WEYERHAEUSER CO (Form: 10-Q, Received: 08/05/2016 17:27:52)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

__________________________________________________

FORM 10-Q

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x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2016



o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER: 1-4825

__________________________________________________

WEYERHAEUSER COMPANY

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Washington		91-0470860
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

33663 Weyerhaeuser Way South Federal Way, Washington		98063-9777
(Address of principal executive offices)		(Zip Code)

(253) 924-2345

(Registrant’s telephone number, including area code)

__________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x Accelerated filer o Non-accelerated filer o Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No

As of July 29, 2016 , 748,731,669 shares of the registrant’s common stock ($1.25 par value) were outstanding.

TABLE OF CONTENTS



PART I	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS:
	CONSOLIDATED STATEMENT OF OPERATIONS	1
	CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	2
	CONSOLIDATED BALANCE SHEET	3
	CONSOLIDATED STATEMENT OF CASH FLOWS	4
	INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	5
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	6
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (“MD&A”)	38
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	58
ITEM 4.	CONTROLS AND PROCEDURES	59

PART II	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	59
ITEM 1A.	RISK FACTORS	59
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	60
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	NA
ITEM 4.	MINE SAFETY DISCLOSURES	NA
ITEM 5.	OTHER INFORMATION	60
ITEM 6.	EXHIBITS	61
	SIGNATURE	62

FINANCIAL INFORMATION

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)



	QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES	JUNE 2016			JUNE 2015			JUNE 2016			JUNE 2015
Net sales	$	1,655		$	1,345		$	3,060		$	2,625
Costs of products sold	1,258			1,057			2,347			2,050
Gross margin	397			288			713			575
Selling expenses	22			24			45			49
General and administrative expenses	94			63			170			129
Research and development expenses	4			5			9			8
Charges for integration and restructuring, closures and asset impairments (Note 15)	14			—			125			14
Other operating costs (income), net (Note 16)	5			(4		)	(47		)	25
Operating income	258			200			411			350
Equity earnings from joint ventures (Note 7)	7			—			12			—
Interest income and other	10			9			19			18
Interest expense, net of capitalized interest	(114		)	(85		)	(209		)	(167		)
Earnings from continuing operations before income taxes	161			124			233			201
Income taxes (Note 17)	(31		)	1			(42		)	(8		)
Earnings from continuing operations	130			125			191			193
Earnings from discontinued operations, net of income taxes (Note 3)	38			19			58			52
Net earnings	168			144			249			245
Dividends on preference shares	(11		)	(11		)	(22		)	(22		)
Net earnings attributable to Weyerhaeuser common shareholders	$	157		$	133		$	227		$	223
Earnings per share attributable to Weyerhaeuser common shareholders, basic and diluted (Note 5) :
Continuing operations	$	0.16		$	0.22		$	0.25		$	0.33
Discontinued operations	0.05			0.04			0.08			0.10
Net earnings per share	$	0.21		$	0.26		$	0.33		$	0.43
Dividends paid per share	$	0.31		$	0.29		$	0.62		$	0.58
Weighted average shares outstanding (in thousands) (Note 5) :
Basic	743,140			516,626			687,572			520,008
Diluted	747,701			519,804			691,060			523,595

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(UNAUDITED)



	QUARTER ENDED					YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2016			JUNE 2015		JUNE 2016			JUNE 2015
Net earnings	$	168		$	144	$	249		$	245
Other comprehensive income (loss):
Foreign currency translation adjustments	(2		)	12		39			(35		)
Actuarial gains, net of tax expense of $17, $24, $25 and $50	31			44		41			106
Prior service costs, net of tax expense (benefit) of $(1), $1, $0, and $1	—			—		(2		)	(2		)
Unrealized gains on available-for-sale securities	1			—		1			1
Total other comprehensive income	30			56		79			70
Comprehensive income attributable to Weyerhaeuser common shareholders	$	198		$	200	$	328		$	315

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED BALANCE SHEET

(UNAUDITED)



DOLLAR AMOUNTS IN MILLIONS	JUNE 30, 2016			DECEMBER 31, 2015
ASSETS
Current assets:
Cash and cash equivalents	$	485		$	1,011
Receivables, less allowances of $2 and $1	409			276
Receivables for taxes	7			30
Inventories (Note 6)	387			325
Prepaid expenses and other current assets	132			63
Assets of discontinued operations (Note 3)	1,908			1,934
Total current assets	3,328			3,639
Property and equipment, less accumulated depreciation of $3,334 and $3,291	1,462			1,233
Construction in progress	172			144
Timber and timberlands at cost, less depletion charged to disposals	14,474			6,479
Minerals and mineral rights, net	319			14
Investments in and advances to joint ventures (Note 7)	905			—
Goodwill	40			40
Deferred tax assets	250			254
Other assets	424			302
Restricted financial investments held by variable interest entities	615			615
Total assets	$	21,989		$	12,720
LIABILITIES AND EQUITY
Current liabilities:
Notes payable	$	1		$	4
Accounts payable	300			204
Accrued liabilities (Note 9)	590			427
Liabilities of discontinued operations (Note 3)	666			690
Total current liabilities	1,557			1,325
Note payable to Timberland Venture (Note 10)	830			—
Long-term debt (Note 10)	8,013			4,787
Long-term debt (nonrecourse to the company) held by variable interest entities	511			511
Deferred pension and other postretirement benefits	926			987
Deposit from contribution of timberlands to related party (Note 7)	437			—
Other liabilities	285			241
Total liabilities	12,559			7,851
Commitments and contingencies (Note 12)

Equity:
Mandatory convertible preference shares, series A: $1.00 par value; $50.00 liquidation; authorized 40,000,000 shares; issued and outstanding: 13,693,046 and 13,799,711 shares	14			14
Common shares: $1.25 par value; authorized 1,360,000,000 shares; issued and outstanding: 733,010,052 and 510,483,285 shares	916			638
Other capital	8,527			4,080
Retained earnings	1,106			1,349
Cumulative other comprehensive loss (Note 13)	(1,133		)	(1,212		)
Total equity	9,430			4,869
Total liabilities and equity	$	21,989		$	12,720

See accompanying Notes to Consolidated Financial Statements.

WEYERHAEUSER COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS(UNAUDITED)



	YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2016			JUNE 2015
Cash flows from operations:
Net earnings	$	249		$	245
Noncash charges (credits) to earnings:
Depreciation, depletion and amortization	289			241
Basis of real estate sold	30			11
Deferred income taxes, net	56			16
Pension and other postretirement benefits (Note 8)	5			21
Share-based compensation expense	40			16
Charges for impairment of assets	15			13
Equity (earnings) loss from joint ventures (Note 7)	(9		)	13
Net gains on dispositions of assets and operations	(51		)	(21		)
Foreign exchange transaction (gains) losses (Note 16)	(12		)	21
Change in:
Receivables less allowances	(90		)	(26		)
Receivable for taxes	35			14
Inventories	17			(15		)
Prepaid expenses	(1		)	(2		)
Accounts payable and accrued liabilities	36			(25		)
Pension and postretirement contributions (Note 8)	(29		)	(39		)
Distributions received from joint ventures	5			—
Other	(46		)	(29		)
Net cash from operations	539			454
Cash flows from investing activities:
Capital expenditures for property and equipment	(140		)	(170		)
Capital expenditures for timberlands reforestation	(34		)	(27		)
Acquisition of timberlands	(8		)	(32		)
Proceeds from sale of assets	83			6
Proceeds from contribution of timberlands to related party (Note 7)	440			—
Distributions received from joint ventures	27			—
Cash and cash equivalents acquired in Plum Creek merger (Note 4)	9			—
Other	(3		)	12
Cash from (used in) investing activities	374			(211		)
Cash flows from financing activities:
Cash dividends on common shares	(469		)	(301		)
Cash dividends on preference shares	(11		)	(11		)
Proceeds from issuance of long-term debt	1,398			—
Payments of debt	(723		)	—
Repurchase of common stock (Note 5)	(1,629		)	(407		)
Other	1			17
Cash from financing activities	(1,433		)	(702		)

Net change in cash and cash equivalents	(520		)	(459		)

Cash and cash equivalents from continuing operations at beginning of period	1,011			1,577
Cash and cash equivalents from discontinued operations at beginning of period	1			3
Cash and cash equivalents at beginning of period	1,012			1,580

Cash and cash equivalents from continuing operations at end of period	485			1,117
Cash and cash equivalents from discontinued operations at end of period	7			4
Cash and cash equivalents at end of period	$	492		$	1,121

Cash paid (received) during the period for:
Interest, net of amount capitalized of $3 and $3	$	225		$	172
Income taxes	$	(25	)	$	5

Noncash investing and financing activities:
Equity issued as consideration for our merger with Plum Creek (Note 4)	$	6,383		$	—

See accompanying Notes to Consolidated Financial Statements.

INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1:	BASIS OF PRESENTATION	6

NOTE 2:	BUSINESS SEGMENTS	8

NOTE 3:	DISCONTINUED OPERATIONS	10

NOTE 4:	MERGER WITH PLUM CREEK	12

NOTE 5:	NET EARNINGS PER SHARE AND SHARE REPURCHASES	14

NOTE 6:	INVENTORIES	16

NOTE 7:	RELATED PARTIES	17

NOTE 8:	PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS	19

NOTE 9:	ACCRUED LIABILITIES	21

NOTE 10:	LONG-TERM DEBT AND LINES OF CREDIT	21

NOTE 11:	FAIR VALUE OF FINANCIAL INSTRUMENTS	23

NOTE 12:	LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES	23

NOTE 13:	CUMULATIVE OTHER COMPREHENSIVE INCOME (LOSS)	25

NOTE 14:	SHARE-BASED COMPENSATION	25

NOTE 15:	CHARGES FOR INTEGRATION AND RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS	28

NOTE 16:	OTHER OPERATING COSTS (INCOME), NET	29

NOTE 17:	INCOME TAXES	29

NOTE 18:	CONDENSED CONSOLIDATING FINANCIAL INFORMATION	30

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE QUARTERS AND YEAR-TO-DATE ENDED JUNE 30, 2016 AND 2015

NOTE 1: BASIS OF PRESENTATION

We are a corporation that has elected to be taxed as a real estate investment trust (REIT). We expect to derive most of our REIT income from investments in timberlands, including the sale of standing timber. As a REIT, we generally are not subject to federal corporate level income taxes on REIT taxable income that is distributed to shareholders. We are required to pay corporate income taxes on earnings of our Taxable REIT Subsidiary (TRS), which includes our manufacturing businesses and the portion of our Timberlands and Real Estate and Energy & Natural Resources (Real Estate & ENR) segments' income included in the TRS.

Our consolidated financial statements provide an overall view of our results and financial condition. They include our accounts and the accounts of entities we control, including:


•	majority-owned domestic and foreign subsidiaries,


•	the results of Plum Creek Timber Company, Inc. (Plum Creek) for the period from February 19, 2016 (the merger date) to June 30, 2016 (see Note 4: Merger with Plum Creek ), and


•	variable interest entities in which we are the primary beneficiary.

They do not include our intercompany transactions and accounts, which are eliminated.

We account for investments in and advances to unconsolidated equity affiliates using the equity method, with taxes provided on undistributed earnings. This means that we record earnings and accrue taxes in the period earnings are recognized by our unconsolidated equity affiliates.

Throughout these Notes to Consolidated Financial Statements, unless specified otherwise, references to “Weyerhaeuser,” “we,” “the company” and “our” refer to the consolidated company.

The accompanying unaudited Consolidated Financial Statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods presented. Except as otherwise disclosed in these Notes to Consolidated Financial Statements, such adjustments are of a normal, recurring nature. The Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission pertaining to interim financial statements; certain disclosures normally provided in accordance with accounting principles generally accepted in the United States have been omitted. These Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2015 . Results of operations for interim periods should not be regarded as necessarily indicative of the results that may be expected for the full year.

RECLASSIFICATIONS

We have reclassified certain balances and results from the prior year to be consistent with our 2016 reporting. This makes year-to-year comparisons easier. Our reclassifications had no effect on consolidated net earnings or equity.

Our reclassifications present 1) our adoption of new accounting pronouncements and 2) the results of discontinued operations separately from results of continuing operations on our Consolidated Statement of Operations , Consolidated Balance Sheet and in the related footnotes. Note 3: Discontinued Operations provides information about our discontinued operations.

As a result of the merger, we have revised our business segments. Results for fiscal periods prior to 2016 have been revised to conform to the new segments and to exclude discontinued operations. Note 2: Business Segments provides information about our revised business segments.

NEW ACCOUNTING PRONOUNCEMENTS

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, a comprehensive new revenue recognition model that requires an entity to recognize revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration it expects to receive in exchange for those goods or services. In August 2015, FASB issued ASU 2015-14, which deferred the effective date for an additional year. In March 2016, FASB issued ASU 2016-08, which does not change the core principle of the guidance; however, it does clarify the implementation guidance on principal versus agent considerations. In April 2016, FASB issued ASU 2016-10, which clarifies two aspects of ASU 2014-09: identifying performance obligations and the licensing implementation guidance. In May 2016, FASB issued ASU 2016-12, which amends ASU 2014-09 to provide improvements and practical expedients to the new revenue recognition model. We plan to adopt these accounting standard updates on January 1, 2018, and may use either the retrospective or cumulative effect transition method. We are evaluating the impact on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor determined the effect of the standard to our ongoing financial reporting.

In April 2015, FASB issued ASU 2015-03, which amends the presentation of debt issuance costs on the consolidated balance sheet. Under the new guidance, debt issuance costs are presented as a direct deduction from the carrying amount of the debt liability rather than as an asset. The new guidance is effective retrospectively for fiscal periods beginning after December 15, 2015. We adopted on January 1, 2016, and have reclassified balances of debt issuance costs accordingly in our consolidated balance sheet and in related disclosures for all periods presented.

In May 2015, FASB issued ASU 2015-07, which clarifies the presentation within the fair value hierarchy of certain investments held within our pension plan. The new guidance is effective retrospectively for fiscal periods starting after December 15, 2015. This new guidance removes the requirement to categorize within the fair value hierarchy investments for which fair value is measured using the net asset value per share as a practical expedient and, instead, permits separate disclosure. Upon adoption these investments are presented separately from the fair value hierarchy and reconciled to total investments in our consolidated financial statements and related disclosures. We adopted on January 1, 2016.

In July 2015, FASB issued ASU 2015-11, which simplifies the measurement of inventories valued under most methods, including our inventories valued under FIFO – the first-in, first-out – and moving average cost methods. Inventories valued under LIFO – the last-in, first-out method – are excluded. Under this new guidance, inventories valued under these methods would be valued at the lower of cost or net realizable value, with net realizable value defined as the estimated selling price less reasonable costs to sell the inventory. The new guidance is effective prospectively for fiscal periods starting after December 15, 2016, and early adoption is permitted. We expect to adopt on January 1, 2017, and are evaluating the impact on our consolidated financial statements and related disclosures.

In September 2015, FASB issued ASU 2015-16, which results in the ability to recognize, in current period earnings, any changes in provisional amounts during the measurement period after the closing of an acquisition, instead of restating prior periods for these changes. We adopted on January 1, 2016. Measurement period adjustments related to our merger with Plum Creek did not have a material impact to earnings or cash flows for the quarter and year-to-date period ended June 30, 2016.

In February 2016, FASB issued ASU 2016-02, which requires lessees to recognize assets and liabilities for the rights and obligations created by those leases and requires both capital and operating leases to be recognized on the balance sheet. The new guidance is effective for fiscal years beginning after December 15, 2018, and early adoption is permitted. We expect to adopt on January 1, 2019, and are evaluating the impact on our consolidated financial statements and related disclosures.

In March 2016, FASB issued ASU 2016-09, which simplifies several aspects of accounting for share-based payment transactions, including income tax consequences, award classification, cash flows reporting, and forfeiture rate application. Specifically, the update requires all excess tax benefits and tax deficiencies to be recognized as income tax expense or benefit in the income statement with a cumulative-effect adjustment to equity as of the beginning of the period of adoption. The update allows excess tax benefits to be classified along with other income tax cash flows as an operating activity on the statement of cash flows. When accruing compensation cost, an entity can make an entity-wide accounting policy election to either estimate the number of awards expected to vest or to

account for forfeitures as they occur with a cumulative-effect adjustment to equity as of the beginning of the period of adoption. The update requires cash paid by an employer when directly withholding shares for tax-withholding purposes to be classified as a financing activity on the statement of cash flows, applied retrospectively. This guidance is effective for fiscal years beginning after December 15, 2016. As permitted, we elected to adopt early, and applied the different aspects as prescribed by the standard effective January 1, 2016. The adoption of this guidance represents a change in accounting policy and did not have a material impact on our consolidated financial statements. Shares withheld by the employer for tax-withholding purposes for the six months ended June 30, 2015, of $11 million were retrospectively reclassified from an operating activity to a financing activity in the Consolidated Statement of Cash Flows .

NOTE 2: BUSINESS SEGMENTS

Reportable business segments are determined based on the company’s management approach. The management approach, as defined by FASB ASC 280, “Segment Reporting,” is based on the way the chief operating decision maker organizes the segments within a company for making decisions about resources to be allocated and assessing their performance.

During fiscal year 2016, the company’s chief operating decision maker changed the information regularly reviewed for making decisions to allocate resources and assess performance. As a result, the company will report its financial performance based on three business segments: Timberlands, Real Estate & ENR, and Wood Products. Prior to revising our segment structure, activities related to the Real Estate & ENR business segment were reported as part of the Timberlands business segment.

Amounts for all periods presented have been reclassified throughout the consolidated financial statements and disclosures to conform to the new segment structure.

We are principally engaged in growing and harvesting timber, manufacturing, distributing, and selling products made from trees, as well as maximizing the value of every acre we own through the sale of higher and better use (HBU) properties and monetizing reserves of minerals, oil, gas, coal, and other natural resources on our timberlands. The following is a brief description of each of our reportable business segments and activities:


•	Timberlands – which includes logs, timber, and our Uruguay operations;


•	Real Estate & ENR – which includes sales of HBU and non-core timberlands, minerals, oil, gas, coal and other natural resources, and equity interests in our Real Estate Development Ventures (as defined and described in Note 7: Related Parties ); and


•	Wood Products – which includes softwood lumber, engineered wood products, oriented strand board, plywood, medium density fiberboard and building materials distribution.

Discontinued operations as presented herein consist of the operations of our former Cellulose Fibers segment, and relate to assets and liabilities that have been reclassified as discontinued operations on our balance sheet as of June 30, 2016. All periods presented have been revised to separate the results of discontinued operations from the results of our continuing operations . Refer to Note 3: Discontinued Operations for more information regarding our discontinued operations.

An analysis and reconciliation of our business segment information to the respective information in the Consolidated Statements of Operations is as follows:



	QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2016			JUNE 2015			JUNE 2016			JUNE 2015
Sales to unaffiliated customers:
Timberlands	$	471		$	328		$	858		$	651
Real Estate & ENR	38			13			77			47
Wood Products	1,146			1,004			2,125			1,927
	1,655			1,345			3,060			2,625
Intersegment sales:
Timberlands	193			187			415			415
Wood Products	22			22			44			41
	215			209			459			456
Total sales	1,870			1,554			3,519			3,081
Intersegment eliminations	(215		)	(209		)	(459		)	(456		)
Total	$	1,655		$	1,345		$	3,060		$	2,625
Net contribution to earnings:
Timberlands	$	125		$	117		$	254		$	256
Real Estate & ENR ⁽¹⁾	12			10			27			33
Wood Products	156			71			243			133
	293			198			524			422
Unallocated items ⁽²⁾⁽³⁾	(18		)	11			(82		)	(54		)
Net contribution to earnings	275			209			442			368
Interest expense, net of capitalized interest	(114		)	(85		)	(209		)	(167		)
Earnings from continuing operations before income taxes	161			124			233			201
Income taxes	(31		)	1			(42		)	(8		)
Earnings from continuing operations	130			125			191			193
Earnings from discontinued operations, net of income taxes	38			19			58			52
Net earnings	168			144			249			245
Dividends on preference shares	(11		)	(11		)	(22		)	(22		)
Net earnings attributable to Weyerhaeuser common shareholders	$	157		$	133		$	227		$	223


(1)	The Real Estate & ENR segment includes the equity earnings from and investments in and advances to our Real Estate Development Ventures (as defined and described in Note 7: Related Parties ), which are accounted for under the equity method.

(2)

Unallocated items are gains or charges not related to or allocated to an individual operating segment. They include a portion of items such as: share-based compensation, pension and postretirement costs, foreign exchange transaction gains and losses associated with financing, equity earnings from our Timberland Venture, (as defined and described in Note 7: Related Parties ), the elimination of intersegment profit in inventory and the LIFO reserve.


(3)	As a result of reclassifying our former Cellulose Fibers segment as discontinued operations, Unallocated items also includes retained indirect corporate overhead costs previously allocated to the former segment.

A reconciliation of our business segment total assets to total assets in the Consolidated Balance Sheet is as follows:



DOLLAR AMOUNTS IN MILLIONS	JUNE 30, 2016		DECEMBER 31, 2015
Total Assets:
Timberlands and Real Estate & ENR ⁽¹⁾	$	15,888	$	7,260
Wood Products	1,840		1,541
Unallocated items	2,353		1,985
Discontinued operations	1,908		1,934
Total	$	21,989	$	12,720


(1)	Assets attributable to the Real Estate & ENR business segment are combined with total assets for the Timberlands segment because we do not produce separate balance sheets internally.

NOTE 3: DISCONTINUED OPERATIONS

On November 8, 2015, Weyerhaeuser announced that the board authorized the exploration of strategic alternatives for its Cellulose Fibers business segment.

On May 1, 2016, we entered into an agreement to sell our Cellulose Fibers pulp business to International Paper for $2.2 billion in cash. The pulp business consists of five pulp mills located in Columbus, Mississippi; Flint River, Georgia; New Bern, North Carolina; Port Wentworth, Georgia and Grande Prairie, Alberta, and two modified fiber mills located in Columbus, Mississippi and Gdansk, Poland. This transaction is expected to close in fourth quarter 2016.

On June 15, 2016, we entered into an agreement to sell our Cellulose Fibers liquid packaging board business to Nippon Paper Industries Co., Ltd., for $285 million in cash. Our liquid packaging board business consists of one mill located in Longview, Washington. This transaction is expected to close in third quarter 2016.

The transactions with International Paper and Nippon Paper Industries Co., Ltd., are subject to customary closing conditions, including regulatory review. We will continue to operate these operations separately from International Paper and Nippon Paper Industries Co., Ltd., until the respective transactions close.

The assets and liabilities of the pulp and liquid packaging board businesses, along with our investment in our printing papers joint venture, met the criteria necessary to be classified as held-for-sale during second quarter 2016, including the expectation that the sales of these assets are probable and will be completed within one year.

Results of operations for these businesses, along with our interest in our printing papers joint venture, have been reclassified to discontinued operations. These operations were previously reported as the Cellulose Fibers segment. These results have been summarized as "Earnings from discontinued operations, net of income taxes" on our Consolidated Statement of Operations for each period presented. The related assets and liabilities of these operations met the criteria for classification as "held for sale" and have been reclassified as discontinued operations on our Consolidated Balance Sheet for each date presented. We did not reclassify our Consolidated Statement of Cash Flows to reflect discontinued operations.

We expect to use after-tax proceeds from our sales of our discontinued operations for repayment of long-term debt.

The following table presents net earnings from discontinued operations.



	QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2016			JUNE 2015			JUNE 2016			JUNE 2015
Total net sales	$	456		$	467		$	886		$	914
Costs of products sold	374			417			760			809
Gross margin	82			50			126			105
Selling expenses	3			4			7			7
General and administrative expenses	8			8			17			16
Research and development expenses	2			1			3			3
Charges for integration and restructuring, closures and asset impairments ⁽¹⁾	25			—			31			—
Other operating income, net	(10		)	(6		)	(19		)	(14		)
Operating income	54			43			87			93
Equity loss from joint venture	(1		)	(7		)	(3		)	(13		)
Interest expense, net of capitalized interest	(1		)	(3		)	(3		)	(4		)
Earnings from discontinued operations before income taxes	52			33			81			76
Income taxes	(14		)	(14		)	(23		)	(24		)
Net earnings from discontinued operations	$	38		$	19		$	58		$	52


(1)	Charges for integration and restructuring, closures and asset impairments consist of costs related to our strategic evaluation of the Cellulose Fibers businesses and transaction-related costs.

The following table shows carrying values for assets and liabilities classified as discontinued operations as of June 30, 2016 and December 31, 2015.



DOLLAR AMOUNTS IN MILLIONS	JUNE 30, 2016		DECEMBER 31, 2015
Assets
Cash and cash equivalents	$	7	$	1
Receivables, less allowances	213		211
Inventories	230		243
Prepaid expenses	15		14
Property and equipment, net	1,313		1,339
Construction in progress	72		51
Timber and timberlands at cost, less depletion charged to disposals	—		1
Investments in and advances to joint ventures	58		74
Total assets of discontinued operations	$	1,908	$	1,934
Liabilities
Accounts payable	$	99	$	122
Accrued liabilities	94		118
Long-term debt	88		88
Deferred income taxes	359		336
Other liabilities	26		26
Total liabilities of discontinued operations	$	666	$	690

Cash flows from discontinued operations for the three and six months ended June 30, 2016 and June 30, 2015 are as follows:



	QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2016			JUNE 2015			JUNE 2016			JUNE 2015
Net cash provided by operating activities	$	68		$	73		$	134		$	173
Net cash used in investing activities	$	(12	)	$	(31	)	$	(34	)	$	(58	)

NOTE 4: MERGER WITH PLUM CREEK

On February 19, 2016, we merged with Plum Creek Timber Company, Inc. (Plum Creek). Plum Creek was a REIT that primarily owned and managed timberlands in the United States. Plum Creek also produced wood products, developed opportunities for mineral and other natural resource extraction, and sold real estate properties. The merger combined two industry leaders. The breadth and diversity of our combined timberlands, real estate, energy and natural resources assets, and wood products operations position Weyerhaeuser to capitalize on the improving housing market and to continue to capture HBU land values across the combined portfolio.

Under the merger agreement, each issued and outstanding share of Plum Creek common stock was exchanged for 1.60 Weyerhaeuser common shares, with cash paid in lieu of any fractional shares. Upon consummation of the merger, all outstanding Plum Creek stock options (all fully vested as of the merger date) and restricted stock units were converted into Weyerhaeuser stock options and restricted stock units, after giving effect to the 1.60 exchange ratio. Because the Plum Creek stock options were fully vested and relate to services rendered to Plum Creek prior to the merger, the replacement stock options were also fully vested and their fair value is included in the consideration transferred. Replacement restricted stock units relate to services to be performed post-merger and therefore were not included in consideration transferred. See additional details about replacement share-based payment awards in Note 14: Share-based Compensation .

The following table summarizes the total consideration transferred in the merger:



DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES
Number of Plum Creek common shares outstanding ⁽¹⁾	174,307,267
Exchange ratio per the merger agreement	1.60
Weyerhaeuser shares issued in exchange for Plum Creek equity ⁽²⁾	278,901,479
Price per Weyerhaeuser common share ⁽³⁾	$	22.87
Aggregate value of Weyerhaeuser common stock issued			$	6,378
Fair value of stock options ⁽⁴⁾			5
Estimated consideration transferred			$	6,383


(1)	The number of shares of Plum Creek common stock issued and outstanding as of February 19, 2016.


(2)	Total shares issued net of partial shares settled in cash.


(3)	The closing price of Weyerhaeuser common stock on the NYSE on February 19, 2016.


(4)	The estimated fair value of Plum Creek stock options for pre-merger services rendered.

We recognized $8 million and $118 million of merger-related costs that were expensed during the quarter and year-to-date period ended June 30, 2016, respectively. We also recognized $14 million of merger-related costs that were expensed during the fourth quarter of 2015. See Note 15: Charges for Integration and Restructuring, Closures, and Asset Impairments for descriptions of the components of merger-related costs. These costs are included in "Charges for integration and restructuring, closures and asset impairments" in our Consolidated Statement of Operations .

The amount of revenue and loss before income taxes from acquired Plum Creek operations included in our Consolidated Statement of Operations from the merger date to June 30, 2016 are as follows:



	QUARTER ENDED		YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2016		JUNE 2016
Net sales	$	243	$	369
Loss before income taxes	$	4	$	35

Summarized unaudited pro forma information that presents combined amounts as if this merger occurred at the beginning of 2015 is as follows:



	QUARTER ENDED				YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES	JUNE 2016		JUNE 2015		JUNE 2016		JUNE 2015
Net sales	$	1,655	$	1,640	$	3,216	$	3,318
Net earnings from continuing operations attributable to Weyerhaeuser common shareholders	$	122	$	114	$	266	$	184
Earnings from continuing operations per share attributable to Weyerhaeuser common shareholders, basic and diluted	$	0.16	$	0.14	$	0.35	$	0.23

Pro forma net earnings attributable to Weyerhaeuser common shareholders excludes $3 million and $134 million non-recurring merger-related costs (net of tax) incurred in the quarterly and six-month periods ended June 30, 2016, respectively. No non-recurring merger-related costs were incurred during the quarterly or six-month periods ended June 30, 2015. Pro forma data may not be indicative of the results that would have been obtained had these events occurred at the beginning of the periods presented, nor is it intended to be a projection of future results.

Weyerhaeuser has accounted for the merger transaction as the acquirer and has applied the acquisition method of accounting. Under the acquisition method, the assets acquired and liabilities assumed by Weyerhaeuser from Plum Creek were recorded as of the date of the acquisition at their respective estimated fair values.

The fair values of the assets acquired and liabilities assumed were preliminarily determined using the income, cost and market approaches. The fair value measurements were generally based on significant inputs that are not observable in the market and thus represent Level 3 measurements as defined in ASC 820, Fair Value Measurement , with the exception of certain long-term debt instruments assumed in the acquisition that can be valued using observable market inputs and are therefore Level 2 measurements. The income approach was primarily used to value acquired timberlands, minerals and mineral rights, equity investments in the Timberland Venture (as defined and described in Note 7: Related Parties ) and Real Estate Development Ventures (as defined and described in Note 7: Related Parties ), and the note payable to the Timberland Venture. The income approach estimates fair value for an asset based on the present value of cash flow projected to be generated by the asset. Projected cash flows are discounted at rates of return that reflect the relative risk of achieving the cash flows and the time value of money. The cost approach, which estimates value by determining the current cost of replacing an asset with another of equivalent economic utility, was used, as appropriate, for property and equipment. The cost to replace a given asset reflects the estimated reproduction or replacement cost for the property, less an allowance for loss in value due to depreciation. The market approach was primarily used to value higher and better use real estate tracts included within acquired timberlands, certain land and building assets included within acquired property and equipment, and long-term debt instruments. The market approach estimates fair value for an asset based on values of recent comparable transactions.

The initial allocation of purchase price was recorded using preliminary estimated fair value of assets acquired and liabilities assumed based upon the best information available to management at the time. The purchase price allocation was updated in the second quarter 2016. The measurement period adjustments reflect additional information obtained to record the fair value of certain assets acquired and liabilities assumed based on facts and circumstances existing as of the acquisition date. Measurement period adjustments reflected below did not have a material impact to earnings and had no impact to cash flows for the quarter or year-to-date period ended June 30, 2016.

Initial and updated preliminary estimated fair values of identifiable assets acquired and liabilities assumed as of the merger date are as follows:



DOLLAR AMOUNTS IN MILLIONS	FEBRUARY 19, 2016		MEASURMENT PERIOD ADJUSTMENTS			JUNE 30, 2016
Current assets	$	128	$	(2	)	$	126
Timber and timberlands	8,124		48			8,172
Minerals and mineral rights	312		(3		)	309
Property and equipment	272		(5		)	267
Equity investment in Timberland Venture	876		(35		)	841
Equity investment in Real Estate Development Ventures	88		(4		)	84
Other assets	163		2			165
Total assets acquired	9,963		1			9,964

Current liabilities	610		—			610
Long-term debt	2,056		—			2,056
Note Payable to Timberland Venture	837		1			838
Other liabilities	77		—			77
Total liabilities assumed	3,580		1			3,581

Net assets acquired	$	6,383	$	—		$	6,383

These estimated fair values are preliminary in nature and subject to further adjustments, which could be material. We have not identified any material unrecorded pre-merger contingencies where the related asset, liability or impairment is probable and the amount can be reasonably estimated. We are in the process of finalizing our valuations related to the following:


•	timber and timberlands,


•	minerals and mineral rights,


•	property and equipment,


•	acquired equity method investments, and


•	other contractual rights and obligations.

Our valuations will be finalized when certain information arranged to be obtained has been received and our review of that information has been completed. Prior to the finalization of the purchase price allocation, if information becomes available that would indicate it is probable that such events had occurred and the amounts can be reasonably estimated, such items will be included in the final purchase price allocation.

NOTE 5: NET EARNINGS PER SHARE AND SHARE REPURCHASES

NET EARNINGS PER SHARE

Our basic and diluted earnings per share attributable to Weyerhaeuser shareholders were:


•	$0.21 during second quarter 2016 and $0.33 during year-to-date 2016 ; and


•	$0.26 during second quarter 2015 and $0.43 during year-to-date 2015 .

Basic earnings per share is net earnings available to common shareholders divided by the weighted average number of our outstanding common shares, including stock equivalent units where there is no circumstance under which those shares would not be issued.

Diluted earnings per share is net earnings available to common shareholders divided by the sum of the weighted average number of our outstanding common shares and the effect of our outstanding dilutive potential common shares:



	QUARTER ENDED		YEAR-TO-DATE ENDED
SHARES IN THOUSANDS	JUNE 2016	JUNE 2015	JUNE 2016	JUNE 2015
Weighted average number of outstanding common shares – basic	743,140	516,626	687,572	520,008
Dilutive potential common shares:
Stock options	3,061	2,446	2,398	2,704
Restricted stock units	1,075	291	678	353
Performance share units	425	441	412	530
Total effect of outstanding dilutive potential common shares	4,561	3,178	3,488	3,587
Weighted average number of outstanding common shares – dilutive	747,701	519,804	691,060	523,595

We use the treasury stock method to calculate the effect of our outstanding stock options, restricted stock units and performance share units. Share-based payment awards that are contingently issuable upon the achievement of specified performance or market conditions are included in our diluted earnings per share calculation in the period in which the conditions are satisfied.

We use the if-converted method to calculate the effect of our outstanding preference shares. In applying the if-converted method, conversion is not assumed for purposes of computing diluted earnings per share if the effect would be antidilutive. Preference shares are antidilutive whenever the amount of the dividend declared in or accumulated for the current period per common share obtainable on conversion exceeds diluted earnings per share exclusive of the preference shares.

Preference shares are evaluated for participation on a quarterly basis to determine whether two-class presentation is required. Preference shares are considered to be participating as of the financial reporting period end to the extent they would participate in dividends paid to common shareholders. Preference shares are not considered participating for the quarter and year-to-date periods ended June 30, 2016 . Under the provisions of the two-class method, basic and diluted earnings per share would be presented for both preference and common shareholders.

Potential Shares Not Included in the Computation of Diluted Earnings per Share

The following shares were not included in the computation of diluted earnings per share because they were either antidilutive or the required performance or market conditions were not met. Some or all of these shares may be dilutive potential common shares in future periods.



	QUARTER ENDED		YEAR-TO-DATE ENDED
SHARES IN THOUSANDS	JUNE 2016	JUNE 2015	JUNE 2016	JUNE 2015
Stock options	1,916	2,102	1,916	2,102
Performance share units	471	354	471	354
Preference shares	25,273	24,987	25,273	24,987

STOCK REPURCHASE PROGRAM

We repurchased 26,673,396 shares of common stock for $832 million (including transaction fees) during second quarter 2016 and 58,040,937 shares of common stock for $1,695 million (including transaction fees) during year-to-date 2016 under the 2016 Share Repurchase Authorization. The 2016 Share Repurchase Authorization was approved in November 2015 by our Board of Directors and authorized management to repurchase up to $2.5 billion of outstanding shares subsequent to the closing of our merger with Plum Creek. This new authorization replaced the August 2015 share repurchase authorization. Transaction fees incurred for repurchases are not counted as use of funds authorized for repurchases under the 2016 Share Repurchase Authorization. All common stock purchases under the stock repurchase program were made in open-market transactions. As of June 30, 2016 , we had remaining authorization of $806 million for future stock repurchases.

We record share repurchases upon trade date as opposed to the settlement date when cash is disbursed. We record a liability to account for repurchases that have not been cash settled. Unsettled repurchases consisted of 2,260,407 shares totaling $66 million as of June 30, 2016 . There were no unsettled repurchases as of June 30, 2015 , or December 31, 2015 .

From July 1, 2016, to August 1, 2016, we repurchased 8,802,375 shares of common stock for $274 million under the 2016 Share Repurchase Authorization. As of August 1, 2016, we had remaining authorization of $532 million .

MANDATORY CONVERTIBLE PREFERENCE SHARES

On July 1, 2016, all outstanding 6.375% Mandatory Convertible Preference Shares, Series A (Preference Shares) converted into Weyerhaeuser common shares at a rate of 1.6929 Weyerhaeuser common shares per Preference Share. The company issued a total of 23.2 million Weyerhaeuser common shares in conjunction with the conversion, based on 13.7 million Preference Shares outstanding as of the conversion date.

In accordance with the terms of the Preference Shares, the number of Weyerhaeuser common shares issuable on conversion was determined based on the average volume weighted average price of $29.54 for Weyerhaeuser common shares over the 20-trading-day period beginning June 1, 2016, and ending on June 28, 2016.

NOTE 6: INVENTORIES

Inventories include raw materials, work-in-process and finished goods.



DOLLAR AMOUNTS IN MILLIONS	JUNE 30, 2016		DECEMBER 31, 2015
LIFO Inventories:
Logs and chips	$	11	$	5
Lumber, plywood and panels	54		48
Other products	13		11
FIFO or moving average cost inventories:
Logs and chips	33		36
Lumber, plywood, panels and engineered wood products	95		75
Other products	95		84
Materials and supplies	86		66
Total	$	387	$	325

LIFO – the last-in, first-out method – applies to major inventory products held at our U.S. domestic locations. The FIFO – the first-in, first-out method – or moving average cost methods apply to the balance of our domestic raw material and product inventories as well as for all material and supply inventories and all foreign inventories. If we used FIFO for all LIFO inventories, our stated inventories would have been higher by $68 million as of June 30, 2016 and $67 million as of December 31, 2015 .

NOTE 7: RELATED PARTIES

We use the equity method to account for our investments in various joint ventures. The following tables summarize the current period equity earnings or loss from and our respective balances of our investments in and advances to each of our joint ventures:



	QUARTER ENDED				YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2016		JUNE 2015		JUNE 2016		JUNE 2015
Equity earnings from joint ventures:
Timberland Venture	$	7	$	—	$	12	$	—
Real Estate Development Ventures	—		—		—		—
Total	$	7	$	—	$	12	$	—

					JUNE 30, 2016		DECEMBER 31, 2015
Investment in and advances to joint ventures:
Timberland Venture					$	825	$	—
Real Estate Development Ventures					80		—
Total					$	905	$	—

Through our merger with Plum Creek on February 19, 2016, we acquired equity interests in the Real Estate Development Ventures and the Timberland Venture. Additionally, through the merger Weyerhaeuser assumed the benefits and obligations associated with the formation of Twin Creeks Timber, LLC a timberland venture (Twin Creeks Venture). The Twin Creeks Venture was funded with initial capital contributions on April 1, 2016.

Real Estate Development Ventures

WestRock-Charleston Land Partners, LLC (WR-CLP) is a limited liability company which holds residential and commercial real estate development properties, currently under development (Class A Properties) and higher-value timber and development lands (Class B Properties) (referred to collectively as the Real Estate Development Ventures). We have a 3 percent interest in Class A Properties and a 50 percent interest in Class B Properties. WestRock Company is the other member of WR-CLP and owns 97 percent of the Class A Properties and 50 percent of the Class B Properties. The Company uses the equity method for both its Class A and Class B interests. Our share of the equity earnings are included in the net contribution to earnings of our Real Estate & ENR segment.

