Document:

EXHIBIT 10.8

 

Amendment to Asset Purchase Agreement

(Reno/Sparks)

 

THIS AMENDMENT TO
ASSET PURCHASE AGREEMENT (RENO/SPARKS) (the “Amendment”) is made and
entered into as of July 20, 2004, by and between CROWN PACIFIC LIMITED
PARTNERSHIP, a Delaware limited partnership (“Seller”),
Debtor-in-Possession under Jointly Administered Case No. 03-11258-PHX-RJH in
the United States Bankruptcy Court for the District of Arizona filed on
June 29, 2003 under Chapter 11 of Title 11 of the United States
Code, and RENO LUMBER, a Nevada corporation (“Buyer”).

 

Recitals:

 

A.            Seller and Buyer are parties to that certain
Asset Purchase Agreement (Reno/Sparks) dated as of June 2, 2004 (the “Agreement”),
pursuant to which Seller has agreed to sell and Buyer has agreed to purchase,
on the terms and conditions set forth therein, substantially all of the assets
associated with Seller’s contractor supply yard business in Sparks, Nevada.
Capitalized terms used but not defined herein have the respective meanings set
forth in the Agreement.

 

B.            The parties wish to
amend the Agreement to substitute for Annex E to Schedule E
thereto the attached Annex E (Replacement).

 

Agreements:

 

In consideration
of the foregoing and the mutual covenants of the parties set forth in this
Amendment, the parties, intending to be legally bound, agree as follows:

 

1.             Replacement of Annex E. Annex E to Schedule E to the
Agreement is hereby replaced with the attached Annex E (Replacement).

 

2.             Modification. This Amendment may not be modified or amended except by the
written agreement of the parties.

 

3.             Binding Effect.
The provisions of this Amendment shall be binding upon and inure to the benefit
of the parties and their respective successors and assigns.

 

4.             Effect
of Amendment. Except as expressly provided in this Amendment, the Agreement
shall remain unamended and in full force and effect. All references in the
Agreement to “this Agreement” shall be deemed to mean the Agreement as amended
by this Amendment

 

1

 

IN
WITNESS WHEREOF, the parties have executed this Amendment as of the date first
above written.

 

	
  Seller:

  	
  CROWN PACIFIC LIMITED PARTNERSHIP,

  
	
   

  	
  an Oregon limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Crown Pacific Management Limited 

  Partnership, its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Steven E. Dietrich

  	
   

  
	
   

  	
   

  	
   

  	
  Steven E. Dietrich

  	
   

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Buyer:

  	
  RENO LUMBER,

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ D.S. Yaeger

  	
   

  
	
   

  	
   

  	
  D.S. Yaeger, Chief Executive Officer

  	
   

  
						

 

2EXHIBIT 10.9

 

Asset
Purchase Agreement

(alliance)

 

This ASSET PURCHASE
AGREEMENT (this “Agreement”) is made and entered into as of June 21,
2004 (the “Effective Date”) by and among CROWN PACIFIC PARTNERS L.P., a
Delaware limited partnership (“CPPLP”), CROWN PACIFIC LIMITED
PARTNERSHIP, a Delaware limited partnership (collectively with CPPLP, the “Seller”),
Debtors-in-Possession under Jointly Administered Case No. 03-11258-PHX-RJA (the
“Case”) in the United States Bankruptcy Court for the District of
Arizona (the “Bankruptcy Court”) filed on June 29, 2003 (the “Petition
Date”) under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy
Code”), and ALC ACQUISITION LLC, an Arizona limited liability company (the
“Buyer”).

 

Recitals:

 

A.            Seller owns and operates contractor supply
businesses in Queen Creek, Scottsdale and Glendale, Arizona (the “Business”).

 

B.            Seller wishes to sell substantially all
assets associated with the Business to Buyer, and Buyer wishes to purchase such
assets from Seller, in each case on the terms and conditions set forth in this
Agreement.

 

Agreements:

 

In consideration of the
foregoing, the mutual covenants of the parties set forth in this Agreement, and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties, intending to be legally bound, agree as
follows:

 

1.             Purchase and Sale.

 

1.1           Agreement to Purchase and Sell. On the terms and subject to the conditions
set forth in this Agreement, Seller agrees to sell, transfer, assign, convey,
and deliver to Buyer and Buyer agrees to purchase from Seller, all of Seller’s
right, title, and interest as of the Closing Date in and to the following
assets (collectively, the “Purchased Assets”):

 

1.1.1.       Contracts.  To
the extent transferable, Seller’s right, title, and interest (i) as lessee
under those real property leases listed on Schedule A-1 to this
Agreement (the “Real Property Leases”), (ii) as lessee under those
equipment leases and similar arrangements listed on Schedule A-2 to this
Agreement (the “Personal Property Leases”), and (iii) as a party to
those other contracts, licenses, agreements, and similar arrangements listed on
Schedule A-3 to this Agreement and all purchase orders arising out of
the operation of the Business and outstanding as of the Closing Date,
including, without limitation, those purchase orders listed on Schedule A-4
to be delivered at Closing (the “Other Contracts”);

 

1.1.2.       Real Property and
Improvements.  Seller’s right, title and interest in and to
all improvements located on the Leased Real Property (the “Improvements”);

 

1.1.3.       Personal Property.  All
tangible personal property and items of equipment used exclusively in the
operation of the Business which is owned by Seller and located on the Real
Property on the Closing Date, including, without limitation, those items listed
on Schedule B to this Agreement and any other tangible personal property
acquired by Seller after the Effective Date and prior to the Closing Date
exclusively in connection with the Business (the “Personal Property”);

 

1.1.4.       Intangible Property.  All
intangible personal property owned or held by Seller and used solely and
exclusively in connection with the Business, but in each case only to the
extent of Seller’s interest therein and only to the extent transferable,
together with the Books and Records, specifically including the right to use of
the trade name “Alliance” and “Alliance Lumber” within the State of Arizona
(the “Intangible Property”);

 

 

1.1.5.       Receivables.  All
accounts receivable arising out of the operation of the Business and
outstanding as of the Closing Time (excluding accounts receivable from other
divisions of Seller) except such accounts receivable which, as of the Closing
Date, have been outstanding for more than ninety days (such accounts receivable
shall be deemed to have arisen on the date an invoice for the receivable was
first sent to the customer) and, subject to the provisions of Section 1.2, all
causes of action relating thereto (the “Receivables”); and

 

1.1.6.       Inventory.  (i)
All inventories of lumber, other wood products, and other products held for
resale by the Business, or in transit to the Business, or otherwise prepaid, in
the Ordinary Course of Business as of the Closing Time, wherever located, including,
without limitation, those inventories or products in transit listed on Schedule
C to be delivered at Closing; and (ii) all fuel, spare parts, and supplies
owned by Seller and located at any of the facilities operated by the Business
as of Closing Time (the “Inventory”).

 

1.2           Excluded Assets. 
Notwithstanding anything to the contrary in this Agreement, the
Purchased Assets shall not include (collectively, the “Excluded Assets”)
(i) all cash and cash equivalents, (ii) any Personal Property Lease or Other
Contract that is terminated or expires prior to the Closing Date in accordance
with its terms or in the Ordinary Course of Business, (iii) Seller’s rights
under this Agreement and to all cash and non-cash consideration payable or
deliverable hereunder, (iv) any and all rights to the use of the name “Crown
Pacific,” (v) all preference or avoidance claims and actions of Seller,
including any such claims or actions arising under Sections 544, 547, 548, 549,
and 550 of the Bankruptcy Code, (vi) Inventory sold or otherwise transferred by
Seller in the Ordinary Course of Business prior to the Closing Date, (vii)
insurance proceeds, claims and causes of action with respect to, or arising in
connection with, any Excluded Asset, (viii) those items listed on Schedule D
to this Agreement, and (ix) any pre-Petition Date Personal Property Leases and
Other Contracts which are neither necessary nor useful for the conduct of the
Business; provided, that Buyer
has notified Seller in writing of its decision to exclude such Contracts prior
to the earlier of (x) the commencement of an auction with respect to the
Purchased Assets is scheduled to be held or (y) the commencement of a sale
hearing is scheduled to be held with respect to the sale of the Purchased
Assets to Buyer.

 

2.             Purchase Price and Payment; Assumption of
Liabilities; Cure Costs.

 

2.1           Purchase Price

 

.  In consideration of the sale,
transfer, and conveyance to Buyer of the Purchased Assets, Buyer shall, at the
Closing (i) pay to Seller cash in an amount (the “Purchase Price”) equal
to (w) the Estimated Net Book Value, less (x) the Current Liabilities, less (y)
the aggregate amount of the pre-Petition Date Claims set forth on Schedule E
to this Agreement, plus (z) One Million Dollars ($1,000,000); and (ii) assume the
Assumed Liabilities.  Not less than two
(2) Business Days prior to the anticipated Closing Date, Seller shall give
Buyer notice of the Estimated Net Book Value. 
The Purchase Price shall be adjusted after the Closing to reflect any
difference between the Estimated Net Book Value and the Actual Net Book Value,
as provided in Section 2.4.

