Document:

Exhibit 10.2

 

 

FIRST AMENDMENT TO

EQUITY AND ASSET PURCHASE AGREEMENT

 

THIS
FIRST AMENDMENT TO EQUITY AND ASSET PURCHASE AGREEMENT, dated
as of April 22, 2005 (this “Amendment”), is
made and entered into by and between MeadWestvaco Corporation, a Delaware corporation
(“Seller”), and Escanaba Timber LLC (formerly
known as Maple Acquisition LLC), a Delaware limited liability company (“Purchaser”). Capitalized terms used herein but
otherwise not defined shall have the meaning given to such terms in the Purchase
Agreement (as defined below).

 

WHEREAS, Seller
and Purchaser have entered into that certain Equity and Asset Purchase
Agreement, dated as of January 14, 2005 (the “Purchase Agreement”), which contemplates that Seller
and its Subsidiaries will sell, assign and transfer to Purchaser and/or one or
more of its Designated Affiliates, and that Purchaser and/or one or more of its
Designated Affiliates will purchase and acquire from Seller and its
Subsidiaries, all of the right, title and interest of Seller and its
Subsidiaries in and to the Purchased Equity Interests and the Purchased Assets,
and that Purchaser and/or one or more of its Designated Affiliates will assume
the Assumed Liabilities, in each case, upon the terms and subject to the
conditions set forth in the Purchase Agreement; and

 

WHEREAS, Seller
and Purchaser desire to amend the Purchase Agreement as set forth below;

 

NOW, THEREFORE, in consideration of the mutual
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

 

ARTICLE I

AMENDMENT TO PURCHASE AGREEMENT

 

Section 1.1                                      Amendment
of Section 1.6.  Section 1.6
of the Purchase Agreement is hereby amended and restated in its entirety as
follows:

 

“On the terms and
subject to the conditions hereof, and subject to the exclusions set forth in Section 1.3,
(a) at or immediately prior to the Closing, Seller shall, and shall cause
CP and the Acquired Companies to, sell, assign, transfer, convey and deliver to
the Purchaser (or one or more of its Designated Affiliates), and Purchaser (or
one or more of its Designated Affiliates) shall purchase, acquire, accept and
assume from Seller, CP and such Acquired Companies, all of the right, title and
interest of Seller, CP and such Acquired Companies in and to all of the Assets
and Liabilities that are being conveyed hereunder that are Related to the
Timber Business, other than the Timberlands set forth in Schedule 1.6 and
the Contracts Related to the Timber Business set forth in Schedule 1.6,
and (b) prior to the Closing, Seller shall cause Escanaba Paper Company
to, sell, assign, transfer, convey and deliver to EPC Timberlands LLC (“EPC”), a Purchased Company to
be formed and wholly-owned by Seller prior to Closing, the interests of which
shall constitute Purchased Equity Interests for all purposes under this
Agreement, and EPC shall purchase, acquire, accept and assume from Seller and
Escanaba Paper Company, all of the right, title and interest of Seller and
Escanaba Paper Company in and to, all of the

 

 

Timberlands set
forth on Schedule 1.6 and the Contracts Related to the Timber Business set
forth in Schedule 1.6. Notwithstanding anything to the contrary contained
herein, Purchaser shall be responsible for the excess of (i) the Transfer
Taxes incurred in connection with the transfers by Seller, Escanaba Paper
Company and the other Acquired Companies contemplated by this Section 1.6,
over (ii) the Transfer Taxes with respect to Timberlands that would otherwise
have been incurred (and as a result of the transfers by Seller, Escanaba Paper
Company and the other Acquired Companies contemplated by this Section 1.6
will not be incurred) at Closing on account of the stock of the Acquired
Companies being transferred to Purchaser (and the amount of any and all other
Transfer Taxes shall be paid by Seller and Purchaser as provided in Section 14.10).
Purchaser confirms that pursuant to this Section 1.6, Purchaser is
responsible for all of any Transfer Taxes due in connection with the transfer
and conveyance of Timberlands to EPC and/or the conveyance of the
interests in EPC, as described in clause (b) of the first sentence of this
Section 1.6.”

 

Section 1.2                                      Amendment
of Section 2.2.  Section 2.2
of the Purchase Agreement is hereby amended and restated in its entirety as
follows:

 

“2.2 Payment of
Initial Cash Consideration. At the Closing, the Closing Date Cash
Consideration (as defined below) shall be paid as follows: (a) the Closing
Date Cash Consideration less $100,000,000 shall be paid by wire transfer of
immediately available funds in U.S. Dollars to an account or accounts
designated by Seller, such designation to be made in writing at least three
Business Days prior to the Closing Date, and (b) through the issuance to
Seller of $100,000,000 in aggregate principal amount of promissory notes (the “Holdco
Notes”) of NewPage Holding
Corporation, a Delaware corporation and a wholly-owned Subsidiary of Purchaser (“NewPage Holdings”) having the terms and conditions
set forth in Annex A hereto.”