WR-CLP is a variable interest entity and is financed by regular capital calls from the manager of WR-CLP in proportion to a member’s ownership interest. If a member does not make a capital contribution, the member’s ownership interest is diluted. We are committed to make additional capital contributions of up to $29 million during the years 2016 to 2020 . We do not intend to provide any additional sources of financing for WR-CLP.

We are not the primary beneficiary of WR-CLP. We consider the activities that most significantly impact the economic performance of WR-CLP to be the day-to-day operating decisions along with the oversight responsibilities for the real estate development projects and properties. WestRock Company (the other equity member) has the power to direct the activities of WR-CLP that most significantly impact its economic performance through its ability to manage the day-to-day operations of WR-CLP. WestRock Company also has the ability to control all management decisions associated with all Class A and Class B Properties through its majority representation on the board of directors for the Class A Properties and due to its equal representation on the board of directors for the Class B Properties.

Our maximum exposure to loss is $80 million , the carrying amount of our investment in WR-CLP at June 30, 2016 , plus any required future capital contributions we make.

Timberland Venture

We hold preferred and common interests in Southern Diversified Timber, LLC, a timberland joint venture (Timberland Venture), which includes 100 percent of the preferred interests and 9 percent of the common interests. The Timberland Venture’s other member, an affiliate of Campbell Global LLC, holds 91 percent of the Timberland Venture’s common interests. The activities of the Timberland Venture consist primarily of owning timberlands and entering into cutting contracts with an affiliate of Campbell Global for the selling and harvesting of timber. An affiliate of Campbell Global is the manager of the Timberland Venture. Our investment in and share of the equity earnings of the Timberland Venture is not attributed to one of our business segments, and is reported in Unallocated Items.

The preferred interest is entitled to a cumulative preferred return equal to 7.875 percent per year. No distributions can be made on the common interests until all current period and prior period preferred returns have been paid. Both our preferred and common interests are accounted for based on the equity method. Equity earnings of the Timberland Venture are first allocated to our preferred interest to the extent of our preferred return, with any excess earnings allocated among the common interests based on ownership percentage. All of the equity earnings will be allocated to our preferred interest in years in which our preferred return equals or exceeds the earnings of the Timberland Venture. To the extent of shortfall in equity earnings (cumulative preferred return in excess of allocated equity earnings), future years’ excess earnings will be allocated to our preferred interest until the cumulative shortfall is eliminated.

On June 27, 2016, the other member of the Timberland Venture notified us of their intention to exercise its option to redeem its interest, which will result in a termination of the joint venture. Upon the redemption, the members’ capital accounts will be adjusted to reflect the fair value of the Timberland Venture’s net assets at the redemption date. The adjustments will first be allocated to our preferred interest to the extent that any accumulated shortfall in net income attributable to our preferred interest exists, but only to the extent that the fair value of the net assets of the Timberland Venture exceed book basis. The other member is entitled to receive timberlands and other assets equal to its adjusted capital account in redemption of its interest in the joint venture. We expect the redemption to occur during the second half of 2016.

The Timberland Venture is a variable interest entity. Aside from quarterly interest payments on the Note Payable to Timberland Venture, we did not provide financing or other support to the venture. The venture generates sufficient cash from operating activities to finance its operations.

We are not the primary beneficiary of the Timberland Venture. We do not manage the day-to-day operations of the Timberland Venture, have only limited protective rights and our involvement is generally limited to receiving distributions on our preferred and common interests. We are not the primary beneficiary because we do not direct the activities that most significantly impact the Timberland Venture’s economic performance. We believe that the activities that most significantly impact the Timberland Venture’s economic performance include managing the timberlands along with the timing and extent of the harvesting activities, neither of which we control.

Our maximum exposure to loss is $825 million , the carrying amount of the investment at June 30, 2016 . Generally, losses are first allocated among the common interests based on positive capital accounts in which we hold a 9 percent common interest. Losses would be allocated to our preferred interest only when losses have reduced capital accounts comprising the common interests to zero.

Twin Creeks Venture

On April 1, 2016, we contributed approximately 260,000 acres of our southern timberlands with an agreed-upon value of approximately $560 million to Twin Creeks Timber LLC (Twin Creeks Venture) in exchange for cash of approximately $440 million and a 21 percent ownership interest. The other members contributed cash of approximately $440 million for a combined 79 percent ownership interest.

The Twin Creeks Venture is expected to raise total committed capital of up to $950 million from its investors over the next several years. We expect to maintain a 21 percent ownership interest and to contribute additional capital of up to $85 million during the next several years. Unless extended by unanimous vote of all the investors, the term of the Twin Creeks Venture is 15 years.

In conjunction with contributing to the venture, we entered into a separate agreement to manage the timberlands owned by the Twin Creeks Venture, including harvesting activities, marketing and log sales activities, and replanting

and silviculture activities. This management agreement guarantees an annual return to the venture in the form of minimum quarterly payments from us equal to 3 percent of the fair value of the managed timberlands. We are also required to annually distribute 75 percent of any profits earned by us in excess of the minimum quarterly payments. The management agreement is cancellable at any time by Twin Creeks Timber LLC and otherwise will expire after three years.

The guaranteed return that the management agreement requires Weyerhaeuser to provide to the Twin Creeks Venture constitutes continuing involvement in the timberlands we contributed to the venture. This continuing involvement prohibits recognition of the contribution as a sale and requires application of the deposit method to account for the cash payment received. By applying the deposit method to the contribution of timberlands to the venture:


•	our receipt of $440 million proceeds from the contribution of timberlands to the venture was recorded as a noncurrent liability – "Deposit from contribution of timberlands to related party" – on our Consolidated Balance Sheet ;


•	the contributed timberlands will continue to be reported within the "Timber and timberlands at cost, less depletion charged to disposals" on our Consolidated Balance Sheet with no change in value;


•	no gain or loss was recognized in our Consolidated Statement of Operations ; and


•	our balance sheet does not reflect our 21 percent ownership interest in the Twin Creeks Venture.

The receipt of $440 million was classified as a cash flow from investing activities in our Consolidated Statement of Cash Flows . The cash proceeds from our contribution of timberlands were used to fund our share repurchases described in Note 5: Net Earnings per Share and Share Repurchases .

The "Deposit from contributions of timberlands to related party" liability balance will subsequently increase for additional payments received from the venture (e.g., distributions) and decrease for any payments by us to the venture (e.g., the guaranteed return payments) with no corresponding impact to earnings. These cash flows are included in "Other" cash flows from investing activities in our Consolidated Statement of Cash Flows .

All revenues and expenses from our harvest and sale of standing timber from the contributed timberland will continue to be reported in our Consolidated Statement of Operations and attributed to our Timberlands business segment as though the contribution had not occurred.

NOTE 8: PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

The components of net periodic benefit costs (credits) are:



	PENSION
	QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2016			JUNE 2015			JUNE 2016			JUNE 2015
Service cost ⁽¹⁾	$	11		$	13		$	24		$	28
Interest cost	69			68			137			133
Expected return on plan assets	(123		)	(121		)	(246		)	(239		)
Amortization of actuarial loss	40			47			78			91
Amortization of prior service cost	1			1			2			2
Accelerated pension costs included in Plum Creek merger-related costs (Note 15)	—			—			5			—
Total net periodic benefit cost (credit) - pension	$	(2	)	$	8		$	—		$	15


(1)	Service cost includes $3 million and $5 million for quarters ended June 30, 2016, and June 30, 2015, respectively, and $7 million and $8 million for the year-to-date periods ended June 30, 2016, and June 30, 2015, respectively for employees of our Cellulose Fibers segment. These charges are included in our results of discontinued operations.



	OTHER POSTRETIREMENT BENEFITS
	QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2016			JUNE 2015			JUNE 2016			JUNE 2015
Interest cost	$	3		$	2		$	5		$	5
Amortization of actuarial loss	2			3			4			5
Amortization of prior service credit	(2		)	(2		)	(4		)	(4		)
Total net periodic benefit cost - other postretirement benefits	$	3		$	3		$	5		$	6

ASSUMED PLANS FROM MERGER WITH PLUM CREEK

Upon our merger with Plum Creek, we assumed one qualified pension plan and two nonqualified pension plans. All active participants in these plans became fully vested and the plans were frozen as of February 19, 2016. The cumulative funded status of the assumed plans as of February 19, 2016, was a net liability of $62 million .

The expected return on assets for the qualified plan assumed is 7 percent . Assets of $47 million related to the nonqualified plans are held in a grantor trust and are subject to the claims of creditors in the event of bankruptcy. As a result, these are not considered plan assets and have not been netted against the nonqualified pension liability. These assets are included in "Other assets" in our Consolidated Balance Sheet .

During first quarter 2016, we recognized $5 million of pension benefit costs from change in control provisions for certain Plum Creek executives. These enhanced pension benefits were triggered by changes in control and retention decisions made after the completion of the merger (see Note 15: Charges for Integration and Restructuring, Closures and Impairments ). We did not recognize any additional costs for change in control provisions during second quarter 2016.

FAIR VALUE OF PENSION PLAN ASSETS AND OBLIGATION

We estimate the fair value of pension plan assets based upon the information available during the year-end reporting process. In some cases, primarily private equity funds, the information available consists of net asset values as of an interim date, cash flows between the interim date and the end of the year and market events. We updated the year-end estimated fair value of pension plan assets to incorporate year-end net asset values reflected in financial statements received after we have filed our Annual Report on Form 10-K. During second quarter 2016, we recorded an increase in the fair value of the pension assets of $7 million , or less than 1 percent . We also updated our census data that is used to estimate our projected benefit obligation for pension and other postretirement benefit plans. As a result of that update, during second quarter 2016, we recorded an increase to the projected benefit obligation of $1 million , or less than 1 percent . The net effect was a $6 million increase in the funded status.

Consistent with accounting for the merger as the acquirer in a business combination (see Note 4: Merger with Plum Creek ), pension assets and benefit obligations for plans assumed from Plum Creek were re-measured to reflect their fair value as of the merger date. This included updating asset values, updating discount rates to reflect market conditions as of the date of the merger, and freezing benefit accruals. The fair value of these items as of February 19, 2016, were as follows:


•	$137 million qualified pension plan assets;


•	$149 million qualified pension plan projected benefit obligation; and


•	$50 million nonqualified pension plan projected benefit obligation.

No adjustments were made to the fair value of assets or projected benefit obligations of plans assumed from Plum Creek during the second quarter.

EXPECTED CONTRIBUTIONS AND BENEFIT PAYMENTS

In 2016 we expect to:


•	be required to contribute approximately $17 million for our Canadian registered plan;


•	be required to contribute or make benefit payments for our Canadian nonregistered plans of $3 million ;


•	make benefit payments of $57 million for our U.S. nonqualified pension plans, including $38 million of benefit payments for plans assumed from Plum Creek to be paid out of assets held in grantor trusts; and


•	make benefit payments of $22 million for our U.S. and Canadian other postretirement plans.

We do not anticipate making a contribution to our U.S. qualified pension plans for 2016 .

NOTE 9: ACCRUED LIABILITIES

Accrued liabilities were comprised of the following:



DOLLAR AMOUNTS IN MILLIONS	JUNE 30, 2016		DECEMBER 31, 2015
Wages, salaries and severance pay	$	130	$	117
Pension and other postretirement benefits	88		44
Vacation pay	34		30
Taxes – Social Security and real and personal property	33		17
Interest	126		102
Customer rebates and volume discounts	30		31
Deferred income	63		28
Other	86		58
Total	$	590	$	427

NOTE 10: LONG-TERM DEBT AND LINES OF CREDIT

This note provides details about our:


•	long-term debt assumed in the Plum Creek merger and


•	new term loans issued.

LONG-TERM DEBT ASSUMED IN THE PLUM CREEK MERGER

Through our merger with Plum Creek, we assumed long-term debt instruments consisting of:


•	two issuances of publicly traded Senior Notes;


•	an Installment Note (defined and described below); and


•	the Note Payable to Timberland Venture (defined and described below).

Concurrent with the merger, we repaid in full the outstanding balances of Plum Creek's Revolving Line of Credit and Term Loan using $720 million of cash on hand.

Senior Notes

The assumed Senior Notes are publicly traded and were issued by Plum Creek Timberlands, L.P. (PC Timberlands) and are fully and unconditionally guaranteed by Weyerhaeuser Company as of the acquisition date. See Note 18: Condensed Consolidating Financial Information for issuer and guarantor financial information. There were two separate issuances of Senior Notes: $569 million (principal) of 4.70 percent notes which mature in 2021 and $325 million (principal) of 3.25 percent notes which mature in 2023. The Senior Notes are redeemable prior to maturity;

however, they are subject to a premium on redemption, which is based upon interest rates of U.S. Treasury securities having similar average maturities.

Through preliminary acquisition accounting the Senior Notes were recognized at estimated fair values of $614 million for the 4.70 percent notes and $324 million for the 3.25 percent notes as of the acquisition date. The differences between cash interest payments and the amounts recorded as interest expense at the effective market rates will adjust the carrying values of the notes to the principal amounts at maturity.

Installment Note

We assumed an installment note (Installment Note) payable to WestRock Land and Development, LLC (WR LD) that was issued in connection with Plum Creek's acquisition of certain timberland assets. The principal balance of the Installment Note is $860 million . Following the issuance, WR LD pledged the installment note to certain banks. The annual interest rate on the Installment Note is fixed at 5.207 percent . Interest is paid semi-annually with the principal due upon maturity in December 2023. The term may be extended at the request of the holder if the company at the time of the request intends to refinance all or a portion of the Installment Note for a term of five years or more. The Installment Note is generally not redeemable prior to maturity except in certain limited circumstances and could be subject to a premium on redemption.

We receive patronage refunds under the Installment Note. Patronage refunds are distributions of profits from banks in the farm credit system, which are cooperatives that are required to distribute profits to their members. Patronage distributions, which are made in either cash or stock, are received in the year after they were earned and are recorded as offsets to interest expense.

Through preliminary acquisition accounting, the Installment Note was recognized at an estimated fair value of $893 million as of the acquisition date. The difference between the cash interest payments and the amount being recorded as interest expense at the effective market rate will reduce the carrying value of the Installment Note to the principal amount at the maturity date.

Note Payable to Timberland Venture

We have assumed a promissory note payable to Timberland Venture (Note Payable to Timberland Venture) that has a principal balance of $783 million . The annual interest rate on the Note Payable to Timberland Venture is fixed at 7.375 percent . Interest is paid quarterly with the principal due upon maturity. The note matures on October 1, 2018, but may be extended until October 1, 2020, at our election. The note is not redeemable prior to maturity.

Through preliminary acquisition accounting, the Note Payable to Timberland Venture was recognized at an estimated fair value of $838 million as of the acquisition date. The difference between the cash interest payments and the amount being recorded as interest expense at the effective market rate will reduce the carrying value of the note to the principal amount at the maturity date.

The Timberland Venture is a related party, as described in Note 7: Related Parties .

NEW TERM LOANS ISSUED

During February 2016 and subsequent to completion of the Plum Creek merger, we entered into a $600 million 18-month senior unsecured term loan maturing in August 2017. Borrowings are currently at LIBOR plus 1.05 percent . As of June 30, 2016 , we had $600 million outstanding under this facility.

During March 2016, we entered into a $1.9 billion 18-month senior unsecured term loan maturing in September 2017. Borrowings are currently at LIBOR plus 1.05 percent . At June 30, 2016 , we had $800 million outstanding under this facility.

NOTE 11: FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair values and carrying values of our long-term debt consisted of the following:



	JUNE 30, 2016				DECEMBER 31, 2015
DOLLAR AMOUNTS IN MILLIONS	CARRYING VALUE		FAIR VALUE (LEVEL 2)		CARRYING VALUE		FAIR VALUE (LEVEL 2)
Long-term Debt – fixed rate	$	6,066	$	7,184	$	4,238	$	4,967
Long-term Debt – variable rate	1,947		1,950		549		550
Note Payable to Timberland Venture	830		845		—		—
Total Debt	$	8,843	$	9,979	$	4,787	$	5,517

To estimate the fair value of fixed rate long-term debt, we used the following valuation approaches:


•	market approach – based on quoted market prices we received for the same types and issues of our debt; or


•	income approach – based on the discounted value of the future cash flows using market yields for the same type and comparable issues of debt.

We believe that our variable rate long-term debt instruments have net carrying values that approximate their fair values with only insignificant differences.

The fair value of the Note Payable to Timberland Venture is estimated using a market approach based on quoted market prices we received for comparable issues of debt.

The inputs to these valuations are based on market data obtained from independent sources or information derived principally from observable market data. The difference between the fair value and the carrying value represents the theoretical net premium or discount we would pay or receive to retire all debt at the measurement date.

FAIR VALUE OF OTHER FINANCIAL INSTRUMENTS

We believe that our other financial instruments, including cash and cash equivalents, short-term investments, mutual fund investments held in grantor trusts, receivables, and payables, have net carrying values that approximate their fair values with only insignificant differences. This is primarily due to the short-term nature of these instruments and the allowance for doubtful accounts.

NOTE 12: LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES

This note provides details about our:


•	legal proceedings and


•	environmental matters.

LEGAL PROCEEDINGS

We are party to various legal proceedings arising in the ordinary course of business. We are not currently a party to any legal proceeding that management believes could have a material adverse effect on our long-term consolidated financial position, results of operations or cash flows. See Note 17: Income Taxes for a discussion of a tax proceeding involving Plum Creek REIT's 2008 U.S. federal income tax return.

ENVIRONMENTAL MATTERS

Our environmental matters include:


•	site remediation and


•	asset retirement obligations.

Site Remediation

Under the Comprehensive Environmental Response Compensation and Liability Act – commonly known as the Superfund – and similar state laws, we:


•	are a party to various proceedings related to the cleanup of hazardous waste sites and


•	have been notified that we may be a potentially responsible party related to the cleanup of other hazardous waste sites for which proceedings have not yet been initiated.

We have received notification from the Environmental Protection Agency (the EPA) and have acknowledged that we are a potentially responsible party in a portion of the Kalamazoo River Superfund site in southwest Michigan. Our involvement in the remediation site is based on our former ownership of the Plainwell, Michigan mill located within the remediation site. In 2015, we received invitations from the EPA to negotiate an administrative order on consent for a contaminant removal action for a portion of the site comprising a stretch of the river approximately 1.7 miles long that the EPA refers to as the Otsego Township Dam Area. Several other companies also operated upstream pulp mills, and two other parties received the same invitations. On April 14, 2016, the EPA issued an administrative order to the company and the other parties, the terms and scope of which are generally consistent with the company’s and the other parties’ discussions with the EPA. The company and the other parties have begun to jointly implement the administrative order. At this time we do not expect to incur material losses related to the implementation of the administrative order.

As of June 30, 2016 , our total accrual for future estimated remediation costs on the active Superfund sites and other sites for which we are responsible was approximately $36 million . These reserves are recorded in "Accrued liabilities" and "Other liabilities" on our Consolidated Balance Sheet . The accrual has not changed materially since the end of 2015.

Asset Retirement Obligations

We have obligations associated with the retirement of tangible long-lived assets consisting primarily of reforestation obligations related to forest management licenses in Canada and obligations to close and cap landfills. As of June 30, 2016 , our accrued balance for these obligations was $32 million . These obligations are recorded in "Accrued liabilities" and "Other liabilities" on our Consolidated Balance Sheet . The accruals have not changed materially for continuing operations since the end of 2015.

Some of our sites have materials containing asbestos. We have met our current legal obligation to identify and manage these materials. In situations where we cannot reasonably determine when materials containing asbestos might be removed from the sites, we have not recorded an accrual because the fair value of the obligation cannot be reasonably estimated.

NOTE 13: CUMULATIVE OTHER COMPREHENSIVE INCOME (LOSS)

Changes in amounts included in our cumulative other comprehensive income (loss) by component are:



			PENSION						OTHER POSTRETIREMENT BENEFITS
DOLLAR AMOUNTS IN MILLIONS	Foreign currency translation adjustments		Actuarial losses			Prior service costs			Actuarial losses			Prior service credits			Unrealized gains on available-for-sale securities		Total
Beginning balance as of December 31, 2015	$	207	$	(1,372	)	$	(11	)	$	(77	)	$	35		$	6	$	(1,212	)
Other comprehensive income (loss) before reclassifications	39		(19		)	—			3			—			1		24
Income taxes	—		4			—			(1		)	—			—		3
Net other comprehensive income (loss) before reclassifications	39		(15		)	—			2			—			1		27
Amounts reclassified from cumulative other comprehensive income (loss) ⁽¹⁾	—		78			2			4			(4		)	—		80
Income taxes	—		(27		)	(1		)	(1		)	1			—		(28		)
Net amounts reclassified from cumulative other comprehensive income (loss)	—		51			1			3			(3		)	—		52
Total other comprehensive income (loss)	39		36			1			5			(3		)	1		79
Ending balance as of June 30, 2016	$	246	$	(1,336	)	$	(10	)	$	(72	)	$	32		$	7	$	(1,133	)
(1) Actuarial losses and prior service credits (cost) are included in the computation of net periodic benefit costs (credits). See Note 8: Pension and Other Postretirement Benefit Plans .

NOTE 14: SHARE-BASED COMPENSATION

In year-to-date 2016 , we granted 6,121,835 stock options, 1,954,769 restricted stock units (RSUs), 495,079 performance share units (PSUs) and 106,752 stock appreciation rights. In addition, 1,128,765 outstanding RSUs and 288,780 outstanding PSUs vested during year-to-date 2016 . A total of 1,516,957 shares of common stock were issued as a result of RSU vesting, PSU vesting and stock option exercises.

SHARE-BASED COMPENSATION RESULTING FROM OUR MERGER WITH PLUM CREEK

Included in the award activity above are replacement awards granted as a result of the merger with Plum Creek. Eligible outstanding Plum Creek stock options, restricted stock unit and deferred stock unit awards were converted into equivalent equity awards with respect to Weyerhaeuser Common Shares, after giving effect to the appropriate adjustments to reflect the consummation of the merger. In total, we issued replacement awards consisting of 1,953,128 stock options and 1,248,006 RSUs. We also assumed 289,910 value management awards (VMAs) through the merger with Plum Creek.

Replacement Stock Option Awards

The replacement stock option awards issued as a result of the merger with Plum Creek have similar exercise provisions as the terms of our current awards. All replacement stock option awards were fully vested prior to the date of the merger, so no expense will be recorded. The value of the replacement stock option awards was $5 million , which was included in the equity consideration issued in the merger as described in Note 4: Merger with Plum Creek .

Replacement Restricted Stock Unit Awards

The replacement RSUs issued as a result of the merger with Plum Creek have similar vesting provisions as the terms of existing Weyerhaeuser restricted stock unit awards. Expense for replacement RSUs will continue to be recognized over the remaining service period unless a qualifying termination occurs. A qualifying termination of an awardee will result in acceleration of vesting and expense recognition in the period that the qualifying termination occurs. Qualifying terminations during year-to-date 2016 resulted in accelerated vesting of 669,490 of the replacement RSUs and recognition of $15 million of expense. This accelerated expense is included in merger-related integration costs as described in Note 15: Charges for Integration and Restructuring, Closures and Asset Impairments .

Value Management Awards

Following the merger, the VMAs assumed were valued at target. All outstanding VMAs, if earned, will vest December 31, 2017, and be paid in the first quarter of 2018. The VMAs are classified and accounted for as liabilities, as they will be cash settled upon vesting. The expense recognized over the remaining performance period will equal the cash value of an award as of the last day of the performance period multiplied by the number of awards that are earned. Expense for VMAs will continue to be recognized over the remaining service period unless a qualifying termination occurs. A qualifying termination of an awardee will result in acceleration of vesting and expense recognition in the period that the qualifying termination occurs. Qualifying terminations during year-to-date 2016 resulted in $6 million of expense recognized. This accelerated expense is included in merger-related integration costs as described in Note 15: Charges for Integration and Restructuring, Closures and Asset Impairments .

STOCK OPTIONS

Excluding replacement awards granted as a result of the merger, the weighted average exercise price of stock options granted to date in 2016 was $23.09 . The vesting and post-termination vesting terms for stock options granted to date in 2016 were as follows:


•	vest ratably over four years, except for the replacement stock option awards granted as a result of the Plum Creek merger, which were fully vested as of the grant date;


•	vest or continue to vest in the event of death while employed, disability or retirement at an age of at least 62;


•	continue to vest upon retirement at an age of at least 62, but a portion of the grant forfeits if retirement occurs before the one year anniversary of the grant;


•	continue to vest for one year in the event of involuntary termination when the retirement criteria has not been met; and


•	stop vesting for all other situations including early retirement prior to age 62.

Weighted Average Assumptions Used in Estimating the Value of Stock Options Granted in 2016



	Stock Options ⁽¹⁾
Expected volatility	25.43		%
Expected dividends	5.37		%
Expected term (in years)	4.95
Risk-free rate	1.28		%
Weighted average grant date fair value		$2.73


(1)	Weighted average assumptions presented do not include the replacement stock option awards issued as consideration for our merger with Plum Creek.

RESTRICTED STOCK UNITS

Excluding replacement awards granted as a result of the merger, the weighted average fair value of the RSUs granted in 2016 was $23.09 . The vesting provisions for RSUs granted in 2016 were as follows:


•	vest ratably over four years;


•	immediately vest in the event of death while employed or disability;


•	continue to vest upon retirement at an age of at least 62, but a portion of the grant forfeits if retirement occurs before the one year anniversary of the grant;


•	continue vesting for one year in the event of involuntary termination when the retirement criteria has not been met; and


•	will forfeit upon termination of employment in all other situations including early retirement prior to age 62.

PERFORMANCE SHARE UNITS

The weighted average grant date fair value of PSUs granted in 2016 was $20.83 .

The final number of shares granted in 2016 will range from 0 percent to 150 percent of each grant's target, depending upon actual company performance.

The ultimate number of PSUs earned is based on three measures:


•	our relative total shareholder return (TSR) ranking measured against the S&P 500 over a three year period;


•	our relative TSR ranking measured against an industry peer group of companies over a three year period; and


•	achievement of Plum Creek merger cost synergy targets.

The vesting provisions for PSUs granted in 2016 were as follows:


•	vest 100 percent on the third anniversary of the grant date as long as the individual remains employed by the company;


•	fully vest in the event the participant dies or becomes disabled while employed;


•	continue to vest upon retirement at an age of at least 62, but a portion of the grant forfeits if retirement occurs before the one year anniversary of the grant;


•	continue vesting for one year in the event of involuntary termination when the retirement criteria has not been met and the employee has met the second anniversary of the grant date; and


•	will forfeit upon termination of employment in all other situations including early retirement prior to age 62.

Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted in 2016



	Performance Share Units
Performance period	1/1/2016 – 12/31/2018
Valuation date closing stock price	$	23.09
Expected dividends	5.37					%
Risk-free rate	0.48		%	–	0.93	%
Expected volatility	23.57		%	–	28.09	%

STOCK APPRECIATION RIGHTS

Stock appreciation rights are re-measured to reflect the fair value at each reporting period. The following table shows the weighted average assumptions applied to all outstanding stock appreciation rights as of June 30, 2016 .

Weighted Average Assumptions Used to Re-measure the Value of Stock Appreciation Rights as of June 30, 2016



	Stock Appreciation Rights
Expected volatility	23.29		%
Expected dividends	4.27		%
Expected term (in years)	2.44
Risk-free rate	0.85		%
Weighted average fair value		$6.52

The vesting and post-termination vesting terms for stock appreciation rights granted in 2016 are the same as for stock options described above.

NOTE 15: CHARGES FOR INTEGRATION AND RESTRUCTURING, CLOSURES AND ASSET IMPAIRMENTS



	QUARTER ENDED				YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2016		JUNE 2015		JUNE 2016		JUNE 2015
Integration and restructuring charges related to our merger with Plum Creek:
Termination benefits	$	3	$	—	$	48	$	—
Acceleration of share-based compensation related to qualifying terminations (Note 14)	2		—		21		—
Acceleration of pension benefits related to qualifying terminations (Note 8)	—		—		5		—
Professional services	—		—		39		—
Other integration and restructuring costs	3		—		5		—
Total integration and restructuring charges related to our merger with Plum Creek	8		—		118		—
Charges related to closures and other restructuring activities:
Termination benefits	3		—		3		1
Other closures and restructuring costs	1		—		2		—
Total charges related to closures and other restructuring activities	4		—		5		1
Impairments of long-lived assets	2		—		2		13
Total charges for integration and restructuring, closures and impairments	$	14	$	—	$	125	$	14

During 2016 , we incurred and accrued for termination benefits (primarily severance), accelerated share-based payment costs, and accelerated pension benefits based upon actual and expected qualifying terminations of certain

employees as a result of restructuring decisions made subsequent to the merger. We also incurred non-recurring professional services costs for investment banking, legal and consulting, and certain other fees directly attributable to our merger with Plum Creek.

During 2015, we recognized a noncash impairment charge of $13 million in first quarter 2015 related to a nonstrategic asset held in Unallocated Items that was sold in second quarter 2015. The fair value of the asset was determined using significant unobservable inputs (level 3) based on discounted cash flow model.

Changes in accrued severance related to restructuring during the year-to-date period ended June 30, 2016 , were as follows:



DOLLAR AMOUNTS IN MILLIONS
Accrued severance as of December 31, 2015	$	5
Charges	51
Payments	(26		)
Accrued severance as of June 30, 2016	$	30

Accrued severance is recorded within the "Wages, salaries and severance pay" component of "Accrued liabilities" on our Consolidated Balance Sheet as detailed in Note 9: Accrued Liabilities . The majority of the accrued severance balance as of June 30, 2016 , is expected to be paid within one year.

NOTE 16: OTHER OPERATING COSTS (INCOME), NET

Other operating costs (income), net:


•	includes both recurring and occasional income and expense items and


•	can fluctuate from year to year.

ITEMS INCLUDED IN OTHER OPERATING COSTS (INCOME), NET



	QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2016			JUNE 2015			JUNE 2016			JUNE 2015
Gain on disposition of nonstrategic assets	$	(10	)	$	(4	)	$	(46	)	$	(6	)
Foreign exchange losses (gains), net	1			(8		)	(12		)	21
Litigation expense, net	18			6			21			11
Other, net	(4		)	2			(10		)	(1		)
Total other operating costs (income), net	$	5		$	(4	)	$	(47	)	$	25

Gain on disposition of nonstrategic assets included a $36 million pretax gain recognized in the first quarter of 2016 on the sale of our Federal Way, Washington headquarters campus.

Foreign exchange losses (gains) result from changes in exchange rates, primarily related to our Canadian operations.

NOTE 17: INCOME TAXES

As a REIT, we generally are not subject to federal corporate level income taxes on REIT taxable income that is distributed to shareholders. We are required to pay corporate income taxes on earnings of our TRS, which includes our manufacturing businesses and the portion of our Timberlands and Real Estate & ENR segments' income included in the TRS.

The quarterly provision for income taxes is based on the current estimate of the annual effective tax rate. Our 2016 estimated annual effective tax rate for our TRS is approximately 32 percent , which is lower than the U.S. domestic statutory federal tax rate primarily due to favorable permanent tax deductions and lower foreign tax rates applicable to foreign earnings, partially offset by state income taxes.

Following the merger with Plum Creek in first quarter 2016, our income tax receivables and deferred income tax balances for our TRS have been adjusted to include Plum Creek’s TRS, which include $4 million in federal income tax receivables and $61 million in deferred income tax assets arising from temporary differences between the tax bases and book bases of assets acquired and liabilities assumed in the merger. See Note 4: Merger with Plum Creek for additional details.

ONGOING IRS MATTER

We received a Notice of Final Partnership Administrative Adjustment (FPAA), dated July 20, 2016, from the Internal Revenue Service (IRS) in regard to Plum Creek REIT’s 2008 U.S. federal income tax treatment of the transaction forming the Timberland Venture. The IRS is asserting the transfer of the timberlands to the Timberland Venture was a taxable transaction to the company at the time of the transfer rather than a nontaxable capital contribution. We plan to file a petition in the U.S. Tax Court and will vigorously contest this adjustment.

In the event that we are unsuccessful in this tax litigation, we could be required to recognize and distribute gain to shareholders of approximately $600 million and pay built-in gains tax of approximately $100 million . We would also be required to pay interest on both of those amounts, which would be substantial. We expect that as much as 80 percent of any such distribution could be made with our common stock, and shareholders would be subject to tax on the distribution at the applicable capital gains tax rate. Alternatively, we could elect to retain the gain and pay corporate-level tax to minimize interest costs to the company.

Although the outcome of this process cannot be predicted with certainty, we are confident in our position based on U.S. tax law and believe we will be successful in defending it. Accordingly, no reserve has been recorded related to this matter.

NOTE 18: CONDENSED CONSOLIDATING FINANCIAL INFORMATION

PC Timberlands, a 100 percent owned subsidiary of Weyerhaeuser Company (WY), is the primary obligor of $894 million in debt securities that are registered under the U.S. Securities Act of 1933. WY has guaranteed this debt, fully, unconditionally and irrevocably assuming and agreeing to perform, jointly and severally with PC Timberlands, the payment and covenant obligations for the debt.

The following condensed consolidating financial information provides information about: PC Timberlands, as issuer and primary obligor of the registered debt securities; Weyerhaeuser, as guarantor of the registered debt securities; and all other subsidiaries, as required by SEC Rule 3-10 of Regulation S-X (Rule 3-10). This condensed consolidating information was prepared in accordance with US GAAP, with the exception of investments in subsidiaries, which are accounted for using the equity method as required by Rule 3-10.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS – QUARTER



	QUARTER ENDED JUNE 30, 2016
DOLLAR AMOUNTS IN MILLIONS	Parent Company – WY			Subsidiary Issuer – PC Timberlands			Non-Issuer and Non-Guarantor Subsidiaries			Eliminations			Total Company
Net sales	$	186		$	55		$	1,618		$	(204	)	$	1,655
Costs of products sold	68			37			1,360			(207		)	1,258
Gross margin	118			18			258			3			397
Other operating expenses, net	12			14			113			—			139
Operating income	106			4			145			3			258
Non-operating expense, net	(23		)	(9		)	(65		)	—			(97		)
Earnings (loss) from continuing operations before income taxes	83			(5		)	80			3			161
Income taxes	—			—			(31		)	—			(31		)
Earnings (loss) from continuing operations	83			(5		)	49			3			130
Earnings from discontinued operations, net of income taxes	—			—			38			—			38
Net earnings (loss)	83			(5		)	87			3			168
Dividends on preference shares	(11		)	—			—			—			(11		)
Net earnings (loss) attributable to Weyerhaeuser common shareholders	$	72		$	(5	)	$	87		$	3		$	157



	QUARTER ENDED JUNE 30, 2015
DOLLAR AMOUNTS IN MILLIONS	Parent Company – WY			Subsidiary Issuer – PC Timberlands*		Non-Issuer and Non-Guarantor Subsidiaries			Eliminations			Total Company
Net sales	$	181		$	—	$	1,327		$	(163	)	$	1,345
Costs of products sold	55			—		1,170			(168		)	1,057
Gross margin	126			—		157			5			288
Other operating expenses, net	17			—		71			—			88
Operating income	109			—		86			5			200
Non-operating expense, net	(13		)	—		(63		)	—			(76		)
Earnings from continuing operations before income taxes	96			—		23			5			124
Income taxes	—			—		1			—			1
Earnings from continuing operations	96			—		24			5			125
Earnings from discontinued operations, net of income taxes	—			—		19			—			19
Net earnings	96			—		43			5			144
Dividends on preference shares	(11		)	—		—			—			(11		)
Net earnings attributable to Weyerhaeuser common shareholders	$	85		$	—	$	43		$	5		$	133


*	The Subsidiary Issuer – PC Timberlands – was acquired February 19, 2016, and there were no guarantees by Parent Company prior to that date. As such, information is included for this entity beginning on the acquisition date.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS – YEAR-TO-DATE



	YEAR-TO-DATE ENDED JUNE 30, 2016
DOLLAR AMOUNTS IN MILLIONS	Parent Company – WY			Subsidiary Issuer – PC Timberlands*			Non-Issuer and Non-Guarantor Subsidiaries			Eliminations			Total Company
Net sales	$	372		$	82		$	2,996		$	(390	)	$	3,060
Costs of products sold	125			61			2,551			(390		)	2,347
Gross margin	247			21			445			—			713
Other operating expenses, net	93			36			173			—			302
Operating income (loss)	154			(15		)	272			—			411
Non-operating expense, net	(35		)	(15		)	(128		)	—			(178		)
Earnings (loss) from continuing operations before income taxes	119			(30		)	144			—			233
Income taxes	—			—			(42		)	—			(42		)
Earnings (loss) from continuing operations	119			(30		)	102			—			191
Earnings from discontinued operations, net of income taxes	—			—			58			—			58
Net earnings (loss)	119			(30		)	160			—			249
Dividends on preference shares	(22		)	—			—			—			(22		)
Net earnings (loss) attributable to Weyerhaeuser common shareholders	$	97		$	(30	)	$	160		$	—		$	227



	YEAR-TO-DATE ENDED JUNE 30, 2015
DOLLAR AMOUNTS IN MILLIONS	Parent Company – WY			Subsidiary Issuer – PC Timberlands*		Non-Issuer and Non-Guarantor Subsidiaries			Eliminations			Total Company
Net sales	$	379		$	—	$	2,579		$	(333	)	$	2,625
Costs of products sold	116			—		2,273			(339		)	2,050
Gross margin	263			—		306			6			575
Other operating expenses, net	36			—		189			—			225
Operating income	227			—		117			6			350
Non-operating expense, net	(19		)	—		(130		)	—			(149		)
Earnings (loss) from continuing operations before income taxes	208			—		(13		)	6			201
Income taxes	—			—		(8		)	—			(8		)
Earnings (loss) from continuing operations	208			—		(21		)	6			193
Earnings from discontinued operations, net of income taxes	—			—		52			—			52
Net earnings	208			—		31			6			245
Dividends on preference shares	(22		)	—		—			—			(22		)
Net earnings attributable to Weyerhaeuser common shareholders	$	186		$	—	$	31		$	6		$	223


*	The Subsidiary Issuer – PC Timberlands – was acquired February 19, 2016, and there were no guarantees by Parent Company prior to that date. As such, information is included for this entity beginning on the acquisition date.

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) – QUARTER



	QUARTER ENDED JUNE 30, 2016
DOLLAR AMOUNTS IN MILLIONS	Parent Company – WY		Subsidiary Issuer – PC Timberlands			Non-Issuer and Non-Guarantor Subsidiaries			Eliminations		Total Company
Net earnings (loss)	$	83	$	(5	)	$	87		$	3	$	168
Other comprehensive income:
Foreign currency translation adjustments	—		—			(2		)	—		(2		)
Actuarial gains, net of tax expense	1		—			30			—		31
Prior service costs, net of tax expense	—		—			—			—		—
Unrealized gains on available-for-sale securities	—		1			—			—		1
Total other comprehensive income	1		1			28			—		30
Comprehensive income (loss)	$	84	$	(4	)	$	115		$	3	$	198



	QUARTER ENDED JUNE 30, 2015
DOLLAR AMOUNTS IN MILLIONS	Parent Company – WY			Subsidiary Issuer – PC Timberlands*		Non-Issuer and Non-Guarantor Subsidiaries		Eliminations		Total Company
Net earnings	$	96		$	—	$	43	$	5	$	144
Other comprehensive income:
Foreign currency translation adjustments	—			—		12		—		12
Actuarial gains (losses), net of tax expense	(1		)	—		45		—		44
Prior service costs (credits), net of tax expense	(1		)	—		1		—		—
Unrealized gains on available-for-sale securities	—			—		—		—		—
Total other comprehensive income (loss)	(2		)	—		58		—		56
Comprehensive income	$	94		$	—	$	101	$	5	$	200


*	The Subsidiary Issuer – PC Timberlands – was acquired February 19, 2016, and there were no guarantees by Parent Company prior to that date. As such, information is included for this entity beginning on the acquisition date.

