connection with any Release of Hazardous
Materials.
1.11 Closing. The term "Closing" shall mean the simultaneous
conveyance by Boise Cascade and Oxford of the Assets to Purchaser and the
payment by Purchaser of the Purchase Price to Boise Cascade. The Closing
shall be held at the time, date, and location specified in Section 14
hereof and shall be deemed to occur as of 12:00 a.m. Eastern standard time
on such date.
1.12 Closing Statement. The term "Closing Statement" shall mean the
Preliminary and Final Closing Statements, collectively or singularly as the
context may indicate.
1.13 Code. The term "Code" shall mean the Internal Revenue Code of
1986, as amended, and the Treasury regulations promulgated thereunder.
1.14 Cogeneration Facility. The term "Cogeneration Facility" shall
mean the cogeneration facility operated by RCC.
1.15 Cogeneration Stock. The term "Cogeneration Stock" shall mean
all of the issued and outstanding shares of Rumford Cogen common stock, no
par value, as of Closing.
1.16 Collective Bargaining Agreements. The term "Collective
Bargaining Agreements" shall mean all of the labor agreements applicable to
employees employed in the Business. Such agreements are identified in
Schedule 6.7 hereof.
1.17 Companies. The term "Companies" shall mean Rumford Falls and
Rumford Cogen.
1.18 Contracts. The term "Contracts" shall mean all executory
leases, licenses, contracts, and agreements of Boise Cascade and Oxford
that have previously been entered into in the ordinary course of their
conduct of, and are related to, the Business or are entered into after the
date hereof in accordance with the terms of this Agreement. Boise Cascade's
Multiple Mill Purchasing Agreements are excluded from the term "Contracts."
1.19 Elections. The term "Elections" shall mean, with respect to
Rumford Falls and Rumford Cogen, the election to be made by Purchaser,
Boise Cascade, and Oxford pursuant to Section 338(h)(10) of the Code, as
described in Section 12.1 hereof.
1.20 Employees. The term "Employees" shall mean all of the persons
employed by Boise Cascade in its conduct of the Business as of Closing,
including the sales force for the products produced at the Rumford
Facility, whether or not such persons are actively at work at Closing and
including, without limitation, persons on paid or unpaid leaves of absence,
layoff, short-term disability, workers' compensation, or receiving accident
and sickness benefits.
1.21 Entities. The term "Entities" shall mean, collectively, Boise
Cascade, Oxford, Rumford Falls, Rumford Cogen, and RCC.
1.22 Environmental Laws. The term "Environmental Laws" shall mean
any and all federal, state or local laws, statutes, ordinances, codes,
rules, regulations, orders, decrees and directives imposing liability or
standards of conduct for or relating to the protection of the environment,
including, but not limited to, the following statutes as now written and
amended, and as amended hereafter, including any and all regulations
promulgated thereunder and any and all state counterparts: the Federal
Water Pollution Control Act, 33 U.S.C. 1251, et seq. the Oil Pollution Act,
33 U.S.C. Section 2701, et seq., the Clean Air Act, 42 U.S.C. Section 7401,
et seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601, et seq.,
the Solid Waste Disposal Act, 42 U.S.C. Section 6901, et seq., the
Comprehensive Environmental Response Compensation and Liability Act, 42
U.S.C. Section 9601, et seq., the Emergency Planning and Community
Right-to-Know Act of 1986, 42 U.S.C. Section 11001, et seq., and the Safe
Drinking Water Act, 42 U.S.C. Section 300f, et seq.
1.23 Environmental Liabilities and Costs. The term "Environmental
Liabilities and Costs" means all costs of Cleanup, all fines and penalties,
and the cost of defending, settling, or otherwise disposing of any claim by
a third party for injury to or death of any person or damage to property
resulting from any Release of Hazardous Materials into the indoor or
outdoor environment as a result of the ownership or operation of the assets
during the Operating Period.
1.24 Equipment. The term "Equipment" shall mean (i) all of the
computer hardware and software owned by Boise Cascade or Oxford and located
at the Rumford Facility or any of the Leased Facilities and (ii) all other
machinery, equipment, and similar items of tangible personal property which
are (in either case) owned by Boise Cascade or Oxford and used or held for
use primarily in the operation of the Business, including, without
limitation, all removable trade fixtures and leasehold improvements,
construction in progress, furniture and furnishings, office machinery and
equipment, tools, plant and warehouse machinery and equipment, rolling
stock, delivery, and other vehicles, and similar items located at the
Facilities, excluding, however, the Excluded Assets.
1.25 Excluded Assets. The term "Excluded Assets" shall mean (i) any
asset described in Schedule 1.25 hereof or otherwise specifically referred
to herein as an Excluded Asset; or (ii) any other asset owned, leased or
licensed by Boise Cascade which is not located at the Rumford Facility
and/or Leased Facilities and whose use is not devoted primarily to the
Rumford Facility or Leased Facilities. Any asset listed in Schedule 1.25
shall be an Excluded Asset notwithstanding the fact that it may be included
in the definition of any of the classes of Assets described herein.
1.26 Facility. The term "Facility" shall mean any plant, warehouse,
sales office, or other site of a Business operation and may be preceded by
the name of the community in which the operation is located (e.g., Rumford
Facility).
1.27 Facility Leases. The term "Facility Leases" shall mean the
leases identified in Part I of Schedule 1.27 hereof.
1.28 Final Balance Sheet. The term "Final Balance Sheet" means the
balance sheet that shall reflect, as of the Closing, all assets owned by
Boise Cascade, Oxford, Rumford Falls, and Rumford Cogen and used by them
primarily in the conduct of the Business, and all undischarged liabilities
incurred by Boise Cascade, Oxford, Rumford Falls, and Rumford Cogen in the
conduct of the Business, stated on a consolidated basis, exclusive of
(i) any Excluded Assets; and (ii) any liabilities of Boise Cascade or
Oxford not constituting Assumed Liabilities. The Final Balance Sheet shall
be based on the books and records of the Business and shall be prepared on
a basis consistent with the Historical Balance Sheet utilizing Historical
Accounting Procedures, except for the adjustments reflected in
Schedule 1.33. Such books and records shall not include (i) entries for
specific assets and liabilities of RCC, which are accounted for on an
equity basis pursuant to Historical Accounting Procedures, (ii) entries for
Androscoggin and Gulf Island, which are accounted for on a historical cost
basis, or (iii) any obligations for borrowed money incurred by Boise
Cascade or any of its subsidiaries or affiliates to finance the acquisition
of any of the assets recorded on the books and records of the Business.
1.29 Final Closing Statement. The term "Final Closing Statement"
shall mean the document bearing that name to be prepared pursuant to
Section 4.2.1 hereof by Boise Cascade from the books and records of the
Business as of Closing. It shall be prepared in accordance with the
Historical Accounting Procedures used in the preparation of the Historical
Balance Sheet, provided, however, that the Final Closing Statement shall
not include (i) any liabilities not assumed by Purchaser pursuant to
Section 5.1 hereof; (ii) the liabilities set forth in Schedule 5.3; and
(iii) the Excluded Assets.
1.30 Gulf Island. The term "Gulf Island" shall mean Gulf Island
Pond Oxygenation Project, a general partnership in which Boise Cascade
holds a 30.5% equity interest.
1.31 Hazardous Materials. The term "Hazardous Material" shall mean
(a) any "hazardous substance" as defined in the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. Section 9601(14), et
seq.), as amended, and the regulations promulgated pursuant thereto
("CERCLA"), or any similar state law; (b) any petroleum, including crude
oil or any extraction thereof; (c) natural gas liquids or liquefied natural
gas; and (d) any asbestos, polychlorinated biphenyl ("PCB") or any material
or thing containing such substance in a concentration which makes its
disposal or release subject to regulatory control.
1.32 Historical Accounting Procedures. The term "Historical
Accounting Procedures" means the accounting policies and procedures in use
by Boise Cascade in respect of the Business on June 30, 1996, except that
no cash (other than a petty cash account if it is less than $500) will be
included in any balance sheet. Such procedures are those used to prepare
the divisional financial statements that are combined to prepare the
audited, consolidated financial statements of Boise Cascade.
1.33 Historical Balance Sheet. The term "Historical Balance Sheet"
shall mean the internally prepared June 30, 1996, balance sheet for the
Business, which includes the assets and liabilities of Rumford Cogen and
Rumford Falls on a consolidated basis, and is attached as Schedule 1.33
hereto.
1.34 Industrial Revenue Bonds. The term "Industrial Revenue Bonds"
means the financings described in Schedule 1.34.
1.35 Intangible Rights. The term "Intangible Rights" shall mean the
various registered copyrights, patents, trademarks, service marks and
applications therefor listed in Schedule 1.35, licenses with respect to any
of the foregoing, trade secrets, proprietary manufacturing information and
know-how and customer and supplier lists with respect to the Business and
the goodwill associated with any of the foregoing and all other similar
intangible rights of any form or nature which are owned by Boise Cascade or
Oxford and used by them exclusively in their conduct of the Business but
excluding the Excluded Assets.
1.36 Inventory. The term "Inventory" shall mean all inventories of
raw materials, logs, wood chips, chemicals, resin, strapping, dies, tools,
pallets, paper stock, inks, spare parts, operating and office supplies,
shipping supplies, gasoline, diesel, and other fuel supplies, miscellaneous
supplies and materials owned by Boise Cascade or Oxford and used in the
Business and either on hand at the Facilities, at offsite public
warehouses, or in transit thereto as of Closing; and all work in process
and finished goods not yet sold which are owned by Boise Cascade or which
were delivered by Boise Cascade in the ordinary course of its conduct of
the Business pursuant to terms where title has not yet passed to the buyer
thereof; together with any rights of Boise Cascade to the warranties, if
any, and to the extent assignable, received from manufacturers and sellers
of the raw materials and rollstock, and any related claims, credits, right
of recovery and set-off with respect thereto, but excluding finished goods
inventory held by Boise Cascade at its regional service centers, none of
which will be recorded on the Final Balance Sheet.
1.37 Joint Facility. The term "Joint Facility" means any Facility
set forth in Schedule 1.37.
1.38 Miscellaneous Assets. The term "Miscellaneous Assets" shall
mean all of the assets, properties, and rights of the Business, other than
the Excluded Assets, of every kind and description, real or personal,
tangible or intangible, whether or not fully depreciated, capitalized or
expensed, to the extent such assets are (i) presently used primarily in the
Business, or subsequently acquired for use in the conduct of the Business
prior to Closing, (ii) either located at the Facilities, in the process of
being delivered to the Facilities as of Closing, or reserved primarily for
use at the Facilities, (iii) not within the definition of Realty,
Facilities, Equipment, Inventory, Spare Parts, Contracts, Collective
Bargaining Agreements, Intangible Rights, Accounts Receivable, or Excluded
Assets, and (iv) owned by Boise Cascade or Oxford as of Closing.
1.39 Multiple Mill Purchasing Agreements. The term "Multiple Mill
Purchasing Agreements" means contracts covering goods or services that are
applicable to the Business and at least one location outside of the
Business, such as Boise Cascade's Corporate and Paper Division bulk
purchasing or engineering services arrangements with third parties, which
apply by their terms to multiple mills or facilities in addition to the
Rumford Facility.
1.40 Net Book Value of the Business. The term "Net Book Value of
the Business" means the amount by which assets exceed liabilities as
reflected on the Final Balance Sheet.
1.41 Oxford. The term "Oxford" shall mean Oxford Paper Company, a
Delaware corporation, a wholly owned subsidiary of Boise Cascade.
1.42 Pre-Closing Period. The term "Pre-Closing Period" shall mean
that portion of any Straddle Period that ends on the Closing date.
1.43 Preliminary Closing Statement. The term "Preliminary Closing
Statement" shall mean the statement prepared by Boise Cascade for purposes
of the Closing which shall include its best estimate of the Purchase Price.
The Preliminary Closing Statement shall be in the form attached as Schedule
1.43 and shall be prepared in accordance with the Historical Accounting
Procedures.
1.44 Purchase Price. The term "Purchase Price" shall have the
meaning assigned to it in Section 3.1.
1.45 Purchaser. The term "Purchaser" shall mean Mead Oxford
Corporation, a Delaware corporation.
1.46 Realty. The term "Realty" shall mean (i) the parcels of real
property described in Schedule 1.46 hereof, together with all improvements
located thereon and all rights appurtenant thereto, and (ii) any other real
property owned by Boise Cascade or Oxford and utilized by either of them in
the Business which are located in the states of Maine, Vermont, or
New Hampshire. Timberlands are excluded from the definition of Realty.
Specific pieces of real property may be referred to from time to time
herein by a combination of the name of the community in which the real
property is located and the term "Realty."
1.47 Release. The term "Release" means any release, spill,
emission, discharge, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching, or migration into the indoor or outdoor
environment (including, without limitation, ambient air, surface water,
groundwater, and surface or subsurface strata) or into or out of any
property, including the movement of Hazardous Materials through or in the
air, soil, surface water, groundwater, or property, but excluding any such
Release by a third party originating on property adjoining or in the
vicinity of Realty or Timberlands.
1.48 RCC. The term "RCC" shall mean Rumford Cogeneration Company
Limited Partnership, a Maine limited partnership.
1.49 Rumford Cogen. The term "Rumford Cogen" shall mean Rumford
Cogeneration Inc., a Delaware corporation, a wholly owned subsidiary of
Boise Cascade and the general partner of RCC.
1.50 Rumford Cogeneration Support Contracts. The term "Rumford
Cogeneration Support Contracts" shall mean the contracts between RCC and
Oxford or Boise Cascade listed in Schedule 1.50.
1.51 Rumford Falls. The term "Rumford Falls" shall mean Rumford
Falls Power Company, a Maine corporation, a wholly owned subsidiary of
Oxford.
1.52 Rumford Falls Stock. The term "Rumford Falls Stock" shall mean
all of the issued and outstanding shares of Rumford Falls common stock, par
value of $100 per share, as of the Closing.
1.53 Rumford Mill Assets. The term "Rumford Mill Assets" shall mean
the Accounts Receivable, Contracts, Collective Bargaining Agreements,
Equipment, Facility Leases, Inventory, Miscellaneous Assets, Realty, Spare
Parts, and Intangible Rights, but excluding the Excluded Assets.
1.54 Shares. The term "Shares" shall mean the Rumford Falls Stock
and the Cogeneration Stock.
1.55 Spare Parts. The term "Spare Parts" shall mean (i) all spare
parts owned by Boise Cascade or Oxford and either located at the Facilities
or reserved primarily for use at the Facilities, and (ii) all spare parts
installed on the Equipment and currently being amortized.
1.56 Straddle Period. The term "Straddle Period" shall mean any
taxable period that begins before and ends after the Closing date.
1.57 Straddle Period Return. The term "Straddle Period Return"
shall mean any Tax Return for a Straddle Period.
1.58 Taxes. The term "Taxes" shall mean all taxes, levies, or other
like assessments, charges, or fees (including estimated taxes, charges, and
fees), including, without limitation, income, corporation, add-on minimum,
ad valorem, advance corporation, gross receipts, transfer, excise,
property, sales, use, value-added, license, payroll, employment, severance,
pay as you earn ("PAYE"), withholding on amounts paid by or to the relevant
party, social security, and franchise or other governmental taxes or
charges imposed by the United States or any state, county, local, or
foreign government or subdivision or agency thereof; and such term shall
include any interest, penalties, or additions to tax attributable to such
taxes.
1.59 Tax Returns. The term "Tax Returns" shall mean any report,
return, or other information, including, without limitation, property tax
bills, filed, or required to be filed, with any taxing authority with
respect to Taxes.
1.60 Timberlands. The term "Timberlands" shall mean all of the
timberlands in the states of Maine, Vermont, and New Hampshire owned by
Boise Cascade or Oxford as further described in summary fashion in
Schedule 1.60 hereof.
1.61 Trucking Terminal Assets. The term "Trucking Terminal Assets"
shall mean those trucks, trailers, and related assets owned by Boise
Cascade or BCT Inc. located at the Rumford Facility which are used in the
conduct of the Business and are not recorded on the Historical Balance
Sheet.
1.62 Additional Terms. The following terms have the meaning set
forth in the following sections.
Accounting Records. The term "Accounting Records" shall have the
meaning set forth in Section 19.12.
Adjustment Report. The term "Adjustment Report" shall have the
meaning set forth in Section 4.2.2.
Agreement. The term "Agreement" shall have the meaning set forth in
the recitals.
Allocation. The term "Allocation" shall have the meaning set forth
in Section 3.4.
Boise Cascade Preliminary Tax Payment. The term "Boise Cascade
Preliminary Tax Payment" shall have the meaning set forth in Section
12.2.3.
Claims. The term "Claims" shall have the meaning set forth in
Section 19.3.
CO. The term "CO" shall have the meaning set forth in Section
6.9.4.
COBRA. The term "COBRA" shall have the meaning set forth in Section
11.4.3.
Employee Benefit Plans. The term "Employee Benefit Plans" shall
have the meaning set forth in Section 6.16.
Environmental Assessment. The term "Environmental Assessment" shall
have the meaning set forth in Section 6.17.10.
ERISA. The term "ERISA" shall have the meaning set forth in Section
6.16.
FERC. The term "FERC" shall have the meaning set forth in Section
6.18.1.
Final Determination. The term "Final Determination" shall have the
meaning set forth in Section 4.2.1.
Final Purchase Date. The term "Final Purchase Date" shall have the
meaning set forth in Section 4.2.4.
Flex Plans. The term "Flex Plans" shall have the meaning set forth
in Section 11.7.
FPA. The term "FPA" shall have the meaning set Forth in Section
6.18.1.
GAAP. The term "GAAP" shall have the meaning set forth in Section
6.3.2.
Gain Sharing Plan. The term "Gain Sharing Plan" shall have the
meaning set forth in Section 11.8.
HSR Act. The term "HSR Act" shall have the meaning set forth in
Section 9.5.
Indemnified Party. The term "Indemnified Party" shall have the
meaning set forth in Section 19.7.
Indemnifying Party. The term "Indemnifying Party" shall have the
meaning set forth in Section 19.7.
Independent Accountants. The term "Independent Accountants" shall
have the meaning set forth in Section 4.2.3.
Issuer. The term "Issuer" shall have the meaning set forth in
Section 5.1.4.
Large Cleanup. The term "Large Cleanup" shall have the meaning set
forth in Section 19.8.
Liabilities. The term "Liabilities" shall have the meaning set
forth in Section 6.13.