 

Section 1.3                                      Amendment
of Section 2.3(a).  Section 2.3(a) of
the Purchase Agreement is hereby amended and restated in its entirety as
follows:

 

“(a) At least
five Business Days prior to the Closing Date, Seller shall prepare, or cause to
be prepared, and deliver to Purchaser a good faith estimated statement of
Working Capital of the Business as of the close of business on the Closing Date
(the “Estimated Closing Date Working Capital Statement”), and
a certificate setting forth a good faith estimate of Working Capital as of
close of business on the Closing Date (“Estimated Closing Date Working
Capital”), an
estimate of Closing Date Cash (“Estimated Closing Date Cash”), an estimate of Assumed
Indebtedness (“Estimated Assumed Indebtedness”), and an estimate of YTD Capital Expenditures
(“Estimated YTD Capital Expenditures”).
 The
Estimated Closing Date Working Capital Statement shall be prepared in
accordance with GAAP, as modified by the accounting policies specified on Schedule 2.3(a) (“Specified Accounting Policies”), and to the extent consistent with
GAAP, in accordance with the accounting principles, procedures, policies,
methods that were employed in preparing the Benchmark Balance Sheet,
consistently applied.  The Initial Cash
Consideration shall be (i)(A) increased dollar for dollar to the extent
the Estimated Closing Date Working Capital exceeds the Target Working Capital,
or (B) decreased dollar for dollar to the extent the Estimated Closing
Date Working Capital is less than the Target Working Capital, (ii) increased
dollar for dollar to the extent that Estimated Closing Date Cash is greater
than U.S.$0, (iii) decreased dollar for dollar by the Estimated Assumed
Indebtedness, and (iv)(A) increased dollar for dollar to the extent the
Estimated YTD Capital Expenditures exceeds

 

 

the Target Capital
Expenditures, or (B) decreased dollar for dollar to the extent the
Estimated YTD Capital Expenditures is less than the Target Capital Expenditures
(the Initial Cash Consideration, as adjusted pursuant to this sentence and Section 6.12,
the “Closing Date Cash Consideration”).”

 

Section 1.4                                      Amendment
of Section 2.3(b).  The first
sentence of Section 2.3(b) of the Purchase Agreement is hereby
amended and restated in its entirety as follows:

 

“Within 90
calendar days following the Closing Date, Purchaser shall prepare, or cause to
be prepared, and deliver to Seller a statement of Working Capital of the
Business as of the close of business on the Closing Date (as such may be
adjusted following resolution of disputes in accordance with Section 2.3(d),
the “Closing Date Working Capital Statement”), and
a certificate setting forth a calculation of Working Capital as of the close of
business on the Closing Date (“Closing Date Working Capital”), a calculation of Closing Date
Cash, a calculation of Assumed Indebtedness, and a calculation of the YTD
Capital Expenditures,”

 

Section 1.5                                      Amendment
of Section 2.3(c).  The first
sentence of Section 2.3(c) of the Purchase Agreement is hereby
amended and restated in its entirety as follows:

 

“During the
preparation of the Estimated Closing Date Working Capital Statement and the
calculation of Estimated Closing Date Working Capital, Estimated Closing Date
Cash, Estimated Assumed Indebtedness and Estimated YTD Capital Expenditures
(the “Estimated Closing Date Financial Data”), Seller
shall, and shall cause its Subsidiaries to afford Purchaser reasonable
opportunity to review such preparation, including supporting detail.”

 

Section 1.6                                      Amendment
of Section 2.3(d).  Section 2.3(d) of
the Purchase Agreement is hereby amended and restated in its entirety as
follows:

 

“After receipt of
the Closing Date Working Capital Statement, Seller shall have 30 calendar days
to review the Closing Date Working Capital Statement and the accompanying
certificate (collectively, the “Closing Date Financial Data”), together
with the work-papers used in the preparation thereof. Seller and its authorized
representatives shall have full access to all relevant books and records and
employees of Purchaser and the Acquired Companies to the extent reasonably
required to complete their review of the Closing Date Financial Data. Seller
may dispute items reflected in the calculation of Closing Date Working Capital
and Closing Date Cash and Assumed Indebtedness and YTD Capital Expenditures
only on the basis that such amounts (i) were not determined in conformity
with GAAP, as modified by the Specified Accounting Policies, applied by
Purchaser on a consistent basis (to the extent consistent with GAAP) with the
accounting principles, procedures, policies, methods that were employed in
preparing the Benchmark Balance Sheet, consistently applied, (ii) with
respect to YTD Capital Expenditures, were not determined in the manner
specified in the definition of YTD Capital
Expenditures, or (iii) contain arithmetic error. Unless Seller delivers
written notice to Purchaser on or prior to the 20th calendar day after Seller’s
receipt of the Closing Date Working Capital Statement, which notice shall set
forth a specific description of the basis of Seller’s objection or objections
and the adjustments to the amount of Closing Date Working Capital and/or
Closing Date Cash and/or Assumed Indebtedness and/or YTD Capital Expenditures
which Seller believes should be made, Seller shall be deemed to have accepted
and agreed to the calculation of Closing

 

 

Date Working Capital and
YTD Capital Expenditures and Closing Date Cash and/or Assumed Indebtedness. If
Seller so notifies Purchaser of its objection to the calculation of Closing
Date Working Capital, YTD Capital Expenditures, Closing Date Cash and/or
Assumed Indebtedness, Purchaser and Seller shall, within 30 calendar days
following such notice (the “Resolution Period”), attempt
to resolve their differences and any resolution by them as to any disputed
amounts shall be final, binding and conclusive. If following resolution of any
disputed amounts there do not remain in dispute amounts the aggregate net
effect of which exceeds U.S.$1 million with respect to the Closing Date Working
Capital, the YTD Capital Expenditures, the Closing Date Cash or Assumed
Indebtedness, then all amounts remaining in dispute shall be deemed to have
been resolved in favor of the calculation of Closing Date Working Capital, YTD
Capital Expenditures, Closing Date Cash or Assumed Indebtedness, as the case
may be, delivered by Seller to Purchaser.”

 

Section 1.7                                      Amendment
of Section 2.3(e).

 

1.7.1                        The first
sentence of Section 2.3(e) of the Purchase Agreement is hereby amended
and restated in its entirety as follows:

 

“If, at the
conclusion of the Resolution Period, the aggregate net effect of all amounts
remaining in dispute exceeds U.S.$1 million with respect to Closing Date
Working Capital, YTD Capital Expenditures, Closing Date Cash or Assumed
Indebtedness, then all amounts remaining in dispute shall be submitted to
Deloitte & Touche LLP (the “Neutral Auditors”).”

