Document:

Exhibit 10.17(a)

 

EMPLOYMENT AGREEMENT

Between

LOUISIANA-PACIFIC CORPORATION

and

MARK
A. SUWYN

As
Restated January 2, 1996

 

AMENDMENT
NO. 1

 

Pursuant
to the resolution of the Compensation Committee of the Board of Directors of
Louisiana-Pacific Corporation (“LP”) adopted on February 1, 2003 and the
authority granted therein, LP and Mark A. Suwyn (“Executive”) hereby agree that
the Employment Agreement between LP and Executive, as restated January 2, 1996
(“Agreement”), is hereby amended, effective as of February 1, 2003, to add new
subsection (vi) to Section 5(f) of the Agreement to read in full as follows:

 

“(vi)
Notwithstanding subsections (i) through (v) of this Section 5(f) immediately
above, in the event a Change in Control occurs that also constitutes a “Change
of Control” as defined in Section 2 of the Change of Control Employment
Agreement between Executive and the Company dated as of January 25, 1998 (the
“COC Agreement”), the compensation and benefits that may become payable to
Executive in the event of a termination of his employment following such event
shall be determined solely under the provisions of the COC Agreement rather
than under this Agreement if the COC Agreement, including any amendments
thereto, remains in effect on the date of such Change of Control and provides
such compensation and benefits in amounts that are equal to or greater than
those that would otherwise be provided under this Agreement.”

 

IN
WITNESS WHEREOF, the parties have executed this Amendment No. 1 as of the 1st
day of February 2003.

 

 

	
   

  	
  LOUISIANA-PACIFIC
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
   

  	
   

  
	
   

  	
  Executive
  Vice President, Administration and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
  By 

  	
   

  	
   

  
	
   

  	
  Mark
  A. SuwynExhibit 10.21

 

EXECUTION COPY

 

PURCHASE AND SALE
AGREEMENT

 

 

BY AND BETWEEN

 

 

LOUISIANA-PACIFIC
CORPORATION

 

 

AND

 

ETT ACQUISITION
COMPANY, LLC

 

 

Dated July 2, 2003

 

 

TABLE
OF CONTENTS

 

	
  ARTICLE
  I

  	
  DEFINITIONS

  
	
   

  	
   

  
	
  1.01

  	
  Defined
  Terms

  
	
   

  	
   

  
	
  1.02

  	
  Construction
  of Certain Terms and Phrases

  
	
   

  	
   

  
	
  ARTICLE II

  	
  PURCHASE AND SALE

  
	
   

  	
   

  
	
  2.01

  	
  Purchased
  Assets

  
	
   

  	
   

  
	
  2.02

  	
  Assumed Liabilities

  
	
   

  	
   

  
	
  2.03

  	
  Excluded Assets and
  Liabilities

  
	
   

  	
   

  
	
  2.04

  	
  Purchase Price and Payment

  
	
   

  	
   

  
	
  2.05

  	
  Earnest Money Deposit

  
	
   

  	
   

  
	
  2.06

  	
  Independent Consideration

  
	
   

  	
   

  
	
  ARTICLE
  III

  	
  CLOSING

  
	
   

  	
   

  
	
  3.01

  	
  Closing

  
	
   

  	
   

  
	
  3.02

  	
  Conditions
  Precedent to Obligations of Seller and Purchaser

  
	
   

  	
   

  
	
  3.03

  	
  Additional
  Conditions Precedent to Obligations of Purchaser

  
	
   

  	
   

  
	
  3.04

  	
  Additional Conditions Precedent
  to Obligations of Seller

  
	
   

  	
   

  
	
  3.05

  	
  Deliveries at Closing

  
	
   

  	
   

  
	
  3.06

  	
  Prorations

  
	
   

  	
   

  
	
  3.07

  	
  Purchase Price Allocation

  
	
   

  	
   

  
	
  3.08

  	
  Costs
  and Expenses

  
	
   

  	
   

  
	
  ARTICLE
  IV

  	
  REPRESENTATIONS
  AND WARRANTIES OF SELLER

  
	
   

  	
   

  
	
  4.01

  	
  Representations and Warranties of
  Seller

  
	
   

  	
   

  
	
  4.02

  	
  Supplemental Disclosure

  
	
   

  	
   

  
	
  4.03

  	
  NO REPRESENTATIONS

  
	
   

  	
   

  
	
  ARTICLE
  V

  	
  REPRESENTATIONS
  AND WARRANTIES OF PURCHASER

  
	
   

  	
   

  
	
  5.01

  	
  Representations
  and Warranties of Purchaser

  
	
   

  	
   

  
	
  ARTICLE VI

  	
  SURVIVAL;
  INDEMNIFICATION

  
	
   

  	
   

  
	
  6.01

  	
  Survival

  
	
   

  	
   

  
	
  6.02

  	
  Indemnity
  by Seller

  
	
   

  	
   

  
	
  6.03

  	
  Indemnity by Purchaser

  

 

 

	
  6.04

  	
  Third
  Party Claims

  
	
   

  	
   

  
	
  6.05

  	
  Payment

  
	
   

  	
   

  
	
  6.06

  	
  Access and Information

  
	
   

  	
   

  
	
  6.07

  	
  Monetary Limitations

  
	
   

  	
   

  
	
  6.08

  	
  Remedies Cumulative

  
	
   

  	
   

  
	
  ARTICLE VII

  	
  CERTAIN AGREEMENTS

  
	
   

  	
   

  
	
  7.01

  	
  Conduct of the
  Business Prior to Closing

  
	
   

  	
   

  
	
  7.02

  	
  Casualty and Condemnation

  
	
   

  	
   

  
	
  7.03

  	
  Hart-Scott-Rodino Filings

  
	
   

  	
   

  
	
  7.04

  	
  Commercially Reasonable
  Efforts

  
	
   

  	
   

  
	
  7.05

  	
  Title

  
	
   

  	
   

  
	
  7.06

  	
  Access to Real Property

  
	
   

  	
   

  
	
  7.07

  	
  Due
  Diligence

  
	
   

  	
   

  
	
  7.08

  	
  Exclusivity

  
	
   

  	
   

  
	
  7.09

  	
  Public Announcements

  
	
   

  	
   

  
	
  7.10

  	
  Further
  Assurances

  
	
   

  	
   

  
	
  7.11

  	
  Allocations

  
	
   

  	
   

  
	
  7.12

  	
  Recording

  
	
   

  	
   

  
	
  7.13

  	
  Retention of Obligations

  
	
   

  	
   

  
	
  7.14

  	
  No Leases

  
	
   

  	
   

  
	
  7.15

  	
  Consents

  
	
   

  	
   

  
	
  7.16

  	
  Release
  of Seller

  
	
   

  	
   

  
	
  7.17

  	
  Notification

  
	
   

  	
   

  
	
  7.18

  	
  Supply
  Agreement

  
	
   

  	
   

  
	
  ARTICLE
  VIII

  	
  TERMINATION

  
	
   

  	
   

  
	
  8.01

  	
  Termination

  
	
   

  	
   

  
	
  8.02

  	
  Effect of Termination

  
	
   

  	
   

  
	
  8.03

  	
  Seller
  Default

  
	
   

  	
   

  
	
  8.04

  	
  Purchaser
  Default; Liquidated Damages

  
	
   

  	
   

  
	
  ARTICLE IX

  	
  GENERAL PROVISIONS

  

 

ii

 

	
  9.01

  	
  Notices

  
	
   

  	
   

  
	
  9.02

  	
  Binding
  Effect

  
	
   

  	
   

  
	
  9.03

  	
  Assignment

  
	
   

  	
   

  
	
  9.04

  	
  Waiver

  
	
   

  	
   

  
	
  9.05

  	
  Amendment

  
	
   

  	
   

  
	
  9.06

  	
  Certain Required Notices.

  
	
   

  	
   

  
	
  9.07

  	
  Attorneys’
  Fees

  
	
   

  	
   

  
	
  9.08

  	
  Severability

  
	
   

  	
   

  
	
  9.09

  	
  Integration

  
	
   

  	
   

  
	
  9.10

  	
  Construction and
  Interpretation

  
	
   

  	
   

  
	
  9.11

  	
  Dispute
  Resolution

  
	
   

  	
   

  
	
  9.12

  	
  Governing
  Law

  
	
   

  	
   

  
	
  9.13

  	
  WAIVER OF JURY TRIAL

  
	
   

  	
   

  
	
  9.14

  	
  Time

  
	
   

  	
   

  
	
  9.15

  	
  Counterparts

  
	
   

  	
   

  
	
  9.16

  	
  Broker’s or Finder’s Fee

  
	
   

  	
   

  
	
  9.17

  	
  No Third Party
  Beneficiaries

  
	
   

  	
   

  
	
  9.18

  	
  Confidentiality

  
	
   

  	
   

  
	
  9.19

  	
  Facsimile Signatures

  
	
   

  	
   

  
	
  9.20

  	
  Bulk
  Sales Act

  

 

iii

 

EXHIBITS

 

	
  Exhibit
  A

  	
   

  	
  Form
  of Note

  
	
  Exhibit
  B

  	
   

  	
  Form
  of Letter of Credit

  
	
  Exhibit
  C

  	
   

  	
  Form
  of Escrow Agreement

  
	
  Exhibit
  D

  	
   

  	
  Form
  of Deed

  
	
  Exhibit
  E

  	
   

  	
  Form
  of Bill of Sale

  
	
  Exhibit
  F

  	
   

  	
  Form
  of Assignment and Assumption Agreement

  
	
  Exhibit
  G

  	
   

  	
  Form
  of Seller’s Affidavit

  
	
  Exhibit
  H

  	
   

  	
  Form
  of Non-Foreign Affidavit

  
	
  Exhibit
  I

  	
   

  	
  Form
  of Opinion of Counsel to Seller

  
	
  Exhibit
  J

  	
   

  	
  Form
  of Letter Agreement

  
	
  Exhibit
  K

  	
   

  	
  Form
  of Opinion of Counsel to Purchaser

  
	
  Exhibit
  L

  	
   

  	
  Harvest
  Schedule

  
	
  Exhibit
  M

  	
   

  	
  Form
  of Supply Agreement

  

 

 

PURCHASE
AND SALE AGREEMENT

 

THIS PURCHASE AND SALE AGREEMENT (“Agreement”)
is made as of July 2, 2003 (the “Effective Date”) by and between LOUISIANA-PACIFIC
CORPORATION,
a Delaware corporation (“Seller”), and ETT ACQUISITION COMPANY, LLC,
a Delaware limited liability company  (“Purchaser”).

 

In consideration of the
mutual covenants of the parties set forth herein and for other good and
valuable consideration, Seller and Purchaser agree as follows:

 

ARTICLE I

DEFINITIONS

 

1.01                           Defined Terms. 
As used in this Agreement, the following defined terms have the meanings
indicated below:

 

“Additional Agreements” shall have the meaning
set forth in Section 2.01(g) of this Agreement.

 

“Adjusted Cash Amount” shall have the meaning
set forth in Section 2.04(c)

 

“Affiliate” of any Person means a Person which,
directly or indirectly, controls, is controlled by or is under common control
with such Person.

 

“Agreement” means this Purchase and Sale
Agreement and the exhibits, schedules and Disclosure Schedule attached hereto,
as amended from time to time.

 

“Assignment and Assumption Agreement” has the
meaning set forth in Section 3.05(a)(iii) of this Agreement.

 

“Assumed Liabilities” has the meaning set forth
in Section 2.02 of this Agreement.

 

“Bill of Sale” has the meaning set forth in
Section 3.05(a)(ii) of this Agreement.

 

“Brown and Caldwell” means Brown and Caldwell,
having an office at 201 East Washington Street, Suite 500, Phoenix, Arizona
85004.

 

“Cash Amount” has the meaning set forth in
Section 2.04(c) of this Agreement.

 

“Casualty Loss” has the meaning set forth in
Section 7.02(a) of this Agreement.

 

“Claim” means, with respect to the Property,
any claim, demand, investigation, suit, action or cause of action, default,
assessment, litigation or other proceeding, including administrative
proceedings, third party actions, arbitral proceedings and proceedings by or
before any Governmental Authority.

 

“Closing” has the meaning set forth in Section
3.01 of this Agreement.

 

 

“Closing Date” has the meaning set forth in
Section 3.01 of this Agreement.

 

“Closing Statement” has the meaning set forth
in Section 3.06(b) of this Agreement.

 

“Code” has the meaning set forth in
Section 2.05(c) of this Agreement.

 

“Condemnation Proceedings” has the meaning set
forth in Section 7.02(a) of this Agreement.

 

“Contracts” has the meaning set forth in
Section 2.01(g) of this Agreement.

 

“Contingent Obligation” has the meaning set
forth in Section 7.13 of this Agreement.

 

“Conveyancing Instruments” means the deeds,
assignments of leases and other instruments necessary or appropriate under
applicable law to convey to Purchaser fee simple title to the Real Property
with covenants of special warranty as to title.

 

“Deductible” has the meaning set forth in
Section 6.07(a) of this Agreement.

 

“Deeds” has the meaning set forth in Section
3.05(a)(i) of this Agreement.

 

“Deposit” has the meaning set forth in
Section 2.05(a) of this Agreement and is deemed to include all interest
earned thereon.

 

“Disclosure Schedule” means the Disclosure
Schedule to this Agreement, as supplemented or amended (if applicable) pursuant
to Section 4.02 of this Agreement.

 

“Due Diligence” has the meaning set forth in
Section 7.07 of this Agreement.

 

“Due Diligence Information” has the meaning set
forth in Section 7.06(f) of this Agreement.

 

“Effective Date” has the meaning set forth in
the introductory paragraph of this Agreement.

 

“Environmental Due Diligence Deadline” has the
meaning set forth in Section 7.07 of this Agreement.

 

 “Environmental
Law” means any applicable law, statute, ordinance, code, rule, regulation
or order of any Governmental Authority relating to (i) pollution or the
regulation or protection of human health, safety or the environment or to
threatened or endangered species, (ii) Hazardous Materials, (iii) the
reclamation of land and waterways, (iv) emissions, discharges, releases or
threatened releases of Hazardous Materials into the environment (including ambient
air, soil, surface water, ground water, land surface and subsurface strata) or
(v) the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials.

 

“Environmental Sites” has the meaning set forth
in Section 7.06(c) of this Agreement.

 

2

 

“Escrow Agent” means Fidelity National Title
Insurance Company, having an office at 717 N. Harwood Street, Suite 800,
Dallas, Texas 75201.

 

“Escrow Agreement” has the meaning set forth in
Section 2.05(b) of this Agreement.

 

“Excluded Assets” has the meaning set forth in
Section 2.03 of this Agreement.

 

“Excluded Liabilities” has the meaning set
forth in Section 2.03 of this Agreement.

 

“Existing Surveys” means existing surveys of
portions of the Real Property.

 

“Extended Due Diligence Period” has the meaning
set forth in Section 4.02 of this Agreement.

 

“Governmental Authority” means any legislative,
judicial, executive, regulatory or administrative body, agency, commission,
authority or instrumentality of the United States of America or of any state,
county, city or other political subdivision within the United States of
America, and any arbitrator or panel of arbitrators whose rulings, orders,
decrees and awards are, in the particular circumstances presented, enforceable
in a court of law within the United States of America.

 

“Harvest Schedule” has the meaning set forth in
Section 7.01(a) of this Agreement.

 

“Hazardous Material” means any hazardous
substance, pollutant, petroleum or any fraction thereof, contaminant or toxic
or hazardous material or waste and asbestos.

 

“HSR Act” means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated
under such act.

 

“Indemnified Party” has the meaning set forth
in Section 6.04(a) to this Agreement.

 

“Knowledge of Seller” means the actual
knowledge, after reasonable investigation, of the employees of Seller listed in
Section 1.01 of the Disclosure Schedule.

 

“LC” has the meaning set forth in
Section 2.04(c) of this Agreement.

 

“LC Bank” means Wachovia Bank, National
Association.

 

“Lease Agreement” has the meaning set forth in
Section 3.05(a)(xiii) of this Agreement.

 

“Leases” has the meaning set forth in
Section 2.01(h) of this Agreement.

 

“Letter Agreement” has the meaning set forth in
Section 3.05(a)(xiv) of this Agreement.

 

3

 

“Liability” means any liability or obligation
(whether known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
whether incurred or consequential and whether due or to become due), including
any liability for Taxes.

 

 “Licenses”
has the meaning set forth in Section 2.01(f) of this Agreement.

 

“Liens” means any mortgage, lien, charge,
pledge, hypothecation, assignment, deposit, arrangement, encumbrance, security
interest, assessment, adverse claim, levy, preference or priority or other
security agreement of any kind or nature whatsoever (whether voluntary or
involuntary, affirmative or negative, and whether imposed or created by
operation of law or otherwise) in, on or with respect to the Property, or any
other interest in the Property designed to secure the repayment of debt or the
performance of any other obligations, whether arising by contract, operation of
law or otherwise.

 

“Losses” means all claims, demands,
investigations, proceedings, suits, actions or causes of action, losses,
liabilities, fines, penalties, judgments, liens, injuries, damages, costs of
settlement or other costs or expenses of whatever kind or nature (including any
action or proceeding brought, threatened or ordered by any Governmental
Authority), including attorneys’ and experts’ fees and court costs and
expenses, and investigation and remediation costs.

 

“Mineral Rights” has the meaning set forth in
Section 2.01(b) of the Agreement.

 

“New Surveys” means updates of Existing Surveys
or new surveys of portions of Real Property obtained by either Purchaser or
Seller, at Purchaser’s request.

 

“Nonacceptance Notice” has the meaning set
forth in Section 7.07 of this Agreement.

 

“Nonassignable Contract” has the meaning set
forth in Section 7.15 of this Agreement.

 

“Non-environmental Due Diligence Deadline” has
the meaning set forth in Section 7.07 of this Agreement.

 

“Non-timberland Allocation” means that portion of the Purchase Price allocated to all those items
set forth in Section 3.07 of the Disclosure Schedule other than
“Timberlands” and “Standing Timber”.

 

“Note Amount” has
the meaning set forth in Section 2.04(c) of this Agreement.

 

“Note” has the meaning set forth in
Section 2.04(c) of this Agreement.

 

“Permitted Exceptions” means: (i)
encroachments, overlaps, boundary line disputes or other matters (other than
lack of access) that would be disclosed by an accurate survey or inspection of
the Real Property; (ii) liens for taxes not yet due and payable; (iii)
mechanics’, workers’, materialmen’s, carriers’ or other like liens arising in
the ordinary course of business to the extent the underlying obligation is not
yet due and payable; (iv) all previous reservations, exceptions and conveyances
of record of oil, gas and associated hydrocarbon minerals and royalty and other
rights and interests with respect thereto; (v) any law, ordinance or

 

4

 

 governmental
regulation (including building and zoning ordinances) that restricts, regulates
or prohibits the occupancy, use or enjoyment of the Real Property, or regulates
the character, dimensions or location of any improvements now or hereafter
erected on the Real Property; (vi) all
matters affecting the Real Property recorded in the real property records of
the applicable county other than (x) Liens (excluding Liens covered by (ii) and
(iii) above) and (y) any other matter recorded in the real property records of
the applicable county that would adversely affect Purchaser’s ability to
conduct forestry management activities of any kind on the Real Property;
(vii) all matters disclosed in the Disclosure Schedule; and (viii) unrecorded
easements that do not adversely affect the ability to conduct forestry
management activities of any kind on the Real Property.

 

“Person” means any natural person, corporation,
limited liability company, general partnership, limited partnership,
proprietorship, joint stock company, joint venture, trust, association or
organization, whether or not for profit, and any Governmental Authority.

 

“Personal Property” has the meaning set forth
in Section 2.01(e) of this Agreement.

 

 “Property”
means the Real Property, Personal Property, Purchased Contracts, Leases,
Records and Plans, and Licenses, but excluding the Excluded Assets.

 

“Property Taxes” has the meaning set forth in
Section 3.06(a)(i) of this Agreement.

 

“Property Tax Code” has the meaning set forth
in Section 4.01(q) of this Agreement.

 

“Proposed Supplement” has the meaning set forth
in Section 4.02 of this Agreement.

 

“Proration Items” has the meaning set forth in
Section 3.06(a) of this Agreement.

 

“Proration Time” has the meaning set forth in
Section 3.06(a) of this Agreement.

 

“Purchase Price” has the meaning set forth in
Section 2.04(a) of this Agreement.

 

“Purchased Contracts” has the meaning set forth
in Section 2.01(g) of this Agreement.

 

“Purchaser” has the meaning set forth in the
introductory paragraph of this Agreement; provided, that from and after
the Closing, for purposes of Sections 7.10, 7.11 and 7.12  hereto, Purchaser shall mean, at any time,
each of ETT Acquisition Company, LLC and each Affiliate (as of the Closing
Date) of ETT Acquisition Company, LLC having title at such time to any portion
of the Property.

 

“Purchaser Indemnified Parties” has the meaning
set forth in Section 6.02 of this Agreement.

 

“Purchaser’s Phase I Report” has the meaning
set forth in Section 7.06(c) of this Agreement.

 

5

 

“Real Property” has the meaning set forth in
Section 2.01(d) of this Agreement.

 

“Records and Plans” has the meaning set forth
in Section 2.01(i) of this Agreement.

 

 “Related
Agreements” means all other agreements, instruments and documents to be
executed in connection with the consummation of the transactions contemplated
by this Agreement and such other agreements.

 

“Representatives” has the meaning set forth in
Section 9.18 of this Agreement.

 

“Seed Orchard” means the pine seed orchard
consisting of 191 acres, more or less, located in Newton County, Texas.

 

“Selected Environmental Sites” has the meaning
set forth in Section 7.06(c) of this Agreement.

 

“Seller” has the meaning set forth in the
introductory paragraph of this Agreement.