 

2.2           Deposit Escrow.  Subject to the terms and
conditions of an escrow agreement entered into among Buyer, Seller and the
Deposit Escrow Agent (as defined below), substantially in the form attached
hereto as Exhibit A (the “Deposit Escrow Agreement”), on or prior
to the Effective Date, Buyer shall deliver to and deposit in trust with JP
Morgan Chase Bank or other similar escrow agent or company mutually acceptable
by written agreement between Buyer and Seller (the “Deposit Escrow Agent”),
the sum of Two Million Dollars ($2,000,000.00) (the “Deposit”) in
immediately available, good funds.  Upon
receipt of the Deposit, the Deposit Escrow Agent shall immediately deposit the
Deposit into an account pursuant to the Deposit Escrow Agreement.  The Deposit Escrow Agent shall return to
Buyer the Deposit (and any interest accrued thereon) upon the earlier of (A)
Buyer’s termination of this Agreement under Section 8.1.1 as a result of the
failure of a condition to Buyer’s obligations, as set forth in Section 4.2 (a “Seller
Default Termination”), (B) Seller’s termination of this Agreement at its
election under Section 8.1.1 unless there has been a Buyer Default Termination,
(C) mutual termination of this Agreement under Section 8.1.2, (D) Buyer’s or
Seller’s termination of this Agreement under Section 8.1.3 unless there has
been a Buyer Default Termination, (E) pursuant to Section 2.4.5, or (F) the
failure of the Bankruptcy Court to enter an unstayed Approval Order because of
the acceptance of a higher bid.  The
Deposit Escrow Agent shall deliver the Deposit (and any interest accrued
thereon) to Seller upon the earlier of (A) Seller’s termination of this
Agreement under Section 8.1.1 as a result of the failure of a condition to
Seller’s obligations set forth in Sections 4.1.1 or 4.1.2 (a “Buyer Default
Termination”), (B) pursuant to Section 2.4.5 or (C) Seller’s termination of
this

 

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Agreement under Section 8.1.3 if there has
been a Buyer Default Termination. 
Promptly upon the occurrence of any of the events described in the
immediately preceding two sentences, CPPLP and Buyer shall jointly instruct the
Deposit Escrow Agent to release the Deposit in accordance with this Section
2.2.  The Deposit Escrow Agent’s escrow
fees and charges shall be paid one-half by Seller and one-half by Buyer, in
which respect the Seller and the Buyer shall not be jointly liable since each
shall only be liable for its own part (one-half) of the said fees and charges.

 

2.3           Payment of Purchase Price. 
Buyer shall pay the Purchase Price less the Deposit to Seller in United
States dollars by completed wire transfer of immediately available funds on the
Closing Date.

 

2.4           Net Book Value.

 

2.4.1.       Inventory Count. 
Promptly following the Closing, Representatives of Seller and Buyer
shall jointly conduct a physical count of the Inventory as of the Closing Time.

 

2.4.2.       Statement of Actual Net
Book Value.  Within twenty (20) Business Days after the
Closing Date, Seller shall deliver the Statement of Actual Net Book Value to
Buyer.  Buyer shall, and shall direct
its employees to, cooperate with Seller, at no expense to Seller, and provide
Seller with access to all Books and Records necessary, for the preparation of
the Statement of Actual Net Book Value.

 

2.4.3.       Objections. 
Buyer shall have ten (10) Business Days after the delivery of the
Statement of Actual Net Book Value within which to give Seller notice of any
objection to any amount set forth therein. 
Any such notice shall identify the specific amounts to which Buyer
objects and shall set forth with reasonable specificity the basis for Buyer’s
objections.  All amounts set forth in
the Statement of Actual Net Book Value to which Buyer does not object as
provided in this Section 2.4.3 shall irrevocably be deemed approved by Buyer.

 

2.4.4.       Disputes.  If
Buyer gives notice in accordance with Section 2.4.3 objecting to any amounts
set forth in the Statement of Actual Net Book Value, then the parties shall
negotiate in good faith in an effort to resolve such objections. If the parties
are unable to resolve any such objections within ten (10) Business Days after
Buyer’s notice of objection is given, then the issues in dispute shall be
submitted to the Accountants for resolution. In such event, (i) each party
shall furnish to the Accountants such workpapers and other documents and
information relating to the disputed issues as are in the possession or control
of such party and shall be afforded an opportunity to present to the
Accountants the basis for its view with respect to the disputed issues and to
discuss the determination of the disputed issues with the Accountants, (ii) the
determination by the Accountants shall be final and binding on the parties, and
(iii) Seller and Buyer shall each pay, and shall each be liable only for,
one-half of the fees and expenses of the Accountants. Seller and Buyer shall
direct the Accountants to use all reasonable efforts to complete their determination
of the disputed issues within thirty (30) calendar days after they are
submitted to the Accountants.

 

2.4.5.       Payments.  On
the third Business Day following (i) the expiration of the ten (10) Business
Day period referred to in Section 2.4.3 if Buyer fails to give a notice of
objection as provided therein, or (ii) the resolution of any objections set
forth in Buyer’s notice pursuant to Section 2.4.3, whether by agreement of the
parties or determination by the Accountants pursuant to Section 2.4.4, the
Deposit shall be released to Buyer or Seller, as the case may be, in accordance
with this Section 2.4.5.

 

If the Actual Net Book
Value, as determined in accordance with this Section 2.4, is greater than the
Estimated Net Book Value, then (i) Buyer and Seller shall jointly instruct the
Deposit Escrow Agent to release to Seller, by wire transfer, the amount as may
be in the Deposit escrow account and (ii) Buyer shall pay directly to Seller,
on the same date as the amount in the Deposit escrow account is released
pursuant to this sentence, an amount, if any, equal to the excess of the Net
Book Value Difference over the Deposit.

 

If the Actual Net Book Value
as determined in accordance with this Section 2.4, is less than the Estimated
Net Book Value, then (i) Buyer and Seller shall jointly instruct the Deposit
Escrow Agent to release (x) to Buyer, by wire transfer, an amount equal to the
Net Book Value Difference or such lesser amount as may be in the Deposit

 

3

 

escrow account, and (y) to Seller, by wire
transfer, any amount remaining in the Deposit escrow account after payment of
the foregoing and (ii) Seller shall pay directly to Buyer, on the same date as
the Deposit is released pursuant to this sentence, an amount equal to the
excess of the Net Book Value Difference over the Deposit.

 

2.5           Cure Costs.  Buyer agrees to satisfy, as
and when due, all cure obligations due and owing under the Contracts assumed by
Buyer at the Closing which the Bankruptcy Court orders to be paid as a
condition to Seller’s assumption and assignment to Buyer of the Contracts in
accordance with Section 365 of the Bankruptcy Code or otherwise
transferred.  As of the Effective Date,
to Seller’s Knowledge and to Buyer’s Knowledge, there are no such cure
obligations.  Prior to the Closing Date,
Buyer and Seller shall cooperate in good faith to determine all such cure
obligations.  Buyer shall have no
obligation to cure any such obligations with respect to the Contracts, if any,
that are excluded pursuant to Section 1.2(ix) or which are not otherwise listed
on Schedules A-1, A-2 or A-3.

 

2.6           Claims Waiver by Buyer. 
Buyer (i) shall acquire all pre-Petition Date Claims in favor of Persons
who have accounts payable that are set forth on Schedule E to this
Agreement and (ii) hereby waives and releases Seller, Crown Management and each
other debtor in the Case from any and all claims and causes of action with
respect to any and all such Claims.

 

3.             Pre-Closing Matters.

 

3.1           Operation of Business. 
Between the Effective Date and the Closing Date, Seller shall:

 

3.1.1.       Use commercially reasonable efforts to conduct the Business and operate
and maintain the Purchased Assets in the Ordinary Course of Business;

 

3.1.2.       Not sell, lease, or otherwise transfer or dispose of any material
Purchased Assets, or any interest therein, other than transfers and
dispositions, including the sale of lumber, other wood products, and other
products, made in the Ordinary Course of Business;

 

3.1.3.       Not permit or allow any material Purchased Assets to become subject to
any additional Lien (other than Permitted Encumbrances);

 

3.1.4.       Use its commercially reasonable efforts to maintain the relations and
goodwill with suppliers, customers, and others having business relationships
with Seller in connection with the Business; and

 

3.1.5.       Pay all post-Petition Date amounts due under the Personal Property
Leases and the Real Property Leases through the Closing Date.