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) – YEAR-TO-DATE



	YEAR-TO-DATE ENDED JUNE 30, 2016
DOLLAR AMOUNTS IN MILLIONS	Parent Company – WY		Subsidiary Issuer – PC Timberlands*			Non-Issuer and Non-Guarantor Subsidiaries			Eliminations		Total Company
Net earnings (loss)	$	119	$	(30	)	$	160		$	—	$	249
Other comprehensive income:
Foreign currency translation adjustments	—		—			39			—		39
Actuarial gains, net of tax expense	3		—			38			—		41
Prior service credits, net of tax expense	—		—			(2		)	—		(2		)
Unrealized gains on available-for-sale securities	—		1			—			—		1
Total other comprehensive income	3		1			75			—		79
Comprehensive income (loss)	$	122	$	(29	)	$	235		$	—	$	328



	YEAR-TO-DATE ENDED JUNE 30, 2015
DOLLAR AMOUNTS IN MILLIONS	Parent Company – WY			Subsidiary Issuer – PC Timberlands*		Non-Issuer and Non-Guarantor Subsidiaries			Eliminations		Total Company
Net earnings	$	208		$	—	$	31		$	6	$	245
Other comprehensive income:
Foreign currency translation adjustments	—			—		(35		)	—		(35		)
Actuarial gains, net of tax expense	4			—		102			—		106
Prior service credits, net of tax expense	(1		)	—		(1		)	—		(2		)
Unrealized gains on available-for-sale securities	—			—		1			—		1
Total other comprehensive income	3			—		67			—		70
Comprehensive income	$	211		$	—	$	98		$	6	$	315


*	The Subsidiary Issuer – PC Timberlands – was acquired February 19, 2016, and there were no guarantees by Parent Company prior to that date. As such, information is included for this entity beginning on the acquisition date.

CONDENSED CONSOLIDATING BALANCE SHEET



	JUNE 30, 2016
DOLLAR AMOUNTS IN MILLIONS	Parent Company – WY		Subsidiary Issuer – PC Timberlands		Non-Issuer and Non-Guarantor Subsidiaries		Eliminations			Total Company
Cash and cash equivalents	$	69	$	20	$	396	$	—		$	485
Other current assets	73		7		863		(8		)	935
Assets of discontinued operations	—		—		1,908		—			1,908
Total current assets	142		27		3,167		(8		)	3,328
Property and equipment, net	165		89		1,208		—			1,462
Timber and timberlands at cost, net	3,454		5,813		5,228		(21		)	14,474
Investments in and advances to subsidiaries	11,875		4,565		630		(17,070		)	—
Other assets	96		139		3,125		(635		)	2,725
Total assets	$	15,732	$	10,633	$	13,358	$	(17,734	)	$	21,989

Current liabilities	$	174	$	83	$	639	$	(5	)	$	891
Liabilities of discontinued operations	—		—		666		—			666
Total current liabilities	174		83		1,305		(5		)	1,557
Note payable to Timberland Venture	—		—		830		—			830
Long-term debt	3,935		935		3,743		(600		)	8,013
Other long-term liabilities	87		498		1,574		—			2,159
Total liabilities	4,196		1,516		7,452		(605		)	12,559
Equity:
Mandatory convertible preference shares	14		—		—		—			14
Common shares	916		—		—		—			916
Other equity	10,606		9,117		5,906		(17,129		)	8,500
Total equity	11,536		9,117		5,906		(17,129		)	9,430
Total liabilities and equity	$	15,732	$	10,633	$	13,358	$	(17,734	)	$	21,989

CONDENSED CONSOLIDATING BALANCE SHEET (continued)



	DECEMBER 31, 2015
DOLLAR AMOUNTS IN MILLIONS	Parent Company – WY		Subsidiary Issuer – PC Timberlands*		Non-Issuer and Non-Guarantor Subsidiaries		Eliminations			Total Company
Cash and cash equivalents	$	673	$	—	$	338	$	—		$	1,011
Other current assets	7		—		693		(6		)	694
Assets of discontinued operations	—		—		1,934		—			1,934
Total current assets	680		—		2,965		(6		)	3,639
Property and equipment, net	167		—		1,066		—			1,233
Timber and timberlands at cost, net	3,538		—		2,964		(23		)	6,479
Investments in and advances to subsidiaries	2,948		—		—		(2,948		)	—
Other assets	88		—		1,916		(635		)	1,369
Total assets	$	7,421	$	—	$	8,911	$	(3,612	)	$	12,720

Current liabilities	$	66	$	—	$	574	$	(5	)	$	635
Liabilities of discontinued operations	—		—		690		—			690
Total current liabilities	66		—		1,264		(5		)	1,325
Long-term debt	1,645		—		3,742		(600		)	4,787
Other long-term liabilities	91		—		1,648		—			1,739
Total liabilities	1,802		—		6,654		(605		)	7,851
Equity:
Mandatory convertible preference shares	14		—		—		—			14
Common shares	638		—		—		—			638
Other equity	4,967		—		2,257		(3,007		)	4,217
Total equity	5,619		—		2,257		(3,007		)	4,869
Total liabilities and equity	$	7,421	$	—	$	8,911	$	(3,612	)	$	12,720


*	The Subsidiary Issuer – PC Timberlands – was acquired February 19, 2016, and there were no guarantees by Parent Company prior to that date. As such, information is included for this entity beginning on the acquisition date.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS



	YEAR-TO-DATE ENDED JUNE 30, 2016
DOLLAR AMOUNTS IN MILLIONS	Parent Company – WY			Subsidiary Issuer – PC Timberlands*			Non-Issuer and Non-Guarantor Subsidiaries			Eliminations			Total Company
Net cash from (used in) operations	$	40		$	38		$	461		$	—		$	539
Net cash from (used in) investing activities:
Capital expenditures	$	(25	)	$	(9	)	$	(140	)	$	—		$	(174	)
Acquisition of timberlands	(1		)	—			(7		)	—			(8		)
Proceeds from sale of assets	—			—			83			—			83
Proceeds from contribution of timberlands to related party	—			440			—			—			440
Distributions from joint ventures	—			—			27			—			27
Cash acquired in merger with Plum Creek	—			5			4			—			9
Distribution from subsidiaries	812			—			—			(812		)	—
Other	—			(3		)	—			—			(3		)
Net cash from (used in) investing activities	$	786		$	433		$	(33	)	$	(812	)	$	374
Net cash from (used in) financing activities:
Net proceeds from issuance of debt	$	1,398		$	—		$	—		$	—		$	1,398
Payments on debt	(720		)	—			(3		)	—			(723		)
Cash dividends on common shares	(469		)	—			—			—			(469		)
Cash dividends on preference shares	(11		)	—			—			—			(11		)
Repurchase of common stock	(1,629		)	—			—			—			(1,629		)
Distribution to parent	—			(451		)	(361		)	812			—
Other	1			—			—			—			1
Net cash used in financing activities	$	(1,430	)	$	(451	)	$	(364	)	$	812		$	(1,433	)



	YEAR-TO-DATE ENDED JUNE 30, 2015
DOLLAR AMOUNTS IN MILLIONS	Parent Company – WY			Subsidiary Issuer – PC Timberlands*		Non-Issuer and Non-Guarantor Subsidiaries			Eliminations			Total Company
Net cash from (used in) operations	$	(4	)	$	—	$	458		$	—		$	454
Net cash from (used in) investing activities:
Capital expenditures	$	(30	)	$	—	$	(167	)	$	—		$	(197	)
Acquisitions of timberlands	(26		)	—		(6		)	—			(32		)
Proceeds from sale of assets	—			—		6			—			6
Issuance of note to parent	—			—		(600		)	600			—
Distribution from subsidiaries	292			—		—			(292		)	—
Other	12			—		—			—			12
Net cash from (used in) investing activities	$	248		$	—	$	(767	)	$	308		$	(211	)
Net cash from (used in) financing activities:
Proceeds from note from subsidiary	$	600		$	—	$	—		$	(600	)	$	—
Cash dividends on common shares	(301		)	—		—			—			(301		)
Cash dividends on preferred shares	(11		)	—		—			—			(11		)
Repurchase of common stock	(407		)	—		—			—			(407		)
Distribution to parent	—			—		(292		)	292			—
Other	17			—		—			—			17
Net cash from (used in) financing activities	$	(102	)	$	—	$	(292	)	$	(308	)	$	(702	)


*	The Subsidiary Issuer – PC Timberlands – was acquired February 19, 2016, and there were no guarantees by Parent Company prior to that date. As such, information is included for this entity beginning on the acquisition date.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)

FORWARD-LOOKING STATEMENTS

This report contains statements concerning our future results and performance that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements:


•	are based on various assumptions we make and


•	may not be accurate because of risks and uncertainties surrounding the assumptions that we make.

Factors listed in this section – as well as other factors not included – may cause our actual results to differ significantly from our forward-looking statements. There is no guarantee that any of the events anticipated by our forward-looking statements will occur. Or if any of the events occur, there is no guarantee what effect they will have on our operations or financial condition.

We will not update our forward-looking statements after the date of this report.

FORWARD-LOOKING TERMINOLOGY

Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often use words such as expects, may, should, will, believes, anticipates, estimates, projects, intends, plans, targets and approximately. They may use the positive or negative or other variation of those and similar words.

STATEMENTS

We make forward-looking statements in this report concerning our plans, strategies, intentions and expectations, including with respect to estimated taxes and tax rates, expectations relating to shares, share repurchases, share compensation, dilution and dividends, expected results of legal proceedings and the sufficiency of litigation reserves, expected uses of cash, expectations relating to pension contributions and benefit payments, and our expectations relating to the U.S. housing market, economic conditions, strength of the U.S. dollar and demand for our products.

We base our forward-looking statements on a number of factors, including the expected effect of:


•	the economy,


•	laws and regulations,


•	adverse litigation outcomes and the adequacy of reserves,


•	changes in accounting principles,


•	contributions to pension plans,


•	projected benefit payments,


•	projected tax treatment, rates and credits, and


•	other related matters.

You should understand that it is not possible to predict or identify all such factors and, consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties. Should other risks or uncertainties materialize, or should our underlying assumptions prove inaccurate, actual results could differ materially from past results as well as from our estimated or projected results .

RISKS, UNCERTAINTIES AND ASSUMPTIONS

Major risks and uncertainties – and assumptions that we make – that affect our business and may cause actual results to differ from these forward-looking statements include, but are not limited to:


•	the effect of general economic conditions, including employment rates, interest rate levels, housing starts, availability of financing for home mortgages and strength of the U.S. dollar;


•	market demand for our products, including market demand for our timberland properties with higher and better uses, which is related to, among other factors, the strength of the various U.S. business segments and U.S. and international economic conditions;


•	performance of our manufacturing operations, including maintenance and capital requirements;


•	potential disruptions in our manufacturing operations;


•	the level of competition from domestic and foreign producers;


•	raw material availability and prices;


•	the effect of weather;


•	the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters;


•	energy prices;


•	the successful execution of our internal plans and strategic initiatives, including without limitation the realization of cost and operational synergies;


•	the successful and timely execution and integration of our strategic acquisitions, including our ability to realize expected benefits and synergies, and the successful and timely execution of our strategic divestitures, each of which is subject to a number of risks and conditions beyond our control including, but not limited to, timing and required regulatory approvals;


•	transportation and labor availability and costs;


•	federal tax policies, interpretations or rulings;


•	the effect of forestry, land use, environmental and other governmental regulations;


•	legal proceedings;


•	performance of pension fund investments and related derivatives;


•	the effect of timing of retirements and changes in the market price of our common stock on charges for share-based compensation;


•	changes in accounting principles; and


•	other factors described under “Risk Factors” in our 2015 Annual Report on Form 10-K and in our Registration Statement on Form S-4/A filed on December 23, 2015.

EXPORTING ISSUES

We are a large exporter, affected by:


•	economic activity in Europe and Asia, especially Japan and China;


•	currency exchange rates – particularly the relative value of the U.S. dollar, Canadian dollar, euro and yen; and


•	restrictions on international trade or tariffs imposed on imports.

RESULTS OF OPERATIONS

In reviewing our results of operations, it is important to understand these terms:


•	Sales realizations refer to net selling prices – this includes selling price plus freight, minus normal sales deductions.


•	Net contribution to earnings (loss) attributable to Weyerhaeuser shareholders before interest expense and income taxes.

In the following discussion, unless otherwise noted, references to increases or decreases in income and expense items, sales realizations, shipment volumes, and net contributions to earnings are based on the quarter and year-to-date period ended June 30, 2016 , compared to the quarter and year-to-date period ended June 30, 2015 .

The following discussion includes references to results from acquired Plum Creek operations beginning on the February 19, 2016, merger date and the respective impacts of these results to our current period results when compared to our prior period results, which do not include pre-merger results of Plum Creek operations. When compared to historical Plum Creek results, the post-merger results of the acquired operations are significantly impacted by the following items:


•	Increased depletion charges and increased basis of real estate sold as a result of applying acquisition accounting to Timber and timberlands assets acquired as described in Note 4: Merger with Plum Creek and


•	Certain merger-related costs as described in Note 15: Charges for Integration and Restructuring, Closures and Asset Impairments .

ECONOMIC AND MARKET CONDITIONS AFFECTING OUR OPERATIONS

The strength of the U.S. housing market strongly affects our Wood Products and Timberlands segments. As published by the U.S. Census Bureau, total housing starts for 2015 were 1.11 million units. We continue to expect improving U.S. housing starts and anticipate a level of approximately 1.2 million units in 2016 as a result of employment growth, improving consumer confidence and continued historically low mortgage rates. In the first half of 2016 housing starts averaged 1.16 million total units on a seasonally adjusted annual basis according to the U.S. Census Bureau and single family units averaged 0.78 million as a seasonally adjusted annual rate. This is consistent with expectations for 8 percent to 10 percent year-over-year growth in starts. Repair and remodeling activity is also a driver of wood product demand. The Joint Center for Housing of Harvard University is projecting an increase in remodeling expenditures of 8.6 percent in 2016 over 2015.

Our Real Estate & ENR segment is affected by the health of the U.S. economy and especially the U.S. housing sector, which influences the real estate market. According to the Realtors Land Institute of the National Association of Realtors, land transaction prices and volumes are expected to be the same or stronger in 2016 compared to 2015.

Demand for logs from our Timberlands segment is affected by production levels of wood-based building products. U.S. wood product markets advanced in second quarter 2016, consistent with the spring construction season and helped by a rising single family share of total housing starts. Single family starts are up 15 percent year to date over the same period last year on a seasonally adjusted basis. Demand for logs increased with wood products production and log supplies kept pace, leaving prices relatively flat from first quarter 2016 for western and southern sawlogs and southern pulpwood. Our western holdings are also affected by export demand. Log inventories in Chinese ports in April and May were lower in 2016 than for the same period in 2015 and demand was seasonally higher in second quarter 2016 as activity picked up after the conclusion of lunar New Year celebrations that impacted first quarter 2016. Japan housing starts for January through April 2016 are up 6.4 percent from the same period last year. Housing starts are a key driver of wood product and log demand in Japan. We expect demand from China and Japan in 2016 to be similar to 2015.

CONSOLIDATED RESULTS

How We Did Second Quarter and Year-to-Date 2016



	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES	JUNE 2016		JUNE 2015		2016 VS. 2015			JUNE 2016		JUNE 2015		2016 VS. 2015
Net sales	$	1,655	$	1,345	$	310		$	3,060	$	2,625	$	435
Costs of products sold	1,258		1,057		201			2,347		2,050		297
Operating income	258		200		58			411		350		61
Earnings of discontinued operations, net of tax	38		19		19			58		52		6
Net earnings attributable to Weyerhaeuser common shareholders	157		133		24			227		223		4
Earnings per share attributable to Weyerhaeuser shareholders, basic and diluted	$	0.21	$	0.26	$	(0.05	)	$	0.33	$	0.43	$	(0.10	)

Comparing Second Quarter 2016 with Second Quarter 2015

Net sales

Net sales increased $310 million – 23 percent. Excluding $236 million of net sales attributable to acquired Plum Creek operations, net sales increased $74 million – 6 percent – attributable to the following:


•	Timberlands segment sales increased $2 million, primarily due to increased sales volumes in the West and South;


•	Real Estate & ENR segment sales increased $8 million, primarily due to increased volume of real estate acres sold; and


•	Wood Products segment sales increased $64 million, primarily due to increased oriented strand board and lumber average sales realizations and increased lumber and engineered solid section shipment volumes.

Costs of products sold

Costs of products sold increased $201 million – 19 percent. Excluding $199 million of costs of products sold attributable to acquired Plum Creek operations, costs of products sold increased $2 million , primarily attributable to the following:


•	Timberlands costs of products sold increased $4 million, primarily due to increased sales volumes and higher fee sourcing costs in the West.


•	Real Estate & ENR costs of products sold increased $3 million, primarily due to increased real estate sales as explained above.


•	Costs of products sold from Unallocated Items increased $4 million, primarily due to higher unallocated pension expense.

These increases were partially offset by decreased costs of products sold in our Wood Products segment – $9 million – primarily due to lower log, resin and manufacturing costs per unit. These decreases were partially offset by increased sales volumes for lumber and engineered solid section.

Operating income

Operating income increased $58 million – 29 percent. Excluding $11 million of operating income attributable to acquired Plum Creek operations, operating income increased $47 million – 24 percent – primarily attributable to increased net sales and Costs of products sold explained above.

These increases were partially offset by a $14 million increase to charges for integration and restructuring, closures and asset impairments, which is primarily attributable to the following:


•	integration costs related to our merger with Plum Creek – $8 million – and


•	restructuring charges related to our decision to close our lumber and plywood mills in Columbia Falls, Montana – $3 million.

Net earnings attributable to Weyerhaeuser common shareholders

Our net earnings attributable to Weyerhaeuser common shareholders increased $24 million – 18 percent. Excluding $9 million of net losses attributable to acquired Plum Creek operations, net earnings increased $33 million – 25 percent. Earnings from discontinued operations, net of tax, increased $19 million – 100 percent – primarily due to lower costs of products sold from ceasing depreciation when Cellulose Fibers manufacturing assets were classified as held-for-sale during second quarter 2016 – $17 million (net of tax effect). This reduction to costs of products sold was partially offset by lower sales realizations.

Excluding earnings from discontinued operations, net of tax, net earnings attributable to Weyerhaeuser common shareholders increased $5 million – 4 percent – primarily attributable to the variances in net sales, costs of products sold and operating income as explained above, partially offset by a $33 million increase in income taxes from continuing operations resulting from increased taxable earnings generated by our TRS.

Comparing Year-to-Date 2016 with Year-to-Date 2015

Net sales

Net sales increased $435 million – 17 percent. Excluding $358 million of net sales attributable to acquired Plum Creek operations, net sales increased $77 million – 3 percent. This was attributable to increased sales in our Wood Products segment – $87 million, primarily due to increased oriented strand board average sales realizations and increased shipment volumes for oriented strand board and lumber.

This increase was partially offset by the following:


•	Timberlands segment sales decreased $2 million, primarily due to lower fiber prices in the West and South, offset by increased sales volumes in the West; and


•	Real Estate & ENR segment sales decreased $8 million, primarily due to decreases in volume of timberlands acres sold and lower oil and natural gas prices, partially offset by an increase in the average price realized per timberland acre.

Costs of products sold

Costs of products sold increased $297 million – 14 percent. Excluding $298 million of costs of products sold attributable to acquired Plum Creek operations, costs of products sold decreased $1 million , primarily attributable to the following:


•	Real Estate & ENR costs of products sold decreased $5 million, primarily due to a decrease in real estate acreage sold;


•	Wood Products costs of products sold decreased $4 million, primarily due to lower log, resin and manufacturing costs per unit, partially offset by increased sales volume in most product lines; and


•	Costs of products sold from Unallocated Items decreased $6 million primarily due to a decrease in the amount of intersegment profit eliminated from ending inventory and LIFO reserves.

These decreases were offset by a $14 million – 2 percent – increase in Timberlands costs of products sold caused by increased sales volumes and increased fee sourcing costs in the West.

Operating income

Operating income increased $61 million – 17 percent. Excluding $21 million of operating income attributable to acquired Plum Creek operations, operating income increased $40 million – 11 percent primarily due to the following:


•	increased gross profit as described above – $78 million,


•	a pretax gain related to the sale of our Federal Way headquarters campus – $36 million, and


•	gain on noncash foreign exchange debt held by our Canadian entity – $34 million .

These increases were partially offset by $118 million of transaction and integration costs from our merger with Plum Creek.

Net earnings attributable to Weyerhaeuser common shareholders

Our net earnings attributable to Weyerhaeuser common shareholders increased $4 million – 2 percent. Excluding $39 million of net losses attributable to acquired Plum Creek operations, net earnings increased $43 million – 19 percent. Earnings from discontinued operations, net of tax, increased $6 million – 12 percent – primarily due to lower costs of products sold from ceasing depreciation when Cellulose Fibers manufacturing assets were classified as held-for-sale during second quarter 2016. This reduction to costs of products sold was partially offset by lower sales realizations.

Excluding earnings from discontinued operations, net of tax, net earnings attributable to Weyerhaeuser common shareholders increased $37 million – 17 percent – primarily attributable to the variances in net sales, costs of products sold and operating income as explained above, partially offset by a $35 million increase in income taxes from continuing operations resulting from increased taxable earnings generated by our TRS.

TIMBERLANDS

How We Did Second Quarter 2016 and Year-to-Date 2016



	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	JUNE 2016		JUNE 2015		2016 VS. 2015			JUNE 2016		JUNE 2015		2016 VS. 2015
Net sales to unaffiliated customers:
Delivered logs ⁽¹⁾ :
West	$	232	$	221	$	11		$	447	$	431	$	16
South	154		58		96			255		116		139
North	19		—		19			32		—		32
Other	7		3		4			14		11		3
Subtotal delivered logs sales	412		282		130			748		558		190
Stumpage and pay-as-cut timber	23		10		13			38		14		24
Products from international operations ⁽²⁾	21		25		(4		)	37		49		(12		)
Recreational and other lease revenue	8		5		3			14		11		3
Other	7		6		1			21		19		2
Subtotal net sales to unaffiliated customers	471		328		143			858		651		207
Intersegment sales:
United States	153		139		14			297		288		9
Other	40		48		(8		)	118		127		(9		)
Subtotal intersegment sales	193		187		6			415		415		—
Total sales	$	664	$	515	$	149		$	1,273	$	1,066	$	207
Costs of products sold	$	509	$	383	$	126		$	968	$	778	$	190
Operating income and Net contribution to earnings	$	125	$	117	$	8		$	254	$	256	$	(2	)

(1)

The Western region includes Washington and Oregon. The Southern region includes Virginia, North Carolina, South Carolina, Florida, Georgia, Alabama, Mississippi, Louisiana, Arkansas, Texas and Oklahoma. The Northern region includes West Virginia, Maine, New Hampshire, Vermont, Michigan, Wisconsin and Montana. Other includes our Canadian operations and the timberlands of the Twin Creeks Venture that we manage.


(2)	Includes logs, plywood and hardwood lumber harvested or produced by our international operations in Uruguay.

Comparing Second Quarter 2016 with Second Quarter 2015

Net sales – unaffiliated customers

Net sales to unaffiliated customers increased $143 million – 44 percent. Excluding $141 million of net sales attributable to acquired Plum Creek timberlands operations, net sales to unaffiliated customers increased $2 million – 1 percent – primarily due to slightly higher sales volumes in the South and West.

Intersegment sales

Intersegment sales increased $6 million – 3 percent. Excluding intersegment sales from Plum Creek timberlands operations of $7 million, intersegment sales were consistent between the compared periods.

Costs of products sold

Costs of products sold increased $126 million – 33 percent. Excluding $122 million of costs attributable to acquired Plum Creek operations, costs of products sold increased $4 million – 1 percent – primarily due to increased sales volumes and higher fee sourcing costs in the West.

Operating income and Net contribution to earnings

Operating income and Net contribution to earnings increased $8 million – 7 percent. Excluding $6 million of income attributable to acquired Plum Creek operations, operating income increased $2 million – 2 percent – attributable to net sales and costs of products sold explained above.

Comparing Year-to-Date 2016 with Year-to-Date 2015

Net sales – unaffiliated customers

Net sales to unaffiliated customers increased $207 million – 32 percent. Excluding $209 million of net sales attributable to acquired Plum Creek operations, net sales to unaffiliated customers decreased $2 million, primarily due to lower fiber prices in the West and South, offset by a 7 percent increase in sales volumes in the West.

Intersegment sales

Intersegment sales did not change. Excluding intersegment sales from Plum Creek timberlands operations of $11 million, intersegment sales decreased $11 million – 3 percent – primarily due to slightly lower sales realizations, partially offset by a 4 percent increase to sales volumes in both the West and the South.

Costs of products sold

Costs of products sold increased $190 million – 24 percent. Excluding $176 million of costs of products sold attributable to Plum Creek operations, costs of products sold increased $14 million – 2 percent – primarily due to increased sales volumes and increased fee sourcing costs in the West.

Operating income and Net contribution to earnings

Operating income and Net contribution to earnings decreased $2 million – 1 percent. Excluding $13 million of income attributable to acquired Plum Creek operations, operating income decreased $15 million – 6 percent – attributable to:


•	increased selling, general and administrative costs related to integrating operations following the Plum Creek merger; and


•	decreased net sales and increased costs of products sold explained above.

THIRD-PARTY LOG SALES VOLUMES AND FEE HARVEST VOLUMES



	QUARTER ENDED		AMOUNT OF CHANGE		YEAR-TO-DATE ENDED		AMOUNT OF CHANGE
VOLUMES IN THOUSANDS ⁽¹⁾⁽²⁾	JUNE 2016	JUNE 2015	2016 VS. 2015		JUNE 2016	JUNE 2015	2016 VS. 2015
Third party log sales – tons:
West	2,363	2,207	156		4,496	4,215	281
South	4,340	1,582	2,758		7,121	3,137	3,984
North	292	—	292		502	—	502
Uruguay	89	197	(108	)	235	362	(127	)
Other	169	61	108		338	257	81
Total	7,253	4,047	3,206		12,692	7,971	4,721
Fee harvest volumes – tons:
West	2,980	2,662	318		5,781	5,419	362
South	7,061	3,559	3,502		12,091	6,900	5,191
North	454	—	454		714	—	714
Uruguay	248	242	6		547	505	42
Other	181	—	181		181	—	181
Total	10,924	6,463	4,461		19,314	12,824	6,490

(1)

The West region includes Washington and Oregon. The South region includes Virginia, North Carolina, South Carolina, Florida, Georgia, Alabama, Mississippi, Louisiana, Arkansas, Texas and Oklahoma. The North region includes West Virginia, Maine, New Hampshire, Vermont, Michigan, Wisconsin, and Montana. Other includes our Canadian operations and the timberlands of the Twin Creeks Venture that we manage.


(2)	Beginning in the first quarter of 2016, we report log sales and fee harvest volumes in tons. Prior period volumes have been converted from cubic meters to tons using annualized 2015 conversion factors as follows:

West: 1.056 m ³ = 1 ton

South: 0.818 m ³ = 1 ton

Canada: 1.244 m ³ = 1 ton

Uruguay: 0.907 m ³ = 1 ton

REAL ESTATE, ENERGY & NATURAL RESOURCES

How We Did Second Quarter 2016 and Year-to-Date 2016



	QUARTER ENDED				AMOUNT OF CHANGE		YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	JUNE 2016		JUNE 2015		2016 VS. 2015		JUNE 2016		JUNE 2015		2016 VS. 2015
Net sales:
Real estate	$	26	$	8	$	18	56		35		21
Energy and natural resources	12		5		7		21		12		9
Total	$	38	$	13	$	25	$	77	$	47	$	30
Costs of products sold	$	19	$	2	$	17	$	39	$	12	$	27
Operating income	$	12	$	10	$	2	$	27	$	33	$	(6	)
Equity earnings from joint venture	—		—		—		—		—		—
Net contribution to earnings	$	12	$	10	$	2	$	27	$	33	$	(6	)

The timing of real estate sales is a function of many factors, including the general state of the economy, demand in local real estate markets, the ability to obtain entitlements, the ability of buyers to obtain financing, the number of competing properties listed for sale, the seasonal nature of sales (particularly in the northern states), the plans of

adjacent landowners, our expectation of future price appreciation, the timing of harvesting activities, and the availability of government and not-for-profit funding (especially for conservation sales). In any period the average sales price per acre will vary based on the location and physical characteristics of parcels sold.

Comparing Second Quarter 2016 with Second Quarter 2015

Net sales

Net sales increased $25 million – 192 percent. Excluding $17 million of net sales attributable to acquired Plum Creek operations, net sales increased $8 million – 62 percent – attributable to increases in volume of timberlands acres sold. This increase was partially offset by a decrease in average price realized per acre.

Costs of products sold

Costs of products sold increased $17 million . Excluding the $14 million of costs of products sold attributable to acquired Plum Creek operations, costs of products sold increased $3 million, primarily due to increased real estate sales volume as explained above.

Operating income and Net contribution to earnings

Operating income and Net contribution to earnings for the quarter increased $2 million – 20 percent. Excluding $2 million of operating income and net contribution to earnings attributable to acquired Plum Creek operations, operating income and net contribution to earnings were unchanged.

Comparing Year-to-Date 2016 with Year-to-Date 2015

Net sales

Net sales increased $30 million – 64 percent. Excluding $38 million of net sales attributable to acquired Plum Creek operations, net sales decreased $8 million – 17 percent.


•	Net real estate sales decreased $6 million – 17 percent – attributable to decreases in volume of timberlands acres sold, partially offset by an increase in the average price realized per acre.


•	Net energy and natural resource sales decreased $2 million – 17 percent – primarily due to lower oil and natural gas prices.

Costs of products sold

Costs of products sold increased $27 million . Excluding the $32 million of costs of products sold attributable to acquired Plum Creek operations, costs of products sold decreased $5 million – 42 percent – primarily due to a decrease in real estate acreage sold.

Operating income and Net contribution to earnings

Operating income and net contribution to earnings for the quarter decreased $6 million – 18 percent. Excluding $4 million of operating income and net contribution to earnings attributable to acquired Plum Creek operations, operating income and net contribution to earnings decreased $10 million – 30 percent, primarily attributable to decreased net sales of Weyerhaeuser legacy operations as explained above.

REAL ESTATE SALES STATISTICS



	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
	JUNE 2016		JUNE 2015		2016 VS. 2015			JUNE 2016		JUNE 2015		2016 VS. 2015
Acres sold	10,020		1,220		8,800			25,245		15,595		9,650
Average price per acre	$	2,555	$	4,490	$	(1,935	)	$	2,210	$	2,025	$	185

WOOD PRODUCTS

How We Did Second Quarter 2016 and Year-to-Date 2016



	QUARTER ENDED				AMOUNT OF CHANGE			YEAR-TO-DATE ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	JUNE 2016		JUNE 2015		2016 VS. 2015			JUNE 2016		JUNE 2015		2016 VS. 2015
Net sales:
Structural lumber	$	498	$	450	$	48		$	917	$	884	$	33
Engineered solid section	115		113		2			224		207		17
Engineered I-joists	73		76		(3		)	139		137		2
Oriented strand board	182		147		35			345		284		61
Softwood plywood	50		36		14			85		69		16
Medium density fiberboard	41		—		41			61		—		61
Other products produced	48		48		—			94		96		(2		)
Complementary building products	139		134		5			260		250		10
Total	$	1,146	$	1,004	$	142		$	2,125	$	1,927	$	198
Costs of products sold	$	957	$	903	$	54		$	1,819	$	1,732	$	87
Operating income and Net contribution to earnings	$	156	$	71	$	85		$	243	$	133	$	110

Upon our merger with Plum Creek, we acquired five manufacturing facilities in Montana. The sales and net contribution to earnings of these entities beginning on the merger date of February 19, 2016, are included in the results of our Wood Products segment. The results of the two plywood facilities are reported in softwood plywood and the two lumber facilities are reported in structural lumber.

The Medium Density Fiberboard (MDF) facility supplies high-quality MDF to a wide range of customers throughout North America. Some of the more common uses for our MDF include furniture and cabinet components, architectural moldings, doors, store fixtures, core material for hardwood plywood, face material for softwood plywood, commercial wall paneling and substrate for laminate flooring.

In June 2016, we announced our plans to permanently close the lumber facility and softwood plywood facility in Columbia Falls, Montana, during the third quarter of 2016. The closure of these facilities will allow us to align the available log supply with our manufacturing capacity, including adding shifts at our Kalispell, Montana facilities, to position our Montana operations for long-term success.

Comparing Second Quarter 2016 with Second Quarter 2015

Net sales

Net sales increased $142 million – 14 percent. Excluding $78 million of net sales attributable to acquired Plum Creek operations, net sales increased $64 million – 6 percent – due to:


•	a 26 percent increase in oriented strand board average sales realizations, and


•	a 4 percent increase in lumber shipment volumes,


•	a 4 percent increase in lumber average sales realizations, and


•	a 7 percent increase in engineered solid section shipment volumes.

These items were partially offset by:


•	a 5 percent decrease in engineered solid section average sales realizations,


•	a 16 percent decrease in plywood average sales realizations, and


•	a 12 percent decrease in plywood shipment volumes.

Costs of products sold

Costs of products sold increased $54 million – 6 percent. Excluding $63 million of costs of products sold attributable to acquired Plum Creek operations, costs of products sold decreased $9 million – 1 percent – primarily due to lower log, resin and manufacturing costs per unit, partially offset by increased sales volume in lumber and engineered solid section .

Operating income and Net contribution to earnings

Operating income and Net contribution to earnings increased $85 million – 120 percent. Excluding $14 million of income attributable to acquired Plum Creek operations, operating income and net contribution to earnings increased $71 million – 100 percent. The increase is attributable to the changes in net sales and costs of products sold as explained above.

Comparing Year-to-Date 2016 with Year-to-Date 2015

Net sales

Net sales increased $198 million – 10 percent. Excluding $111 million of net sales attributable to acquired Plum Creek operations, net sales increased $87 million – 5 percent – due to:


•	an 18 percent increase in oriented strand board average sales realizations ,


•	a 5 percent increase in lumber shipment volumes ,


•	an 11 percent increase in engineered solid section shipment volumes ,


•	a 3 percent increase in oriented strand board shipment volumes; and


•	a 4 percent increase in complementary building product sales.

These items were partially offset by:


•	a 3 percent decrease in lumber average sales realizations,


•	an 18 percent decrease in plywood average sales realizations ,


•	a 3 percent decrease in engineered solid section average sales realizations, and


•	a 7 percent decrease in plywood shipment volumes.

Costs of products sold

Costs of products sold increased $87 million – 5 percent. Excluding $91 million of costs of products sold attributable to acquired Plum Creek operations, costs of products sold decreased $4 million, primarily due to lower log, resin and manufacturing costs per unit, partially offset by increased sales volume in most product lines .

Operating income and Net contribution to earnings

Operating income and Net contribution to earnings increased $110 million – 83 percent. Excluding $18 million of income attributable to acquired Plum Creek operations, operating income and net contribution to earnings increased $92 million – 69 percent. The increase is primarily attributable to the changes in net sales and costs of products sold as explained above.

THIRD-PARTY SALES VOLUMES



	QUARTER ENDED		AMOUNT OF CHANGE		YEAR-TO-DATE ENDED		AMOUNT OF CHANGE
VOLUMES IN MILLIONS ⁽¹⁾	JUNE 2016	JUNE 2015	2016 VS. 2015		JUNE 2016	JUNE 2015	2016 VS. 2015
Structural lumber – board feet	1,249	1,175	74		2,401	2,250	151
Engineered solid section – cubic feet	6.0	5.6	0.4		11.5	10.4	1.1
Engineered I-joists – lineal feet	50	50	—		94	91	3
Oriented strand board – square feet (3/8”)	761	771	(10	)	1,520	1,471	49
Softwood plywood – square feet (3/8”)	131	101	30		241	190	51


(1)	Sales volumes include sales of internally produced products and products purchased for resale primarily through our distribution business.

PRODUCTION AND OUTSIDE PURCHASE VOLUMES

Outside purchase volumes are primarily purchased for resale through our distribution business. Production volumes are produced for sale through our own sales organizations and through our distribution business. Production of oriented strand board and engineered solid section are also used to manufacture engineered I-joists.



	QUARTER ENDED		AMOUNT OF CHANGE		YEAR-TO-DATE ENDED		AMOUNT OF CHANGE
VOLUMES IN MILLIONS	JUNE 2016	JUNE 2015	2016 VS. 2015		JUNE 2016	JUNE 2015	2016 VS. 2015
Structural lumber – board feet:
Production	1,205	1,087	118		2,334	2,130	204
Outside purchase	72	98	(26	)	128	187	(59	)
Total	1,277	1,185	92		2,462	2,317	145
Engineered solid section – cubic feet:
Production	5.9	5.6	0.3		11.5	10.6	0.9
Outside purchase	—	—	—		—	—	—
Total	5.9	5.6	0.3		11.5	10.6	0.9
Engineered I-joists – lineal feet:
Production	46	48	(2	)	92	91	1
Outside purchase	3	1	2		4	2	2
Total	49	49	—		96	93	3
Oriented strand board – square feet (3/8”):
Production	733	700	33		1,482	1,404	78
Outside purchase	102	81	21		159	146	13
Total	835	781	54		1,641	1,550	91
Softwood plywood – square feet (3/8”):
Production	111	63	48		199	124	75
Outside purchase	24	27	(3	)	44	64	(20	)
Total	135	90	45		243	188	55

UNALLOCATED ITEMS

Unallocated items are gains or charges from continuing operations not related to or allocated to an individual operating segment. They include a portion of items such as: share-based compensation, pension and postretirement costs, foreign exchange transaction gains and losses associated with financing, equity earnings from our Timberland Venture, the elimination of intersegment profit in inventory and the LIFO reserve. As a result of reclassifying our former Cellulose Fibers segment as discontinued operations, Unallocated items also includes retained indirect corporate overhead costs previously allocated to the former segment.

NET CONTRIBUTION TO EARNINGS – UNALLOCATED ITEMS



	QUARTER ENDED						AMOUNT OF CHANGE			YEAR-TO-DATE ENDED						AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	JUNE 2016			JUNE 2015			2016 VS. 2015			JUNE 2016			JUNE 2015			2016 VS. 2015
Unallocated corporate function expense	$	(24	)	$	(16	)	$	(8	)	$	(41	)	$	(34	)	$	(7	)
Unallocated share-based compensation	1			1			—			(1		)	4			(5		)
Unallocated pension and postretirement credits	10			3			7			22			6			16
Foreign exchange gain (loss)	1			9			(8		)	14			(20		)	34
Elimination of intersegment profit in inventory and LIFO	(2		)	18			(20		)	(8		)	4			(12		)
Gain on sale of non-strategic asset	8			—			8			44			—			44
Charges for integration and restructuring, closures and asset impairments:
Plum Creek merger- and integration-related costs	(8		)	—			(8		)	(118		)	—			(118		)
Other restructuring, closures, and asset impairments	(1		)	—			(1		)	(1		)	(14		)	13
Other	(20		)	(13		)	(7		)	(24		)	(18		)	(6		)
Operating income (loss)	(35		)	2			(37		)	(113		)	(72		)	(41		)
Equity earnings from joint venture	7			—			7			12			—			12
Interest income and other	10			9			1			19			18			1
Net contribution to earnings	$	(18	)	$	11		$	(29	)	$	(82	)	$	(54	)	$	(28	)

Comparing Second Quarter 2016 with Second Quarter 2015

Changes in Unallocated Items were primarily related to:


•	a decrease in elimination of intersegment profit in inventory and LIFO – $20 million ;


•	charges recognized in second quarter 2016 related to our merger with Plum Creek (refer to Note 15: Charges for Integration and Restructuring, Closures and Asset Impairments ) – $8 million ;


•	a decrease in noncash foreign exchange gains on debt held by our Canadian entity – $8 million ; and


•	equity earnings from our investment in the Timberland Venture – $7 million – which was acquired in our merger with Plum Creek.