 

1.7.2                        The last
sentence of Section 2.3(e) of the Purchase Agreement is hereby amended
and restated in its entirety as follows:

 

“The term “Final
Closing Date Working Capital” shall mean the definitive Closing Date Working Capital, the
term “Final YTD Capital Expenditures” shall mean the definitive YTD Capital
Expenditures, the term “Final Closing Date Cash” shall mean the definitive Closing Date
Cash and the term “Final Assumed Indebtedness” shall mean the definitive Assumed Indebtedness,
respectively, agreed to (or deemed to be agreed to) by Purchaser and Seller in accordance
with the terms of Section 2.3(d) or the definitive Closing Date Financial
Data resulting from the determinations made by the Neutral Auditors in
accordance with this Section 2.3(e) (in addition to those items
theretofore agreed to by Seller and Purchaser).”

 

Section 1.8                                      Amendment
of Section 2.3(f). Section 2.3(f) of the Purchase Agreement is
hereby amended and restated in its entirety as follows:

 

“The Closing Date
Cash Consideration shall be (i)(A) increased dollar for dollar to the extent
the Final Closing Date Working Capital exceeds Estimated Closing Date Working Capital,
or (B) decreased dollar for dollar to the extent the Final Closing Date
Working Capital is less than Estimated Closing Date Working Capital, (ii)(A) increased
dollar for dollar to the extent that Final Closing Date Cash is greater than
Estimated Closing Date Cash or (B) decreased dollar for dollar to the
extent that Final Closing Date Cash is less than Estimated Closing Date Cash,
(iii)(A) increased dollar for dollar by the amount Estimated Assumed
Indebtedness exceeds Final Assumed Indebtedness and (B) decreased dollar
for dollar by the amount Final Assumed Indebtedness exceeds Estimated Assumed
Indebtedness, and (iv)(A)

 

 

increased dollar for
dollar to the extent that Final YTD Capital Expenditures is greater than
Estimated YTD Capital Expenditures or (B) decreased dollar for dollar to
the extent that Final YTD Capital Expenditures is less than Estimated YTD
Capital Expenditures. Any adjustments to the Closing Date Cash Consideration
made pursuant to this Section 2.3(f), together with interest on such amount
from the Closing Date to the date of payment at a per annum rate equal to the
JP Morgan Chase prime rate (determined as of the Closing Date), shall be paid
by wire transfer of immediately available funds to the account or accounts
specified by Seller, if Seller is owed payment, or to the account or accounts
specified by Purchaser, if Purchaser is owed payment, within five Business Days
after the Final Closing Date Working Capital, Final Closing Date Cash, Final
Assumed Indebtedness and Final YTD Capital Expenditures are agreed to by
Purchaser and Seller or any remaining disputed items are ultimately determined
by the Neutral Auditors.”

 

Section 1.9                                      Amendment
of Section 2.3. Section 2.3 of the Purchase Agreement is hereby
amended by adding the following new paragraphs (h) and (i):

 

(h)                                 Notwithstanding
anything herein to the contrary, if the Closing occurs on May 2, 2005, the
Closing will be deemed to have occurred at 11:59 p.m. (eastern standard
time), on April 30, 2005 for all purposes, including Article XI and
all determinations and/or calculations with respect to the Estimated Closing
Date Working Capital Statement, the Closing Date Working Capital Statement,
Closing Date Working Capital, Estimated Closing Date Working Capital, Final
Closing Date Working Capital, Closing Date Cash, Estimated Closing Date Cash,
Final Closing Date Cash, Estimated Assumed Indebtedness, Final Assumed
Indebtedness, YTD Capital Expenditures, Estimated YTD Capital Expenditures,
Final YTD Capital Expenditures, the Estimated Closing Date Financial Data, the
Closing Date Financial Data and related definitions.

 

(i)                                     Notwithstanding
anything herein to the contrary, if the Closing occurs on May 2, 2005, (i) the
Closing Date will be deemed to have occurred on April 30, 2005 for all purposes,
and (ii) the close of business on the Closing Date will be deemed to have
occurred at 11:59 p.m. (eastern standard time) on April 30, 2005 for
all purposes.

 

Section 1.10                                Amendment
of Section 3.1. Section 3.1 of the Purchase Agreement is hereby
amended and restated in its entirety as follows:

 

“Closing Date.
Subject to Section 2.3(h), the closing of the transactions contemplated
hereunder (the “Closing”) is expected to take place at the offices of Schulte
Roth & Zabel LLP, 919 Third Avenue, New York, New York 10022, at 10:00 a.m.
(local time) on May 2, 2005, provided that the conditions set forth in
Articles VIII and IX have been satisfied (other than those conditions that by
their terms cannot be satisfied until the Closing Date) or, in the case of Article VIII,
waived by Purchaser, or, in the case of Article IX, waived by Seller
(subject to Section 2.3(i), such date and time being referred to herein as
the “Closing Date”). If the Closing does not occur on May 2, 2005, the
Closing shall occur at the offices of Schulte Roth & Zabel LLP, 919
Third Avenue, New York, New York 10022, at 10:00 a.m. (local time) on the
earlier to occur of (i) the last Business Day of the calendar month in
which the last of the conditions set forth in Articles VIII and IX have been
satisfied (other than those conditions that by their terms cannot be satisfied
until the Closing Date) or, in the case of Article VIII, waived by
Purchaser or, in the

 

 

case of Article IX,
waived by Seller, or (ii) at such other place and at such other time and
date as may be mutually agreed upon by Purchaser and Seller (in the event that
the Closing does not occur on May 2, 2005, such date and time being
referred to herein as the “Closing Date”)”

 

Section 1.11                                Amendment
of Section 8.11. Section 8.11 of the Purchase Agreement is hereby
amended and restated in its entirety as follows:

 

“Business IRBs.
Purchaser shall have received evidence reasonably satisfactory to it that the
Business IRBs shall have been repaid or legally defeased in full on or prior to
the close of business on (i) April 30, 2005, if the Closing occurs on
May 2, 2005 or (ii) the Business Day immediately preceding the
Closing Date, if the Closing does not occur on May 2, 2005, in each case
pursuant to agreements and instruments reasonably satisfactory to Purchaser,
that all Liens securing obligations thereunder shall have been released or
terminated, and that each Leased Real Property which shall have been the
subject of a lease relating thereto shall have been reconveyed to Seller or the
applicable Seller Subsidiary or Acquired Company prior to Closing.”