LIBOR Rate. The term "LIBOR Rate" shall have the meaning set forth
in Section 4.2.5.
Loan Agreement. The term "Loan Agreement" shall have the meaning
set forth in Section 5.1.4.
Modified Aggregate Deemed Sale Price. The term "Modified Aggregate
Deemed Sale Price" shall have the meaning set forth in Section 12.1.2.
Negative Balance Sheet Adjustment. The term "Negative Balance Sheet
Adjustment" shall have the meaning set forth in Section 3.2.
New Plans. The term "New Plans" shall have the meaning set forth in
Section 11.7.
Operating Period. The term "Operating Period" shall have the
meaning set forth in Section 6.17.1.
Permitted Encumbrances. The term "Permitted Encumbrances" shall
have the meaning set forth in Section 8.3.
Phase I Environmental Assessment. The term "Phase I Environmental
Assessment" shall have the meaning set forth in Section 6.17.10.
Phase II Environmental Assessment. The term "Phase II Environmental
Assessment" shall have the meaning set forth in Section 6.17.10.
Positive Balance Sheet Adjustment. The term "Positive Balance Sheet
Adjustment" shall have the meaning set forth in Section 3.2.
Pre-Closing Returns. The term "Pre-Closing Returns" shall have the
meaning set forth in Section 12.2.1.
Preliminary Payment. The term "Preliminary Payment" shall have the
meaning set forth in Section 4.1.
PUHCA. The term "PUHCA" shall have the meaning set forth in
Section 6.18.1.
Records. The term "Records" shall have the meaning set forth in
Section 19.12.
Reserved Identification. The term "Reserved Identification" shall
have the meaning set forth in Section 21.
Service. The term "Service" shall have the meaning set forth in
Section 11.2.
Settlement Date. The term "Settlement Date" shall have the meaning
set forth in Section 4.2.4.
Site. The term "Site" shall have the meaning set forth in
Section 6.17.4.
Tax Claim. The term "Tax Claim" shall have the meaning set forth in
Section 12.5.1.
Tax Indemnification Obligation. The term "Tax Indemnification
Obligation" shall have the meaning set forth in Section 12.2.3.
Tax Indemnified Party. The term "Tax Indemnified Party" shall have
the meaning set forth in Section 12.5.1.
Tax Indemnifying Party. The term "Tax Indemnifying Party" shall
have the meaning set forth in Section 12.5.1.
Transfer Taxes. The term "Transfer Taxes" shall have the meaning
set forth in Section 12.3.
Transferred Employees. The term "Transferred Employees" shall have
the meaning set forth in Section 11.2.
Transferred Hourly Employees. The term "Transferred Hourly
Employees" shall have the meaning set forth in Section 11.2.
Transferred Salaried Employees. The term "Transferred Salaried
Employees" shall have the meaning set forth in Section 11.2.
Underground Storage Tanks. The term "Underground Storage Tanks"
shall have the meaning set forth in Section 6.17.5.
WARN Act. The term "WARN Act" shall have the meaning set forth in
Section 6.14.1.
2. Purchase and Sale. At the Closing, Boise Cascade and Oxford
shall sell and convey to Purchaser, and Purchaser shall purchase and accept
the Assets from Boise Cascade and Oxford. Also at the Closing, Purchaser
shall assume the Assumed Liabilities.
3. Purchase Price.
3.1 Purchase Price. The purchase price for the Assets shall be the
sum of US$643,604,000, adjusted by adding thereto any Positive Balance
Sheet Adjustment or subtracting therefrom any Negative Balance Sheet
Adjustment determined pursuant to Section 3.2 hereof. Such amount, as
further adjusted pursuant to Section 3.3 hereof, shall be referred to
herein as the "Purchase Price."
3.2 Balance Sheet Adjustment Determination. The "Balance Sheet
Adjustment" shall be equal to the amount by which the Net Book Value of the
Business exceeds US$603,291,000 (a "Positive Balance Sheet Adjustment") or
is less than US$603,291,000 (a "Negative Balance Sheet Adjustment").
3.3 Purchase Price Adjustments. The Purchase Price shall be subject
to the following additional adjustments:
3.3.1 The Purchase Price shall be increased or decreased, as
appropriate, by an amount equal to any amounts either to be received or
paid out under any Contracts or Facility Leases, or related to any real or
personal property taxes and other continuing periodic expenses of the
Business which shall be prorated as of the Closing except to the extent
such prorations are reflected in the Closing Statements. For example, if
Boise Cascade shall have paid expenses which also covered periods after the
Closing, the Purchase Price shall be increased by the amount of the
prorated portion of such prepaid expenses relating to the post-Closing
period, except to the extent that such prepayment is reflected as an asset
on the Final Balance Sheet. Similarly, if certain payments, such as real
estate taxes, are to be paid in arrears following the Closing, but also
cover periods prior to the Closing, the Purchase Price shall be reduced by
the prorated amount reflecting the pre-Closing period, except to the extent
that any such amounts are reflected as a liability on the Final Balance
Sheet.
3.3.2 The Purchase Price shall be increased or decreased by the
adjustment provided for in Section 11.7.
3.3.3 The Purchase Price shall be increased or decreased to reflect
the obligations of the parties under Section 4.3 herein.
3.4 Allocation of Purchase Price. Purchaser shall prepare, and
Purchaser, Boise Cascade, and Oxford shall agree to, the allocation of the
Purchase Price and the Assumed Liabilities (other than contingent
liabilities) among the Assets to be purchased hereunder which allocation
shall be finalized as soon as practicable after the Closing, but not later
than six months after Closing, but shall be adjusted to take account of any
post-closing purchase price adjustments (the "Allocation"). The Allocation
shall be made in accordance with Section 1060 of the Code and applicable
Treasury regulations. The Purchaser, Boise Cascade, and Oxford shall (i) be
bound by the Allocation for purposes of determining any Taxes, (ii) prepare
and file, and cause their affiliates to prepare and file, their Tax Returns
on a basis consistent with the Allocation and (iii) take no position, and
cause their affiliates to take no position, inconsistent with the
Allocation on any applicable Tax Return, in any proceeding before any
taxing authority or otherwise. In the event that the Allocation is disputed
by any taxing authority, the party receiving notice of the dispute shall
promptly notify the other party hereto concerning resolution of the
dispute.
4. Terms of Payment.
4.1 Closing. At the Closing, Boise Cascade shall prepare and
deliver to Purchaser the Preliminary Closing Statement showing the
estimated Purchase Price based on the best information then available to
Boise Cascade. At Closing, Purchaser shall pay the full amount of the
Purchase Price to Boise Cascade by wire transfer of immediately available
US funds to an account designated by Boise Cascade at least three business
days prior to Closing. The amount so paid shall be referred to as the
"Preliminary Payment".
4.2 Final Settlement.
4.2.1 Within 45 days after the Closing, Boise Cascade shall prepare
and deliver to Purchaser a Final Balance Sheet and a final determination of
the Purchase Price which shall be set forth on the Final Closing Statement
("Final Determination").
4.2.2 Purchaser shall have a period of 30 days to audit or review
the Final Closing Statement, including the Final Balance Sheet upon which
it is based, to determine that it has been prepared in accordance with the
requirements of this Agreement. Boise Cascade shall make available its work
papers, or the work papers of any accounting firm retained by Boise
Cascade, for review and examination by Purchaser and its representatives.
On or prior to the expiration of such 30 day period, Purchaser shall
deliver to Boise Cascade either (i) the written acknowledgment of
Purchaser's acceptance of the Final Closing Statement; or (ii) a written
report setting forth any proposed adjustments thereto ("Adjustment
Report"). A failure to make the delivery within such 30 day period shall
constitute acceptance of the Final Closing Statement as delivered.
4.2.3 If Boise Cascade and Purchaser fail to agree on any of
Purchaser's proposed adjustments to the Final Closing Statement contained
in the Adjustment Report within 20 days after Purchaser delivers the
Adjustment Report, then Boise Cascade and Purchaser mutually agree that
their respective independent accountants shall jointly select an accountant
from another of the "Big 6 Accounting Firms" ("Independent Accountants"),
who shall make the final determination with respect to the correctness of
the proposed adjustments in the Adjustment Report based upon the terms and
conditions of this Agreement after presentations made by Boise Cascade and
Purchaser. The decision of the Independent Accountants shall be final and
binding on Boise Cascade and Purchaser. The parties shall request that the
Independent Accountants make a prompt determination and shall cooperate to
achieve such a resolution. The costs and expenses of the Independent
Accountants and their services rendered pursuant to this Section 4.2.3
shall be borne equally by Boise Cascade and Purchaser.
4.2.4 The date on which the Final Closing Statement is accepted by
Purchaser, or on which all disputes in respect thereof are resolved, shall
hereinafter be referred to as the "Settlement Date" and the amount so
determined shall be referred to as the "Final Purchase Price."
4.2.5 In the event the Final Purchase Price is greater than the
Preliminary Payment, then Purchaser shall pay to Boise Cascade within five
days after the Settlement Date an aggregate amount equal to such excess
plus interest thereon from the Closing at the per annum interest rate of
one percent over one month LIBOR, as reported on Rueters screen on the
Closing date and on each date thereafter on which a loan based on one month
LIBOR would customarily be reset until such balance is paid in full (the
"LIBOR Rate"). In the event the Final Purchase Price is less than the
Preliminary Payment, Boise Cascade shall pay to Purchaser within five days
after the Settlement Date an aggregate amount equal to such deficiency plus
interest thereon from the Closing at the per annum interest rate of one
percent over the LIBOR Rate.
4.3 Overaccruals, Property Taxes. Certain accrued liabilities for
accrued real and personal property tax liabilities which will be assumed by
Purchaser will be established by Boise Cascade using its past experience
and best estimate of the actual liability. When those liabilities are
finally determined, Purchaser shall notify Boise Cascade of the actual
liability and provide such supporting documentation as may be reasonably
required by Boise Cascade to establish the actual liability. To the extent
the liability was over-(or under-) accrued, the parties shall promptly
make the necessary adjusting payment, without interest.
5. Assumption of Liabilities.
5.1 Assumed Liabilities. At the Closing, Purchaser shall assume the
following liabilities of Boise Cascade or Oxford, as the case may be:
5.1.1 All undischarged current liabilities and obligations of Boise
Cascade and Oxford, which arose in the ordinary course of and are related
to the operation of the Business prior to the Closing and which are
recorded pursuant to Historical Accounting Procedures in the books and
records of Boise Cascade for the Business at Closing but only to the extent
of the dollar amount reflected therein;
5.1.2 All liabilities and obligations of Boise Cascade and Oxford
arising from and after the Closing under the Contracts, Facility Leases,
Rumford Cogeneration Support Contracts, and any permits or licenses
included in the Assets, which are not required by the Historical Accounting
Procedures to be recorded in the Closing Statements;
5.1.3 Liabilities and obligations relating to the employee benefit
plans, workers' compensation, and Transferred Employees in accordance with,
but only to the extent contemplated by, Sections 11.1 through 11.8 of this
Agreement.
5.1.4 The obligations of Boise Cascade arising after Closing
pursuant to Sections 5.7 and 5.8 (subject to Section 5.11) of the Loan
Agreement dated as of June 1, 1990 ("Loan Agreement"), by and between the
Finance Authority of Maine ("Issuer") and Boise Cascade, provided that at
such time as Purchaser decides in its sole discretion to remove the
equipment, which is subject to such covenants, from service or take any
other actions prohibited by such sections of the Loan Agreement, it shall
give Boise Cascade 90 days' prior written notice of any such removal or
other actions, and Boise Cascade shall, prior to the expiration of such
notice period, procure for Purchaser the right to refrain from further
performance of such covenants. Such action shall be taken by waiver or
release by the Issuer of such covenants or, if necessary, prepayment of the
bonds which are secured by a lien granted by the Issuer on said Loan
Agreement.
5.2 Performance. Purchaser shall fully perform and discharge the
Assumed Liabilities.
5.3 Nonassumption of Other Liabilities. Except as specifically set
forth in Section 5.1 of this Agreement, Purchaser does not, and will not,
be obligated to assume the Industrial Revenue Bond obligations (other than
as provided in Section 5.1.4) or any other debt, obligation, liability, or
duty of Boise Cascade or Oxford of any form or nature, absolute or
contingent, known or unknown, whether incurred in connection with its
operation of the Business or otherwise. Other than the specific obligations
assumed by Purchaser pursuant to Section 5.1.4, Boise Cascade shall fully
perform and discharge such Industrial Revenue Bonds and other obligations
in accordance with their terms. Without limiting the foregoing, Purchaser
shall not assume the liabilities set forth in Schedule 5.3.
5.4 Consents to Assignment. Boise Cascade and Purchaser shall use
their best efforts and cooperate with each other to obtain any required
consent to the assignment of the Contracts prior to the Closing. With
respect to any Contracts other than those listed on Schedule 6.2.1, if
Boise Cascade is unable to obtain consent to the assignment prior to
Closing, the Contract in question shall be deemed an Excluded Asset and any
obligation or liability arising therefrom shall be excluded from the
Assumed Liabilities with an appropriate adjustment made to the Closing
Statements in the amount, if any, recorded on the Closing Statements for
such liability or asset. If any Contract so excluded is an obligation of
Boise Cascade to sell product produced at the Rumford Facility, Purchaser
shall enter into and perform a subcontract with Boise Cascade pursuant to
which Purchaser will sell product to Boise Cascade on substantially the
same terms as Boise Cascade is obligated to sell or perform under the
excluded Contract. If any Contract so excluded is an obligation of Boise
Cascade to purchase inventories of raw materials, Purchaser shall
repurchase such inventories from Boise Cascade on substantially the same
terms as Boise Cascade is obligated to purchase the inventories under the
excluded Contract.
6. Representations and Warranties of Boise Cascade. Boise Cascade
hereby represents and warrants to Purchaser as follows:
6.1 Organization and Standing. Boise Cascade is a corporation duly
organized, validly existing and in good standing under the laws of the
state of Delaware and duly qualified, in good standing or licensed as a
foreign corporation authorized to do business in all states in which any of
its assets may be situated and where it is required to be so qualified in
order to conduct the Business as a foreign corporation. Except for Oxford,
Rumford Falls, RCC, Rumford Cogen, Androscoggin, and Gulf Island, Boise
Cascade does not own, directly or indirectly, any capital stock of, or
other equity interest in, any person or participate in any joint venture or
similar arrangement with any person relating to the Business.
Oxford is a corporation duly organized, validly existing and in
good standing under the laws of the state of Delaware and duly qualified,
in good standing or licensed as a foreign corporation authorized to do
business in all states in which its ownership of any of its assets or its
business activities require such qualification or license. Except for
Rumford Falls and Androscoggin, Oxford does not, directly or indirectly,
own any capital stock of, or other equity interest in, any person or
participate in any joint venture or similar arrangement with any person
relating to the Business.
Rumford Falls is a corporation duly organized, validly existing and
in good standing under the laws of the state of Maine and duly qualified,
in good standing or licensed as a foreign corporation authorized to do
business in all states in which its ownership of any of its assets or its
business activities require such qualification or license. Rumford Falls
does not own any capital stock of, or other equity interest in, any person
or participate in any joint venture or similar arrangement with any person,
except that it owns 25% of the equity of Androscoggin.
Rumford Cogen is a corporation duly organized, validly existing and
in good standing under the laws of the state of Delaware and duly
qualified, in good standing or licensed as a foreign corporation authorized
to do business in all states in which its ownership of any of its assets or
its business activities require such qualification or license. Rumford
Cogen does not own any capital stock of, or other equity interest in, any
person or participate in any joint venture or similar arrangement with any
person, except for a 30% interest as the general partner in RCC.
RCC is a limited partnership duly organized, validly existing, and
in good standing under the laws of the state of Maine and duly qualified,
in good standing or authorized to do business in all states in which its
ownership of any of its assets or its business activities require such
qualification or license.
None of the Entities is a "foreign person" within the meaning of
Section 1445(b)(2) of the Code.
6.2 Authority. Boise Cascade and Oxford currently have, and have
had at all relevant times, full corporate power and authority to execute
and deliver this Agreement and all documents and instruments referred to
herein or contemplated hereby and to carry out the terms and conditions
hereof and thereof. Boise Cascade and Oxford have duly and lawfully taken
all corporate action necessary to authorize the execution, delivery and
performance of this Agreement and all documents and instruments related
thereto. This Agreement has been duly executed and constitutes the valid
and binding obligation of Boise Cascade and Oxford, enforceable in
accordance with its terms and conditions except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting enforcement of creditors' rights generally and by
general principles of equity (whether applied in a proceeding at law or in
equity).
6.2.1 No Default. None of the execution, delivery and performance
of this Agreement by Boise Cascade or Oxford will constitute a violation of
or a default under, or give rise to the acceleration of rights under, any
mortgage, indenture, promissory note, contract, understanding, arrangement,
or other agreement of any kind or character, to which Boise Cascade,
Oxford, Rumford Cogen, Rumford Falls, or RCC is a party, or by which any of
them is bound (except as set forth in Schedule 6.2.1 and further excepting
any consents which, if not obtained, would not individually or in the
aggregate have a material adverse effect on the Business), Boise Cascade's
or Oxford's charter or bylaws, or any court injunction or decree or any
valid and enforceable order of a governmental agency having jurisdiction
over Boise Cascade or Oxford. Boise Cascade and Oxford will use their best
efforts to obtain any required approval or consent of any federal, state,
county, local or other governmental or regulatory body or any other person.
6.3 Financial.
6.3.1 Historical Balance Sheet. The Historical Balance Sheet was
prepared from the books and records of the Business, and all such books and
records were prepared and maintained in accordance with the Historical
Accounting Procedures except for the adjustments disclosed in
Schedule 1.33. The Historical Balance Sheet presents fairly in all material
respects the financial position of such Business at June 30, 1996.
6.3.2 RCC. The financial statements of RCC, dated December 31,
1995, which have previously been provided to the Purchaser, have been
prepared in accordance with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis during the periods
involved and fairly present in all material respects the financial position
and results of operations and cash flows of RCC as at the date thereof and
for the period presented therein. Since such date, there has been no
material adverse change in its financial condition, operations or
properties.
6.3.3 Absence of Certain Changes. Since July 1, 1996: (i) the
Entities have conducted the operations of the Business only in the ordinary
course consistent with past practice, (ii) there has not been a material
adverse effect on the Assets, liabilities, or physical operations of the
Business (other than as a result of changes in market conditions); and
(iii) the Entities have not taken action that if taken after the date
hereof would constitute a violation of Section 9.1 hereof.