Comparing Year-to-Date 2016 with Year-to-Date 2015

Changes in Unallocated Items were primarily related to:


•	charges recognized year-to-date 2016 related to our merger with Plum Creek (refer to Note 15: Charges for Integration and Restructuring, Closures and Asset Impairments ) – $118 million ;


•	a pretax gain related to the sale of our Federal Way, Washington headquarters campus, which is recorded in "Other operating costs (income), net" in our Consolidated Statement of Operations – $36 million;


•	noncash foreign exchange on debt held by our Canadian entity changed from a loss year-to-date 2015 to a gain year-to-date 2016 – $34 million ;


•	equity earnings from our investment in the Timberland Venture – $12 million – which was acquired in our merger with Plum Creek; and


•	a noncash impairment charge recognized in first quarter 2015 related to a nonstrategic asset that was sold in second quarter 2015 – $13 million .

INTEREST EXPENSE

Our interest expense, net of capitalized interest incurred was:


•	$114 million for the second quarter 2016 and $209 million for the year-to-date 2016


•	$85 million for the second quarter 2015 and $167 million for the year-to-date 2015

Interest expense increased $29 million compared to second quarter 2015 and $42 million compared to year-to-date 2015 primarily due to interest costs from the long-term debt assumed in the Plum Creek merger, refer to Note 10: Long-Term Debt and Lines of Credit .

INCOME TAXES

Our provision for income taxes for our continuing operations was:


•	$31 million for the second quarter 2016 and $42 million year-to-date 2016 and


•	$(1) million for the second quarter 2015 and $8 million year-to-date 2015.

The increase to our provision for income taxes, both in the second quarter and year-to-date 2016, is primarily due to higher earnings in our TRS. Refer to Note 17: Income Taxes .

LIQUIDITY AND CAPITAL RESOURCES

We are committed to maintaining an appropriate capital structure that enables us to:


•	protect the interests of our shareholders and lenders and


•	have access at all times to all major financial markets.

CASH FROM OPERATIONS

Consolidated net cash provided by our operations was:


•	$539 million for year-to-date 2016 and


•	$454 million for year-to-date 2015 .

Comparing Year-to-Date 2016 with Year-to-Date 2015

Net cash provided by our operations increased $85 million , primarily due to:


•	increased cash flows from our business segments of $197 million ; and


•	a decrease in cash paid for income taxes of $30 million .

These increases were partially offset by:


•	decreased operating cash flows from discontinued operations of $39 million ;


•	an increase in cash paid for interest of $53 million corresponding with our increased average indebtedness;


•	increased unallocated general and administrative costs – $14 million ;


•	cash payments made in 2016 related to the Plum Creek merger of $75 million . Cash payments for merger-related costs were comprised of:


◦	investment banking and other professional services fees – $39 million ;


◦	termination benefits – $26 million ;


◦	settlement of VMAs – $5 million ; and


◦	other merger-related costs – $5 million .

See Performance Measures for our Adjusted EBITDA by segment.

CASH FROM INVESTING ACTIVITIES

Consolidated net cash provided by (used in) investing activities was:


•	$374 million for year-to-date 2016 and


•	$(211) million for year-to-date 2015 .

Comparing Year-to-Date 2016 with Year-to-Date 2015

Net cash from investing activities increased $585 million , primarily due to proceeds of $440 million from our contribution of timberlands to the Twin Creeks joint venture, as well as proceeds from the sale of assets, cash distributions from joint ventures, and reduced capital expenditures.

Summary of Capital Spending by Business Segment



	YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2016		JUNE 2015
Timberlands	$	51	$	41
Real Estate & ENR	1		—
Wood Products	81		97
Unallocated Items	7		1
Discontinued operations	34		58
Total	$	174	$	197

We anticipate that our net capital expenditures for 2016 – excluding acquisitions – will be approximately $540 million .

Our agreement to sell our pulp manufacturing business to International Paper (see Note 3: Discontinued Operations ) provides for reimbursement of certain expenditures we incur to complete ongoing capital projects at our Port Wentworth pulp mill. According to the terms of the agreement, we anticipate that we will be reimbursed for approximately $30 million of our anticipated 2016 net capital expenditures following the close of the sale to International Paper, which is expected to occur in the fourth quarter of 2016.

CASH FROM FINANCING ACTIVITIES

Consolidated net cash used in financing activities was:


•	$1,433 million for year-to-date 2016 and


•	$702 million for year-to-date 2015 .

Comparing Year-to-Date 2016 with Year-to-Date 2015

Net cash used in financing activities increased $731 million primarily due to the following:


•	repayment of Plum Creek's line of credit and term loan outstanding at the merger date – $720 million ,


•	increase in cash paid to repurchase common shares – $1.2 billion , and


•	increase in cash dividends paid – $168 million .

These outflows were offset by $1.4 billion of proceeds from issuance of new term loan credit facilities subsequent to the merger date.

Revolving Credit Facility

Weyerhaeuser Company has a $1 billion senior unsecured revolving credit facility that expires in September 2018. There were no borrowings under our credit facility in year-to-date 2016 or 2015 , and as of June 30, 2016 , the entire $1 billion remained available for borrowing.

Assumed Debt and Debt Repayments

In connection with the merger with Plum Creek, Weyerhaeuser Company either assumed or repaid Plum Creek's outstanding long-term debt instruments. The long-term debt instruments assumed consisted of:


•	two issuances of publicly traded Senior Notes,


•	an Installment Note and


•	the Note Payable to Timberland Venture.

For additional information on long-term debt instruments assumed, see Notes to Consolidated Financial Statements - Note 10: Long-Term Debt and Lines of Credit .

Concurrent with the merger, Weyerhaeuser repaid in full the outstanding balances of Plum Creek's Revolving Line of Credit and Term Loan using $720 million of cash on hand. There were no payments of debt in 2015.

There are no debt maturities in the next 12 months.

Term Loan Credit Facilities

In February 2016, Weyerhaeuser Company entered into a $600 million 18-month senior unsecured term loan maturing in August 2017. As of June 30, 2016 , we had $600 million outstanding under this facility.

In March 2016, Weyerhaeuser Company entered into a $1.9 billion 18-month senior unsecured term loan maturing in September 2017. As of June 30, 2016 , we had $800 million outstanding under this facility.

Debt Covenants

As of June 30, 2016 , Weyerhaeuser Company was in compliance with all debt covenants. There have been no significant changes during second quarter 2016 to the debt covenants presented in our 2015 Annual Report on Form 10-K for our existing long-term debt instruments. The debt covenants for the Senior Notes assumed through our merger with Plum Creek and the debt covenants for the new term loans issued in February 2016 and March 2016 do not differ materially from our debt covenants presented in our 2015 Annual Report on Form 10-K.

On April 28, 2016, the Installment Note Payable was amended to align the agreement's debt covenants with our term loans' covenants. The assumed Note Payable to Timberland Venture does not include any material financial maintenance covenants.

When calculating compliance in accordance with financial debt covenants, we exclude the impact of our pension and other post-retirement plans recorded within cumulative other comprehensive income from adjusted shareholders' interest (equity). The excluded amounts are $1,386 million and $1,425 million and are equal to the cumulative actuarial losses and prior service costs for our pension and post-retirement plans at June 30, 2016 and December 31, 2015 , respectively (see Notes to Consolidated Financial Statements - Note 13: Cumulative Other Comprehensive Income (Loss) ).

Option Exercises

We received cash proceeds from the exercise of stock options of:


•	$12 million in 2016 and


•	$25 million in 2015 .

Our average stock price was $28.78 and $33.55 in year-to-date 2016 and 2015 , respectively.

Paying Dividends and Repurchasing Stock

We paid cash dividends on common shares of:


•	$469 million in 2016 and


•	$301 million in 2015 .

The increase in dividends paid is primarily due to an increase in our quarterly dividend from $0.29 to $0.31 per share and an increase in total shares outstanding.

We repurchased 26,673,396 shares of common stock for $832 million (including transaction fees) during second quarter 2016 and 58,040,937 shares for $1,695 million (including transaction fees) during year-to-date 2016 under the 2016 Share Repurchase Authorization. The 2016 Share Repurchase Authorization was approved in November 2015 by our Board of Directors and authorized management to repurchase up to $2.5 billion of outstanding shares subsequent to the closing of our merger with Plum Creek. This new authorization replaced the August 2015 share repurchase authorization. Transaction fees incurred for repurchases are not counted as use of funds authorized for repurchases under the 2016 Share Repurchase Authorization. All common stock purchases under the stock repurchase program were made in open-market transactions. As of June 30, 2016 , we had remaining authorization of $806 million for future stock repurchases.

PERFORMANCE MEASURES

We use Adjusted Earnings before Interest, Taxes, Depreciation, Depletion and Amortization (Adjusted EBITDA) as a key performance measure to evaluate the performance of the consolidated company and our business segments. This measure should not be considered in isolation from and is not intended to represent an alternative to our results reported in accordance with U.S. generally accepted accounting principles (U.S. GAAP). However, we believe Adjusted EBITDA provides meaningful supplemental information for investors about our operating performance, better facilitates period to period comparisons, and is widely used by analysts, lenders, rating agencies and other interested parties.

Our definition of Adjusted EBITDA may be different from similarly titled measures reported by other companies. Due to recent organizational changes and our February 19, 2016 merger with Plum Creek, effective for 2016, we have revised our definition of Adjusted EBITDA to add back the basis of real estate sold. We have revised our prior-period presentation to conform to our current reporting.

Adjusted EBITDA, as we define it, is operating income from continuing operations adjusted for depreciation, depletion, amortization, basis of real estate sold, pension and postretirement costs not allocated to business segments (primarily interest cost, expected return on plan assets, amortization of actuarial loss and amortization of prior service cost/credit), and special items. Adjusted EBITDA excludes results from joint ventures.

ADJUSTED EBITDA BY SEGMENT



	QUARTER ENDED					AMOUNT OF CHANGE			YEAR-TO-DATE ENDED						AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	JUNE 2016			JUNE 2015		2016 VS. 2015			JUNE 2016			JUNE 2015			2016 VS. 2015
Adjusted EBITDA by Segment:
Timberlands	$	220		$	168	$	52		$	419		$	360		$	59
Real Estate & ENR	28			11		17			62			44			18
Wood Products	189			98		91			306			186			120
	437			277		160			787			590			197
Unallocated Items	(24		)	1		(25		)	(38		)	(58		)	20
Total	$	413		$	278	$	135		$	749		$	532		$	217

We reconcile Adjusted EBITDA to net earnings for the consolidated company and to operating income for the business segments, as those are the most directly comparable U.S. GAAP measures for each. The table below reconciles Adjusted EBITDA for the quarter ended June 30, 2016 :



DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products		Unallocated Items			Total
Adjusted EBITDA by Segment:
Net earnings										$	168
Earnings from discontinued operations, net of income taxes										(38		)
Interest expense, net of capitalized interest										114
Income taxes										31
Net contribution to earnings	$	125	$	12	$	156	$	(18	)	$	275
Equity earnings from joint ventures	—		—		—		(7		)	(7		)
Interest income and other	—		—		—		(10		)	(10		)
Operating income	125		12		156		(35		)	258
Depreciation, depletion and amortization	95		3		33		2			133
Basis of real estate sold	—		13		—		—			13
Non-operating pension and postretirement credits	—		—		—		(10		)	(10		)
Special items ⁽¹⁾	—		—		—		19			19
Adjusted EBITDA	$	220	$	28	$	189	$	(24	)	$	413


(1)	Special items include: $8 million of Plum Creek merger-related costs and $11 million of legal expense.

The table below reconciles Adjusted EBITDA for the quarter ended June 30, 2015 :



DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products		Unallocated Items			Total
Adjusted EBITDA by Segment:
Net earnings										$	144
Earnings from discontinued operations, net of income taxes										(19		)
Interest expense, net of capitalized interest										85
Income taxes										(1		)
Net contribution to earnings	$	117	$	10	$	71	$	11		$	209
Equity earnings from joint ventures	—		—		—		—			—
Interest income and other	—		—		—		(9		)	(9		)
Operating income	117		10		71		2			200
Depreciation, depletion and amortization	51		—		27		2			80
Basis of real estate sold	—		1		—		—			1
Non-operating pension and postretirement credits	—		—		—		(3		)	(3		)
Adjusted EBITDA	$	168	$	11	$	98	$	1		$	278

The table below reconciles Adjusted EBITDA for the year-to-date period ended June 30, 2016 :



DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products		Unallocated Items			Total
Adjusted EBITDA by Segment:
Net earnings										$	249
Earnings from discontinued operations, net of income taxes										(58		)
Interest expense, net of capitalized interest										209
Income taxes										42
Net contribution to earnings	$	254	$	27	$	243	$	(82	)	$	442
Equity earnings from joint ventures	—		—		—		(12		)	(12		)
Interest income and other	—		—		—		(19		)	(19		)
Operating income (loss)	254		27		243		(113		)	411
Depreciation, depletion and amortization	165		5		63		4			237
Basis of real estate sold	—		30		—		—			30
Non-operating pension and postretirement credits	—		—		—		(22		)	(22		)
Special items ⁽¹⁾	—		—		—		93			93
Adjusted EBITDA	$	419	$	62	$	306	$	(38	)	$	749


(1)	Special items include: $118 million of Plum Creek merger-related costs, $36 million gain on sale of non-strategic assets, and $11 million of legal expense.

The table below reconciles Adjusted EBITDA for the year-to-date period ended June 30, 2015 :



DOLLAR AMOUNTS IN MILLIONS	Timberlands		Real Estate & ENR		Wood Products		Unallocated Items			Total
Adjusted EBITDA by Segment:
Net earnings										$	245
Earnings from discontinued operations, net of income taxes										(52		)
Interest expense, net of capitalized interest										167
Income taxes										8
Net contribution to earnings	$	256	$	33	$	133	$	(54	)	$	368
Equity earnings from joint ventures	—		—		—		—			—
Interest income and other	—		—		—		(18		)	(18		)
Operating income (loss)	256		33		133		(72		)	350
Depreciation, depletion and amortization	104		—		53		7			164
Basis of real estate sold	—		11		—		—			11
Non-operating pension and postretirement credits	—		—		—		(6		)	(6		)
Special items ⁽¹⁾	—		—		—		13			13
Adjusted EBITDA	$	360	$	44	$	186	$	(58	)	$	532

(1) Special items include: a $13 million noncash impairment charge related to a nonstrategic asset.

CRITICAL ACCOUNTING POLICIES

Our critical accounting policies are discussed in our 2015 Annual Report on Form 10-K. As a result of the impact to our financial statements from our merger with Plum Creek, we now consider the following accounting policies to be critical accounting policies. The following are information updates, and should be read in conjunction with, the critical accounting policies disclosed in our 2015 Annual Report on Form 10-K.

Timber Depletion

We record depletion – the costs attributed to timber harvested – as trees are harvested.

To calculate our depletion rate, which is updated annually, we:


•	take the total carrying cost of the timber and


•	divide by the total timber volume estimated to be harvested during the harvest cycle.

Estimating the volume of timber available for harvest over the harvest cycle requires the consideration of the following factors:


•	effects of fertilizer and pesticide applications,


•	changes in environmental regulations and other regulatory restrictions,


•	limits on harvesting certain timberlands,


•	changes in harvest plans,


•	scientific advancement in seedling and growing technology; and


•	changes in weather patterns.

In addition, the duration of the harvest cycle varies by geographic region and species of timber.

Depletion rate calculations do not include estimates for:


•	future silviculture or sustainable forest management costs associated with existing stands,


•	future reforestation costs associated with a stand’s final harvest; and


•	future volume in connection with the replanting of a stand subsequent to its final harvest.

A 5 percent decrease in our estimate of future harvest volumes would have:


•	Increased depletion expense by $3 million for second quarter 2016.


•	Increased depletion expense by $2 million for second quarter 2015.


•	Increased depletion expense by $6 million for year-to-date 2016.


•	Increased depletion expense by $4 million for year-to-date 2015.

Business Combinations

We recognize identifiable assets acquired and liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions for the purchase price allocation process to value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to any goodwill previously recorded (or to earnings in the event that no goodwill was previously recorded) to the extent that we identify adjustments to the preliminary purchase price allocation. Beginning January 1, 2016, we have adopted ASU 2015-16, which eliminates the requirement to retrospectively apply measurement period adjustments to the preliminary purchase price allocation and revise comparative information on the income statement and balance sheet for any prior periods affected. We will recognize measurement period adjustments and any resulting effect on earnings during the period in which the adjustment is identified. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our condensed consolidated statements of operations.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

LONG-TERM INDEBTEDNESS OBLIGATIONS

The following summary of our long-term indebtedness obligations includes:


•	all future cash obligations arising from our long-term indebtedness, which includes obligations for the Note Payable to Timberland Venture;


•	scheduled principal repayments for the next five years and after;


•	weighted average interest rates for debt maturing in each of the next five years and after; and


•	estimated fair values of outstanding obligations.

We estimate the fair value of our debt instruments using quoted market prices we received for the same types and issues of our debt or on the discounted value of the future cash flows using market yields for the same type and comparable issues of debt. Changes in market rates of interest affect the fair value of our fixed-rate debt.

SUMMARY OF LONG-TERM INDEBTEDNESS PRINCIPAL OBLIGATIONS AS OF JUNE 30, 2016



DOLLAR AMOUNTS IN MILLIONS
	2016			2017			2018			2019			2020			THEREAFTER			TOTAL			FAIR VALUE
Fixed-rate debt	$	—		$	281		$	845		$	500		$	—		$	5,168		$	6,794		$	8,029
Average interest rate	—		%	6.95		%	7.35		%	7.38		%	—		%	6.16		%	6.43		%	N/A
Variable-rate debt	$	—		$	1,400		$	—		$	—		$	550		$	—		$	1,950		$	1,950
Average interest rate	—		%	1.49		%	—		%	—		%	2.07		%	—		%	1.66		%	N/A

CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Disclosure controls are controls and other procedures that are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, to allow timely decisions regarding required disclosure. The company’s principal executive officer and principal financial officer have concluded that the company’s disclosure controls and procedures were effective as of June 30, 2016 , based on an evaluation of the company’s disclosure controls and procedures as of that date.

CHANGES IN INTERNAL CONTROLS

As a result of our February 2016 merger with Plum Creek, the company is implementing internal controls over significant processes specific to the acquisition that management believes are appropriate in consideration of related integration of operations, systems, control activities, and accounting for the merger and merger-related transactions. As of the date of this Quarterly Report on Form 10-Q, we are in the process of further integrating the acquired Plum Creek operations into our overall internal controls over financial reporting.

Except as described above, no changes occurred in the company’s internal control over financial reporting during second quarter 2016 that have materially affected, or are reasonably likely to materially affect, the company’s internal control over financial reporting.

LEGAL PROCEEDINGS

Refer to “Notes to Consolidated Financial Statements – Note 12: Legal Proceedings, Commitments and Contingencies.”

RISK FACTORS

There have been no material changes with respect to the risk factors disclosed in our 2015 Annual Report on Form 10-K.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

INFORMATION ABOUT COMMON SHARE REPURCHASES DURING SECOND QUARTER 2016

ISSUER PURCHASES OF EQUITY SECURITIES



COMMON SHARE REPURCHASES DURING SECOND QUARTER	TOTAL NUMBER OF SHARES (OR UNITS) PURCHASED	AVERAGE PRICE PAID PER SHARE (OR UNIT)		TOTAL NUMBER OF SHARES (OR UNITS) PURCHASED AS PART OF PUBLICLY ANNOUCED PLANS OR PROGRAMS	MAXIMUM NUMBER (OR APPROXIMATE DOLLAR VALUE) OF SHARES (OR UNITS) THAT MAY YET BE PURCHASED UNDER THE PLANS OR PROGRAMS
April 1 – April 30	12,288,096	$	31.48	12,288,096	$	1,250,716,457
May 1 – May 31	12,124,893	31.16		12,124,893	872,903,002
June 1 – June 30	2,260,407	29.47		2,260,407	806,283,924
Total repurchases during second quarter	26,673,396	$	31.16	26,673,396	$	806,283,924

During second quarter 2016 , we repurchased 26,673,396 shares of common stock for $832 million (including transaction fees) under the 2016 Share Repurchase Authorization. We repurchased 58,040,937 shares of common stock for $1,695 million (including transaction fees) during year-to-date 2016 under the 2016 Share Repurchase Authorization. The 2016 Share Repurchase Authorization was approved in November 2015 by our Board of Directors and authorized management to repurchase up to $2.5 billion of outstanding shares subsequent to the closing of our merger with Plum Creek. This new authorization replaced the August 2015 share repurchase authorization. Transaction fees incurred for repurchases are not counted as use of funds authorized for repurchases under the 2016 Share Repurchase Authorization. All common stock purchases under the stock repurchase program were made in open-market transactions. As of June 30, 2016 , we had remaining authorization of $806 million for future stock repurchases.

OTHER INFORMATION

As discussed previously in this quarterly report, Weyerhaeuser NR Company, a wholly owned subsidiary of Weyerhaeuser Company, entered into an agreement on May 1, 2016 to sell the company’s Cellulose Fibers pulp manufacturing business to International Paper for $2.2 billion in cash. The basic terms of this agreement are described in our Current Report on Form 8-K, dated May 2, 2016 and filed with the Securities and Exchange Commission on May 2, 2016. The sale is expected to close in the fourth quarter of 2016, subject to certain closing conditions, primarily the receipt of regulatory approvals. On August 4, 2016, the Company was notified that the U.S. Department of Justice had concluded its Hart-Scott-Rodino review without taking any action. Regulatory approvals are still required in other jurisdictions.

EXHIBITS



2.1	Asset Purchase Agreement, dated as of June 15, 2016, by and between Weyerhaeuser NR Company and Nippon Paper Industries, Co., Ltd.*

2.2	Asset Purchase Agreement, dated as of May 1, 2016, by and between Weyerhaeuser NR Company and International Paper Company*

12.1	Statements regarding computation of ratios

31.1	Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934

32.1	Certification pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934, and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350)

100.INS	XBRL Instance Document

100.SCH	XBRL Taxonomy Extension Schema Document

100.CAL	XBRL Taxonomy Extension Calculation Linkbase Document

100.DEF	XBRL Taxonomy Extension Definition Linkbase Document

100.LAB	XBRL Taxonomy Extension Label Linkbase Document

100.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

*Exhibits and schedules to this exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The company will furnish a copy of any such omitted exhibits and schedules to the Securities and Exchange Commission upon request but may request confidential treatment for any exhibit or schedule so furnished.

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	WEYERHAEUSER COMPANY
	Date:	August 5, 2016

	By:	/s/ JEANNE M. HILLMAN
		Jeanne M. Hillman
		Vice President and Chief Accounting Officer

EXHIBIT 2.1

EXECUTION VERSION

ASSET PURCHASE AGREEMENT

Dated as of June 15, 2016,

Between

WEYERHAEUSER NR COMPANY

and

NIPPON PAPER INDUSTRIES CO., LTD.

TABLE OF CONTENTS

Page

ARTICLE I PURCHASE AND SALE OF THE TRANSFERRED ASSETS 1

1.01 Purchase and Sale 1

1.02 Transferred Assets and Excluded Assets 1

1.03 Consents to Certain Assignments 6

1.04 Assumption of Liabilities 6

1.05 Shared Contracts 9

1.06 Risk of Loss 10

1.07 Misallocated Transfers 10

ARTICLE II CLOSING 10

2.01 Closing 10

2.02 Transactions to Be Effected at the Closing 10

2.03 Post-Closing Purchase Price Adjustment 11

2.04 Other Adjustments; Wrong pockets 13

ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER 14

3.01 Organization, Standing and Power 14

3.02 Authority; Execution and Delivery; Enforceability 14

3.03 No Conflicts; Governmental Approvals 15

3.04 Litigation 15

3.05 Availability of Funds 16

3.06 Non-Reliance 16

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER 16

4.01 Organization, Standing and Power 16

4.02 Authority; Execution and Delivery; Enforceability; Title to Transferred Assets 16

4.03 No Conflicts; Governmental Approvals 17

4.04 Financial Statements; Undisclosed Liabilities 18

4.05 Absence of Certain Changes or Events 18

4.06 Taxes 18

4.07 Employee and Related Matters; ERISA 18

4.08 Labor 20

4.09 Litigation 20

4.10 Compliance with Applicable Laws 21

4.11 Environmental Matters 21

4.12 Real Property 23

4.13 Intellectual Property 24

4.14 Business Material Agreements 24

4.15 Condition and Sufficiency of Assets 26

4.16 Material Business Relationships 27

TABLE OF CONTENTS

Page

4.17 Inventory 27

4.18 Disclosure 27

4.19 Disclaimer of Additional Representations and Warranties 27

ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS 28

5.01 Conduct of Business 28

5.02 No Control of Seller’s Business 29

5.03 Access to Certain Environmental Records 29

5.04 Notice of Certain Changes 30

ARTICLE VI ADDITIONAL AGREEMENTS 30

6.01 No Use of Certain Retained Names 30

6.02 Access to Information; Confidentiality 30

6.03 Efforts 32

6.04 Antitrust Notification and Other Regulatory Filings 32

6.05 Noncompetition and Nonsolicitation 33

6.06 Employee Matters 35

6.07 Fees and Expenses 43

6.08 Public Announcements 43

6.09 Site Services Agreements 44

6.10 Bulk Transfer Laws 44

6.11 Refunds and Remittances 44

6.12 Leased Vehicles and Forklifts 44

6.13 Real Estate Matters 45

6.14 Further Assurances 45

6.15 Supplemental Disclosures 45

6.16 Transition Planning 46

ARTICLE VII CONDITIONS PRECEDENT 46

7.01 Conditions to Each Party’s Obligation 46

7.02 Conditions to Obligations of Seller 47

7.03 Conditions to Obligations of Purchaser 47

7.04 Frustration of Closing Conditions 48

ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER 48

8.01 Termination 48

8.02 Effect of Termination 49

8.03 Amendment 49

8.04 Extension; Waiver 49

8.05 Procedure for Termination, Amendment, Extension or Waiver 50


TAX MATTERS	50

9.01 Purchase Price Allocations 50

9.02 Transfer Taxes 50

9.03 Straddle Period 51

9.04 Preparation of Tax Returns. 51

9.05 Tax Refunds 52

TABLE OF CONTENTS

Page

9.06 Certificate of Non-Foreign Status 52

9.07 Research and Development 52

ARTICLE X INDEMNIFICATION 53

10.01 Indemnification by Seller 53

10.02 Indemnification by Purchaser 54

10.03 Indemnification for Tax Matters 55

10.04 Indemnification Procedures 56

10.05 Indemnification as Sole and Exclusive Remedy 57

10.06 Calculation of Indemnity Payments 58

10.07 Additional Matters 58

ARTICLE XI GENERAL PROVISIONS 58

11.01 Survival of Representations, Warranties and Agreements 58

11.02 Notices 59

11.03 Definitions 60

11.04 Interpretation; Disclosure Letters 68

11.05 Severability 69

11.06 Counterparts 69

11.07 Entire Agreement; No Third-Party Beneficiaries 69

11.08 Governing Law 69

11.09 Assignment 70

11.10 Enforcement 70

11.11 Waiver and Amendment 71


Appendix	Glossary of Defined Terms


Exhibit A	Form of Intellectual Property License Agreement


Exhibit B	Site Services Agreements


Exhibit C	Wood Chip Supply Agreement

iii

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “ Agreement ”) dated June 15, 2016, is between Weyerhaeuser NR Company, a Washington corporation (“ Seller ”) and Nippon Paper Industries Co., Ltd, a Japanese corporation (“ Purchaser ”).

WHEREAS, Purchaser wishes to purchase from Seller, and Seller wishes to sell to Purchaser, the Transferred Assets upon the terms and subject to the conditions of this Agreement; and

WHEREAS, capitalized terms used but not defined elsewhere in this Agreement shall have the meanings set forth in Section 11.03 .

NOW, THEREFORE, the Parties hereto agree as follows:

ARTICLE I

PURCHASE AND SALE OF THE TRANSFERRED ASSETS

1.01 Purchase and Sale. Upon the terms and subject to the conditions of this Agreement, at the Closing, Seller shall transfer, assign and deliver to Purchaser, and Purchaser shall purchase, acquire and accept from Seller, all of Seller’s right, title and interest in, to and under all the Transferred Assets, for (i) an aggregate purchase price of (A) $285,000,000 in cash, plus (B) the Lease Buyout Amount, if any (collectively, the “ Purchase Price ”), which Purchase Price is subject to adjustment as set forth in Section 2.03 , and (ii) the assumption of the Assumed Liabilities. The purchase and sale of the Transferred Assets and the assumption of the Assumed Liabilities are collectively referred to in this Agreement as the “ Acquisition .”

1.02 Transferred Assets and Excluded Assets.

(a) For purposes of this Agreement, “ Transferred Assets ” means the following assets owned by Seller on the Closing Date, other than the Excluded Assets:

(i) all real property owned by Seller set forth in Section 1.02(a)(i)(A) of the Seller Disclosure Letter (collectively, the “ Owned Real Property ”), and all of the leaseholds and other interests in real property held by Seller of which are set forth in Section 1.02(a)(i)(B) of the Seller Disclosure Letter , in each case together with Seller’s right, title and interest in, to and under all plants, facilities, buildings, structures, improvements and fixtures thereon and all easements and rights of way pertaining thereto or accruing to the benefit thereof and all other appurtenances and real property rights pertaining thereto (collectively and together with the Owned Real Property, the “ Transferred Real Property ”);

(ii) (A) all raw materials, works-in-process, finished goods and products, supplies, parts and other inventories owned by Seller (“ Inventory ”) that as of the Closing are located on the Transferred Real Property, other than the Inventory set forth in Section 1.02(a)(ii) of the

Seller Disclosure Letter , and (B) all other Inventory as of the Closing that are used or held for use solely in the operation of the Business or produced by the Business for use in or sale by the Business (collectively, with the Inventory, the “ Transferred Inventory ”);

(iii) (A) all other tangible personal property owned by Seller, including all machinery, equipment, furniture, furnishings, tools and vehicles owned by Seller (“ Tangible Personal Property ”) and interests therein owned by Seller as of the Closing that are used or held for use primarily in the operation of the Business; and (B) all Tangible Personal Property and interests therein set forth in Section 1.02(a)(iii) of the Seller Disclosure Letter ;

(iv) all accounts receivable of Seller as of the Closing primarily arising out of or relating to the operation of the Business, including for avoidance of doubt to the extent arising out of, or relating to, the operation of the Business prior to the Closing;

(v) all patents (including all reissues, divisions, continuations, reexaminations and extensions thereof), patent applications, trademarks, trademark registrations, trademark applications, service marks, trade names, business names, brand names, copyright registrations, copyright applications, designs, design registrations, domain names, logos, slogans, trade styles, trade dress and other indicia of origin and all rights to any of the foregoing set forth in Section 1.02(a)(v) of the Seller Disclosure Letter (the “ Scheduled Intellectual Property ”);

(vi) all trade secrets, unregistered copyrights, know-how, processes, methods, designs, plans, specifications, data, inventions and discoveries (whether or not patentable and reduced to practice), improvements, confidential or proprietary information, customer data and all rights with respect to any of the foregoing, in each case that are owned by Seller and used or held for use primarily in the operation of the Business as currently conducted (the “ Transferred Technology ” and collectively with the Scheduled Intellectual Property, the “ Transferred Intellectual Property ”) and to the extent assignable, all license and other contractual rights granted to Seller by a third party with regard to trade secrets, unregistered copyrights, know-how, processes, methods, designs, plans, specifications, data, inventions and discoveries (whether or not patentable and reduced to practice), improvements, confidential or proprietary information and customer data used or held for use solely in the operation of the Business as currently conducted, including, without limitation, those set forth in Section 1.02(a)(vi) of the Seller Disclosure Letter (the “ Transferred Licensed Intellectual Property ”);

(vii) all permits, licenses, franchises, approvals or authorizations from any Governmental Entity (“ Permits ”) that are held by Seller and used

or held for use primarily in the operation of the Business, in each case to the extent such Permits are transferable (the “ Transferred Permits ”);

(viii) all contracts, leases (including equipment leases), subleases (including equipment subleases), licenses (including equipment licenses), notes, bonds, debentures, indentures, guarantees, agreements, commitments and all other legally binding instruments, arrangements and understandings, whether or not in writing (“ Contracts ”), to which Seller is a party or by which Seller is bound and which are set forth as Business Material Agreements in Section 1.02(a)(viii) of the Seller Disclosure Letter , and all other Contracts to which Seller is a party or by which Seller is bound that are used or held for use primarily in, or that arise primarily out of, the operation of the Business (the foregoing collectively, the “ Transferred Contracts ”); provided, however, that the Transferred Contracts shall exclude any Shared Contracts and Excluded Contracts;

(ix) all rights of Seller in and to products sold or leased (including products returned after the Closing Date and rights of Seller of rescission, replevin and reclamation) solely in the operation of the Business;

(x) all credits, prepaid expenses, rebates, deferred charges, advance payments, security deposits and prepaid items (except for those related to Taxes) that are used or held for use primarily in, or that arise primarily out of, the operation of the Business;

(xi) all rights, claims, causes of action and credits (except those related to Taxes) owned by Seller to the extent relating to any Transferred Asset or any Assumed Liability, including any such item arising under any guarantee, warranty, indemnity, right of recovery, right of set-off or similar right in favor of Seller in respect of any Transferred Asset or any Assumed Liability;

(xii) subject to Section 6.02 , all books, records and other documents (including all books of account, ledgers, general, financial, accounting and Transferred Employee personnel records, files, invoices, customers’ and suppliers’ lists, other distribution lists, operating, production and other manuals, manufacturing and quality control records and procedures, billing records, sales and promotional literature) (in all cases, in any form or medium) owned by Seller (“ Records ”) that are currently used or held for use solely in, or that arise solely out of, the current conduct or on-going operation of the Business;

(xiii) all goodwill owned by Seller generated by or associated with the Business or the Transferred Assets;

(xiv) all assets of any Assumed Benefit Plan set forth in Section 1.02(a)(xiv) of the Seller Disclosure Letter or Assumed Benefit Agreement (collectively, the “ Assumed Benefit Assets ”);

(xv) all insurance policies set forth in Section 1.02(a)(xv) of the Seller Disclosure Letter (collectively, the “ Business Insurance Policies ”) and all rights and claims thereunder and any proceeds thereof;

(xvi) subject to Section 1.05 , all rights related to the Purchaser Portion of any Shared Contract;

(xvii)subject to Section 6.12 , the Transferred Vehicles and Forklifts; and

(xviii) other assets of Seller set forth in Section 1.02(a)(xviii) of the Seller Disclosure Letter .

(b) For the purposes of this Agreement, “ Excluded Assets ” shall mean the following assets owned by Seller to the extent such assets would otherwise constitute Transferred Assets:

(i) all assets set forth in Section 1.02(b)(i) of the Seller Disclosure Letter ;

(ii) all cash and cash equivalents;

(iii) all insurance policies, other than the Business Insurance Policies, and all rights and claims thereunder and any proceeds thereof;

(iv) all rights, claims, causes of action and credits to the extent relating to any Excluded Asset or any Retained Liability, including any such item arising under any guarantee, warranty, indemnity or similar right in favor of Seller in respect of any Excluded Asset or any Retained Liability;

(v) any letters of credit set forth on Section 1.02(b)(v) of the Seller Disclosure Letter ;

(vi) all shares of capital stock of, or other equity interests in, Seller, any affiliate of Seller or any other Person;

(vii) all assets (other than the Assumed Benefit Assets) relating to any Business Benefit Plan or Business Benefit Agreement in which any employee of Seller or any of its affiliates participates;

(viii) subject to Section 6.02 , all Records relating to the Business that form part of Seller’s or any other member of the Seller Group’s

general ledger or that are personnel records of any individual who is not a Transferred Employee;

(ix) all Records prepared in connection with the sale or transfer of the Business, including bids received from third parties and analyses related to the Business;

(x) all rights of Seller under this Agreement or any other Transaction Document;

(xi) (A) the names and marks set forth in Section 1.02(b)(xi) of the Seller Disclosure Letter and any name or mark derived from, similar to or including any of the foregoing (in each case, in any style or design) (collectively, the “ Retained Names ”) and (B) all Intellectual Property Rights other than the Transferred Intellectual Property;

(xii) all real property owned by Seller, leaseholds and other interests in real property held by Seller (other than those set forth in Sections 1.02(a)(i)(A) and 1.02(a)(i)(B) of the Seller Disclosure Letter ), including the real estate interests set forth in Section 1.02(b)(xii) of the Seller Disclosure Letter, in each case together with all right, title and interest in, to and under all plants, facilities, buildings, structures, improvements and fixtures thereon and all easements and rights of way pertaining thereto or accruing to the benefit thereof and all other appurtenances and real property rights pertaining thereto and all related leases (“ Excluded Real Property ”);

(xiii) all Tangible Personal Property that is located on Excluded Real Property and used or held for use by: (x) Seller or any of its affiliates, or (y) NORPAC, in providing goods or services to Purchaser contemplated under the Site Services Agreements or Wood Chip Supply Agreement;

(xiv) all Permits held by Seller other than the Transferred Permits, including those set forth in Section 1.02(b)(xiv) of the Seller Disclosure Letter ;

(xv) all Contracts held by Seller other than the Transferred Contracts, including those set forth in Section 1.02(b)(xv) of the Seller Disclosure Letter (“ Excluded Contracts ”);

(xvi) all accounts receivable pursuant to which a payment is owed by the Seller Business to the Business;

(xvii) any refund or credit of Taxes attributable to any Retained Tax Liability;

(xviii) all tangible personal property and interests therein set forth in Section 1.02(b)(xviii) of the Seller Disclosure Letter ;

(xix) except as provided pursuant to any Site Services Agreement or the Transition Service Agreement executed pursuant to Section 6.16 , all rights to receive, and all rights with respect to the delivery of, corporate-level services of the type provided as of the date of this Agreement to the Business by Seller or any of its affiliates, including assets used or held for use by Seller in connection with such corporate-level services; and

(xx) subject to Section 1.05 , all rights related to the Seller Portion of any Shared Contract.

1.03 Consents to Certain Assignments

(a) Notwithstanding anything in this Agreement to the contrary, this Agreement shall not constitute an agreement to assign, directly or indirectly, any asset or any claim or right or any benefit arising under or resulting from such asset if an attempted direct or indirect assignment thereof, without the consent of a third party or Governmental Approval, would constitute a breach, default, violation or other contravention of the rights of such third party or Governmental Entity or applicable Law, would be ineffective with respect to any party to an agreement concerning such asset, claim or right, or would in any way adversely affect the rights of Seller or, upon transfer, Purchaser under such asset, claim or right. If any direct or indirect transfer or assignment by Seller to Purchaser, or any direct or indirect acquisition or assumption by Purchaser of, any interest in, or liability, obligation or commitment under, any asset, claim or right requires the consent of a third party or Governmental Approval, then such transfer or assignment or assumption shall be made subject to such consent or Governmental Approval being obtained.

(b) If any such consent or Governmental Approval referred to in Section 1.03(a) is not obtained prior to the Closing, the Closing shall nonetheless take place on the terms set forth herein and, thereafter, Purchaser and Seller shall cooperate (each at its own expense) in any lawful and commercially reasonable arrangement proposed by Purchaser under which Purchaser shall obtain (without infringing upon the legal rights of such third party or Governmental Entity or violating any applicable Law) the economic claims, rights and benefits (net of the amount of any related Tax costs imposed on Seller or any of its affiliates) under the asset, claim or right with respect to which the consent or Governmental Approval has not been obtained in accordance with this Agreement (such arrangement, the “ Arrangement ”). Purchaser shall bear any related economic burden (including the amount of any related Tax costs imposed on Seller or any of its affiliates) with respect to the asset, claim or right with respect to which the consent or Governmental Approval has not been obtained in accordance with this Agreement.