 

Section 1.12                                Amendment
of Article VIII. Article VIII of the Purchase Agreement is hereby
amended by adding the following new Section 8.12:

 

“Wickliffe IRBs.
Purchaser shall have received evidence reasonably satisfactory to it that,
effective as of the Closing, all right, title and interest to the industrial
revenue bonds listed in Schedule 8.12 (the “Wickliffe
IRBs”) shall
be transferred to Purchaser or its Designated Affiliate pursuant to agreements
and instruments reasonably satisfactory to Purchaser.”

 

Section 1.13                                Amendment
of Section 10.1(c)(iii)(D). Section 10.1(c)(iii)(D) of the Purchase
Agreement is hereby amended and restated in its entirety as follows:

 

“(D) As soon
as practicable after the Closing Date, Seller shall deliver to Purchaser or one
or more of its Designated Affiliates a list of the Transferred Employees
covered by the Seller Savings Plans.”

 

Section 1.14                                Amendment
of Section 15.1. Section 15.1 is hereby amended by deleting the
definition of “Target Working Capital” therein and replacing it with the
following:

 

“Target Working Capital” means U.S.$ 390,475,000 (calculated in the manner and upon the
numbers set forth on Schedule 15.1(j) (as amended hereby)).

 

Section 1.15                                Amendment
of Section 15.1. Section 15.1 is hereby amended by adding the following definitions:

 

“EPC” has the meaning set forth in Section 1.6.

 

“Estimated YTD Capital
Expenditures” has the meaning set forth in Section 2.3(a).

 

“Final YTD
Capital Expenditures” has the meaning set forth in Section 2.3(e).

 

“Holdco Notes” has the meaning set forth in Section 2.2.

 

 

“NewPage Holdings” has the meaning set forth in Section 2.2.

 

“Target
Capital Expenditures” means (x) if the Closing Date is May 2,
2005, U.S.$21,113,000, or (y) if the Closing Date is not May 2, 2005, the
aggregate amount of capital expenditures scheduled to be made in accordance
with the Capital Budgets (as reflected on Schedule 6.2(q) to the
Purchase Agreement) during the period commencing on January 1, 2005 and
ending at the close of business on the Closing Date (it being understood that
in the event the Closing Date does not occur on the last day of a calendar
quarter, the amount of capital expenditures scheduled to be made for such shorter
period shall be deemed to equal the aggregate amount of capital expenditures
scheduled to be made during the applicable calendar quarter divided by ninety
(90) and multiplied by the number of calendar days which have elapsed between
the beginning of such calendar quarter and the Closing Date), in each case,
calculated in the manner and upon the numbers set forth on Schedule 6.2(q).

 

“Wickliffe IRBs” has the meaning set
forth in Section 8.2.

 

“YTD
Capital Expenditures” means the actual aggregate amount of
capital expenditures made with respect to the items described in the Capital
Budgets (as such Capital Budgets may be modified or amended by mutual agreement
of the parties hereto) during the period commencing on January 1, 2005 and
ending at the close of business on the Closing Date (it being understood that
determinations as to whether an expenditure is a capital expenditure as opposed
to a maintenance expenditure shall be made in accordance with GAAP and, to the
extent consistent with GAAP, in accordance with Seller’s current accounting
principles, procedures, policies, and methods with respect to the
categorization of expenditures in the Business).

 

Section 1.16                                Assumed
Indebtedness. The parties hereto agree that the Wickliffe IRBs shall be
treated as Assumed Indebtedness for all purposes, except for purposes of
determining the Final Cash Consideration pursuant to Article II. The
parties hereto acknowledge and agree that in no event shall the Wickliffe IRBs
be included in any calculation of Assumed Indebtedness, Estimated Assumed
Indebtedness or Final Assumed Indebtedness.

 

Section 1.17                                Amendment
of Section 10.4(c). Section 10.4(c) of the Purchase Agreement
is hereby amended by adding the following sentence at the end thereof:

 

“In furtherance of
and not by way of limitation of the foregoing, until such time as the consent
of the counterparties is obtained to the assignment of the Contracts listed on Schedule 10.4(c) hereto
(the “Section 10.4(c) Contracts”), Seller
shall remain obligated under the Section 10.4(c) Contracts and shall
pass through to Purchaser (or its Designated Affiliate) the rights and obligations
under the Section 10.4(c) Contracts in the manner contemplated by
this Section 10.4(c); provided that nothing herein shall relieve Purchaser
and Seller of their obligations to use their respective reasonable best efforts
from and after the Closing to obtain consents to the assignment of the Section 10.4(c) Contracts.”

 

ARTICLE II

AMENDMENT TO SCHEDULES TO PURCHASE AGREEMENT

 

Section 2.1                                      Schedule 1.6.
The Schedules to the Purchase Agreement are hereby amended by adding Annex B
as Schedule 1.6 of the Purchase Agreement, and such Schedule

 

 

shall be deemed for all
purposes to have been delivered as of the date of the Purchase Agreement.