 

“Seller Indemnified Parties” has the meaning
set forth in Section 6.03 of this Agreement.

 

“Strips” has the meaning set forth in
Section 2.01(d) of this Agreement.

 

“Supplement” has the meaning set forth in
Section 4.02 of this Agreement.

 

“Supply Agreement” has the meaning set forth in
Section 7.18 of this Agreement.

 

“Surveys” means the Existing Surveys and any
New Surveys.

 

“Tax” or “Taxes” means any federal,
state, local, or foreign income, gross receipts, license, payroll, employment,
excise, severance, stamp, occupation, premium, windfall profits, environmental
(including taxes under Code § 59A), customs duties, capital stock, franchise,
profits, withholding, social security (or similar, including FICA),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not.

 

“Tax Affiliate” means a Person bearing a
relationship to Seller described in Section 267(b) or 707(b) of the Code.

 

“Third Party Claim” has the meaning set forth
in Section 6.04(a) of this Agreement.

 

“Timberlands” has the meaning set forth in
Section 2.01(a) of this Agreement.

 

“Title Claims” means (a) any defects in,
exceptions to, or Liens, Claims, reservations, restrictions or conditions on,
to or affecting title to the Real Property (including without limitation the
timber thereon), whether evidenced by written instrument or otherwise
evidenced, (b) boundary disputes regarding or gaps between the boundaries of
the Real Property 

 

6

 

and the boundaries of adjacent land or public or
private thoroughfares, and (c) the absence of such access to any portion of the
Real Property as would be commercially reasonable to permit Purchaser to use,
manage, harvest or dispose of any assets located on or appurtenant to the Real
Property (or any portion thereof), all as presently operated by Seller; provided,
that Title Claims shall not include Permitted Exceptions; provided, further, however, that as used in this
definition of Title Claims the term “Permitted Exceptions” shall not include
any matters affecting the Real Property recorded in the real property records
of the applicable county that are not listed in Schedule B to the Title
Commitment that would adversely affect Purchaser’s ability to conduct forestry
management activities of any kind on the Real Property.

 

“Title Commitment” has the meaning set forth in
Section 7.05(a) of this Agreement.

 

“Title Company” means Fidelity National Title
Insurance Company, having an office at 717 N. Harwood Street, Suite 800,
Dallas, Texas 75201.

 

“Title Defect” means any title matter (other
than zoning or permitting compliance) relating to any of the Real Property that
is disclosed in the Title Commitment or in the Surveys (other than (i) a
Permitted Exception; provided that as used in this definition of Title
Defect the term “Permitted Exceptions” shall not include any matters affecting the Real Property recorded
in the real property records of the applicable county that are not listed in
Schedule B to the Title Commitment that would adversely affect Purchaser’s
ability to conduct forestry management activities of any kind on the Real
Property or (ii) a Lien securing indebtedness for money borrowed which
will be released at or prior to Closing), which, in Purchaser’s reasonable
judgment, would adversely affect the use, enjoyment or marketability by
Purchaser of the Real Property.

 

“Title Objections” has the meaning set forth in
Section 7.05(a) of the Agreement.

 

“Title Policies” means the TLTA owner’s form
title policies, which title policies insure the fee simple title to the Real
Property is vested in Purchaser subject only to the Permitted Exceptions.

 

“Transferee Affiliate” means any Affiliate of
the Purchaser.

 

“WARN” means the Worker Adjustment and
Retraining Act of 1988, as from time to time in effect.

 

“Water Rights” has the meaning set forth in
Section 2.01(c) of the Agreement.

 

1.02                           Construction of Certain Terms and
Phrases.  Unless the context of
this Agreement otherwise requires: (i) words of any gender include each other
gender; (ii) words using the singular or plural number also include the plural
or singular number, respectively; (iii) the terms “hereof,” “herein,” “hereby”
and derivative or similar words refer to this Agreement in its entirety;
(iv) the terms “Article” or “Section” refer to the specified Article or
Section of this Agreement; and (v) the word “including” means “including
without limitation.”  Whenever this
Agreement refers to a number of days, such number shall refer to calendar days
unless business days are specified; provided, that if the relevant time
period would otherwise end on a date which is not a business day, such period
shall instead end on the immediately succeeding business day.  All accounting terms used herein and not
expressly defined herein shall have the 

 

7

 

meanings
given to them under accounting principles that are generally accepted and
employed in the United States of America. 
Any representation or warranty contained herein as to the enforceability
of a contract or other agreement shall be subject to the effect of any
bankruptcy, insolvency, reorganization, moratorium or other similar law
affecting the enforcement of creditors’ rights generally and to general
equitable principles (regardless of whether such enforceability is considered
in a proceeding in equity or at law).

 

ARTICLE II

PURCHASE AND SALE

 

2.01                           Purchased Assets.  At the Closing Seller will sell, convey, transfer, grant, assign
and deliver to Purchaser and Purchaser shall purchase, accept and receive from
Seller, on the terms and subject to the conditions set forth in this Agreement,
including the provisions of Section 2.06, free and clear of any Lien of
any kind whatsoever other than the Permitted Exceptions, all of the following
assets (the “Property”):

 

(a)                                  Timberlands.  The real property lying in various counties
in the State of Texas more particularly described on Section 2.01(a) of the
Disclosure Schedule attached hereto consisting of 464,963 acres of
timberland, more or less, and Seed Orchard, together with all timber of all
species thereon (including those standing dead or down, all felled and bucked
logs, trees, shrubs and reproduction thereon) as of the Closing Date, and
including all buildings, structures, other constructions and improvements
of every nature located or situated on such real property; tenements,
rights, servitudes, easements, hereditaments, rights of way, privileges,
liberties, appendages and appurtenances now or hereafter belonging or
pertaining to such real property (the “Timberlands”);

 

(b)                                 Mineral
Rights.  All of Seller’s right,
title and interest in and to: (i)  any
oil, gas, other hydrocarbons, sand, gravel, and any other minerals and mineral
interests, which may be in, under and/or that may be produced, saved and
marketed, from the Timberlands, (ii) any royalties, bonuses, overriding
royalties, production payments, and (iii) any other oil, gas and mineral
interests of whatever nature and character, or other interests connected
therewith, arising therefrom or ancillary thereto (the “Mineral Rights”);

 

(c)                                  Water
Rights.  All of Seller’s right,
title and interest in and to:  (i) the
surface water and surface water rights, appropriations and permits related to
surface water of the Timberlands, (ii) any groundwater and any severed
groundwater, and (iii) any groundwater licenses or permits in locations other
than in the Timberlands used for the benefit of the Timberlands (the “Water
Rights”);

 

(d)                                 Strips.  All strips and gores associated with the
Timberlands (the “Strips” and together with the Timberlands, the Mineral
Rights and the Water Rights, the “Real Property”);

 

(e)                                  Personal
Property.  The machinery, equipment,
motor vehicles, appliances, tools, supplies, furnishings, inventory and other
tangible personal property related to the Real Property or attached to,
appurtenant to, situated on or used in the conduct of the Seller’s commercial
activities on the Real Property, together with all warranties associated
therewith, as described on Section 2.01(e) of the Disclosure Schedule
(the “Personal Property”);

 

8

 

(f)                                    Licenses.  All rights under licenses, permits,
authorizations, orders, registrations, certificates, variances, approvals,
franchises and consents of Governmental Authorities or other Persons which are
related to the operation of the Real Property (the “Licenses”),
including those licenses, permits, authorizations, orders,  registrations, certificates, variances,
approvals, franchises and consents more particularly described on Section
2.01(f) of the Disclosure Schedule;

 

(g)                                 Contracts.  All rights under contracts, agreements,
understandings and commitments to which Seller is a party or by which Seller is
bound, in each case as of the Effective Date, that relate to the Property or
any portion thereof or by which the Property or any portion thereof is bound or
that relate to the commercial activities of Seller conducted on the Real
Property or any portion thereof, including those relating to the provision of
logging, harvesting, reforestation, silviculture, land management, insect and
disease control, wildlife management, consulting, maintenance or other services
to Seller, the leasing of equipment or machinery to Seller, the sale of
materials, supplies or other goods to Seller, or the sale or provision by
Seller of pulpwood, sawlogs, other wood fiber or other materials, supplies,
goods or services to third parties (the “Contracts”), including those
contracts, agreements, understandings and commitments more particularly
described on Section 2.01(g) of the Disclosure Schedule  and any contracts, agreements,
understandings and commitments entered into by Seller after the Effective Date
in accordance with Section 7.01 hereof (the “Additional Agreements”
and together with the Contracts, the “Purchased Contracts”);

 

(h)                                 Leases.  All rights with respect to leases, licenses
and other agreements to which Seller is a party or by which Seller is bound
relating to the use or occupancy of the Real Property or of any portion
thereof, or by which the Real Property is bound (the “Leases”),
including all right-of-way or road usage agreements, hunting, fishing or
campsite leases, seismic permits, pipeline leases, mineral leases, and sand and
gravel leases more particularly described on Section 2.01(h) of the
Disclosure Schedule; and

(i)                                     Records
and Plans.  All of the Seller’s
(i) books and records relating to the Property; (ii) structural reviews,
architectural drawings and environmental, engineering, soils, seismic, geologic
and architectural reports, studies and certificates pertaining to the Real
Property; (iii) plans, specifications and drawings of any improvements located
on the Real Property; (iv) blueprints, plats, maps, surveys, building diagrams,
maintenance and production records and environmental records and reports
relating to the Real Property; and (v) title documents, acquisition deeds,
title policies and surveys of the Real Property, whether written or
electronically stored or otherwise recorded (the “Records and Plans”); provided,
that the Seller may retain such originals thereof as may be required by law and
provide copies thereof to Purchaser, and Purchaser shall provide Seller with
copies thereof at Seller’s expense as Seller reasonably requires to enable
Seller effectively to prepare its financial reports and tax returns, collect
amounts due to it in respect of pre-Closing operations and administer, defend
and discharge liabilities and obligations not assumed by Purchaser hereunder; provided,
further, that the term “Records and Plans” does not include (A) any
document or correspondence that would be subject to the attorney-client
privilege; (B) any document or item that Seller is contractually or otherwise
bound to keep confidential; (C) any internal memoranda, reports or assessments
of Seller relating to Seller’s valuation of the Property; and (D) any
appraisals of the Real Property, whether prepared internally by Seller or
externally.  Notwithstanding the
foregoing, to the extent that the Records and Plans include documents subject
to the attorney-client privilege or subject to confidentiality agreements, the
Seller shall use commercially reasonable efforts to construct an

 

9

 

arrangement
whereby Seller, without violating such privilege or agreements, will provide
Purchaser with as much material and relevant information as possible concerning
the subject matter of the otherwise privileged or confidential information as
is permissible without causing Seller to waive its privilege or violate such
agreements.

 

2.02                           Assumed Liabilities.  On the terms and subject to the conditions
set forth herein and except as expressly contemplated by Section 2.03
hereof, from and after the Closing, the Purchaser will assume and satisfy or
perform when due only the following Liabilities of the Seller (collectively,
the “Assumed Liabilities”):

 

(a)                                  all
Liabilities of Seller under the Licenses listed on Section 2.01(f) of the
Disclosure Schedule arising after the Closing Date other than Liabilities
arising from any breach or default occurring prior to the Closing Date;

 

(b)                                 all
Liabilities of Seller arising after the Closing Date under the Contracts listed
on Section 2.01(g) of the Disclosure Schedule and under the Additional
Agreements, in each case other than Liabilities arising from any breach or
default occurring prior to the Closing Date;

 

(c)                                  all
Liabilities of Seller under the Leases listed on Section 2.01(h) of the
Disclosure Schedule arising after the Closing Date other than Liabilities
arising from any breach or default occurring prior to the Closing Date; and

 

(d)                                 any
Liability of the Seller with respect to the Real Property arising out of any
condition existing at the Real Property prior to Closing which constitutes a
violation of or gives rise to a duty to report or remediate under any
Environmental Law, other than any Liability with respect to a Third Party Claim
covered under Sections 6.02(d) and (e).

 

2.03                           Excluded Assets and Liabilities.  The Property does not include the property
described in Section 2.03 of the Disclosure Schedule (the “Excluded
Assets”).  Except as expressly set
forth in this Agreement, and without increasing the scope of the Assumed
Liabilities by implication, Purchaser will not assume or perform any
Liabilities not specifically contemplated by Section 2.02 to be Assumed
Liabilities nor any of the following Liabilities (whether or not contemplated
by Section 2.02) (together, the “Excluded Liabilities”):

 

(i)                                     any
Liability of Seller under any Licenses, Contracts or Leases not listed on Sections 2.01(f),
(g) and (h) of the Disclosure Schedule;

 

(ii)                                  any
Liability of the Seller for making payments or providing benefits of any kind
to its employees or former employees, including, without limitation, (i) as a
result of the sale of the Property or as a result of the termination by the
Seller of any employees, (ii) any Liability arising out of, or relating to
WARN, (iii) any Liability to provide former employees so-called COBRA continuation
coverage, (iv) any Liability in respect of medical and other benefits for
existing and future retirees, and (v) any Liability in respect of work-related
employee injuries or worker’s compensation claims;

 

(iii)                               any
Liability of Seller for Taxes, whether or not related to the Seller’s
commercial activities on the Property;

 

10

 

(iv)                              any
Liability of Seller arising as a result of any claim or legal or equitable
action or judicial or administrative proceeding initiated at any time in
respect of anything done, suffered to be done or omitted to be done by Seller
or any of its respective Affiliates, directors, officers, employees, agents,
contractors or sub-contractors, except for those Liabilities that Purchaser has
expressly assumed under Section 2.02(d);

 

(v)                               any
Liability of Seller to indemnify any Person by reason of the fact that such
Person was a client or officer, employee, or agent of Seller or was serving at
the request of Seller as a partner, trustee, director, officer, employee or
agent of another entity;

 

(vi)                              any
debt or other Liability of Seller for or in respect of any loan, account
payable, guarantee or indebtedness;

 

(vii)                           any
Liability of Seller under this Agreement or for costs and expenses incurred in
connection with this Agreement, including legal and other fees and expenses
incurred in connection with the entering into, execution of and performance by
Seller under this Agreement; and

 

(viii)                        any
Liability arising out of or resulting from noncompliance prior to the Closing
Date with any national, regional or local laws, statutes, ordinances, rules,
regulations, orders, determinations, judgments or directives, whether
legislatively, judicially or administratively promulgated, except for those
Liabilities that Purchaser has expressly assumed under Section 2.02(d).

 

2.04                           Purchase Price and  Payment.

 

(a)                                  Purchase
Price.  The purchase price for the
Seed Orchard shall be $320,000.  The
aggregate purchase price for the Property shall be TWO HUNDRED EIGHTY FOUR
MILLION EIGHT HUNDRED THIRTY-TWO THOUSAND ONE HUNDRED FIFTEEN AND NO/100
DOLLARS ($284,832,115.00), subject to adjustment as provided in
Sections 2.04(b), 7.02, 7.05, 7.06, and 7.13 (the “Purchase Price”).  The Purchase Price, less the amount of the
Deposit, shall be payable as provided in this Section 2.04.

 

(b)                                 Acreage
Adjustment.  At least five (5) days
prior to the Closing Date, Seller and Purchaser shall determine based on the
uncontested, undivided deeded acres in the Title Commitment the actual number
of acres included in the Real Property, excluding the Seed Orchard.  If this number is different than the number
of acres in the definition of Real Property above, excluding the Seed Orchard,
the Purchase Price shall be adjusted either up or down to reflect the
difference on the basis of $625.00 per acre; provided that if the
acreage adjustment is in excess of 23,000 acres, each of Purchaser and Seller
shall have a right to terminate this Agreement.  If applicable, at least three (3) days prior to the Closing Date,
Purchaser and Seller shall submit to the Title Company a written notice
advising the Title Company of the adjustment to the Purchase Price pursuant to
this Section 2.04(b).

 

(c)                                  Cash
and Note Arrangement.  At the
Closing, Purchaser shall (i) pay to Seller in cash, in immediately
available funds, an amount equal to the sum of (x) the Non-timberland
Allocation plus (y) the product of (1) the Purchase Price minus
the Non-timberland Allocation and (2) .05 (the “Cash Amount”), plus
(z) any adjustments, as applicable, (1) to the 

 

11

 

extent
that the Note Amount is rounded down to an increment of $100,000 pursuant to
this Section 2.04(c)(ii)(A) and (2) pursuant to Section 7.13 hereof (the sum of
(x), (y) and (z), the “Adjusted Cash Amount”), less the amount of the
Deposit, and (ii) deliver to Seller, or its designee, (A) an
installment note in the form of Exhibit A hereto (the “Note”),
which shall have been duly authorized and validly issued by, and shall be
binding upon and enforceable against the Purchaser, in the aggregate principal
amount equal to the Purchase Price minus the Adjusted Cash Amount
(calculated without making the adjustment referred to in Section
2.04(c)(i)(z)(1)) rounded down to the nearest $100,000 increment (the “Note
Amount”) and (B) a separate irrevocable standby letter of credit in
the form of Exhibit B hereto (the “LC”), which shall have been
duly authorized and validly issued by the LC Bank for the account of the
Purchaser in an aggregate amount equal to the Note Amount.  Seller expressly waives and releases any
express or implied purchase money lien to secure payment of the Note Amount.

 

2.05                           Earnest Money Deposit.

 

(a)                                  The
Deposit.  On the Effective Date,
Purchaser will deliver a non-refundable (except as specified herein) earnest
money deposit of  EIGHT MILLION SEVEN
HUNDRED THIRTY ONE THOUSAND FIVE HUNDRED AND NO/100 DOLLARS ($8,731,500.00) in
immediately available funds to the Escrow Agent to be deposited in an interest
bearing account (the “Deposit”).

 

(b)                                 Escrow
Instructions.  The Deposit shall be
held in escrow by the Escrow Agent, in accordance with the escrow agreement, a
form of which is attached hereto as Exhibit C (the “Escrow
Agreement”).  The Deposit shall be
non-refundable to Purchaser (except as specified herein), and at the Closing
the interest earned thereon shall be credited toward Purchaser’s payment of the
Purchase Price at Closing.  Purchaser
shall be responsible for any taxes associated with interest earned on the
Deposit.

 

(c)                                  Designation
of Reporting Person.  In order to
assure compliance with the requirements of Section 6045 of the Internal
Revenue Code of 1986, as amended (together with the regulations promulgated
thereunder, the “Code”), and any related reporting requirements of the
Code:

 

(i)                                     Seller
and Purchaser shall designate the Escrow Agent as the person to be responsible
for all information reporting under Section 6045(e) of the Code;

 

(ii)                                  Seller
and Purchaser shall provide to the Escrow Agent all information and
certifications regarding such party, as reasonably requested by the Escrow
Agent or otherwise required to be provided by a party to the transaction
described herein under Section 6045 of the Code; and

 

(iii)                               Seller
and Purchaser shall provide to the Escrow Agent such party’s taxpayer
identification number and a statement (on Internal Revenue Service
Form W-9 or an acceptable substitute form), signed under penalties of
perjury, confirming such taxpayer identification number.

 

2.06                           Independent Consideration.  Contemporaneously with the execution and
delivery of this Agreement, Purchaser has paid to Seller as further
consideration for this Agreement, in cash, the sum of $100.00, in addition to
the Deposit and the Purchase Price, and independent of 

 

12

 

any
other consideration provided hereunder, which independent consideration is
fully earned by Seller and is non-refundable under any circumstances.

 

ARTICLE III

CLOSING

 

3.01                           Closing.  The
consummation of the transactions contemplated by this Agreement (the “Closing”)
shall take place at the offices of the Title Company or at such other location
as the parties may mutually agree on the third business day following the date
upon which all the conditions precedent set forth in Sections 3.02, 3.03
and 3.04 are satisfied or waived by the appropriate party hereto, or on such
other date as the parties may mutually agree in writing; provided, that
such date must occur on any day between and including the fourth and
twenty-second day of the month.  The
date on which the closing shall occur is hereinafter referred to as the “Closing
Date”.  At Closing, the events set
forth in Sections 3.02, 3.03 and 3.04 of this Agreement will occur, it
being understood that the performance or tender of performance of all matters
set forth in Sections 3.02, 3.03 and 3.04 are conditions which may be
waived only by the party for whose benefit they are intended.

 

3.02                           Conditions Precedent to Obligations
of Seller and Purchaser.  The
obligations of Purchaser and Seller under this Agreement to consummate the
transactions contemplated hereby will be subject to satisfaction, at or prior
to Closing, of the conditions that:

 

(a)                                  Hart-Scott-Rodino.  All applicable waiting periods (and any
extensions thereof) applicable to the transactions contemplated by this
Agreement under applicable U.S. and foreign antitrust or trade regulation laws
and regulations, including under the HSR Act, shall have expired or been
earlier terminated and neither the Department of Justice nor the Federal Trade
Commission shall have taken any action to enjoin or delay (for a period of
longer than 120 days) the consummation of the transactions contemplated by this
Agreement;

 

(b)                                 No
Litigation.  There shall not be in
effect a preliminary or permanent injunction, temporary restraining order or
other judicial or administrative order or decree, the effect of which prohibits
the consummation of the transactions contemplated herein or otherwise imposes
conditions on such consummation.  No
party to this Agreement shall have been advised by any Governmental Authority
(which advisory has not been officially withdrawn by such Governmental
Authority on or prior to the Closing Date) that such Governmental Authority is
investigating the transactions contemplated by this Agreement (i) to determine
whether to file or commence any litigation which seeks or would seek to enjoin,
restrain or prohibit the consummation of the transactions contemplated by this
Agreement or cause the transactions contemplated by this Agreement to be
rescinded or (ii) to limit or otherwise adversely affect the ability of the
Purchaser to continue operation of the Property as presently conducted by the
Seller or to require divestiture by the Purchaser of all or any material
portion of the Property or any other property owned by Purchaser.