6.4 Taxes.
6.4.1 Schedule 6.4.1 lists (i) all Tax Returns and the jurisdiction
in which such Tax Returns are filed and (ii) all elections with respect to
Taxes and any consents pursuant to section 341(f) of the Code filed by the
Entities (excluding Boise Cascade) during 1995 relating to or attributable
to the Companies, RCC, the Assets or the Business.
6.4.2 Except as otherwise set forth on Schedule 6.4.2:
(a) The Entities (excluding Boise Cascade) have or will have (i)
timely filed, or caused to be filed on a timely basis, with the appropriate
taxing authorities all Tax Returns required to be filed on or before the
Closing with respect to or attributable to the Companies, the Assets, the
Business or RCC and such Tax Returns are true, correct and complete in all
material respects and (ii) paid, or caused to be paid, on a timely basis
all Taxes due and payable or established adequate reserves in accordance
with GAAP for the payment of all such Taxes.
(b) The Entities (excluding Boise Cascade) have not (i) received
any notice of deficiency or assessment from any taxing authorities with
respect to liability for Taxes of the Companies or otherwise attributable
to or arising from the Assets, the Business or RCC that have not been fully
paid or finally settled, (ii) requested an extension of time within which
to file any Tax Return that has not since been filed, (iii) made any
requests to any taxing authority for rulings or determinations with respect
to any Taxes of the Companies or otherwise attributable to or relating to
the Assets, the Business or RCC which is currently pending and (iv) granted
any requests, agreements, consents or waivers to extend the statutory
period of limitations applicable to the assessment of any Taxes with
respect to any Tax Returns relating to or attributable to the Companies,
the Assets, the Business or RCC which period (after giving effect to such
extensions or waivers) has not expired.
(c) There are no ongoing audits or examinations of any of the Tax
Returns relating to or attributable to the Companies, the Assets, the
Business or RCC.
(d) None of the Entities (excluding Boise Cascade) has received any
inquiry or claim from any taxing authority in a jurisdiction in which the
Entities (excluding Boise Cascade) do not file Tax Returns which states
that the Entities (excluding Boise Cascade) with respect to the Companies,
the Assets, the Business, or RCC are or may be subject to taxation in such
jurisdiction.
(e) There are no liens for Taxes upon any of the Assets or any of
the other properties of the Business, the Companies or RCC other than liens
for Taxes not yet due or payable.
(f) No taxing authority is now asserting or threatening to assert
any deficiency or assessment for additional Taxes of any of the Entities
(excluding Boise Cascade) or otherwise attributable to or relating to the
Assets, the Business or RCC, and none of the Entities have knowledge of any
facts that, if known to any taxing authority, would likely result in the
issuance of a notice of proposed deficiency or similar notice of intention
to assess Taxes of the Companies or otherwise relating to or attributable
to the Assets, the Business or RCC.
(g) There has been no change in the method of accounting utilized
with respect to RCC that would require any adjustment to taxable income
pursuant to section 481 of the Code, and none of the Entities have
knowledge that the Internal Revenue Service has proposed any such
adjustment or has proposed any such change in accounting method.
(h) Neither Rumford Falls nor Rumford Cogen is a party to any
agreement providing for the allocation or apportionment of any liability
for Taxes, payments of Taxes or Tax benefits or refunds.
(i) Neither Rumford Falls nor Rumford Cogen has been a member of
any affiliated, consolidated, combined or unitary group other than one with
respect to which Boise Cascade was the common parent since 1976.
(j) No power of attorney has been granted by the Entities
(excluding Boise Cascade) to any party with respect to any Tax matter of or
relating to the Companies, the Assets, the Business or RCC which is
currently in force.
(k) The aggregate amount of Tax credits of Rumford Falls and
Rumford Cogen does not exceed $5 million.
(l) RCC has filed an election under section 754 of the Code to
adjust the basis of RCC's property in the manner provided in section 734
(in the case of a distribution of property) and section 743 (in the case of
a transfer of a partnership interest).
(m) None of the Entities has participated in or cooperated with an
international boycott within the meaning of section 999 of the Code.
(n) Effective as of Closing, the Entities will not own any property
that is or will be required to be treated as being owned by another person
pursuant to the provisions of section 168(f)(8) of the Code (as in effect
prior to the amendment by TEFRA of 1982).
(o) There have not been any transfers of any of the partnership
interests in RCC within the twelve month period immediately preceding the
date of this Agreement.
6.5 Compliance with Laws; Permits. Except as noted in Schedule 6.5,
to the best of Boise Cascade and Oxford's knowledge after due inquiry of
their key managers, the Business is being, and has been for the last three
years, conducted in compliance in all material respects with all applicable
federal, state or local laws, rules and regulations, and any court or
administrative order. Boise Cascade has all federal, state, and local
governmental licenses and permits required to conduct the Business in the
manner in which it is presently conducted, except where the failure to have
such licenses and permits will not have a material adverse effect on the
operations or financial condition of the Business. Except for environmental
permits (which are addressed in Section 6.17.7), Schedule 6.5 lists all
licenses and permits material to the operation of the Business and, to the
best knowledge of Boise Cascade, all such permits are valid and in full
force and effect.
6.6 Litigation. Except as set forth on Schedule 6.6, there are no
outstanding orders, judgments, injunctions, awards or decrees of any court,
governmental or regulatory body or arbitration tribunal which affect the
Assets or the operation of the Business. Schedule 6.6 sets forth all
currently pending, or to Boise Cascade's knowledge after review with the
key managers of the Business, threatened actions, investigations, suits,
claims, legal, administrative and arbitral proceedings with respect to or
arising out of the Assets or the Business.
6.7 Contracts and Agreements. Schedule 6.7 lists all of the
following for the Entities:
6.7.1 The Collective Bargaining Agreements.
6.7.2 Contracts and other agreements (including accepted purchase
orders) for the purchase or sale of product, materials, supplies,
merchandise or services for use in the conduct of the Business except for
those entered into in the ordinary course of business and (i) which have
terms expiring in less than one year from the date of this Agreement; (ii)
are cancelable on less than 61 days' notice without penalty, liability or
premium; (iii) involve an amount of $500,000 or less; or (iv) provide for
the supply of goods or services under Multiple Mill Purchase Agreements.
6.7.3 Railroad sidetrack agreements associated with the Rumford
Facility.
6.7.4 Trucking, delivery and service agreements, including
truck/trailer leases, or driver leases associated with the Business except
for those terminable on less than 91 days' notice without penalty,
liability or premium.
6.7.5 Contracts and other agreements for the sale of any of the
Assets, except for those not required to be disclosed pursuant to Section
6.7.2 hereof, or for the grant to any person of any preferential rights to
purchase any of the Assets.
6.7.6 Any joint development, joint venture or partnership
agreements relating to the Business.
6.7.7 Contracts and other agreements containing covenants of any of
the Entities not to compete in any line of business or with any person in
any geographical area or covenants of any other person not to compete with
any of the Entities in any line of business or any geographic area which
directly affect all or any portion of the Business, excluding any Employee
Benefit Plan listed in Schedule 6.16.
6.7.8 Contracts and other agreements relating to the acquisition of
any operating business or the capital stock of any other person, if such
operating business or stock will become part of the Assets or the Business.
6.7.9 Options or contracts for the purchase of any fixed asset or
real property for the Business, tangible or intangible, for a purchase
price of more than $250,000 per individual item or $2,000,000 in the
aggregate for all items, exclusive of the option held by Rumford Cogen to
acquire, subject to certain conditions, the interests of the limited
partners in RCC and the option held by RCC, subject to certain conditions,
to acquire the stock of Rumford Falls.
6.7.10 Contracts and other agreements arising out of or related to
the Business requiring the payment to or by any person of a royalty,
license fee, know-how, or technical fee, or override or similar commission
or fee.
6.7.11 Guarantees by any of the Entities of any obligation of any
other person arising out of or related to the Business.
6.7.12 Construction agreements or equipment purchase orders or
contracts relating to any capital improvements currently being made to the
Assets requiring capital in excess of $1,000,000 per individual contract,
or $5,000,000 in the aggregate, except in either case as set forth on
capital plans previously delivered to Purchaser.
6.7.13 All employment agreements and all consulting agreements
relating to the Business excluding consulting agreements terminable on 31
days' notice or less.
6.7.14 All leases for equipment or machinery used in the conduct of
the Business, except those entered into in the ordinary course of business
and (i) which have terms expiring less than one year from the date of this
Agreement; (ii) are cancelable on less than 61 days' notice without
penalty, liability or premium; or (iii) involve an amount of $100,000 or
less.
6.7.15 All sales agreements of the Business that have a remaining
term of more than one year; and
6.7.16 All other contracts, agreements or commitments relating to
the Business except for those entered into in the ordinary course of
business and (i) which have terms expiring in less than one year from the
date of this Agreement; (ii) are cancelable on less than 61 days' notice
without penalty, liability or premium; or (iii) involve an amount of
$500,000 or less.
6.7.17 At least 30 days prior to Closing, Boise Cascade shall
deliver or make available to Purchaser true and complete copies of all of
the items set forth in Schedule 6.7. Except as set forth in Schedule
6.7.17, all of such contracts, agreements, leases, and other items are
valid, subsisting, in full force and effect and binding upon the parties
thereto in accordance with their terms, subject to the qualifications that
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting enforcement of creditor's rights
generally and by general principles of equity (whether applied in a
proceeding at law or in equity) and that no representation is made as to
the power or authority of the counterparty of each such contract to enter
into and perform such contract in accordance with its terms. Boise Cascade
or its relevant subsidiary has satisfied in full or provided for all of its
liabilities and obligations thereunder requiring performance prior to the
date hereof in all material respects, is not in default under any of them,
nor does any condition exist that with notice or lapse of time or both
would constitute such default.
6.8 Conditions of and Title to Personal Property.
6.8.1 Personal Property. Boise Cascade, Oxford, Rumford Cogen, and
Rumford Falls have, and as of the Closing will have, good and marketable
title to all of the personal property reflected in the Historical Balance
Sheet or acquired after June 30, 1996 (except for personal property sold or
otherwise disposed of after June 30, 1996), free and clear of all security
interests, mortgages, pledges, liens, charges, and encumbrances of any
nature whatsoever, except for minor imperfections of title, encumbrances,
or liens as do not materially detract from or interfere with the present
use of the property or otherwise materially impair the operation of the
Business. THE BUILDINGS, MACHINERY, AND EQUIPMENT BEING SOLD PURSUANT TO
THIS AGREEMENT (DIRECTLY AND BY VIRTUE OF TRANSFER OF THE STOCK OF RUMFORD
FALLS AND RUMFORD COGEN AND INCLUDING, WITHOUT LIMITATION, THE ASSETS OF
RCC), ARE BEING SOLD "AS IS," AND NEITHER BOISE CASCADE NOR OXFORD MAKES
ANY WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, WHETHER OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE, WITH RESPECT TO ANY OF SUCH
BUILDINGS, MACHINERY, AND EQUIPMENT, EXCEPT FOR THE WARRANTY OF TITLE
HEREINABOVE SET FORTH. BOISE CASCADE AND PURCHASER REPRESENT THAT THEY ARE
ENGAGED IN THE PAPER BUSINESS AT NUMEROUS LOCATIONS THROUGHOUT THE UNITED
STATES AND ARE KNOWLEDGEABLE AND EXPERIENCED IN THAT BUSINESS.
6.8.2 RCC. RCC has, and as of the Closing will have, good and
marketable title to all of the personal property reflected in its financial
statements or acquired after the date thereof (except for personal property
sold or otherwise disposed of since such date), free and clear of all
security interests, mortgages, pledges, liens, charges, and encumbrances of
any nature whatsoever, except for the mortgages and security interests
granted by it to Bank of America, as agent for the financing provided at
the time of its organization and for the mortgage and security interest
granted by it to Central Maine Power Company in connection with its
execution of a long-term agreement to sell the bulk of its power output to
such firm and for minor imperfections of title, encumbrances, or liens as
do not materially detract from or interfere with the present use of its
assets or materially impair the operation of its portion of the Business.
6.8.3 Rumford Cogen. Rumford Cogen has no property or assets other
than its general partnership interest in RCC and certain accounts
receivable from Boise Cascade and has no material liabilities other than
its obligations under RCC's partnership agreement and deferred tax
liabilities. Upon consummation of the transactions contemplated by this
Agreement, Purchaser will succeed to all of Boise Cascade's or Oxford's
rights, powers, liabilities, and obligations with respect to RCC and the
cogeneration project owned by RCC. Consummation of the transactions
contemplated by this Agreement will not accelerate, augment or otherwise
change the rights of any other party with respect to RCC, including the
limited partners of RCC.
6.8.4 Inventory. That portion of the Inventory which is finished
goods has been produced in the ordinary course of business and is of a
quality salable in the ordinary course of business.
6.8.5 Accounts Receivable. The Accounts Receivable, all other
receivables shown on the Historical Balance Sheet and all receivables
acquired or generated by Boise Cascade and Oxford since June 30, 1996
(subject to reserves for noncollectibility as reflected in the Final
Balance Sheet), are bona fide receivables and represent amounts due with
respect to transactions entered into in the ordinary course of business. No
such account has been assigned or pledged to any other person, firm or
corporation and no defense or setoff to any such account has been asserted
by the account obligor.
6.9 Real Property.
6.9.1 Schedule. Schedules 1.46 and 1.60 identify all the owned real
property included in Realty and Timberlands. All acreages specified in such
Schedules are approximately accurate.
6.9.2 No Assessments. Boise Cascade and Oxford have not received
any written notice or communication advising them of any material general
or special assessment relating to the Realty and/or Timberlands that is not
fully paid or which is not disclosed in a schedule to this Agreement. To
the knowledge of Boise Cascade and Oxford, there are no plans by any
governmental authority which may result in the imposition of any special
assessment relating to the Realty and/or Timberlands.
6.9.3 Ownership. Oxford and/or Boise Cascade has good, valid,
marketable, and fee simple title to those portions of the Realty upon which
the Rumford pulp and paper mill is located, free and clear of all security
interests, liens, mortgages, encumbrances, and restrictions other than
Permitted Encumbrances and encumbrances which will be extinguished prior to
Closing. Boise Cascade and Oxford represent and warrant, and will convey to
Purchaser, only such title to the Timberlands and the balance of the Realty
as they received from their vendors, and they further represent and warrant
that they have not done or suffered any security interests, liens,
mortgages, encumbrances, and restrictions that will continue after Closing
other than Permitted Encumbrances.
To the best knowledge of Boise Cascade, after due inquiry of the
Rumford mill manager, there is no claim of any third party affecting the
title to said portion of the Realty, or defect in the zoning thereof, which
would materially impair the operation of the Business as it is currently
conducted.
6.9.4 Use of the Real Properties. Boise Cascade and Oxford have
used the Rumford Facility in conformity with any Certificate of Occupancy
("CO") issued for the Rumford Facility. No proceeding is currently pending
or threatened regarding the revocation or limitation of any CO issued for
the Rumford Facility, and to Boise Cascade's knowledge, there is no basis
or grounds for any such revocation.
6.9.5 Access to the Real Properties. To the best of Boise Cascade
and Oxford's knowledge after consultation with the Rumford mill manager, no
fact or condition exists which would prohibit adequate rights of access to
and from the Rumford Facility from and to public highways and roads, and
Boise Cascade and Oxford have not received written notice of any pending or
threatened restriction or denial, governmental or otherwise, upon such
ingress or egress which would adversely affect the operation of the Rumford
Facility. To the best knowledge of Boise Cascade, Boise Cascade presently
has adequate rights of access to the Timberlands to permit their proper use
as Timberlands.
6.9.6 No Condemnation. Neither Boise Cascade nor Oxford has
received any written notice of any pending condemnation or eminent domain
proceeding which, if successfully prosecuted, would have a material adverse
effect on the continued use or operation of the Business.
6.9.7 Rumford Facility. Every plant, warehouse, sales office, or
other building that comprises the Rumford Facility is located within the
perimeter of the Rumford Realty.
6.9.8 Utilities. The Realty conveyed to Purchaser provides
Purchaser with adequate access to all utilities necessary for the operation
of the Rumford Facility in a manner substantially consistent with the
manner in which it is presently being operated.
6.9.9 Native American Claims. To the best of Boise Cascade and
Oxford's knowledge, within the past three years, no claims have been
asserted and there are no current claims with respect to the Realty or
Timberlands constituting tribal lands.
6.10 Leased Facilities. Part I of Schedule 1.27 lists all leased
real property used by Boise Cascade or Oxford in the Business which will be
assigned to Purchaser. Part II of Schedule 1.27 lists all leased real
property held by Rumford Cogen, Rumford Falls, and RCC. The leased real
property listed in Schedule 1.27 is all of the real property leased and
used by any of the Entities in their conduct of the Business other than
leased property used in the operation of any Joint Facility. True, complete
and correct copies of the current lease agreements for each of the leases
scheduled in Schedule 1.27 have previously been delivered to Purchaser. The
Entities enjoy peaceful possession of all the Leased Facilities. None of
the Entities nor, to the best of Boise Cascade's knowledge, the lessor is
in default under any of the terms or conditions of any of such leases, and
there is no event which, but for the passing of time or the giving of
notice or both, would constitute an event of default under any of such
leases by the lessee or, to the best of Boise Cascade's knowledge, the
lessor. None of the Entities nor any such lessor has commenced any action
or given or received any written notice for the purpose of terminating any
of such leases.
6.11 All Necessary Assets. Except for the Excluded Assets, all of
the rights, properties and assets utilized or required by Boise Cascade in
connection with owning and operating the Business are (i) either owned by
the Entities; or (ii) licensed or leased to the Entities under one of the
Contracts conveyed to Purchaser under this Agreement. The Assets constitute
all the assets necessary for Purchaser to conduct the Business following
the Closing in a manner substantially similar to the manner in which it was
conducted by the Entities prior to the Closing, except for those aspects of
the Business which utilize the Excluded Assets. Neither Boise Cascade nor
Oxford has a commitment or legal obligation, absolute or contingent, to any
person other than the Purchaser to sell, assign, transfer, lease, sublease,
or effect a sale of any Assets, except in the ordinary course of business
consistent with past practice.