 

Section 2.2                                      Schedule 8.12.
The Schedules to the Purchase Agreement are hereby amended by adding Annex C
as Schedule 8.12 of the Purchase Agreement, and such Schedule shall
be deemed for all purposes to have been delivered as of the date of the
Purchase Agreement.

 

Section 2.3                                      Schedule 10.4(c).
The Schedules to the Purchase Agreement are hereby amended by adding Annex D
as Schedule 10.4(c) of the Purchase Agreement, and such Schedule shall
be deemed for all purposes to have been delivered as of the date of the
Purchase Agreement.

 

Section 2.4                                      Amendment
of Schedule 15.1(c). Schedule 15.1(c) of the Purchase Agreement
is hereby amended by deleting such schedule in its entirety and replacing
the same with Annex E hereto, and such amended Schedule shall be
deemed for all purposes to have been delivered as of the date of the Purchase
Agreement.

 

Section 2.5                                      Amendment
of Schedule 15.1(j). Schedule 15.1(j) of the Purchase Agreement
is hereby amended by deleting such schedule in its entirety and replacing
the same with Annex F hereto, and such amended Schedule shall be
deemed for all purposes to have been delivered as of the date of the Purchase
Agreement.

 

ARTICLE III

MISCELLANEOUS

 

Section 3.1                                      No
Waiver. Nothing in this Amendment shall constitute a waiver by Seller or
Purchaser of any breach or default on the part of any party to the Purchase
Agreement.

 

Section 3.2                                      Governing
Law; Jurisdiction. The provisions of Sections 15.3 and 15.4 of the Purchase
Agreement shall apply to this Amendment as if references to “Agreement” therein
were to this Amendment.

 

Section 3.3                                      No
Other Agreements. This Amendment together with the Purchase Agreement (as
amended by this Amendment and together with the Schedules, Exhibits and other
agreements referenced therein), the Transition Agreements (together with the
Schedules, Exhibits and other agreements referenced therein) and the
Confidentiality Agreement contain, and are intended as, a complete statement of
all of the terms and the arrangements between the parties hereto with respect
to the matters provided for herein, and supersede any previous agreements and
understandings between the parties hereto with respect to those matters.

 

Section 3.4                                      Effect.
Except as expressly set forth herein, this Amendment shall not by implication
or otherwise alter, modify, amend or in any way affect any of the
representations, warranties, terms, conditions, obligations, covenants or
agreements contained in the Purchase Agreement, all of which shall continue in
full force and effect in accordance with their respective terms. For the
avoidance of doubt, except as expressly set forth herein, the execution,
delivery and effectiveness of this Amendment shall not constitute a
reaffirmation, remaking, withdrawal

 

 

or modification as of the
date of this Amendment of any of the representations, warranties or covenants
of any party hereto.

 

Section 3.5                                      Counterparts;
Execution and Delivery by Facsimile. This Amendment may be executed in two
or more counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same agreement. This Amendment may be
executed and delivered by facsimile, with such delivery to be as effective as
delivery of an originally executed counterpart hereof.

 

 

IN WITNESS
WHEREOF, the parties hereto caused this Amendment to be duly executed as of the
date first above written.

 

 

	
   

  	
  MEADWESTVACO
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ E. Mark Rajkowski

  	
   

  
	
   

  	
   

  	
  Name: E. Mark Rajkowski

  
	
   

  	
   

  	
  Title: SR VP CFO

  

 

 

	
   

  	
  ESCANABA TIMBER LLC
  (formerly

  known as Maple Acquisition LLC)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Linda Sheffield

  	
   

  
	
   

  	
   

  	
  Name: Linda Sheffield

  
	
   

  	
   

  	
  Title: TreasurerExhibit 10.3

 

SECOND
AMENDMENT TO

EQUITY AND ASSET PURCHASE
AGREEMENT

 

THIS SECOND AMENDMENT TO EQUITY AND ASSET PURCHASE AGREEMENT,
dated as of April 30,
2005 (this “Amendment”), is
made and entered into by and between MeadWestvaco Corporation, a Delaware
corporation (“Seller”), and Escanaba Timber LLC (formerly
known as Maple Acquisition LLC), a Delaware limited liability company (“Purchaser”). Capitalized
terms used herein but otherwise not defined shall have the meaning given to
such terms in the Purchase Agreement (as defined below).

 

WHEREAS, Seller and Purchaser have entered into that certain Equity and
Asset Purchase Agreement, dated as of January 14, 2005 (the “Purchase
Agreement”), which contemplates that Seller and
its Subsidiaries will sell, assign and transfer to Purchaser and/or one or more
of its Designated Affiliates, and that Purchaser and/or one or more of its
Designated Affiliates will purchase and acquire from Seller and its
Subsidiaries, all of the right, title and interest of Seller and its
Subsidiaries in and to the Purchased Equity Interests and the Purchased Assets,
and that Purchaser and/or one or more of its Designated Affiliates will assume
the Assumed Liabilities, in each case, upon the terms and subject to the
conditions set forth in the Purchase Agreement; and

 

WHEREAS, Seller and Purchaser have entered into that certain First
Amendment to Equity and Asset Purchase Agreement, dated as of April 22,
2005 (the “First Amendment,” together with the Purchase
Agreement, the “Amended Purchase Agreement”)

 

WHEREAS, Seller and Purchaser desire to further amend the Amended
Purchase Agreement as set forth below;

 

NOW, THEREFORE, in consideration of the mutual agreements contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

 

ARTICLE I

AMENDMENT
TO PURCHASE AGREEMENT

 

Section 1.1                                      Amendment of Section 6.12(e).   Section 6.12(e) of
the Purchase Agreement is hereby amended by adding the following at the end of Section 6.12(e):

 