 

3.03                           Additional Conditions Precedent to
Obligations of Purchaser.  The
obligation of Purchaser to consummate the transactions contemplated hereby
shall be subject to the fulfillment on or before the Closing Date of all of the
following conditions, any or all of which may be waived by Purchaser in its
sole discretion:

 

13

 

(a)                                  Closing
Deliveries.  Seller shall have
delivered, or caused to be delivered to Purchaser, the items set forth in
Section 3.05(a).

 

(b)                                 Due
Diligence.  Purchaser shall have
completed its Due Diligence investigation as contemplated by Section 7.07,
which investigation shall be satisfactory to it in its sole discretion.

 

(c)                                  Consents.  All of the consents, authorizations,
registrations or approvals of or with any Governmental Authority or other
Person that are required in connection with the consummation of the
transactions contemplated by this Agreement, as disclosed in Section 7.15 of
the Disclosure Schedule, shall have been filed, made, given or obtained in
a manner reasonably satisfactory to Purchaser and no such authorization,
consent or approval will have been revoked.

 

(d)                                 Truth
of Warranties.  All of the
representations and warranties of Seller contained in this Agreement (i) that
are not qualified by materiality shall be true and correct in all respects when
made and shall be deemed to have been made at and as of the Closing and shall
then be true and correct in all material respects and (ii) that are qualified
by materiality shall be true and correct when made and shall be deemed to have
been made at and as of the Closing and shall then be true and correct, in each
case other than representations and warranties that expressly speak only as of
a specific date or time, which will be true and correct as of such specified
date or time; provided that for purposes of determining whether the
conditions set forth in this Section 3.03(d) have been satisfied on the Closing
Date with respect to the representations and warranties of Seller in Section
4.01(m), the Knowledge of the Seller will be deemed to not include (i) any
matter discovered by Brown and Caldwell and included in the Purchaser’s Phase I
Report or (ii) any other matter discovered by a third party in assessing the
environmental condition of the Property which matter is included in a report
provided to Purchaser.

 

(e)                                  Performance
of Obligations.  Seller shall have
performed and observed all covenants and agreements contained in this Agreement
that are to be performed and observed by Seller prior to or at the Closing.

 

(f)                                    Title
Insurance.  The Title Company shall
have issued to Purchaser (and any successors and assigns as contemplated by
Section 9.03, if applicable) the Title Policies in the amount of the
Purchase Price insuring title to the Real Property in the Purchaser (and any
such successors and assigns) subject only to the Permitted Exceptions and with
such endorsements as requested by Purchaser.

 

(g)                                 
LC.  The LC Bank shall have
delivered the LC to Seller.

 

(h)                                 Tax
Consequences.  No aspect of the
transactions contemplated by this Agreement and the Related Agreements will, in
the Purchaser’s sole judgment, result in unfavorable tax consequences to the
Purchaser or any of its Affiliates, including the potential recognition of
“unrelated business taxable income” (as defined in Sections 512 through 514 of
the Code).

 

(i)                                     Acreage
Adjustment.  Purchaser and Seller
shall have mutually approved any adjustment to the Purchase Price in accordance
with Section 2.04(b).

 

14

 

3.04                           Additional Conditions Precedent to
Obligations of Seller.

 

The obligation of Seller to consummate the
transactions contemplated hereby shall be subject to the fulfillment on or
before the Closing Date of all of the following conditions, any or all of which
may be waived by Seller in its sole discretion:

 

(a)                                  Payment
of Purchase Price.  Seller shall
have received the Adjusted Cash Amount, less the Deposit, the Note and the LC
and the Escrow Agent shall have released the Deposit to Seller.

 

(b)                                 Closing
Deliveries.  Purchaser shall have
delivered, or caused to be delivered to Seller, the items set forth in
Section 3.05(b).

 

(c)                                  Truth
of Warranties.  All of the
representations and warranties of Purchaser contained in this Agreement (i)
that are not qualified by materiality shall be true and correct in all respects
when made and shall be deemed to have been made at and as of the Closing and shall
then be true and correct in all material respects and (ii) that are qualified
by materiality shall be true and correct when made and shall be deemed to have
been made at and as of the Closing and shall then be true and correct, in each
case other than representations and warranties that expressly speak only as of
a specific date or time, which will be true and correct as of such specified
date or time.

 

(d)                                 Performance
of Obligations.  Purchaser shall
have performed and observed all covenants and agreements contained in this
Agreement that are to be performed and observed by Purchaser prior to or at the
Closing.

 

3.05                           Deliveries at Closing.

 

(a)                                  Seller
Deliveries.  At the Closing, the
Seller shall deliver or cause to be delivered to the Purchaser:

 

(i)                                     one
special warranty deed for each county in the State of Texas in which the Real
Property is located in the form attached hereto as Exhibit D
(collectively, the “Deeds”), duly executed and acknowledged by Seller,
conveying to Purchaser all of the Real Property;

 

(ii)                                  a
Bill of Sale in the form attached hereto as Exhibit E (the “Bill
of Sale”), duly executed by Seller, conveying to Purchaser the Personal
Property, and all of Seller’s right, title and interest in the Records and
Plans.

 

(iii)                               an
Assignment and Assumption Agreement in the form attached hereto as Exhibit F
(the “Assignment and Assumption Agreement”), duly executed by Seller,
conveying to Purchaser all of Seller’s right, title and interest in and to the
Leases, Purchased Contracts and Licenses;

 

(iv)                              an
affidavit in the form attached hereto as Exhibit G, executed by
Seller in favor of the Title Company;

 

(v)                                 water
and sewer notice, and other like notices required pursuant to the laws of the
State of Texas.

 

15

 

(vi)                              a
certificate of non-foreign status in the form attached hereto as Exhibit H
duly executed by Seller;

 

(vii)                           the
Conveyancing Instruments necessary to transfer to Purchaser the Mineral Rights
and the Water Rights;

 

(viii)                        releases
(in recordable form if necessary) of any and all financing or materialmen’s,
mechanic’s, workers’, carriers’ or other like liens on the Property, security
interests in any of the Property, and all other liens, claims or interests
objected to by Purchaser with respect to the Property;

 

(ix)                                a
certificate dated as of the Closing Date and executed by a duly authorized
officer of Seller certifying as to the fulfillment of the conditions set forth
in Sections 3.03(c), (d) and (e) and Section 7.01(a);

 

(x)                                   a
copy of the resolution of the board of directors of Seller authorizing the
execution, delivery and performance of this Agreement and the Related
Agreements to be executed by Seller, certified by the secretary or an assistant
secretary of Seller;

 

(xi)                                all
of the consents that Seller and Purchaser have agreed are required to
consummate the transactions contemplated by this Agreement;

 

(xii)                             a
legal opinion from Seller’s general counsel in the form attached hereto as Exhibit
I;

 

(xiii)                          a lease
agreement in a form to be mutually agreed upon by Seller and The Molpus
Woodlands Group for the administrative office of Seller located in Silsbee, TX
(the “Lease Agreement”), duly executed by Seller; provided that
such lease agreement shall contain a ten year lease term, with an option to
extend such term for a period of five years at the election of The Molpus
Woodlands Group, and an annual rent of $100.00;

 

(xiv)                         a letter
agreement in the form attached hereto as Exhibit J (the “Letter
Agreement”), duly executed by Seller; and

 

(xv)                            such
other certificates, assurances and documents as Purchaser may reasonably
request to carry out the consummation of the transactions contemplated by this
Agreement.

 

(b)                                 Purchaser
Deliveries.  At the Closing,
Purchaser shall deliver or cause to be delivered to Seller:

 

(i)                                     the
Assignment and Assumption Agreement duly executed by Purchaser;

 

(ii)                                  a
counterpart of any required notices provided pursuant to
Section 3.05(a)(v);

 

(iii)                               the
Note duly executed by Purchaser;

 

(iv)                              the
LC;

 

16

 

(v)                                 a
certificate dated as of the Closing Date and executed by a duly authorized
officer of Purchaser certifying as to the fulfillment of the conditions set
forth in Sections 3.04(c) and (d);

 

(vi)                               a
legal opinion from Ropes & Gray LLP, counsel to the Purchaser, in the form
attached hereto as Exhibit K;

 

(vii)                           the
Lease Agreement duly executed by The Molpus Woodlands Group;

 

(viii)                        the Letter
Agreement, duly executed by Purchaser; and

 

(ix)                                such
other certificates, assurances and documents as Seller may reasonably request
to carry out the consummation of the transactions contemplated by this
Agreement.

 

3.06                           Prorations.

 

(a)                                  Proration
Items.  The following items
(collectively, the “Proration Items”) will be prorated as of 11:59 p.m.
Central Time on the date immediately preceding the Closing Date (the “Proration
Time”):

 

(i)                                     real
estate, personal property, occupancy and other similar taxes and assessments
(the “Property Taxes”), subject to the terms of Section 3.06(c)
below; and

 

(ii)                                  prepaid
rents, up-front payments, income, permit or registration fees and royalty
payments from the Purchased Contracts, Leases and Licenses; and

 

(iii)                               utility
bills and charges for water, telephone, electricity and other utilities and
fuel.

 

(b)                                 Method
of Proration.  Seller will be
charged and credited for the amounts of any Proration Items relating to the
period up to and including the Proration Time, and Purchaser will be charged
and credited for all of the Proration Items relating to the period after the
Proration Time.  The preliminary
estimated Closing prorations will be set forth on a preliminary closing
statement to be prepared by Seller and submitted to Purchaser for Purchaser’s
approval prior to the Closing Date.  The
preliminary closing statement, once agreed upon by Purchaser and Seller (the “Closing
Statement”), will be signed by Purchaser and Seller and delivered to the
Title Company for purposes of making the preliminary proration adjustment at
Closing subject to the post-closing adjustment provided below.  The preliminary proration shall be paid at
Closing by Purchaser to Seller (if the preliminary prorations result in a net
credit to Seller) or by Seller to Purchaser (if the preliminary prorations
result in a net credit to Purchaser). 
If the actual amounts of the Proration Items are not known at the
Proration Time, the prorations will be made at Closing on the basis of the best
evidence then available; thereafter, when actual figures are received (not to
exceed 120 days following Closing), re-prorations will be made on the basis of
the actual figures, and a final settlement will be made between Seller and
Purchaser with any net credit to Purchaser paid to Purchaser in cash by Seller
and any net credit to Seller paid to Seller in cash by Purchaser; provided,
that no re-proration will be made with respect to any Proration Item described
in Section 3.06(a)(ii) to the extent that such re-proration would
constitute a Contingent Obligation (as defined Section 7.13 below).

 

17

 

(c)                                  Property
Taxes.  If the current year’s
Property Taxes are not then known, the parties shall prorate the Property Taxes
on the basis of the previous year’s Property Taxes, or if applicable, on the
basis of a written estimate of the current year’s Property Taxes received from
the assessor’s office, multiplied by 104% of the prior year’s tax
rate.  To the extent that any of the
Real Property includes only a portion of a particular tax parcel, then for
purposes of performing the Property Tax proration for the parcel being retained
by Seller, the Property Taxes for that particular parcel shall be deemed to be
the Property Taxes due for the entire tax parcel multiplied by a fraction, the
numerator of which is the acreage in the parcel being retained by Seller and
the denominator of which is the total acreage of the property that comprises
the entire tax parcel.  Purchaser shall
receive a credit on the Closing Statement for any such amounts and Purchaser
agrees to pay the Property Tax for such tax parcels for the year in which the
Closing occurs, prior to delinquency, and to provide Seller with written
evidence that Purchaser timely paid the Property Tax on any such partial
lots.  Within thirty (30) days after the
date on which such Property Taxes are paid by Purchaser, re-prorations shall be
made on the basis of the actual Property Taxes due by each party with respect
to such partial tax lots, and a final settlement will be made between Seller
and Purchaser with any net credit to Purchaser paid to Purchaser in cash by
Seller and any net credit to Seller paid to Seller in cash by Purchaser.  Notwithstanding the foregoing, if the
Property is specially assessed for ad valorem property taxes, Seller shall be
responsible for and shall pay all deferred and/or additional Taxes that arise
from Seller’s use or activities on the Property prior to the Closing Date,
regardless of whether the Property is disqualified for such special assessment
at or after the Closing Date.

 

(d)                                 Contracts.  Purchaser will receive a credit on the
Closing Statement for the prorated amount (as of the Proration Time) for any
and all payments due or owing under any Purchased Contracts, Leases and
Licenses the payments of which are made in a periodic nature, for periods prior
to the Closing Date.  If Seller has paid
any amounts under any such Purchased Contracts, Leases and Licenses the
payments of which are made in a periodic nature, for periods after the
Proration Time, Seller will receive a credit on the Closing Statement for the
prorated amount (as of the Proration Time) for such amounts.

 

3.07                           Purchase Price Allocation.  The parties agree that the preliminary
allocation of the Purchase Price shall be set forth in Section 3.07 of the
Disclosure Schedule.  The Seller and
Purchaser agree that the allocation may be amended or modified by mutual
agreement to establish a final allocation prior to the Closing Date.

 

3.08                           Costs and Expenses.

 

(a)                                  Except
as provided in Sections 3.08(b) and (c), each party will pay its own costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby.

 

(b)                                 Seller
will pay (i) any costs charged by the Title Company for the production of the
Title Commitment including title search, examination fees and expenses
associated therewith, (ii) recording fees for the Deeds and any other
Conveyancing Instruments, (iii) one-half of the escrow fee, (iv) any
personal property sales/use or vehicle transfer tax applicable to the sale, (v)
any real estate transfer, documentary or stamp tax applicable to the sale, and
(vi) any fees and costs of any financial advisor or other consultant
retained by Seller.

 

18

 

(c)                                  Purchaser
will pay (i) any and all premiums for the Title Policies, endorsements to the
Title Policies and any mortgagee title policies and any endorsements thereto or
taxes thereon, (ii) the cost of obtaining or updating any New Surveys or
updating any Existing Surveys, (iii) one-half of the escrow fee, (iv) any fees
or costs of any financial advisor or other consultant retained by Purchaser,
and (v) a one-time upfront LC fee to the LC Bank for the full term of the LC to
and including the LC expiration date.

 

ARTICLE
IV

REPRESENTATIONS AND WARRANTIES OF SELLER

 

4.01                           Representations and Warranties of Seller.  Subject to the provisions of
Section 4.03 and the exceptions referred to in the Disclosure Schedule,
Seller represents and warrants to Purchaser that the statements contained in
this Section 4.01 are correct and complete as of the date of this
Agreement and, unless a date is specified in such representation and warranty,
will be correct and complete as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this Section 4.01).

 

(a)                                  Organization
of Seller.  Seller is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware.  Seller has all
necessary corporate power and authority to (i) conduct its business as it is
presently being conducted, (ii) execute this Agreement and the Related
Agreements to which it is to be a party and (iii) perform its obligations and
consummate the transactions contemplated hereby and thereby.  Seller is duly qualified to do business in
the State of Texas and the failure to be qualified to do business in any other
jurisdiction would not, individually or in the aggregate, have a material
adverse effect on the financial condition or results of operations of Seller or
Seller’s ability to perform its obligations under this Agreement and the
Related Agreements to which it is to be a party.

 

(b)                                 Authorization.  All corporate and other actions or
proceedings (including shareholder action) to be taken by or on the part of
Seller to authorize and permit the execution and delivery by Seller of this
Agreement and the Related Agreements, the performance by Seller of its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby have been duly and properly taken.  This Agreement has been, and the Related
Agreements to be executed and delivered by Seller at the Closing will have
been, duly executed and delivered by Seller. 
Upon execution by Seller of this Agreement and such Related Agreements,
assuming the valid authorization, execution and delivery by the Purchaser of
this Agreement and any Related Agreements to which the Purchaser is a party,
this Agreement and the Related Agreements shall constitute, legal, valid and
binding obligations of Seller that are enforceable against Seller in accordance
with their terms.

 

(c)                                  Non-Contravention.  Subject to obtaining the consents, approvals
and waivers, and taking the actions, making the filings and giving the notices,
referred to in Section 4.01(c) of the Disclosure Schedule, the
execution and delivery by Seller of this Agreement and the Related Agreements
to be executed and delivered by Seller at Closing and the consummation by
Seller of the transactions contemplated hereby and thereby will not conflict
with, result in a breach or violation of, or default under (i) any judgment,
order, injunction, decree, regulation or ruling of any Governmental Authority
applicable to Seller or any of its assets; (ii) any statute, law, ordinance,
rule or regulation; (iii) the terms, conditions or provisions of the Seller’s
certificate of incorporation, bylaws or any standing resolution of its Board of

 

19

 

Directors,
or (iv) any Purchased Contract, Lease, License or any note or other evidence of
indebtedness, mortgage, deed of trust, indenture, or other agreement or
instrument to which Seller is a party or by which Seller or the Property may be
bound, except for such conflict, breach, violation or default which would not
adversely affect the validity or enforceability of this Agreement or the
ability of Seller to consummate the transactions contemplated hereby or by the
Related Agreements and would not adversely affect the operation of the Property
by the Purchaser.

 

(d)                                 Consents
and Approvals.  There are no
approvals, consents or registration requirements with respect to any
Governmental Authority or any other Person that are or will be necessary for
the valid execution and delivery by the Seller of this Agreement and the
Related Agreements to which it is to be a party, or the consummation of the
transactions contemplated hereby and thereby, other than (i) those which are
listed on Section 4.01(d) of the Disclosure Schedule and (ii) any filing
required under the HSR Act.

 

(e)                                  Suits
and Proceedings.  Except as set
forth in Section 4.01(e) of the Disclosure Schedule, there are no
legal actions, suits or similar proceedings pending or, to the Knowledge of the
Seller, threatened against Seller or the Property that (i) seek to restrain or
enjoin the execution and delivery of this Agreement or the Related Agreements
to which it is to be a party, or the consummation of any of the transactions
contemplated hereby or thereby or (ii) if adversely determined, would, individually
or in the aggregate, be expected to materially adversely affect the value of
the Property or the continued operations of the Real Property.  There are no judgments, outstanding orders,
injunctions, decrees, stipulations or awards against the Seller (or affecting
any of its assets, including the Property) which prohibit or restrict or could
reasonably be expected to result in any delay of the consummation of the
transactions contemplated by this Agreement.

 

(f)                                    Contracts.  Except as disclosed in Section 4.01(f)
of the Disclosure Schedule, to the Knowledge of the Seller with respect to
each Purchased Contract:  (i) the
Purchased Contract is legal, valid, binding and enforceable and in full force
and effect, subject to the Seller obtaining the necessary consents disclosed in
Section 4.01(d) of the Disclosure Schedule, and the Purchased Contract
will continue to be legal, valid, binding and enforceable in accordance with
its terms and in full force and effect on identical terms following the
consummation of the transactions contemplated hereby, (ii) neither the Seller
nor any other party thereto is in breach thereof or default thereunder and no
event has occurred which with notice or lapse of time would constitute a breach
or default, or permit termination, modification, or acceleration under the
Purchased Contract, and (iii) no party has repudiated any provision of the
Purchased Contract.  Except for the
Excluded Assets, Seller has not entered into, been assigned or assumed any
Purchased Contract or other agreement relating to the Real Property or the
Personal Property evidenced by a writing, and to the Knowledge of the Seller,
Seller has not entered into, been assigned or assumed any Purchased Contract or
other agreement relating to the Real Property or the Personal Property not
evidenced by a writing, in each case other than the Contracts disclosed in Section
2.01(g) of the Disclosure Schedule, the Additional Agreements and
agreements disclosed in the deed records of the Counties of Polk, Tyler,
Liberty, Hardin, Jasper, Newton and Orange of the State of Texas.  The Seller shall have provided to Purchaser
access to a correct and complete copy of each Contract listed on Section
2.01(g) of the Disclosure Schedule no later than seven (7) days after the
Effective Date.

 

20

 

(g)                                 Leases.  Except as disclosed in Section 4.01(g)
of the Disclosure Schedule, to the Knowledge of the Seller with respect to
each Lease set forth in Section 2.01(h) of the Disclosure Schedule:  (i) the Lease is legal, valid, binding and
enforceable in accordance with its terms and in full force and effect, subject
to the Seller obtaining the necessary consents disclosed in Section 4.01(d)
of the Disclosure Schedule, and the Lease will continue to be legal, valid,
binding, enforceable in accordance with its terms and in full force and effect
on identical terms following the consummation of the transactions contemplated
hereby, (ii) neither the Seller nor any other party thereto is in breach thereof
or default thereunder and no event has occurred which with notice or lapse of
time would constitute a breach or default, or permit termination, modification,
or acceleration under the Lease, and (iii) no party has repudiated any
provision of the Lease.  Except for the
Excluded Assets, Seller has not entered into, been assigned or assumed any
Lease or other agreement relating to the Real Property or the Personal Property
evidenced by a writing, and to the Knowledge of the Seller, Seller has not
entered into, been assigned or assumed any Lease or other agreement relating to
the Real Property or the Personal Property not evidenced by a writing, in each
case other than the agreements disclosed in the Section 2.01(h) of the
Disclosure Schedule and agreements disclosed in the deed records of the
Counties of Polk, Tyler, Liberty, Hardin, Jasper, Newton and Orange of the
State of Texas.  The Seller shall have
provided to Purchaser access to a correct and complete copy of each Lease
listed on Section 2.01(h) of the Disclosure Schedule  no later than seven (7) days
after the Effective Date.

 

(h)                                 Licenses.  Except as disclosed in Section 4.01(h)
of the Disclosure Schedule, the Licenses set forth in Section 2.01(f)
of the Disclosure Schedule constitute all licenses necessary to operate the
Real Property in the manner that it is presently operated, except where the
failure to hold a license would not materially adversely affect such operation
of the Real Property.  The Seller shall
have provided to Purchaser access to a correct and complete copy of each
License listed on Section 2.01(f) of the Disclosure Schedule no
later than seven (7) days after the Effective Date.