1.04 Assumption of Liabilities

(a) Upon the terms and subject to the conditions of this Agreement including, without limitation, those Retained Liabilities outlined in Section 1.04(b) , Purchaser shall, effective as of the Closing, assume, and shall pay, perform and discharge when due, all Liabilities of Seller primarily arising out of or relating to the Transferred Assets, the Business or

the operation of the Business, in each case prior to, on or after the Closing Date, other than the Retained Liabilities (collectively, the “ Assumed Liabilities ”), which Assumed Liabilities shall include (in each case, regardless of when such Liabilities arose, arise or were or are incurred and excluding the Retained Liabilities):

(i) all Liabilities to the extent included as Current Liabilities on the Statement, as finally determined after resolution of all disputes in accordance with Section 2.03 , including all accounts payable of Seller primarily arising out of the operation of the Business;

(ii) all ordinary course Liabilities to the extent arising out of, or relating to, the operation of the Business or the ownership of the Transferred Assets prior to the Closing;

(iii) all Liabilities of Seller under the Transferred Contracts and the Transferred Permits other than the Liabilities under any of the Transferred Contracts or the Transferred Permits which cannot be transferred to Purchaser; provided, however, that this Section 1.04(a)(iii) shall in no way limit Purchaser’s obligations pursuant to Section 1.03(b) ;

(iv) all accounts payable and accrued liabilities arising out of or relating to the operation of the Business, including for avoidance of doubt to the extent arising out of, or relating to, the operation of the Business or the ownership of the Transferred Assets prior to the Closing, or otherwise in respect of the Business;

(v) all Liabilities of Seller arising out of or relating to products manufactured or sold by the Business at any time, including Liabilities for refunds, adjustments, allowances, repairs, exchanges, returns and warranty, product liability, merchantability and other claims relating to such products;

(vi) all Liabilities of Seller arising as a result of at any time being the owner, lessee or occupant of, or the operator of the activities conducted at, the Transferred Real Property;

(vii) all Environmental Liabilities of Seller at any time arising out of or relating to the Business, the Transferred Real Property, the ownership, operation of the Business or the ownership or operation of, or activities conducted at, the Transferred Real Property;

(viii) all Liabilities of Seller in respect of any Action, pending or threatened, and claims, whether or not presently asserted, at any time arising out of or relating to the operation of the Business;

(ix) (A) all Liabilities of Seller with respect to the Transferred Employees and their dependents and beneficiaries arising out of or relating to any Assumed Benefit Plan or Assumed Benefit Agreement and (B) all

other employment and employee Liabilities of Seller arising out of or relating to the operation of the Business;

(x) all Liabilities of Seller for Taxes arising out of or relating to the Transferred Assets for any Post-Closing Tax Period other than Seller’s portion of the Transfer Taxes, if any;

(xi) all Liabilities of Seller (A) reflected on the Balance Sheet other than Liabilities discharged after the date of the Balance Sheet, and (B) set forth on Section 1.04(a)(xi) of the Seller Disclosure Letter ;

(xii) subject to Section 1.05 , all Liabilities related to the Purchaser Portion of any Shared Contract; and

(xiii) subject to Section 6.12 , all Liabilities related to the Transferred Vehicles and Forklifts.

(b) Notwithstanding any other provision of this Agreement to the contrary, Purchaser shall not assume any Retained Liabilities. For the purposes of this Agreement, “ Retained Liabilities ” shall mean the following Liabilities of Seller (in each case, excluding any Liability to the extent included as a Current Liability on the Statement, as finally determined after resolution of all disputes in accordance with Section 2.03 ):

(i) all Liabilities to the extent not arising out of or relating to the Business, the Transferred Assets or the ownership or operation thereof;

(ii) all Liabilities to the extent arising out of or relating to Excluded Assets;

(iii) (A) all Liabilities incurred under or with respect to any Business Benefit Plan or any Business Benefit Agreement that is not an Assumed Benefit Plan or Assumed Benefit Agreement and (B) all other employment and employee Liabilities arising out of or relating to the operation of the Business to the extent such Liabilities are expressly retained by Seller pursuant to Section 6.06 ;

(iv) Liabilities for Taxes of Seller with respect to the Transferred Assets for any Pre-Closing Tax Period, but excluding Purchaser’s portion of Transfer Taxes (collectively, the “ Retained Tax Liabilities ”);

(v) all accounts payable pursuant to which a payment is owed by the Business to the Seller Business;

(vi) all Liabilities for indebtedness for borrowed money;

(vii) all Liabilities of Seller arising pursuant to the terms of this Agreement or any Ancillary Agreement;

(viii) all Liabilities for fees and expenses required to be borne by Seller in connection with the Transactions pursuant to the terms of this Agreement;

(ix) except as provided in Section 6.06(l)(iii) , all Liabilities of Seller related to Former Employees;

(x) subject to Section 1.05 , all Liabilities related to the Seller Portion of any Shared Contract;

(xi) all Liabilities to the extent arising out of or relating to Kepner v. Weyerhaeuser Co , No. 6:16-cv-01040-AA (D. Or. Jun. 8, 2016), and any other claims based on the subject matter thereof;

(xii) all Liabilities to the extent arising out of or relating to Cowlitz County v. Robert P. Radakovich, Sr., et al , No. 11-2-00848-8, (Cowlitz County Superior Court, Jul. 7, 2011) and other claims or regulatory enforcement actions arising out of the closure of the Mount Solo landfill or any obligations related thereto; and

(xiii) except to the extent provided in Section 1.03(b) , all Liabilities under any of the Transferred Contracts or the Transferred Permits which cannot be transferred to Purchaser.

1.05 Shared Contracts .

(a) The Parties shall, and shall cause their respective subsidiaries to, use their commercially reasonable efforts to reasonably divide, partially assign, modify and/or replicate (in whole or in part) the respective rights and obligations under and in respect of any Shared Contract (including by working with third parties to such Shared Contracts), such that (i) Purchaser is the beneficiary of the rights and is responsible for the obligations related to the portion of such Shared Contract relating to the Business (the “ Purchaser Portion ”), which rights shall be a Transferred Asset and which obligations shall be an Assumed Liability, and (ii) Seller is the beneficiary of the rights and is responsible for the obligations related to such Shared Contract not relating to the Business (the “ Seller Portion ”), which rights shall be an Excluded Asset and which obligations shall be a Retained Liability. If the Parties or their respective affiliates are not able to enter into an arrangement to divide, partially assign, modify and/or replicate (in whole or in part) the rights and obligations under and in respect of any such Shared Contract as contemplated by the immediately preceding sentence prior to the Closing, the Closing shall nonetheless take place on the terms set forth herein and, thereafter, Purchaser and Seller shall, and shall cause their respective subsidiaries to, use their commercially reasonable efforts to cooperate (each at its own expense) in any lawful, contractually permissible and commercially reasonable arrangement under which, following the Closing and until the earlier of four (4) years after the Closing and the date on which the division, partial assignment, modification and/or replication of such Shared Contract as contemplated by the immediately preceding sentence is effected, Purchaser shall receive the interest in the benefits and

obligations of the Purchaser Portion under such Shared Contract and Seller shall receive the interest in the benefits and obligations of the Seller Portion under such Shared Contract.

(b) Seller and Purchaser shall, and shall cause their respective subsidiaries to, (i) treat for all Tax purposes the portion of each Shared Contract inuring to its respective businesses as assets owned by, and/or liabilities of, as applicable such Party or such Party’s applicable subsidiary, as applicable, not later than the Closing and (ii) neither report nor take any Tax position (on a Tax Return or otherwise) inconsistent with such treatment (unless required by applicable Law).

1.06 Risk of Loss . As of the time of Closing, title to all Transferred Assets shall be transferred to Purchaser an d Purchaser shall thereafter bear all risk of loss associated with the Transferred Assets and be solely responsible for procuring adequate insurance to protect the Transferred Assets against any such loss.

1.07 Misallocated Transfers. In the event that, at any time or from time to time after the Closing, any Party (or any of its subsidiaries) shall receive or otherwise possess any asset or be liable for any Liability that is allocated to any other Person pursuant to this Agreement or any other Transaction Document, such Party shall promptly transfer or assign, or cause to be transferred or assigned, such asset or Liability to the Person so entitled thereto, and the relevant Party will cause such entitled Person to accept such asset or assume such Liability. Prior to any such transfer, the Person receiving or possessing such asset shall hold such asset in trust for any such other Person.

ARTICLE II

CLOSING

2.01 Closing . The closing of the Acquisition (the “ Closing ”) shall take place at the offices of Perkins Coie LLP, 1201 Third Avenue, Suite 4900, Seattle, Washington 98101, on the last Business Day of the month in which the conditions set forth in Article VII (other than the conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions at such time) have been satisfied (or, to the extent permitted by Law, waived by the Parties entitled to the benefit thereof) and shall be effective as of 11:59 p.m. on such date, or shall take place at such other place, time and date as shall be agreed in writing between Seller and Purchaser. The date on which the Closing occurs is referred to in this Agreement as the “ Closing Date ”.

2.02 Transactions to Be Effected at the Closing . At the Closing:

(a) Seller shall deliver or cause to be delivered to Purchaser (i) duly executed deeds (in recordable form) for each Owned Real Property, bills of sale, assignments and other instruments each in a form reasonably acceptable to Purchaser of transfer relating to the Transferred Assets, (ii) a duly executed counterpart of the Intellectual Property License Agreement and (iii) all such other certificates and documents required to be delivered to Purchaser at or prior to the Closing pursuant to this Agreement or any Ancillary Agreement each in a form reasonably acceptable to Purchaser (the documents in clauses (i) and (iii),

collectively, the “ Asset Conveyance Documents ”) (it being understood that the certificates, deeds, bills of sale, assignments, instruments of transfer, agreements and other documents referred to in clauses (i) through (iii) shall not require Seller to make any additional representations, warranties or covenants, expressed or implied, not contained in this Agreement or the Ancillary Agreements; provided , however , that the deeds for the Owned Real Property shall be bargain and sale deeds with covenants against grantor’s acts (also known as “special warranty” deeds); and

(b) Purchaser shall deliver to Seller, (i) payment, by wire transfer of immediately available funds to one or more accounts designated in writing by Seller (such designation to be made at least two (2) Business Days prior to the Closing Date), in an amount equal to (A) the Purchase Price, plus or minus (B) an estimate, prepared by Seller in good faith and delivered to Purchaser at least two (2) Business Days prior to the Closing Date, of any adjustment to the Purchase Price under Section 2.03 (the amount of the Purchase Price plus or minus such estimate of any adjustment under Section 2.03 being hereinafter called the “ Closing Date Payment ”), (ii) duly executed counterparts of the deeds, bills of sale, assignments and other instruments of transfer referred to in Section 2.02(a)(i) and duly executed assumption agreements and other instruments of assumption providing for the assumption of the Assumed Liabilities, (iii) a duly executed counterpart of the Intellectual Property License Agreement and (iv) all such other certificates and documents required to be delivered to Seller at or prior to the Closing pursuant to this Agreement or any Ancillary Agreement (the documents in clauses (ii) and (iv), collectively, the “ Liabilities Assumption Documents ”) (it being understood that the deeds, bills of sale, assignments, instruments of transfer, agreements and other documents referred to in clauses (ii) through (iv) shall not require Purchaser to make any additional representations, warranties or covenants, expressed or implied, not contained in this Agreement or the Ancillary Agreements).

2.03 Post-Closing Purchase Price Adjustment.

(a) The Statement . Within sixty (60) days after the Closing Date, Seller shall prepare and deliver to Purchaser a statement (the “ Statement ”), setting forth the Working Capital of the Business as of the close of business on the date immediately preceding the Closing Date (the “ Closing Working Capital ”).

(b) Objections; Resolution of Disputes . The Statement shall become final and binding upon the Parties on the thirtieth (30th) day following delivery thereof, unless Purchaser gives written notice of its disagreement with the Statement (a “ Notice of Disagreement ”) to Seller prior to such date. Any Notice of Disagreement shall specify in reasonable detail the nature of any disagreement so asserted and Purchaser’s calculation of Closing Working Capital. If a Notice of Disagreement is received by Seller in a timely manner, then the Statement (as revised in accordance with this sentence) shall become final and binding upon the Parties on the earlier of (i) the date Seller and Purchaser resolve in writing any differences they have with respect to the matters specified in the Notice of Disagreement and (ii) the date any disputed matters are finally resolved in writing by the Accounting Firm. During the thirty- (30-) day period following the delivery of a Notice of Disagreement, Seller and Purchaser shall seek in good faith to resolve in writing any differences that they may have with respect to the matters specified in the Notice of Disagreement. At the end of such thirty- (30-) day period, if the

disagreement has not been resolved, Seller and Purchaser shall submit to an independent accounting firm (the “ Accounting Firm ”) for determination of any and all matters that remain in dispute and were properly included in the Notice of Disagreement. The dispute resolution by the Accounting Firm shall be an expert determination under the relevant Laws of the State of Delaware. The Accounting Firm shall be PricewaterhouseCoopers LLP or, if such firm is unable or unwilling to act, such other nationally recognized independent public accounting firm as shall be agreed upon by the Parties hereto in writing. Seller and Purchaser shall use commercially reasonable efforts to cause the Accounting Firm to render a decision in writing resolving the matters submitted to the Accounting Firm within thirty (30) days of receipt of the submission. Absent fraud, bad faith or manifest error, the determination of the Accounting Firm shall be final and binding on the Parties and judgment may be entered upon such determination in any court having jurisdiction over the Party against which such determination is to be enforced. The cost of any determination (including the fees and expenses of the Accounting Firm and reasonable attorney fees and expenses of the Parties) pursuant to this Section 2.03 shall be borne by Purchaser and Seller in inverse proportion as they may prevail on matters resolved by the Accounting Firm, which proportionate allocations shall also be determined by the Accounting Firm at the time the determination of the Accounting Firm is rendered on the merits of the matters submitted. Other than the fees and expenses referred to in the immediately preceding sentence, the fees and disbursements of Seller’s independent auditors shall be borne by Seller and the fees and disbursements of Purchaser’s independent auditors shall be borne by Purchaser.

(c) Adjustment Payment . If the Closing Working Capital exceeds $54,000,000 (the “ WC Target ”), the Purchase Price shall be increased by the amount by which the Closing Working Capital exceeds the WC Target, and if the Closing Working Capital is less than the WC Target, the Purchase Price shall be decreased by the amount by which the Closing Working Capital is less than the WC Target (the Purchase Price as so increased or decreased shall hereinafter be referred to as the “ Adjusted Purchase Price ”). If the Closing Date Payment is less than the Adjusted Purchase Price, Purchaser shall, and if the Closing Date Payment is more than the Adjusted Purchase Price, Seller shall, within ten (10) Business Days after the Statement becomes final and binding on the Parties, make payment by wire transfer in immediately available funds in an amount equal to the absolute value of the difference between the Adjusted Purchase Price and the Closing Date Payment to one or more accounts designated in writing at least two (2) Business Days prior to such payment by the Party entitled to receive such payment, plus interest thereon at a rate of interest per annum equal to the Prime Rate, calculated on the basis of the actual number of days elapsed divided by 365, from and including the Closing Date but excluding the date of payment.

(d) Working Capital . The term “ Working Capital ” means Current Assets minus Current Liabilities. The terms “ Current Assets ” and “ Current Liabilities ” mean the current assets and current liabilities, respectively, of the Business, excluding all items with respect to Taxes, all Excluded Assets and all Retained Liabilities. Current Assets and Current Liabilities shall be determined as follows: (i) first, the methods, policies, principles, methodologies and rules set forth in Section 2.03(d) of the Seller Disclosure Letter shall be applicable, without regard to whether such methods, policies, principles, methodologies and rules are consistent with GAAP, (ii) second, to the extent not covered by Section 2.03(d) of the Seller Disclosure Letter , the methods, policies, principles, methodologies and rules as were used by Seller in the preparation of the Annual Balance Sheet shall be applicable, without regard to

whether such methods, policies, principles, methodologies and rules are consistent with GAAP, and (iii) third, to the extent no relevant method, policy, principle, methodology or rule is applicable pursuant to the foregoing clauses (i) and (ii), GAAP, applied in a manner consistent with Seller’s historical methods, policies, principles, methodologies and rules, excluding any effects of the Transactions, shall be applicable. The foregoing principles are referred to in this Agreement as the “ Accounting Principles .” The Closing Working Capital is to be calculated as of the close of business on the date immediately preceding the Closing Date in accordance with the Accounting Principles. The scope of the disputes to be resolved by the Accounting Firm as provided in Section 2.03(b) shall be solely limited to whether such calculation was done in accordance with the Accounting Principles, and whether there were mathematical errors in the Statement. The Accounting Firm’s determination of any amount in dispute must be within the range of values assigned to such amount by the Parties hereto. The Accounting Firm is not authorized or permitted to make any other determination or adjustment based on GAAP if the Accounting Principles can be determined pursuant to clauses (i) and (ii) of the definition thereof. Without limiting the generality of the foregoing, the Accounting Firm is not authorized or permitted to make any determination as to the accuracy of any representation or warranty in this Agreement or as to compliance by the Parties with any of their covenants in this Agreement (other than (A) whether the Statement calculation was done in accordance with the Accounting Principles and (B) whether there were any mathematical errors in the Statement).

(e) Post-Closing Books and Records . Following the Closing, Purchaser shall not take any actions with respect to the accounting books and records of the Business on which the Statement is to be based that would affect the Statement. During the period of time from and after the Closing Date through the resolution of any adjustment to the Purchase Price contemplated by this Section 2.03 , Purchaser shall afford to Seller and its Representatives reasonable access during normal business hours to all the properties, systems, books, Contracts, personnel and Records of the Business relevant to the adjustment contemplated by this Section 2.03 , solely for the purpose of determining such adjustment, subject to Seller and its Representative agreeing to keep such information confidential.

2.04 Other Adjustments; Wrong pockets .

(a) To the extent that personal property taxes, real estate taxes, assessments, utility, water, sewer and other similar charges paid by Seller before the Closing Date are allocable to periods after the Closing Date, the amount of such charges shall be paid to Seller by Purchaser promptly upon written request. To the extent that any such amounts are paid by Purchaser after the Closing Date and are allocable to periods before the Closing Date, the amount of such charges shall be paid to Purchaser by Seller promptly upon written request.

(b) After the Closing, to the extent Purchaser is presented with a payable which is a Retained Liability, or Seller is presented with a payable which is an Assumed Liability, the receiving Party shall promptly notify the other Party and exercise commercially reasonable efforts to cooperate to allow the other Party to resolve the matter (e.g., by making payment) within twenty (20) Business Days. If, following such twenty (20) Business Day period or upon the written request of Purchaser, Seller pays any such amount which is an Assumed Liability (before, on or after the Closing Date), the amount of such payment shall be paid to Seller by Purchaser promptly upon Seller’s written request. If, following such twenty

(20) Business Day period or upon the written request of Purchaser, Purchaser pays any such amount which is a Retained Liability (before, on or after the Closing Date), the amount of such payment shall be paid to Purchaser by Seller promptly upon Purchaser’s written request. Notwithstanding the foregoing, payment by a Party of such a payable on behalf of the other Party pursuant to the foregoing sentence shall not in any way change or modify the classification of such payable as a Retained Liability, Assumed Liability or Current Liability under this Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser represents and warrants to Seller, as of the date of this Agreement and as of the Closing Date as though made on the Closing Date (except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct on and as of such earlier date) that, except as specifically disclosed in the manner contemplated in Section 11.04 and disclosed in the letter dated as of the date of this Agreement from Purchaser to Seller (the “ Purchaser Disclosure Letter ”, attached hereto and made a part hereof):

3.01 Organization, Standing and Power . Purchaser is duly organized, validly existing and in good standing under the Laws of Japan. Purchaser has all requisite power and authority necessary to enable it to own, lease or otherwise hold its properties and assets and to conduct its business as currently conducted. Purchaser is duly qualified to do business and is in good standing (or its equivalent status) in each jurisdiction where the nature of its business or the ownership or leasing of its properties makes such qualification or good standing necessary, except for any failure to be so qualified or in good standing that, individually or in the aggregate, has not had and would not reasonably be expected to have a Purchaser Material Adverse Effect.

3.02 Authority; Execution and Delivery; Enforceability. Purchaser has all requisite power and authority to execute and deliver each Transaction Document to which it is or is contemplated to be a party, to perform its obligations thereunder and to consummate the Transactions. The execution and delivery by Purchaser of each Transaction Document to which it is or is contemplated to be a party and the consummation by Purchaser of the Transactions have been duly authorized by the Board of Directors of Purchaser, and no other corporate proceedings on the part of Purchaser are necessary to authorize the Transaction Documents or the consummation of the Transactions. Purchaser has duly executed and delivered this Agreement, and, assuming due authorization, execution and delivery by Seller, this Agreement constitutes Purchaser’s legal, valid and binding obligation, enforceable against Purchaser in accordance with its terms (except insofar as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally or by principles governing the availability of equitable remedies). Prior to the Closing, Purchaser will have duly executed and delivered each other Transaction Document to which it is or is contemplated to be a party, and, assuming due authorization, execution and delivery by the other Parties thereto, each other Transaction Document to which it is or is contemplated to be a party will constitute its legal, valid and binding obligation, enforceable against it in accordance with its terms (except insofar as such enforceability may be limited by applicable bankruptcy,

insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally or by principles governing the availability of equitable remedies).

3.03 No Conflicts; Governmental Approvals .

(a) The execution and delivery by Purchaser of each Transaction Document to which it is a party does not, the execution and delivery by Purchaser of each Transaction Document to which it is contemplated to be a party will not, and the consummation of the Transactions and compliance with the terms hereof and thereof will not, conflict with, or result in any violation of or default (or an event that, with or without notice or lapse of time or both, would become a default) under, or give rise to a right of termination, cancelation or acceleration of any obligation or to loss of a material benefit under, or to increased, additional, accelerated or guaranteed rights or entitlements of any Person under, or result in the creation of any Lien upon any of the properties or assets of Purchaser or any of its subsidiaries under, any provision of (i) the certificate or articles of incorporation and the bylaws or comparable organizational documents of Purchaser or any of its subsidiaries, (ii) any Contract to which Purchaser or any of its subsidiaries is a party or by which any of their respective properties or assets is bound or (iii) subject to the filings, consents and other matters referred to in Section 3.03(b) , any judgment, order or decree issued, promulgated or entered into by or with any Governmental Entity (“ Judgment ”) or statute, law (including common law), ordinance, rule or regulation promulgated or entered into by or with any Governmental Entity (“ Law ”) applicable to Purchaser or any of its subsidiaries or their respective properties or assets, other than, in the case of clauses (ii) and (iii) above, any such item that, individually or in the aggregate, has not had and would not reasonably be expected to have a Purchaser Material Adverse Effect.

3.04 Litigation . There is no Action pending or, to the knowledge of Purchaser, any claim that has been asserted against or affecting Purchaser or any of its subsidiaries that, individually or in the aggregate, has had or would reasonably be expected to have a Purchaser Material Adverse Effect, nor is there any Judgment outstanding against Purchaser or any of its subsidiaries or to which any of their respective properties or assets is subject that has had or would reasonably be expected to have a Purchaser Material Adverse Effect.

3.05 Availability of Funds .

(a) Purchaser has, or will have at the Closing, sufficient cash to pay the Closing Date Payment and any other amounts required to be paid in connection with the consummation of the Transactions and to pay all related fees and expenses of Purchaser and its subsidiaries, and there is no restriction on the use of such cash for such purposes. Purchaser has the financial resources and capabilities to fully perform all of its obligations under this Agreement and the other Transaction Documents.

(b) In no event shall the receipt or availability of funds or financing by or to Purchaser or any of its affiliates or any other financing transaction be a condition to any of the obligations of Purchaser to consummate the Transactions.

3.06 Non-Reliance . Purchaser has not relied upon, and shall not rely upon, any statements by Seller other than those expressly set forth in this Agreement or any other Transaction Document.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Purchaser, as of the date of this Agreement and as of the Closing Date as though made on the Closing Date (except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct on and as of such earlier date) that, except as specifically disclosed in the manner contemplated in Section 11.04 and disclosed in the letter dated as of the date of this Agreement (and as may be updated from time to time pursuant to Section 6.15 ) from Seller to Purchaser (the “ Seller Disclosure Letter ”, attached hereto and made a part hereof):

4.01 Organization, Standing and Power . Seller is duly organized and validly existing under the Laws of the State of Washington and has all requisite power and authority, and Seller possesses all governmental franchises, licenses, permits, authorizations and approvals, necessary to enable it to own, lease or otherwise hold its properties and assets which constitute Transferred Assets and to conduct the Business as currently conducted, other than such franchises, licenses, permits, authorizations and approvals the lack of which, individually or in the aggregate, would not be material to the Business as presently conducted. Seller is duly qualified to do business in each jurisdiction where the nature of the Business or the ownership or leasing of the Transferred Assets makes such qualification necessary, except where the failure to be so qualified would not be material to the Business as presently conducted.

4.02 Authority; Execution and Delivery; Enforceability; Title to Transferred Assets .

(a) Seller has all requisite power and authority to execute and deliver each Transaction Document to which it is or is contemplated to be a party, to perform its obligations thereunder and to consummate the Transactions. The execution and delivery by Seller of each Transaction Document to which it is or is contemplated to be a party and the consummation by Seller of the Transactions have been duly authorized by all necessary corporate action on

the part of Seller, and no other corporate proceedings on the part of Seller are necessary to authorize the Transaction Documents or the consummation of the Transactions. Seller has duly executed and delivered this Agreement, and, assuming due authorization, execution and delivery by Purchaser, this Agreement constitutes Seller’s legal, valid and binding obligation, enforceable against Seller in accordance with its terms (except insofar as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally or by principles governing the availability of equitable remedies). Prior to the Closing, Seller will have duly executed and delivered each other Transaction Document to which it is or is contemplated to be a party, and, assuming due authorization, execution and delivery by the other Parties thereto, each other Transaction Document to which it is or is contemplated to be a party will constitute its legal, valid and binding obligation, enforceable against it in accordance with its terms (except insofar as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally or by principles governing the availability of equitable remedies).

(b) Seller has good and valid title to, or a valid leasehold interest in, all of the Transferred Assets. All Transferred Assets (including leasehold interests) are free and clear of Liens except for Permitted Liens and those Liens identified in Section 4.02(b) of the Seller Disclosure Letter . This Section 4.02(b) does not relate to intellectual property matters, which are the subject of Section 4.13 (Intellectual Property).

4.03 No Conflicts; Governmental Approvals .

(a) The execution and delivery by Seller of each Transaction Document to which it is a party does not, the execution and delivery by Seller of each Transaction Document to which it is contemplated to be a party will not, and the consummation of the Transactions and compliance with the terms hereof and thereof will not, conflict with, or result in any violation of or default (or an event that, with or without notice or lapse of time or both, would become a default) under, or give rise to a right of termination, cancelation or acceleration of any obligation or to loss of a material benefit under, or to increased, additional, accelerated or guaranteed rights or entitlements of any Person under, any provision of (i) the articles of incorporation and the bylaws (or comparable organizational documents) of Seller, (ii) any Business Material Agreement or (iii) subject to the filings, consents and other matters referred to in Section 4.03(b) , any Judgment or Law applicable to Seller or the Transferred Assets, other than, in the case of clauses (ii) and (iii) above, any such item that, individually or in the aggregate, would not be material to the Business as presently conducted.

(b) No Governmental Approval is required to be obtained or made by or with respect to Seller in connection with the execution, delivery and performance of any Transaction Document to which Seller is a party or the consummation of the Transactions, other than (i) compliance with and filings and notifications under the HSR Act, Section 721 of the DPA and any other Review Laws, (ii) compliance with and filings and notifications under applicable Environmental Laws, (iii) those that may be required solely by reason of Purchaser’s (as opposed to any third party’s) participation in the Acquisition and the other Transactions, (iv) compliance with and filings, notifications and approvals under applicable subdivision, boundary line, and legal lot standards reasonably necessary to accommodate the conveyance of

the Transferred Real Property, and (v) such other Governmental Approvals that, individually or in the aggregate, would not be material to the Business as presently conducted.

4.04 Financial Statements; Undisclosed Liabilities .

(a) Section 4.04(a) of the Seller Disclosure Letter includes audited balance sheets with respect to the Business as of each of December 31, 2015 and December 31, 2014 (such balance sheets, together with the notes thereto, the “ Annual Balance Sheets ”) and the related audited statements of operations and cash flows for the periods ended December 31, 2015, December 31, 2014 and December 31, 2013 (together with the notes thereto and the Annual Balance Sheets, the “ Annual Business Financial Statements ”). The Annual Business Financial Statements (i) were prepared in accordance with the books of account and other financial records of Seller, (ii) present fairly in all material respects the financial position of the Business and the results of its operations and changes in cash flows as of the dates thereof and for the periods covered thereby and (iii) except as set forth in Section 4.04(a) of the Seller Disclosure Letter , were prepared in accordance with GAAP, in a manner and using accounting principles consistent with Seller’s historical financial statements.

(b) Except as set forth on Section 4.04(b) of the Seller Disclosure Letter or as reflected or reserved against on the Annual Balance Sheet as of December 31, 2015 (the “ Balance Sheet ”), the Business has no Liabilities of any nature other than Liabilities that (i) were incurred in the ordinary course of business since the date of the Balance Sheet, or (ii) are not required to be disclosed on a balance sheet for the Business prepared in accordance with GAAP or in the notes thereto. Notwithstanding anything to the contrary herein, this Section 4.04(b) shall not constitute any representation or warranty with respect to the matters addressed in Sections 4.06 (Taxes), 4.07 (Employee Related Matters; ERISA), 4.11 (Environmental Matters) and 4.13 (Intellectual Property).

4.05 Absence of Certain Changes or Events . Except as specifically contemplated by this Agreement or the other Transaction Documents, from the date of the Balance Sheet to the date of this Agreement, the Business has been conducted in the ordinary course, and there has not been any Effect that, individually or in the aggregate, has had or would reasonably expected to have a Business Material Adverse Effect.

4.06 Taxes . With respect to the Transferred Assets (i) Seller has (A) filed each material Tax Return required to be filed (taking into account extensions) and all such Tax Returns were true, complete and correct in all material respects, (B) timely paid all Taxes shown as due on such Tax Returns, other than Taxes being contested in good faith and which have been properly reserved for and (C) complied in all material respects with all legal requirements relating to the withholding and payment of Taxes and (ii) no Lien for Taxes exists and no outstanding claims for Taxes have been asserted in writing.

4.07 Employee and Related Matters; ERISA

(a) Section 4.07(a) of the Seller Disclosure Letter sets forth, each material Business Benefit Plan and material Business Benefit Agreement, other than any material Business Benefit Plan or material Business Benefit Agreement (i) mandated by applicable Law

or (ii) for which Seller shall be solely liable and which shall not cause Purchaser and its subsidiaries to incur any Liabilities or obligations. Seller has delivered or made available to Purchaser true, complete and correct copies of the following with respect to each Business Benefit Plan and Business Benefit Agreement required to be listed in Section 4.07(a) of the Seller Disclosure Letter , if applicable, (A) a copy of the applicable Business Benefit Plan or Business Benefit Agreement (or in the case of any such Business Benefit Plan or Business Benefit Agreement that is unwritten, a description of the material terms thereof); (B) the most recent annual report on Form 5500 filed with respect to each such Business Benefit Plan, (C) the most recent summary plan description for each such Business Benefit Plan and (D) the most recent actuarial valuation report for each such Business Benefit Plan.

(b) Each Assumed Benefit Plan has been administered in all material respects in accordance with its terms and is in compliance with all applicable Laws in all material respects. As of the date of this Agreement, none of the Assumed Benefit Plans is intended to qualify under Section 401 of the Code or is subject to Title IV of ERISA. Seller is not obligated to contribute to any multiemployer plan, as defined in Section 3(37) of ERISA, on behalf of any Business Employees. With respect to Seller or any Person or entity that would be treated as a single employer with Seller for purposes of Sections 414(b), (c), (m) or (o) of the Code, there does not exist, nor do any circumstances exist that would reasonably be expected to result in, incur any Controlled Group Liability that would result in any liability, at or after the Effective Time, to Purchaser or any entity that, together with Purchaser, is treated as a single employer under Sections 414(b), (c), (m), or (o) of the Code, that, individually or in the aggregate, would be material to the Business as presently conducted. For purposes of this Agreement, “ Controlled Group Liability ” means any and all Liabilities (i) under Title IV of ERISA, other than for payments of premiums to the Pension Benefit Guaranty Corporation, (ii) under Section 302 or 4068(a) of ERISA, (iii) under Sections 412(n) or 4971 of the Code and (iv) for violation of the continuation coverage requirements of Section 601 et seq . of ERISA and Section 4980B of the Code or the group health requirements of Sections 9801 et seq . of the Code and Sections 701 et seq . of ERISA.

(c) With respect to each Assumed Benefit Plan that is subject to Laws other than those of the United States (each, a “ Non-U.S. Assumed Benefit Plan ”), each such Non-U.S. Assumed Benefit Plan (i) has been maintained in all material respects accordance with its terms and applicable legal requirements, (ii) if intended to qualify for special tax treatment, meets the material requirements for such treatment and (iii) if required to be funded and/or book reserved , is funded and/or book reserved, as appropriate, in accordance with applicable Laws in all material respects based on reasonable actuarial assumptions.

(d) Except as set forth in Section 4.07(d) of the Seller Disclosure Letter, the execution and delivery of the Transaction Documents does not, and the consummation of the Transactions and compliance with the terms hereof and thereof will not (alone or in conjunction with any other event), (i) result in any material payment becoming due to any Business Employee under any Assumed Benefit Plan or Assumed Benefit Agreement, (ii) materially increase any benefits otherwise payable to any Business Employee under any Assumed Benefit Plan or Assumed Benefit Agreement, (iii) result in the acceleration of time of payment or vesting of any such benefits under any Assumed Benefit Plan or Assumed Benefit Agreement to

any material extent, or (iv) limit the ability of Purchaser or its subsidiaries to amend, modify or terminate any Assumed Benefit Plan or Assumed Benefit Agreement.

(e) Except as set forth in Section 4.07(e) of the Seller Disclosure Letter , as of the date of this Agreement, all wages, commissions and bonuses fully earned and required to be paid to any Business Employees for services performed on or prior to the date of this Agreement have been paid in full.

4.08 Labor .

(a) Section 4.08(a) of the Seller Disclosure Letter contains a list as of the date of this Agreement, of each collective bargaining, works council or other labor union contract or arrangement that covers one or more Business Employees (each, a “ CBA ”). Except as disclosed in Section 4.08(a) of the Seller Disclosure Letter , there are no (i) strikes, work stoppages, lockouts or arbitrations pending against or involving Seller by any Business Employees or (ii) unfair labor practice charges or grievances pending against Seller by or on behalf of any Business Employee that, individually or in the aggregate, would be material to the Business as presently conducted.

(b) Seller has not been in material breach of the terms of the CBAs and other Contracts listed on Section 4.08(a) of the Seller Disclosure Letter and has conducted its business in compliance with all applicable Laws in all material respects pertaining to employment and employment practices to the extent they relate to employees of the Business, including all Laws relating to labor relations, equal employment opportunities, fair employment practices, employment discrimination, harassment, retaliation, reasonable accommodation, disability rights or benefits, immigration, wages, hours, overtime compensation, child labor, hiring, promotion and termination of employees, working conditions, meal and break periods, privacy, health and safety, workers’ compensation, leaves of absence and unemployment insurance. To the knowledge of Seller, all individuals characterized and treated by Seller as consultants or independent contractors of the Business are properly treated as independent contractors under all applicable Laws and all employees of the Business classified as exempt under the Fair Labor Standards Act and state and local wage and hour laws are properly classified. Except as set forth in Section 4.08(b)(2) of the Seller Disclosure Letter there are no Actions against Seller pending, or to the knowledge of Seller, threatened to be brought or filed, by or with any Governmental Authority or arbitrator in connection with the employment of any current or former applicant, employee, consultant or independent contractor of the Business, including, without limitation, any claim relating to unfair labor practices, employment discrimination, harassment, retaliation, equal pay, wages and hours or any other employment related matter arising under applicable Laws.

(c) With respect to the Business, Seller has complied with the WARN Act, and it has no plans to undertake any action that would trigger the WARN Act.

4.09 Litigation . As of the date of this Agreement, except as set forth on Section 4.09 of the Seller Disclosure Letter , there is (a) no Action pending or, to the knowledge of Seller, any claim that has been asserted against or affecting Seller relating to the Business, nor (b) any Judgment outstanding against Seller or to which any of its properties or assets is subject, in each

case relating to the Business, that, in each case of (a) and (b) individually or in the aggregate, would be material to the Business as presently conducted. This Section 4.09 does not relate to environmental matters, which are the subject of Section 4.11 , or intellectual property matters, which are the subject of Section 4.13 .

4.10 Compliance with Applicable Laws . To the knowledge of Seller, Seller with respect to the Business only, is, and has been since January 1, 2011, in compliance with all applicable Laws in all material respects. With respect to the Business only, Seller has not received any written communication since January 1, 2011 from a Governmental Entity that alleges that Seller is not in compliance with any applicable Law in any material respect, which alleged noncompliance has not been resolved in all material respects. This Section 4.10 does not relate to Tax matters, which are the subject of Section 4.06 , or Environmental Laws, which are the subject of Section 4.11 .

4.11 Environmental Matters .

(a) Except as listed in Section 4.11 of the Seller Disclosure Letter :

(i) to the knowledge of Seller, Seller is and has been for the past four (4) years in compliance with all applicable Environmental Laws.

(ii) to the knowledge of Seller, for the last five (5) years, neither Seller nor any of its affiliates has used or permitted the Transferred Real Property to be used for generating, transporting, treating, storing, manufacturing, emitting, or disposing any reportable quantities of Hazardous Materials, except as permitted by Environmental Laws;

(iii) (x) there exists no actual or threat of a Release of a Hazardous Material upon, on, under, or migrating to or from the Owned Real Property, or as of the date of this Agreement and to the knowledge of Seller, any neighboring property, in violation of Environmental Laws or that would reasonably be expected to result in an Environmental Claim or action under such law; and (y) no governmental authority has made any investigation of or report respecting the Owned Real Property with respect to any actual or alleged violation of Environmental Laws which remains outstanding; and

(iv) for the past four (4) years, no person, business entity, or governmental entity has asserted or threatened in writing any claim, cause of action, penalty, demand for payment or compensation against Seller relating to the presence or Release of Hazardous Materials on the Transferred Real Property which remains outstanding.

(b) As of the date of this Agreement, there are not and there have not been previously, any actions, suits, or proceedings or settlements related to the presence or Release of Hazardous Materials on the Owned Real Property or migrating from the Owned Real Property which remain outstanding, except for the Consent Decree, dated September 1, 1998, entered in the State of Washington Department of Ecology v. Weyerhaeuser Company, Cowlitz County

Superior Court No. 98-2-91225-1, with regard to the former Plywood Mill Intake Structure; and Agreed Order No. DE 1037, dated April 9, 2004, entered into between the State of Washington Department of Ecology and Weyerhaeuser Company, with regard to the Chlor-Alkali Plant.

(c) There are no environmental-related cost or damages pending or threatened against Seller with respect to any alleged Release of Hazardous Materials at, on, in, above, under, or about the Transferred Real Property, or to the knowledge of Seller, any neighboring property;

(d) To the knowledge of Seller, the Improvements in the Owned Real Property do not contain asbestos or lead-based paint in any form.