“It is hereby acknowledged that Purchaser has not received Express Maps
for all of the Timberlands prior to the Closing. If it shall be determined
after the Closing that less than the applicable minimum acreage (determined as
set forth in this Section 6.12(e)) in the Escanaba Forest, the Chillicothe
Forest and/or the Wickliffe Forest was conveyed to Purchaser at Closing, then
Purchaser shall be entitled to claim the applicable Purchase Price Credit under
this Section 6.12(e), and Seller shall promptly cause such amount to be
paid to Purchaser, which amount shall be deemed to be an adjustment to the
Purchase Price; provided, however, that Purchaser must make any such claim in
writing not later than the earlier of (x) fifteen (15) days after its receipt
of the last of all the Express Maps covering all of the Escanaba Forest, the
Chillicothe Forest and the Wickliffe Forest and (y) ninety (90) days after the
Closing. Purchaser shall make available to Seller any GIS data and other
documents and personnel reasonably required by Seller to

 

1

 

evaluate
and respond to any such claim. Notwithstanding anything to the contrary in Section 6.11
or in this Section 6.12, Purchaser shall not be entitled to deliver, after
the Closing, any notices of Title Defects with respect to the Titled Properties
for which Purchaser has obtained Title Policies at the Closing.”

 

Section 1.2                                      Amendment of Section 7.6. The last sentence of Section 7.6 of
the Purchase Agreement is hereby amended and restated in its entirety as
follows:

 

“To the extent such substitution contemplated by the first sentence of
this Section 7.6 has not been effected, Purchaser shall (i) use
commercially reasonable efforts to affect such substitution as soon as
practicable following the Closing, but in any event within 6 months thereof
(except with respect to the Guarantee described in Schedule 7.6(i), for
which Purchaser shall continue to use commercially reasonable efforts to effect
such substitution until such substitution occurs), and (ii) indemnify
Seller and its Subsidiaries that are not Acquired Companies with respect to any
such Guarantees (including the Guarantee described in Schedule 7.6(i)) in
accordance with Article XI; provided, however, that notwithstanding
anything in the foregoing, with respect to any of the Guarantees (other than
the Guarantee set forth in Schedule 7.6(i)), Seller and its Subsidiaries
may at any time following the six month anniversary of the Closing terminate
one or more of such Guarantees and thereafter cease to have any obligation whatsoever
arising from or in connection with any such terminated Guarantee.”

 

Section 1.3                                      Amendment of Section 8.9. Section 8.9 of the Purchase Agreement
is hereby amended and restated in its entirety as follows:

 

“Officer’s Certificate. Purchaser shall have received a
certificate from Seller to the effect set forth in Section 8.1, 8.2 and
8.8, dated the Closing Date, signed on behalf of Seller by the Chief Executive
Officer, Chief Financial Officer, Treasurer or any Vice President of Seller.”

 

Section 1.4                                      Amendment of Section 11.7. Section 11.7 of the Purchase Agreement
is hereby amended by adding the following at the end of such Section 11.7:

 

“The parties hereby confirm that, (1) pursuant to Section 6.10(b) and
Section 8.10 of this Agreement, Purchaser has obtained Title Policies with
respect to (among other properties) the properties conveyed at the Closing
pursuant to the Deeds (which term shall be deemed to include, for purposes of
this Section 11.7, any deeds for Timberlands in Escanaba, Michigan
executed and delivered pursuant to clause (b) of the first sentence of Section 1.6
of this Agreement, as amended by the First Amendment), and (2) pursuant to
clause (a) of the first sentence of this Section 11.7, the grantor
under such Deeds shall have no liability to the grantee under such Deeds (or to
any successors or assigns of such grantee) pursuant to any warranty (express or
implied) contained or deemed contained in any such Deed, including (without limitation)
any such express or implied warranties pertaining to the legal descriptions
annexed to any such Deeds.” 

 

Section 1.5                                      Amendment of Section 15.1. Section 15.1 of the Purchase Agreement
is hereby amended by adding the following definition:

 

“UPRC
2001 IRBs” means the Upper Potomac River, Maryland, June 1, 2001, Series 2001
($1,600,000) industrial revenue bond issue.”

 

 

Section 1.6                                      Assumed Indebtedness. The parties hereto acknowledge and agree
that, to (the extent that (i) the Capital Charge (as defined in the
Facilities Agreement between Seller and the Upper Potomac River Commission,
dated as of November 8, 2001 (the “Facilities Agreement”)) payable
by Purchaser and/or its Designated Affiliates following the Closing does not
exceed (x) $892,934.16 (or such other amount determined using a proportionate
share of the Capital Charge other than 28.11%, as determined in accordance with
Section 6.01 of the Facilities Agreement) in the aggregate through final
maturity of the 2001 UPRC IRBs (either amount, the “Aggregate Capital Charge”), and
(y) $26,782 (or such other amount determined using a proportionate share of the
Capital Charge other than 28.11%, as determined in accordance with Section 6.01
of the Facilities Agreement) per annum (either amount, the “Per Annum Capital
Charge,”) and (ii) Purchaser and/or its Designated Affiliates have no
obligations with respect to the 2001 UPRC IRBs other than as set forth in the
Facilities Agreement, the 2001 UPRC IRBs shall be treated as Assumed
Indebtedness for all purposes, except for purposes of determining the Final
Cash Consideration pursuant to Article II, and shall not be included in
any calculation of Assumed Indebtedness, Estimated Assumed Indebtedness, or
Final Assumed Indebtedness.  The parties
hereto also acknowledge and agree that, to the extent that the Capital Charge
payable by Purchaser and/or its Subsidiaries following the Closing either (i) does
exceed (x) on an aggregate basis through final maturity, the Aggregate Capital
Charge, or (y) on a per annum basis, the Per Annum Capital Charge, or (ii) the
Purchaser and/or its Designated Affiliates have obligations with respect to the
2001 UPRC IRBs other than as set forth in the Facilities Agreement, the 2001
UPRC IRBs shall be included in any calculation of Assumed Indebtedness,
Estimated Assumed Indebtedness, or Final Assumed Indebtedness, in each case for
purposes of determining the Final Cash Consideration pursuant to Article II,
but only to the extent of such excess or additional obligation, or, if such
determination is made after Final Assumed Indebtedness is finally determined,
Seller shall pay Purchaser or its Designated Affiliate the amount of such
excess or the amount in respect of such additional obligation.