 

3.2           Access to Information. 
Between the Effective Date and the Closing Date, Seller shall, upon
reasonable advance notice from Buyer to Seller, (i) afford to Buyer and its
Representatives access (during normal business hours), in a manner so as not to
interfere with Seller’s normal operations and subject to reasonable
restrictions imposed by Seller, to the Purchased Assets, and (ii) cause its
Representatives to furnish Buyer with such information with respect to the
Business and the Purchased Assets as may be within Seller’s possession or
control and as Buyer may reasonably request. 
Buyer shall have no right hereunder to conduct any environmental or
other assessment of the Property other than visual inspection and document
review.  Buyer expressly acknowledges
and agrees that nothing in this Section 3.2 is intended to give rise to any
contingency to Buyer’s obligation to proceed with the transactions contemplated
herein.

 

3.3           Damage or Destruction.  In
the event of any damage to or destruction of a Purchased Asset (other than
normal wear and tear) (a “Loss”) between the Effective Date and the
Closing Date, (i) Buyer shall not be entitled to terminate this transaction,
and (ii) the Purchase Price shall be reduced by an amount equal to the
estimated cost to repair or restore the Purchased Asset to substantially its
condition immediately prior to the occurrence of such Loss (to the extent, if
any, that Seller has not completed such repair or restoration).  The estimated cost to repair or restore the
Purchased Asset to substantially its condition immediately prior to the occurrence
of such Loss shall be agreed to by Seller and Buyer or, if they are unable to
agree, shall be determined by an independent, qualified insurance adjuster
selected by the parties (or, if they are unable to agree on such selection,

 

4

 

one appointed by the Bankruptcy Court upon
application by either party).  Seller
shall be entitled to retain any insurance proceeds paid or payable on account
of such Loss.

 

3.4           Bankruptcy Court Approval. 
Promptly following the Effective Date, Seller shall file a motion with
the Bankruptcy Court requesting, and shall thereafter use commercially
reasonable efforts to obtain, entry of an order (the “Approval Order”)
which (i) approves the sale of the Purchased Assets to Buyer on the terms and
conditions set forth in this Agreement and authorizes Seller to proceed with
the transactions herein contemplated, (ii) includes a specific finding that
Buyer is a good faith purchaser of the Purchased Assets and is entitled to the
protection afforded by Section 363(m) of the Bankruptcy Code, (iii) states that
the sale of the Purchased Assets to Buyer shall be free and clear of all Liens
whatsoever (except as expressly provided in this Agreement), and (iv) approves
Seller’s assumption and assignment of the pre-Petition Date Contracts pursuant
to Section 365 of the Bankruptcy Code and orders Buyer to pay any cure amounts
payable to the other parties to such Contracts as a condition to such
assumption and assignment.

 

3.5           Release.  On or prior to the Effective
Date, Buyer and Seller shall have executed, and Buyer shall have caused its
Affiliates named therein to execute, a Release, substantially in the form of Exhibit
D to this Agreement.

 

4.             Conditions to Closing.

 

4.1           Seller’s Conditions.  Seller’s
obligation to close this transaction shall be subject to and contingent upon
the satisfaction (or waiver by Seller in its sole discretion) of each of the
following conditions:

 

4.1.1.       All representations and warranties of Buyer set forth in this Agreement
(considered collectively) and each such representation and warranty (considered
individually) shall have been true and correct in all material respects as of
the Effective Date and shall be true and correct in all material respects as of
the Closing Date, as if made on the Closing Date.

 

4.1.2.       All of the covenants and obligations that Buyer is obligated to perform
or comply with pursuant to this Agreement prior to or at the Closing
(considered collectively) and each such covenant and obligation (considered
individually) shall have been performed and complied with in all material
respects.

 

4.1.3.       Buyer shall have made the deliveries of documents and funds required to
be made pursuant to Section 5.3.

 

4.1.4.       As of the Closing Date, there shall not be in effect any Legal
Requirement or any Order that prohibits the transfer of any material portion of
the Purchased Assets by Seller to Buyer.

 

4.1.5.       Since the Effective Date, there shall not have been commenced or
Threatened against Seller or any Affiliate of Seller any Proceeding (i) seeking
material Damages or other material relief in connection with any aspect of this
transaction, or (ii) that could reasonably be expected to have the effect of
preventing or making illegal this transaction.

 

4.1.6.       Neither the consummation of this transaction nor the performance of
Seller’s obligations hereunder shall, directly or indirectly (with or without
notice, lapse of time, or both), contravene, conflict with, result in a
violation of, or cause Seller or any Affiliate of Seller to suffer any material
adverse consequence under any applicable Legal Requirement or Order that has
been published, introduced, or otherwise proposed by or before any Governmental
Authority since the Effective Date.

 

4.1.7.       The Bankruptcy Court shall have entered the Approval Order and such
order shall not have been stayed as of the Closing Date.

 

4.2           Buyer’s Conditions. 
Buyer’s obligation to close this transaction shall be subject to and
contingent upon the satisfaction (or waiver by Buyer in its sole discretion) of
each of the following conditions:

 

5

 

4.2.1.       All representations and warranties of Seller set forth in this
Agreement (considered collectively) and each such representation and warranty
(considered individually) shall have been true and correct in all material
respects as of the Effective Date and shall be true and correct in all material
respects as of the Closing Date, as if made on the Closing Date.

 

4.2.2.       All of the covenants and obligations that Seller is obligated to
perform or comply with pursuant to this Agreement prior to or at the Closing
(considered collectively) and each such covenant and obligation (considered
individually) shall have been performed and complied with in all material
respects.

 

4.2.3.       Seller shall have made the deliveries of documents required to be made
pursuant to Section 5.2.

 

4.2.4.       As of the Closing Date, there shall not be in effect any Legal
Requirement or any Order that prohibits the transfer of any material portion of
the Purchased Assets by Seller to Buyer.

 

4.2.5.       Since the Effective Date, there shall not have been commenced or
Threatened against Buyer or any Affiliate of Buyer any Proceeding (i) seeking
material Damages or material other relief in connection with any aspect of this
transaction, or (ii) that could reasonably be expected to have the effect of
preventing or making illegal this transaction.

 

4.2.6.       Neither the consummation of this transaction nor the performance of
Buyer’s obligations hereunder shall, directly or indirectly (with or without
notice, lapse of time, or both), contravene, conflict with, result in a
violation of, or cause Buyer or any Affiliate of Buyer to suffer any material
adverse consequence under any applicable Legal Requirement or Order that has
been published, introduced, or otherwise proposed by or before any Governmental
Authority since the Effective Date.

 

4.2.7.       The Bankruptcy Court shall have entered the Approval Order and such
order shall not have been stayed as of the Closing Date.

 

4.2.8.       Since the Effective Date, the ability of Wells Fargo Bank, National
Association to provide financing to Buyer pursuant to that certain commitment
letter dated June 8, 2004 shall not have been adversely affected in any material
way as the result of any fire, explosion, accident, riot, terrorist attack,
civil or labor disturbance, strike, boycott, lockout, flood, drought, storm,
earthquake, embargo or other casualty or act of God or the public enemy.

 

5.             Closing.

 

5.1           Time and Place of Closing.  The
Closing shall take place at the offices of Andrews Kurth LLP, 600 Travis, Suite
4200, Houston, Texas, or at such other location as the parties may mutually
agree. Subject to the provisions of Section 8, the Closing shall take place commencing
at a time and on a Friday mutually acceptable to the parties that is within ten
(10) Business Days after the later of (x) entry of the Approval Order or (y)
delivery of the notice of Estimated Net Book Value specified in Section 2.1; provided, however,
the Closing shall occur no later than August 31, 2004.

 

5.2           Seller’s Deliveries to Buyer at Closing.  At
the Closing, Seller shall deliver, or cause to be delivered, to Buyer:

 

5.2.1.       A Bill of Sale, substantially in the form of Exhibit B to this
Agreement (the “Bill of Sale”), conveying the Personal Property and the
Inventory to Buyer, duly executed by Seller.

 

5.2.2.       An Assignment and Assumption Agreement, substantially in the form of Exhibit
C to this Agreement (the “Assignment and Assumption Agreement”),
duly executed by Seller and providing for (a) the assignment to Buyer of the
Contracts, the Intangible Property and the Receivables, and (b) Buyer’s
assumption of the Assumed Liabilities and indemnification of Seller in respect
thereof (including, without

 

6

 

limitation, indemnification
in respect of any legal fees or other costs incurred by Seller in exercising
its right to indemnity).