6.12 Intangible Rights. Part I of Schedule 1.35 sets forth all
patents, trademarks, service marks, trade names, and all applications and
licenses for any of the foregoing which are owned by any of the Entities
and used by any of them exclusively in the Business, true and complete
copies of which have been previously delivered to Purchaser. Part II of
Schedule 1.35 sets forth all patents, trademarks, service marks, trade
names, and all applications for any of the foregoing which are owned by any
of the Entities and used by them in the Business on a nonexclusive basis
and which shall be deemed Excluded Assets. All registrations listed in Part
I of Schedule 1.35 are in full force and effect in accordance with their
terms. Except as set forth in Schedule 1.35, no licenses, sublicenses,
covenants or agreements have been granted or entered into by Boise Cascade
or Oxford in respect of any of such trade names, trademarks, service marks,
copyrights or patents or any applications therefor. Boise Cascade and/or
Oxford is transferring all patents, trademarks, trade names, service marks
or copyrights necessary for the conduct of the Business as presently
operated, other than those listed in Part II of Schedule 1.35. To the best
knowledge of Boise Cascade, there is not now, and has not been during the
past three years, any infringement, misuse or misappropriation by any of
the Entities of any valid patent, trademark, trade name, service mark,
copyright or trade secret which relates to the Business and which is owned
by any third party. There is not now any pending or, to the best knowledge
of Boise Cascade, threatened claim of infringement, misuse or
misappropriation of any patent, trademark, trade name, service mark,
copyright or trade secret against any of the Entities relating to the
Business. There is no pending or threatened claim by any of the Entities
against others for infringement, misuse or misappropriation of any patent,
trademark, trade name, service mark, copyright or trade secret used by the
Business and owned by the Entities.
6.13 Liabilities. There is no direct or indirect indebtedness,
liability, claim, loss, damage, deficiency, obligation or responsibility,
fixed or unfixed, liquidated or unliquidated, secured or unsecured,
accrued, absolute, contingent or otherwise, relating to the Business (the
"Liabilities") that either would be material to the Business taken as a
whole or that would be required pursuant to Historical Accounting
Procedures to be reflected on the Historical Balance Sheet and that is not
reflected on the Historical Balance Sheet, except for liabilities and
obligations of RCC, all of which are disclosed in the financial statements
of RCC to the extent required by GAAP. Since the date of the Historical
Balance Sheet, none of Boise Cascade, Oxford, Rumford Falls or Rumford
Cogen has incurred any Liabilities that would be required pursuant to
Historical Accounting Procedures to be reflected on or reserved against in
any of their balance sheets or that would be material to the Business taken
as a whole, except for Liabilities incurred in the ordinary course of
business consistent with past practice and in accordance with Section 9.1.
None of the liabilities of RCC, Androscoggin, or Gulf Island are recorded
on the Historical Balance Sheet because such entities are not accounted for
on a consolidated basis with the balance sheet of Boise Cascade and its
subsidiaries or affiliates. Boise Cascade, Rumford Falls, and/or Oxford, as
appropriate, have recorded in their financial statements all liabilities
and obligations arising out of the ownership of an interest in Androscoggin
and Gulf Island in accordance with and to the extent required by Historical
Accounting Procedures. Except as set forth in Schedule 6.13, neither Boise
Cascade, Oxford, Rumford Falls, nor Rumford Cogen have any Liabilities
arising out of or connected with the Business other than:
6.13.1 Liabilities fully and adequately reflected or reserved on
the Historical Balance Sheet in accordance with Historical Accounting
Procedures;
6.13.2 Liabilities incurred since June 30, 1996, in the ordinary
course of business in accordance with Section 9.1;
6.13.3 Liabilities and obligations not required by Historical
Accounting Procedures to be reflected or reserved against in the Historical
Balance Sheet; and
6.13.4 Liabilities and obligations arising out of the Industrial
Revenue Bonds.
6.14 Employee Relations.
6.14.1 Labor Relations. (a) Except to the extent set forth in
Schedule 6.14.1, (i) there is no labor strike, dispute, slowdown, stoppage
or lockout actually pending, or to the knowledge of Boise Cascade,
threatened against or affecting the Business and during the past three
years there has not been any such action; (ii) Boise Cascade has provided
to Purchaser, or will provide prior to Closing, copies of all current
published personnel policies, rules or procedures applicable to employees
of the Business; (iii) to Boise Cascade's knowledge, the Business has for
the last three years been in compliance in all material respects with all
applicable laws respecting employment and employment practices, terms and
conditions of employment, wages, hours of work and occupational safety and
health, and is not engaged in any unfair labor practices as defined in the
National Labor Relations Act or other applicable law, ordinance or
regulation; (iv) to the knowledge of Boise Cascade, there is no unfair
labor practice charge or complaint against the Business pending or
threatened before the National Labor Relations Board or any similar state
or foreign agency; (v) there is no grievance arising out of any collective
bargaining agreement or other grievance procedure; (vi) to the knowledge of
Boise Cascade, no charges with respect to or relating to the Business are
pending before the Equal Employment Opportunity Commission or any other
agency responsible for the prevention of unlawful employment practices;
(vii) Boise Cascade has not received notice of the intent of any federal,
state, or local agency responsible for the enforcement of labor or
employment laws to conduct an investigation with respect to or relating to
the Business and no such investigation is in progress; and (viii) to the
knowledge of Boise Cascade after consultation with the key managers of the
Rumford Facility, there are no complaints, lawsuits or other proceedings
pending or threatened in any forum by or on behalf of any present or former
employee of the Business, any applicant for employment or classes of the
foregoing alleging breach of any express or implied contract or employment,
any law or regulation governing employment or the termination thereof or
other discriminatory, wrongful or tortious conduct in connection with the
employment relationship.
(b) Since the enactment of the Worker Adjustment and Retraining
Notification Act (the "WARN Act"), Boise Cascade has not effectuated (i) a
"plant closing" (as defined in the WARN Act) affecting any site of
employment or one or more Facilities or operating units within any site of
employment or Facility of the Business; or (ii) a "mass layoff" (as defined
in the WARN Act) affecting any site of employment or Facility of the
Business; nor has the Business been involved in any transaction or engaged
in layoffs or employment terminations sufficient in number to trigger
application of any similar state or local law. No Employee has suffered an
"employment loss" (as defined in the WARN Act) in the past six (6) months.
6.14.2 Employees. Boise Cascade has separately provided a list of
the names, social security numbers, dates of hire, locations of employment,
and dates of birth of each Employee. The list is a true, correct, and
complete schedule of such information as of the date hereof and will be
updated to provide a true, correct, and complete schedule of such
information as of the date of Closing. None of Oxford, Rumford Falls,
Rumford Cogen, or RCC have employees because all labor and management
services required by such companies are provided by Boise Cascade under
management agreements.
6.15 Products and Services. There are no orders or decrees of any
court or governmental or regulatory body by which any of the Entities are
bound and there are no statements, citations or decisions by any
governmental or regulatory body to the effect that any product or service
manufactured, marketed, distributed, or provided at any time by any of the
Entities with the Assets is defective or fails to meet in any material
respect any standards promulgated by any such governmental or regulatory
body. There have been no recalls ordered by any such governmental or
regulatory body with respect to any product manufactured or distributed by
any of the Entities in the course of its operation of the Business.
Schedule 6.15 sets forth any pending (i) product warranty claims or causes
of action where the amount claimed exceeds $50,000 and (ii) product
liability claims or causes of action alleging personal injury or property
damage resulting from products or materials sold by the Business.
6.16 Employee Benefit Plans. Schedule 6.16 contains a true and
complete list of all employee benefit plans ("Employee Benefit Plans")
maintained by Boise Cascade which are applicable to the Employees. Boise
Cascade has complied in all material respects with the requirements of the
Employee Retirement Income Security Act of 1974 ("ERISA") and the Code as
they apply to such plans. No "party in interest" or "disqualified person"
has engaged in a "prohibited transaction" with such plans within the
meaning of Section 406 of ERISA or Section 4975 of the Code. All
contributions required by law or the terms thereof with respect to the
Employee Benefit Plans have been made. There exists no encumbrance upon any
of the Assets and no obligation among the Assumed Liabilities that is
attributable to the establishment or operation of such Employee Benefit
Plans.
6.17 Environmental Matters.
6.17.1 Purchaser acknowledges that Oxford acquired the Rumford
Facility in 1976 from a previous operator of the Business. All of the
representations and warranties contained in this Section 6.17 made by any
of the Entities are limited to the period of time from the date in 1976
when Oxford acquired the Rumford Mill until the date of the Closing (the
"Operating Period"), provided, however, that Boise Cascade will disclose,
without accepting any liability to Purchaser, any information or knowledge
it has with respect to environmental matters occurring prior to the
Operating Period. Notwithstanding anything to the contrary contained
herein, the representations and warranties set forth in this Section 6.17
shall not apply to contamination of any of the Realty or Timberlands
caused by adjoining landowners provided, however, that Boise Cascade
will disclose, without accepting any liability to Purchaser, any
information or knowledge it has with respect to contamination of
the Realty or Timberlands from adjoining landowners.
6.17.2 Except as set forth in Schedule 6.17, none of the Entities
have in connection with their operation of the Business or their ownership
and use of the Assets transported, stored, treated or disposed of, nor have
they allowed or arranged for any third person to transport, store, treat or
dispose of, Hazardous Material to or at any location other than a site
lawfully permitted at the time to receive such Hazardous Material for such
purposes, nor have they performed, arranged for or allowed by any method or
procedure such transportation, storage, treatment or disposal in
contravention of any Environmental Laws in force at that time.
6.17.3 Except as set forth in Schedule 6.17, none of the Entities
have in connection with their operation of the Business or their ownership
and use of the Assets used, generated, treated, stored or disposed of
Hazardous Materials which resulted in a Release thereof on, into, or
beneath the surface of the Assets, except for inventories of such
substances to be used, and wastes generated therefrom, in the ordinary
course of business of Boise Cascade, which inventories and wastes, if any,
were and are stored or disposed of in accordance with applicable laws and
regulations, and except for any Release from which the Hazardous Materials
have been removed. Except as set forth in Schedule 6.17, except for any
Release from which the Hazardous Materials have been removed, and except in
compliance with Environmental Laws and permit terms, there has not
occurred, nor is there presently occurring in the operations of the
Business or use of the Assets, a Release of any Hazardous Material on,
into, or beneath the surface of the Assets, and no part of the Assets,
including the groundwater located thereon, is, to the best knowledge of
Boise Cascade, presently contaminated by Hazardous Materials.
6.17.4 Except as set forth in Schedule 6.17, to the knowledge of
Boise Cascade, none of the Entities have transported or disposed of, nor,
to the actual knowledge of Boise Cascade, have any of the Entities allowed,
or arranged for any third parties to transport or dispose of, in the
conduct of the Business, any Hazardous Materials to or at a site which
pursuant to CERCLA or any similar state law has been placed on the CERCLIS,
the National Priorities List, or their state equivalents, or which the
United States Environmental Protection Agency or the relevant state agency
has proposed or is proposing to place on the CERCLIS, the National
Priorities List, or their state equivalents (hereinafter collectively
referred to as a "Site"). Except as set forth in Schedule 6.17, none of the
Entities have received notice that they are a potentially responsible party
for a federal or state environmental cleanup site arising from or relating
to the Business or the Assets or any Site under any Environmental Law.
Except as set forth in Schedule 6.17, none of the Entities have received
any written or oral request for information in connection with any federal
or state Site arising from or relating to the Business or the Assets nor
have any of the Entities undertaken (or been requested to undertake) any
response, remedial, or cleanup action of any kind arising from or relating
to the Business at the request of any federal, state or local government
entity, or at the request of any other person or entity.
6.17.5 Except as identified in Schedule 6.17, there are no
Underground Storage Tanks, asbestos containing materials, or regulated PCB
capacitors and transformers in any or on any Asset. For purposes of this
Section 6.17.5, the term "Underground Storage Tanks" shall have the meaning
given it in the Solid Waste Disposal Act, 42 U.S.C. Section 6991, et seq.,
and the applicable state law or regulation.
6.17.6 Schedule 6.17 identifies (i) all environmental audits,
assessments, or occupational health studies (other than routine safety
surveys of job sites) undertaken by Boise Cascade with respect to the
Business or the Assets within the past three years; (ii) the results of any
groundwater, soil or air monitoring undertaken with respect to any Facility
within the past three years other than routine sampling and analysis
required by license or permit; (iii) all citations issued with respect to
the Business or the Assets within the past three years under the
Occupational Safety and Health Act of 1970; and (iv) all claims,
liabilities, litigation, notices of violation, administrative enforcement
proceedings, whether pending or threatened, or judgment or enforcement
orders issued with respect to the Business or the Assets within the past
three years or currently outstanding under the applicable Environmental
Laws.
6.17.7 All permits, licenses and authorizations held by Boise
Cascade and Oxford required by applicable Environmental Laws are listed on
Schedule 6.17, and to the knowledge of Boise Cascade, all such permits,
licenses and authorizations are valid and in full force and effect. With
respect to the Business, Boise Cascade and Oxford are currently in
compliance in all material respects with all applicable Environmental Laws,
including without limitation, obtaining and maintaining in effect all
permits, licenses, or other authorizations required by applicable
Environmental Laws, and Boise Cascade and Oxford are currently in
compliance with all such permits, licenses and authorizations.
6.17.8 Except as set forth on Schedule 6.17, Boise Cascade has not
entered into any agreement with respect to the Assets that may require it
to pay to, reimburse, guarantee, pledge, defend, indemnify or hold harmless
any person for or against any Environmental Liabilities and Costs.
6.17.9 Boise Cascade has not been notified that its operation or
use of the Assets has resulted in the "taking" of any endangered or
threatened species or the adverse modification of "critical habitat" of an
endangered or threatened species as those terms are defined under the
Endangered Species Act, 16 U.S.C. Section 1531, et seq., or similar state
statutes applicable to the Timberlands.
6.17.10 Purchaser, at its sole cost and expense, shall have the
right prior to the Closing to conduct a Phase I environmental assessment
(the "Phase I Environmental Assessment") commencing after the execution of
this Agreement, and where it has reasonable grounds to believe that there
is contamination of the soil or groundwater by Hazardous Materials, which
contamination has not been investigated by Boise Cascade, a Phase II
environmental assessment (the "Phase II Environmental Assessment," and
together with the Phase I Environmental Assessment, the "Environmental
Assessment"). In the event of a Phase II Assessment, Boise Cascade shall be
accorded the right to provide comments on the design of such Phase II
Assessment and to collect split samples of soil or groundwater during such
Phase II Assessment. Purchaser shall deliver a copy of its Phase I and
Phase II reports to Boise Cascade.
6.18 Rumford Cogen; RCC.
6.18.1 No Utility Status. Pursuant to Sections 292.202(n) and
292.206(c)(i) of the Federal Energy Regulatory Commission's ("FERC")
regulations, and Rule 5 under the Public Utility Holding Company Act of
1935, as amended ("PUHCA"), the general partnership interest of Rumford
Cogen in RCC is not considered to be an interest of an "electric utility"
as defined in Section 3(22) of the Federal Power Act, as amended ("FPA"),
or an "electric utility holding company" as defined in Section 292.202(n)
of FERC's regulations, or any combination thereof. Neither Boise Cascade
nor Oxford are (i) subject to regulation under PUHCA, (ii) subject to
regulation under the FPA other than as contemplated by Section 3(18)(A) of
the FPA and 18 CFR Section 292.601(c) or (iii) subject to regulation as an
"electric utility," "electric corporation," "electrical company," "public
utility," "holding company," "public utility holding company" or "public
service corporation" or the equivalent under any existing law, rule,
regulation, order or interpretation of any governmental authority.
6.18.2 Project Documents. Schedule 6.18.2 is a complete and correct
list of all agreements and instruments to which either Rumford Cogen or RCC
is a party or by which Rumford Cogen, RCC or their respective assets is
bound. Neither Rumford Cogen nor RCC is in default under or with respect to
any such agreement, and except as disclosed in Schedule 6.18.2, the
consummation of the transactions contemplated by this Agreement will not
give rise to the acceleration of rights under any of such agreements.
6.18.3 Qualifying Facility. The cogeneration project as owned and
operated by RCC meets all requirements for a "qualifying cogeneration
facility" under PURPA, the FERC regulations implemented thereunder and all
administrative and judicial precedents relating thereto, including without
limitation all requirements as to utility ownership, operating and
efficiency standards and useful thermal output.
7. Representations and Warranties of Purchaser. Purchaser hereby
represents, warrants, and covenants to Boise Cascade as follows:
7.1 Purchaser Organization and Standing. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
state of Delaware and, prior to Closing, or as promptly as practical
thereafter, will be duly qualified, in good standing or licensed as a
foreign corporation authorized to do business in all states in which any of
the Assets may be situated, and where it is required to be so qualified in
order to conduct the activities currently carried on by the Entities with
such assets. Purchaser is not a "foreign person" within the meaning of
Section 1445(b)(2) of the Code.
7.2 Purchaser Parent Organization and Standing. Purchaser Parent is
a corporation duly organized, validly existing, and in good standing under
the laws of the state of Ohio, and is duly qualified, in good standing, or
licensed as a foreign corporation authorized to do business in all states
in which such qualification or licensing is required by reason of its
execution, delivery, and performance of this Agreement. Purchaser Parent is
not a "foreign person" within the meaning of Section 1445(b)(2) of the
Code.
7.3 Authority. Purchaser and Purchaser Parent each have full
corporate power and authority to execute and deliver this Agreement and all
documents and instruments required of them by the terms hereof and to carry
out the terms and conditions hereof and thereof. Purchaser and Purchaser
Parent have taken all corporate action necessary to authorize their
respective execution, delivery, and performance of this Agreement and all
related documents and instruments. This Agreement has been duly executed
and constitutes a valid and binding obligation of each of Purchaser and
Purchaser Parent, enforceable in accordance with its terms and conditions
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting enforcement of
creditors' rights generally and by general principles of equity (whether
applied in a proceeding at law or in equity).
7.4 No Default or Consents. Except as set forth in Schedule 7.4,
none of the execution, delivery and performance of this Agreement by either
of Purchaser or Purchaser Parent will constitute a violation or default or
give rise to the acceleration of rights under any mortgage, indenture,
promissory note, contract, understanding, arrangement, or other agreement
of any kind or character to which Purchaser or Purchaser Parent is a party,
or by which either of them are bound, or their respective charter or
bylaws, any court injunction or decree or any valid and enforceable order
of a governmental agency having jurisdiction over Purchaser or Purchaser
Parent. No approval or consent of any foreign, federal, state, county,
local or other governmental or regulatory body (except as otherwise
specified in Schedule 7.4) is required in connection with the execution and
delivery by Purchaser or Purchaser Parent of this Agreement and the
consummation and performance by either of them of the transactions
contemplated hereby.