 

(i)                                     Title
and Access to Real Property.  Except
as disclosed in Section 4.01(i)-1 of the Disclosure Schedule:  (i) Seller owns fee simple title to the Real
Property, free and clear of all Title Claims, and upon the execution and
delivery of the Conveyancing Instruments, Purchaser will have fee simple title
to the Real Property, free and clear of all Title Claims; and (ii)  Seller has access to the Real Property for
ingress and egress to and from public roads as would be commercially reasonable
to permit Purchaser to manage and operate and harvest timber from the Real
Property as presently operated. Except as disclosed in Section 4.02(i)-2 of
the Disclosure Schedule, to the Knowledge of Seller, no disputes exist with
any Persons with respect to access to or from the Real Property.

 

(j)                                     Title
to Personal Property.  Except as
disclosed in Section 4.01(j) of the Disclosure Schedule, Seller has good
title to all of the Personal Property free and clear of any Liens of any kind
whatsoever.

 

(k)                                  Volume
and Quality of Timber.  The
specifications with respect to the volume and category of timber set forth on
the attached Section 4.01(k) of the Disclosure Schedule were arrived at
by the Seller in good faith.  The Seller
is not in the possession of any information, or aware of any condition, damage,
injury or loss with respect to the Property which would cause a reasonable person
to determine that such specifications are materially misleading.

 

21

 

(l)                                     Compliance
with Laws.  Except as set forth in Section 4.01(l)
of the Disclosure Schedule, Seller holds all material licenses, certificates,
permits, franchises, approvals, exemptions, registrations and rights of any
Governmental Authority which are necessary to operate the Real Property as
currently operated.  Seller is currently
operating the Real Property in compliance in all respects with all applicable
laws, statutes, rules, regulations, judgments, orders and decrees of any
Governmental Authority applicable to the Real Property, and except as set forth
in Section 4.01(l)-2 of the Disclosure Schedule, Seller has not
received any written notice of any failure to be so in compliance that remains
uncured.

 

(m)                               Environmental
Matters.  Except as set forth in the
Environmental Assessment, Louisiana-Pacific Properties, Big Block Transaction,
Jasper, Cleveland and Silsbee Areas, dated as of December 20, 2002, performed
by Brown and Caldwell, to the extent such assessment pertains to the Real
Property, and except as disclosed in Section 4.01(m)-1 of the
Disclosure Schedule: (i) Seller has operated, and is currently operating,
the Real Property in compliance in all respects with all applicable
Environmental Laws, (ii) to the Knowledge of Seller, there has been no release
or threatened release of any Hazardous Material on, upon, into or from the Real
Property, (iii) during the five (5) years prior to the Closing Date, there have
been no Hazardous Materials generated by the Seller that have been disposed of,
released or come to rest at the Real Property, (iv) to the Knowledge of the
Seller there are no underground storage tanks located on, no PCBs or
PCB-containing equipment used or stored on, and no Hazardous Material stored on
the Real Property, (v) no portion of the Real Property has ever been used by
Seller or with Seller’s permission during Seller’s period of ownership, as a
landfill to receive solid waste, whether or not hazardous, or for the dumping,
discharge, treatment, storage, release or disposal of any Hazardous Material
except for oil and gas residuals from wells and (vi) to the Knowledge of the
Seller all restoration of the surface as to surface or subsurface mining,
gravel or other digging operations no longer in operation have been completed
in compliance with applicable laws and regulations.  Except as disclosed in Section 4.01(m)-2 of the
Disclosure Schedule: (i) Seller has not received any written notice of a
violation of any Environmental Laws from any Governmental Authority that has
not been remediated in accordance with applicable Environmental Laws or remains
uncured; (ii) to the Knowledge of Seller, there are no Claims relating to the
condition of the Real Property or any part thereof or the conduct by the Seller
of its business thereon; (iii) to the Knowledge of Seller, there are no
anticipated Claims regarding any portion of the Real Property that may be
targeted for clean-up of any Hazardous Material; and (iv) to the Knowledge of
the Seller, no part of the Real Property has been used in a manner in violation
of applicable Environmental Laws, even if such use has been terminated and
remediation has occurred.

 

(n)                                 Matters
relating to the Real Property. 
Except as disclosed in Section 4.01(n)-1 of the Disclosure Schedule,
no condemnation proceeding is pending, or, to the Knowledge of the Seller,
threatened, by any Governmental Authority relating to the Real Property.  Except as disclosed in Section 4.01(n)-2
of the Disclosure Schedule, no adverse possession proceeding relating to
the Real Property is pending and to the Knowledge of the Seller, no boundary
line or adverse possession dispute relating to the Real Property is pending or threatened.

 

(o)                                 Endangered
and Exotic Species.  As of the date
hereof, except as disclosed in Section 4.01(o) of the Disclosure
Schedule, to the Knowledge of Seller: (i) there are no plants or animals
which are listed as threatened or endangered under the Endangered Species Act 

 

22

 

located
on the Real Property, and (ii) Seller has not imported, raised or released
exotic animals within the boundaries of the Real Property.

 

(p)                                 Cemeteries.  Except as disclosed in Section 4.01(p)
of the Disclosure Schedule, to the Knowledge of Seller, no portion of the
Real Property is being or has been used as a cemetery.

 

(q)                                 Limited
Use Property.  Except as disclosed
in Section 4.01(q)-1 of the Disclosure Schedule, no portion of the Real
Property has been designated by Seller or any prior owner as “Qualified
open-space land” pursuant to Section 23.51, et seq of Title 1 of the V.T.C.A.
Tax Code (the “Property Tax Code”). 
Except as disclosed in Section 4.01(q)-2 of the Disclosure Schedule,
no portion of the Real Property has been designated as part of an “aesthetic
management zone”, a “critical wildlife habitat zone”, a “streamside management
zone”, or as “qualified restricted-use timber land” pursuant to Section
23.9801, et seq. of the Property Tax Code.

(r)                                    Taxation
as Qualified Timber Land.  The Real
Property qualifies for and has received the benefit of taxation as qualified
timber land pursuant to Section 23.71 of the Property Tax Code.  Seller has properly filed all necessary
applications to continue the Real Property being appraised as qualified timber
land for 2003 and has filed all proper applications and the Real Property has
been taxed in at least 5 of the last 7 years as qualified timber land.  To the Knowledge of Seller, there has been
no change in use for any portion of the Real Property such that it is or was no
longer considered as qualified timber land for assessment and taxation
purposes.

 

(s)                                  Prescribed
Burning Obligations.  No portion of
the Real Property is subject to prescribed burning obligations by the Texas
Forest Service.

 

(t)                                    Infestation
Control.  No portion of the Real
Property is subject to control measures for infestations by the Texas Forest
Service and there has been no filing or receipt of any notice by Seller from
the Texas Forest Service of the intent by Texas Forest Service regarding the
existence of any infestation.

 

(u)                                 Taxes.  There are no Liens, other than the Permitted
Exceptions, on any of the Property that arose in connection with any failure to
alleged failure to pay any tax and there are no material claims for taxes which
might result in any such Liens.

 

(v)                                 Acquisition
for Investment.  Seller acknowledges
that the Note will not be registered under the Securities Act of 1933 or
qualified or registered under any state securities laws and that no public
market exists for the Note.  Seller is
acquiring the Note for its own account, and not with a view to the resale or
distribution thereof otherwise than in compliance will all applicable state and
federal securities laws.  Seller is an “accredited
investor” within the meaning of Rule 501 of Regulation D under the
Securities Act of 1933 and can bear the economic risk of its investment in the
Note, and has such knowledge and experience in financial or business matters
that it is capable of evaluating the merits and risks of its investment in the
Note.

 

(w)                               No
Leasehold Interest.  None of the
Seller nor any Tax Affiliate of the Seller has any leasehold interest in the
Property, or any leaseback of any portion of the Property that would result, at
or immediately following the Closing, in a lease described in Section 

 

23

 

514(c)(9)(B)
(iii) of the Code, nor will any such lease or leaseback be created by the
transactions contemplated by this Agreement.

 

(x)                                   Due
Diligence Documents.  The documents
to be made available to the Purchaser and its representatives during the
Purchaser’s due diligence review of the Property, including those documents
described on the Disclosure Schedule, were (A) prepared and used in the actual
and ordinary course of the Seller’s business operations and are correct and
complete copies of such documents, or, to the extent that such documents
contain confidential information which Seller cannot disclose to Purchaser, are
summaries of correct and complete documents used in the actual and ordinary
course of Seller’s business operations and (B) to the Knowledge of the Seller,
are not incorrect, inaccurate or misleading in any material respect when taken
as a whole.

 

(y)                                 Absence
of Changes.  Since December 31,
2002, (i) there has not been any Casualty Loss, except normal wear and tear of
the elements, and (ii) there has not been any material liability of the Seller
with regard to the Property, contingent or otherwise, other than trade
accounts, operating expenses, obligations under executory contracts incurred
for fair consideration, or taxes accrued with respect to operations during such
period, all incurred in the ordinary course of business consistent with past
practices.

 

(z)                                   Mineral
and Water Rights.  Neither Seller
nor any of its subsidiaries or Affiliates has any right, title and interest in
or to any minerals or mineral interests and any right, title and interest in or
to any surface water or water rights, in each case with respect to the Real
Property, that are not being conveyed to Purchaser hereunder.  Except as set forth in Section 4.01(z) of
the Disclosure Schedule, to the Knowledge of Seller, Seller has not sold,
conveyed, assigned, transferred or licensed any surface water or surface water
rights related to the surface water and water rights with respect to the Real
Property.

 

(aa)                            Officers
and Employees.  The individuals on Section
1.01-1 of the Disclosure Schedule represent all the management personnel of
Seller directly involved in administrative, silvicultural, harvesting and other
land management activities with respect to the Property.

 

4.02                           Supplemental Disclosure.  In the event that Seller discovers or
becomes aware of any matter hereafter arising or discovered which, if existing
and known at the Effective Date, would have been required to have been set
forth or described in such Disclosure Schedule, it may submit to the Purchaser
in writing a proposed supplement to the Disclosure Schedule (a “Proposed
Supplement”) no later than (i) in the case of environmental matters, the
Environmental Due Diligence Deadline, or (ii) in the case of all other matters,
August 1, 2003.  Purchaser shall notify
Seller in writing no later than (i) in the case of environmental matters, ten
(10) days after the Environmental Due Diligence Deadline, or (ii) in the case
of all other matters, August 11, 2003, whether, in its sole discretion, it
accepts the Proposed Supplement or whether it desires additional time to
conduct Due Diligence with respect to the matters raised in a Proposed
Supplement.  In the event Purchaser
notifies Seller that it desires additional time to conduct Due Diligence of any
matter disclosed in a Proposed Supplement, Purchaser shall have until (i) in
the case of environmental matters, sixty (60) days after the Environmental Due
Diligence Deadline, or (ii) in the case of all other matters, September 26,
2003, to complete its Due Diligence (the “Extended Due Diligence Period”).
 During the Extended Due Diligence
Period, Purchaser and Seller shall negotiate with one another and shall attempt
to reach a mutually agreeable resolution 

 

24

 

with
respect to the matters disclosed in any Proposed Supplement.  No later than the end of the Extended Due
Diligence Period, Purchaser shall notify Seller in writing whether or not, in
its sole discretion, it consents to any Proposed Supplement, or any portion
thereof, and the conditions on which any such consent is being given.  Upon satisfaction of such conditions, the
matters to which consent has been given shall constitute a “Supplement,”
and any such Supplement shall be given effect for all purposes under or in
connection with this Agreement and the transactions contemplated hereby as if
made on the Effective Date. 
Notwithstanding the foregoing, Purchaser’s knowledge of any matter
contained in a Proposed Supplement and Purchaser’s decision to exclude any or
all of such matters from any Supplement is not intended to be, and shall not be
deemed to be, a waiver of Purchaser’s rights to recover from Seller for any
breach of any representation or warranty or any covenant under this Agreement
or a waiver of Purchaser’s rights under Article VI.

 

4.03                           NO REPRESENTATIONS.  PURCHASER SPECIFICALLY ACKNOWLEDGES AND
AGREES THAT (i) EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN ANY RELATED
AGREEMENT, DOCUMENT, CERTIFICATE OR INSTRUMENT REQUIRED HEREBY, SELLER IS
TRANSFERRING THE PROPERTY “AS IS, WHERE IS AND WITH ALL FAULTS” AND (ii) EXCEPT
FOR THE REPRESENTATIONS AND WARRANTIES OF SELLER EXPRESSLY SET FORTH HEREIN, OR
IN ANY RELATED AGREEMENT, DOCUMENT, CERTIFICATE OR INSTRUMENT REQUIRED HEREBY,
NEITHER SELLER NOR ANY OTHER PERSON IS MAKING, AND PURCHASER IS NOT RELYING ON,
ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, WHETHER ORAL OR
WRITTEN, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, AS TO ANY MATTER
CONCERNING ANY OF THE PROPERTY OR THE TRANSACTIONS CONTEMPLATED HEREBY, OR THE
ACCURACY OR COMPLETENESS OF ANY INFORMATION PROVIDED TO PURCHASER BY SELLER OR
ANY OTHER PERSON OR OTHERWISE OBTAINED BY PURCHASER CONCERNING ANY OF THE
PROPERTY OR THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING ANY REPRESENTATIONS
OR WARRANTIES RELATING TO:  (A) THE
QUALITY, NATURE, HABITABILITY, MERCHANTABILITY, USE, OPERATION, VALUE,
MARKETABILITY, ADEQUACY OR PHYSICAL CONDITION OF ANY OF THE PROPERTY OR ANY
ASPECT OR PORTION THEREOF, INCLUDING STRUCTURAL ELEMENTS OF ANY BUILDINGS OR
IMPROVEMENTS, ACCESS, SEWAGE, WATER AND UTILITY SYSTEMS, FACILITIES AND
APPLIANCES, SOILS, GEOLOGY, SURFACE WATER, GROUNDWATER OR ACCESS TO OR VALUE,
VOLUME OR QUALITY OF TIMBER; (B) THE MAGNITUDE OR DIMENSIONS OF ANY REAL
PROPERTY; (C) THE DEVELOPMENT OR INCOME POTENTIAL, OR RIGHTS OF OR RELATING TO,
ANY REAL PROPERTY, OR THE FITNESS, SUITABILITY, VALUE OR ADEQUACY OF ANY REAL
PROPERTY FOR ANY PARTICULAR PURPOSE; (D) THE ZONING OR OTHER LEGAL STATUS OF
ANY REAL PROPERTY OR THE EXISTENCE OF ANY OTHER PUBLIC OR PRIVATE RESTRICTIONS
ON THE USE OF ANY REAL PROPERTY; (E) THE COMPLIANCE OF ANY REAL PROPERTY OR ITS
OPERATION WITH ANY APPLICABLE CODES, LAWS, REGULATIONS, STATUTES, ORDINANCES,
COVENANTS, CONDITIONS AND RESTRICTIONS OF ANY GOVERNMENTAL AUTHORITY OR OF ANY
OTHER PERSON; (F) THE ABILITY OF PURCHASER TO OBTAIN ANY NECESSARY
GOVERNMENTAL APPROVALS, LICENSES OR PERMITS FOR THE USE OR DEVELOPMENT OF ANY 

 

25

 

REAL PROPERTY; OR (G) THE
PRESENCE, ABSENCE, CONDITION OR COMPLIANCE OF ANY HAZARDOUS MATERIALS ON, IN,
UNDER, ABOVE OR ABOUT ANY REAL PROPERTY OR ANY ADJOINING OR NEIGHBORING
PROPERTY.

 

ARTICLE
V

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

5.01                           Representations and Warranties of
Purchaser.  Purchaser represents
and warrants to Seller that the statements contained in this Section 5.01
are correct and complete as of the date of this Agreement and, unless a date is
specified in such representation and warranty, will be correct and complete as
of the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section 5.01).

 

(a)                                  Organization
of Purchaser.  Purchaser is a
limited liability company duly formed, validly existing and in good standing
under the laws of the State of Delaware. 
Purchaser has all the necessary power and authority to (i) conduct its
business as it is presently being conducted, (ii) execute this Agreement and
the Related Agreements to which it is to be a party and (iii) perform its
obligations and consummate the transactions contemplated hereby and
thereby.  As of the Closing Date,
Purchaser will be qualified to do business in each jurisdiction in which the
failure to do so would, individually or in the aggregate, have a material
adverse effect on the financial condition or results of operations of
Purchaser.

 

(b)                                 Authorization.  All limited liability company and other
actions or proceedings to be taken by or on the part of Purchaser to authorize
and permit the execution and delivery by Purchaser of this Agreement and the
Related Agreements, the performance by Purchaser of its obligations hereunder
and thereunder and to consummate the transactions contemplated hereby and
thereby have been duly and properly taken. 
This Agreement has been, and the Related Agreements to be executed and
delivered by Purchaser at the Closing will have been, duly executed and
delivered by Purchaser.  This Agreement
constitutes, and the Related Agreements to be executed and delivered by
Purchaser at the Closing will constitute, legal, valid and binding obligations
of Purchaser that are enforceable in accordance with their terms against
Purchaser.

 

(c)                                  Non-Contravention.  Subject to obtaining the consents, approvals
and waivers, and taking the actions, making the filings and giving the notices,
referred to in Section 5.01(c) of the Disclosure Schedule, the
execution and delivery, by Purchaser of this Agreement and the Related
Agreements to be executed and delivered by Purchaser at the Closing and the
consummation by Purchaser of the transactions contemplated hereby and thereby
will not conflict with, result in a breach or violation of, or default under
(i) any judgment, order, injunction, decree, regulation or ruling of any court
or Governmental Authority applicable to Purchaser or any of its assets;
(ii) any statute, law, ordinance, rule or regulation; or (iii) the terms,
conditions, or provisions of Purchaser’s certificate of formation or operating
agreement, any note or other evidence of indebtedness, any mortgage, deed of
trust or indenture, or any lease or other material agreement or instrument to
which Purchaser is a party or by which Purchaser may be bound.

 

(d)                                 Suits
and Proceedings.  There are no legal
actions, suits or similar proceedings pending or, to Purchaser’s actual
knowledge, threatened against Purchaser that seek 

 

26

 

to
restrain or enjoin the execution and delivery of this Agreement or the Related
Agreements to which it is to be a party, or the consummation of any of the transactions
contemplated hereby or thereby.  There
are no judgments, outstanding orders, injunctions, decrees, stipulations or
awards against the Purchaser or affecting any of its assets, which prohibit or
restrict or could reasonably be expected to result in any delay of the
consummation of the transactions contemplated by this Agreement.

 

(e)                                  Financial
Capability.  Purchaser has
sufficient cash or access to funds to pay the Adjusted Cash Amount and
otherwise perform its obligations hereunder and to pay all fees, costs and
expenses for which it is responsible in connection with the transactions
contemplated hereby, and has credit ratings or capital resources sufficient to
enable it to deliver the Note and the LC.

 

ARTICLE
VI

SURVIVAL; INDEMNIFICATION

 

6.01                           Survival. 
Except as otherwise set forth in the following sentence of this Section
6.01, all of the representations and warranties of Seller contained in
Section 4.01 or in any Exhibit, Schedule, instrument or certificate
delivered pursuant to this Agreement shall survive the Closing and continue in
full force and effect until the third anniversary of the Closing Date.  The representations and warranties of Seller
contained in Sections 4.01(a) (Organization of Seller), 4.01(b)
(Authorization), 4.01(i) (Title and Access to Real Property), 4.01(u) (Taxes)
and 9.16 (No Brokers) shall survive the Closing and shall continue in full
force and effect without limit as to time (subject to the statute of limitation
applicable to the subject matter underlying such representation and warranty
and any extensions or waivers thereof). 
Except as otherwise set forth in the following sentence of this
Section 6.01, all of the representations and warranties of Purchaser
contained in Section 5.01 or in any Exhibit, Schedule, instrument or
certificate delivered pursuant to this Agreement shall survive the Closing and
continue in full force and effect until the third anniversary of the Closing
Date. The representations and warranties of Purchaser contained in
Sections 5.01(a) (Organization of Purchaser), 5.01(b) (Authorization), and
9.16 (No Brokers) shall survive the Closing and shall continue in full force
and effect without limit as to time (subject to the statute of limitation
applicable to the subject matter underlying such representation and warranty
and any extensions or waivers thereof). 
No representation, warranty, covenant or indemnity of Seller under this
Agreement shall merge into the Conveyancing Instruments at Closing.  The termination of any such representation
and warranty shall not affect any claim for breaches of representations and
warranties if written notice thereof is given to the breaching party prior to
such termination date.  All covenants
and indemnities of any party in this Agreement shall, unless otherwise specifically
provided therein, survive the Closing and remain in full force and effect
forever.