 

5.2.3.       Written certification evidencing Seller’s satisfaction of all of
Seller’s covenants and obligations set forth in Sections 4.1.1 and 4.1.2.

 

5.3           Buyer’s Deliveries to Seller at Closing.  At
the Closing, Buyer shall deliver, or cause to be delivered, to Seller:

 

5.3.1.       The Purchase Price, less the Deposit (which shall be released to
Seller, together with all interest thereon, by the Deposit Escrow Agent), by
wire transfer of immediately available funds.

 

5.3.2.       The Assignment and Assumption Agreement, duly executed by Buyer.

 

5.3.3.       The Bill of Sale, duly executed by Buyer.

 

5.3.4.       Written certification evidencing Buyer’s satisfaction of all of Buyer’s
covenants and obligations set forth in Sections 4.2.1 and 4.2.2.

 

5.3.5.       Appropriate evidence of all necessary action by Buyer in connection
with the transactions contemplated hereby, including, without limitation: (i)
certified copies of resolutions duly adopted by Buyer’s Board of Directors
approving the transactions contemplated by this Agreement and authorizing the
execution, delivery, and performance by Buyer of this Agreement; and (ii) a
certificate as to the incumbency of officers of Buyer executing this Agreement
and any instrument or other document delivered in connection with the
transactions contemplated by this Agreement.

 

5.3.6.       In the event that Buyer makes any assignment of its rights under this
Agreement to an Affiliate of Buyer as provided in Section 10.5 below, Buyer
shall have executed and delivered to Seller, concurrently with or prior to the
Closing Date, a guaranty, substantially in the form and substance attached
hereto as Exhibit E (the “Guaranty”), of all of Buyer’s
obligations under this Agreement and under any documents executed by such
Affiliate of Buyer in favor of Seller pursuant hereto.

 

5.4           Taxes.  In accordance with Section
1146(c) of the Bankruptcy Code, the making or delivery of any instrument to
evidence, effectuate, or perfect the rights, transfers, and conveyances
contemplated by this Agreement shall be in contemplation of a plan or plans of
reorganization to be confirmed in the Case and, as such, shall be free and
clear of any and all Taxes and any such instrument may, at the request of
Buyer, contain an endorsement to that effect. 
In the event that, notwithstanding the foregoing, any Taxes are assessed
on the transfer of the Purchased Assets to Buyer, such Taxes shall be paid by
Buyer, and Buyer shall complete and file all returns associated therewith.

 

5.5           Prorations.  Rent, current taxes and other
amounts due that relate or are attributable to the Business and/or the Real
Property and the Personal Property Leases shall be prorated between Seller and
Buyer as of the Closing Date, except to the extent, if any, that any of the
foregoing are included in the calculation of Current Liabilities.  All obligations due in respect of periods on
or prior to the Closing Date (other than the Assumed Liabilities) shall be paid
in full or otherwise satisfied by Seller, and all obligations due in respect of
periods after the Closing Date (other than the Assumed Liabilities) shall be
paid in full or otherwise satisfied by Buyer. 
Rent shall be prorated on the basis of a thirty (30) day month.

 

5.6           Possession.  Buyer shall be entitled to
possession of the Purchased Assets immediately upon the Closing.

 

5.7           Closing Costs. 
Buyer shall pay, if Buyer elects to obtain title insurance with respect
to the Leased Real Property and the Improvements, the premium for insurance, as
well as for any endorsements thereto that Buyer elects to obtain.

 

7

 

6.             Representations and Warranties.

 

6.1           Seller’s Representations and Warranties. 
Each Seller represents and warrants to Buyer as follows:

 

6.1.1.       Organization and Good Standing. Seller is a limited partnership duly formed, validly existing, and in
good standing under the laws of the State of Delaware.

 

6.1.2.       Authority; No Conflict.

 

(a)           Upon obtaining the Approval Order, this Agreement shall constitute the
legal, valid, and binding obligation of Seller, enforceable against Seller in
accordance with its terms. Upon their execution and delivery by Seller at the
Closing, each of the Seller Closing Documents will constitute the legal, valid,
and binding obligations of Seller, enforceable against Seller in accordance
with their respective terms. Subject to obtaining the Approval Order and
applicable provisions of bankruptcy law, Seller has full partnership power,
authority, and capacity to execute and deliver this Agreement and each of the
Seller Closing Documents and to perform its obligations hereunder and
thereunder.

 

(b)           Upon obtaining the Approval Order, neither the execution and delivery
of this Agreement, nor the performance of any of Seller’s obligations
hereunder, nor the consummation of the transactions herein contemplated will,
directly or indirectly (with or without notice, lapse of time, or both), (i)
contravene or result in a violation of any provision of Seller’s Organizational
Documents or any resolution adopted by the Board of Control, by the general or
limited partners of Crown Management, or by the limited partners of Seller;
(ii) contravene or result in a violation of any Legal Requirement or any Order
to which Seller or any of the Purchased Assets is subject; or (iii) contravene
or result in a violation or breach of any provision of, or give any Person the
right to declare a default or exercise any remedy under, any agreement,
instrument, or writing of any nature to which Seller is a party or by which
Seller or any of its assets or properties is bound.

 

6.1.3.       Certain Proceedings.
Except for the Case, no Proceeding is pending or, to Seller’s Knowledge, has
been Threatened, against Seller that challenges, or could reasonably be
expected to have the effect of preventing, making illegal, or otherwise
materially interfering with, the transactions herein contemplated.

 

6.2           Buyer’s Representations and Warranties. 
Buyer represents and warrants to Seller as follows:

 

6.2.1.       Organization and Good Standing. Buyer is a corporation, duly formed, validly existing, and in good
standing under the laws of the State of Arizona.

 

6.2.2.       Authority; No Conflict.

 

(a)           This Agreement constitutes the legal, valid, and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms. Upon their
execution and delivery by Buyer at the Closing, each of the Buyer Closing Documents
will constitute the legal, valid, and binding obligations of Buyer, enforceable
against Buyer in accordance with their respective terms. Buyer has full
corporate power, authority, and capacity to execute and deliver this Agreement
and each of the Buyer Closing Documents and to perform its obligations
hereunder and thereunder.

 

(b)           Neither the execution and delivery of this Agreement, nor the
performance of any of Buyer’s obligations hereunder, nor the consummation of
the transactions herein contemplated will, directly or indirectly (with or
without notice, lapse of time, or both), (i) contravene or result in a
violation of any provision of Buyer’s Organizational Documents or any
resolution adopted by the Board of Directors or the shareholders of Buyer; or
(ii) contravene or result in a violation of any Legal Requirement or any Order
to which Buyer is subject; or (iii) 

 

8

 

contravene
or result in a violation or breach of any provision of, or give any Person the
right to declare a default or exercise any remedy under, any agreement,
instrument, or writing of any nature to which Buyer is a party or by which
Buyer or any of its assets or properties is bound.

 

6.2.3.       Certain Proceedings.
No Proceeding is pending or, to Buyer’s Knowledge, has been Threatened against
Buyer that challenges, or could reasonably be expected to have the effect of
preventing, making illegal, or otherwise materially interfering with, the
transactions herein contemplated.

 

6.2.4.       Buyer has sufficient funds available to consummate the transactions
contemplated hereby.

 

6.3           “AS IS” Transaction. As a material inducement to Seller to enter
into this Agreement and to consummate the transactions herein contemplated,
Buyer hereby acknowledges and agrees as follows:

 

6.3.1.       Buyer has conducted all investigations, inspections, studies, tests,
and analyses it desired to conduct with respect to the Business and the
Purchased Assets and acknowledges that it has been provided sufficient access
to the Purchased Assets, including the Books and Records, and to key employees
for such purpose. In entering into this Agreement, Buyer is relying solely on
its own investigation and is assuming the risk that adverse physical, economic,
or other conditions or circumstances may not have been revealed by its
investigation.