7.5 Condition of Assets. Subject to Section 9.2 hereof, Purchaser
and Purchaser Parent acknowledge and agree that Purchaser is acquiring the
tangible personal property included in the Assets in AS IS and WHERE IS
physical condition. Nothing contained in this Section 7.5 shall limit,
restrict or modify any of the warranties and representations made by Boise
Cascade to Purchaser in Section 6 hereof.
8. Real Property.
8.1 Mill Property. Title to the Realty which constitutes the
principal property of the Rumford Facility will be conveyed to the
Purchaser by a full warranty deed, subject to Permitted Encumbrances as
defined in Section 8.3 below.
8.2 Other Property. Title to the Timberlands and that portion of
the Realty not covered by Section 8.1 shall be conveyed by a Quitclaim Deed
with Covenant against grantor's acts in Maine, a Quitclaim Deed against
grantor's acts in New Hampshire, and a Limited Warranty Deed against
grantor's acts in Vermont, subject to Permitted Encumbrances.
8.3 Permitted Encumbrances. The term "Permitted Encumbrances "
means (i) all easements, conditions, mineral interests, restrictions, and
agreements of record; (ii) liens for state and local property taxes, water
charges, sewer rents, and other taxes and assessments, which are not
delinquent or subject to penalty; and (iii) such minor encumbrances or
imperfections of title, if any, which are not substantial in nature or
amount and which do not distract from the value of the Realty or
Timberlands as presently used or impair the operations of the Business
conducted thereon.
8.4 Imperfections. After the Closing, Boise Cascade shall cooperate
with Purchaser to clear any imperfections of title to the Realty and
Timberlands.
9. Covenants of Boise Cascade.
9.1 Operations. Except as set forth in Schedule 9.1 or as expressly
contemplated by this Agreement, with respect to the Business, and from the
date hereof through the Closing, none of the Entities shall, without the
prior consent of Purchaser, which consent shall not be unreasonably
withheld or delayed:
9.1.1 Enter into, amend or terminate an employment agreement with
any Employee; or adopt, enter into or amend any employee benefit plan which
materially affects the Business;
9.1.2 Knowingly waive any right of material value to the Business;
9.1.3 Make any change in the application of the Historical
Accounting Procedures or GAAP;
9.1.4 Make or revoke any tax election or settle or compromise any
tax liability or change (or make a request to any taxing authority to
change) any aspect of the method of accounting for tax purposes utilized by
any of the Entities relating to or otherwise attributable to the Companies
and RCC;
9.1.5 Other than in the ordinary course of its conduct of the
Business, make any wage or salary increase or bonus, or increase in any
other direct or indirect compensation, for or to any of its Employees or
any accrual for or commitment or agreement to make or pay the same;
9.1.6 Other than in the ordinary course of its conduct of the
Business, (i) enter into any lease (as lessor or lessee), or sell, abandon
or make any other disposition of any of the Assets, except for disposition
of Equipment which, due to its age, physical condition or obsolescence, is
no longer used or useful to the Business in which it was used and which
does not in the aggregate have a book value, net of depreciation, in excess
of $250,000; or (ii) grant any lien, mortgage, security interest or other
encumbrance on any of the Assets;
9.1.7 Incur in connection with its operation of the Business or
assume in connection therewith, any debt, obligation or liability (whether
absolute or contingent or whether or not currently due and payable) except
for current liabilities incurred in the ordinary course of Business and the
prepayment of portions thereof;
9.1.8 Except for Inventory and Equipment acquired in the ordinary
course of the conduct of the Business, make, in connection with its
operation of the Business, any acquisition of all or any part of the
assets, properties, capital stock or business of any other person;
9.1.9 Pay, directly or indirectly, any of the material liabilities
arising out of or connected with the Business except for payment otherwise
in the ordinary course of their conduct of the Business;
9.1.10 Terminate or fail to renew any Contract or other agreement
that is or was of a nature required to be disclosed on Schedule 6.7 where
such Contract or other agreement may be terminated or renewed unilaterally
by Boise Cascade;
9.1.11 In connection with their operation of the Business, enter
into, or become obligated under any lease, contract, agreement or
commitment except for those that have a term of less than one year or are
cancelable on less than 61 days' notice without penalty, liability or
premium and involve an amount of $250,000 or less; or
9.1.12 Hire or terminate any key managers of the Business with a
salary range of 116 or above.
9.2 Corporate Examinations and Investigations. Prior to the
Closing, Purchaser and its employees and representatives shall be
permitted, upon prior notice to John Holleran, to make such investigation
of the assets, properties, business and operations relating to the Business
and such examination of the books, records, returns, and financial
statements relating to the Business, as Purchaser may reasonably request.
Any such investigation and examination shall be conducted at reasonable
times and under reasonable circumstances, and Boise Cascade shall cooperate
fully therein. In order that Purchaser may have full opportunity to make
such a business, accounting and legal review, examination, or investigation
as it may wish of the Business and of the Assets, Boise Cascade shall
furnish the representatives of Purchaser during such period with all such
information and copies of documents concerning the Business as such
representatives may reasonably request, and shall cause the officers,
employees, consultants, agents, accountants, and attorneys of Boise Cascade
to cooperate fully with such representatives in connection with such review
and examination. In the event this transaction is not completed for any
reason, Purchaser shall continue to be subject to the confidentiality
obligations set forth in a Letter Agreement dated July 24, 1996, between
Purchaser and Boise Cascade.
9.3 Permits, Consents, and Approvals. Boise Cascade shall cooperate
with Purchaser to obtain all permits, consents, and approvals from any
governmental or regulatory body or any other person where required for the
consummation of the Closing and the transactions contemplated hereby and
the continuance in full force and effect of the contracts and other
agreements set forth on any schedule to this Agreement. Boise Cascade shall
render such assistance to Purchaser as may be necessary and reasonable to
obtain any such consents, permits, or approvals, provided, however, that
such assistance shall not include the payment of monies or consent to
material modifications of the terms of any permit, license, contract, or
agreement. Boise Cascade shall use its best efforts to cause the UPIU and
IBEW to consent to the assumption of the Collective Bargaining Agreements
by Purchaser without any changes, provided that such efforts shall not
require the payment of any monies to the UPIU or IBEW or their respective
members or agreement to any change in the terms of the Collective
Bargaining Agreements.
9.4 Accounts Receivable Lock Box. Boise Cascade shall make
appropriate lockbox arrangements in order that any payments received after
the Closing with respect to the Accounts Receivable are promptly remitted
to the Purchaser.
9.5 Antitrust Approvals. Boise Cascade will promptly make any
filings required under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"). Boise Cascade will use its best efforts
to supply information to any federal, state or foreign agency reviewing the
transactions contemplated by this Agreement under the HSR Act or any
applicable state or foreign antitrust law, and to persuade any such agency
not to challenge such transactions (it being understood that Boise Cascade
shall not be required to enter into any consent decree or similar order).
In the event that any federal, state or foreign agency takes action to
enjoin such transactions under applicable antitrust laws, Boise Cascade
agrees to diligently litigate in good faith against any such action until
the entry of a preliminary injunction or other final order enjoining the
completion of the transactions contemplated hereunder. Boise Cascade will
bear its own costs of defending against any action by a federal, state or
foreign antitrust agency.
9.6 Disclosure Schedule Supplements.
9.6.1 The parties acknowledge that Boise Cascade may not have
completed the Schedules to this Agreement prior to executing this
Agreement. Accordingly, Boise Cascade shall have the right from time to
time prior to the Closing to supplement any Schedule with respect to any
matter hereafter arising which, if existing or known as of the date of this
Agreement, would have been required to be set forth or described in such
disclosure schedule; provided, however, that Boise Cascade shall complete
the Schedules as promptly as practicable after the date hereof. Any such
supplemental disclosure made in accordance with this Section 9.6 will be
deemed to have cured any breach of any representation or warranty made in
this Agreement, and will be deemed to have been disclosed as of the date of
this Agreement for purposes of determining whether or not the conditions
set forth in Section 15 hereof have been satisfied.
9.6.2 Notwithstanding Section 9.6.1 hereof, if in the good faith
judgment of the Purchaser, the supplements or amendments to the Schedules,
individually or in the aggregate, materially and adversely affect either
(i) the value of the Business or (ii) the Purchaser's ability to operate
the Business substantially as it has been operated by Boise Cascade, and
such affect is greater than $10 million, then in such event, the parties
shall negotiate in good faith for a period of 30 days in respect of an
adjustment in the Purchase Price, and if the parties are unable to reach
agreement on such an adjustment, the parties shall jointly retain an
arbitrator to act as a binding arbitrator of such dispute. The results of
such arbitration shall be final and binding upon the parties provided
however, that (i) if the arbitration award is less than $10 million, there
shall be no adjustment to the Purchase Price; (ii) if the arbitrator's
award is greater than $10 million and less than $40 million, the Purchase
Price adjustment shall be the amount of the arbitration award less $10
million; (iii) if the arbitrator's award is greater than $40 million, Boise
Cascade may at its option terminate this Agreement, subject to the right of
Purchaser to limit the reduction in the Purchase Price to $30 million and
continue this Agreement in force.
9.6.3 The arbitrator shall be Jaako-Pory if the dispute involves a
question of the Purchaser's ability to operate the Business, and shall be
Goldman Sachs & Co. if the dispute involves the value of the Business. If
Jaako-Pory or Goldman Sachs refuses to serve as an arbitrator, the parties
shall select a replacement. If the parties cannot agree on a replacement
arbitrator, the arbitrator refusing to serve shall be requested to select a
replacement arbitrator. The parties shall share equally the cost of the
arbitrator.
10. Covenants of Purchaser.
10.1 Permits, Consents, and Approvals. Purchaser shall use its best
efforts (which shall not include the payment of any monies outside the
ordinary course) to obtain all permits, consents, and approvals from any
governmental or regulatory body or any other person where required for the
consummation of the Closing and the transactions contemplated hereby and
shall execute such documents as are reasonable to transfer and assume such
obligations. Purchaser shall use its best efforts to cause the UPIU and
IBEW to consent to the assumption of the Collective Bargaining Agreements
by Purchaser without any changes, provided that such efforts shall not
require the payment of any monies to the UPIU or IBEW or their respective
members or agreement to any change in the terms of the Collective
Bargaining Agreements.
10.2 Antitrust Approvals. Purchaser will promptly make any filings
required under the HSR Act. Purchaser will use its best efforts to supply
information to any federal, state or foreign agency reviewing the
transactions contemplated by this Agreement under the HSR Act or any
applicable state or foreign antitrust law, and to persuade any such agency
not to challenge such transactions (it being understood that the Purchaser
shall not be required to enter into any consent decree or similar order).
In the event that any federal, state or foreign agency takes action to
enjoin such transactions under applicable antitrust laws, Purchaser agrees
to diligently litigate in good faith against any such action until the
entry of a preliminary injunction or other final order enjoining the
completion of the transactions contemplated hereunder. Purchaser will bear
its own costs of defending against any action by a federal, state or
foreign antitrust agency.
11. Employees.
11.1 Transfer of Employees. As of 11:59 p.m., Eastern standard
time, on the day immediately preceding Closing, Boise Cascade shall
terminate its employment of all of the Employees. With respect to each
Employee terminated by Boise Cascade, Boise Cascade shall be responsible
for payment when due of all salaries, wages, commissions and bonuses earned
up to Closing. In accordance with Boise Cascade's "Termination of
Employment" policy, Boise Cascade shall not be obligated to pay any
severance benefits to any such terminated Employee who is offered
employment by Purchaser, provided, however, that Boise Cascade shall be
responsible for any claims for severance benefits by Employees arising as a
result of any termination of employment occurring on or prior to the
Closing. Boise Cascade shall reimburse the Employees for all travel
expenses and other business-related expenses arising prior to Closing and
for which they are properly entitled to reimbursement from Boise Cascade.
Purchaser shall honor the number of days of 1996 and 1997 paid vacation
which is unused as of Closing, and to which each Employee hired by
Purchaser is entitled pursuant to (a) Boise Cascade's vacation policy for
salaried employees as reflected in Schedule 11.1, or (b) any Collective
Bargaining Agreement applicable to such Employee. For purposes of
determining the amount of vacation to which Employees are entitled,
Purchaser shall treat each Employee's Service (as defined below) with Boise
Cascade as service with Purchaser.
11.2 Obligation to Hire. Effective 12:00 a.m., Eastern standard
time, on the day of Closing, Purchaser shall offer employment to each of
the Employees terminated by Boise Cascade pursuant to Section 11.1. Neither
Boise Cascade nor Purchaser shall be obligated to pay severance pay to any
Employee who rejects Purchaser's offer of employment. Purchaser shall pay
and provide wages and benefits to all bargaining unit employees of the
Business who accept employment with Purchaser and commence such employment
on the day of Closing (the "Transferred Hourly Employees") in accordance
with the terms of the applicable Collective Bargaining Agreement. All
salaried employees of the Business who accept employment with Purchaser and
commence such employment as of Closing (the "Transferred Salaried
Employees" and, together with the Transferred Hourly Employees, the
"Transferred Employees") will be included in Purchaser's benefits plans
applicable to such Employees and will be subject to Purchaser's employment
policies. Purchaser shall credit Transferred Salaried Employees and,
assuming Purchaser's ability to assume the Collective Bargaining Agreements
as contemplated by Section 10.1, Transferred Hourly Employees with their
service with Boise Cascade, and its predecessors for whom service is
treated as service with Boise Cascade under Boise Cascade's policies
(collectively "Service"), as though it had been service with the Purchaser
for purposes of benefit amount, vesting, and eligibility under Purchaser's
benefit plans and policies, provided that Purchaser shall have the right to
offset the benefit amount so provided under Purchaser's pension plans by
the amount of the benefit payable to each such Transferred Employee under
the respective Boise Cascade pension plan, provided that in no event shall
the amount of any such offset cause any Transferred Employee to fail to
accrue a benefit payable under Purchaser's plans from and after the
Closing. Boise Cascade shall treat the transactions contemplated by this
Agreement as a "partial termination" (within the meaning of Section 411 of
the Code) with respect to the Transferred Employees for purposes of any
plan of Boise Cascade that is intended to be qualified under Section 401(a)
of the Code. Purchaser shall provide coverage under its employee benefit
plans to Transferred Employees without requiring satisfaction of waiting
periods, evidence of insurability, and similar terms and conditions
applicable to participants in such plans, as though Transferred Employees
had been employees of Purchaser covered by Purchaser's plans during the
period of Boise Cascade Service.
11.3 Severance. All Transferred Salaried Employees who accept
employment with Purchaser and are subsequently terminated by Purchaser
shall receive the severance benefits from Purchaser, if any, to which they
may be entitled under Purchaser's then existing severance policies
applicable to Purchaser's employees who are similarly situated provided,
however, that Purchaser shall credit the Service the Employee has with both
Boise Cascade and Purchaser in the application of such policies.
11.4 Workers' Compensation, Medical Claims and Retirees.
11.4.1 Purchaser shall assume all liabilities arising from workers
compensation claims, whether characterized as medical or indemnity, or
arising under any other similar government-mandated programs which are
based on injuries incurred by Employees or former employees in connection
with the Business, without regard to the date of occurrence of the injury
or injuries giving rise to the workers' compensation claim; provided,
however, that Purchaser does not assume any liability for claims other than
workers' compensation claims related to such injuries.
11.4.2 Boise Cascade shall remain solely responsible in accordance
with its employee welfare benefit plans for the satisfaction of all claims
regardless of when filed (subject to claim filing requirements of such
plans), for (i) medical, dental, and vision benefits claims which relate to
services provided to Transferred Employees prior to Closing, and (ii) life
insurance, accident or disability benefits (other than workers'
compensation benefits) claims which relate to events or injuries incurred
prior to Closing. Upon Closing, Purchaser shall adopt plans for the
remainder of the 1996 calendar year providing medical, dental, and vision
benefits substantially identical to those provided by Boise Cascade, and
shall give effect under such plans to benefit elections, contributions,
copayments, and deductibles of Transferred Employees for the 1996 plan
year. Boise Cascade shall provide claims administration services for such
plans in accordance with Section 23 hereof. Subject to the approval of the
carriers, Purchaser shall also continue in full force and effect through
December 31, 1996, the programs of group term life insurance (employee and
dependent), accidental death and dismemberment insurance (employee and
dependent), accident and sickness insurance, and long-term disability
insurance covering Transferred Employees.
11.4.3 As of Closing, with respect to former and retired employees
of the Business who had terminated employment or retired on or prior to
Closing, Boise Cascade shall be liable for all liabilities and obligations
in connection with claims for benefits brought by or in respect of such
former or retired employees of the Business under any of Boise Cascade's
pension and/or welfare benefit plans, including, but not limited to, such
liabilities with respect to medical, dental, life insurance, health,
accident or disability benefits, but excluding any claims for or relating
to workers' compensation benefits. Boise Cascade will provide eligibility
for coverage under provisions of the Consolidated Omnibus Budget
Reconciliation Act ("COBRA") to employees who terminate employment with
Boise Cascade prior to 11:59 p.m. on the day immediately preceding Closing,
and will continue coverage for employees currently on COBRA coverage or
eligible to elect such coverage as of Closing. Purchaser will be solely
responsible for complying with all employer responsibilities under COBRA
after Closing with respect to all Transferred Employees.
11.5 No Third-Party Beneficiary. This Agreement is being entered
into solely for the benefit of the parties hereto, and the parties do not
intend that any Employee or any other person shall be a third-party
beneficiary of the covenants by either Boise Cascade or Purchaser contained
in this Agreement.
11.6 Workers Adjustment and Retraining Act ("WARN"). Purchaser
shall indemnify and hold Boise Cascade harmless from and against any and
all liabilities, claims and losses (including attorney's fees, court costs,
and other litigation expenses) arising under WARN Act or any state version
of WARN Act by reason of Purchaser's shutdown of any Facility or layoff of
over 50 Employees which occurs after the Closing.
