AND ON TERMS SIMILAR TO THOSE SET FORTH HEREIN WITH RESPECT TO
THE DEPOSIT.
3.8.5
NOTWITHSTANDING ANY OTHER PROVISION OF THIS SECTION 3.8, PURSUANT
TO THE BIDDING PROCEDURES ORDER, A BID THAT EXCLUDES ANY ONE OR MORE OF THE PORT
ANGELES MILL, THE MARYSVILLE MILL, THE GILCHRIST MILL (COLLECTIVELY WITH THE
KNRC STOCK), OR THE PRINEVILLE PROPERTY SHALL CONSTITUTE A QUALIFYING BID ONLY
IF SUCH BID (I) IN SELLER'S REASONABLE JUDGMENT AFTER CONSULTATION WITH ITS
REPRESENTATIVES AND THE SECURED LENDERS, IS LIKELY TO RESULT IN VALUE TO SELLER
MORE THAN ONE MILLION DOLLARS ($1,000,000) IN EXCESS OF THAT PROVIDED UNDER THIS
AGREEMENT (TAKING INTO ACCOUNT OTHER QUALIFYING BIDS FOR LESS THAN ALL OF THE
PURCHASED ASSETS, THE IMPACT OF ANY DELAY IN CLOSING THE TRANSACTION
CONTEMPLATED BY SUCH BID, THE COSTS OF CARRYING ANY UNSOLD ASSETS, THE PURCHASE
PRICE ADJUSTMENTS INCLUDED THEREIN, THE PAYMENT OF THE BREAK-UP FEE AND THE
EXPENSE REIMBURSEMENT TO BUYER AND ANY OTHER RELEVANT FACTORS) OR THAT WOULD
OTHERWISE BE IN THE BEST INTERESTS OF THE BANKRUPTCY ESTATES INCLUDED IN THE
CASE; (II) CONTAINS NO DUE DILIGENCE CONTINGENCIES; (III) IS ACCOMPANIED BY
SUFFICIENT EVIDENCE THAT THE PERSON SUBMITTING IT
9
HAS THE FINANCIAL ABILITY TO CONSUMMATE SUCH TRANSACTION AND CONTAINS NO
FINANCING CONTINGENCIES; AND (IV) UNLESS SUCH BID IS MADE BY ONE OR MORE OF THE
SECURED LENDERS, PROVIDES FOR A DEPOSIT ON TERMS SIMILAR TO THOSE SET FORTH
HEREIN WITH RESPECT TO THE DEPOSIT AND IN AN AMOUNT EQUAL TO NOT LESS THAN TEN
PERCENT (10%) OF THE PURCHASE PRICE PAYABLE UNDER SUCH BID, WHICH AMOUNT SHALL
BE INCREASED TO NOT LESS THAN FIFTEEN PERCENT (15%) OF THE PURCHASE PRICE
PAYABLE UNDER SUCH BID ON THE BUSINESS DAY FOLLOWING ENTRY OF THE APPROVAL
ORDER.
3.8.6
NOTWITHSTANDING ANY OTHER PROVISION OF THIS SECTION 3.8, A BID THAT
INCLUDES THE GILCHRIST MILL SHALL CONSTITUTE A QUALIFYING BID ONLY IF SUCH BID
ALSO INCLUDES AN OFFER TO PURCHASE THE KNRC STOCK.
3.8.7
AT THE COMMENCEMENT OF THE AUCTION, SELLER SHALL ANNOUNCE THE
HIGHEST OR BEST QUALIFYING BID RECEIVED PRIOR TO SUCH TIME. AUCTION BIDDING
SHALL BEGIN WITH SUCH HIGHEST OR BEST QUALIFYING BID AND SUBSEQUENTLY SHALL
CONTINUE IN MINIMUM INCREMENTS OF AT LEAST TWO HUNDRED FIFTY THOUSAND DOLLARS
($250,000). SUBSEQUENT BIDS SUBMITTED BY BUYER SHALL NOT REQUIRE ANY ADDITIONAL
DEPOSIT. THE AUCTION SHALL BE CONDUCTED BY, AND UNDER THE DIRECTION AND CONTROL
OF, SELLER, UNLESS OTHERWISE ORDERED BY THE BANKRUPTCY COURT. SELLER SHALL HAVE
REASONABLE DISCRETION TO ESTABLISH AND/OR MODIFY ANY AUCTION RULES OR PROCEDURES
SO AS TO MAXIMIZE, IN SELLER'S REASONABLE JUDGMENT AND IN CONSULTATION WITH THE
SECURED LENDERS, THE REALIZATION OF VALUE FOR THE PURCHASED ASSETS EXCEPT TO THE
EXTENT THAT ANY SUCH NEWLY ESTABLISHED
OR MODIFIED AUCTION RULES ARE
INCONSISTENT WITH ANY PROVISIONS OF THIS AGREEMENT. THE AUCTION SHALL BE
CONCLUDED BY SELLER NO EARLIER THAN THE CONCLUSION OF COMPETITIVE BIDDING FOR
ALL OR CERTAIN OF THE PURCHASED ASSETS. UPON THE CONCLUSION OF THE AUCTION,
SELLER, IN ITS REASONABLE JUDGMENT AND IN CONSULTATION WITH