 

6.3.2.       EXCEPT AS EXPRESSLY SET FORTH IN SECTION 6.1, NEITHER SELLER NOR ANY OF
THEIR REPRESENTATIVES MAKES OR HAS MADE ANY REPRESENTATION OR WARRANTY
WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY MATTER RELATING TO THE
BUSINESS OR THE PURCHASED ASSETS, INCLUDING INCOME TO BE DERIVED OR EXPENSES TO
BE INCURRED IN CONNECTION THEREWITH; THE TERMS OF THE REAL PROPERTY LEASES; THE
PHYSICAL CONDITION OF ANY OF THE PURCHASED ASSETS (OR ANY PORTION THEREOF) AND
ANY LEASED REAL PROPERTY OR IMPROVEMENTS, OR ANY PROPERTY WHICH IS THE SUBJECT
OF ANY OF THE PERSONAL PROPERTY LEASES OR ANY PART OF THE FOREGOING; THE
ENVIRONMENTAL CONDITION OF ANY LEASED REAL PROPERTY OR IMPROVEMENTS; THE ZONING
OF ANY LEASED REAL PROPERTY OR IMPROVEMENT; THE TRANSFERABILITY OF ANY OF THE
PURCHASED ASSETS; THE VALUE OF THE PURCHASED ASSETS (OR ANY PORTION THEREOF);
THE TERMS, AMOUNT, VALIDITY, OR ENFORCEABILITY OF ANY OF THE ASSUMED
LIABILITIES; THE TITLE TO ANY OF THE PURCHASED ASSETS (OR ANY PORTION THEREOF);
THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY OF THE PURCHASED
ASSETS; OR ANY OTHER MATTER OR THING RELATED TO THE PURCHASED ASSETS OR THE
BUSINESS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SELLER HEREBY
EXPRESSLY DISCLAIMS ANY WARRANTY, EXPRESS OR IMPLIED, OF MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE AS TO ANY OF THE PURCHASED ASSETS (OR ANY
PORTION THEREOF).

 

6.3.3.       BUYER WILL ACCEPT THE PURCHASED ASSETS AT THE CLOSING “AS IS,” “WHERE
IS,” AND “WITH ALL FAULTS”.

 

6.4           No Survival of Representations and Warranties. The representations and warranties set
forth in Sections 6.1 and 6.2 shall not survive beyond the Closing Date.

 

7.             Additional Covenants.

 

7.1           Employee Matters.

 

7.1.1.       Offer of Employment. 
Buyer agrees to offer (or to cause one of its Affiliates to offer),
effective as of the Closing Date, employment to substantially all employees who
are in the active employment of the Business on the Closing Date, on
substantially the same terms and conditions, in the aggregate, and at the same
rate of pay, as such employee was employed on the day prior to the Closing Date
(the “Continuing

 

9

 

Employees”); provided,
however, that Buyer shall have
the right to conduct customary employee background checks prior to offering
employment to any such employee.  Buyer
will grant to each Continuing Employee service credit for previous service
recognized by Seller for purposes of vacation and other benefits (whether or
not accrued on the financial statements of Seller).

 

7.1.2.       WARN Act. 
Buyer shall be responsible for and shall pay any and all liabilities or
obligations under the WARN Act, if any, arising out of or resulting from
layoffs of employees or any termination of their employment in the Business
which occurs on or after the Closing Date. 
Buyer agrees to indemnify, and hold Seller and its successors harmless
from or against, any and all Damages which Seller may incur in connection with
any suit or claim of violation brought against Seller under the WARN Act or any
similar state or foreign law, which relates to transactions effected on or
after the Closing Date, or any other action taken by Buyer after the Closing
Date.

 

7.1.3.       Employee Benefits. 
Effective as of the Closing Date, Buyer shall offer group medical
insurance coverage for the Continuing Employees and their dependents and
beneficiaries, without preexisting condition exclusions, waiting times to
commence coverage, or other lapses in coverage.  In addition, commencing on the Closing Date, Buyer shall provide
the Continuing Employees and their dependents and beneficiaries coverage under
any other pension, retirement, welfare and fringe benefit plans, programs,
policies or arrangements established by Buyer for such persons, who for all
purposes of this sentence will be credited, to the extent permissible under
applicable law, with all service recognized by Seller or its Affiliates.

 

7.1.4.       Forms W-2. 
Seller and Buyer agree that (i) Seller will issue a Form W-2 to each
individual who is employed in the Business as of, or prior to, the Closing Date
in respect of all payments made by Seller to each such individual on or prior
to the Closing Date, and (ii) Buyer will issue a Form W-2 to each Continuing
Employee in respect of all payments made by Buyer or any Affiliate of Buyer to
each such individual after the Closing Date.

 

7.1.5.       Payment of Pre-Closing
Wages and Benefits.  To the extent that any wages and benefits
owed to Continuing Employees as of the Closing Date remain unpaid on the
Closing Date, Seller shall retain all obligations with respect thereto.  Seller shall remain liable for, and Buyer
shall not assume any liability of Seller under, the Key Employee Retention Plan
between Seller and certain persons, including certain Continuing Employees.

 

7.2           Retention of and Access to Books and Records.

 

7.2.1.       Buyer agrees to retain the Books and Records for a period of seven (7)
years after the Closing Date.  Buyer
shall permit Seller (or its successors) and its Representatives to inspect and
copy, at Seller’s (or such successor’s) sole expense, any of the Books and
Records at any time during normal business hours, upon reasonable advance
notice.

 

7.2.2.       After the seven-year period referred to in Section 7.2.1, Buyer shall
provide not less than thirty (30) nor more than sixty (60) days notice to
Seller (or its successors, if previously identified by notice to Buyer) prior
to any proposed destruction or disposition of any of the Books and Records. Any
such notice shall identify with reasonable specificity the Books and Records to
be destroyed or disposed of and the date on which such destruction or
disposition will occur. If the recipient of any such notice wishes to obtain
any of the Books or Records to be destroyed or disposed of, it may do so by
giving notice to Buyer at any time prior to the scheduled date for destruction
or disposition.  All out-of-pocket costs
of delivering any such Books and Records to a requesting party shall be paid by
such party.

 

7.3           No Transition Services. Except as may be otherwise agreed in
writing by Seller and Buyer, as of the Closing Date, all data processing,
accounting, insurance, banking, legal, communications, and other services and
products provided by Seller or its Affiliates in respect of the Business and
the Purchased Assets, and any prior agreements or understandings (written or
oral) with respect thereto, shall terminate and Buyer shall not be entitled to
any on-going benefit thereof.

 

10

 

7.4           No Use of Crown Pacific Name. Buyer shall (i) not, at any time after the
Closing, use in connection with the conduct of the Business or the ownership,
use, or operation of the Purchased Assets the name “Crown Pacific” or any name
deceptively similar thereto and (ii) as soon as reasonably practicable after
the Closing Date, remove from the Purchased Assets, other than Inventory, all
references to the name “Crown Pacific” and its logos.

 

7.5           Allocation of Purchase Price.  The
Purchase Price shall be allocated among the Purchased Assets by Buyer within
thirty (30) calendar days following the Closing Date, or such later date as the
Purchase Price, as adjusted, is determined, and Buyer shall immediately notify
Seller of such allocation.  If Seller
objects to any allocation, Buyer and Seller shall resolve such differences
within 30 days, and if not resolved within such time, the matter shall be
settled in accordance with Section 2.4.3 herein.  Following resolution of the allocations, (i) such allocation
shall be reflected in the Tax returns (including, but not limited to, Internal
Revenue Service Form 8594) that are filed by Buyer and the Seller in accordance
with Section 1060 of the Code (and any similar provision of state or local law,
as appropriate), with such adjustments as may be necessary pursuant to Section
2.4 hereof; and (ii) Buyer and the Seller agree to treat and report in filings
under the Code (and any state or local law, as appropriate) (and, if necessary,
to cause each of their respective Affiliates to so treat and report) the
transactions contemplated by this Agreement in a manner consistent with one
another.

 

7.6           Reasonable Access to Records and Certain
Personnel.  As long as the Case is pending, (i) Buyer
shall permit Seller’s counsel and other professionals employed in the Case
reasonable access to the Books and Records (whether in documentary or data
form) for the purpose of the continuing administration of the Case (including,
without limitation, the pursuit of any avoidance, preference or similar
action), which access shall include (a) the right to copy, at Seller’s expense,
such documents and records as they may request in furtherance of the purposes
described above, and (b) Buyer’s copying and delivering to Seller or its
professionals such documents or records as they may request, but only to the
extent Seller or its professionals furnishes Buyer with reasonably detailed
written descriptions of the materials to be so copied and Seller reimburses
Buyer for the reasonable costs and expenses thereof, and (ii) Buyer shall
provide Seller and such professionals (at no cost to Seller) with reasonable
access during regular business hours to various personnel to whom Seller may
need continued access post-Closing to assist Seller in the continuing
administration of the Case, provided that such access does not unreasonably
interfere with Buyer’s normal business operations.

 

7.7           Collection of Accounts Receivable. 
After the Closing Date, Buyer shall assist Seller in the collection of
the accounts receivable which have been outstanding for more than ninety days
as of the Closing Date and which have been retained by Seller in accordance
with Section 1.1.5.  To the extent Buyer
collects any such receivables, Buyer shall immediately remit the proceeds to
Seller, less a ten percent collection fee on the amount of such receivable
collected.