11.7 Flexible Spending Account Plans. Prior to Closing, Boise
Cascade will amend the Boise Cascade Health Care Flexible Spending Account
Plan and the Boise Cascade Dependent Day Care Flexible Spending Account
Plan (collectively, the "Flex Plans"), to create new plans covering only
the Transferred Employees ("New Plans"), and Purchaser shall adopt such New
Plans and continue them in full force and effect through December 31, 1996.
Boise Cascade shall provide claims administration services for such New
Plans in accordance with the transition services agreement described in
Section 23 hereof. The Purchase Price shall be adjusted by an amount equal
to (x) the total liability for benefits under such New Plans adopted by
Purchaser, less (y) the sum of (i) the amount of Transferred Employees'
Salary Reduction Elections under such New Plans to be effective during the
remaining calendar year after the date of Closing, plus (ii) the total
amount of benefits Boise Cascade has paid (or is obligated to pay) under
such New Plans up to and including the date of Closing. The amounts treated
as either employer or employee contributions with respect to the Flex Plan
made prior to or on the date of Closing will not constitute "plan assets"
as that term is defined in ERISA and regulations thereunder, and no amounts
with respect to either employee or employer contributions under the Flex
Plans have ever been held in trust for the benefit of participants in the
Flex Plans.
11.8 Incentive Plans. Purchaser will continue in full force and
effect Boise Cascade's Incentive Plan for Hourly and certain Salaried
Employees at the Rumford Facility (the "Gain Sharing Plan") for at least
the duration of the 1996 calendar year, and shall assume all Boise
Cascade's obligations with respect to the Gain Sharing Plan, a copy of
which is set forth in Schedule 11.8. Boise Cascade will make payments to
the extent any are earned, prorated through the Closing date, in accordance
with the terms of other incentive compensation plans applicable to
Transferred Employees as though the Transferred Employees were employed by
Boise Cascade through December 31, 1996.
11.9 Non-solicitation of Employees. For a period of two years
following the Closing, Boise Cascade shall not solicit any Employee for
employment without the prior consent of Purchaser.
12. Tax Matters.
12.1 Section 338(h)(10) Election.
12.1.1 (i) Boise Cascade, Oxford and Purchaser shall jointly make
Elections (and any comparable election under state or local tax law) with
regard to each of the Companies prior to or on the Closing date; (ii) Boise
Cascade and Purchaser shall, as promptly as practicable following the
Closing date, cooperate with each other to take all actions necessary and
appropriate (including filing such forms, returns, elections, schedules and
other documents as may be required) to effect and preserve timely Elections
in accordance with the provisions of Treasury regulations promulgated under
section 338 of the Code (or any comparable provisions of state or local tax
law) or any successor provisions and (iii) Boise Cascade, Oxford and
Purchaser shall report the purchase by Purchaser of the Shares pursuant to
this Agreement consistent with the Elections (and any comparable elections
under state or local tax laws) and shall take no position inconsistent
therewith in any Tax Return, any proceeding before any taxing authority or
otherwise.
12.1.2 In connection with each Election, Purchaser shall prepare,
and Purchaser and Boise Cascade shall agree to, the determination of the
"Modified Aggregate Deemed Sales Price" (as defined under Treasury
regulation section 1.338(h)(10)-1(f)) and the allocation of each such
"Modified Aggregate Deemed Sales Price" among the assets of each respective
Company, which shall be finalized as of the Closing date, and which shall
be consistent with the Allocation contemplated by Section 3.4 hereof. The
determination of the amount of each such "Modified Aggregate Deemed Sales
Price" and the allocation thereof shall be made in accordance with section
338(b) of the Code and applicable Treasury regulations. Boise Cascade,
Oxford and Purchaser shall (i) be bound by such determination and such
allocation for purposes of determining any Taxes, (ii) prepare and file,
and cause their affiliates to prepare and file, Tax Returns on a basis
consistent with each such determination of the "Modified Aggregate Deemed
Sales Price" and each such allocation and (iii) take no position, and cause
their affiliates to take no position, inconsistent with any such
determination or allocation on any applicable Tax Return, in any proceeding
before any taxing authority or otherwise. In the event that any such
allocation and/or determination is disputed by any taxing authority, the
party receiving notice of the dispute shall promptly notify the other party
hereto concerning resolution of the dispute.
12.1.3 As a result of the Election to be made with respect to
Rumford Cogen, the basis of the property owned by RCC shall be adjusted in
the manner provided in section 743 of the Code pursuant to the election
under section 754 of the Code that has been filed by RCC and the income or
loss of RCC for the taxable year in which the Closing occurs, as it
pertains to Rumford Cogen, shall be allocated based on the interim-closing-
of-the-books method pursuant to section 706(c) of the Code and treasury
regulations promulgated thereunder.
12.2 Tax Return Filing and Payment of Taxes Responsibility.
12.2.1 Boise Cascade shall (i) prepare and file, or cause to be
prepared and filed, on a timely basis (in each case, at its sole cost and
expense) all Tax Returns with respect to the Companies or otherwise
relating to the Assets or the Business for all taxable periods ending on or
before the Closing date (the "Pre-Closing Returns") and (ii) pay, or cause
to be paid, all Taxes shown to be due on such Pre-Closing Returns.
12.2.2 The Purchaser shall (i) prepare and file, or cause to be
prepared and filed, on a timely basis (in each case, at its sole cost and
expense) all other Tax Returns for all taxable periods ending after the
Closing date with respect to the Companies or otherwise relating to the
Assets or to the Business including Straddle Period Returns, and (ii) pay,
or cause to be paid, all Taxes shown to be due on such Tax Returns.
12.2.3 In connection with any Straddle Period Return, Boise Cascade
shall be liable for and shall pay, or cause to be paid, any Taxes for which
Boise Cascade has agreed to indemnify the Purchaser pursuant to Section
12.4 hereof. The Purchaser shall provide Boise Cascade with copies of any
Straddle Period Returns at least twenty (20) days prior to the due date
thereof (giving effect to any extensions thereto), accompanied by a
statement calculating in reasonable detail the Boise Cascade
indemnification obligation pursuant to Section 12.4 hereof (the "Tax
Indemnification Obligation"). Boise Cascade shall pay, or cause to be paid,
to the Purchaser the amount of the Tax Indemnification Obligation within
ten (10) days of receiving copies of the Straddle Period Returns (the
"Boise Cascade Preliminary Tax Payment"). If Boise Cascade objects to the
determination of the Tax Indemnification Obligation, the Purchaser and
Boise Cascade shall use reasonable efforts to resolve such dispute, but if
a final resolution is not obtained within fifteen (15) days, the dispute
shall be submitted to the Independent Accountants with instructions that
such Independent Accountants render a determination with respect to the
dispute within thirty (30) days. The determination of the Independent
Accountants shall be conclusive and binding upon the parties in the manner
and to the same effect as a binding arbitration award. All costs and
expenses incurred relating to the engagement of the Independent Accountants
shall be shared equally by Boise Cascade and the Purchaser. If the Tax
Indemnification Obligation, as finally determined, exceeds the amount of
the Boise Cascade Preliminary Tax Payment, Boise Cascade shall promptly
pay, or cause to be paid, the amount of such excess to the Purchaser. If
the Tax Indemnification Obligation, as finally determined, is less than the
amount of the Boise Cascade Preliminary Tax Payment, the Purchaser shall
promptly refund the amount of such deficiency to Boise Cascade.
12.2.4 Boise Cascade, Oxford and the Purchaser shall reasonably
cooperate, and shall cause their respective affiliates, officers,
employees, agents, auditors and representatives reasonably to cooperate, in
preparing and filing all Tax Returns (including amended returns and claims
for refund), including the issuance of a power of attorney and maintaining
and making available to each other all records necessary in connection with
Taxes and in resolving all disputes and audits with respect to all taxable
periods relating to Taxes.
12.3 Transfer and Similar Taxes. Notwithstanding any other
provision of this Agreement to the contrary, all sales (including, without
limitation, bulk sales), use, transfer, gains, stamp, duties, recording and
similar Taxes ("Transfer Taxes") incurred in connection with the
transactions contemplated by this Agreement shall be shared equally by
Boise Cascade and Oxford, on the one hand, and the Purchaser, on the other.
The party charged by law with the duty of making the necessary filings and
returns with respect to such Transfer Taxes shall do so in accordance with
applicable law and that party shall be reimbursed accordingly.
12.4 Tax Indemnification.
12.4.1 Notwithstanding anything in this Agreement to the contrary
and except as provided in Section 5.1.1, 12.3, and 12.4.2 hereof, Boise
Cascade shall indemnify the Purchaser and its affiliates and hold them
harmless from and against (i) any liability for Taxes of the Companies or
otherwise relating to the Assets or Business for all taxable periods ending
on or before the Closing date and for the Pre-Closing Period, (ii) any
liability for Taxes which result from (A) the deemed sale of assets
pursuant to the Elections, and (B) the deemed sale of assets pursuant to
any comparable elections under state or local tax laws and (iii) any
liability for Taxes imposed upon either of the Companies pursuant to
Treasury Regulation section 1.1502-6 as a result of being a member of the
affiliated group, within the meaning of section 1504 of the Code, of which
the Boise Cascade and Oxford are members.
12.4.2 Notwithstanding anything in this Agreement to the contrary,
the Purchaser shall indemnify Boise Cascade and its affiliates and hold
them harmless from and against (i) any liability for Taxes of the Companies
or otherwise relating to the Assets or Business for any taxable period
ending after the Closing date (except to the extent such taxable period
began before the Closing date, in which case the Purchaser's indemnity will
cover only that portion of any such Taxes that is not attributable to the
Pre-Closing Period) and (ii) any liability for real and personal property
Taxes accrued on the Final Closing Statement subject to any adjustment made
pursuant to Section 4.3 hereof.
12.4.3 In the case of any Straddle Period, the determination of the
liability for Taxes for the Pre-Closing Period shall be accrued on the
Final Closing Statement on an interim-closing-of-the-books basis as if such
taxable period ended on and included the Closing date, except that (i) all
standard deductions, exemptions, allowances and other similar items shall
be apportioned to the Pre-Closing Period on a per diem basis and (ii) real
and personal property Taxes shall be apportioned between Boise Cascade and
the Purchaser in accordance with the principles under section 164(d) of the
Code.
12.5 Procedures Relating to Indemnification of Tax Claims.
12.5.1 If a claim for Taxes is made or a notice of an audit is
issued by any taxing authority in writing, which, if successful, might
result in an indemnity payment pursuant to Section 12.4, the party seeking
indemnification (the "Tax Indemnified Party") shall promptly notify the
other party (the "Tax Indemnifying Party") in writing of such claim (a "Tax
Claim") within a reasonably sufficient period of time to allow the Tax
Indemnifying Party effectively to contest such Tax Claim, and in reasonable
detail to apprise the Tax Indemnifying Party of the nature of the Tax
Claim, and provide copies of all correspondence and documents received by
it from the relevant taxing authority. Failure to give prompt notice of a
Tax Claim hereunder shall not affect the Tax Indemnifying Party's
obligation under Section 12.4, except to the extent that the Tax
Indemnifying Party is materially prejudiced by such failure to give prompt
notice.
12.5.2 With respect to any Tax Claim which might result in an
indemnity payment to the Purchaser pursuant to Section 12.4 (including,
without limitation, Taxes relating to a Straddle Period), Boise Cascade
shall control all proceedings taken in connection with such Tax Claim and,
without limiting the foregoing, may in its sole discretion and at its sole
expense pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with any taxing authority with respect thereto,
and may, in its sole discretion, either pay the Tax claimed and sue for a
refund where applicable law permits such refund suits or contest such Tax
Claim. Boise Cascade shall not under any circumstances settle or otherwise
compromise any Tax Claim referred to in the preceding sentence without the
Purchaser's prior written consent not to be unreasonably withheld. In
connection with any proceeding taken in connection with such Tax Claim, (i)
Boise Cascade shall keep the Purchaser informed of all material
developments and events relating to such Tax Claim if involving a material
liability for Taxes and (ii) the Purchaser shall have the right to
participate, at its sole expense, in (but not control) any such
proceedings. The Purchaser shall cooperate with Boise Cascade in contesting
such Tax Claim, which cooperation shall include, without limitation, the
issuance of a power of attorney, the provision to Boise Cascade of records
and information which are reasonably relevant to such Tax Claim, and making
employees available to provide additional information or explanation of any
material provided hereunder or to testify at proceedings relating to such
Tax Claim. In connection with such cooperation, Boise Cascade shall
reimburse Purchaser for any out-of-pocket expenses incurred with respect
thereto.
12.5.3 With respect to any Tax Claim not described in the preceding
paragraph which might result in an indemnity payment to Boise Cascade
pursuant to Section 12.4, the Purchaser shall control all proceedings in
accordance with provisions that are parallel to those in Section 12.5.2.
12.6 Refunds and Credits. Any refunds and credits of Taxes of any
of the Companies or otherwise relating to the Assets or the Business with
respect to (i) any taxable period ending on or before the Closing date
shall be for the account of Boise Cascade, and if received or utilized by
the Purchaser or any of its affiliates, shall be paid to Boise Cascade
within five (5) business days after the Purchaser or any of its affiliates
receives such refund or utilizes such credit, (ii) any taxable period
beginning after the Closing date shall be for the account of the Purchaser,
and if received or utilized by Boise Cascade, or any of its affiliates,
shall be paid by Boise Cascade to the Purchaser within five (5) business
days after Boise Cascade, or any of its affiliates, receives such refund or
utilizes such credit, (iii) any Straddle Period shall be apportioned
between Boise Cascade and the Purchaser in the same manner as such Taxes
originally had been allocated pursuant to Sections 12.1.3 and 12.4.3 hereof
and (iv) any Election (and any comparable elections under state or local
tax laws) shall be for the account of Boise Cascade, and if received or
utilized by the Purchaser, any of its affiliates or either of the Companies
shall be paid to Boise Cascade within five (5) business days after
Purchaser, any of its affiliates or either of the Companies receives such
refund or utilizes such credit.
12.7 Termination of Tax Sharing Agreements. On or prior to the
Closing date, all tax sharing agreements and similar arrangements to which
either of the Companies is a party or otherwise relating to the Assets or
the Business shall be terminated, all obligations thereunder shall be
settled, and no additional payments shall be made under any thereof after
the Closing date.
12.8 Employee Payroll Information. Boise Cascade and Oxford shall
transfer to the Purchaser any records relating to withholding and payment
of income and unemployment Taxes (federal, state and local) and FICA Taxes
with respect to wages paid to Transferred Employees by Boise Cascade and
Oxford during the calendar year in which the Closing occurs (including,
without limitation, Forms W-4, Employee's Withholding Allowance
Certificate). The Purchaser shall provide the Transferred Employees with
Forms W-2, Wage and Tax Statement, for such calendar year setting forth the
wages paid and Taxes withheld with respect to the Transferred Employees for
the calendar year in which the Closing occurs by Boise Cascade and Oxford
and the Purchaser as predecessor and successor employers, respectively, as
provided by Revenue Procedure 84-77.
12.9 Survival of Tax Provisions. Any claim to be made pursuant to
this Section 12 must be made before the expiration (with valid extensions)
of the applicable statute of limitations relating to the Taxes at issue.
13. Risk of Loss. If any loss or damage is suffered prior to
Closing to any portion of the Assets which is not material, Boise Cascade
shall at its sole cost and expense repair or replace such damaged or lost
assets as soon as reasonably practicable and the Closing shall proceed
without delay or adjustment to the Purchase Price on account of such loss
or damage. Purchaser shall not, in such event, be entitled to or have any
claim against the proceeds of insurance held by Boise Cascade covering such
loss. If any of the Assets which are not material are condemned prior to
Closing, Closing shall proceed without delay or adjustment of the Purchase
Price, provided that Boise Cascade shall deliver the condemnation proceeds
to Purchaser or if such condemnation proceedings have not been concluded
prior to Closing, Boise Cascade shall at Closing assign its rights in such
proceeding to Purchaser. For purposes of this Section 13, "material" shall
mean Assets lost, damaged, or condemned with a book value greater than
$65,000,000 or materially affecting the operations of the Rumford Facility.
14. Closing and Termination.
14.1 Closing. The Closing shall occur at 10:00 a.m., Mountain
standard time, on November 26, 1996, at the offices of Boise Cascade, 1111
West Jefferson Street, Boise, Idaho 83728-0001, or at such other time and
place as Purchaser and Boise Cascade mutually agree upon in writing. If
Closing does not occur on November 26, 1996, or any other date agreed upon
by the parties, because one or more conditions precedent are not satisfied,
then in such event the Closing shall be delayed to a later date agreed upon
by the parties, and if the parties are unable to agree upon such a date, it
shall be the first business day which is at least 10 days after the day all
of the conditions precedent are satisfied.
14.2 Termination. This Agreement may be terminated at any time
prior to the Closing as follows, and in no other manner:
14.2.1 By mutual consent of Purchaser and Boise Cascade;
14.2.2 By either Boise Cascade or the Purchaser, if, through no
fault of the party seeking termination, the Closing shall not have occurred
on or prior to June 30, 1997.
14.2.3 By either Boise Cascade or the Purchaser if any court or
governmental body having competent jurisdiction shall have issued a
preliminary injunction or other similar or final order enjoining the
transactions contemplated hereby.
14.2.4 By Purchaser in the event any representation or warranty
made herein for the benefit of Purchaser, or in any certificate, schedule
or documents furnished to Purchaser, pursuant to this Agreement is untrue
in any material respect, or Boise Cascade shall have defaulted in any
material respect in the performance of any material obligation under this
Agreement, which breach or default has not been cured within 10 days (or
such longer period as is reasonably necessary to cure such breach or
default) after notice of such breach or default;
14.2.5 By Boise Cascade at any time prior to Closing if any
representation or warranty made herein for the benefit of Boise Cascade, or
in any certificate, schedule, or documents furnished to Boise Cascade,
pursuant to this Agreement is untrue in any material respect, or Purchaser
shall have defaulted in any material respect in the performance of any
material obligation under this Agreement, which breach or default has not
been cured within 10 days (or such longer period as is reasonably necessary
to cure such breach or default) after notice of such breach or default.
14.3 Effect of Termination. In the event of the termination of this
Agreement as provided in Section 14.2, written notice thereof shall
forthwith be given by the terminating party or parties to the other party
or parties specifying the provision hereof pursuant to which such
termination is made, and this Agreement shall forthwith become null and
void, and there shall be no liability on the part of Boise Cascade, Oxford
or the Purchaser; provided that nothing herein shall relieve any party from
any liability or obligation with respect to any willful breach of this
Agreement.