 

ARTICLE II

AMENDMENT TO SCHEDULES TO PURCHASE AGREEMENT

 

Section 2.1             Amendment
of Schedule 1.1.   Schedule 1.1
of the Purchase Agreement is hereby amended by deleting such schedule in
its entirety and replacing the same with Annex A hereto, and such
amended Schedule shall be deemed for all purposes to have been delivered
as of the date of the Purchase Agreement.

 

Section 2.2                                      Amendment of Schedule 1.2(a)(i).   Schedule 1.2(a)(i) of
the Purchase Agreement is hereby amended by deleting such schedule in its
entirety and replacing the same with Annex B hereto, and such amended Schedule shall
be deemed for all purposes to have been delivered as of the date of the
Purchase Agreement.

 

Section 2.3                                      Amendment of Schedule 1.2(a)(ii).   Schedule 1.2(a)(ii) of
the Purchase Agreement is hereby amended by deleting such schedule in its
entirety and replacing the same with Annex C hereto, and such amended Schedule shall
be deemed for all purposes to have been delivered as of the date of the
Purchase Agreement.

 

 

Section 2.4                                      Amendment of Schedule 1.2(b)(i).   Schedule 1.2(b)(i) of the Purchase
Agreement is hereby amended by deleting such schedule in its entirety and
replacing the same with Annex D hereto, and such amended Schedule shall
be deemed for all purposes to have been delivered as of the date of the
Purchase Agreement.

 

Section 2.5                                      Amendment of Schedule 1.2(b)(ii).   Schedule 1.2(b)(ii) of the Purchase
Agreement is hereby amended by deleting such schedule in its entirety and
replacing the same with Annex E hereto, and such amended Schedule shall
be deemed for all purposes to have been delivered as of the date of the
Purchase Agreement.

 

Section 2.6                                      Amendment of Schedule 1.2(g).   Schedule 1.2(g) of the Purchase
Agreement is hereby amended by deleting such schedule in its entirety and
replacing the same with Annex F hereto, and such amended Schedule shall
be deemed for all purposes to have been delivered as of the date of the
Purchase Agreement.

 

Section 2.7                                      Amendment of Schedule 1.2(n).   Schedule 1.2(n) of the Purchase Agreement
is hereby amended by deleting such schedule in its entirety and replacing
the same with Annex G hereto, and such amended Schedule shall be
deemed for all purposes to have been delivered as of the date of the Purchase
Agreement.

 

Section 2.8                                      Amendment of Schedule 1.3(d).   Schedule l.3(d) of the Purchase Agreement
is hereby amended by deleting such schedule in its entirety and replacing
the same with Annex H hereto, and such amended Schedule shall be
deemed for all purposes to have been delivered as of the date of the Purchase
Agreement.

 

Section 2.9                                      Amendment of Schedule 1.3(e).   Schedule 1.3(e) of
the Purchase Agreement is hereby amended by deleting such schedule in its
entirety and replacing the same with Annex I hereto, and such amended Schedule shall
be deemed for all purposes to have been delivered as of the date of the
Purchase Agreement.

 

Section 2.10                                Amendment of Schedule 1.4(o).   Schedule 1.4(o) of the Purchase Agreement
is hereby amended by deleting such schedule in its entirety and replacing
the same with Annex J hereto, and such amended Schedule shall be
deemed for all purposes to have been delivered as of the date of the Purchase
Agreement.

 

Section 2.11                                Amendment of Schedule 3.2(h).   Schedule 3.2(h) of the Purchase
Agreement is hereby amended by deleting such schedule in its entirety and
replacing the same with Annex K hereto, and such amended Schedule shall
be deemed for all purposes to have been delivered as of the date of the
Purchase Agreement.

 

Section 2.12                                Amendment of Schedule 4.1.   Schedule 4.1
of the Purchase Agreement is hereby amended by deleting such schedule in
its entirety and replacing the same with Annex L hereto, and such
amended Schedule shall be deemed for all purposes to have been delivered
as of the date of the Purchase Agreement.

 

Section 2.13                                Amendment of Schedule 4.2.   Schedule 4.2
of the Purchase Agreement is hereby amended by deleting such schedule in
its entirety and replacing the

 

 

same
with Annex M hereto, and such amended Schedule shall be deemed for
all purposes to have been delivered as of the date of the Purchase Agreement.

 

Section 2.14                                Amendment of Schedule 4.3.   Schedule 4.3 of the Purchase Agreement is
hereby amended by deleting such schedule in its entirety and replacing the
same with Annex N hereto, and such amended Schedule shall be deemed
for all purposes to have been delivered as of the date of the Purchase
Agreement.

 

Section 2.15                                Amendment of Schedule 4.5.   Schedule 4.5
of the Purchase Agreement is hereby amended by deleting such schedule in
its entirety and replacing the same with Annex O hereto, and such
amended Schedule shall be deemed for all purposes to have been delivered
as of the date of the Purchase Agreement.

 

Section 2.16                                Amendment of Schedule 4.9(a)(i).   Schedule 4.9(a)(i) of the Purchase Agreement
is hereby amended by deleting such schedule in its entirety and replacing
the same with Annex P hereto, and such amended Schedule shall be
deemed for all purposes to have been delivered as of the date of the Purchase
Agreement.