 

6.02                           Indemnity by Seller.  Seller will indemnify, defend and hold
harmless the Purchaser and each of its Affiliates (as of the Closing Date )
then having title to any portion of the Property,  and each of their parents, subsidiaries, Affiliates,
predecessors, successors and assigns and their respective officers, directors,
partners, members, managers, employees and agents (the “Purchaser
Indemnified Parties”) from any Losses incurred or suffered by the Purchaser
Indemnified Parties (including those arising out of direct Claims by Purchaser
against Seller) or any of them as a result of, arising out of or relating to,
whether directly or indirectly:  (a) the
breach or inaccuracy or non-fulfillment of any representations or warranties of
the Seller contained in this Agreement, or in any Exhibit, Schedule, instrument
or certificate delivered 

 

27

 

pursuant
to this Agreement (in each case, as such representation or warranty would read
if all qualifications as to materiality, including each reference to the phrase
“material adverse effect” were deleted therefrom), other than up to the
$750,000 of Losses that Purchaser has agreed to incur pursuant to
Section 7.02(b) hereof and up to $1,000,000 of Losses that Purchaser has
agreed to incur pursuant to Section 7.05(b) hereof; provided, that
for purposes of determining the rights of Purchaser Indemnified Parties to
indemnification for Losses incurred or suffered with respect to a breach of
each representation and warranty of Seller in Section 4.01(m) which is
qualified by the phrase “to the Knowledge of the Seller,” the corresponding Section
4.01(m) of the Disclosure Schedule will be deemed to include any matter
discovered by Brown and Caldwell and included in the Purchaser’s Phase I
Report; (b) any breach or violation of any covenant or agreement of the Seller
in this Agreement; (c) any Excluded Liability; (d) any Third Party Claim
brought prior to the seventh anniversary of the Closing Date, which Third Party
Claim arises from or is related to (i) any oil and gas operations which
occurred or are occurring on the Property on or prior to the Closing Date or
(ii) the activities conducted on or prior to the Closing Date on any solid wood
manufacturing site existing on the Property at or prior to the Closing Date;
and (e) any Third Party Claim (other than those contemplated by (d) above)
brought prior to the third anniversary of the Closing Date, which Third Party
Claim arises from or is related to any condition existing on or prior to the
Closing Date which constitutes a violation of or gives rise to a duty to report
or remediate under any Environmental Law.

 

6.03                           Indemnity by Purchaser.  Purchaser will indemnify, defend and hold
harmless the Seller and each of its parents, subsidiaries, Affiliates,
predecessors, successors and assigns and their respective officers, directors,
employees and agents (the “Seller Indemnified Parties”) from any and all
Losses incurred or suffered by Seller Indemnified Parties (including those
arising out of direct claims by Seller against Purchaser) or any of them as a
result of, arising out of or relating to, whether directly or indirectly:  (a) the breach or inaccuracy or
non-fulfillment of any representations or warranties of the Purchaser contained
in this Agreement, or in any Exhibit, Schedule, instrument or certificate
delivered pursuant to this Agreement; (b) any breach or violation of any
covenant or agreement of the Purchaser in this Agreement or the Escrow
Agreement; or (c) any liability which is an Assumed Liability.

 

6.04                           Third Party Claims.

 

(a)                                  Notification.  If any third party shall notify any party
hereto (the “Indemnified Party”) with respect to any matter (a “Third
Party Claim”) which may give rise to a claim for indemnification against
any other party under this Article VI, then the Indemnified Party shall
promptly notify the indemnifying party (the “Indemnifying Party”)
thereof in writing; provided, however, that no delay on the part
of the Indemnified Party shall relieve the Indemnifying Party from any
obligation hereunder unless (and then solely to the extent) the Indemnifying
Party thereby is prejudiced.

 

(b)                                 Defense
by Indemnifying Party.  Any
Indemnifying Party will have the right to defend the Indemnified Party against
the Third Party Claim with counsel of its choice reasonably satisfactory to the
Indemnified Party so long as the (i) Indemnifying Party notifies the
Indemnified Party in writing within thirty (30) days after the Indemnified
Party has given notice of the Third Party Claim that the Indemnifying Party
will indemnify the Indemnified Party from and against the entirety of any
Losses the Indemnified Party may suffer resulting from, arising out of,
relating to, or caused by the Third Party Claim, (ii) the Indemnifying Party
provides the Indemnified Party with evidence acceptable to the Indemnified
Party that the Indemnifying Party 

 

28

 

will
have the financial resources to defend against the Third Party Claim and
fulfill its indemnification obligations hereunder, (iii) the Third Party Claim
involves only money damages and does not seek an injunction or other equitable
relief, (iv) settlement of, or an adverse judgment with respect to, the Third
Party Claim is not, in the good faith judgment of the Indemnified Party, likely
to establish a precedential custom or practice adverse to the continuing
business interests of the Indemnified Party, and (v) the Indemnifying Party
conducts the defense of the Third Party Claim actively and diligently.

 

(c)                                  Settlement.  So long as the Indemnifying Party is
conducting the defense of the Third Party Claim in accordance with
Section 6.04(b) above, (i) the Indemnified Party may retain separate
co-counsel at its sole cost and expense and participate in the defense of the
Third Party Claim, (ii) the Indemnified Party will not consent to the entry of
judgment or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnifying Party (which consent
shall not be unreasonably withheld), and (iii) the Indemnifying Party will not
consent to the entry of judgment or order or enter into any settlement with
respect to the Third Party Claim unless written agreement is obtained releasing
the Indemnified Party from all liability thereunder and such judgment, order or
settlement does not contain any admission of guilt or culpability of the
Indemnified Party.

 

(d)                                 Defense
by Indemnified Party.   In the event
that any of the conditions in Section 6.04(b) above is or becomes
unsatisfied, however, (i) the Indemnified Party may defend against, and consent
to the entry of judgment or enter into any settlement with respect to, the
Third Party Claim in any manner it may deem appropriate (and the Indemnified
Party need not consult with, or obtain any consent from, the Indemnifying Party
in connection therewith), (ii) the Indemnifying Party will reimburse the
Indemnified Party promptly and periodically for the costs of defending against
the Third Party Claim (including reasonable attorneys’ fees and expenses), and
(iii) the Indemnifying Party will remain responsible for any Losses the
Indemnified Party may suffer resulting from, arising out of, relating to, or
caused by the Third Party Claim to the fullest extent provided in this Article
VI.

 

(e)                                  Negligence
of Indemnified Party.  The
indemnities provided by Seller and Purchaser under Sections 6.02(c), (d) and
(e) and 6.03(c), respectively, include Third Party Claims alleging the
negligence of any Indemnified Party.

 

6.05                           Payment.  With
respect to all claims other than Third Party Claims, the Indemnifying Party
shall promptly pay or reimburse the Indemnified Party in respect of any claim
or liability for Losses to which the foregoing indemnities relate after the
receipt of written notice from the Indemnified Party outlining with reasonable
particularity the nature and amount of the claim(s).  All claims for indemnity hereunder must be submitted by the
Indemnified Party to the Indemnifying Party within the time period for survival
set forth in Section 6.01.  In the
event the Indemnifying Party fails or refuses to make payment for such claims
within a period of 30 days from the date of notice to the Indemnifying Party,
the Indemnified Party shall be entitled to exercise all legal means of relief
available.  The Indemnifying Party shall
reimburse the Indemnified Party for all costs and expenses (including
reasonable legal fees and expenses and costs of investigation) incurred by the
Indemnified Party in enforcing its rights under this Article VI.  Such reimbursement shall be without regard
to any monetary limitations on the Indemnifying Party’s obligation to indemnify
the Indemnified Party under Section 6.07.

 

29

 

6.06                           Access and Information.  With respect to any claim for
indemnification hereunder, the Indemnified Party will give to the Indemnifying
Party and its counsel, accountants and other representatives reasonable access,
during normal business hours and upon the giving of reasonable prior notice, to
its books and records relating to such claims, and to its employees,
accountants, counsel and other representatives, all without charge to the Indemnifying
Party, except for the reimbursement of the out-of-pocket reasonable expenses of
the Indemnified Party.  In this regard,
the Indemnified Party agrees to maintain any of its books and records which may
relate to a claim for indemnification hereunder for such period of time as may
be necessary to enable the Indemnifying Party to resolve such claim.

 

6.07                           Monetary Limitations.

 

(a)                                  Seller
Obligations.  The Seller will have
no obligation to indemnify the Purchaser Indemnified Parties pursuant to Sections 6.02(a),
(d) and (e) in respect of the Losses contemplated therein unless the aggregate
amount of all such Losses incurred or suffered by the Purchaser Indemnified
Parties exceeds $3,500,000 (the “Deductible”), and the Seller’s
aggregate liability in respect of claims for indemnification pursuant to
Sections 6.02(a), (d) and (e) will not exceed $50,000,000; provided,
that the amount of the Deductible will be decreased by any Losses incurred by
Purchaser pursuant to Sections 7.02(b) and 7.05(b) hereto in an amount not
to exceed $1,750,000; provided, further, that the foregoing
limitations will not apply to (a) claims for indemnification pursuant to
Section 6.02(a) in respect of breaches of, or inaccuracies in,
representations and warranties set forth in Sections 4.01(a)
(Organization),  4.01(b)
(Authorization), 4.01(u) (Taxes) and 9.16 (No Brokers) or (b) claims based upon
fraud or intentional misrepresentation. 
Claims for indemnification pursuant to Sections 6.02(b) and (c) are
not subject to the monetary limitations set forth in this Section 6.07(a).

 

(b)                                 Purchaser
Obligations.  The Purchaser will
have no obligation to indemnify the Seller Indemnified Persons pursuant to
Section 6.03(a) in respect of Losses arising from the breach of, or
inaccuracy in, any representation or warranty described therein unless the
aggregate amount of all such Losses incurred or suffered by the Seller
Indemnified Parties exceeds $3,500,000, and the Purchaser’s aggregate liability
in respect of claims for indemnification pursuant to Section 6.03(a) will
not exceed $50,000,000; provided, however, that the foregoing
limitations will not apply to (a) claims for indemnification pursuant to
Section 6.03(a) in respect of breaches of, or inaccuracies in,
representations and warranties set forth in Sections 5.01(a)
(Organization), 5.01(b) (Authorization) and 9.16 (No Brokers) or (b) claims
based upon fraud or intentional misrepresentation.  Claims for indemnification pursuant to Sections 6.03(b) and
(c) are not subject to the monetary limitations set forth in this
Section 6.07(b).

 

(c)                                  Knowledge
and Investigation.  The right of the
Purchaser Indemnified Parties or Seller Indemnified Parties to indemnification
pursuant to this Article VI will not be affected by any investigation conducted
or knowledge acquired (or capable of being acquired) at any time, whether
before or after the execution and delivery of this Agreement or the Closing,
with respect to the accuracy of any representation or warranty, or performance
of or compliance with any covenant or agreement, referred to in
Sections 6.02 and 6.03.  The waiver
of any condition contained in this Agreement based on the breach of any such
representation or warranty, or on the performance of or compliance with any
such covenant or agreement, will not affect the right of any Purchaser
Indemnified Parties or Seller Indemnified Parties to 

 

30

 

indemnification
pursuant to this Article VI based on such representation, warranty, covenant or
agreement.

 

6.08                           Remedies Cumulative.  The rights of the Purchaser Indemnified
Parties and Seller Indemnified Parties under this Article VI are cumulative,
and each Purchaser Indemnified Party and Seller Indemnified Party, as the case
may be, will have the right in any particular circumstance, in its sole
discretion, to enforce any provision of this Article VI without regard to the
availability of a remedy under any other provision of this Article VI.

 

ARTICLE VII

CERTAIN AGREEMENTS

 

7.01                           Conduct of the Business Prior to
Closing.  From the Effective
Date hereof until the Closing Date, except as permitted by this Agreement or as
otherwise consented to by the Purchaser in writing, such consent not to be
unreasonably withheld, conditioned or delayed, Seller shall continue to conduct
its business in connection with the Property in the ordinary and usual course
as heretofore conducted.  Without
limiting the generality of the foregoing, the Seller shall:

 

(a)                                  conduct
its commercial harvesting operations on the Real Property in accordance with
the harvest schedule attached hereto as Exhibit L (“Harvest Schedule”).
Commencing on January 1, 2003 and ending on the Closing Date, Seller shall pay
up to $1,500,000 toward the costs of those certain silvicultural practices and
activities mutually agreed upon by Purchaser and Seller.  If Purchaser requests that Seller undertake
any silvicultural work which causes Seller to incur costs exceeding $1,500,000,
Purchaser shall pay such excess costs to Seller by check within thirty (30) days
after receipt of an invoice;

 

(b)                                 not
sell, transfer, encumber or otherwise dispose of any of the Real Property,
except for logs and timber harvested by Seller in the ordinary course of its
business, and shall not sell, transfer, encumber or otherwise dispose of any of
the Personal Property except in the ordinary course of business;

 

(c)                                  take
all reasonable steps to enforce its rights under all Purchased Contracts,
Licenses and Leases;

 

(d)                                 maintain
its books of account and records relating to the Property in the usual, regular
and ordinary manner, consistent with past practice;

 

(e)                                  preserve
for the benefit of Purchaser the goodwill of those Persons having business
relations with the Seller with respect to the Property;

 

(f)                                    advise
all of Seller’s employees who perform work at or with respect to the Property
to cooperate with Purchaser and its agents with respect to Purchaser’s
conducting of its due diligence investigations; and

 

(g)                                 not
enter into any contract, agreement, understanding, commitment, lease or license
which would be assumed by the Purchaser hereunder, nor renew, extend,
terminate, materially modify or waive any material rights under any Contract,
Lease or License, in each case except with the Purchaser’s prior written
consent; provided, that the Seller may enter into, extend or renew (i)
any lease pursuant to which (A) the sole benefit granted to lessee is the right

 

31

 

to
graze, hunt, fish or camp upon the Real Property and (B) the sole burden upon
the Seller is the obligation to allow such lessee to enter the Real Property
and engage in such activities; (ii) any contract required to perform the
silvicultural activities contemplated by (a) above, the cost of which will be
borne solely by Seller; and (iii) any contract pertaining to the harvesting of
the Real Property which harvesting is being performed in accordance with the
Harvest Schedule; in each case without obtaining such consent; and provided;
further that, other than those Leases accepted by Purchaser, Seller
shall, at its cost, use commercially reasonable efforts to terminate all sand,
gravel and other mining leases and use commercially reasonable efforts to cause
the lessee to properly restore the surface pursuant to the terms of such lease
prior to Closing.

 

7.02                           Casualty and Condemnation.

 

(a)                                  Notice
of Casualty Loss and Condemnation Proceedings.  From the Effective Date until the Closing Date, Seller will
promptly notify Purchaser of any material physical damage to the Property by fire,
flood, windstorm, earthquake or other similar occurrence (a “Casualty Loss”)
or of any condemnation proceeding commenced or threatened, or any exercise of
eminent domain powers (or notice of the exercise thereof), with respect to the
Property (the “Condemnation Proceedings”).

 

(b)                                 Settlement
of Casualty Losses and Condemnation Proceedings.  If one or more Casualty Losses or Condemnation Proceedings result
in an aggregate diminution in the value of the Property of $750,000 or less,
the Purchase Price shall not be reduced to reflect the aggregate diminution in
the value of the Property resulting from such Casualty Losses and/or
Condemnation Proceedings, and Seller shall be entitled to retain any insurance
proceeds or other payment or relief to which it may be entitled with respect to
such Casualty Losses and/or Condemnation Proceedings.  If one or more Casualty Losses or Condemnation Proceedings result
in an aggregate diminution in the value of the Property of more than $750,000
but less than $10,000,000, then the Purchase Price shall be reduced to reflect
the aggregate diminution in the value of the Property resulting from such
Casualty Losses and/or Condemnation Proceedings, and Seller shall be entitled
to retain any insurance proceeds or other payment or relief to which it may be
entitled with respect to such Casualty Losses and/or Condemnation
Proceedings.  If one or more Casualty
Losses or Condemnation Proceedings result in an aggregate diminution in the
value of the Property of $10,000,000 or more, Purchaser may elect to terminate
this Agreement by written notice to the Seller to be received no later than
thirty (30) days after Purchaser receives its initial notice of the Casualty
Losses and/or Condemnation Proceedings, in which case the Deposit shall be
returned to Purchaser and, except as expressly provided to the contrary in this
Agreement, Seller and Purchaser shall have no further rights, duties,
obligations or liabilities under this Agreement.

 

(c)                                  Determination
of Diminution in Value.  For purposes
of determining the diminution in value of the Property in Section 7.02(b)
above, (i) any diminution with respect to a Casualty Loss will be determined in
accordance with Section 9.11 hereof and (ii) any diminution with respect
to Condemnation Proceedings in connection with any portion of the Property
other than the Seed Orchard will be valued on the basis of $625.00 per acre.

 

7.03                           Hart-Scott-Rodino Filings.

(a)                                  Filings.  If required by law, as soon as reasonably
practicable following the Effective Date, Seller, on the one hand, and
Purchaser, on the other hand, shall make all 

 

32

 

necessary
filings, and thereafter make any other required submissions, with respect to
this Agreement and the consummation of the transactions contemplated hereby
required under the HSR Act.  Seller and
Purchaser shall cooperate with each other in connection with the making of all
such filings and use their respective commercially reasonable efforts to obtain
any governmental clearance required for the consummation of the transactions
contemplated hereby (including compliance with the HSR Act and any applicable
foregoing government reporting requirements). 
If any action or proceeding is instituted (or threatened to be
instituted) by any Governmental Authority that challenges the consummation of
the transactions contemplated hereby, each of Purchaser and Seller shall
cooperate and use their respective commercially reasonable efforts to contest
and resist any such action or proceeding and to have vacated, lifted, reversed
or overturned any decree, judgment or order (whether temporary, preliminary or
permanent) that prohibits, prevents or restricts the consummation of the
transactions contemplated by this Agreement. 
Purchaser shall pay all filing fees required by the HSR Act in
connection with the transactions contemplated by this Agreement.

 

(b)                                 No
Divestiture Required. 
Notwithstanding the foregoing, none of Seller or Purchaser or any of
their respective Affiliates shall be required to divest themselves of any
material assets.

 

7.04                           Commercially Reasonable Efforts.  From the Effective Date until the Closing
Date, subject to the terms and conditions herein provided, including those
contained in Section 7.03, Seller and Purchaser agree to use all
commercially reasonable efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement and to cooperate with the other in connection
with the foregoing, including using all commercially reasonable efforts:

 

(a)                                  to
obtain, and to cooperate with the other party in obtaining, all necessary
waivers, consents, releases and approvals, including all authorizations,
consents, orders and approvals of any Governmental Authority that are listed on
Section 4.01(d) of the Disclosure Schedule;

 

(b)                                 to
lift or rescind any injunction or restraining order or other order adversely
affecting the ability of the parties hereto to consummate the transactions
contemplated hereby;

 

(c)                                  to
effect all necessary registrations and filings and submissions of information
requested by any Governmental Authority; and

 

(d)                                 to
fulfill all conditions to this Agreement.

 

7.05                           Title.

 

(a)                                  Title
Commitment.  As soon as is
practicable, and in any event within ten (10) days after the Effective Date,
Seller shall cause the Title Company to deliver to Purchaser a commitment for
title insurance (including all corresponding exception documents) issued by the
Title Company for the Real Property (“Title Commitment”) and Seller
shall provide Purchaser with full access to all copies of Existing Surveys in
Seller’s possession or control. 
Purchaser shall have until the Non-environmental Due Diligence Deadline
to object in writing to any Title Defect disclosed in the Title Commitment and
the Existing Surveys; provided that Purchaser’s 

 

33

 

remedy
for any Title Defect concerning the number of acres included in the Real
Property is limited to a reduction in the Purchase Price as specified in
Section 2.04(b).  In addition, Purchaser
shall have ten (10) days from the date on which Purchaser has received a New
Survey to object to any Title Defect disclosed in the New Survey.  If Purchaser fails to timely provide such
notice, all matters shown on, and all documents referred to in the Title
Commitment, the Existing Surveys and the New Surveys shall be deemed Permitted
Exceptions, and Purchaser shall have no further right to object to such matters
or documents.  Any Title Defects
objected to by Purchaser in accordance with this Section 7.05(a) shall be
referred to herein as the “Title Objections”.

 

(b)                                 Effect
of Title Objections.  If the aggregate
cost to remove or cure all Title Objections is equal to or less than
$1,000,000, Seller will not have any obligation to remove or cure such Title
Objections and there shall be no decrease in the Purchase Price as a result of
such Title Objections.  If the aggregate
cost to remove or cure all Title Objections exceeds $1,000,000, then Purchaser
may, by written notice to Seller on or before the Non-environmental Due
Diligence Deadline, elect to terminate this Agreement; provided, that,
in the event the aggregate cost to remove or cure all Title Objections does not
exceed $2,500,000, Seller shall be able to prevent such termination by
electing, by written notice to Purchaser within fifteen (15) days after receipt
of Purchaser’s notice of termination, to either (i) decrease the Purchase Price
by the amount by which the aggregate cost to remove or cure all Title
Objections exceeds $1,000,000, (ii) remove or cure certain Title Objections to
the reasonable satisfaction of the Purchaser prior to the Closing such that the
aggregate cost to remove or cure the remaining Title Objections does not exceed
$1,000,000 or (iii) remove or cure certain Title Objections to the reasonable
satisfaction of the Purchaser prior to the Closing and decrease the Purchase
Price by the amount by which the aggregate cost to remove or cure the remaining
Title Objections exceeds $1,000,000.

 

7.06                           Access to Real Property.

 

(a)                                  Inspection.
From the Effective Date until the Closing Date, but subject to the rights of
third Persons under the Leases and Purchased Contracts, Purchaser shall have
the right to enter onto the Real Property at reasonable times for the purpose
of performing Purchaser’s Due Diligence. 
All expenses in connection with the Due Diligence shall be paid solely
by Purchaser (but subject to reimbursement as specified herein), whether or not
the transactions contemplated by this Agreement are consummated and whether or
not the information obtained for Purchaser’s Due Diligence is communicated to
Seller.