 

8.             Termination.

 

8.1           Termination Events. This Agreement may, by notice given prior
to or at the Closing (which notice shall specify the grounds for termination),
be terminated:

 

8.1.1.       If all conditions to Closing required to obligate a party to close the
transactions set forth herein have been satisfied and such party has not
tendered performance of its Closing obligations or deliveries hereunder on or
before the Closing Date, then the party who is not then in default hereunder
may terminate this Agreement by delivering to the other written notice of
termination.  Any waiver of a condition
shall be effective only if such waiver is stated in writing and signed by the
waiving party; provided, however, that the consent of a party to
the Closing shall constitute a waiver by such party of any conditions to
Closing not satisfied as of the Closing Date; or

 

8.1.2.       By mutual written agreement of Seller and Buyer; or

 

8.1.3        By either party, if the sale contemplated by this Agreement has not
closed on or before August 31, 2004.

 

11

 

8.2           Effect of Termination.  If
this Agreement is terminated pursuant to Section 8.1, all further obligations
of the parties under this Agreement shall thereupon terminate, except that
Sections 2.2, 10.2, 10.3, 10.6 through 10.12 and 10.14 through 10.16,
inclusive, shall survive; provided,
however, that if this Agreement
is terminated by Seller because of a material Breach of this Agreement by Buyer
or because one or more of the conditions to Seller’s obligations under this
Agreement is not satisfied as a result of Buyer’s failure to comply with its
obligations under this Agreement, the Seller’s right to pursue all legal
remedies shall survive such termination unimpaired.

 

8.3           Break-Up Fee.  If
the Bankruptcy Court approves a sale of the Purchased Assets to a third party
other than Buyer or its Affiliates (other than as a result of the failure of a
condition to Seller’s obligations set forth in Sections 4.1.1, 4.1.2 or 4.1.3),
then this Agreement shall terminate, and Seller shall pay to Buyer, upon
consummation of such transaction with such third party, by wire transfer of
immediately available funds to an account designated by Buyer, a termination
fee in the amount of $200,000, which shall constitute liquidated damages of
Buyer and shall be Buyer’s sole and exclusive remedy in respect of such
termination.

 

9.             Definitions and Interpretation.

 

9.1           Defined Terms.  As
used in this Agreement, the following terms have the respective meanings set
forth below:

 

“Accountants” means a
firm of independent certified public accountants jointly selected by the
parties or, if they are unable to agree within five (5) additional Business
Days, appointed by the Bankruptcy Court upon the request of either party.

 

“Actions” has the
meaning set forth in Section 7.7.1.

 

“Actual Net Book Value”
means an amount equal to:

 

(i)            the book value of the Personal Property
listed on Schedule B, plus

 

(ii)           the cost of any items of Personal Property acquired by Seller in the
Ordinary Course of Business after the Effective Date and prior to the Closing
Date exclusively in connection with the operation of the Business, plus

 

(iii)          the value of the Inventory as of the Closing Time (valued at average
cost, determined in a manner consistent with Seller’s internal operating
statements for the period ending as of the last day of the last calendar month
ended prior to the Effective Date, without further adjustment to market value),
plus

 

(iv)          the value of the Receivables as of the Closing Time (valued at Seller’s
book value before deduction for allowance of doubtful accounts, determined in
accordance with generally accepted accounting principles consistently applied
in accordance with Seller’s past practices), plus

 

(v)           outstanding deposits as of the Closing Time on all Contracts, plus

 

(vi)          prepaid expenses (other than prepaid insurance premiums) as of the
Closing Time in connection with the operation of the Business, plus

 

(vii)         the value of notes receivable arising out of the operation of the
Business and outstanding on the Closing Time (valued at Seller’s net book
value, determined in accordance with generally accepted accounting principles
consistently applied in accordance with Seller’s past practices).

 

“Affiliate” means (i)
with respect to an individual (a) each member of such individual’s Family (as
hereinafter defined), (b) any Person that is directly or indirectly controlled
by such individual or one or more members of such individual’s Family, (c) any
Person in which such individual or one or more members of such individual’s
Family hold (individually or in the aggregate) a Material Interest (as
hereinafter defined), and (d) any 

 

12

 

Person with respect to which such individual
or one or more members of such individual’s Family serves as a director,
officer, partner, executor, or trustee (or in any similar capacity); or (ii)
with respect to any Person other than an individual (a) any Person that
directly or indirectly controls, is directly or indirectly controlled by, or is
directly or indirectly under common control with such Person, (b) any Person
that holds a Material Interest in such Person or in which such Person holds a
Material Interest, (c) each Person that serves as a director, officer, partner,
executor, or trustee of such Person (or in any similar capacity), (d) any
Person with respect to which such Person serves as general partner or trustee
(or in any similar capacity), and (e) any Affiliate of any individual described
in the foregoing clause (ii)(c) or (ii)(d). 
For purposes of this definition, (A) the “Family” of an
individual means the individual, the individual’s spouse, any other natural
person who is related to the individual or the individual’s spouse within the
second degree, and any other natural person who resides with the individual;
and (B) “Material Interest” means direct or indirect beneficial ownership
of voting securities or interests representing at least 20% of the outstanding
voting power of a Person or equity securities or interests representing at
least 20% of the outstanding equity securities or interests in a Person.

 

“Agreement” means
this Asset Purchase Agreement (Alliance).

 

“Approval Order” has
the meaning set forth in Section 3.4.

 

“Assignment and
Assumption Agreement” has the meaning set forth in Section 5.2.2.

 

“Assumed Liabilities”
means:

 

(i)            any and all liabilities and obligations arising
under, pursuant to, or in connection with the Contracts from and after the
Closing Date or otherwise required to be performed with respect to the
Purchased Assets on or after the Closing Date,

 

(ii)           all post-Petition Date liabilities that are Current Liabilities,

 

(iii)          all pre-Petition Date Claims that are set forth on Schedule E,

 

(iv)          any required COBRA continuation coverage to “M&A Qualified
Beneficiaries” (as defined in Treasury Regulation Section 54.4980B-9, Q/A-4)
resulting from the sale of the Business regardless of whether the Buyer is or
becomes a “successor employer” (as defined in Treasury Regulation Section
54.4980B-9 (Q/A-8(c)), and

 

(v)           all other liabilities and obligations to be assumed by Buyer pursuant
to this Agreement.

 

“Bankruptcy Code” has
the meaning set forth in the preamble.

 

“Bankruptcy Court”
has the meaning set forth in the preamble.

 

“Bill of Sale” has
the meaning set forth in Section 5.2.1.

 

“Board of Control”
means the Board of Control of Crown Management.

 

“Books and Records”
means all books and records of Seller that pertain exclusively to the conduct
of the Business, the ownership, use, and operation of the Purchased Assets, or
the payment or performance of the Assumed Liabilities, including any such
records maintained on computer and all related computer software.

 

“Breach” means any
inaccuracy in or breach of, or any failure to perform or comply with, any
representation, warranty, covenant, obligation, or other provision of this
Agreement or any document delivered pursuant to this Agreement.

 

“Business” has the
meaning set forth in Recital A.

 

13

 

“Business Day” means
any day other than a Saturday, Sunday, or other day on which commercial banks
in Phoenix, Arizona are authorized or required by applicable Legal Requirements
to be closed.

 

“Buyer” has the
meaning set forth in the preamble.

 

“Buyer Closing Documents”
means the documents to be executed and delivered by Buyer at the Closing
pursuant to Section 5.3.

 

“Buyer Default
Termination” has the meaning set forth in Section 2.2.

 

“Buyer’s Knowledge”
means that any officer or director of Buyer or its Affiliates is actually aware
of a particular fact or other matter.

 

“Case” has the
meaning set forth in the preamble.

 

“Claim” has the
meaning set forth in Section 101 of the Bankruptcy Code.

 

“Closing” means the
closing of this transaction, at which the events set forth in Section 5.2 shall
occur.

 

“Closing Date” means
the date on which the Closing occurs.

 

“Closing Time” means
the close of Seller’s business on the Closing Date.

 

“Code” means the
Internal Revenue Code of 1986, as amended.

 

“Continuing Employees”
has the meaning set forth in Section 7.1.1.

 

“Contracts” means the
Real Property Leases, the Personal Property Leases and the Other Contracts.

 

“CPPLP” has the
meaning set forth in the preamble.

 

“Crown Management”
means Crown Pacific Management Limited Partnership, a Delaware limited
partnership, the managing general partner of Seller.