(e) Seller has disclosed to Purchaser copies of all material documents in Seller’s possession, custody, or control relating to environmental matters with respect to the Transferred Real Property and Seller’s or Lessee’s operation thereof for the last four (4) years.

(f) Seller has obtained and maintains all permits that are required under applicable Environmental Law for the occupation, use, and operation of the Owned Real Property, and all such permits are in effect and no appeal or other action known to Seller is pending to revoke any such permit.

(g) There are no aboveground or underground storage tanks, under, or at the Owned Real Property which contained material which, if known to have leaked into the water, soils, or groundwater, would require cleanup, removal, or some other remedial action under applicable Environmental Laws.

(h) None of the Business or the Transferred Assets or any real property currently or formerly owned, leased or operated by Seller in connection with the Business is listed on, or has been proposed for listing on, the National Priorities List (or CERCLIS) under CERCLA, or any similar state list.

(i) Section 4.11(i) of the Seller Disclosure Letter contains a complete and accurate list of all off-site Hazardous Materials treatment, storage, or disposal facilities or locations used by Seller and any predecessors in connection with the Business or the Transferred Assets as to which Seller may retain liability, and none of these facilities or locations has been placed or proposed for placement on the National Priorities List (or CERCLIS) under CERCLA, or any similar state list, and Seller has not received any Environmental Notice regarding potential liabilities with respect to such off-site Hazardous Materials treatment, storage, or disposal facilities or locations used by Seller.

(j) Seller owns and controls all Environmental Attributes and has not entered into any contract or pledge to transfer, lease, license, guarantee, sell, mortgage, pledge or otherwise dispose of or encumber any Environmental Attributes as of the date of this Agreement. Seller is not aware of any condition, event or circumstance that might prevent, impede or materially increase the costs associated with the transfer (if required) to Purchaser of any Environmental Attributes after the Closing Date.

4.12 Real Property .

(a) Section 4.12(a) of the Seller Disclosure Letter sets forth a map depicting the Owned Real Property. Seller has delivered to Purchaser a title commitment (the “ Title Commitment ”) issued by Old Republic National Title Insurance Company (the “ Title Company ”), and all related underlying documents from the Title Company, with respect to the Owned Real Property and other adjacent real property. With respect to each parcel of Owned Real Property:

(i) Seller has good and marketable fee simple title, free and clear of all Encumbrances, except (A) Permitted Liens and (B) those Liens set forth on Section 4.12(a)(i)the Seller Disclosure Letter ;

(ii) except as set forth on Section 4.12(a)(ii) of the Seller Disclosure Letter Seller has not leased or otherwise granted to any Person the right to use or occupy such Owned Real Property or any portion thereof; and

(iii) there are no unrecorded outstanding options, rights of first offer or rights of first refusal to purchase such Owned Real Property or any portion thereof or interest therein.

(b) Section 4.12(b) of the Seller Disclosure Letter sets forth each parcel of real property leased by Seller (as, without limitation, Lessee, Licensee, or Sublessee) and used in or necessary for the conduct of the Business as currently conducted (together with all rights, title and interest of Seller in and to leasehold improvements relating thereto, including, but not limited to, security deposits, reserves or prepaid rents paid in connection therewith, collectively, the “ Leased Real Property ”), and a true and complete list of all leases, subleases, licenses, concessions and other agreements (whether written or oral), including all amendments, extensions renewals, guaranties and other agreements with respect thereto, pursuant to which Seller holds any Leased Real Property (collectively, the “ Leases ”). Seller has delivered to Purchaser a true and complete copy of each Lease. With respect to each Lease:

(i) such Lease is valid, binding, enforceable and in full force and effect, and Seller enjoys peaceful and undisturbed possession of the Leased Real Property;

(ii) Seller is not in material breach or default under such Lease, and no event has occurred or circumstance exists which, with the delivery of notice, passage of time or both, would constitute such a material breach or default, and Seller has paid all rent due and payable under such Lease;

(iii) Seller has not received nor given any notice of any default or event that with notice or lapse of time, or both, would constitute a material default by Seller under any of the Leases and, to the Knowledge of Seller and as of the date of this Agreement, no other party is in material default thereof, and no party to any Lease has exercised any termination rights with respect thereto;

(iv) Seller has not subleased, assigned or otherwise granted to any Person the right to use or occupy such Leased Real Property or any portion thereof; and

(v) Seller has not pledged, mortgaged or otherwise granted an Encumbrance on its leasehold interest in any Leased Real Property.

(c) As of the date of this Agreement, Seller has not received any written notice of (i) violations of building codes and/or zoning ordinances or other governmental or regulatory Laws affecting the Real Property, (ii) existing, pending or threatened condemnation proceedings affecting the Real Property, or (iii) existing, pending or threatened zoning, building code or other moratorium proceedings, or similar matters which would reasonably be expected to materially and adversely affect the ability to operate the Real Property as currently operated. Neither the whole nor any material portion of any Real Property has been damaged or destroyed by fire or other casualty.

4.13 Intellectual Property .

(a) After giving effect to the Transactions and the Intellectual Property License Agreement, Purchaser will (i) own the Transferred Intellectual Property; and (ii) have a valid license to the Transferred Licensed Intellectual Property. Seller is the sole owner of the Transferred Intellectual Property free and clear of all security interests and other than as set forth in Section 4.13(b) of the Seller Disclosure Letter Seller has not granted an exclusive license to any Transferred Intellectual Property. Notwithstanding any other representations, Seller makes no representation with respect to whether patent, copyright, trademark or domain name applications listed in the Scheduled Intellectual Property will be issued by the applicable Governmental Entity or if issued, whether practicing any of the claims in any such patents, copyrights, trademarks or domain names infringes or will infringe any Intellectual Property Rights of any third party.

(b) As of the date of this Agreement, no material claims are pending or have been asserted in writing against Seller by any Person (i) claiming infringement or misappropriation of such Person’s Intellectual Property Rights in the conduct of the Business as currently conducted, or (ii) challenging the validity, ownership, patentability, enforceability, registrability or use of the Transferred Intellectual Property. Other than as set forth in Section 4.13(b) of the Seller Disclosure Letter , as of the date of this Agreement and to the knowledge of Seller, no Person is infringing or misappropriating the Transferred Intellectual Property.

4.14 Business Material Agreements .

(a) Section 4.14(a) of the Seller Disclosure Letter sets forth all the Business Material Agreements as of the date of this Agreement, except for the Contracts set forth in Section 1.02(b)(xv) of the Seller Disclosure Letter and the Shared Contracts set forth in Section 11.03(3) of the Seller Disclosure Letter . For purposes of this Agreement, the term “ Business Material Agreements ” means any of the following Contracts to which Seller, with respect to the Business only, is a party or by which the Business is bound:

(i) any written employment Contract with any Business Employee that has an aggregate future liability in excess of $200,000 or any collective bargaining agreement or other Contract with any labor union;

(ii) any covenant not to compete or restricting the development, marketing or distribution of the products of the Business that materially limits the conduct of the Business as currently conducted;

iii) any continuing Contract for the future purchase or sale of materials, supplies, equipment, raw materials, packaging or commodities (other than short-term purchase Contracts and orders for Inventory in the ordinary course of business) which has an aggregate future liability to any Person (other than Seller) in excess of $500,000 and is not terminable by notice of not more than ninety (90) days for a cost of less than $100,000;

(iv) any management, service, consulting or other similar Contract (other than Contracts for services in the ordinary course of business, including transportation and warehousing Contracts) which has an aggregate future liability to any Person (other than Seller) in excess of $500,000 and is not terminable by notice of not more than ninety (90) days for a cost of less than $100,000;

(v) any Contract under which Seller has borrowed any money from, or issued any note, bond, debenture or other evidence of indebtedness (other than accounts payable with respect to purchase Contracts and orders in the ordinary course of business) to, any Person (other than Seller) or any other note, bond, debenture or other evidence of indebtedness (other than accounts payable with respect to purchase Contracts and orders in the ordinary course of business) of Seller (other than in favor of Seller) in any such case which, individually, is in excess of $500,000;

(vi) any Contract (including any “take-or-pay” or “keep well” agreement) under which (A) any Person (other than Seller) has directly or indirectly guaranteed indebtedness, Liabilities or obligations of Seller or (B) Seller has directly or indirectly guaranteed indebtedness, Liabilities or obligations of any Person, other than Seller (in each case other than endorsements for the purpose of collection in the ordinary course of business), in any such case which, individually, is in excess of $500,000;

(vii) any material Contract granting a Lien upon any Transferred Real Property or Leased Real Property, which Lien is not a Permitted Lien;

(viii) any lease, sublease or similar Contract with any Person (other than Seller) under which Seller is a lessor or sublessor of, or makes available for use to any Person (other than Seller), (A) any Transferred Real Property, (B) any Leased Real Property or (C) any portion of any premises otherwise occupied by Seller that, in either case, specifies annual payments in excess of $500,000;

(ix) any lease or similar Contract with any Person (other than Seller) under which Seller is a lessee of, or holds or uses, any machinery, equipment, vehicle or other tangible personal property owned by any Person, which lease or similar Contract

has an aggregate future liability in excess of $500,000 and is not terminable by notice of not more than ninety (90) days for a cost of less than $100,000;

(x) any Contract with any Person (other than Seller) that relates to the formation, creation, governance or control of any partnership, joint venture or similar arrangement that is material to the Business;

(xi) any Contract with any Person (other than Seller) providing for indemnification of any Person, other than the constitutive documents of Seller, and marketing agreements, property leases, Intellectual Property Rights, License Agreements and other commercial agreements entered into in the ordinary course of business;

(xii) any Contract that requires Seller to use any supplier or third party for all or substantially all of Seller’s requirements or needs or requires Seller to provide to other Parties “most favored nation” pricing; or

(xii) any other Contract that has an aggregate future liability to any Person (other than Seller) in excess of $500,000 and is not terminable by notice of not more than ninety (90) days for a cost of less than $100,000, other than purchase orders or sales orders entered into in the ordinary course of business after the date hereof and not in violation of this Agreement.

(b) As of the date of this Agreement, each of the Business Material Agreements set forth in Section 4.14(a) of the Seller Disclosure Letter and Shared Contracts set forth in Section 11.03(3) of the Seller Disclosure Letter is in full force and effect (except to the extent any of them expires in accordance with its terms), and Seller has not violated any provisions of, or committed or failed to perform any act that, with or without notice, lapse of time, or both, would constitute a default under the provisions of any Business Material Agreement or Shared Contract, except for violations or defaults that, individually or in the aggregate, are and would not reasonably be expected to be material to the Business as presently conducted. True and complete copies of each written Business Material Agreement (and a summary of each oral Business Material Agreement) listed in Section 4.14(a) of the Seller Disclosure Letter and each Shared Contract set forth in Section 11.03(3) of the Seller Disclosure Letter (including all written modifications and amendments thereto and waivers thereunder) have been made available to Purchaser.

4.15 Condition and Sufficiency of Assets . Except as set forth in Section 4.15(1) of the Seller Disclosure Letter , the buildings, plants, structures, furniture, fixtures, machinery, equipment, vehicles and other items of tangible personal property included within the Transferred Assets, taken as a whole, are in all material respects, in good operating condition, and are adequate for the uses to which they are being put, and none of such buildings, plants, structures, furniture, fixtures, machinery, equipment, vehicles and other items is in need of maintenance or repairs except for ordinary, routine maintenance and repairs that are not material in nature or cost. Except as set forth in Section 4.15(2) of the Seller Disclosure Letter , the Transferred Assets together with Purchaser’s rights under this Agreement and the Ancillary Agreements are sufficient for the continued conduct of the Business after the Closing in substantially the same manner as conducted prior to the Closing.

4.16 Material Business Relationships .

(a) Section 4.16(a) of the Seller Disclosure Letter sets forth with respect to the Business (i) each customer who has paid aggregate consideration to Seller for goods or services rendered in an amount greater than or equal to $500,000 for each of the two (2) most recent calendar years (collectively, the “ Material Customers ”); and (ii) the amount of consideration paid by each Material Customer during such periods. As of the date of this Agreement, Seller has not received any written notice that any Material Customer has ceased, or intends to cease or to materially reduce, its purchases of goods and services from the Business, or intends to otherwise terminate its relationship with the Business.

(b) Section 4.16(b) of the Seller Disclosure Letter sets forth with respect to the Business (i) each supplier to whom Seller has paid consideration for goods and /or services rendered in an amount greater than or equal to $500,000 for each of the two most recent calendar years (collectively, the “ Material Suppliers ”); and (ii) the amount of purchases from each Material Supplier during such periods. As of the date of this Agreement, Seller has not received any written notice that any of the Material Suppliers has ceased, or intends to cease or to materially reduce, its supply of goods and services to the Business, or intends to otherwise terminate its relationship with the Business.

4.17 Inventory . The Inventory reflected on the Balance Sheet, in the aggregate, consists of a quality and quantity that is usable and salable in the ordinary course of business consistent with past practice, except (a) for obsolete, damaged, defective or slow-moving items that have been written off or written down to fair market value or for which adequate reserves have been established or (b) as would not be material to the Business as currently operated. All Inventory is owned by Seller free and clear of all Liens other than Permitted Liens, and no Inventory is held on a consignment basis.

4.18 Disclosure . As of the date hereof, the representations and warranties made by Company in this Article IV, as qualified or supplemented by the Seller Disclosure Letter, when read together in their entirety, do not contain any untrue statement of a material fact.

4.19 Disclaimer of Additional Representations and Warranties . EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY OTHER TRANSACTION DOCUMENT, SELLER MAKES NO OTHER REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE TRANSFERRED ASSETS, THE ASSUMED LIABILITIES OR THE BUSINESS, ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, OR THE CONDITION OR PROSPECTS (FINANCIAL OR OTHERWISE) OF THE TRANSFERRED ASSETS, THE ASSUMED LIABILITIES OR THE BUSINESS, INCLUDING ANY PROJECTIONS, FORECASTS, BUDGETS, ESTIMATES OR OTHER FORWARD-LOOKING INFORMATION.

ARTICLE V

COVENANTS RELATING TOCONDUCT OF BUSINESS

5.01 Conduct of Business . Except for matters set forth in Section 5.01 of the Seller Disclosure Letter , otherwise expressly permitted by this Agreement or the other Transaction Documents, required by applicable Law or consented to in writing by Purchaser, from the date hereof to the Closing Date, Seller shall conduct the Business in the ordinary course of business in a manner consistent with past practice and, to the extent consistent therewith, use its commercially reasonable efforts to preserve the material business relationships of the Business with licensors, customers, suppliers, distributors and others with whom the Business deal in the ordinary course of business. In addition, and without limiting the generality of the foregoing, except for matters set forth in Section 5.01 of the Seller Disclosure Letter , otherwise expressly permitted by this Agreement or the other Transaction Documents, required by applicable Law or a CBA or consented to in writing by Purchaser, from the date hereof to the Closing Date, Seller shall not do any of the following to the extent the following apply exclusively to the Business:

(a) acquire, in a single transaction or a series of related transactions, whether by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, limited liability company, joint venture, association or other business organization or division thereof or any other Person, if any of the foregoing is material, individually or in the aggregate to the Business, taken as a whole (solely to the extent a substantial portion of the assets acquired constitutes Transferred Assets);

(b) (i) adopt, enter into, terminate, amend, extend or renew any Business Benefit Plan or Business Benefit Agreement other than in the ordinary course of business consistent with past practice, or (ii) increase the compensation or benefits of, or pay any bonus to, any Business Employee, other than increases in base salary or payments of bonuses in the ordinary course of business consistent with past practice, except in each case, (A) as required pursuant to the terms of any Business Benefit Plan or Business Benefit Agreement in effect as of the date of this Agreement or (B) as would not result in Purchaser or its subsidiaries incurring any material Liabilities;

(c) make any material change in the Business’s financial accounting, principles and practices in effect on the date of the Balance Sheet, except insofar as may have been required by a change in GAAP (solely to the extent such change would be binding on Purchaser);

(d) sell, transfer, lease (as lessor), license or otherwise dispose of or make subject to any Lien (other than Permitted Liens) any Transferred Asset with a value or purchase price, that individually or in the aggregate exceeds $1,000,000, except dispositions of Inventory and excess, obsolete or worn-out assets in the ordinary course of business consistent with past practice or that are no longer used or useful in the operation of the Business;

(e) (i) enter into any lease with a term in excess of eighteen (18) months (whether such lease is an operating or capital lease) other than operating leases and renewals of

existing leases in the ordinary course of business consistent with past practice or (ii) authorize or make any capital expenditure other than (A) in the ordinary course of business consistent with past practice, (B) as provided in the capital expenditures budget set forth in Section 5.01(e) of the Seller Disclosure Letter (the “ CapEx Budget ”), (C) capital expenditures not specifically provided in the CapEx Budget but that, in the aggregate, do not exceed ten percent (10%) of the total CapEx Budget; (D) for which Seller and its affiliates shall be solely obligated and which shall not be included in the Assumed Liabilities, or (E) as a reasonable response to any emergency or to otherwise maintain the safety and integrity of any asset or property;

(f) waive or amend any confidentiality agreement between Seller and any Person (other than Seller), other than in the ordinary course of business consistent with past practice;

(g) enter into any agreement or arrangement that would, after the Closing Date, limit or restrict in any material respect Purchaser from operating the Business substantially as operated as of the date of this Agreement;

(h) except in the ordinary course of business consistent with past practice, modify, amend, enter into or terminate any Business Material Agreement, or waive, release or assign any material rights or claims of Seller primarily relating to the Business;

(i) settle any Action if such settlement would require any payment of an amount in excess of $500,000 individually or $1,000,000 in the aggregate by Purchaser, or would obligate Purchaser to take any material action, or restrict Purchaser in any material respect from taking any action, in each case at or after the Closing Date; or

(j) authorize any of, or commit or agree to take any of, the foregoing actions.

5.02 No Control of Seller’s Business . Nothing contained in this Agreement is intended to give Purchaser, directly or indirectly, the right to control or direct the operations of the Seller Business or, prior to the Closing, the Business. Prior to the Closing, Seller shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its businesses and operations.

5.03 Access to Certain Environmental Records . Between the date of this Agreement and the Closing, Seller shall only to the extent permitted by Law, afford to Purchaser and its Representatives, reasonable access (including the opportunity to duplicate and retain such information, subject to the provisions of (i) through (iii) below) during normal business hours to all records in Seller’s possession related to the use of the Transferred Real Property by Seller or any of its affiliates or their permitted use of the Transferred Real Property for generating, transporting, treating, storing, manufacturing, emitting, or disposing of any reportable quantities of Hazardous Materials (except as permitted by Environmental Laws); provided, however, that Seller may withhold: (i) any document (or portions thereof) or information that is subject to the terms of a confidentiality agreement with a third party, (ii) any document (or portions thereof) or information which may constitute privileged attorney-client communications or attorney work product and the transfer of which, or the provision of access to which, as reasonably determined by such Seller’s counsel, could constitute a waiver of any such privilege and (iii) any document

(or portions thereof) or information relating to pricing or other matters that are highly sensitive if the exchange of such document (or portions thereof) or information, as determined by Seller’s counsel, might reasonably result in antitrust difficulties for Seller or any of its affiliates. If any material is withheld by such Seller pursuant to the proviso to the preceding sentence, Seller shall inform Purchaser as to the general nature of what is being withheld.

5.04 Notice of Certain Changes . Between the date of this Agreement and the Closing, Seller will provide prompt notice to Purchase of Seller’s receipt of (a) any written notice from a Material Supplier or Material Customer that such Material Supplier or Material Customer has ceased, or intends to cease or to materially reduce, its supply or purchase of goods and services to or from the Business, or intends to otherwise terminate its relationship with the Business, or (b) any written notice from the counterparty to a Business Material Agreement of the termination of, or such counterparty’s intent to terminate, such Business Material Agreement.

ARTICLE VI

ADDITIONAL AGREEMENTS

6.01 No Use of Certain Retained Names . Purchaser shall, and shall cause its affiliates to, promptly, and in any event within ninety (90) days after the Closing Date (except as expressly provided below with regard to Inventory), (a) make all necessary filings and take all other necessary actions to discontinue any references to the Retained Names, (b) revise print advertising, product labeling and all other information or other materials, including any Internet or other electronic communications vehicles, to delete all references to the Retained Names and (c) change signage and stationery and otherwise discontinue use of the Retained Names. In no event shall Purchaser or any of its affiliates use any Retained Names after the Closing in any manner or for any purpose different from the use of such Retained Names by Seller during the 90-day period preceding the Closing Date. With respect to the Inventory, Purchaser may continue to sell such Inventory, notwithstanding that it or its labeling or packaging bears one or more of the Retained Names, for a reasonable time after the Closing (not to exceed one hundred twenty (120) days).

6.02 Access to Information; Confidentiality.

(a) Upon reasonable written notice, Seller and, following the Closing Date, Purchaser shall, and shall cause their respective subsidiaries to, with respect to the Business only and only to the extent permitted by Law, afford to the other Party and to the Representatives of such other Party, reasonable access (including the opportunity to duplicate and retain such information, subject to the provisions of (i) through (iii) below) during normal business hours for so long as such information is retained by a party or any of its subsidiaries (which shall be for a period of at least four (4) years following the date of this Agreement) to all reasonably requested properties, plants, books, systems, Contracts, commitments, personnel and records (including financial records) with respect to the Business but excluding Records that are included in Section 1.02(b)(viii) and, during such period, Seller and, following the Closing Date, Purchaser shall, and shall cause their respective subsidiaries to, furnish promptly to the requesting party, to the extent permitted by Law, all other information concerning the Business on or prior to the Closing Date as such requesting party may reasonably request; provided,

however, that a Party may withhold: (i) any document (or portions thereof) or information that is subject to the terms of a confidentiality agreement with a third party, (ii) any document (or portions thereof) or information which may constitute privileged attorney-client communications or attorney work product and the transfer of which, or the provision of access to which, as reasonably determined by such Party’s counsel, could constitute a waiver of any such privilege and (iii) any document (or portions thereof) or information relating to pricing or other matters that are highly sensitive if the exchange of such document (or portions thereof) or information, as determined by such Party’s counsel, might reasonably result in antitrust difficulties for such Party or any of its affiliates. If any material is withheld by such Party pursuant to the proviso to the preceding sentence, such Party shall inform the other Party as to the general nature of what is being withheld; provided, however, that in respect of any request after the Closing Date, the Party requesting such access agrees to reimburse the other Party promptly for all reasonable and necessary out-of-pocket costs and expenses incurred in connection with any such request.

(b) After the Closing Date, except in the case of an Action by one Party against another Party, each Party hereto shall use commercially reasonable efforts to make available to each other Party, upon written request, the former, current and future directors, officers, employees and other Representatives of the Business as witnesses, to the extent that any such Person (giving consideration to business demands of such directors, officers, employees and other Representatives) may reasonably be required in connection with any Action in which the requesting Party may from time to time be involved, regardless of whether such Action is a matter with respect to which indemnification may be sought hereunder. The requesting Party shall bear all costs and expenses in connection therewith.

(c) Seller shall keep confidential, and shall cause its affiliates and instruct its and their officers, directors, employees and advisors to keep confidential, all information relating to the Business except as required by applicable Law or administrative process and except for information which is available to the public on the Closing Date, or thereafter becomes available to the public other than as a result of a breach of this Section 6.02(a) . The covenant set forth in this Section 6.02(a) shall terminate four years after the Closing Date.

(d) Prior to the Closing, Seller shall, and shall cause its affiliates to, use commercially reasonable efforts to remove, erase, delete or otherwise destroy any Seller information (whether in print, electronic or other forms) in the possession of any Transferred Employee that does not constitute a Transferred Asset. After the Closing, upon its discovery (i.e., with no duty of investigation), Purchaser shall, and shall cause its affiliates to, use commercially reasonable efforts to promptly remove, erase, delete or otherwise destroy any Seller information (whether in print, electronic or other forms) in the possession of any Transferred Employee that does not constitute a Transferred Asset.

(e) All information provided to Purchaser pursuant to this Section 6.02 shall be held by Purchaser and Seller as Confidential Information (as defined in the Confidentiality Agreement, dated as of December 3, 2015, between Seller and Purchaser (the “ Confidentiality Agreement ”)) and shall be subject to the Confidentiality Agreement; provided, however, that from and after the Closing, Purchaser shall have no further obligations to Seller under the

Confidentiality Agreement with respect to the Records that are included as Transferred Assets under Section 1.02(a)(xii) .

6.03 Efforts .

(a) Each of Purchaser and Seller shall use its commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable to cause the Closing to occur, in the most expeditious manner practicable, including (i) cooperating with the other Party to obtain all necessary or advisable actions or non-actions, waivers, consents and approvals from Governmental Entities and third parties and making all necessary or advisable registrations and filings (including filings with Governmental Entities, if any) and taking all steps as may be necessary to obtain an approval or waiver from, or to avoid an Action or proceeding by, any Governmental Entity or third party, (ii) cooperating with the other Party to obtain all necessary or advisable consents, approvals or waivers from third parties, (iii) defending against any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or any other Transaction Document or the consummation of the Transactions, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Entity vacated or reversed, and (iv) executing and delivering any additional instruments necessary to consummate the Transactions and to fully carry out the purposes of the Transaction Documents. Neither Party shall, nor shall it permit any of its affiliates to, take any actions that would, or that would reasonably be expected to, result in any of the conditions set forth in Article VII not being satisfied.

(b) Each of Purchaser and Seller shall use its commercially reasonable efforts to have any restraint or prohibition of the type described in Section 7.01(b) terminated as promptly as practicable.

6.04 Antitrust Notification and Other Regulatory Filings .

(a) Each of Purchaser and Seller shall (i) file or cause to be filed no later than twenty (20) Business Days following the execution and delivery of this Agreement (except with respect to any filings under Section 721 of the DPA which shall be filed only as promptly as practicable), with the United States Federal Trade Commission (the “ FTC ”) and the United States Department of Justice (the “ DOJ ”) information required by the HSR Act, and, (ii) with respect to other Review Laws, to file or cause to be filed with any other Governmental Entities as promptly as practicable following the execution and delivery of this Agreement all notification and report forms that may be required for the Transactions and, (iii) provide any supplemental information requested in connection therewith pursuant to the HSR Act or any other Review Law and (iv) include in each such filing, notification and report form referred to in the immediately preceding clauses (i and ii) a request for early termination or acceleration of any applicable waiting or review periods, to the extent available under the applicable Review Laws. Any such filing, notification and report form and supplemental information shall be in substantial compliance with the applicable requirements of the HSR Act and other Review Laws. Each of Purchaser and Seller shall furnish to the other such necessary information and reasonable assistance as the other may reasonably request in connection with its preparation of any filing or submission that is necessary under the HSR Act and other Review Laws. Each of Purchaser and Seller shall keep each other apprised of the status of any communications with,

and any inquiries or requests for additional information from, the FTC, the DOJ and any other applicable Governmental Entity and shall comply with any such inquiry or request as promptly as practicable. Each of Purchaser and Seller shall use its commercially reasonable efforts to obtain clearance required under the HSR Act and other Review Laws for the consummation of the Transactions as promptly as practicable.

(b) Each of Purchaser and Seller shall use its commercially reasonable efforts to cause the expiration or termination of the applicable waiting periods under the HSR Act and any other Review Law as soon as practicable. Seller and Purchaser agree not to extend, directly or indirectly, any such waiting period or enter into any agreement with a Governmental Entity to delay or not consummate the Transactions to be consummated on the Closing Date, except with the prior written consent of the other Party. Seller and Purchaser agree not to have any substantive contact with any Governmental Entity in respect of any filing or proceeding contemplated by this Section 6.04 unless it consults with the other Party in advance and, to the extent permitted by such Governmental Entity, gives the other Party the opportunity to participate. If any Antitrust Proceeding is instituted (or threatened to be instituted) challenging any of the Transactions under any Review Law, Seller and Purchaser shall use their commercially reasonable efforts to resolve (and to avoid the institution of) any such Antitrust Proceeding. If, notwithstanding such commercially reasonable efforts, any such Antitrust Proceeding is instituted, Seller and Purchaser shall further use their commercially reasonable efforts to contest such Antitrust Proceeding until each such Antitrust Proceeding is resolved pursuant to a settlement or a final nonappealable court order.

(c) The Parties shall jointly inform CFIUS of the transaction contemplated by this Agreement and the Parties shall make all filings and submissions required to be made or effected by CFIUS pursuant to Section 721 of the DPA.

(d) Each Party shall provide any information requested by CFIUS or any other agency or branch of the United States government in connection with their review of the transactions contemplated by this Agreement.

6.05 Noncompetition and Nonsolicitation .

(a) For a period of three (3) years commencing on the Closing Date (the “ Restricted Period ”), Seller shall not, and shall not permit any of its affiliates to, directly or indirectly, (i) engage in the Restricted Business; or (ii) have an ownership interest in any Person that engages in the Restricted Business. Notwithstanding the foregoing, nothing herein shall prohibit Seller or any of its affiliates, during such period from:

(i) owning, operating, conducting or engaging in any manner in any businesses or activities conducted or engaged in by Seller or any other member of the Seller Group as of the date of this Agreement or the Closing Date (including, for avoidance of doubt, the Seller Business) other than the manufacturing and marketing of liquid packaging board; provided, however, that notwithstanding anything else contained herein, neither Seller nor any other member of the Seller Group shall engage in the

manufacturing and marketing of liquid packaging board during the Restricted Period;

(ii) becoming a passive owner of not more than five percent (5%) of the outstanding shares of any class of securities of a Person that, directly or indirectly, engages in Restricted Business; provided , however , that Seller may not exert influence on the management bodies of such companies other than the rights that attach to the purchased securities;

(iii) performing any services for Purchaser or any of its affiliates;

(iv) acquiring and, after such acquisition, owning an interest in another Person (or its successor) that is engaged in Restricted Business if such Restricted Business generated, during either of the last two (2) completed fiscal years of such Person, less than thirty three percent (33%) of such Person’s consolidated net income; or

(v) selling products to, servicing, soliciting, or receiving products or services from, or otherwise engaging in, any commercial activities with a Person engaged in Restricted Business, or any customer, supplier, licensor or licensee of a Person engaged in Restricted Business, so long as neither Seller nor any of its affiliates engage, directly or indirectly, in equity ownership, revenue sharing, joint venture or shared operation of Restricted Business.

(b) During the Restricted Period, neither Purchaser nor Seller shall, and shall not permit any of their respective affiliates to, directly or indirectly, hire or solicit any person who is employed by Purchaser or Seller or their respective affiliates in Longview, WA during the Restricted Period, or encourage any such employee to leave such employment, except pursuant to a general solicitation which is not directed specifically to any such employees; provided, however, that nothing in this Section 6.05(b) shall prevent Purchaser, Seller or any of their respective affiliates from (i) soliciting or hiring any employee whose employment has been terminated by Purchaser, Seller or their respective affiliates, as applicable, (ii) soliciting or hiring any employee who first contacts Purchaser, Seller or their respective affiliates, as applicable, in response to a general solicitation, or (iii) soliciting or hiring any employee who has resigned or whose employment has been terminated by such employee after ninety days (90) from the date of such resignation or termination of employment unless otherwise reasonably agreed to by the Parties on a case-by-case basis.

(c) During the Restricted Period, neither Purchaser nor Seller shall, and shall not permit any of their respective affiliates to, make or publish, verbally or in writing, any statement intending to injure or interfere with the relationship of the other Party or its respective affiliates with any material customer or supplier. For avoidance of doubt, the foregoing restrictions shall not apply to any confidential communications with any Governmental Entity (including but not limited to communications made in the course of any governmental investigation) or any communications or disclosures required pursuant to applicable Law.

(d) Each of Seller and Purchaser acknowledges that a breach or threatened breach of this Section 6.05 may give rise to irreparable harm to the other Party, for which monetary damages would not be an adequate remedy, and hereby agrees that in the event of a breach or a threatened breach by Seller or Purchaser of any such obligations, the other Party shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to seek equitable relief, including a temporary restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction (without any requirement to post bond). Each of Seller and Purchaser acknowledges that the restrictions contained in this Section 6.05 are reasonable and necessary to protect the legitimate interests of each of Purchaser and Seller and constitute a material inducement to each of Purchaser and Seller to enter into this Agreement and consummate the transactions contemplated by this Agreement.

6.06 Employee Matters .

(a) Employee List . Section 6.06(a) of the Seller Disclosure Letter sets forth a list of the Business Employees as of the date of this Agreement (the “ Employee List ”), identified by employee ID number, including each Business Employee’s title, base salary, wage rate or annualized fixed or guaranteed remuneration, start date, employment status (i.e., part-time or full-time, exempt or nonexempt), an indication of whether or not such Business Employee is in a supervisory role (i.e., the direct supervisor of one or more Business Employees) and an indication of whether or not such Business Employee’s employment is governed by a CBA, in each case, subject to Seller’s obligations under applicable data privacy Laws or any other obligations to maintain the confidentiality of such information under applicable Law. Seller shall deliver to Purchaser an update to the Employee List at a reasonable time prior to the Closing Date.

(b) Continuation of Employment .

(i) No later than the earliest to occur of (A) twenty (20) days prior to the Closing Date, (B) the date required by applicable Law, any Business Benefit Agreement or any applicable CBA, or (C) the date required to avoid any Severance Obligations Purchaser shall make offers of employment, effective as of 11:59 p.m. on the Closing Date (the “ Transfer Time ”), to each Business Employee. Offers pursuant to this Section 6.06(b) shall (X) be in a form reasonably acceptable to Seller, (Y) comply with applicable Law, any applicable CBA and this Section 6.06 and shall be sufficient to avoid all Severance Obligations. Except as prohibited by the just cause provision in any applicable CBA, Purchaser may offer each Business Employee employment on an at-will basis.

(ii) Without limiting the generality of the foregoing, subject to the terms of any applicable CBA and applicable Law, any Business Employee who accepts such offer of employment who is not actively at work on the Closing Date by reason of disability leave or other extended leave protected by applicable Law shall become an employee of Purchaser or its subsidiaries only if such Business Employee returns from such leave within the twelve-month period immediately following the Closing Date (or any such longer period during which Seller or its subsidiaries, or Purchaser or its

subsidiaries, are required by applicable Law or applicable CBA to employ such Business Employee upon his or her return from such leave), in which case such Business Employee shall commence employment with Purchaser as of the date such Business Employee returns from such leave, rather than the Closing Date (all references in this Agreement to the Transfer Time with respect to any such Business Employee shall be construed as references to the time, if any, such Business Employee commences active employment with Purchaser or its subsidiaries).

(iii) Effective as of the Transfer Time, each Transferred Employee shall cease to actively participate in any Business Benefit Plan.

(iv) Nothing herein shall be construed as a representation or guarantee by Seller or any other member of the Seller Group that any particular Business Employee or Business Employees will accept the offer of employment from Purchaser or will continue in employment with Purchaser following the Transfer Time.

(c) Prior Service Credit . From and after the applicable Transfer Time, Purchaser shall, and shall cause its subsidiaries to, give to each Transferred Employee full credit for all purposes (including for purposes of eligibility to participate, level of benefits, early retirement eligibility and early retirement subsidies, vacation accrual and other paid time off, severance or separation entitlements (whether under a CBA, statute or common law), long-service pay, vesting and benefit accrual) under any employee benefit plan or arrangement provided, maintained or contributed to by Purchaser or any of its subsidiaries for such Transferred Employee’s service with Seller and its subsidiaries and affiliates, and with any predecessor employer, to the same extent recognized by Seller and its subsidiaries and affiliates immediately prior to the applicable Transfer Time, except to the extent such credit would result in the duplication of benefits for the same period of service. Notwithstanding the foregoing, to the extent permitted under applicable CBA or applicable Law, Purchaser and its subsidiaries shall not be required to provide credit for such service for benefit accrual purposes under any employee benefit plan or arrangement of Purchaser or its subsidiaries or affiliates that is a defined benefit pension plan.

(d) Non-adjustment of Compensation and Benefits. Without limiting the generality of Section 6.06(b)(i) , from the Closing Date and through the period ending twelve (12) months thereafter, Purchaser shall, and shall cause its subsidiaries to, provide each Transferred Employee whose employment is not subject to the terms of an applicable CBA with (i) base salary and incentive compensation opportunities that are no less favorable than those provided to such Transferred Employee as of immediately prior to the Closing and (ii) other employee benefits that are no less favorable in the aggregate than the employee benefits provided to such Transferred Employee as of immediately prior to the Closing. For the avoidance of doubt, nothing in this Section 6.06(d) is intended to restrict Purchaser’s ability to terminate or discipline Transferred Employees whose employment is not subject to the terms of an applicable CBA.

(e) Assumption of Liabilities . Except as otherwise expressly provided in this Agreement, from and after the Closing Date, Purchaser and its subsidiaries shall assume (and Seller and its subsidiaries shall not retain) liability for all employment and employee Liabilities

relating to all Transferred Employees, and none of the Former Employees (except as set forth in Section 6.06(l)(iii)), arising out of or relating to the operation of the Business prior to the Closing Date.

(f) Cash Incentive Bonus Plans; Retention Arrangements . Without limiting the generality of Section 6.06(b)(i) and Section 6.06(d) , effective as of the Closing Date, Purchaser shall, or shall cause its subsidiaries to, assume all liability for and make any and all payments required with respect to compensation payable in respect of any Transferred Employee (whether relating to periods prior to or following the Closing Date) under (i) each cash-based bonus or incentive compensation plan or arrangements of Seller and its subsidiaries set forth in a Business Benefit Plan or Business Benefit Agreement, in each case, in an amount no less than the amount such Transferred Employee would have been eligible to receive for the applicable performance period had such Transferred Employee remained an employee of Seller and its subsidiaries through the requisite date, assuming achievement of applicable goals and conditions at target performance levels, and (ii) each retention letter agreement set forth in Section 6.06(f) of the Seller Disclosure Letter and each retention arrangement entered into following the date hereof in accordance with Section 5.01 of the Seller Disclosure Letter . From and after the Closing Date, Purchaser shall, and shall cause its subsidiaries to maintain the retention letter agreements described in this Section 6.06(f) pursuant to their terms as in effect as of the Closing Date.

(g) Certain Welfare Benefits Matters .

(i) Effective immediately following the Closing, Purchaser shall, and shall cause its subsidiaries to, have in effect for the benefit of the Transferred Employees employee benefit plans, programs and arrangements providing medical, dental, vision, health, non-occupational short-term disability and long-term disability benefits and any other employee benefit plans, programs and arrangements required by applicable Law (collectively, the “ Purchaser Welfare Plans ”). Purchaser shall, and shall cause its subsidiaries to, (A) waive all limitations as to waiting periods with respect to participation and coverage requirements applicable to the Transferred Employees and their dependents and beneficiaries under the Purchaser Welfare Plans, to the extent waived under the applicable corresponding Business Benefit Plan immediately prior to the applicable Transfer Time, and (B) provide each Transferred Employee and his or her eligible dependents and beneficiaries with credit under the Purchaser Welfare Plans for any co-payments and deductibles paid under the applicable corresponding Business Benefit Plans prior to the applicable Transfer Time in the calendar year in which the applicable Transfer Time occurs for purposes of satisfying any applicable deductible or out-of-pocket requirements (and any annual and lifetime maximums) under any Purchaser Welfare Plan in which such Transferred Employee participates.

(ii) From and after the Closing Date, Purchaser shall assume all Liabilities of Seller and its subsidiaries to the Transferred Employees (and their eligible dependents and beneficiaries) in respect of health insurance under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, the Health Insurance Portability and Accountability Act of 1996, Sections 601 et seq . and Sections 701 et seq . of ERISA, Section 4980B and Sections 9801 et seq . of the Code and applicable state or

similar Laws, which Liabilities shall be Assumed Liabilities. Subject to the foregoing, Seller shall be responsible for any COBRA related liabilities for its other employees entitled to continuation of benefits under COBRA as of the Closing.