 

Section 2.17                                Amendment of Schedule 4.9(b).   Schedule 4.9(b) of
the Purchase Agreement is hereby amended by deleting such schedule in its
entirety and replacing the same with Annex Q hereto.

 

Section 2.18                                Amendment of Schedule 4.9(c).   Schedule 4.9(c) of
the Purchase Agreement is hereby amended by deleting such schedule in its
entirety and replacing the same with Annex R hereto, and such amended Schedule shall
be deemed for all purposes to have been delivered as of the date of the
Purchase Agreement.

 

Section 2.19                                Amendment of Schedule 4.9(c)(iii).   Schedule 4.9(c)(iii) of
the Purchase Agreement is hereby amended by deleting such schedule in its
entirety and replacing the same with Annex S hereto, and such amended Schedule shall
be deemed for all purposes to have been delivered as of the date of the
Purchase Agreement.

 

Section 2.20                                Amendment of Schedule 4.10(a).   Schedule 4.10(a) of
the Purchase Agreement is hereby amended by deleting such schedule in its
entirety and replacing the same with Annex T hereto, and such amended Schedule shall
be deemed for all purposes to have been delivered as of the date of the
Purchase Agreement.

 

Section 2.21                                Amendment of Schedule 4.11(a).   Schedule 4.11(a) of
the Purchase Agreement is hereby amended by deleting such schedule in its
entirety and replacing the same with Annex U hereto, and such amended Schedule shall
be deemed for all purposes to have been delivered as of the date of the
Purchase Agreement.

 

Section 2.22                                Amendment of Schedule 4.14.   Schedule 4.14 of the Purchase Agreement is
hereby amended by deleting such schedule in its entirety and replacing the
same with Annex V hereto, and such amended Schedule shall be deemed
for all purposes to have been delivered as of the date of the Purchase
Agreement.

 

 

Section 2.23                                Amendment of Schedule 6.14.   Schedule 6.14
of the Purchase Agreement is hereby amended by deleting such schedule in
its entirety and replacing the same with Annex W hereto, and such
amended Schedule shall be deemed for all purposes to have been delivered
as of the date of the Purchase Agreement.

 

Section 2.24                                Amendment of Schedule 7.6.    Schedule 7.6
of the Purchase Agreement is hereby amended by deleting such schedule in
its entirety and replacing the same with Annex X hereto, and such
amended Schedule shall be deemed for all purposes to have been delivered
as of the date of the Purchase Agreement.

 

Section 2.25                                Schedule 7.6(i).   The
Schedules to the Purchase Agreement are hereby amended by adding Annex Y
as Schedule 7.6(i) of the Purchase Agreement, and such Schedule shall
be deemed for all purposes to have been delivered as of the date of the Purchase
Agreement.

 

Section 2.26                                Amendment of Schedule 7.9.   Schedule 7.9
of the Purchase Agreement is hereby amended by deleting such schedule in
its entirety and replacing the same with Annex Z hereto, and such
amended Schedule shall be deemed for all purposes to have been delivered
as of the date of the Purchase Agreement.

 

ARTICLE III

MISCELLANEOUS

 

Section 3.1                                      No Waiver. Nothing in this Amendment shall constitute a waiver by Seller or
Purchaser of any breach or default on the part of any party to the Purchase Agreement.

 

Section 3.2                                      Governing Law; Jurisdiction. The provisions of Sections 15.3 and 15.4 of
the Purchase Agreement shall apply to this Amendment as if references to “Agreement”
therein were to this Amendment.

 

Section 3.3                                      No Other Agreements.  
This Amendment together with the Purchase Agreement (as amended by this
Amendment and together with the Schedules, Exhibits and other agreements
referenced therein), the Transition Agreements (together with the Schedules,
Exhibits and other agreements referenced therein) and the Confidentiality
Agreement contain, and are intended as, a complete statement of all of the
terms and the arrangements between the parties hereto with respect to the
matters provided for herein, and supersede any previous agreements and
understandings between the parties hereto with respect to those matters.

 

Section 3.4                                      Effect. Except as expressly set forth herein, this Amendment shall not by
implication or otherwise alter, modify, amend or in any way affect any of the
representations, warranties, terms, conditions, obligations, covenants or
agreements contained in the Purchase Agreement, all of which shall continue in
full force and effect in accordance with their respective terms. For the
avoidance of doubt, except as expressly set forth herein, the execution,
delivery and effectiveness of this Amendment shall not constitute a
reaffirmation, remaking, withdrawal or modification as of the date of this
Amendment of any of the representations, warranties or covenants of any party
hereto.

 

 

Section 3.5                                      Counterparts; Execution and Delivery by
Facsimile. This Amendment
may be executed in two or more counterparts, each of which shall be deemed to
be an original, but all of which shall constitute one and the same agreement.
This Amendment may be executed and delivered by facsimile, with such delivery
to be as effective as delivery of an originally executed counterpart hereof.

 

 

IN WITNESS WHEREOF, the parties hereto caused this Amendment to be duly
executed as of the date first above written.

 

 

	
   

  	
  MEADWESTVACO
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Robert E. Birkenholz

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Robert
  E. Birkenholz

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ESCANABA
  TIMBER LLC

  (formerly known as Maple Acquisition LLC)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Linda Sheffield

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Linda
  Sheffield

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

  
					

 

 

ANNEX A

 

Schedule 1.1

Purchased Companies

 

1.          Escanaba Paper Company

 

2.          MeadWestvaco Maryland, Inc.

 

3.          MeadWestvaco Kentucky, LP

 

4.          MeadWestvaco Oxford Corporation

 

5.          MeadWestvaco Energy Services LLC

 

6.          Upland Resources, Inc.

 

7.          EPC Timberlands LLC

 

8.          Oxford Paper Company

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