 

(b)                                 Tests.  As part of the Due Diligence, Purchaser
shall: (i) notify Seller before conducting any invasive test on the Real
Property and provide notice to Seller as to the date and time of testing so as
to allow Seller the opportunity to observe the testing operations (if Seller fails
to have a representative present at the time and place for testing, it is
deemed to have waived its right to observe such testing) and make available to
Seller any split samples taken in connection with such testing; (ii) make
available to Seller copies of any and all test reports (including a draft of
the Purchaser’s Phase I delivered by Brown and Caldwell, which draft shall
incorporate any comments made by Purchaser on such report) conducted by or for
Purchaser; (iii) remove promptly from the Real Property all soil, drill
cuttings, drilling muds, liquids or other substances or equipment or storage
containers incident to conducting any environmental test and manage all such
materials in compliance with all applicable laws; (iv) restore the Real Property
to substantially the same condition prior to any test, reasonable wear and tear
from 

 

34

 

ordinary
use excepted; and (v) give written notice to Seller before communicating with
any Governmental Authority regarding the environmental condition of the Real
Property.

 

(c)                                  Carve-Out
of Environmental Sites.  Purchaser
has contracted with Brown and Caldwell to conduct a Phase I Environmental
Assessment of the Real Property and to produce a report of its findings (the “Purchaser’s
Phase I Report”).  In the event that
Purchaser’s Phase I Report identifies any portion of the Real Property that may
contain Hazardous Materials or otherwise may be in violation of or require
remediation under any Environmental Law (the “Environmental Sites”),
Purchaser may request in writing to Seller, within twenty (20) days of
Purchaser’s receipt of the Purchaser’s Phase I Report from Brown and Caldwell,
that any of the Environmental Sites be separated and excluded from the balance
of the Real Property to be conveyed pursuant to this Agreement (such
Environmental Sites, the “Selected Environmental Sites”) and that the
Purchase Price be reduced by the aggregate value of the Environmental Sites to
be excluded on the basis of $625.00 per acre. 
Within twenty (20) days of Seller’s receipt of Purchaser’s request to
exclude the Selected Environmental Sites, Seller shall notify Purchaser in
writing of its election to either: (i) at its sole cost and expense, remediate
the Selected Environmental Sites to Purchaser’s reasonable satisfaction prior
to Closing; (ii) separate and exclude the Selected Environmental Sites from the
balance of the Real Property to be conveyed pursuant to this Agreement and
reduce the Purchase Price by the aggregate value of such Selected Environmental
Sites on the basis of $625.00 per acre; or (iii) terminate this Agreement.

 

(d)                                 Determination
of Size of Selected Environmental Sites. 
Unless this Agreement is terminated pursuant to Section 7.06(c), if
Seller fails or chooses not to remediate the Selected Environmental Sites to
Purchaser’s reasonable satisfaction prior to Closing, then Purchaser and Seller
will negotiate in good faith to agree on the size of the Selected Environmental
Site parcels to be carved-out and Purchaser will provide Seller reasonable
access to any such Selected Environmental Sites following the Closing.  In the event that Purchaser and Seller are
not able to agree on the size of the Selected Environmental Site parcels to be
excluded, the size of such Selected Environmental Site parcels shall be
determined in accordance with Section 9.11 hereof.

 

(e)                                  No
Liens.  From March 6, 2003 until the
Closing Date, Purchaser shall not create or suffer to be created any damage,
lien, or encumbrance against the Real Property as a result of Purchaser or
Purchaser’s agents entering onto the Real Property.  Purchaser agrees to indemnify and hold Seller harmless from and
against any and all Losses (other than Losses related to the results of the
testing or inspection conducted by Purchaser) arising out of any such Due
Diligence performed by Purchaser or on Purchaser’s behalf.  If Seller is made a party to
any action, suit or other proceeding as a result of Seller’s agreement to allow
Purchaser to have access to the Real Property for the purposes of Purchaser’s
Due Diligence, Purchaser agrees to pay all of Seller’s reasonable costs,
including, without limitation, reasonable attorneys’ fees.  Purchaser agrees that Seller shall not be
liable for any damage, loss, or claim of any type whatsoever to any vehicle,
equipment, or other personal property used, stored or left on the Real Property
by Purchaser, its agents, or contractors, in connection with the performance of
Purchaser’s Due Diligence, and agrees to defend, indemnify and hold Seller
harmless from any such damage, loss, or claim.

 

(f)                                    Records
and Plans.  From the Effective Date
until the Closing Date, but subject to any rights of third Persons, upon
reasonable notice, Seller shall afford the officers, employees and authorized
agents and representatives of Purchaser reasonable access during 

 

35

 

normal
business hours to the Records and Plans, Purchased Contracts, Leases, Licenses,
and all information on each item listed on the Disclosure Schedule (the “Due
Diligence Information”) and allow Purchaser to make copies of the Due
Diligence Information.

 

7.07                           Due Diligence. 
The obligation of Purchaser to consummate the transactions contemplated
hereby is conditioned on Purchaser’s review and approval of the condition of
the Property, including review of the Seed Orchard, all Purchased Contracts,
Licenses, and Leases, the environmental condition of the Real Property, the
Title Commitment and the Existing Surveys and New Surveys (“Due Diligence”).  Seller will permit the Purchaser and its
representatives to have full access (at reasonable times and upon reasonable
notice) to the Property and to all employees and officers of the Seller with
knowledge of the Property .  If the
results of the Due Diligence are not acceptable to Purchaser, in its sole
discretion, Purchaser may elect not to proceed with the transactions
contemplated hereby and shall give written notice to Seller of such decision (“Nonacceptance
Notice”).  A Nonacceptance Notice
shall not relate in any way to the volume or value of timber on the Real
Property.  If Purchaser gives a
Nonacceptance Notice, this Agreement shall terminate, the Deposit shall be
returned to Purchaser, and except as provided herein, all obligations of Seller
and Purchaser under this Agreement shall terminate without liability to either
party and each party shall bear its own costs. 
Purchaser will be deemed to have waived any right to give a Nonacceptance
Notice related to the environmental condition of the Real Property if such
Nonacceptance Notice is not received by Seller on or before July 16, 2003 (the
“Environmental Due Diligence Deadline”).  Purchaser will be deemed to have waived any right to give a
Nonacceptance Notice unrelated to the environmental condition of the Real
Property if such Nonacceptance Notice is not received by Seller on or before
sixty (60) days after the later of the date on which Purchaser has received:
(i) the last Title Commitment on all parcels or tracts of the Real Property and
legible copies of all documents listed as exceptions in the Title Commitment,
(ii) full access to the Existing Surveys, and (iii) full access to the Due
Diligence Information (the “Non-environmental Due Diligence Deadline”).

 

7.08                           Exclusivity. 
From the Effective Date until the Closing Date, Seller will not, and
will not permit its Affiliates to, directly or indirectly: (a) solicit,
initiate, or encourage the submission of any proposal or offer from any Person
relating to, or enter into any transaction relating to, the acquisition of all
or part of the Property or (b) participate in any discussions or negotiations
regarding, furnish any information with respect to, assist or participate in,
or facilitate in any other manner, any effort or attempt by any Person to do or
seek any of the foregoing.

 

7.09                           Public Announcements.  From the Effective Date and continuing after
the Closing Date, Seller and Purchaser shall not issue or make any reports,
statements or releases or other communications to the public with respect to
this Agreement, or the transactions contemplated hereby without the prior
written consent of the other, which consent shall not be unreasonably withheld
or delayed; provided, that any disclosure required to be made under
applicable law or applicable rules of a national securities exchange may be
made only if a party required to make such disclosure has determined in good
faith that it is necessary to do so and has used best efforts, prior to the
issuance of the disclosure, to provide the other party with a copy of the
proposed disclosure and to discuss the proposed disclosure with the other
party.

 

7.10                           Further Assurances.  From and after the Closing Date, each of the parties hereto shall
execute such further Conveyancing Instruments, and such other documents,
instruments of 

 

36

 

transfer
or assignment (including a Real Estate Excise Tax Affidavit) and do such other
things as may be reasonably required or desirable to carry out the intent of
the parties hereunder and the provisions of this Agreement and the transactions
contemplated hereby.

 

7.11                           Allocations. 
From and after the Closing Date, neither Seller nor Purchaser  shall file any return or take any position
with any taxing authority that is inconsistent with the allocation set forth in
Section 3.07 of the Disclosure Schedule attached hereto.

 

7.12                           Recording. 
From the Effective Date and continuing after the Closing Date, neither
Purchaser nor Seller shall record this Agreement or any memorandum hereof.

 

7.13                           Retention of Obligations.  From the Effective Date until the Closing
Date, notwithstanding anything to the contrary in this Agreement, Seller hereby
expressly retains responsibility for, and in no event shall Purchaser or any
Transferee Affiliates assume any liability or have any obligation for, any
obligation which would result in the Purchase Price not being a “fixed amount”
determined as of the Closing Date within the meaning of Section 514(c)(9)(B)(i)
of the Code (a “Contingent Obligation”).  In the event that Purchaser determines at any time prior to the
Closing that any obligation it would otherwise assume or be subject to upon
consummation of the transactions contemplated by this Agreement would constitute
a Contingent Obligation, then it shall give prompt written notice to Seller
identifying in reasonable detail the nature of the Contingent Obligation.  Purchaser and Seller shall jointly use their
commercially reasonable efforts to terminate the Contingent Obligation or to
reform the Contingent Obligation.  If
Purchaser and Seller are not able to terminate the Contingent Obligation or to
reform it so that Purchaser determines that it is no longer a Contingent
Obligation, such obligation shall be specifically deleted from the agreements
to be assigned pursuant to this Agreement, and the Cash Amount shall be
increased by the fair value of such Contingent Obligation, as agreed upon by
Seller and Purchaser or, if they are unable to agree within 10 days of the
anticipated Closing Date, then the fair value shall be determined in accordance
with Section 9.11.  The adjustment
to the Purchase Price shall be determined prior to the Closing.

 

7.14                           No Leases. 
From the Effective Date and continuing after the Closing Date, neither
Seller nor its Tax Affiliates will acquire any interest in any lease, or any
interest in any Person which is a lessee under any lease, being assigned to and
assumed by Purchaser or any Affiliate in connection with the transactions
contemplated by this Agreement if such acquisition would cause the lessee to be
a Tax Affiliate of Seller or otherwise result in a lease described in Section
514(c)(9)(B)(iii) of the Code.

 

The covenant in this Section 7.14 shall survive,
as to each lease subject hereto, for the term of the lease as in effect on the
Closing Date (including any extensions permitted to be exercised by the lessee
by the terms of such lease).  If Seller
gives notice to Purchaser that Seller elects to acquire any interest in a
lessee that would be prohibited by this Section 7.14, then Purchaser shall
permit, or cause any transferee of the Property to permit, the lessee to
terminate the relevant lease, effective on the day immediately preceding the
date the lessee becomes a Tax Affiliate of Seller.

 

7.15                           Consents. 
Seller shall use its commercially reasonable efforts to (i) obtain all
consents, orders, approvals, authorizations, waivers, declarations or filings
necessary to consummate the transactions contemplated hereby which are required
to be obtained by 

 

37

 

applicable
law, any Governmental Authority or otherwise and (ii) obtain all consents
required under the Contracts, Leases and Licenses listed on Section 4.01(d)
of the Disclosure Schedule; provided, however, that the only consents
required as a condition to Closing are the consents to those Contracts, Leases
and Licenses listed on Section 7.15 of the Disclosure Schedule.

 

To the extent and for so
long as all consents, orders, approvals, authorizations, waivers, declarations
or filings required for the assignment of any Contract, Lease or License that
is not listed on Section 7.15 of the Disclosure Schedule shall not have
been obtained by Seller as of the Closing (each a “Nonassignable Contract”),
then post-Closing (i) Seller shall use commercially reasonable efforts to
provide to Purchaser the economic benefits of any Nonassignable Contract, (ii)
Seller shall enforce, at the request of Purchaser, for the account of
Purchaser, any rights of Seller under any Nonassignable Contract (including the
right to elect to terminate the same in accordance with the terms thereof upon
the advice of Purchaser), and (iii) Purchaser shall use commercially reasonable
efforts to perform and discharge any Nonassignable Contract to the same extent
required of Seller under the terms thereof. 
Following the Closing, Seller shall not terminate, modify or amend any
Nonassignable Contract without Purchaser’s prior written consent.

 

7.16                           Release of Seller.  Subject to the terms and conditions of Seller’s indemnity
obligations in Article VI which are not affected in any way by this Section
7.16, from and after the Closing Date, Purchaser, on behalf of itself, and
Purchaser Indemnified Parties and their successors and assigns, hereby forever
waives, relieves, releases, and discharges Seller Indemnified Parties from any
Claims, Losses, and Liabilities, whether known or unknown at the Closing Date,
which the Purchaser Indemnified Parties and their successors and assigns have
or incur, or may in the future have or incur, arising out of or related to the
Assumed Liabilities described in Section 2.02(d), including without limitation,
any and all Claims, Losses, and Liabilities for cost recovery and contribution
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, the Resource Conservation and Recovery Act, and any state counterparts
thereto, including state laws and regulations relating to the investigation and
remediation of oil and gas wastes, as they may be amended from time to time,
and under common law doctrines.

 

7.17                           Notification. 
From the Effective Date until the Closing Date, Seller shall give prompt
notice to Purchaser and Purchaser shall give prompt notice to Seller if either
discovers (i) that any representation or warranty made by Seller contained in
this Agreement that is qualified as to materiality has become untrue or
inaccurate in any material respect or (ii) a failure by Seller to comply with
or satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement; provided, however,
that no such notification shall affect the representations, warranties,
covenants or agreements of the parties or the conditions to the obligations of
the parties under this Agreement, and such notification in not intended to be,
nor shall such notification be deemed to be, a waiver of Purchaser’s rights to
recover from Seller for any breach of any representation and warranty or any
covenant under this Agreement or a waiver of Purchaser’s rights to
indemnification from Seller under Article VI.

 

7.18                           Supply Agreement.  No later than five (5) days after the Closing Date, Seller on the
one hand, and Purchaser or any Affiliate (as of the Closing Date) of Purchaser
then having title to the Real Property, on the other hand, shall each execute
and deliver to the other the Supply Agreement in substantially the form
attached hereto as Exhibit M (the “Supply Agreement”).

 

38

 

ARTICLE VIII

TERMINATION

 

8.01                           Termination. 
This Agreement may be terminated, and the transactions contemplated
hereby may be abandoned:

 

(a)                                  at
any time before the Closing, by mutual written agreement of Seller and
Purchaser;

 

(b)                                 at
any time before the Closing, by Seller or Purchaser, in the event that a final,
nonappealable order or any law becomes effective restraining, enjoining or
otherwise prohibiting or making illegal the consummation of any of the
transactions contemplated by this Agreement or by the Closing Documents, upon
notification of the non-terminating party by the terminating party;

 

(c)                                  by
Purchaser, as provided in Sections 2.04(b), 7.02(b), 7.05(b) and 7.07 of
this Agreement and by Seller as provided in Sections 2.04(b) and 7.06(c) of
this Agreement;

 

(d)                                 by
either the Purchaser or the Seller by providing written notice to the other at
any time after October 31,  2003 if the Closing will not have occurred
by reason of the failure of any condition set forth in Section 3.02, in
the case of the Purchaser or Seller, as applicable, Section 3.03, in the
case of the Purchaser, or Section 3.04, in the case of the Seller, to be
satisfied (unless such failure is the result of one or more breaches or
violations of, or inaccuracy in any covenant, agreement, representation or
warranty of this Agreement by the terminating party); provided, that
if procedures in Section 9.11 for resolving disputes regarding the extent
of diminution of value are invoked, the date referred to in this
Section 8.01(d) shall be extended to the earlier of (i) the second
business day following the date on which all such disputes have been resolved
and (ii) December 31, 2003;

 

(e)                                  by
the Purchaser if either (i) there will be a material breach of, or
material inaccuracy in, any representation or warranty of the Seller contained
in this Agreement as of the date of this Agreement or as of any subsequent date
(other than representations or warranties that expressly speak only as of a
specific date or time, with respect to which the Purchaser’s right to terminate
will arise only in the event of a material breach of, or material inaccuracy
in, such representation or warranty as of such specified date or time), or
(ii) the Seller will have breached or violated in any material respect any
of its respective covenants and agreements contained in this Agreement, in each
case which breach or violation would give rise, or could reasonably be expected
to give rise, to a failure of a condition precedent to the Purchaser’s
obligations set forth in Section 3.02 and 3.03; and

 

(f)                                    by
the Seller if either (i) there will be a material breach of, or material
inaccuracy in, any representation or warranty of the Purchaser contained in
this Agreement as of the date of this Agreement or as of any subsequent date
(other than representations or warranties that expressly speak only as of a
specific date or time, with respect to which the Seller’s right to terminate
will arise only in the event of a material breach of, or material inaccuracy
in, such representation or warranty as of such specified date or time), or
(ii) the Purchaser will have breached or violated in any material respect
any of its respective covenants and agreements contained in this Agreement, in
each case which breach or violation would give rise, or could 

 

39

 

reasonably
be expected to give rise, to a failure of a condition precedent to the Seller’s
obligations set forth in Section 3.02 and 3.04.

 

8.02                           Effect of Termination.  If this Agreement is terminated pursuant to
Section 8.01, this Agreement will forthwith become null and void and the
transactions contemplated hereby shall be abandoned without further action by
the parties hereto and except as otherwise provided in Sections 8.03 and
8.04 below, (i) there will be no liability or obligation on the part of
Seller or Purchaser (or any of their respective officers, directors, employees,
agents or other representatives or affiliates) including with respect to
Article VI and (ii) the Deposit shall be returned to Purchaser; provided,
that this Section 8.02, Sections 3.08, 7.06(e) and 7.09 and Articles I and
IX of this Agreement shall survive any termination of this Agreement and remain
in full force and effect.

 

8.03                           Seller Default. 
If the Closing shall not have occurred as a result of the termination of
the Agreement by the Purchaser pursuant to Section 8.01(e) above, then
Purchaser will be entitled to the return of the Deposit and in addition shall
receive, as its sole and exclusive remedy, either (i) any and all of its
reasonable out-of-pocket costs and expenses incurred in connection with the
negotiation of, and attempted consummation of the transactions contemplated by,
this Agreement or (ii) specific performance of this Agreement.  The Seller acknowledges and agrees that
Purchaser would be damaged irreparably in the event any of the provisions of
this Agreement are not performed in accordance with their specific terms or
otherwise are breached or violated. Accordingly, the Seller agrees that, without
posting bond or other undertaking, the Purchaser will be entitled to an
injunction or injunctions to prevent breaches or violations of the provisions
of this Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any action instituted in any court of the United States or
any state thereof having jurisdiction over the parties.  The Seller further agrees that, in the event
of any action for specific performance in respect of such breach or violation,
it will not assert that the defense that a remedy at law would be adequate.

 

8.04                           Purchaser Default; Liquidated Damages.  If the Closing shall not have occurred as a
result of the termination of the Agreement by the Seller pursuant to
Section 8.01(f) above, then Seller will be entitled to receive the Deposit
as liquidated damages and such liquidated damages shall be the Seller’s sole
and exclusive remedy in connection therewith. 
The parties agree that the anticipated or actual harm, the difficulties
of proof of loss and the inconvenience or infeasibility of otherwise obtaining
an adequate remedy justify such liquidated damages.

 

ARTICLE IX

GENERAL PROVISIONS

 

9.01                           Notices.  All
notices and other communications required or permitted hereunder will be in
writing, and unless otherwise provided in this Agreement, will be deemed
effective when delivered in person or when dispatched by facsimile transmission
(confirmed successful sending by the machine and then confirmed by sending a
copy in writing by mail simultaneously dispatched), or one business day after
dispatch by a nationally recognized overnight courier service to the
appropriate party at the address specified below:

 

40

 

If to Seller:

 

Louisiana-Pacific Corporation 

100 Interstate 45 N

Conroe, Texas  77301

Attn:  Jeff Wagner 

Telephone:  936.760.5938 

Facsimile:  936.760.5907

 

With copies to:

 

Louisiana-Pacific Corporation

805 SW Broadway

Portland, Oregon 97205

Attn: Legal Department

Telephone:  503.821.5100 

Facsimile:  503.821.5210

 

If to Purchaser:

 

ETT Acquisition Company, LLC

c/o The Molpus Woodlands Group

654 North State Street

Jackson, Mississippi 39202

Attn:  Robert
L. Lyle

Telephone:  601.948.8733

Facsimile:  601.352.7463

 

With copy to:

 

Ropes & Gray

One International Place

Boston, MA 02110

Attn:  Larry J. Rowe, Esq.

Telephone:  617.951.7000

Facsimile:  617.951.7050

 

or to such other address
or addresses as any party may from time to time designate as to itself by
notice.

 

9.02                           Binding Effect.  This Agreement is binding upon and inures to the benefit of
Seller and Purchaser and their respective successors and permitted assigns,
and, except as provided in Article VI, no other party is conferred any rights
by virtue of this Agreement or entitled to enforce any of the provisions
hereof.

 

9.03                           Assignment. 
Neither party shall assign this Agreement without the prior written
consent of the other (which consent shall not be unreasonably withheld) and any
attempted assignment hereof without prior written consent shall be void.  Notwithstanding the foregoing, Purchaser
shall have the right to assign all or a portion of its rights and obligations,
including with respect to all or any part of the Property being acquired by the
Purchaser at Closing, to one 

 

41

 

or more
of its Transferee Affiliates for which consent is not required.  If Purchaser exercises its right to assign
hereunder prior to the Closing, the affected Property shall be transferred at
the Closing directly to the assignee.

 

9.04                           Waiver.  Failure
of either party at any time to require performance of any provision of this
Agreement will not limit such party’s right to enforce such provision, nor will
any waiver of any breach of any provision of this Agreement constitute a waiver
of any succeeding breach of such provision or a waiver of such provision
itself.

 

9.05                           Amendment. 
This Agreement cannot be modified, amended or supplemented except by the
written agreement of the parties hereto or their respective successors or
permitted assigns.