(iii) From and after the applicable Transfer Time, Seller and its subsidiaries shall retain all Liabilities in accordance with the Business Benefit Plans for payment of all medical, dental, vision, health, non-occupational short-term disability benefit and long-term disability benefit claims (collectively, “ Welfare Benefit Claims ”) incurred under such plans prior to the applicable Transfer Time with respect to any Transferred Employee (or any dependent or beneficiary thereof), which Liabilities shall be Retained Liabilities, and Purchaser and its subsidiaries shall not assume any Liability with respect to such Welfare Benefit Claims, except that such Liabilities shall be Assumed Liabilities to the extent required by applicable Law or to the extent such Welfare Benefit Claims (A) are incurred under any Assumed Benefit Plan or (B) are insured under an insurance policy in respect of which (1) as of the Closing, Purchaser or its subsidiaries becomes the beneficiary or (2) a Transferred Employee (or any dependent or beneficiary thereof) is the beneficiary and such insurance policy transfers with such Transferred Employee pursuant to applicable Law to Purchaser and its subsidiaries as of the Closing. Purchaser and its subsidiaries shall be liable for payment of all Welfare Benefit Claims incurred on or after the applicable Transfer Time with respect to any Transferred Employee (or any dependent or beneficiary thereof), which Liabilities shall be Assumed Liabilities and, from and after the applicable Transfer Time, Purchaser shall, and shall cause its subsidiaries to, cause all such Welfare Benefit Claims to be assumed by and administered under the Purchaser Welfare Plans. For purposes of the foregoing, a claim shall be deemed to be incurred as follows: (A) life, accidental death and dismemberment, and business travel accident insurance benefits and long-term disability benefits, upon the death, disability or accident giving rise to such benefits, (B) health, dental and prescription drug benefits (including in respect of any hospital confinement), upon provision of such services, materials or supplies, and (C) non-occupational short-term disability benefits, upon the initiation of any claim for such benefit payment.

(iv) From and after the Closing Date, Purchaser and its subsidiaries shall assume (and Seller and its subsidiaries shall not retain) Liability for all claims for workers’ compensation benefits with respect to all Business Employees arising out of or relating to the operation of the Business prior to the Closing Date (or prior to the Transfer Time, in the case of all Transferred Employees) and such Liabilities shall be Assumed Liabilities.

(h) Tax-Qualified Savings/401(k) Plan/Seller’s Deferred Compensation Plan .

(i) Without limiting the generality of Section 6.06(b)(i) , effective no later than the Closing Date, Purchaser or its subsidiaries shall have in effect one or more defined contribution plans that include a qualified cash or deferred arrangement within the meaning of Section 401(k) of the Code (and a related trust exempt from Tax under Section 501(a) of the Code) (collectively, the “ Purchaser 401(k) Plan ”). Each Transferred Employee participating in a Business Benefit Plan that is a defined contribution plan that includes a qualified

cash or deferred arrangement within the meaning of Section 401(k) of the Code (collectively, the “ Business 401(k) Plan ”) immediately prior to the applicable Transfer Time shall become a participant in the Purchaser 401(k) Plan as of the applicable Transfer Time and each other Transferred Employee shall be eligible to participate in the Purchaser 401(k) Plan as of the applicable Transfer Time or as soon as is reasonably practicable following the Transfer Time.

(ii) Seller will fully vest (100%) the 401(k) accounts of Transferred Employees on or prior to the Transfer Time.

(iii) Purchaser shall cause the Purchaser 401(k) Plan to accept a “direct rollover” to such Purchaser 401(k) Plan of the account balances of each Transferred Employee (including promissory notes evidencing all outstanding loans) under the Business 401(k) Plan, if such direct rollover is elected in accordance with applicable Law by such Transferred Employee.

(iv) From and after the Closing Date, Seller and its subsidiaries shall retain all assets and Liabilities under Seller’s nonqualified defined contribution plans maintained for the benefit of the Business Employees in the United States and such liabilities shall be Retained Liabilities.

(i) Accrued Vacation . Effective as of the applicable Transfer Time, Purchaser shall assume Liability for all vacation days or other annual leave (regular, supplemental or banked) accrued or earned but not yet taken by each Transferred Employee as of the applicable Transfer Time (the “ Accrued Vacation Days ”), which Liabilities shall be Assumed Liabilities. In the event that any Transferred Employee is entitled under applicable Law or any policy of Seller or its subsidiaries to be paid for any Accrued Vacation Days on or after the applicable Transfer Time, (A) Purchaser or its applicable subsidiary or, solely to the extent required by applicable Law (as reasonably determined by Seller), Seller or its applicable subsidiary, shall pay any required amounts to such Transferred Employee, (B) such amounts, whether or not paid by Seller or its applicable subsidiary, shall remain Assumed Liabilities and (C) to the extent any such amounts are paid by Seller or its subsidiaries, Seller or the applicable subsidiary shall be entitled to indemnification pursuant to Section 10.02 with respect thereto. From and after the applicable Transfer Time, Purchaser shall, and shall cause its subsidiaries to, honor all the Accrued Vacation Days for which payout is not made pursuant to the immediately preceding sentence.

(j) Severance .

(i) The Parties intend that the Transferred Employees shall have continuous and uninterrupted employment immediately before and immediately after the applicable Transfer Time, and that for purposes of any severance or termination benefit plan, program, policy, agreement or arrangement of Seller, Purchaser or any of their respective subsidiaries, the Transactions shall not constitute a severance of employment of any Transferred Employee prior to or upon the consummation of the Transaction. Without limiting the generality of Section 6.06(b)(i) and 6.06(d) , Purchaser shall, and shall cause its subsidiaries to, provide each Transferred Employee whose employment is terminated by Purchaser or its subsidiaries during the period from the Closing Date and through the

period ending eighteen (18) months thereafter, with severance benefits that are no less favorable than the severance benefits that would have been provided to such Transferred Employee in the event of a termination of employment under the applicable Business Benefit Plan or Business Benefit Agreement as in effect with respect to such Transferred Employee as of immediately prior to the Closing Date, taking into account such Transferred Employee’s service with Seller and its subsidiaries or with any predecessor employer and such Transferred Employee’s service with Purchaser and its subsidiaries.

(ii) Any Liabilities that may result from claims made by any Business Employee for any Severance Obligations arising out of, relating to or in connection with any of the following shall be Assumed Liabilities: (A) any failure by Purchaser or its subsidiaries to comply with this Section 6.06 , (B) any Business Employee’s refusal to accept an offer of employment from (or to commence employment with) Purchaser or its subsidiaries, (C) any Business Employee’s transfer of employment to or continuation of employment with Purchaser or its subsidiaries upon the applicable Transfer Time or (D) Purchaser’s or its subsidiary’s employment or termination of employment of any Transferred Employee on or following the Transfer Time.

(k) Seller Pension Plans . Except with respect to any Liabilities that transfer to Purchaser or its subsidiaries pursuant to applicable Law (i) from and after the Closing Date, Seller and its subsidiaries shall retain all assets and Liabilities under Business Benefit Plans that are tax-qualified or nonqualified defined benefit pension plans, which Liabilities shall be Retained Liabilities, and Seller shall make payments to Transferred Employees with vested rights thereunder in accordance with the terms of the applicable Business Benefit Plan and applicable Law, as in effect from time to time and (ii) effective as of the applicable Transfer Time, each Transferred Employee shall cease active participation in such Business Benefit Plans and service performed for, and compensation earned from, any employer other than Seller or its subsidiaries (or their predecessors, to the extent recognized under the applicable Business Benefit Plan), shall not be taken into account for any purpose under applicable law.

(l) Collectively Bargained Employees . From and after the Closing Date:

(i) Purchaser shall, and shall cause its subsidiaries to, comply with the terms of, and assume all Liabilities of Seller with respect to, each CBA listed in Section 6.06(l)(i) of the Seller Disclosure Letter as in effect as of immediately prior to the Closing Date, and to comply with all applicable Laws with respect thereto. Such Liabilities shall be Assumed Liabilities. Without limiting the generality of Sections 6.06(b)(iii) , 6.06(c) , 6.06(k) , this Section 6.06(l) and Section 6.06(n) : (A) Purchaser shall, and shall cause its subsidiaries to, comply with the terms of each CBA identified on Section 6.06(l)(i) of the Seller Disclosure Letter as in effect as of immediately prior to the Closing Date with respect to all obligations to provide defined benefit pension benefits to the Transferred Employees covered by such CBA; (B) Purchaser shall, and shall cause its subsidiaries to, give credit to each Transferred Employee covered by such CBA for purposes of eligibility for early retirement reduction factors with respect to such defined benefit pension benefits for such Transferred Employee’s service with Seller and its subsidiaries, and with any predecessor

employer, to the same extent recognized by Seller immediately prior to the applicable Transfer Time; (C) each Transferred Employee covered by such CBA shall cease active participation in Seller’s tax-qualified defined benefit pension plan as of the applicable Transfer Time; and (D) Seller shall not give credit to any Transferred Employee covered by such CBA for any purpose under Seller’s tax-qualified defined benefit pension plan for such Transferred Employee’s service with Purchaser and its subsidiaries and affiliates or age attained following the applicable Transfer Time.

(ii) Purchaser agrees to recognize the unions set forth on Section 6.06(l)(i) of the Seller Disclosure Letter as the sole and exclusive collective bargaining agents as of the Closing Date and immediately thereafter for the Transferred Employees represented by such unions immediately prior to the Closing Date.

(iii) Purchaser acknowledges and agrees that all grievances, references, arbitrations, and unfair labor practice charges under any CBAs that are made, filed, commenced or instituted before or after the Closing Date, including those based substantially on events or circumstances that occurred, existed or were initiated before the Closing Date (and whether related to a Transferred Employee or Former Employee), will be Assumed Liabilities subject to representations and warranties of Seller in Section 4.07(e) .

(iv) Notwithstanding anything to the contrary in this Section 6.06 , Purchaser further agrees that the provisions of this Section 6.06 shall be subject to any applicable provision of a CBA in respect of Transferred Employees, to the extent such provision of this Section 6.06 is inconsistent with or otherwise in conflict with the provisions of any such CBA.

(m) Flexible Spending Account Plans . Effective no later than the Closing Date, Purchaser shall, or shall cause its subsidiaries to, have in effect flexible spending arrangements under a cafeteria plan qualifying under Section 125 of the Code (the “ Purchaser Flexible Spending Account Plan ”). From and after the Closing Date, Purchaser shall be liable for all Liabilities and account balances of any Business Benefit Plan that is a flexible spending account plan maintained in the United States with respect to Transferred Employees and their dependents (the “ Seller Flexible Spending Account Plan ”), which Liabilities shall be Assumed Liabilities, and all claims for reimbursement which have not been paid as of the Closing Date shall be paid pursuant to and under the terms of the Purchaser Flexible Spending Account Plan. As soon as practicable following the Closing Date, if applicable, (i) Seller shall, or shall cause its subsidiaries to, transfer to Purchaser or its subsidiaries an amount in cash equal to the excess, if any, of the aggregate contributions to the Seller Flexible Spending Account Plan made by Transferred Employees prior to the Closing Date for the plan year in which the Closing Date occurs over the aggregate reimbursement payouts made to Transferred Employees prior to the Closing Date for such year from such plan and (ii) Purchaser shall, or shall cause its subsidiaries to, cause such amounts to be credited to each such Transferred Employee’s accounts under the Purchaser Flexible Spending Account Plan. In connection with such transfer, Purchaser shall deem that such employees’ deferral elections made under

the Seller Flexible Spending Account Plan for the plan year in which the Closing Date occurs shall continue in effect under the Purchaser Flexible Spending Account Plan for the remainder of the plan year in which the Closing Date occurs. If the aggregate reimbursement payouts made to Transferred Employees from the Seller Flexible Spending Account Plan prior to the Closing for the plan year in which the Closing Date occurs exceed the aggregate accumulated contributions made by the Transferred Employees to such plan prior to the Closing Date for such plan year, Purchaser shall make a payment equal to the value of such excess to Seller as soon as practicable following Purchaser’s receipt of additional contributions from the applicable Transferred Employee.

(n) No Benefit Plan Asset Transfers . Notwithstanding anything herein to the contrary, other than as a result of (i) direct rollovers from the Business 401(k) Plan to the Purchaser 401(k) Plan or (ii) transfers from the Seller Flexible Spending Account Plan to the Purchaser Flexible Spending Account Plan, there shall be no transfer of assets from any Business Benefit Plan to any employee benefit plan or arrangement maintained by Purchaser or its subsidiaries.

(o) WARN Act . Purchaser shall provide any required notice under the Worker Adjustment and Retraining Notification Act, as amended, and any similar Federal, state or local Law or regulation (collectively, the “ WARN Act ”), and to otherwise comply with the WARN Act with respect to any “plant closing” or “mass layoff” (as defined in the WARN Act) or group termination or similar event affecting Business Employees (including as a result of the consummation of the Transactions) and occurring on or after the Closing. Purchaser and Seller shall not, and shall cause their respective subsidiaries not to, take any action within ninety (90) days before or after the Closing Date that would cause any termination of employment of any employees by Seller or its subsidiaries that occurs on or before the Closing Date to constitute a “plant closing” or “mass layoff” or group termination under the WARN Act or that would create any Liability or penalty to Seller or Purchaser or their respective subsidiaries for any employment terminations under applicable Law, and each Party shall indemnify, defend and hold harmless the other Party against all Liabilities in respect of any claim brought as a result of any such action. Seller shall notify Purchaser prior to the Closing of any layoffs of any Business Employees in the 180-day period prior to the Closing.

(p) Work Permit; Consultation . In the event that any Transferred Employee requires a work permit or employment pass or other approval for his or her employment to continue with Purchaser or its subsidiaries following the Closing, Purchaser shall use its commercially reasonable efforts to ensure that any necessary applications are promptly made and to secure the necessary permit, pass or other approval. Purchaser shall comply with all applicable Laws relating to notification of works councils, unions and relevant governmental bodies, and negotiations with works councils and/or unions in respect of the Transactions and shall bear all expenses of any compensation resulting from negotiations with works councils and/or unions.

(q) Employment Tax Reporting Responsibility . Purchaser and Seller hereby agree to follow the alternate procedure for United States Employment Tax withholding as provided in Section 5 of Rev. Proc. 2004-53, 2004-34 I.R.B. 320. Accordingly, Seller shall have no United States Employment Tax reporting responsibilities, and Purchaser shall have full United States Employment Tax reporting responsibilities, for Transferred Employees subject to United States Employment Taxes following the close of business on the Closing Date.

(r) Non-U.S. Transferred Employees . To the extent applicable, the Parties hereto acknowledge the application of the Transfer Regulations and acknowledge and agree that they shall, and shall cause their respective subsidiaries to, comply with the Transfer Regulations. In the event that Purchaser and its subsidiaries, with respect to any Transferred Employee who is not principally employed in the United States as of immediately prior to the Transfer Time (each, a “ Non-U.S. Transferred Employee ”), (i) do not provide terms and conditions of employment and compensation and benefits that are identical to those in effect as of immediately prior to the Transfer Time, (ii) amend or otherwise modify at or after the Transfer Time any terms and conditions of employment or compensation and benefits or (iii) do not comply with applicable Law or the terms of any Assumed Benefit Plans or applicable CBAs, which, in the case of clauses (i), (ii) and (iii), results in any Severance Obligation of Seller or its subsidiaries to such Non-U.S. Transferred Employee or any Liabilities incurred by Seller or its subsidiaries in respect of claims made by such Non-U.S. Employee, such Liabilities shall be Assumed Liabilities.

(s) Administration . Following the date hereof, the Parties hereto shall reasonably cooperate in all matters reasonably necessary to effect the transactions contemplated by this Section 6.06 , including exchanging information and data relating to workers’ compensation, employee benefits and employee benefit plan coverages (except to the extent prohibited by applicable Law), encouraging the Business Employees to accept Purchaser’s offers of employment made pursuant to Section 6.06(b) and obtaining any Governmental Approvals required hereunder.

(t) No Third Party Beneficiaries . No provision of this Section 6.06 shall create any third party beneficiary rights in any current or former employee (including any beneficiary or dependent thereof) of Seller or its subsidiaries. Nothing herein shall (i) guarantee employment for any period of time or preclude the ability of Purchaser and its subsidiaries to terminate the employment of any Transferred Employee at any time and for any reason, (ii) require Purchaser or its subsidiaries to continue any employee benefit plans or arrangements or prevent the amendment, modification or termination thereof after the Closing Date or (iii) amend any Business Benefit Plan or Business Benefit Agreement or other employee benefit or compensatory plans, agreements or arrangements.

6.07 Fees and Expenses . Except as otherwise expressly provided in this Agreement or any Transaction Document, all fees and expenses incurred in connection with the Transactions shall be paid by the Party incurring such fees or expenses. This Section 6.07 does not relate to Transfer Taxes, which are the subject of Section 9.02 . Seller shall bear the cost to provide Purchaser an extended coverage Owner’s Policy of Title Insurance insuring against the standard exceptions commonly referred to as Parties in Possession, Survey Matters, and Mechanics Liens, to be issued to Purchaser at Closing insuring title to the Owned Real Property (“ Title Policy ”). Any additional endorsements required by Purchaser shall be acquired at the sole cost and expense of Purchaser. Any costs associated with obtaining any survey required in order to obtain the Title Policy shall be at the sole cost and expense of Seller.

6.08 Public Announcements . Seller, on the one hand, and Purchaser, on the other hand, shall consult with each other and shall mutually agree upon any press release or other public statements with respect to the Transactions and shall not issue any such press release or make any such public statement prior to such consultation and agreement, other than any press

release or other public statement that only contains information and statements that have been previously approved by the Parties pursuant to this Section 6.08 , except as may be required by applicable Law or court process, by obligations pursuant to any listing agreement with any U.S. national securities exchange or by the Tokyo Stock Exchange, in which case the Party proposing to issue such press release or make such public announcement shall use commercially reasonable efforts to consult in good faith with the other Parties before issuing any such press release or making any such public announcement.

6.09 Site Services Agreements . At the Closing, Seller and Purchaser shall, and shall cause NORPAC to, enter into the Site Services Agreements. Purchaser acknowledges that, as of the Closing, neither Seller nor any of its affiliates shall have any obligation to provide any goods, support or other services to Purchaser or the Business other than those goods and services expressly required to be provided pursuant to the Site Services Agreements. In addition, Seller and Purchaser shall reasonably cooperate and each shall use its commercially reasonable efforts to prepare, as promptly as practicable after the date hereof, for the separation of the Business from Seller and its affiliates on the Closing Date.

6.10 Bulk Transfer Laws . Purchaser hereby waives compliance by Seller with the provisions of any so called “bulk transfer laws” of any jurisdiction in connection with the Acquisition.

6.11 Refunds and Remittances . After the Closing, if Seller or any of its affiliates receives any refund or other amount which is a Transferred Asset or is otherwise properly due and owing to Purchaser in accordance with the terms of this Agreement, Seller promptly shall remit, or shall cause to be remitted, such amount to Purchaser at the address set forth in Section 11.02 . After the Closing, if Purchaser or any of its affiliates receives any refund or other amount which is an Excluded Asset or which is otherwise properly due and owing to Seller or any of its affiliates in accordance with the terms of this Agreement, Purchaser promptly shall remit, or shall cause to be remitted, such amount to Seller at the address set forth in Section 11.02 . After the Closing, if Purchaser or any of its affiliates receives any refund or other amount which is related to claims (including workers’ compensation), litigation or other matters for which Seller is responsible hereunder, and which amount is not a Transferred Asset or is otherwise properly due and owing to Seller in accordance with the terms of this Agreement, Purchaser promptly shall remit, or cause to be remitted, such amount to Seller at the address set forth in Section 11.02 . After the Closing, if Seller or any of its affiliates receives any refund or other amount which is related to claims (including workers’ compensation), litigation or other matters for which Purchaser is responsible hereunder, and which amount is not an Excluded Asset, or is otherwise properly due and owing to Purchaser in accordance with the terms of this Agreement, Seller promptly shall remit, or cause to be remitted, such amount to Purchaser at the address set forth in Section 11.02 .

6.12 Leased Vehicles and Forklifts . The Parties understand and agree that the vehicles and forklifts set forth on Section 6.12 of the Seller Disclosure Letter (as amended prior to the Closing in accordance with this Section 6.12 ) are part of Seller’s “lease pool” and are used on the Transferred Real Property or in connection with the ownership, operation of the Business (the “ Transferred Vehicles and Forklifts ”). The Parties shall, and shall cause their respective subsidiaries to, use their commercially reasonable efforts to transfer the Transferred Vehicles and

Forklifts to Purchaser’s “lease pool” and/or to Purchaser pursuant to arrangements between Purchaser and the applicable lessor (including by working with third parties to such Contracts), in each case, in a lawful, contractually permissible and commercially reasonable manner. If the Parties or their respective affiliates are not able to enter into arrangements to transfer any of the Transferred Vehicles and Forklifts pursuant to the immediately preceding sentence prior to the Closing, the Closing shall nonetheless take place and Purchaser shall purchase such Transferred Vehicles and Forklifts from Seller or the applicable lessor, as the case may be, at a price per item calculated in accordance with the applicable Contract pursuant to which Seller leases such item (the sum of such per item prices, if any, the “ Lease Buyout Amount ”), which Lease Buyout Amount, if any, shall be included in the Purchase Price as provided in Section 1.01 . Seller shall be permitted to update Section 6.12 of the Seller Disclosure Letter to reflect any changes to Seller’s “lease pool” following the execution of this Agreement (to the extent such changes are permissible under Section 5.01 ), which updated Section 6.12 (i) shall be delivered to Purchaser at least five (5) Business Days prior to the Closing and (ii) shall constitute Section 6.12 of the Seller Disclosure Letter for all purposes of this Agreement from and after the date of its delivery.

6.13 Real Estate Matters .

(a) As soon as reasonably practicable after mutual execution of this Agreement, Seller shall cause the Title Company to issue a commitment for the Title Policy applicable to the Owned Real Property.

(b) Each of Seller and Purchaser shall cooperate to establish, at, prior to, or if necessary, after Closing, mutually acceptable easements in order to permit each Party and its respective affiliates, successors, and assigns, and their employees, suppliers, vendors, customers, and other Persons as reasonably necessary, to access the Excluded Real Property or the Transferred Real Property, as the case may be, in the manner, to the extent, and for such purposes as the property has been accessed and/or utilized historically (for the avoidance of doubt, including such easements as will permit employees of the NORPAC business reasonable access over the Transferred Real Property to the site at which the NORPAC business is conducted).

6.14 Further Assurances . After the Closing, each of Seller and Purchaser shall use its commercially reasonable efforts from time to time to execute and deliver, or cause to be executed and delivered by its respective applicable affiliate, at the reasonable request of the other Party such additional documents and instruments, including any assignment or assumption agreements, bills of sale, instruments of assignment, consents and other similar instruments in addition to those required by this Agreement, as may be reasonably required to give effect to this Agreement and the Ancillary Agreements and the transactions contemplated hereby and thereby, and to provide any documents or other evidence of ownership as may be reasonably requested by Purchaser to confirm Purchaser’s ownership of Transferred Assets and the assumption of the Assumed Liabilities.

6.15 Supplemental Disclosures . Only in relation to representations and warranties to be made by Seller at Closing and not for any other purpose or with any other effect, Seller may (but will not be required to), prior to the Closing Date, by notice given to Purchaser in accordance with this Agreement, supplement or amend the Seller Disclosure Letter to reflect the

occurrence or nonoccurrence, or pending or threatened in writing occurrence or nonoccurrence, of any event, in each case occurring or not occurring, pending or threatened between the date of this Agreement and the Closing Date, to the extent the same would otherwise constitute a breach of the representations and warranties to be made by Seller at Closing (in each case, an “ Avoided Breach ”); provided, however, that if: (i) all of the Avoided Breaches, when viewed collectively, or (ii) if any single Avoided Breach, individually, in the view of a reasonable person would have caused the conditions precedent in Section 7.03(a) not to be satisfied, then any time within five (5) Business Days after receipt by Purchaser of the last supplement or amendment to the Seller Disclosure Letter made by Seller, Purchaser may, by giving written notice to Seller, elect to terminate this Agreement pursuant to Section 8.01(d) . No supplement or amendment to the Seller’s Disclosure Schedule shall be taken into account for purposes of Section 10.01(a)(iii) .

6.16 Transition Planning . Each of Purchaser and Seller shall cooperate with the other and use its commercially reasonable efforts to prepare, as promptly as practicable after the date of this Agreement, for the separation of the Business from Seller and its affiliates on the Closing Date without the need for the provision of transition services by Seller. If Purchaser reasonably determines that, notwithstanding compliance by each of Purchaser and Seller with the foregoing sentence, transition services from Seller to Purchaser in respect of the Business will be required in order to permit Purchaser to operate the Business on and after the Closing Date in all material respects as it is currently conducted, Seller and Purchaser shall negotiate in good faith and enter into at Closing a transition services agreement reasonably acceptable to each of them providing for such transition services (the “ Transition Services Agreement ”). The Transition Services Agreement, if any, shall (i) have a term of no more than two (2) months, (ii) provide for pricing to be paid by Purchaser for the services provided thereunder equal to Seller’s fully loaded costs for such services, (iii) not require the provision of any services that have not historically been provided by Seller to the Business, and (iv) not require the provision of services that are not required to operate the Business on and after the Closing Date in all material respects as it is currently conducted.

ARTICLE VII

CONDITIONS PRECEDENT

7.01 Conditions to Each Party’s Obligation . The obligations of Purchaser and Seller to effect the Acquisition are subject to the satisfaction (or, to the extent permitted by Law, waiver) on or prior to the Closing Date of the following conditions:

(a) any waiting period (and any extension thereof) applicable to the Acquisition under the HSR Act shall have been terminated or shall have expired, and any Governmental Approvals, including CFIUS Approval, under any other Review Law, the absence of which would prohibit the consummation of the Acquisition, shall have been obtained or made;

(b) Seller shall have received a boundary line adjustment, subdivision, binding site plan, or other legal lot approval from Cowlitz County, Washington with respect to the Owned Real Property;

(c) no temporary restraining order, cease trading order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Acquisition shall have been issued under or with respect to any Review Law and remain in effect; and

(d) no other temporary restraining order, cease trading order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Acquisition shall be in effect.

7.02 Conditions to Obligations of Seller . The obligation of Seller to effect the Acquisition is further subject to the satisfaction (or, to the extent permitted by Law, waiver) on or prior to the Closing Date of the following conditions:

(a) (i) the representations and warranties of Purchaser set forth in Sections 3.01 and 3.02 shall be true and correct, as of the Closing Date as though made on the Closing Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct on and as of such earlier date), and (ii) all other representations and warranties of Purchaser set forth in this Agreement shall be true and correct, except for any failure to be true and correct that would not, individually or in the aggregate, reasonably be expected to have a Purchaser Material Adverse Effect;

(b) Purchaser shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing Date;

(c) Seller shall have received a certificate signed on behalf of Purchaser by an executive officer of Purchaser certifying the satisfaction by Purchaser of the conditions set forth in Sections 7.02(a) and 7.02(b) ;

(d) Purchaser shall have executed and delivered to Seller each of the other Transaction Documents to which Purchaser is a party;

(e) Seller shall have received evidence from Purchaser, in a form reasonably satisfactory to Seller, of the issuance of new letters of credit in replacement of the letters of credit set forth on Section 1.02(b)(v) of the Seller Disclosure Letter ;

(f) Seller shall have received copy of a Consent, Assignment and Novation Agreement, in a form reasonably satisfactory to Seller and duly executed by each of Purchaser and the Public Utility District No. 1 of Cowlitz County, Washington, evidencing the assignment and assumption of the portion of the Cowlitz Agreement to be assumed by Purchaser pursuant hereto and releasing Seller from all obligations thereunder; and

(g) Seller shall have received the Closing Date Payment in accordance with Section 2.02(b) .

7.03 Conditions to Obligations of Purchaser . The obligation of Purchaser to effect the Acquisition is further subject to the satisfaction (or, to the extent permitted by Law, waiver) on or prior to the Closing Date of the following conditions:

(a) (i) The representations and warranties of Seller set forth in Sections 4.01 and 4.02(a) shall be true and correct, as of the Closing Date as though made on the Closing Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct on and as of such earlier date), and (ii) all other representations and warranties of Seller set forth in this Agreement shall be true and correct, except for any failure to be true and correct that would not, individually or in the aggregate, reasonably be expected to have a Business Material Adverse Effect;

(b) Seller shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing Date;

(c) Purchaser shall have entered into a Consent, Assignment and Novation Agreement, in a form reasonably satisfactory to Purchaser, and duly executed by Purchaser and the Public Utility District No. 1 of Cowlitz County, Washington, evidencing the assignment and assumption of the portion of the Cowlitz Agreement to be assumed by Purchaser pursuant hereto;

(d) Purchaser shall have received a certificate signed on behalf of Seller by an executive officer of Seller certifying the satisfaction by Seller of the conditions set forth in Sections 7.03(a) ;

(e) Since the date hereof there shall not have been any Effect that, individually or in the aggregate, has had or would reasonably be expected to have a Business Material Adverse Effect; and

(f) Seller shall have executed and delivered to Purchaser each of the other Transaction Documents to which Seller is a party.

7.04 Frustration of Closing Conditions . Neither Purchaser nor any Seller may rely on the failure of any condition set forth in this Article VII to be satisfied if such failure was caused by such Party’s failure to act in good faith or to use its efforts to cause the Closing to occur, as required by Sections 6.03 and 6.04 .

ARTICLE VIII

TERMINATION, AMENDMENT AND WAIVER

8.01 Termination. This Agreement may be terminated and the Acquisition and the other Transactions abandoned at any time prior to the Closing:

(a) by mutual written consent of Seller and Purchaser;

(b) by Seller or Purchaser:

(i) if the Closing has not occurred on or prior to the date that is six (6) months after the date hereof, unless the failure to consummate the Acquisition is the result of a material breach of any Transaction Document by the Party seeking

to terminate this Agreement; provided , however , that (A) either Seller or Purchaser may extend such date for up to three (3) months if, at the time of such extension, the only conditions in Article VII not capable of being satisfied are the conditions set forth in Section 7.01 and the Party exercising its rights under this clause (i) is not at such time in material breach of any of its obligations under this Agreement, including its obligations under Sections 6.03 and 6.04 , and (B) neither Purchaser nor Seller may terminate this Agreement under this clause (i) if the conditions in Sections 7.01(a) and 7.01(b) remain unsatisfied as of the date first specified above in this clause (i);

(ii) if any court of competent jurisdiction or other Governmental Entity shall have issued a Judgment that permanently restrains, enjoins or otherwise prohibits the consummation of the Acquisition, and any such Judgment shall have become final and non-appealable; or

(iii) if any Governmental Entity shall have enacted a Law that prohibits or makes illegal the consummation of the Acquisition; or

(c) by Seller, if Purchaser breaches or fails to perform in any respect of any of its representations, warranties or covenants contained in any Transaction Document, which breach or failure to perform (i) would give rise to the failure of a condition set forth in Section 7.02(a) or 7.02(b) and (ii) cannot be or has not been cured within thirty (30) days after the giving of written notice to Purchaser of such breach, unless Seller is then in material breach of any representation, warranty or covenant contained in any Transaction Document; or

(d) by Purchaser, if Seller breaches or fails to perform in any respect of any of its representations, warranties or covenants contained in any Transaction Document, which breach or failure to perform (i) would give rise to the failure of a condition set forth in Section 7.03(a) or 7.03(b) and (ii) cannot be or has not been cured within thirty (30) days after the giving of written notice to Seller of such breach, unless Purchaser is then in material breach of any representation, warranty or covenant contained in any Transaction Document.

8.02 Effect of Termination . If this Agreement is terminated and the Transactions are abandoned as described in Section 8.01 , this Agreement shall become null and void and of no further force and effect, except for Section 6.02(e) , Section 6.07 , Section 6.08 , this Section 8.02 and Article XI . Notwithstanding the foregoing, a termination of this Agreement shall not relieve any Party hereto from any liability or damages resulting from the willful and material breach by such Party of any of its representations, warranties, covenants or agreements set forth in this Agreement or any other Transaction Document.

8.03 Amendment . This Agreement may not be amended except by an instrument in writing signed on behalf of each of the Parties hereto.

8.04 Extension; Waiver . At any time prior to the Closing Date, the Parties hereto may, to the extent permitted by Law, (a) extend the time for the performance of any of the obligations or other acts of the other Parties, (b) waive any inaccuracies in the representations and warranties contained in this Agreement or in any document delivered pursuant to this Agreement or (c) waive compliance with any of the agreements or conditions contained in this Agreement.

Any agreement on the part of a Party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such Party. The failure of any Party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.

8.05 Procedure for Termination, Amendment, Extension or Waiver . A termination of this Agreement pursuant to Section 8.01 , an amendment of this Agreement pursuant to Section 8.03 or an extension or waiver pursuant to Section 8.04 shall, in order to be effective, require in the case of any of the Parties hereto, action by its Board of Directors or the duly authorized designee of its Board of Directors.

ARTICLE IX

TAX MATTERS

9.01 Purchase Price Allocations.

(a) Within ninety (90) days following the date of this Agreement, Purchaser shall provide to Seller (and Seller shall cooperate with Purchaser and provide such information as is reasonably requested by Purchaser to enable Purchaser to provide to Seller) a proposed allocation of the Purchase Price among the Transferred Assets including the Transferred Real Property, and Seller and Purchaser shall attempt to mutually agree to such allocations; provided, however, that if Seller and Purchaser are unable to agree on such allocation within thirty (30) days following the date on which Purchaser provides the allocations to Seller, Seller and Purchaser shall mutually agree on an independent appraisal firm (the “ Appraisal Firm ”) to determine the fair market value of the Transferred Assets. The opinion of the Appraisal Firm shall be rendered within one hundred fifty (150) days following the date of this Agreement and shall be conclusive and binding on the parties, which shall allocate an amount of Purchase Price (and any other items required to be treated as purchase price for Tax purposes) to the Transferred Assets. The fees and expenses of the Appraisal Firm shall be borne equally by Purchaser and Seller.

9.02 Transfer Taxes . urchaser and its affiliates shall be fully liable for, and shall pay, that portion of the Transfer Taxes that constitute sales tax payable by Purchaser, applicable to the conveyance and transfer from Seller to Purchaser (and any subsidiary of Purchaser) of the Transferred Assets. Seller and its affiliates shall pay that portion of Transfer Taxes that constitute real estate excise tax (the “ Applicable REET ”) up to $1,500,000 in the aggregate. In

the event that the Applicable REET exceeds $1,500,000 in the aggregate, Seller and its affiliates, on the one hand, and Purchaser and its affiliates, on the other hand, agree to share equally such portion of the Applicable REET that exceeds $1,500,000. Seller and its affiliates shall be fully liable for, and shall pay, that portion of the Transfer Taxes that constitute Washington State business and occupation tax payable by Seller and/or its affiliates, applicable to the conveyance and transfer from Seller to Purchaser (and any subsidiary of Purchaser) of the Transferred Assets and Assumed Liabilities. Any other Transfer Taxes applicable to the conveyance and transfer of the Transferred Assets shall be payable by the Party on whom the tax is imposed. Seller and its affiliates, on the one hand, and Purchaser and its affiliates, on the other hand, shall cooperate in making all filings, returns, reports and forms, as and when required, to comply with the provisions of any applicable Tax Laws. Within fourteen (14) days of Closing, Purchaser shall propose the taxable value of assets subject to Transfer Taxes to Seller. Within seven (7) days of Closing, the Parties shall agree on the taxable value of property subject to Transfer Taxes. Seller and Purchaser and their respective affiliates shall cooperate in minimizing any Transfer Taxes.

9.03 Straddle Period . Any sales, value-added, goods and services, stamp duties, property, ad valorem and similar Taxes (other than Taxes described in Section 9.02 ) imposed with respect to a Straddle Period shall be allocated between the portion of the Straddle Period ending on the Closing Date and the portion beginning the day after the Closing Date in the following manner: (i) in the case of a property, ad valorem or similar Tax for a Straddle Period, the amount of such Tax allocable to a portion of the Straddle Period shall be the total amount of such Tax for the period in question multiplied by a fraction, the numerator of which is the total number of days in such portion of such Straddle Period and the denominator of which is the total number of days in such Straddle Period (and in the case of property Taxes imposed by the state of Washington, property taxes due and payable in the calendar year that includes the Closing shall be allocated based on number of days owned by each during the calendar year Closing), and (ii) in the case of sales, value-added and similar transaction-based Taxes (other than Taxes described in Section 9.02 ) for a Straddle Period, such Taxes shall be allocated to the portion of the Straddle Period in which the relevant transaction occurred.

9.04 Preparation of Tax Returns.

(a) Seller Responsibility . Seller shall prepare and file all Tax Returns and make all determinations with respect to and have exclusive control over (i) any Federal consolidated Tax Return that includes Seller for all taxable periods, (ii) any consolidated, combined or unitary state Tax Return that includes Seller for all taxable periods, and (iii) any other Tax Returns with respect to the Transferred Assets for any pre-Closing Tax Period.

(b) Purchaser Responsibility . Purchaser shall prepare and file and make all determinations with respect to and have exclusive control over any other Tax Returns relating to the Transferred Assets (other than Tax Returns described in Sections 9.04(a)(i) and (ii) above) for any post-Closing Tax Period, including any Straddle Period.

(c) Straddle Periods . To the extent Purchaser has responsibility for preparing a Straddle Period Tax Return, it shall prepare such Tax Return in a manner not inconsistent with practices, accounting methods, elections and conventions used with respect to such Tax Returns for preceding Tax periods. Purchaser shall use commercially reasonable efforts to make any

Tax Returns and work papers in respect of a Straddle Period available for review by Seller sufficiently in advance of the due date for filing such Tax Returns to provide Seller with a meaningful opportunity to analyze, comment on and dispute such Tax Returns and for such Tax Returns to be modified, as reasonably requested by Seller before filing. In the event of any disagreement between Purchaser on the one hand, and Seller, on the other hand, such disagreement shall be resolved by an accounting firm of international reputation mutually agreeable to Purchaser and Seller (the “ Tax Accountant ”), and any such determination by the Tax Accountant shall be final. The fees and expenses of the Tax Accountant shall be borne equally by Purchaser and Seller. If the Tax Accountant does not resolve any differences between Purchaser and Seller with respect to such Tax Return at least five (5) days prior to the due date therefor, such Tax Return shall be filed as prepared by Purchaser and subsequently amended to reflect the Tax Accountant’s resolution.

(d) Payment . The Party legally responsible for paying to the relevant Taxing Authority the amount of Tax liability reflected on such Tax Return shall pay such Tax, subject to any indemnification rights it may have against the other Party, and Purchaser shall pay any State of Washington property taxes due after the Closing.

9.05 Tax Refunds . Seller and Purchaser shall be entitled to refunds or credits relating to Taxes arising out of, relating to or in respect of the Transferred Assets as set forth in Article I .

(a) Each Party shall forward, or cause to be forwarded, to the Party entitled pursuant to this Section 9.05 to receive the amount or economic benefit of a refund or credit of Taxes the amount of such refund or credit within a reasonable amount of time after such refund is received or after such credit is allowed or applied against another Tax liability, as the case may be.

(b) If, subsequent to a payment of a refund or credit under Section 9.05(a) , a Taxing Authority reduces or disallows the amount of any such refund or credit plus any interest, the portion of any such refund or credit reduced or disallowed shall be returned to the Party who had forwarded or reimbursed such refund or credit, including any interest thereon.

9.06 Certificate of Non-Foreign Status . Seller shall furnish to Purchaser on or prior to the Closing Date a certificate of its non-foreign status complying with the provisions of Treasury Regulation Section 1.1445-2(b).

9.07 Research and Development . Purchaser and Seller agree that adjustments to research and development expenses for the purposes of determining Tax credits for research and development activities shall be governed by Section 41(f)(3) of the Code. Pursuant to Section 41(f)(3)(B) of the Code, Seller shall furnish Purchaser with information as is necessary for the application of Section 41(f)(3)(A) of the Code.