 

“Current Liabilities”
means the sum of Seller’s accounts payable, accrued expenses, and other current
liabilities in connection with the Business or arising from the ownership or
operation of the Purchased Assets (including all amounts owed under financing
arrangements, whether classified as current or long-term), all as of the
Closing Time, in each case determined in accordance with generally accepted
accounting principles consistently applied in accordance with Seller’s past
practices; provided, however,
that Current Liabilities shall not include the following:

 

(i)            any inter- or intra-company liabilities,

 

(ii)           pre-Petition Date tax liabilities,

 

(iii)          pre-Petition Date Claims listed on Schedule E to this Agreement,

 

(iv)          any payroll or benefit liabilities arising out of the operation of the
Business prior to the Closing Time,

 

(v)           any sales or use tax liabilities arising out of the operation of the
Business prior to the Closing Time, and

 

(vi)          any loans or other financing provided to Seller pursuant to that
certain Post-Petition Financing Agreement with The CIT Group/Business Credit,
Inc., dated June 29, 2003.

 

14

 

“Damages” means all
losses, liabilities, claims, damages (including incidental and consequential
damages), expenses (including costs of investigation and defense and reasonable
attorneys’ fees), and diminution of value, whether or not involving a
third-party claim, except to the extent, if any, that any such losses,
liabilities, claims, damages, expenses, or diminution in value are recovered
through insurance proceeds actually received (net of any costs incurred in
connection therewith, whether through retrospective premium adjustments,
experience-based premium adjustments, or otherwise).

 

“Deposit” has the
meaning set forth in Section 2.2.

 

“Deposit Escrow Agent”
has the meaning set forth in Section 2.2.

 

“Deposit Escrow Agreement”
has the meaning set forth in Section 2.2.

 

“Effective Date” has
the meaning set forth in the preamble.

 

“Estimated Net Book Value”
means Seller’s good faith estimation of the Actual Net Book Value, as of the
close of business on the Friday immediately prior to the anticipated Closing
Date, except in the case of Inventory, which shall be as of the last day of the
month immediately preceding the month during which the Closing Date occurs,
which estimation shall be conclusive for purposes of determining the Purchase
Price, subject only to post-Closing adjustment as provided in Section 2.4.

 

“Excluded Assets” has
the meaning set forth in Section 1.2.

 

“Governmental Authority”
means any national, federal, state, provincial, county, municipal, or local
government, or the government of any political subdivision of the any of the
foregoing, or any entity, authority, agency, ministry, or other similar body
exercising executive, legislative, judicial, regulatory, or administrative
authority or functions of or pertaining to the government, including any
quasi-governmental entity established to perform any such functions.

 

“Guaranty” has the
meaning set forth in Section 5.3.6.

 

“Improvements” has
the meaning set forth in Section 1.1.2.

 

“Intangible Property”
has the meaning set forth in Section 1.1.4.

 

“Inventory” has the
meaning set forth in Section 1.1.6.

 

“Leased Real Property”
means the real property that is subject to the Real Property Leases.

 

“Legal Requirement”
means any federal, state, local, municipal, foreign, international,
multinational, or other administrative Order, constitution, law, ordinance,
principle of common law, regulation, rule, statute, or treaty.

 

“Lien” means any
mortgage, deed of trust, pledge, assignment, security interest, encumbrance,
lien, charge, or claim of any kind or nature whatsoever in respect of any
property, including any of the foregoing created by, arising under, or
evidenced by any conditional sale or other title retention agreement, the
interest of a lessor under a capital lease, any financing lease having
substantially the same economic effect as any of the foregoing, or the filing
of a financing statement naming the owner of the property as to which such lien
relates as the debtor under the Uniform Commercial Code or any comparable law.

 

“Loss” has the
meaning set forth in Section 3.3.

 

“Net Book Value
Difference” means, as applicable, the Actual Net Book Value less the
Estimated Net Book Value, or the Estimated Net Book Value less the Actual Net
Book Value.

 

15

 

“Order” means any
award, decision, injunction, judgment, order, ruling, subpoena, or verdict
entered, issued, made, or rendered by any court, administrative agency, or
other Governmental Authority or by any arbitrator or mediator.

 

“Ordinary Course of
Business” means any action taken by a Person if, and only if, such action
is consistent with the past practices of such Person and is taken in the
ordinary course of the normal day-to-day operations of such Person.

 

“Organizational Documents”
means (i) the articles or certificate of incorporation and the bylaws of a
corporation, (ii) the partnership agreement and any statement of partnership of
a general partnership, (iii) the limited partnership agreement and certificate
of limited partnership of a limited partnership, (iv) any charter, operating
agreement, or similar document adopted or filed in connection with the
creation, formation, or organization of a Person, and (v) any amendment to any
of the foregoing.

 

“Other Contracts” has
the meaning set forth in Section 1.1.1.

 

“Permitted Encumbrances”
means with respect to any specified property, such defects, irregularities,
encumbrances, and other imperfections of title as normally exist with respect
to property similar in character, and, in any event, are not substantial in
character, amount, or extent, and do not materially detract from the value or
materially impair the use of the property in question.

 

“Person” means an
individual, partnership, corporation, limited liability company, joint stock
company, trust, unincorporated organization or association, joint venture, or
other organization, whether or not a legal entity, or a Governmental Authority.

 

“Personal Property”
has the meaning set forth in Section 1.1.3.

 

“Personal Property Leases”
has the meaning set forth in Section 1.1.1.

 

“Petition Date” has
the meaning set forth in the preamble.

 

“Proceeding” means
any action, arbitration, audit, hearing, litigation, or suit (whether civil,
criminal, administrative, investigative, or informal) commenced, brought,
conducted, or heard by or before, or otherwise involving, any Governmental
Authority, arbitrator, or mediator.

 

“Purchase Price” has
the meaning set forth in Section 2.1.

 

“Purchased Assets”
has the meaning set forth in Section 1.1.

 

“Real Property” means
the real property legally described in the Real Property Leases.

 

“Real Property Leases”
has the meaning set forth in Section 1.1.1.

 

“Receivables” has the
meaning set forth in Section 1.1.5.

 

“Representative”
means, with respect to a particular Person, any director, officer, employee,
agent, consultant, advisor, or other representative of or to such Person,
including such Person’s attorneys, accountants, and financial advisors.

 

“Seller” has the
meaning set forth in the preamble.

 

“Seller Closing Documents”
means the documents to be executed and delivered by Seller at the Closing
pursuant to Section 5.2.

 

“Seller Default Termination”
has the meaning set forth in Section 2.2.

 

16

 

“Seller’s Knowledge”
means that Steven E. Dietrich is actually aware of a particular fact or other
matter.

 

“Statement of Actual Net
Book Value” means an unaudited statement of the Actual Net Book Value,
including the principal components thereof, as of the Closing Time.

 

“Tax” means any tax
(including any income tax, capital gains tax, value-added tax, sales tax,
excise tax, property tax, gift tax, or estate tax), levy, assessment, tariff,
duty (including any customs duty), deficiency, or other fee, and any related
charge or amount (including any fine, penalty, interest, or addition to tax),
imposed, assessed, or collected by or under the authority of any Governmental
Authority or payable pursuant to any tax-sharing agreement or other contract
relating to the sharing or payment of any such tax, levy, assessment, tariff,
duty, deficiency, or fee.

 

“Threatened” means,
with respect to a claim, Proceeding, dispute, action, or other matter, the
making of any demand or statement (written or oral), the giving of any written
notice, the occurrence of any event, or the existence of any circumstance that
would lead a prudent Person to conclude that such claim, Proceeding, dispute,
action, or other matter is likely to be asserted, commenced, taken, or
otherwise pursued in the future.

 

“WARN Act” means the
Worker Adjustment and Retraining Act, as amended.

 

9.2           Construction and Interpretation.

 

9.2.1.       The headings or titles of the sections of this Agreement are intended
for ease of reference only and shall have no effect whatsoever on the
construction or interpretation of any provision of this Agreement.  References herein to sections are to
sections of this Agreement unless otherwise specified.

 

9.2.2.       Meanings of defined terms used in this Agreement are equally applicable
to singular and plural forms of the defined terms. The masculine gender shall
also include the feminine and neutral genders and vice versa.

 

9.2.3.       As used herein, (i) the term “party” refers to a party to this
Agreement, unless otherwise specified, (ii) the terms “hereof,” “herein,”
“hereunder,” and similar terms refer to this Agreement as a whole and not to
any particular provision of this Agreement, (iii) the term “including” is not
limiting and means “including, without limitation,” (iv) the term “documents”
includes all instruments, documents, agreements, certificates, indentures,
notices, and other writings, however evidenced, and (v) the term “property”
includes any kind of property or asset, real, personal, or mixed, tangible or
intangible.

 

9.2.4.       In the event any period of time specified in this Agreement ends on a
day other than a Business Day, such period shall be extended to the next
following Business Day.  In the
computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including,” the words “to” and “until” each
mean “to but excluding,” and the word “through” means “to and including.”