 

9.06                           Certain Required Notices.

 

(a)                                  NOTICE
REGARDING POSSIBLE LIABILITY FOR ADDITIONAL TAXES.  If for the current ad valorem tax year the
taxable value of the Real Property is determined by a special appraisal method
that allows for appraisal of the Real Property at less than its market value,
Purchaser may not be able to meet the requirements to qualify the Real Property
for that special appraisal method in a subsequent year and the Real Property
may then be appraised at its full market value.  In addition, the transfer of the Real Property or a subsequent
change in the use of the Real Property may result in the imposition of
additional tax plus interest as a penalty for the transfer or the change in use
of the Real Property.  The taxable value
of the Real Property and the applicable method of appraisal for the current tax
year is public information and may be obtained from the tax appraisal district
established for the county in which the Real Property is located.

 

(b)                                 NOTICE
REGARDING POSSIBLE ANNEXATION.  If
any portion of the Real Property is located outside the limits of a
municipality, such portion of the Real Property may now or later be included in
the extraterritorial jurisdiction of a municipality and may now or later be
subject to annexation by the municipality. 
Each municipality maintains a map that depicts its boundaries and
extraterritorial jurisdiction.  To
determine if any portion of the Real Property is located within a
municipality’s extraterritorial jurisdiction or is likely to be located within
a municipality’s extraterritorial jurisdiction, Purchaser is advised to contact
all municipalities located in the general proximity of the Real Property for
further information.

 

(c)                                  WATER
AND SEWER SERVICE NOTICE.  Those
portions or parcels of the Real Property disclosed in Section 9.06(c)
of the Disclosure Schedule are located in the water or sewer service areas
noted in Section 9.06(c) of the Disclosure Schedule, which water
and sewer service areas are the utility service providers authorized by law to
provide water or sewer service to such portions or parcels of the Real
Property.  Other than those noted in Section 9.06(c)
of the Disclosure Schedule, no other retail public utility is authorized to
provide water or sewer service to the applicable portions or parcels of the
Real Property.  Special costs or charges
may be assessed before Purchaser can receive water or sewer service.  Purchaser is advised to contact the
applicable utility service provider to determine the cost that Purchaser will
be required to pay and the period of time for utility service preparation, if
any, that will be required to provide water or sewer service to the applicable
Real Property.

 

42

 

9.07                           Attorneys’ Fees. 
If arbitration or litigation or any other proceeding of any nature
whatsoever (including any proceeding under the U.S. Bankruptcy Code) is
instituted in connection with any controversy arising out of this Agreement or
to interpret or enforce any rights, the prevailing party shall be entitled to
recover its attorneys’, paralegals’, accountants’, and other experts’ fees and
all other fees, costs, and expenses actually and reasonably incurred, as
determined by an arbitrator or court of competent jurisdiction, in addition to
all other amounts to which it is entitled at law or in equity.  The prevailing party will be deemed to be
the party that shall have prevailed on the issues with the greatest value as
determined by the arbitrator or court of competent jurisdiction.

 

9.08                           Severability. 
If any term or provision of this Agreement or its application to any
person or circumstance shall to any extent be invalid or unenforceable, the
remainder of this Agreement and the application of such term or provision to
such person or circumstances other than those as to which it is held invalid or
unenforceable shall not be affected thereby, and each term or provision of this
Agreement shall be valid and enforceable to the fullest extent permitted by law
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner adverse to any party.  If so affected, the parties shall negotiate
in good faith to modify this Agreement so as to effect the original intent of
the parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.

 

9.09                           Integration. 
This Agreement, together with the Exhibits hereto and the other
instruments and certificates referred to herein, constitutes the parties’
entire agreement and understanding for the purchase and sale of the Property
and supersedes all prior agreements, whether written or oral, between the
parties for such purchase and sale.

 

9.10                           Construction and Interpretation.  The headings or titles for the sections in
this Agreement are intended for ease of reference only and shall not effect the
construction or interpretation of any provision of this Agreement.  All provisions of this Agreement have been
negotiated at arm’s length, and this Agreement shall not be construed for or
against any party by reason of authorship or alleged authorship of any
provision.

 

9.11                           Dispute Resolution.  The parties will attempt in good faith to resolve any controversy
or claim arising out of or relating to Sections 7.02 (to the extent such
controversy relates to any Casualty Losses), 7.05, 7.06 and 7.13 of this
Agreement promptly by negotiations between representatives and senior
executives of the parties who have the authority to settle the
controversy.  A representative of each
party will communicate at least once and attempt to resolve the matter.  If the matter has not been resolved within
20 days of such communication, the controversy shall be settled in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
by an arbitrator who is an expert with respect to the subject matter of the
claim or controversy.  The arbitrator
will determine the diminution in value as promptly as practicable.  The arbitration shall be governed by the
United States Arbitration Act, 9 U.S.C. §
1-16, and judgment rendered by the arbitrator may be entered by any court
having jurisdiction thereof.  The place
of arbitration shall be New York, New York. 
The cost of the arbitration will be borne by Purchaser and Seller
equally.

 

9.12                           Governing Law. 
This Agreement shall be governed by and construed in accordance with the
laws of the State of Texas applicable to a contract executed and performed in
the State of Texas, without giving effect to the conflicts of law principles
thereof.

 

43

 

9.13                           WAIVER OF JURY TRIAL.  THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL
BY JURY IN ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OF THE CONTEMPLATED TRANSACTIONS, WHETHER NOW EXISTING OR HEREAFTER ARISING,
AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.  THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS
PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND
BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY
AND THAT ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR
ANY OF THE CONTEMPLATED TRANSACTIONS SHALL INSTEAD BE TRIED IN A COURT OF
COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

 

9.14                           Time.  Time is of
the essence of this Agreement.

 

9.15                           Counterparts. 
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any of
the parties may execute this Agreement by signing any such counterpart.

 

9.16                           Broker’s or Finder’s Fee.  Except as disclosed in Section 9.16 of
the Disclosure Schedule, each party hereby warrants to the other party that
it has not dealt with any investment banker, broker or salesman in the
negotiation of this Agreement.  Each
party shall indemnify, defend, and hold harmless the other party against any
commissions or fees due by virtue of the execution or Closing of this
Agreement, the obligation or asserted claim for which arises from actions taken
or claimed to be taken by or through the indemnifying party.

 

9.17                           No Third Party Beneficiaries.  Nothing in this Agreement or the Related
Agreements, whether expressed or implied, is intended or shall be construed to
confer upon or give any Person, other than the parties hereto, or in the case
of Article VI, the Purchaser Indemnified Parties and Seller Indemnified
Parties, any rights, remedies or other benefits under or by reason of this
Agreement.

 

9.18                           Confidentiality.  Whether or not the Closing actually occurs, each of the parties
will treat and will use its best efforts to cause all of its Affiliates, and
its respective officers, employees, counsel, accountants, financial advisors,
consultants and other representatives (collectively “Representatives”)
to maintain, in confidence all documents, materials and other information
disclosed to it by or on behalf of the other party during the course of
discussions or negotiations leading to the execution of this Agreement or
thereafter, in the preparation of this Agreement or the Related Agreements or
otherwise in connection with the transaction contemplated hereby or thereby
(the “Confidential Information”), unless (a) compelled to disclose by
judicial or administrative process (including without limitation in connection
with obtaining the necessary approvals of this Agreement and the transactions
contemplated hereby from Governmental Authorities) or by other requirements of
applicable law or applicable rules of a national securities exchange, (b)
disclosed in a Claim asserted or commenced by a party hereto in pursuit of its
rights or in the exercise of its remedies hereunder, or under the Related
Agreements, except to the extent that such documents, materials or information
can be shown to have been (i) previously known by a party receiving such
documents, materials or information, (ii) in the public domain (either prior to
or after the receipt by the receiving party of such documents, materials or
information) through no fault of such receiving party, (c) later acquired 

 

44

 

by the
receiving party from another source if the receiving party is not aware that
such source is under an obligation to the other party hereto to keep such
documents and information confidential, or (d) disclosed to a recipient who has
executed a confidentiality agreement containing substantially the same
restrictions as those set forth herein in connection with the receipt of such
Confidential Information; provided, that following the Closing the
foregoing restrictions will not apply to Purchaser’s use of documents,
materials and information concerning the Property.  In the event the transactions contemplated hereby are not consummated,
upon the request of the other party, each party hereto will, and will cause its
Affiliates and their respective Representatives to, promptly redeliver, or
cause to be redelivered, all copies of documents, materials and information
furnished by the other party in connection with this Agreement or the
transaction contemplated hereby and destroy, or cause to be destroyed, all
notes, memoranda, summaries, analyses, compilations and other writings related
thereto or based thereon prepared by the party that received such documents,
materials and information or its Representatives.

 

Notwithstanding the
preceding sentence or anything else in this Agreement to the contrary, each
party hereto and its respective Representatives may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure of
the transaction and all materials of any kind (including opinions or other tax
analyses) that are provided to the parties hereto relating to such tax
treatment and tax structure.  For this
purpose “tax structure” is limited to any facts relevant to the U.S. federal
income tax treatment of the transaction and does not include information
related to the identity of the parties. 
The preceding authorization to disclose does not prevent each party and
its respective Representatives from asserting any attorney-client privilege,
work-product doctrine, or other applicable privilege or defense against
disclosure of such information.

 

9.19                           Facsimile Signatures.  Facsimile transmission of any signed original
document and retransmission of any signed facsimile transmission will be the
same as delivery of an original. At the request of any party to this Agreement,
the parties will confirm facsimile transmitted signatures by executing an
original document.

 

9.20                           Bulk Sales Act. 
The parties hereby waive compliance with the bulk sales act or
comparable statutory provisions of each applicable jurisdiction.

 

[The remainder of
this page is intentionally left blank.]

 

45

 

IN WITNESS WHEREOF, the parties have executed this
Agreement as of the Effective Date.

 

	
   

  	
  SELLER:

  	 

	
   

  	
   

  	 

	
   

  	
  LOUISIANA-PACIFIC
  CORPORATION

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
   

  	
   

  	 

	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

 

	
   

  	
   

  
	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
  ETT ACQUISITION
  COMPANY, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	 

	
   

  	
  Title:

  	
   

  	
   

  	 

						

 

 

EXHIBIT A

 

FORM OF NOTES

 

 

EXHIBIT B

 

FORM OF LETTER OF CREDIT

 

 

EXHIBIT C

 

FORM OF ESCROW AGREEMENT

 

THIS ESCROW AGREEMENT
(this “Escrow Agreement”) is made as of July 2, 2003, by and among
FIDELITY NATIONAL TITLE INSURANCE COMPANY, a California corporation, having an
address at 717 N. Harwood Street, Suite 800, Dallas, Texas 75201 (“Escrow
Agent”), ETT ACQUISITION COMPANY, LLC, a Delaware limited liability
company, having an address c/o The Molpus Woodlands Group, 654 North State
Street, Jackson, Mississippi 39202 (“Purchaser”), and LOUISIANA-PACIFIC
CORPORATION, a Delaware corporation, having an address at 100 Interstate 45
North, Conroe, Texas 77301 (“Seller”).

 

RECITALS:

 

WHEREAS, Purchaser and
Seller have executed a Purchase and Sale Agreement (the “Purchase Agreement”)
dated July 2, 2003 (the “Effective Date”).

 

WHEREAS, Pursuant to
Section 2.05 of the Purchase Agreement, on the Effective Date, the Purchaser
and the Seller have agreed that the Purchaser shall deposit with Escrow Agent an
earnest money deposit in the amount of $8,731,500.00 (the “Deposit”) in
immediately available funds.

 

WHEREAS, Escrow Agent has
agreed to hold the Deposit, together with any interest or other investment
income earned thereon (collectively, the “Escrow Funds”), in escrow on
the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in
consideration of the premises and of the mutual covenants and agreements
hereinafter set forth and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Purchaser, the Seller and
the Escrow Agent hereby agree as follows:

 

1.1                                 Definitions.  Capitalized terms used but not otherwise
defined herein have the respective meanings assigned to them in the Purchase
Agreement.

 

1.2                                 Engagement
of Escrow Agent.  Seller and
Purchaser hereby engage Escrow Agent to hold the Escrow Funds in accordance
with the Purchase Agreement and Escrow Agent hereby accepts such
engagement.  Escrow Agent hereby agrees
to hold in escrow all funds comprising the Escrow Funds and acknowledges
receipt of the Deposit.  Purchaser shall
have the rights of a secured party in the Escrow Funds, and the Escrow Funds
shall not be subject to any security interest, lien or attachment of any party
or of any creditor of any party other than the Purchaser or a successor or
permitted assign of the Purchaser.  The
Escrow Agent does not own or have any interest in the Escrow Funds but is
serving as escrow holder, having only possession thereof and agreeing to hold
and distribute the Escrow Funds in accordance with the terms and conditions
hereinafter set forth.

 

1.3                                 Investment
of Escrow Funds.  During the term of
this Escrow Agreement, all 

 

 

Escrow Funds shall
be invested and reinvested by the Escrow Agent, as jointly directed in writing
by Purchaser and Sellers, in (i) Bank
of America, N.A. money market rate account with the Escrow Agent; or (ii) such
specific investments as Purchaser and the Seller shall, from time to time,
jointly direct the Escrow Agent in writing.  All interest or other investment income earned on the Deposit
shall accrue to the benefit of the Purchaser. 
The Escrow Agent may liquidate all or any part of the Escrow Funds at
such time and in such manner, upon written direction of Purchaser and Seller,
to convert the Escrow Funds into cash for the application and distribution in
accordance with this Escrow Agreement.

 

1.4                                 Deliveries
from Escrow.

 

(a)                                  Closing.  Purchaser and the Seller shall give joint
written notice to the Escrow Agent at least 24 hours prior to the time
scheduled for Closing, which notice shall include instructions for the
disbursement of the Escrow Fund. The Escrow Agent shall disburse the
then-current balance of the Escrow Funds to the Seller at the Closing and such
amount shall be credited toward Purchaser’s payment of the Purchase Price in
accordance with the terms of the Purchase Agreement.

 

(b)                                 Termination.  If the Escrow Agent receives a written
statement executed by both the Purchaser and the Seller, at any time, stating
that the Purchase Agreement has been terminated in accordance with Sections
8.01 (a), (b), (c), (d) or (e) thereof, then the Escrow Agent shall deliver the
Escrow Funds to the Purchaser.  If the
Escrow Agent receives a written statement executed by both the Purchaser and
the Seller, at any time, stating that the Purchase Agreement has been
terminated in accordance with Section 8.01(f) thereof, then the Escrow Agent
shall deliver the Escrow Funds to the Seller.

 

(c)                                  Agreement
to Deliver Joint Notice.  The
Purchaser and the Seller will execute and deliver to the Escrow Agent such
additional instructions and certificates hereunder as may be required to give
effect to the provisions of Section 1.04.

 

1.5                                 Dispute
Resolution.  Purchase and Seller
shall use their best efforts to attempt to resolve any dispute relating to this
Escrow Agreement, or a breach hereof, including the failure to deliver notice
to the Escrow Agent as required by Section 1.04 in an expedited manner.  To the extent the controversy is not finally
resolved within 15 days, Purchaser and Seller shall engage in the dispute
resolution process referred to in the first two sentences of Section 9.11 of
the Purchase Agreement.  To the extent
that the dispute is finally resolved, Purchaser and Seller shall sign a written
statement setting forth the settlement and submit such statement to the Escrow
Agent, and the Escrow Agent shall be entitled to rely on such statement.  If the dispute is not finally resolved
within 45 days after the date the Purchase Agreement is terminated, either
party may commence an action with respect thereto in a court of competent
jurisdiction.

 

1.6                                 Ownership
for Tax Purposes.  The Purchaser
shall be responsible for all taxes arising from or attributable to the Deposit
for as long as such amounts remain in the escrow account.  The Escrow Agent shall furnish an account
statement showing interest earned to and into the account of the
Purchaser.  The party receiving the
Escrow Funds shall be responsible for all taxes arising from or attributable to
such funds during the period beginning with such receipt.

 

2

 

1.7                                 Compensation.  Escrow Agent will not be compensated for its
services performed pursuant to this Agreement except for (a) those expenses
or costs charged for investments by the bank or institution holding the cash
portion of the Deposit, and (b) reasonable attorneys’ fees or costs
incurred as a result of any dispute between Seller and Purchaser.  Each of the Purchaser and the Seller shall
pay one-half of the amounts required to be paid to the Escrow Agent pursuant to
this Section 1.07 at the time of the Closing or, if such Closing has not
occurred at the time the Escrow Funds are disbursed, at such time.

 

1.8                                 Reporting
Person.  Seller and Purchaser
designate Escrow Agent as the “Reporting Person,” as such term is
utilized in Section 6045 of the Code, and agree to (a) provide to Escrow
Agent the information and other certifications required pursuant to
Section 2.05(c)(ii) and (iii) of the Purchase Agreement and
(b) otherwise comply with Section 2.05 of the Purchase
Agreement.  Escrow Agent agrees to serve
as Reporting Person as set forth in Section 2.05 of the Purchase
Agreement.

 

1.9                                 Escrow
Agent.

 

(a)                                  If
the Escrow Agent shall be uncertain as to its duties or rights hereunder or
shall receive instructions from any of the undersigned with respect to the
Escrow Funds, which, in its opinion, are in conflict with any of the provisions
of this Escrow Agreement, it shall be entitled to refrain from taking any
action until it shall be directed otherwise in writing by the Purchaser and the
Seller or by order of a court of competent jurisdiction.  The Escrow Agent shall be protected in
acting upon any notice, request, waiver, consent, receipt or other document
reasonably believed by the Escrow Agent to be signed by the proper party or
parties.

 

(b)                                 Seller
and Purchaser recognize and acknowledge that Escrow Agent is serving without
compensation and solely as an accommodation to the parties hereto and each
agree that the Escrow Agent shall not be liable for any error or judgment or
for any act done or step taken or omitted by it in good faith or for any
mistake of fact or law, or for anything that it may do or refrain from doing in
connection herewith, except its own gross negligence or willful misconduct, and
the Escrow Agent shall have no duties to anyone except those signing this
Escrow Agreement.

 

(c)                                  The
Escrow Agent is hereby indemnified by the Purchaser and the Seller, from all
losses, costs and expenses that may be incurred by it as a result of the
performance of its duties hereunder, provided that such losses, costs
and expenses shall not have result from the bad faith, willful misconduct or
negligence of the Escrow Agent.  Such
indemnification shall be borne in equal proportions by the Purchaser and the
Seller.  From and after the Closing, for
purposes of this Section 1.9(c), “Purchaser” shall mean, at any time, each of
ETT Acquisition Company, LLC and any Affiliate (as of the Closing Date) of ETT
Acquisition Company, LLC having title at such time to any portion of the
Property.

 

(d)                                 The
Escrow Agent does not have any interest in the Escrow Funds deposited hereunder
but is serving as escrow holder only and having only possession thereof.  This paragraph shall survive notwithstanding
any termination of this Escrow Agreement or the resignation of the Escrow
Agent.

 

3

 

1.10                           Replacement
of Escrow Agent.  The Escrow Agent
may resign at any time by giving 90 days’ prior written notice to the Purchaser
and the Seller, but will continue to serve until a successor is appointed.  Purchaser may, in a written notice delivered
to the Seller and the Escrow Agent, appoint a successor escrow agent; provided,
however, that such successor escrow agent shall be a bank located in Texas with
capital and surplus and undivided profits of more than $100 million.  Any successor escrow agent shall execute and
deliver an instrument accepting the appointment as escrow agent hereunder and
thereupon will have the same rights and duties as the original Escrow Agent and
be governed by the terms and conditions set forth in this Escrow
Agreement.  If no successor escrow agent
is named by the Purchaser, the Escrow Agent may apply to a court of competent
jurisdiction for appointment of a successor escrow agent.

 

1.11                           Notices.  All notices and other communications
required or permitted under this Escrow Agreement will be in writing and,
unless otherwise provided herein, will be deemed effective when delivered in
person or when dispatched by facsimile transmission (confirmed in writing by
mail simultaneously dispatched), or one business day after dispatch by a
nationally recognized overnight courier service to the appropriate party at the
address specified below:

 

If to Seller:

 

Louisiana-Pacific
Corporation 

100 Interstate 45 North

Conroe, Texas  77301

Attn:  Jeff Wagner 

Telephone:  936.760.5938 

Facsimile:  936.760.5907

 

With copies to:

 

Louisiana-Pacific
Corporation

805 SW Broadway

Portland, Oregon 97205

Attn: Ian Ford

Telephone:  503.821.5100 

Facsimile:  503.821.5210

 

If to Purchaser:

 

ETT Acquisition Company,
LLC

c/o The Molpus Woodlands Group

654 North State Street

Jackson, Mississippi 39202

Attn:  Robert L. Lyle

Telephone:                                    601.948.8733

Facsimile:                                            601.352.7463

 

4

 

With copy to:

 

Ropes & Gray

One International Place

Boston, MA 02110

Attn: Larry J. Rowe

Telephone:                                    617.951.7000

Facsimile:                                            617.951.7050

 

If to Escrow Agent:

Fidelity National Title
Insurance Company

717 N. Harwood Street

Suite 800

Dallas, Texas  75201

Attention:                                         Tim
Hardin

Telephone:                                    214.220.1830

Facsimile:                                            214.969.5348

 

or to such other address as either party may from time
to time designate by written notice to the other party as set forth herein.

 

1.12                           Successors
and Assigns.  This Escrow Agreement
is binding upon and inures to the benefit of all parties hereto and their
respective successors and permitted assigns, and no other party is conferred
any rights by virtue of the Escrow Agreement or entitled to enforce any of the
provisions hereof.  No party hereto may
assign this Escrow Agreement without the prior written consent of the other
parties.  Any assignment without prior
written consent shall be deemed null and void.