15. Conditions Precedent to Closing.
15.1 Purchaser. Purchaser shall have no obligation to attend and
carry out the actions required of it at the Closing unless all of the
following conditions precedent shall have been satisfied:
15.1.1 Continued Truth of Representations and Warranties. All the
representations and warranties of Boise Cascade and Oxford contained in
this Agreement shall continue to be true and correct at the Closing in all
material respects as if made on and as of the Closing.
15.1.2 Performance of Obligations. Boise Cascade shall have
performed or tendered performance of each and every one of its obligations
hereunder which by its terms is to be performed at or prior to Closing.
15.1.3 Delivery of Closing Documents. Boise Cascade and Oxford
shall have tendered delivery to Purchaser of all of the documents required
to be delivered under Section 16.1 hereof to Purchaser by it at Closing.
15.1.4 Third-Party Consents. Boise Cascade shall have obtained and
delivered to Purchaser the required consents, if any, to the assignment of
those Contracts and Facility Leases listed on Schedule 6.2.1.
15.1.5 Legal Proceedings. No order shall have been entered and not
vacated by or before any court, administrative agency or other governmental
authority to restrain, prohibit or invalidate any of the transactions
contemplated by this Agreement. No action, suit, proceeding or
investigation by any administrative agency or other governmental authority
regarding the transactions contemplated by this Agreement shall have been
instituted and be continuing.
15.1.6 Condemnation. No material (as defined in Section 13 hereof)
portion of the Assets have been destroyed or are threatened with or subject
to any condemnation proceeding.
15.1.7 Permits and Governmental Consents. All material permits and
licenses required for the operation of the Business shall have been
obtained by Purchaser or transferred to or reissued in Purchaser's name and
all material consents and approvals of any federal, state, county, local,
or other governmental or regulatory body required for any of the execution,
delivery, or performance of this Agreement shall have been obtained, except
for any such permit, license, consent, or approval which is routinely and
customarily given or granted or issued in connection with similar
transactions by the governmental entity empowered to do so after the
transaction has closed.
15.1.8 HSR Filing. The applicable waiting period under the HSR Act
with respect to the actions contemplated by this Agreement shall have
expired or been earlier terminated.
15.1.9 Environmental Assessment. Purchaser shall have completed its
Environmental Assessment.
15.2 Boise Cascade. Boise Cascade shall have no obligation to
attend and carry out the actions required of it at the Closing unless all
of the following conditions precedent shall have been satisfied:
15.2.1 Continued Truth of Representations and Warranties. All the
representations and warranties of Purchaser contained herein shall continue
to be true and correct as of the Closing in all material respects as if
made on and as of the Closing date.
15.2.2 Performance of Obligations. Purchaser shall have
substantially performed or tendered substantial performance of each and
every one of its obligations hereunder which by its terms is to be
performed at or prior to the Closing.
15.2.3 Delivery of Closing Documents. Purchaser shall have tendered
delivery to Boise Cascade of all the documents and payments required to be
delivered under Section 17.1 hereof to Boise Cascade by it at the Closing
pursuant to this Agreement.
15.2.4 Legal Proceedings. No order shall have been entered and not
vacated by or before any court, administrative agency or other governmental
authority to restrain, prohibit or invalidate any of the transactions
contemplated by this Agreement.
15.2.5 HSR Filing. The applicable waiting period under the HSR Act
with respect to the actions contemplated by this Agreement shall have
expired or been earlier terminated.
16. Items to be Delivered by Boise Cascade.
16.1 Closing. At Closing, Boise Cascade shall deliver the following
items to Purchaser:
16.1.1 Title Certificates. A certificate of title for each
registered motor vehicle held by Boise Cascade or Oxford.
16.1.2 Opinion of Counsel. The opinion of J. W. Holleran, Senior
Vice President and General Counsel of Boise Cascade, to the effect that:
16.1.2.1 Organization. Boise Cascade, Oxford, Rumford Falls, and
Rumford Cogen are corporations duly organized, validly existing and in good
standing under the laws of their respective states of incorporation and
that they are qualified or licensed to do business in all states in which
they operate the Business;
16.1.2.2 Authority. Boise Cascade and Oxford's execution and
performance of this Agreement have been duly authorized by all necessary
corporate action, and this Agreement and each certificate and document to
be executed and delivered by it hereunder at or prior to the Closing are
valid, legally binding obligations of Boise Cascade and Oxford, enforceable
against Boise Cascade and Oxford in accordance with their terms and
conditions except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
enforcement of creditors' rights generally and by general principles of
equity (whether applied in a proceeding at law or in equity);
16.1.2.3 Absence of Conflict. None of the execution, delivery, or
the performance of this Agreement constitutes a breach of or allows for the
acceleration of the rights of any party under any material contract, loan
agreement, note, security agreement, lease, indenture or other agreement to
which any of the Entities, or, to the best knowledge of such counsel, RCC
is a party or any provision of Boise Cascade and Oxford's articles of
incorporation, bylaws, or any of the standing resolutions of its board of
directors; and
16.1.2.4 Litigation. None of the Entities, Androscoggin, or Gulf
Island are a party to any lawsuit or administrative proceeding, nor, to the
best of counsel's knowledge, has any person threatened to commence any
lawsuit or administrative proceeding against any of the Entities,
Androscoggin, or Gulf Island except for pending or threatened lawsuits in
respect of Boise Cascade or its subsidiaries which do not seek to prohibit
or restrain the transactions provided for in this Agreement or call into
question the title to any of the Assets.
16.1.3 Certified Resolution. A copy of the resolutions of the Board
of Directors of Boise Cascade and Oxford authorizing the execution and
performance of this Agreement, certified by the Secretary or an Assistant
Secretary of Boise Cascade and Oxford;
16.1.4 Representations and Warranties. A certificate signed by an
officer of Boise Cascade to the effect that (i) all of the representations
and warranties of Boise Cascade and Oxford contained herein are true and
correct in all material respects as of Closing as if made on and as of the
date thereof; and (ii) Boise Cascade and Oxford have performed and complied
with or tendered performance of all of its covenants and agreements
contained herein which by their terms are to be performed or complied with
prior to or as of Closing;
16.1.5 Consents to Assignment. All consents, opinions of counsel,
and other third-party action Boise Cascade is required to obtain with
respect to the Contracts and Facility Leases listed in Schedule 6.2.1;
16.1.6 Assignments. Such assignments, bills of sale and other
instruments of conveyance as may be required to convey the Assets from
Boise Cascade or Oxford to Purchaser;
16.1.7 Deeds. Deeds in recordable form to the Realty and
Timberlands;
16.1.8 FIRPTA Certificate. A duly executed affidavit of non-foreign
status by each of Boise Cascade and Oxford described in Section 1445 of the
Code; and
16.1.9 Forms 8023. For each of the Companies, duly completed
Internal Revenue Service Forms 8023 (Corporate Qualified Stock Purchase
Elections) which are signed by an appropriate officer of the Purchaser,
Boise Cascade and Oxford.
16.1.10 Additional Items. Such additional documents, instruments,
and other items as counsel for Purchaser may reasonably request.
17. Items to be Delivered at Closing by Purchaser.
17.1 At Closing, Purchaser shall deliver the following items to
Boise Cascade:
17.1.1 Certified Resolutions. A copy of the resolutions of the
boards of directors of Purchaser and Purchaser Parent authorizing the
execution and performance of this Agreement certified by the secretary or
an assistant secretary of Purchaser and Purchaser Parent respectively;
17.1.2 Representations and Warranties. A certificate signed by an
officer of Purchaser to the effect that (i) all of the representations and
warranties of Purchaser contained in this Agreement are true and correct in
all material respects as of Closing as if made on and as of Closing; and
(ii) Purchaser has performed and complied with all of its covenants and
agreements contained herein which by their terms are to be performed or
complied with prior to Closing;
17.1.3 Opinion of Counsel. An opinion of Thomas E. Palmer, Vice
President and General Counsel of Purchaser Parent, to the effect that:
17.1.3.1 Organization. Purchaser is a corporation duly organized,
validly existing, and in good standing under the laws of the state of
Delaware, and the Purchaser Parent is a corporation organized and existing
in good standing under the laws of the state of Ohio;
17.1.3.2 Authorization. The execution, delivery, and performance of
this Agreement by Purchaser and Purchaser Parent have been duly authorized
by requisite corporate action lawfully and duly taken and that this
Agreement is a valid, legally binding obligation of Purchaser and Purchaser
Parent, enforceable against each of them in accordance with its terms and
conditions except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
enforcement of creditors' rights generally and by general principles of
equity (whether applied in a proceeding at law or in equity);
17.1.3.3 Absence of Conflict. None of the execution, delivery, or
performance of this Agreement by Purchaser and Purchaser Parent constitutes
a breach of, or allows for the acceleration of the rights of any party
under, any material contract, loan agreement, note, security agreement,
lease, indenture, or other agreement to which Purchaser or Purchaser Parent
is a party or any provision of their respective articles of incorporation,
bylaws, or any of the standing resolutions of their boards of directors;
and
17.1.3.4 Litigation. Neither Purchaser nor Purchaser Parent is a
party to any lawsuit or administrative proceeding, nor, to the best of such
counsel's knowledge, has any person threatened to commence any lawsuit or
administrative proceeding against Purchaser or Purchaser Parent, except for
pending or threatened lawsuits in respect of Purchaser or Purchaser Parent,
which do not seek to prohibit or restrain the transactions provided for in
this Agreement.
17.1.4 Purchase Price. The preliminary Purchase Price payment; and
17.1.5 Additional Items. Such additional documents, instruments,
and other items as counsel for Boise Cascade may reasonably request.
18. Press Releases. No press release or other public statement
regarding this Agreement or the contents hereof shall be made by either
party hereto without prior consultation with the other party except as may
be necessary in the opinion of its counsel for each party to meet the
requirements or regulations of any applicable law, governmental unit, or
agency or stock exchange in which the securities of such party may be
listed, in which event, the party required to make the release or statement
shall advise the other party of its intention to make a release or
statement and shall provide a copy of the proposed release prior to its
public release.
19. Claims and Litigation.
19.1 Scope of Representations and Warranties. EXCEPT AS AND TO THE
EXTENT SPECIFICALLY SET FORTH IN THIS AGREEMENT OR ANY SCHEDULE, EXHIBIT OR
ANY DOCUMENT OR POLICY ATTACHED AS A SCHEDULE OR EXHIBIT HERETO, OR ANY OF
THE DOCUMENTS DELIVERED AT THE CLOSING, THE ENTITIES HEREBY DISCLAIM ALL
OTHER REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS, IMPLIED, OR
STATUTORY, IN CONNECTION WITH THE ASSETS, OR THE BUSINESS, INCLUDING BUT
NOT LIMITED TO (i) THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE; (ii) ANY OPINION, INFORMATION OR ADVICE BY ANY
OFFICER, DIRECTOR, EMPLOYEE, AGENT, CONSULTANT, OR REPRESENTATIVE OF BOISE
CASCADE IN CONNECTION WITH THE NEGOTIATIONS OF THIS TRANSACTION; OR (iii)
ANY BUSINESS OR MARKETING PLANS, STRATEGIES, OR BUDGETS THAT MAY HAVE BEEN
OR MAY BE REVIEWED OR DISCOVERED BY PURCHASER DURING ITS EXAMINATION OF THE
BUSINESS.
19.2 Survival of Representations and Warranties. The respective
representations and warranties of Boise Cascade and Oxford contained herein
shall survive for a period of two years after Closing except that their
representations and warranties relating to environmental or tax matters
shall survive until the expiration of the applicable statutes of
limitations, including any extensions thereof. Purchaser's representations
and warranties set forth herein shall survive Closing for a period of two
years after Closing. At the end of the applicable survival period set forth
above, Boise Cascade or Purchaser, as the case may be, shall, without
further action as to such representations and warranties, be deemed to have
fully released each other from any and all responsibilities arising
thereunder unless during such period the one party shall have notified the
other party in writing of the nature and particulars of any claim breached
by the other party and that party's intent to seek an award for damages or
other available remedies for such breach. Nothing in the preceding sentence
shall constitute a waiver or release of rights Purchaser may have under
applicable law (without regard to the content of this Agreement) against
Boise Cascade for contamination of any of the Realty or Timberlands, any
improvement thereto, or any adjoining realty with a Hazardous Material as
heretofore defined.
19.3 Indemnification by Boise Cascade. Except for Environmental
Liabilities and Costs (which shall be governed by Section 19.4), Boise
Cascade, from and after the Closing, shall indemnify and hold Purchaser and
its affiliates and any of their respective officers, directors, and
employees harmless from and against any and all liabilities, claims for
personal injury or property damages, and losses (including all related
claims for legal fees, costs, and expenses in connection therewith)
asserted by an unrelated third party ("Claims") which are suffered or
incurred by Purchaser with respect to (i) any Claims arising out of any
event or events occurring prior to Closing and related to Boise Cascade's
operation of the Assets or the Business other than the Assumed Liabilities;
(ii) any Claims arising out of the noncompliance by Boise Cascade with the
bulk sales laws of any state in which all or any part of Assets are located
with respect to the transfer thereof hereunder; (iii) any debts,
liabilities or obligations of Boise Cascade and Oxford whether or not
related to the Business other than Assumed Liabilities; (iv) any Claims by
any Employee who rejects Purchaser's offer of employment in respect of the
termination of such Employee's employment with Boise Cascade, so long as
such offer of employment meets the requirements of this Agreement; and (v)
fines and penalties for violations of the Occupational Safety and Health
Act, 29 U.S.C. Section 651, et seq. or similar state statute, which arises
out of Boise Cascade's or Oxford's operation of the Business.
19.4 Environmental Indemnification by Boise Cascade.
19.4.1 During the Operating Period. Boise Cascade hereby agrees to
defend, indemnify and hold harmless Purchaser and its successors, assigns
and affiliates from and against any and all Environmental Liabilities and
Costs, resulting from, arising out of or otherwise relating to:
(a) Any misrepresentation or breach of warranty, agreement or
undertaking hereunder on the part of Boise Cascade, and any undertaking or
other agreement or oblig ation hereunder;
(b) All penalties and fines and the costs of defending, settling,
or otherwise disposing of such actions resulting from Boise Cascade's
operation of the Business prior to Closing due to violation of
Environmental Laws and all laws relating to endangered or threatened
species of fish, wildlife, and plants and the management or use of natural
resources; or
(c) Any Release of Hazardous Material that occurred during the
Operating Period.
19.4.2 During and After the Operating Period. To the extent that
Cleanup is required or undertaken of Hazardous Materials Released both
during the Operating Period and after the Operating Period, liability for
such Cleanup shall be equitably allocated between Boise Cascade and
Purchaser based on the type and estimated quantity of such Releases, or if
those are not known or reasonably determinable, the time period during
which such Releases took place. In such an equitable allocation, Boise
Cascade shall be responsible for Releases during the Operating Period and
Purchaser for Releases after the Operating Period. Boise Cascade and
Purchaser acknowledge that any Releases discovered by Purchaser within six
months following the Closing and which commenced both during the Operating
Period and prior to the Closing shall be deemed to have occurred entirely
during the Operating Period, unless Purchaser failed or fails to take
steps, to the extent reasonably practicable, to prevent the spread or
migration of such a Release.
19.5 Indemnification by Purchaser. Purchaser, from and after the
Closing, shall indemnify and hold Boise Cascade and its officers,
directors, and employees harmless from and against any and all Claims
suffered or incurred by Boise Cascade with respect to (i) any Claims
arising out Purchaser's conduct of the Business from and after Closing;
(ii) any failure by Purchaser to fully and completely discharge any portion
of the Assumed Liabilities; and (iii) any Claims by any Employee hired by
Purchaser who is subsequently terminated by Purchaser except to the extent
that such claim relates to specific acts of Boise Cascade, its agents or
employees, which are unrelated to the termination.
19.6 Limitation of Liability. Notwithstanding any other term or
condition of this Agreement, neither Boise Cascade nor Purchaser shall be
liable to the other party with respect to any claims under Section 6 or
Section 7 hereof until the aggregate direct damages arising from breaches
of the representations and warranties set forth in Sections 6 and 7,
suffered or incurred by such other party hereto exceeds $500,000, (except
that, with respect to claims under Sections 6.17 and 19.4 hereof, the
threshold shall be $250,000 and shall not be included in the $500,000
threshold and with respect to Sections 6.4 and 12.4, the threshold will be
$0) whereupon such other party shall be entitled to indemnification
hereunder for the aggregate damages suffered by such other party with
respect to the Claims to the extent they exceed $500,000, $250,000, or $0,
as the case may be. In calculating any amount to be paid by Boise Cascade
or Purchaser pursuant to this Section 19.6, such amount shall be reduced by
all insurance proceeds, and other reimbursements (but excluding any
calculation of the tax effect of the loss or injury involved) actually
received by the other party hereto and relating to such damages and each
party waives the rights of subrogation that the issuer of any such
insurance or other reimbursing entity may have against the other party in
respect of such Claim. If the damages suffered by Purchaser arising from a
claim based upon a breach of or inaccuracy in any of the representations
and warranties of the Entities set forth in Section 6 hereof is also a
debt, liability or obligation of any of the Entities which Purchaser has
not assumed as an Assumed Liability, then the limitations set forth in this
Section 19.6 (irrespective of whether such matter is disclosed hereunder)
shall not apply or restrict Purchaser's right to indemnification. Neither
party shall be liable for incidental, indirect, special, collateral,
consequential, exemplary or punitive damages arising out of any breach of
any representation or warranty under this Agreement.
19.7 Procedure. In the event that, from and after Closing, a third
person asserts any Claim against Boise Cascade, Purchaser, or any other
person entitled to indemnity pursuant to Section 19.3, 19.4, or 19.5 with
respect to any matter to which the foregoing indemnities relate, other than
any Tax Indemnity pursuant to Section 12.4, the party hereto against whom
the Claim is asserted (the "Indemnified Party") shall give prompt notice to
the other party (the "Indemnifying Party") and the Indemnifying Party shall
take over the defense or settlement of such Claim at its own expense by
giving prompt written notice to the Indemnified Party, provided that such
written notification shall expressly acknowledge the Indemnifying Party's
responsibility to indemnify and hold the Indemnified Party harmless from
and against such third-party Claim. The parties hereto shall cooperate in
defending any such third-party Claim and the defending party hereto shall
have reasonable access to the books and records in the possession or
control of the other party hereto which are pertinent to the defense.