 

9.2.5.       This Agreement is the product of arm’s length negotiations among, and
has been reviewed by counsel to, the parties and is the product of all of the
parties. Accordingly, this Agreement shall not be construed for or against any
party by reason of the authorship or alleged authorship of any provision
hereof.

 

10.           Miscellaneous Provisions.

 

10.1         Survival.  Except for the covenants and
agreements that are expressly provided to be performed after the Closing Date,
none of the respective representations, warranties, covenants and agreements of
Seller and Buyer herein, or in any certificates or other documents delivered
prior to or at the Closing, shall survive the Closing.

 

10.2         Expenses. Each party shall bear its respective expenses incurred in connection
with the preparation, execution, and performance of this Agreement and the
transactions herein contemplated, including all fees and expenses of its
Representatives and any brokerage or finders’ fees or commissions or any other
similar payment in connection with the transactions herein contemplated.

 

17

 

10.3         Attorneys’ Fees.  If
a suit, action, or other Proceeding of any nature whatsoever (including any
Proceeding under the Bankruptcy Code) is instituted in connection with this
Agreement or any instrument or agreement delivered by either party at the
Closing, or to interpret or enforce any rights or remedies hereunder or
thereunder, the prevailing party shall be entitled to recover its attorneys’
fees and all other fees, costs, and expenses actually incurred and reasonably
necessary in connection therewith, as determined by the court at trial or on
any appeal or review, in addition to all other amounts provided by law.

 

10.4         Binding Effect. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties and, subject to the
restrictions on assignment set forth herein, their respective successors and
assigns.

 

10.5         Assignment.  Neither party shall assign
any of its rights or obligations under this Agreement without the prior written
consent of the other party; provided,
however, that Buyer may assign its rights hereunder without such
consent to one or more Affiliates of Buyer as long as Buyer executes the
Guaranty and provides prompt written notice of any such assignment to Seller.

 

10.6         Notices. All notices under this Agreement shall be in writing.  Notices may be (i) delivered personally,
(ii) transmitted by facsimile, (iii) delivered by a recognized national
overnight delivery service, or (iv) mailed by certified United States mail,
postage prepaid and return receipt requested. 
Notices to any party shall be directed to its address set forth below,
or to such other or additional address as any party may specify by notice to
the other party.  Any notice delivered
in accordance with this Section 10.6 shall be deemed given when actually
received or, if earlier, (a) in the case of any notice transmitted by
facsimile, on the date on which the transmitting party receives confirmation of
receipt by facsimile transmission, telephone, or otherwise, if sent during the
recipient’s normal business hours or, if not, on the next Business Day, (b) in
the case of any notice delivered by a recognized national overnight delivery
service, on the next Business Day after delivery to the service or, if
different, on the day designated for delivery, or (c) in the case of any notice
mailed by certified U.S. mail, two Business Days after deposit therein.

 

	
  If to Seller:

  	
   

  	
  Crown Pacific Limited
  Partnership

  
	
   

  	
   

  	
  805 S.W. Broadway, Suite
  1500

  
	
   

  	
   

  	
  Portland, Oregon 97205

  
	
   

  	
   

  	
  Fax No.: 503-228-4875

  
	
   

  	
   

  	
  Attn:       Steven E. Dietrich

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
  Andrews Kurth LLP

  
	
   

  	
   

  	
  600 Travis, Suite 4200

  
	
   

  	
   

  	
  Houston, Texas 77002

  
	
   

  	
   

  	
  Fax No.:  713-238-7172

  
	
   

  	
   

  	
  Attn:        John Sparacino

  
	
   

  	
   

  	
   

  
	
  If
  to Buyer:

  	
   

  	
  ALC
  Acquisition LLC

  
	
   

  	
   

  	
  42048 North Stone Cutter
  Drive

  
	
   

  	
   

  	
  Scottsdale, Arizona 85262

  
	
   

  	
   

  	
  Fax No: 480-209-1624

  
	
   

  	
   

  	
  Attn: True Carr

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
  Gust Rosenfeld, P.L.C.

  
	
   

  	
   

  	
  201 East Washington St.,
  Suite 800

  
	
   

  	
   

  	
  Phoenix, Arizona 85004

  
	
   

  	
   

  	
  Fax No: 602-254-4878

  
	
   

  	
   

  	
  Attn:  Tom Chauncey II

  

 

10.7         Waiver. Any party’s failure to exercise any right or remedy under this
Agreement, delay in exercising any such right or remedy, or partial exercise of
any such right or remedy shall not constitute a waiver of that or any other
right or remedy hereunder.  A waiver of
any Breach of any provision of this Agreement shall not 

 

18

 

constitute a waiver of any
succeeding Breach of such provision or a waiver of such provision itself.  No waiver of any provision of this Agreement
shall be binding on a party unless it is set forth in writing and signed by
such party.

 

10.8         Amendment. This Agreement may not be modified or amended except by the written
agreement of all of the parties hereto.

 

10.9         Severability.  If
any provision of this Agreement is held invalid, illegal, or unenforceable,
then (i) such provision shall be enforceable to the fullest extent permitted by
applicable law, and (ii) the validity and enforceability of the other
provisions of this Agreement shall not be affected and all such provisions
shall remain in full force and effect.

 

10.10       Integration.  This Agreement, including the Exhibits and
Schedules hereto, contains the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements with respect thereto.  The parties acknowledge and agree that there are no agreements or
representations relating to the subject matter of this Agreement, either
written or oral, express or implied, that are not set forth in this Agreement,
in the Exhibits and Schedules to this Agreement.

 

10.11       Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Arizona (without regard
to the principles thereof relating to conflicts of laws).

 

10.12       Jurisdiction.  BUYER AND SELLER AGREE THAT THE BANKRUPTCY
COURT SHALL HAVE EXCLUSIVE JURISDICTION OVER ALL DISPUTES AND OTHER MATTERS
RELATING TO (i) THE INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT OR ANY
ANCILLARY DOCUMENT EXECUTED PURSUANT HERETO; AND (ii) THE PURCHASED ASSETS AND
THE ASSUMED LIABILITIES, AND BUYER EXPRESSLY CONSENTS TO AND AGREES NOT TO
CONTEST SUCH EXCLUSIVE JURISDICTION.

 

10.13       Tax Effect.  None of the parties (nor such parties’
Representatives) has made or is making in this Agreement any representation to
any other party (or such party’s Representatives) concerning any of the tax
effects or consequences on any other party of the transactions provided for in
this Agreement.  Each party represents
that it has obtained, or may obtain, independent tax advice with respect
thereto and upon which it, if so obtained, has solely relied.

 

10.14       Execution.  This Agreement may be executed in any number
of counterparts, all of which together shall constitute one and the same
agreement. Each party may rely upon the signature of each other party on this
Agreement that is transmitted by facsimile as constituting a duly authorized,
irrevocable, actual, current delivery of this Agreement with the original ink
signature of the transmitting party.

 

10.15       Incorporation of Recitals, Exhibits, and Schedules.  The
recitals to this Agreement and all Exhibits and Schedules to this Agreement are
incorporated herein by this reference.

 

10.16       Further Assurances.
Each party agrees to execute and deliver such additional documents and
instruments as may reasonably be required to effect fully the transactions
herein contemplated, as long as the terms thereof are consistent with the terms
of this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

19

 

IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first set forth above.

 

	
  Seller:

  	
  CROWN
  PACIFIC LIMITED PARTNERSHIP,

  	
   

  
	
   

  	
  a
  Delaware limited partnership

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Crown
  Pacific Management Limited

  	
   

  
	
   

  	
   

  	
  Partnership,
  its General Partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Steven E. Dietrich

  	
   

  
	
   

  	
   

  	
  Name:  Steven E. Dietrich

  	
   

  
	
   

  	
   

  	
  Title:  SVP, CFO & Treasurer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CROWN
  PACIFIC PARTNERS L.P.,

  	
   

  
	
   

  	
  a
  Delaware limited partnership

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Crown
  Pacific Management Limited

  	
   

  
	
   

  	
   

  	
  Partnership,
  its Managing General Partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Steven E. Dietrich

  	
   

  
	
   

  	
   

  	
  Name:  Steven E. Dietrich

  	
   

  
	
   

  	
   

  	
  Title:  SVP, CFO & Treasurer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Buyer:

  	
  ALC
  ACQUISITION LLC

  	
   

  
	
   

  	
  an
  Arizona corporation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  True Carr

  	
   

  
	
   

  	
  Name:  True Carr

  	
   

  
	
   

  	
  Title:  Manager

  	
   

  
						

 

20

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