 

1.13                           Severability.  If any term or provision of this Escrow
Agreement or its application to any person or circumstance shall to any extent
be invalid or unenforceable, the remainder of this Escrow Agreement and the
application of such term or provision to such person or circumstance other than
those as to which it is held invalid or unenforceable shall not be affected
thereby, and each term, or provision of this Escrow Agreement shall be valid
and enforceable to the fullest extent permitted by law.

 

1.14                           Amendment.  This Agreement may not be modified or
amended except in a writing signed by the Escrow Agent, the Purchaser and the
Seller.

 

1.15                           Counterparts.  This Escrow Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument, and any of the parties may execute this Agreement by
signing any such counterpart.

 

1.16                           Headings.  The headings and captions in this Agreement
are for convenience of reference only and shall not in any way affect the meaning
or interpretation of this Agreement.

 

1.17                           Governing
Law.  This Escrow Agreement will be
governed by and construed in 

 

5

 

accordance with
the laws of the State of Texas applicable to a contract executed and performed
in the State of Texas, without giving effect to the conflicts of law principles
thereof.

 

1.18                           Termination.  This Escrow Agreement shall terminate when
the Escrow Funds have been fully released or distributed in accordance with the
provisions of this Escrow Agreement.

 

1.19                           Entire
Agreement.  This Agreement contains
the entire agreement between the parties related to the transaction
contemplated hereby and all prior or contemporaneous agreements,
understandings, representations and statements, oral or written, are merged
herein and superseded hereby.

 

1.20                           Facsimile
Signatures.  Facsimile transmission
of any signed original document and retransmission of any signed facsimile
transmission will be the same as delivery of an original.  At the request of any party to this Escrow
Agreement, the parties will confirm facsimile transmitted signatures by
executing an original document.

 

[The remainder of this page is intentionally left blank.]

 

6

 

IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Escrow Agreement as of the date first above written.

 

	
   

  	
  SELLER:

  	 

	
   

  	
   

  	 

	
   

  	
  LOUISIANA-PACIFIC CORPORATION,

  a Delaware corporation

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
   

  	
   

  	 

	
   

  	
  Name:

  	
   

  	
   

  	 

	
   

  	
  Title:

  	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  PURCHASER:

  	 

	
   

  	
   

  	 

	
   

  	
  ETT ACQUISITION COMPANY, LLC, 

  	 

	
   

  	
  a Delaware limited liability company

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	 

	
   

  	
  Title:

  	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  ESCROW
  AGENT:

  	 

	
   

  	
   

  	 

	
   

  	
  FIDELITY NATIONAL TITLE INSURANCE COMPANY,

  a California corporation

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
   

  	
   

  	 

	
   

  	
  Name:

  	
   

  	
   

  	 

	
   

  	
  Title:

  	
   

  	
   

  	 

								

 

7

 

EXHIBIT D

 

FORM OF DEED

 

	
  RECORD AND RETURN TO:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

SPECIAL WARRANTY DEED

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  STATE OF TEXAS

  	
   

  	
  )

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  )

  	
   

  	
  ss.

  	
   

  	
  KNOW ALL MEN BY THESE PRESENTS:

  	
   

  
	
  COUNTY OF

  	
   

  	
  )

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

THAT LOUISIANA-PACIFIC CORPORATION, a Delaware
corporation, having an address at 100 Interstate 45 North, Conroe, Texas 77301
(“Grantor”), for and in consideration of the sum of $10.00 and other
good and valuable consideration paid to Grantor by ETT ACQUISITION COMPANY,
LLC, a Delaware limited liability company, having an address c/o The Molpus
Woodlands Group, 654 North State Street, Jackson, Mississippi 39202 (“Grantee”),
the receipt and sufficiency of which are hereby acknowledged, has GRANTED, SOLD
AND CONVEYED, and by these presents does hereby GRANT, SELL AND CONVEY unto
Grantee, all of that certain real property located in
            County,
Texas, more particularly described in Exhibit A attached hereto and
incorporated herein by reference, together with: (a) all timber of all species
thereon (including those standing dead or down, all felled and bucked logs,
trees, shrubs and reproduction thereon) as of the date hereof, and including
all buildings, structures, other constructions and improvements of every nature
located or situated on such real property; (b) all strips, gores,
 tenements, rights, servitudes, easements, hereditaments, rights of way,
privileges, liberties, appendages and appurtenances now or hereafter belonging
or pertaining to such real property; (c) all of Grantor’s right, title and
interest, if any, in and to (i) any oil, gas, other hydrocarbons, sand, gravel,
and any other minerals and mineral interests, which may be in, under and/or
that may be produced, saved and marketed, from such real property, (ii) any
royalties, bonuses, overriding royalties, production payments, and (iii) any
other oil, gas and mineral interests of whatever nature and character, or other
interests connected therewith, arising therefrom or ancillary thereto; and (d)
all of Grantor’s right, title and interest in and to (i) the surface water and
surface water rights, appropriations and permits related to surface water of
such real property, (ii) any groundwater and any severed groundwater, and (iii)
any groundwater licenses or permits in locations other than in such real
property used for the benefit thereof (collectively, the “Property”);

 

SUBJECT, HOWEVER, to the permitted exceptions attached
hereto and made a part hereof as Exhibit B.

 

 

TO HAVE AND TO HOLD the Property, subject to the
aforesaid encumbrances, unto Grantee, Grantee’s successors and assigns,
forever; and Grantor does hereby bind Grantor and Grantor’s successors and
assigns to WARRANT AND FOREVER DEFEND all and singular the Property, subject to
the aforesaid encumbrances, unto Grantee, Grantee’s successors and assigns,
against every person whomsoever lawfully claiming or to claim the same or any
part thereof, by, through or under Grantor, but not otherwise.

 

All ad valorem taxes and assessments for the Property
for the current calendar year have been prorated by the parties hereto as of
the effective date of this Special Warranty Deed and by acceptance hereof
Grantee hereby expressly assumes liability for the payment thereof and for
subsequent years.

 

[remainder of this
page intentionally left blank]

 

2

 

IN WITNESS WHEREOF, this
Special Warranty Deed has been executed by Grantor on the date set forth below,
and is effective as of
                         ,
2003.

 

	
   

  	
  GRANTOR:

  
	
   

  	
   

  
	
   

  	
  LOUISIANA-PACIFIC CORPORATION, a 

  Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  

 

STATE
OF                                                                                                               )

                                                                                                                                                                        )  ss:

COUNTY OF                                                                                                        )

 

This instrument was acknowledged before me on
                      ,
2003, by                     ,
the
                 
of Louisiana-Pacific Corporation, a Delaware corporation on behalf of said
corporation.

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary Public, State of

  	
   

  	
   

  
				

 

3

 

EXHIBIT E

 

FORM OF BILL OF SALE

 

BILL OF SALE, made,
executed and delivered on
                         ,
by LOUISIANA-PACIFIC CORPORATION, a Delaware corporation (“Seller”), to
ETT Acquisition Company, LLC, a Delaware limited liability company (the “Purchaser”)

 

W I T N E S S E T H:

 

WHEREAS, the Purchaser
and the Seller are parties to a Purchase and Sale Agreement dated as of
                     
(the “Purchase Agreement”); and

 

WHEREAS, the Purchaser
and the Seller now desire to carry out the intent and purpose of the Purchase
Agreement by the Seller’s execution and delivery to the Purchaser of this
instrument evidencing the sale, conveyance, assignment, transfer and delivery
to the Purchaser of the Personal Property and the Records and Plans, each
subject to the Assumed Liabilities; provided, however, that there
shall be excluded the Excluded Liabilities;

 

NOW, THEREFORE, in
consideration of the foregoing premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Seller does hereby sell, convey, assign, transfer, grant and deliver unto
the Purchaser and its successors and assigns, forever, the Personal Property
and the Records and Plans, subject to the Assumed Liabilities and the terms and
conditions of the Agreement, and free and clear of all Liens.

 

TO HAVE AND TO HOLD the
Personal Property and the Records and Plans unto the Purchaser, its successors
and assigns, FOREVER.

 

The Seller hereby
constitutes and appoints the Purchaser and its successors and assigns as its
true and lawful attorneys in fact in connection with the transactions
contemplated by this instrument, with full power of substitution, in the name
and stead of the Seller but on behalf of and for the benefit of the Purchaser
and its successors and assigns, to demand and receive any and all of the
assets, properties, rights and business hereby conveyed, assigned, and
transferred or intended so to be, and to give receipt and releases for and in
respect of the same and any part thereof, and from time to time to institute
and prosecute, in the name of the Seller or otherwise, for the benefit of the
Purchaser or its successors and assigns, proceedings at law, in equity, or
otherwise, which the Purchaser or its successors or assigns reasonably deem
proper in order to collect or reduce to possession or endorse any of the
Personal Property or Records and Plans and to do all acts and things in
relation to the assets which the Purchaser or its successors or assigns
reasonably deem desirable.

 

In the event that any
provision of this Bill of Sale be construed to conflict with a provision in the
Purchase Agreement, the provision in the Purchase Agreement shall be deemed to
be controlling.

 

 

This instrument shall be
binding upon and shall inure to the benefit of the respective successors and
assigns of the Seller and the Purchaser.

 

This Bill of Sale shall
be construed and enforced in accordance with the laws (other than the conflict
of law rules) of the State of Texas.

 

This Bill of Sale may be
executed in one or more counterparts, each of which shall be deemed an original
but all of which together will constitute one and the same instrument.

 

Capitalized terms which
are used but not defined in this herein shall have the meaning ascribed to such
terms in the Purchase Agreement

 

IN WITNESS WHEREOF, the
undersigned has executed this instrument under seal of the Seller on the date
first above written.

 

	
   

  	
  LOUISIANA-PACIFIC
  CORPORATION,

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  

 

2

 

EXHIBIT F

 

FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

 

THIS ASSIGNMENT AND
ASSUMPTION AGREEMENT (this “Agreement”) is made as of
                       
by and between LOUISIANA-PACIFIC CORPORATION, a Delaware corporation, having an
address at 100 Interstate 45 North, Conroe, Texas 77301 (“Seller” or “Assignor”),
and ETT Acquisition Company, a Delaware limited liability company, having an
address c/o The Molpus Woodlands Group, 654 North State Street, Jackson,
Mississippi 39202 (“Purchaser” or “Assignee”).

 

For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Assignor and Assignee hereby agree as follows:

 

WHEREAS, Seller and Purchaser are parties to a
Purchase and Sale Agreement, dated
                         ,
2003 (as amended, supplemented or otherwise modified from time to time, the “Purchase
Agreement”);

 

WHEREAS, pursuant to the Purchase Agreement, the
Purchaser has agreed to assume certain liabilities and obligations of the
Seller that are expressly described as being Assumed Liabilities in Section
2.02 of the Purchase and Sale Agreement, and the Seller has agreed to retain
certain Excluded Liabilities described in Section 2.03 of the Purchase and Sale
Agreement;

 

WHEREAS, capitalized terms which are used but not
defined in this Agreement shall have the meaning ascribed to such terms in the
Purchase Agreement;

 

WHEREAS, it is the intention of the parties that the
Seller will assign to the Purchaser and the Purchaser will assume the Assumed
Liabilities by the execution and delivery of this Assignment Agreement.

 

NOW, THEREFORE, in consideration of the foregoing
premises and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Seller and Purchaser hereby agree
as follows:

 

1.                                       Assignor
hereby SELLS, CONVEYS, TRANSFERS, GRANTS, ASSIGNS AND DELIVERS to Assignee, its
successors and assigns, free and clear of all Liens, all of the right, title
and interest of the Seller in, to and under the Purchased Contracts, Leases and
Licenses (collectively, the “Assigned Property”).

 

2.                                       Assignor
hereby assigns to the Assignee and the Assignee hereby assumes and agrees to
pay and discharge when due the Assumed Liabilities.  Notwithstanding anything herein to the contrary or in any other
writing delivered in connection herewith, the Excluded Liabilities are
specifically excluded from the Assigned Property and shall be retained by the
Assignor at and following the Closing Date.

 

3.                                       The
Assignor hereby constitutes and appoints the Assignee, its successors and
assigns, as the true and lawful agent and attorney-in-fact of the Assignor to
demand and receive any 

 

 

and
all of the Assigned Property which are hereby assigned, conveyed and
transferred, or are intended so to be, and which are not in the possession or
under the exclusive control of the Assignor, and to give receipts and releases
for and in respect of the same, and any part thereof, and from time to time to
institute and prosecute in the name of the Assignor or in the name of the
Assignee, its successors or assigns, as the legal attorney-in-fact of the
Assignor thereunto duly authorized, for the benefit of the Assignee, its
successors and assigns, any and all proceedings at law, in equity or otherwise,
which the Assignee, its successors and assigns, may deem proper for the collection
and enforcement of any claim or right of any kind hereby granted, sold,
conveyed, transferred or assigned, or intended so to be, and to do all acts and
things in relation to the Assigned Property which the Assignee, its successors
and assigns, shall deem desirable, the Assignor hereby declaring that the
foregoing powers are coupled with an interest and are irrevocable by the
Assignor.  Assignor acknowledges that
such appointment does not require the Assignee to use any special skills or
expertise in carrying out any acts under such appointment.  Assignee accepts its appointment as
Assignor’s true and lawful agent and attorney-in-fact.  Assignee understands its duties under this
paragraph 3 and Texas law regarding powers of attorney.  Notwithstanding the foregoing, Assignor
shall retain the right, power, interest and authorization to institute or
prosecute any and all proceedings at law, in equity or otherwise which the
Assignor shall deem proper for the collection and enforcement of any claim or
right under the Assigned Property which constitutes an Excluded Liability.

 

4.                                       Nothing
in this Agreement, express or implied, is intended or shall be construed to
confer upon or give to any person, firm or corporation other than the Assignee,
its successors and assigns, any remedy or claim under or by reason of this
instrument or any term, covenant or condition hereof, and all of the terms,
covenants, conditions, promises and agreements in this Agreement shall be for
the sole and exclusive benefit of the Assignee and its successors and assigns.

 

5.                                       Neither
the making nor the acceptance of this Agreement shall enlarge, restrict or
otherwise modify the terms of the Purchase Agreement or constitute a waiver or
release by the Assignor or the Assignee of any liabilities, duties or
obligations imposed upon either of them by the terms of the Purchase Agreement,
including, without limitation, the representations and warranties and other
provisions which the Purchase Agreement provides shall survive the date hereof.  In the event that any provision of this
Agreement may be construed to conflict with a provision of the Purchase
Agreement, the provision in the Purchase Agreement shall be deemed controlling.

 

6.                                       This
Agreement shall be governed by and construed in accordance with the laws of the
State of Texas applicable to a contract executed and performed in the State of
Texas, without giving effect to the conflicts of law principles thereof.

 

7.                                       This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument, and any of the parties
may execute this Agreement by signing any such counterpart.

 

2

 

IN WITNESS WHEREOF, Assignor and Assignee execute and deliver this
Agreement as of the date and year first above written.

 

	
   

  	
  ASSIGNOR:

  	 

	
   

  	
   

  	 

	
   

  	
  LOUISIANA-PACIFIC
  CORPORATION,

  a Delaware corporation

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
   

  	
   

  	 

	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  ASSIGNEE:

  	 

	
   

  	
   

  	 

	
   

  	
  ETT ACQUISITION
  COMPANY, LLC,

  a Delaware limited liability company

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	 

	
   

  	
  Title:

  	
   

  	
   

  	 

									

 

3

 

EXHIBIT G

 

FORM OF SELLER’S AFFIDAVIT

 

TITLE
COMPANY:  FIDELITY NATIONAL TITLE
INSURANCE COMPANY

 

TITLE COMPANY GF
NOS.:

 

OWNER:  LOUISIANA-PACIFIC CORPORATION

 

PROPERTY DESCRIPTION:

 

Various tracts of land located in Hardin, Jasper,
Liberty, Newton, Orange, Polk, and Tyler Counties, Texas, and being more fully
described on Exhibit “A” attached hereto and made a part hereof.

 

The undersigned
affiant (“Affiant”), after being duly sworn, hereby states under oath that, to
the best of Affiant’s actual conscious knowledge, the following information is
true and correct:

 

1.                                       Purpose
of Affidavit.  Affiant makes this
affidavit (the “Affidavit”) to the Title Company as an inducement to it to
complete a transaction concerning the Property pursuant to the Purchase and
Sale Agreement, dated as of July 2, 2003, by and between Affiant and ETT
Acquisition Company, LLC (the “Purchase Agreement”).  Affiant acknowledges that Title Company is relying upon these
representations as being true and correct. 
Affiant also acknowledges that the contemplated transaction would not be
consummated without the execution of this Affidavit.  Affiant represents that the person executing this Affidavit on
behalf of Affiant is duly authorized to do so.

 

2.                                       Debts
and Liens.  Except as indicated
below, there are no loans, tax liens, abstract of judgment liens or other real
estate liens affecting the Property. 
The exceptions are:

 

	
  CREDITOR

  	
   

  	
  ORIGINAL AMOUNT OF DEBT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

In the event Title Company is directed to pay any of the debts listed
above, Affiant understands that Title Company is relying upon written payoff
information furnished by the Creditor in computing such payments.  If a Creditor deems any additional sum due
and owing, Affiant agrees to indemnify and to hold Title Company harmless with
regard to any claim or alleged claim of the Creditor.

 

 

3.                                       Real
Property Taxes.  All real property
taxes assessed against the Property which are due and payable have been paid in
full.

 

4.                                       Improvement
Debts and Liens.  Except as
indicated below, there are no unpaid debts relating to any of the following
items which may affect the Property: 
plumbing fixtures, water heaters, swimming pools, furnaces, air
conditioners, heaters, radio or television antennas, carpeting, rugs, lawn
sprinkling systems, venetian blinds, window shades, draperies, electric
appliances, fences, gas or electric grills or lights, landscaping or any
personal property or fixtures attached to or a part of the Property, and there
are no security interests affecting the Property evidenced by financing
statements, security agreements or otherwise, nor any unpaid bills for labor or
materials used in connection with any construction of improvements on the Property.  The exceptions are:

 

	
  CREDITOR

  	
   

  	
  ORIGINAL AMOUNT OF DEBT

  
	
   

  	
   

  	
   

  
	
  None

  	
   

  	
  N.A.

  

 

5.                                       Government
Liens.  Affiant has received no
notice of any paving or sewer liens or claims outstanding against the
Property.  There are no petitions for
the paving of streets, alleys or sidewalks adjoining the Property which are
known to the Affiant.  Further, no
governmental authority is claiming a lien against the Property for costs
incurred in removing trash, cutting grass or weeds, or removing or repairing a
building.  There are no judgments,
pending bankruptcies, creditor’s rights proceedings, state or federal tax liens
relating to Affiant in  Hardin, Jasper,
Liberty, Newton, Orange, Polk, and Tyler Counties, Texas or elsewhere.

 

6.                                       Broker’s
and Appraiser’s Liens.  Affiant has
received no notice of any claim of a broker’s or appraiser’s lien relating to
the Property.

 

7.                                       Persons
in Possession.  To the Knowledge of
Seller, no Person is in possession of all or any portion of the Real Property
other than (i) tenants (as tenants only) under the Leases, (ii) as contemplated
by the Permitted Exceptions and (iii) as disclosed in Section 4.01(n)-2 of
the Disclosure Schedule.

 

Capitalized terms which are used but not defined in
this Affidavit shall have the meaning ascribed to such terms in the Purchase
Agreement.

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK.]

 

2

 

EXECUTED this
         day of
                            ,
2003.

 

	
   

  	
  LOUISIANA-PACIFIC
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Printed Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							

 

SWORN TO AND SUBSCRIBED
before me, this         day of
                   ,
2003.

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary Public in and
  for the State of

  	
   

  	
   

  
	
   

  	
   

  
	
  (Acknowledgment)

  
				

 

STATE
OF                                                                                  )

                                                                                                                                             )

COUNTY OF                                                                         )

 

This instrument was
acknowledged before me on the        day of
                   ,
2003, by
                                
who is
                              
of Louisiana-Pacific Corporation, on behalf of said corporation.

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary Public in and
  for the State of

  	
   

  	
   

  
				

 

3

 

EXHIBIT H

 

FORM OF NON-FOREIGN AFFIDAVIT

 

Section 1445 of the
Internal Revenue Code provides that a transferee of a U.S. real property
interest must withhold tax if the transferor is a foreign person.  To inform the transferee that withholding of
tax is not required upon the disposition of a U.S. real property interest by
Louisiana-Pacific Corporation, a Delaware corporation (the “Transferor”),
the undersigned hereby certifies the following on behalf of the Transferor:

 

Transferor is not a
foreign corporation, foreign partnership, foreign trust or foreign estate (as
those terms are defined in the Internal Revenue Code and Income Tax
Regulations);

 

Transferor’s U.S.
employer identification number is 93-0609074; and

 

Transferor’s office address
is:

Louisiana-Pacific
Corporation

805 SW Broadway

Suite 1200

Portland, OR 97205

 

Transferor understands
that this certification may be disclosed to the Internal Revenue Service and
that any false statement made within this certification could be punished by
fine, imprisonment, or both.

 

Under penalties of
perjury the undersigned declares that he has examined this certification and
that to the best of his knowledge and belief it is true, correct and complete,
and the undersigned further declares that he has the authority to sign this
document on behalf of the Transferor.

 

	
   

  	
  TRANSFEROR:

  
	
   

  	
   

  
	
   

  	
  LOUISIANA-PACIFIC
  CORPORATION,

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
					

 

 

EXHIBIT I

 

FORM OF OPINION OF COUNSEL TO SELLER

 

 

EXHIBIT J

 

FORM OF LETTER AGREEMENT

 

 

EXHIBIT K

 

FORM OF OPINION OF COUNSEL TO PURCHASER

 

 

EXHIBIT L

 

HARVEST SCHEDULE

 

 

EXHIBIT M

 

FORM OF SUPPLY AGREEMENT

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