19.8 Release of Hazardous Material Claims. In the event that
Purchaser seeks indemnity for any Claim which arises from the Release of a
Hazardous Material on any parcel of the Realty or the Timberlands,
Purchaser: (i) shall give Boise Cascade prompt notice of its discovery of
such Claim; and (ii) if Purchaser's good faith estimate of the cost of
Cleanup in respect of such claim is more than $1,000,000 (a "Large
Cleanup"), it shall afford Boise Cascade a right to manage and control the
Cleanup of the Release giving rise to such claim which shall include the
negotiation and settlement of any fines or penalties associated therewith.
In connection with the conduct of a Large Cleanup, Boise Cascade shall (i)
provide Purchaser with current information on the progress of the Cleanup;
(ii) allow Purchaser to comment on the plans developed therefor as they are
developed from time to time; (iii) not take actions which materially or
substantially impair the operation of the Facility at which such Release
occurred; (iv) not have any authority to commit Purchaser to any consent
decree or other settlement arrangement with a third party which requires
any action other than a payment of money which shall be supplied by Boise
Cascade; and (v) provide Purchaser, prior to beginning work on the affected
Realty or Timberlands, with an indemnity and insurance coverage as set
forth in Schedule 19.8 hereof. Notwithstanding the foregoing, Purchaser
may, at its option, in connection with any Large Cleanup, elect to manage
and control the Cleanup itself, in which event it shall bear 10% of the
Cost of Cleanup resulting therefrom. In the event of such election,
Purchaser shall (i) provide Boise Cascade with current information on the
progress of the Cleanup; and (ii) allow Boise Cascade the right to comment
upon the plans therefor as they are developed from time to time.
19.9 Litigation Assistance. Boise Cascade and Purchaser shall make
reasonably available to one another the services of any of their respective
employees who have knowledge of facts involved in any proceeding or
litigation, threatened or actual, to which Boise Cascade or Purchaser is,
or is likely to become, a party and which arises out of Boise Cascade's
conduct of the Business prior to Closing or the provision of any services
or sale of goods after Closing which, in any way, relate to any inventory
on hand at Closing. Such employees shall be made available for purposes of
testimony and assistance to their respective attorneys, insurers, and other
agents of Boise Cascade or Purchaser, as the case may be, and for
evaluation of and preparation for trial, arbitration, or other resolution
of litigation. The party requiring that employees be made available in
accordance with this Section shall reimburse the employing party for
reasonable expenses including the cost of travel, food, and lodging.
19.10 Treatment of Indemnification Payments. Any indemnification
payment made pursuant to this Agreement by Boise Cascade to the Purchaser
or by the Purchaser to Boise Cascade, as the case may be, shall be treated
as a Purchase Price adjustment for all Tax purposes.
19.11 Presumption of Sale. Any product liability claim for injury
or damages or product warranty claim from products manufactured at the
Rumford Facility from and after the Closing, shall be a claim for which
Purchaser is responsible. Any product liability claim for injury or damages
or product warranty claims from products manufactured at the Rumford
Facility prior to the Closing shall be a claim for which Boise Cascade is
responsible. As of the Closing, Purchaser shall substitute its label for
Boise Cascade's on all products manufactured by Purchaser at the Rumford
Facility.
19.12 Preservation of Records. Title to all records of Boise
Cascade pertaining primarily to the Business, including, without
limitation, property records, engineering records, purchasing and sales
records, personnel and payroll records, accounting and financial books and
records, customer and vendor lists and records, and any and all other
warehouse and/or office books and records of the Business ("Records") shall
be transferred to Purchaser at Closing. Notwithstanding the foregoing
provision, ownership and possession of all accounting and financial records
of the Business located in Boise, Idaho, which are necessary to prepare
consolidated financial statements or income tax returns for Boise Cascade
("Accounting Records") shall be retained by Boise Cascade. Purchaser and
Boise Cascade shall, respectively, maintain the Records and the Accounting
Records for the lesser of seven years or the standard retention policy of
the holder, provided that no Records or Accounting Records shall be
destroyed unless the holder provides the other party hereunder with at
least 90 days' prior written notice. Upon receipt of notice of destruction,
the nonholder shall have the option, at its sole cost and expense, to take
possession of the records set for destruction, in which case the nonholder
shall assume all further cost of storage and destruction of such records.
20. Costs. Each party agrees that to the extent that it has
heretofore utilized or subsequently utilizes the services of any
accountant, attorney, broker, finder, economist, investment banker, or
other similar firm or individual in connection with this transaction, it
will pay the fee of such firm or individual.
21. Corporate Identification. As of the Closing, Boise Cascade
shall be deemed to have assigned the trade name "Oxford Paper Company," and
any and all related trade names, to the Purchaser and, in connection with
the Closing, shall change the corporate name of Oxford. Except as otherwise
provided herein, Purchaser shall disassociate the trade names "Boise
Cascade" and the trademark "[GRAPHIC OMITTED]" (collectively the Reserved
Identification") as soon after the Closing as is practicable but in any
event no later than one year after Closing. If Purchaser is unable to meet
any of the following requirements within that time, Purchaser shall provide
to Boise Cascade the written explanation for the delay and a timetable for
completion of the requirements and any such reasonable explanation shall
not result in a default. To this end, the following actions shall be taken
by Purchaser:
21.1 Motor Vehicles. Within 120 days from the date of Closing,
Purchaser shall repaint all motor vehicles acquired by it and signs on
Facilities acquired hereunder so as to eliminate the Reserved
Identification.
21.2 Correspondence. Immediately after Closing, Purchaser shall
instruct all of its employees to indicate on the internal and external
correspondence that, notwithstanding the letterhead on any such
correspondence, the source of the correspondence is Purchaser and not Boise
Cascade.
21.3 Promotional Materials. Within 120 days after Closing,
Purchaser shall have printed and distributed to its production, management,
and sales force stickers for all forms of sales and promotional materials
and stationery which will overlay the Reserved Identification on such
materials with the name and/or logo of Purchaser.
21.4 Phone Books. Purchaser shall cause the Reserved Identification
to be deleted from all phone book listings as soon as reasonably practical.
21.5 Advertising. Media advertising, sponsored or paid for in part
by Purchaser (including co-op advertising programs) shall utilize
Purchaser's name and/or corporate logo. Such advertising and other
promotional materials may, for a period of one year from the date of
Closing, contain a statement to the effect that Purchaser has acquired the
Rumford Facility of Boise Cascade.
22. Notices. Any notice or demand required or permitted to be given
under the terms of this Agreement shall be deemed to have been duly given
or made if given by any of the following methods and shall be effective as
indicated below in respect of each such means of notice:
22.1 If deposited in the United States mail, in a sealed envelope,
postage prepaid, by registered or certified mail, return receipt requested,
respectively addressed as set forth below, such notice shall be effective
on the 7th business day following mailing.
22.2 If sent to the address set forth below via an established
national overnight delivery service (such as Federal Express), charges
prepaid, such notice shall be effective on the next business day following
dispatch.
22.3 If sent via any electronic communications method, provided the
sender obtains written confirmation of receipt of the communication by the
electronic communication equipment at the office of the addressee listed
below, such notice shall be effective on the next business day following
dispatch.
To Boise Cascade: Boise Cascade Corporation
Attn: Chief Financial Officer
1111 West Jefferson Street
Boise, ID 83728-0001
Telephone: 208/384-7851
Telecopy: 208/384-4913
Copy to: Boise Cascade Corporation
Attn: Senior Vice President
and General Counsel
1111 West Jefferson Street
Boise, ID 83728
Telephone: 208/384-7704
Telecopy: 208/384-4912
To Purchaser: Mead Oxford Corporation
c/o The Mead Corporation
Attn: Chief Financial Officer
Courthouse Plaza N.E.
Dayton, OH 45463
Telephone: 513/495-3996
Telecopy: 513/461-2424
Copy to: The Mead Corporation
Attention Vice President and
General Counsel
Courthouse Plaza N.E.
Dayton, OH 45463
Telephone: 513/495-4106
Telecopy: 513/461-2424
23. Transition Services. The parties agree that certain services
currently provided to the Business may need to be continued for a period of
time after Closing and that the nature and extent of such need was
difficult to ascertain prior to the execution of this Agreement. The
parties agree that at or before Closing, they will determine a definitive
transition services agreement which will address the following:
23.1 Computer Systems. The parties will determine a transition
process to assure that the computer systems relied upon by the Business are
continued in a manner which allows Purchaser to continue to operate the
Business, such transition period not to exceed six months from Closing.
Purchaser shall provide compensation to Boise Cascade in accordance with
Boise Cascade's customary schedule of charges from time to time in effect
in respect to intracompany computer services. During the transition period,
Boise Cascade and the Purchaser shall cooperate with respect to the
transfer to the Purchaser's system of all information relating to the
Business.
23.2 Transportation Services. Transportation services, including
rail, truck, and intermodal services are currently provided by the
Transportation Division of Boise Cascade and BCT, pursuant to contracts
between the Rumford Facility and BCT. Such contracts shall be assigned to
Purchaser. BCT shall continue to provide such services for a period of up
to six months, at market prices. During such transition period, the
Purchaser and BCT shall discuss in good faith the best manner in which to
transfer such operations to the Purchaser. In furtherance thereof,
Purchaser shall acquire all of the Trucking Terminal assets at a price
equal to the net book value of such assets upon completion of such
transition arrangements which are agreed upon pursuant to this
Section 23.2.
23.3 Benefit Plan Services. Boise Cascade shall provide claims
processing services relating to the New Plans and the pretax premium
medical, dental, and vision plans adopted by Purchaser pursuant to
Sections 11.7 and 11.4.2 hereof for claims for services rendered on or
before December 31, 1996, and which are timely filed under the terms of
such plans. Purchaser shall compensate Boise Cascade for such services at
Boise Cascade's cost per claim processed, as described in the definitive
transition services agreement.
23.4 Other Services. For a period not to exceed six months after
the Closing, Boise Cascade shall reasonably cooperate with and provide to
the Purchaser those services Boise Cascade presently provides to the
Business as Purchaser shall reasonably require. Purchaser shall use its
best efforts to arrange for replacement services as promptly as practical.
The Purchaser shall reimburse Boise Cascade in accordance for Boise
Cascade's fully loaded cost of providing such services.
24. Bulk Sales. Purchaser hereby waives compliance with any
relevant bulk sales law and Boise Cascade hereby promises to hold harmless,
indemnify and defend Purchaser against any loss, damage, claim, or demand
which may be made against it or against the Purchased Assets by reason of
such noncompliance.
25. Further Assurances. Each party shall at any time after Closing
execute and deliver to the other party all such additional instruments of
conveyance and assignment, certificates or documents as such other party
may reasonably request in order to further perfect the intent of this
Agreement.
26. Governing Law. This Agreement shall be governed by Delaware
state law without regard to its choice of law provision.
27. Entire Agreement. This Agreement, together with the
nondisclosure agreement referred to in Section 9.2 hereof, constitutes the
entire agreement between the parties with respect to the subject matter
hereof and merges and replaces all prior negotiations, discussions,
representations, warranties, offers, and agreements between the parties
with respect to the subject matter hereof.
28. Amendment. This Agreement may be amended only by a written
instrument signed by all of the parties hereto.
29. Assignment. No party shall sell, assign, mortgage, pledge, or
otherwise transfer this Agreement or any of its rights hereunder without
the prior written agreement of the other party; provided, however, that
Purchaser Parent may transfer any of its rights hereunder in connection
with a transfer of any of the Assets, in whole or in part; provided
further, however, that Purchaser shall not be relieved of any of its
obligations hereunder as a result of any such transfer. Any sale,
assignment, mortgage, pledge, or other transfer attempted in violation of
this provision shall, at the option of the nontransferring party, be void.
30. Counterparts. This Agreement may be executed in two or more
duplicate counterparts and upon the execution and delivery thereof by each
party of at least one such counterpart, such counterparts shall
collectively constitute a fully executed and delivered agreement as though
all parties had signed a single counterpart of the agreement.
31. Severance. If any of the provisions of this Agreement are found
to be illegal, void, or unenforceable, such provision shall be deemed
eliminated from this Agreement and the balance of the Agreement shall
remain fully enforceable in accordance with its terms; provided that, if
such elimination causes this Agreement to fail in its essential purpose,
this Agreement shall be terminated.
32. Unconditional and Unlimited Guaranties.
32.1 Purchaser Parent hereby extends to Boise Cascade and Oxford an
unconditional and unlimited guaranty of the performance by Purchaser of all
of its obligations arising hereunder and under any agreement, certificate,
or other instrument or document delivered by Purchaser pursuant hereto,
including, without limitation, the timely performance by Purchaser of the
Assumed Liabilities and the payment of the Purchase Price.
32.2 At Closing, Purchaser Parent shall extend to RCC its guaranty
of the performance by Purchaser of the obligations assumed by it under the
Contracts assumed by Purchaser at Closing in which RCC is a counterparty.
Such guaranty shall be in substantially the same form as the guaranty of
such obligations extended to RCC by Boise Cascade on behalf of Oxford dated
October 21, 1987; and, to the extent required to obtain the necessary
consents to assignment, it shall execute and deliver to Bank of America,
N.T. & S.A., as Agent, a Consent to Assignment of such Guaranty by RCC,
which shall be substantially in the form of a Consent to Assignment of
certain project agreements extended by Boise Cascade to Bank of America,
N.T. & S.A., dated as of October 21, 1987, to the extent such Consent
related to the Boise Cascade Guaranty referred to above.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first above written.
BOISE CASCADE CORPORATION
By: /s/ George J. Harad
-----------------------
Name: George J. Harad
Title: Chairman and CEO
OXFORD PAPER COMPANY
By: /s/ J.W. Holleran
-----------------------
Name: J.W. Holleran
Title: Vice President
MEAD OXFORD CORPORATION
By: /s/ Steven C. Mason
----------------------
Name: Steven C. Mason
Title: President
THE MEAD CORPORATION
By: /s/ Steven C. Mason
----------------------
Name: Steven C. Mason
Title: Chairman and CEO
LIST OF SCHEDULES
SCHEDULE/TITLE
SCHEDULE 1.25 Excluded Assets
SCHEDULE 1.27 Part I -- Facility Leases Used in the
Business
Part II -- Leased Real Property Held
by Rumford Cogen, Rumford Falls, and
RCC
SCHEDULE 1.33 Historical Balance Sheet
SCHEDULE 1.34 Industrial Revenue Bonds
SCHEDULE 1.35 Part I -- Intangible Rights Used
Exclusively in the Business
Part II -- Intangible Rights Used in
the Business on a Nonexclusive Basis
and Deemed Excluded Assets
SCHEDULE 1.37 Joint Facilities
SCHEDULE 1.43 Form of Preliminary Closing Statement
SCHEDULE 1.46 Realty
SCHEDULE 1.50 Rumford Cogeneration Support
Contracts
SCHEDULE 1.60 Summary Description of Timberlands
SCHEDULE 5.3 Excluded Liabilities
SCHEDULE 6.2.1 Boise Cascade and Oxford Consents and
Boise Cascade and Oxford Defaults
SCHEDULE 6.4.1 Tax Returns
SCHEDULE 6.4.2 Tax Returns Not Timely Filed and Tax
Payments Not Timely Paid
SCHEDULE 6.5 Reports of Noncompliance with Laws
SCHEDULE 6.6 Litigation
SCHEDULE 6.7 Contracts and Agreements
SCHEDULE 6.7.1 Collective Bargaining Agreements
SCHEDULE 6.7.2 Contracts and Other Agreements for
the Purchase or Sale of Product,
Materials, Supplies, Merchandise, or
Services for Use in the Conduct of
the Business
SCHEDULE 6.7.3 Railroad Sidetrack Agreements
SCHEDULE 6.7.4 Trucking, Delivery, and Service
Agreements
SCHEDULE 6.7.5 Contracts and Other Agreements for
Sale of Assets
SCHEDULE 6.7.6 Joint Development, Joint Venture, or
Partnership Agreements Relating to
the Business
SCHEDULE 6.7.7 Contracts and Other Agreements
Containing Covenants Not to Compete
SCHEDULE 6.7.8 Contracts and Other Agreements
Relating to Acquisition of Any
Operating Business or Capital Stock
SCHEDULE 6.7.9 Options or Contracts for Purchase of
Fixed Assets or Real Property
SCHEDULE 6.7.10 Contracts or Other Agreements
Requiring Payment of Royalty, License
Fee, Know-How, Technical Fee,
Override or Similar Commission or Fee
SCHEDULE 6.7.11 Guarantees
SCHEDULE 6.7.12 Construction Agreements or Equipment
Purchase Orders
SCHEDULE 6.7.13 Employment and Consulting Agreements
SCHEDULE 6.7.14 Leases for Equipment or Machinery
SCHEDULE 6.7.15 Sales Agreements
SCHEDULE 6.7.16 All Other Contracts, Agreements, or
Commitments
SCHEDULE 6.7.17 Invalid Agreements
SCHEDULE 6.13 Liabilities
SCHEDULE 6.14.1 Labor Relations Matters
SCHEDULE 6.15 Product Claims
SCHEDULE 6.16 Employee Benefit Plans
SCHEDULE 6.17 Environmental Matters
SCHEDULE 6.17.2 Transportation, Storage, Treatment,
or Disposal of Hazardous Materials
SCHEDULE 6.17.3 Releases
SCHEDULE 6.17.4 CERCLA or State Sites and Requests
for Information
SCHEDULE 6.17.5 Preliminary Underground Storage
Tanks, Asbestos, and PCB Transformers
SCHEDULE 6.17.6 Environmental Audits; Environmental
Site Assessments; OSHA Citations;
Ground Water, Soil, or Air
Monitoring; Claims Notice of
Violations; and Enforcement Actions
SCHEDULE 6.17.7 Environmental Permits, Licenses, and
Authorizations Held by Boise Cascade
and Oxford
SCHEDULE 6.17.8 Agreements Concerning Environmental
Liabilities and Costs
SCHEDULE 6.18.2 Rumford Cogen and RCC Agreements
SCHEDULE 7.4 Purchaser Consents and Purchaser
Defaults
SCHEDULE 9.1 Operations
SCHEDULE 11.1 Salaried Vacation Policy
SCHEDULE 11.8 Gain Sharing Plan
SCHEDULE 19.8 Insurance and Indemnity Provisions