ARTICLE X

INDEMNIFICATION

10.01 Indemnification by Seller .

(a) From and after the Closing Date, Seller shall indemnify, defend and hold harmless Purchaser and each of its affiliates and their respective Representatives and all successors and assigns of the foregoing (collectively, the “ Purchaser Indemnitees ”) from and against any and all Losses, to the extent arising or resulting from any of the following:

(i) Any Retained Liability;

(ii) any breach of any covenant or agreement of Seller contained in this Agreement;

(iii) any breach of any representation or warranty made by Seller to Purchaser under Article IV of this Agreement (as qualified by the Seller Disclosure Letter), without taking into account any supplement or amendment to the Seller’s Disclosure Letter pursuant to Section 6.15 ;

(iv) any Liabilities (including any third party claims) imposed on, sustained, incurred or suffered by any of the Purchaser Indemnitees to the extent arising out of or relating to the Seller Business or the assets of the Seller Business, whether occurring, arising, existing or asserted before, on or after the Closing Date (other than any Assumed Liabilities);

(v) any fees, expenses or other payments incurred or owed by Seller to any agent, broker, investment banker or other firm or Person retained or employed by it in connection with the Transactions; and

(vi) any Liabilities (including any third party claims) imposed on, sustained, incurred or suffered by any of the Purchaser Indemnitees arising out of or relating to any portion of the Cowlitz Agreement that is not to be assumed by Purchaser or its affiliates (with such affiliates including, for avoidance of doubt, NORPAC).

(b) Seller’s obligations pursuant to the provisions of Section 10.01(a) are subject to the following limitations:

(i) The Purchaser Indemnitees shall not be entitled to recover under 10.01(a)(iii) on any individual claim unless the Losses associated with such claim exceed $25,000, and such items that do not exceed such amount shall not be aggregated for purposes of Section 10.01(b) .

(ii) The Purchaser Indemnitees shall not be entitled to recover under Section 10.01(a)(iii) unless and until the aggregate amount of all Losses for which the Purchaser Indemnitees would recover under Section 10.01(a)(iii) exceeds, collectively, $1,500,000, and then only to the extent of such excess.

(iii) The Purchaser Indemnitees shall not be entitled to recover under Section 10.01(a)(iii) for an amount of Losses in excess of a liability cap (the “ Liability Cap ”) which shall be determined as follows: (1) in the case that the Purchaser Indemnitees recover nothing (i.e., $0) pursuant to Section 10.01(a)(iii) with respect to indemnification for any breaches of the representations or warranties contained in Section 4.11 (Environmental Matters), the Liability Cap shall be $28,500,000; and (2) in the case that the Purchaser Indemnitees recovers any amount other than zero pursuant to Section 10.01(a)(iii) with respect to indemnification for any breaches of the representations or warranties contained in Section 4.11 (Environmental Matters), the Liability Cap shall be (x) such amount so recovered, plus (y) all other amounts recovered pursuant to Section 10.01(a)(iii) with respect to indemnification for any breaches of any representations or warranties other than those contained in Section 4.11 (Environmental Matters); provided, however, that in the case of (2), the sum of (x) and (y) shall not exceed $57,000,000, and the amount of (y) shall not exceed $28,500,000. Notwithstanding the foregoing, nothing contained in this Section 10.01(b)(iii) shall limit in any way the Purchaser Indemnitees’ rights to recover under Section 10.01(a)(iii) for any breach of the representations or warranties contained in Sections 4.01 or 4.02(a) . For the avoidance of doubt, the Liability Cap represents a limit solely on the amount of Losses the Purchaser Indemnitees may actually recover under Section 10.01(a)(iii) in excess of any amounts excluded from recovery under Section 10.01(b)(i) or Section 10.01(b)(ii), and the Purchaser Indemnitees shall have the right to submit claims for indemnity pursuant to Section 10.01(a)(iii) in excess of the Liability Cap (provided that the amounts actually recovered in respect of such claims shall not exceed the Liability Cap to the extent applicable).

(iv) Despite any other provision in this Article X , except in the case of Seller’s common law fraud or Losses for which the Purchaser Indemnitees would recover under Section 10.01(a)(i) or 10.01(a)(iv) , in no event will Seller have any Liability for Losses under this Agreement in excess of the aggregate amount actually received by Seller under this Agreement.

(b) Nothing contained in this Agreement shall limit in any way the Purchaser Indemnitees’ rights to recover for all Losses in the case of Seller’s intentional misrepresentation, intentional misconduct, intentional waste, or common law fraud.

10.02 Indemnification by Purchaser .

(a) From and after the Closing Date, Purchaser shall indemnify, defend and hold harmless Seller, each member of the Seller Group and each of their respective affiliates and Representatives (collectively, the “ Seller Indemnitees ”) from and against any and all Losses, to the extent arising or resulting from any of the following:

(i) any Assumed Liability;

(ii) any breach of any covenant or agreement of Purchaser after the Closing contained in this Agreement requiring performance after the Closing Date;

(iii) any breach of any representation or warranty made by Purchaser to Seller under Article III of this Agreement;

(v) any fees, expenses or other payments incurred or owed by Purchaser to any agent, broker, investment banker or other firm or Person retained or employed by it in connection with the Transactions; and

(vi) any Liabilities (including any third party claims) imposed on, sustained, incurred or suffered by any of the Seller Indemnitees arising out of or relating to the portion of the Cowlitz Agreement to be assumed by Purchaser or its affiliates.

(b) Nothing contained in this Agreement shall limit in any way the Seller Indemnitees’ rights to recover for all Losses in the case of Purchaser’s intentional misrepresentation, intentional misconduct, intentional waste or common law fraud.

10.03 Indemnification for Tax Matters .

(a) Seller shall indemnify, defend and hold harmless the Purchaser Indemnitees from and against:

(i) any and all Liabilities for Taxes of Seller or any other member of the Seller Group with respect to the Transferred Assets or the Business for any Pre-Closing Tax Period and including any Transfer Taxes other than Purchaser’s portion of the Transfer Taxes, pursuant to Section 9.02 ; and

(ii) any and all Liabilities for Taxes attributable to any breach by Seller of its tax-related obligations under this Agreement or of any representation or warranty under this Agreement.

(b) Purchaser shall indemnify, defend and hold harmless the Seller Indemnitees from and against:

(i) any and all Liabilities for Taxes with respect to the Transferred Assets or the Business for any Post-Closing Tax

Period and any Transfer Taxes other than Seller’s portion of the Transfer Taxes pursuant to Section 9.02;

(ii) any and all Liabilities for Taxes attributable to any action taken on or after the Closing Date by Purchaser or any of its affiliates, other than any such action expressly required by applicable Law or by this Agreement or expressly permitted by this Agreement; and

(iii) any and all Liabilities for Taxes attributable to any breach by Purchaser of its tax-related obligations under this Agreement or of any representation or warranty under this Agreement.

10.04 Indemnification Procedures .

(a) Procedures Relating to Indemnification of Third Party Claims . If any party (the “ Indemnified Party ”) receives written notice of the commencement of any Action or the assertion of any claim by a third party or the imposition of any penalty or assessment for which indemnity may be sought under Section 10.01 , 10.02 or 10.03 (a “ Third Party Claim ”), and such Indemnified Party intends to seek indemnity pursuant to this Article X , the Indemnified Party shall promptly provide the other party (the “ Indemnifying Party ”), with written notice of such Third Party Claim, stating the nature, basis and the amount thereof, to the extent known, along with copies of the relevant documents evidencing such Third Party Claim and the basis for indemnification sought. Failure of the Indemnified Party to give such notice will not relieve the Indemnifying Party from liability on account of this indemnification, except if and then only to the extent that the Indemnifying Party is materially prejudiced thereby. The Indemnifying Party shall respond in writing to the Indemnified Party’s written notice of Third Party Claim within thirty (30) days of receipt of such notice. Failure by the Indemnifying Party to timely respond to a written notice of Third Party Claim shall be deemed to be a denial of such indemnification request, and thereafter the Indemnified Party may defend such claim and thereafter seek all Losses incurred in connection therewith in an enforcement action against the Indemnifying Party conducted pursuant to Section 11.10 . The Indemnifying Party shall have the right, by giving written notice to the Indemnified Party, to assume the defense of the Indemnified Party against the Third Party Claim with counsel selected by the Indemnifying Party and reasonably satisfactory to the Indemnified Party. So long as the Indemnifying Party has assumed the defense of the Third Party Claim in accordance herewith, (i) the Indemnifying Party shall actively pursue such defense in good faith, (ii) the Indemnified Party may retain separate co-counsel at its sole cost and expense (except as contemplated by the following sentence) and participate in the defense of the Third Party Claim, (iii) the Indemnified Party shall not file any papers or consent to the entry of any Judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying Party and (iv) the Indemnifying Party shall not (A) admit to any wrongdoing or (B) consent to the entry of any Judgment or enter into any settlement with respect to the Third Party Claim to the extent such Judgment or settlement provides for (x) relief other than money damages or (y) money damages if the Indemnifying Party has not acknowledged in writing that it shall be responsible for such money damages, in the case of each of clauses (A) and (B), without the prior written consent of

the Indemnified Party (which consent shall not be unreasonably withheld or delayed). In the event that the Indemnified Party and the Indemnifying Party reasonably agree that a conflict of interest exists in respect of a Third Party Claim, then the Indemnified Party shall have the right to retain separate counsel selected by the Indemnified Party and reasonably satisfactory to the Indemnifying Party to represent the Indemnified Party in the defense of the Third Party Claim, and the reasonable legal fees and expenses of the Indemnified Party shall be paid by the Indemnifying Party. Notwithstanding the foregoing, the Indemnifying Party shall not be entitled to assume the defense of any Third Party Claim if the Third Party Claim seeks an order, injunction or other equitable relief or relief other than monetary damages against the Indemnified Party that the Indemnified Party reasonably determines, after conferring with its outside counsel, cannot be separated from any related claim for monetary damages. Each party shall use commercially reasonable efforts to minimize Losses from Third Party Claims and shall act in good faith in responding to, defending against, settling or otherwise dealing with such claims. The parties shall also cooperate in any such defense and give each other reasonable access to all information relevant thereto. Whether or not the Indemnifying Party has assumed the defense, such Indemnifying Party will not be obligated to indemnify the Indemnified Party hereunder for any settlement entered into or any Judgment that was consented to by the Indemnified Party without the Indemnifying Party’s prior written consent.

(b) Procedures Relating to Indemnification of Third Party Tax Claims . Notwithstanding Section 10.04(a) , if a Third Party Claim includes, or could reasonably be expected to include, any claim for Taxes relating solely to a Straddle Period, Purchaser and Seller shall jointly control all proceedings taken in connection with such claim (such Third Party Claim, a “ Tax Claim ”).

(c) Procedures for Non-Third Party Claims . The Indemnified Party shall notify the Indemnifying Party in writing promptly of its discovery of any matter that does not involve a Third Party Claim giving rise to the claim of indemnity pursuant hereto. The failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party from liability on account of this indemnification, except only to the extent that the Indemnifying Party is materially prejudiced thereby. The Indemnifying Party shall have forty five (45) days from receipt of any such notice to give notice of dispute of the claim to the Indemnified Party. The Indemnified Party shall reasonably cooperate and assist the Indemnifying Party in determining the validity of any claim for indemnity by the Indemnified Party and in otherwise resolving such matters. Such assistance and cooperation shall include providing reasonable access to and copies of information, records and documents relating to such matters, furnishing employees to assist in the investigation, defense and resolution of such matters and providing legal and business assistance with respect to such matters.

10.05 Indemnification as Sole and Exclusive Remedy . Except as otherwise provided in this Agreement, including the dispute resolution processes and remedies contained in Sections 2.03 , the indemnification rights pursuant to this Article X shall be the sole and exclusive remedy of the Purchaser Indemnitees or the Seller Indemnitees with respect to any matter in any way relating to, arising out of or resulting from this Agreement or the Transactions, including any representation, warranty, covenant or agreement contained herein, except with respect to remedies against a Party for intentional misrepresentation, intentional misconduct, intentional waste or common law fraud committed by such Party.

10.06 Calculation of Indemnity Payments .

(a) Notwithstanding anything to the contrary set forth in this Agreement, there shall be deducted from any Losses an amount equal to any unaffiliated, third-party insurance, indemnification, or contribution payments actually received from an unaffiliated third-party by an Indemnified Party (net of any actual costs of recovery or collection, deductibles, premium adjustments, reimbursement obligations or other costs reasonably related to the insurance, indemnification, or contribution arrangement in respect of Losses thereof); provided, that no Indemnified Party nor any of its affiliates shall have any obligation hereunder to take any action to obtain such payments or to obtain or maintain any such insurance policies. In the event that a third-party insurance or other recovery is actually made by an Indemnified Party with respect to any Losses for which an Indemnified Party has been indemnified hereunder, then such Indemnified Party shall pay to such Indemnifying Party, by wire transfer of immediately available funds to an account designated by such Indemnifying Party, an amount equal to such Losses which such Indemnified Party has been indemnified hereunder.

(b) Notwithstanding anything to the contrary set forth in this Agreement, all Losses that are the subject of indemnification under this Agreement shall be calculated by disregarding all qualifications and limitations as to “materiality,” “Business Material Adverse Effect” and words of similar import set forth in the representations, warranties and/or covenants, as applicable, of the Parties under this Agreement.

(c) Notwithstanding anything in this Agreement to the contrary, no indemnification may be claimed under this Article X for any Losses to the extent such Losses are included in the calculation of any adjustment to the Purchase Price pursuant to Section 2.03 .

10.07 Additional Matters .

(a) For all Tax purposes, Purchaser and Seller agree to treat any indemnity payment under this Agreement as an adjustment to the Purchase Price unless a final determination (which shall include the execution of an IRS Form 870-AD or successor form) provides otherwise.

(b) In no event shall an Indemnifying Party be liable for special, punitive, exemplary, incidental, consequential or indirect damages, or lost profits, whether based on contract, tort, strict liability, other Law or otherwise, except to the extent that such damages are actually payable by the Indemnified Party in connection with a Third Party Claim.

(c) All obligations of Seller under Section 10.03 to indemnify, defend and hold harmless any Purchaser Indemnitee for any Tax shall terminate at the expiration of the statute of limitations, including any applicable extensions or waivers thereof.

ARTICLE XI

GENERAL PROVISIONS

11.01 Survival of Representations, Warranties and Agreements . The representations and warranties of the Parties contained in this Agreement shall survive the Closing until eighteen

(18) months of the Closing Date. No claim may be made with respect to any breach of any representation or warranty contained in this Agreement eighteen (18) months following the Closing Date. Notwithstanding the foregoing, (i) the representations and warranties contained in Sections 3.01 , 3.02 , 4.01 , 4.02(a) , and 4.06 , shall survive until sixty (60) days following the conclusion of the statute of limitations applicable with respect to the underlying subject matter of such representations or warranties, and (ii) the representations and warranties contained in Section 4.11 shall survive until five (5) years following the Closing Date. All agreements and covenants set forth in this Agreement shall survive until fully performed and satisfied. Any claim for indemnity with respect to any breach of any representation or warranty contained in this Agreement for which the Indemnifying Party does not provide notice of such claim in accordance with Article X to the Indemnified Party within the periods specified in this Section 11.01 shall be deemed time-barred and invalid.

11.02 Notices . All notices, requests, claims, demands, waivers and other communications under this Agreement shall be in writing and shall be given as follows:

(a) if to Seller, to

Weyerhaeuser NR Company

33663 Weyerhaeuser Way South

Federal Way, WA 98003

Attention: General Counsel

Phone: 253-924-2802

Email: devin.stockfish@weyerhaeuser.com

with a copy to:

Perkins Coie LLP

1201 Third Avenue, Suite 4900

Seattle, WA 98101

Attention: Andrew Bor, Esq.

Andrew Moore, Esq.

Facsimile: 206-359-9000

Email: abor@perkinscoie.com

amoore@perkinscoie.com

(b) if to Purchaser, to

Nippon Paper Industries Co., Ltd.

Ochanomizu Sola City

4-6, Kandasurugadai, Chiyoda-ku

Tokyo 101-0062, Japan

Attention: International Business Dept.

Facsimile: +81-3-6665-0305

Email: gpu4805@nipponpapergroup.com

with a copy to:

Nishimura & Asahi

Otemon Tower, 1-1-2 Otemachi, Chiyoda-ku

Tokyo 100-8124 JAPAN

Attention: Mr. Yoshinobu Fujimoto and Mr. James Emerson

Facsimile: +81-3-6250-7200

Email: yo_fujimoto@jurists.co.jp and j_emerson@jurists.co.jp

Lane Powell PC

1420 Fifth Avenue, Suite 4200

Seattle, WA 98111

Attention: Mr. Patrick Franke

Facsimile: 206-223-7107

Email: frankep@lanepowell.com

or to such other address(es) as shall be furnished in writing by any such Party to the other Party hereto in accordance with the provisions of this Section 11.02 .

11.03 Definitions . For purposes of this Agreement:

“ $ ” means lawful money of the United States of America.

“ Acquisition Proposal ” means any proposal by a third party with respect to any merger, share exchange, amalgamation, arrangement, takeover bid, sale of assets, or sale of stock involving all or substantially all of the Transferred Assets or the Business, excluding the Acquisition.

“ Action ” means any demand, action, suit, countersuit, arbitration, inquiry, claim (including a counterclaim) proceeding or investigation by or before any Governmental Entity or any arbitration or mediation tribunal.

“ affiliate ” of any Person means another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person. As used herein, “ control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such entity, whether through ownership of voting securities or other interests, by contract or otherwise.

“ Ancillary Agreements ” means the Asset Conveyance Documents, the Liabilities Assumption Documents, the Site Services Agreements, the Wood Chip Supply Agreement and the Intellectual Property License Agreement, and the Transition Services Agreement (if any).

“ Antitrust Proceeding ” means any proceeding seeking a preliminary injunction or other comparable legal impediment to the Acquisition or to Purchaser’s freedom to operate the Business after Closing under any Review Law.

“ Assumed Benefit Agreement ” means each Business Benefit Agreement (i) that Purchaser has agreed to assume, or to cause its subsidiaries to assume, pursuant to any

Transaction Document, or (ii) that Purchaser or any of its subsidiaries is required to assume under applicable Law, Contract or CBA.

“ Assumed Benefit Plan ” means each Business Benefit Plan, or portion thereof, (i) any assets or liabilities of which (A) Purchaser has expressly agreed to assume, or to cause its subsidiaries to assume, pursuant to any Transaction Document or (B) any assets or liabilities of which Purchaser or its subsidiaries is required to assume under applicable Law, Contract or CBA.

“ AWPPW ” means the Association of Western Pulp and Paper Workers.

“ Business ” means the liquid packaging business of Seller, as currently conducted.

“ Business Benefit Agreement ” means any employment, consulting, indemnification, severance, termination, change in control, retention, bonus or similar agreement or arrangement between Seller, on the one hand, and any individual Business Employee, on the other hand.

“ Business Benefit Plan ” means any “employee pension benefit plan” (as defined in Section 3(2) of ERISA, “employee welfare benefit plan” (as defined in Section 3(1) of ERISA, whether or not subject to ERISA) or bonus, pension, profit sharing, deferred compensation, incentive compensation, stock or other equity ownership, stock or other equity purchase, stock or other equity appreciation, restricted stock or other equity, stock or other equity repurchase rights, stock or other equity option, phantom stock or other equity, performance, retirement, vacation, severance, disability, death benefit, hospitalization, medical or other plan, arrangement or understanding (whether or not legally binding or subject to the Laws of the United States) maintained, contributed to or required to be maintained or contributed to by Seller, providing benefits to any Business Employee.

“ Business Day ” means any day on which commercial banks are generally open for business in Seattle, Washington, other than a Saturday, a Sunday or a day observed as a holiday in Seattle, Washington under the Laws of the State of Washington or the Federal Laws of the United States of America.

“ Business Employee ” means (i) each officer, manager or employee of Seller who is primarily engaged in the Business, other than those set forth in Section 11.03(1)(i) of the Seller Disclosure Letter , and (ii) each other officer, manager or employee of Seller set forth in Section 11.03(1)(ii) of the Seller Disclosure Letter , including, in the case of each of clauses (i) and (ii), such individuals who are not actively at work due to vacation, holiday, illness, jury duty, bereavement leave, short-term disability leave, workers’ compensation or other authorized leave of absence or other leave protected under applicable law.

“ Business Material Adverse Effect ” means any Effect that either alone or in combination has been or would reasonably be likely to be, individually or in the aggregate, material and adverse to (i) the business, assets, properties, condition (financial or otherwise), or results of operations of the Business, other than an Effect relating to (A) the economy generally, (B) the industries in which the Business operates generally (including changes in capacity, production, prices and availability, and prices for energy and raw materials), (C) the financial,

securities and currency markets generally, (D) changes or prospective changes in Law, (E) changes or prospective changes in GAAP or accounting standards, (F) volcanoes, tsunamis, earthquakes, floods, storms, hurricanes, tornados or other natural disasters, except in the case of the foregoing clauses (A), (B), (C), (D), (E) and (F) to the extent that the Business is adversely affected in a disproportionate manner relative to other participants in the industries in which the Business operates, (G) acts of war (whether or not declared), sabotage or terrorism, or any escalation or worsening of any such acts of war, sabotage or terrorism, except to the extent that the Business is adversely affected in a disproportionate manner relative to other participants in the industries in which the Business operates, (H) changes resulting or arising from the identity of, or any facts or circumstances relating to, Purchaser and any of its affiliates and (I) the entering into or the public announcement or disclosure of this Agreement or the consummation or proposed consummation of the Transactions or the pendency thereof or (ii) the ability of Seller to perform its obligations under the Transaction Documents or consummate the Transactions.

“ CFIUS Approval ” means a written notice from CFIUS the Committee on Foreign Investment in the United States to the effect that (i) the transaction contemplated by this Agreement is not subject to Section 721 of the DPA; (ii) a determination by CFIUS has been made that there are no issues of national security of the United States sufficient to warrant further review or investigation pursuant to Section 721 of the DPA; or (iii) the President of the United States shall not have acted pursuant to Section 721 of the DPA to suspend or prohibit the consummation of the transactions contemplated by this Agreement, and the applicable period of time for the President of the United States to take such action shall have expired.

“ CFIUS ” means the Committee on Foreign Investment in the United States. “ Code ” means the U.S. Internal Revenue Code of 1986, as amended, and the Treasury regulations promulgated thereunder.

“ commercially reasonable efforts ” means the level of effort that a reasonable person in the position of Purchaser or Seller, as the case may be, ought to make after full consideration of the totality of the circumstances that are readily apparent to Purchaser or Seller, as the case may be, including, without limitation, the financial impact on, and other consequences to, each Party.

“ Consents ” means any consents, waivers or approvals from, or notification requirements to, any third parties.

“ Cowlitz Agreement ” means that certain Electric Service agreement, dated September 28, 2011, by and between Public Utility District No. 1 of Cowlitz County, Washington and Seller assumed by Purchaser or its affiliates.

“ DPA ” means the Defense Production Act of 1950 (50 U.S.C. App. Section 2170).

“ Effect ” means any state of facts, change, effect, condition, development, event or occurrence.

“ Environmental Attributes ” means any emissions and renewable energy credits, energy conservation credits, benefits, offsets and allowances, emission reduction credits or words of similar import or regulatory effect (including emissions reduction credits or allowances under all applicable emission trading, compliance or budget programs, or any other federal, state or regional emission, renewable energy or energy conservation trading or budget program) that have been held, allocated to or acquired for the development, construction, ownership, lease, operation, use or maintenance of the Business or the Transferred Assets or as of: (a) the date of this Agreement; and (b) future years for which allocations have been established and are in effect as of the date of this Agreement.

“ Environmental Claim ” means any written notice, claim, demand, action, judicial or administrative proceeding (including both formal and informal proceedings) or other communication by any other person alleging or asserting liability of or both of Seller or Lessees for investigatory costs, cleanup costs, governmental body response costs, damages or alleged damages to, loss or destruction of natural resources or other real or personal property, personal injuries including but not limited to death, fines, or penalties arising out of, based on, or resulting from (1) the presence, or Release into the environment, of any Hazardous Substance at, to, adjacent to, underlie or from the Transferred Real Property, or (2) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law with respect to the Transferred Real Property, and shall include, without limitation, any claim by any governmental body for enforcement, cleanup, removal, response, remedial or other actions, or damages pursuant to any applicable Environmental Law with respect to the Transferred Real Property, and any claim by any third party seeking damages, contribution, indemnification, cost recovery, compensation, or declaratory or injunctive relief resulting from the presence of Hazardous Substances at, adjacent to, underlying the Transferred Real Property, or arising from alleged injury or threat of injury to health, safety, or the environment with respect to the Transferred Real Property.

“ Environmental Laws ” means any present federal, state, and local laws, ordinances, rules, regulations, administrative order, any administrative policy, as well as common law or any reported decision of a state or federal court, or any substance or matter relating to (1) protection of human health or the environment; (2) Hazardous Substances; and/or (3) liability for or costs of other actual or threatened danger to human health or the environment. The term “Environmental Law” shall include the following statutes, as amended, and any regulations promulgated thereto, and any state or local statutes, ordinances, rules and regulations, addressing similar issues: the Comprehensive Environmental Response, Compensation and Liability Act (including the Superfund Amendments and Reauthorization Act of 1986); the Emergency Planning and Community Right-to-Know Act; the Hazardous Materials Transportation Act; the Resource Conservation and Recovery Act (including Subtitle I relating to underground storage tanks); the Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking water Act; the Federal Water Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the National Environmental Policy Act; the River and Harbors Appropriate Act; the Washington Model Toxics Control Act; the Washington Water Pollution Control Act; the Washington Clean Air Act; the Washington Shoreline Management Act; the Washington Growth Management Act; and the Washington State Environmental Policy Act.

“ Environmental Liabilities ” means all Liabilities relating to or in respect of environmental matters, including (i) the compliance or noncompliance with Environmental Laws, (ii) the alleged or actual presence or Release of, or exposure to, Hazardous Materials, (iii) the offsite transportation, storage, treatment, disposal or arrangement for disposal of Hazardous Materials and (iv) any other Liabilities or costs relating to Environmental Laws, including, in each case, all investigatory, cleanup and other remediation costs, administrative oversight costs, natural resources damages, property damages, personal injury damages, indemnity, contribution and similar obligations and all costs and expenses, interest, fines, penalties and other monetary sanctions in connection with any of the foregoing.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

“ Former Employee ” means any employee of Seller or its affiliates, including, without limitation, the Business Employees, who, regardless of the reason, are not Transferred Employees.

“ Final Order ” means an action by the relevant Governmental Entity that has not been reversed, stayed, enjoined, set aside, annulled or suspended, with respect to which any mandatory waiting period prescribed by Law before the Transactions may be consummated has expired, and as to which all conditions to the consummation of the Transactions prescribed by Law have been satisfied

“ GAAP ” means generally accepted accounting principles in effect in the United States at the relevant time.

“ Hazardous Materials ” means (i) any petroleum or petroleum products, radioactive materials or wastes, asbestos in any form, urea formaldehyde foam insulation and polychlorinated biphenyls and (ii) any other chemical, material, substance or waste that in relevant form or concentration is prohibited, limited or regulated under any Environmental Law.

“ Hazardous Substance ” means any and all substances (whether solid, liquid, or gas) defined, listed, or otherwise classified as pollutants, hazardous wastes, hazardous or toxic substances, materials or wastes, extremely hazardous wastes, or words of similar meaning or regulatory effect under any Environmental Laws in effect at Closing or identified at Closing as having a negative impact on human health or the environment, including but not limited to, those substances, materials, and wastes listed in the United States Department of Transportation Hazardous Materials Table (49 CFR 172.101) or by the Environmental Protection Agency as hazardous substances (40 CFR Part 302) and amendments thereto, or such substances, materials, and wastes which are regulated under any applicable local, state, or federal Environmental Law including, without limitation, any material, waste, or substance which is (1) petroleum and petroleum products; (2) asbestos and asbestos-containing materials; (3) poly-chlorinated biphenyls; (4) urea formaldehyde foam insulation; (5) lead-containing materials; (6) radon; (7) radioactive materials; (8) flammables and explosives; (9) defined as “hazardous waste,” “extremely hazardous waste,” “restricted hazardous waste,” or “hazardous substance” under RCW Chapter 70.105 (Hazardous Waste Management Act) or RCW Chapter 70.105D (Model Toxics Control Act); (10) designated as a “hazardous substance” pursuant to Section 311 of the

Clean Water Act, 33 U.S.C. § 1251, et seq . (33 U.S.C. § 1321) or listed pursuant to Section 307 of the Clean Water Act (33 U.S.C. § 1317); (11) defined as a “hazardous waste” pursuant to Section 1004 of the Resources Conservation and Recovery Act (42 U.S.C. § 6903); or (12) defined as a “hazardous substance” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601, et seq . (42 U.S.C. § 9601), all as amended, replaced, or succeeded, and any other substance or material defined as a toxic or hazardous substance or material or pollutant or contaminant under any other federal, state, or local laws, ordinances, or regulations or under any reported decision of a state or federal court, or any substance or matter in effect at Closing imposing liability for cleanup costs or expenses on any person or entity under any statutory or common law theory.

“ Income Tax ” means (i) any Tax imposed on or measured by net income, including franchise or similar Taxes measured by net income and (ii) the state of Washington B&O Tax.

“ Intellectual Property License Agreement ” means the license of intellectual property by and between Seller and Purchaser substantially in the form attached as Exhibit A .

“ Intellectual Property Rights ” means all patents (including all reissues, divisions, continuations and extensions thereof), patent applications, patent rights, trademarks, trademark (including service marks) registrations, trademark applications, trade names, business names, brand names, copyright registrations, copyright applications, designs, design registrations, domain names, logos, slogans, trade styles, trade dress and other indicia of origin and all rights to any of the foregoing.

“ IRS ” means the U.S. Internal Revenue Service.

“ knowledge of Purchaser ” means (a) the actual knowledge of the Persons set forth in Section 11.03(1) of the Purchaser Disclosure Letter , and (b) what such Persons should have known after reasonable inquiry.

“ knowledge of Seller ” means (a) the actual knowledge of any of the Persons set forth in Section 11.03(2) of the Seller Disclosure Letter , and (b) what such Persons should have known after reasonable inquiry.

“ Liabilities ” means all obligations, liabilities and commitments of any nature, whether known or unknown, express or implied, primary or secondary, direct or indirect, liquidated or unliquidated, absolute, accrued, contingent or otherwise and whether due or to become due and including all costs and expenses related thereto.

“ Liens ” means all pledges, liens, charges, deeds of trust, mortgages, encumbrances and security interests options, rights of first refusal, easements, securities, proxy, voting trust or agreements, transfer restrictions or encroachment reservation.

“ Losses ” means, collectively, any claims, losses, damages (including, in the case of Third Party Claims, any exemplary or punitive damages whether based on contract, tort, strict liability, other Law or otherwise), reasonable out-of-pocket costs (including those in connection with investigating, testing or monitoring site conditions (including sampling, testing, and

analyzing soil, water, air, building materials, wastes, and other materials and substances, whether solid, liquid, or gas), and any costs for cleanup, containment, remedial, removal, or restoration work), reasonable out-of-pocket fees and expenses (including costs of investigation and defense and reasonable legal fees and expenses), deficiencies, suits, judgments, liabilities (including strict liabilities), obligations, debts, assessments, fines, penalties, charges, amounts paid in settlement or interest.

“ NORPAC ” means North Pacific Paper Corporation and any successor thereto.

“ Permitted Liens ” means (i) Liens consisting of zoning or planning restrictions, permits, easements, covenants and other restrictions or limitations on the use or occupancy of real property or irregularities in title thereto which do not individually or in the aggregate materially impair the use of such property as it is presently used in connection with the Business, (ii) Liens for current Taxes, assessments or governmental charges or levies on property not yet due or which are being contested in good faith and for which adequate reserves have been created in accordance with GAAP, (iii) mechanics’, carriers’, workmen’s, materialmen’s, repairmen’s and similar Liens arising in the ordinary course of business or by operation of Law, and (iv) Liens which have been placed by any landlord on any Leased Real Property and subordination or similar agreements relating thereto.

“ Person ” means an individual, a general or limited partnership, a corporation, a trust, a joint venture, an unincorporated organization, a limited liability entity or other entity, including any Governmental Entity.

“ Post-Closing Tax Period ” means all taxable periods beginning after the Closing Date and the portion of a Straddle Period beginning on the day after the Closing Date.

“ Pre-Closing Tax Period ” means all taxable periods ending on or prior to the Closing Date and the portion of a Straddle Period ending on the Closing Date.

“ Prime Rate ” means the prime rate as reported in The Wall Street Journal on the date of the applicable payment (or, if The Wall Street Journal is not published on such applicable date, the Business Day prior to such applicable date on which The Wall Street Journal was published). If The Wall Street Journal shall no longer be published or if it shall cease to report a prime rate, “Prime Rate” shall mean a comparable index or reference rate selected by Seller in its sole discretion.

“ Purchaser Material Adverse Effect ” means any Effect that has been or would reasonably be likely to be material and adverse to the ability of Purchaser to perform its obligations under the Transaction Documents or consummate the Transactions.

“ Release ” means any release, spill, emission, leaking, pumping, pouring, injection, deposit, disposal, discharge, dispersal, dumping, leaching, or migration into the environment, including, without limitation, the movement of Hazardous Substances through ambient air, soil, surface water, groundwater, wetlands, land, or subsurface strata.

“ Representatives ” means, with respect to any Person, its directors, officers, employees, consultants, agents, investment bankers, financial advisors, attorneys, accountants and other representatives.

“ Restricted Business ” means any business competing with the Business.

“ Review Law ” means the HSR Act, Section 721 of the DPA or any other Law of any applicable jurisdiction that pertains to antitrust, merger control, competition or trade regulation matters.

“ Seller Business ” means (i) the business and operations of Seller other than the Business, (ii) all other businesses and operations acquired or commenced by Seller at any time after the Closing Date and (iii) any terminated, divested or discontinued business or operation that at the time of termination, divestiture or discontinuation did not primarily relate to the Business as then conducted.

“ Seller Group ” means Seller, Seller Parent, each subsidiary of Seller and any other Person that is controlled directly or indirectly by Seller Parent.

“ Seller Parent ” means Weyerhaeuser Company, a Washington corporation.

“ Shared Contract ” means any Contract to which Seller is a party or by which Seller is bound that inures to the benefit or burden of each of the Business and the Seller Business (other than those set forth on Section 11.03(3) of the Seller Disclosure Letter and any other Contract that constitutes an Excluded Asset).

“ Site Services Agreements ” means the agreements between Seller and Purchaser in the form of Exhibit B pursuant to which Seller and Purchaser agree to provide goods and services under the terms and subject to the conditions set forth therein.

“ Straddle Period ” shall mean any Tax period that includes (but does not end on) the Closing Date.

“ subsidiary ” of any Person means any corporation or other organization whether incorporated or unincorporated of which at least a majority of the securities or interests having by the terms thereof ordinary voting power to elect at least a majority of the Board of Directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled (i) by such Person, (ii) by any one or more of such Person’s subsidiaries or (iii) by such Person and one or more of its subsidiaries; provided , however , that no Person that is not directly or indirectly wholly-owned by any other Person shall

be a subsidiary of such other Person unless such other Person controls, or has the right, power or ability to control, that Person.

“ Tax ” or “ Taxes ” means all forms of taxation imposed by any Federal, state, provincial, local, foreign or other Taxing Authority, including income, franchise, property, sales, use, excise, employment, unemployment, payroll, social security, estimated, value added, ad valorem, transfer, recapture, withholding, health and other taxes of any kind, including any interest, penalties and additions thereto.

“ Tax Return ” means any report, return, document, declaration or other information or filing required to be supplied to any Taxing Authority with respect to Taxes, including any amendment made with respect thereto.

“ Taxing Authority ” means any Federal, state, provincial, local or foreign government, any subdivision, agency, commission or authority thereof or any quasi-governmental body exercising Tax regulatory authority.

“ Transaction Documents ” means this Agreement, the Ancillary Agreements and the Confidentiality Agreement.

“ Transactions ” means the Acquisition and the other transactions contemplated by the Transaction Documents.

“ Transfer Taxes ” means all sales (including bulk sales), use, transfer, recording, filing, value added, privilege, documentary, registration, conveyance, license, stamp or similar Taxes and notarial or other fees arising out of, in connection with or attributable to the transactions effectuated pursuant to this Agreement; provided that Transfer Taxes shall not include Taxes on or measured by net income or Washington state or local B&O taxes.

“ Transferred Employee ” means each Business Employee who accepts employment with Purchaser or any of its subsidiaries as of the Transfer Time.

“ Wood Chip Supply Agreement ” means the agreement between Seller and Purchaser in the form of Exhibit C pursuant to which Seller and Purchaser agree to provide goods and services under the terms and subject to the conditions set forth therein.

11.04 Interpretation; Disclosure Letters . When a reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The words “hereof”, “hereby”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. Each of the Parties hereto has participated in the drafting and negotiation of this Agreement. If any ambiguity or question of intent or interpretation arises, this Agreement must be construed as if it is drafted by all the Parties hereto, and no presumption or burden of proof

shall arise favoring or disfavoring any Party by virtue of authorship of any of the provisions of this Agreement. Any matter disclosed in any Section of the Purchaser Disclosure Letter or the Seller Disclosure Letter shall qualify the correspondingly numbered representation and warranty or covenant and to any other representation, warranty or covenant where it is reasonably apparent, on the face of such disclosure, that the disclosure is intended to apply to such other Section. When a reference is made in this Agreement or the Seller Disclosure Letter to information or documents being provided, made available or disclosed to Purchaser or its affiliates, such information or documents shall include any information or documents (i) furnished in the “data room” maintained by Seller prior to the execution of this Agreement and to which access has been granted to Purchaser or its affiliates or (ii) otherwise provided in writing (including electronically) to Purchaser or its affiliates.

11.05 Severability . If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule or Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible to the end that the Transactions are fulfilled to the extent possible.

11.06 Counterparts . This Agreement may be executed in one or more counterparts, either manually or electronically, each of which shall be deemed an original and all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the Parties hereto and delivered to the other Parties.

11.07 Entire Agreement; No Third-Party Beneficiaries . The Transaction Documents, taken together with the Purchaser Disclosure Letter and the Seller Disclosure Letter, constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the Parties hereto with respect to the Transactions and are not intended to confer upon any Person other than the Parties hereto any rights or remedies. Notwithstanding the foregoing, (a) Purchaser’s agreement to the provisions of Section 6.06 is given by Purchaser on the express understanding that if Purchaser is in breach of any of the provisions thereof, Seller may, in its absolute discretion and without limitation, seek to enforce compliance with such provisions by Purchaser by applying to a court of competent jurisdiction for damages and/or specific performance, and (b) Purchaser expressly agrees that Seller may seek to enforce Purchaser’s compliance with the provisions of Section 6.06 for the benefit of any Transferred Employee (or beneficiary or dependent thereof) notwithstanding that Seller may not itself have suffered any actual damages as a result of Purchaser’s noncompliance. In the event of any conflict between the provisions of this Agreement (including the Purchaser Disclosure Letter and the Seller Disclosure Letter), on the one hand, and the provisions of the Confidentiality Agreement or the other Transaction Documents (including the schedules and exhibits thereto), on the other hand, the provisions of this Agreement shall control.

11.08 Governing Law . This Agreement shall be governed by, and construed in accordance with, the Laws of the State of Delaware, regardless of the Laws that might otherwise govern under applicable principles of conflicts of laws thereof.

11.09 Assignment . Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of Law or otherwise by any of the Parties hereto without the prior written consent of the other Parties. Any purported assignment without such consent shall be void. Subject to the preceding sentences, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties hereto and their respective successors and assigns. Notwithstanding the foregoing, Purchaser may assign (without consent but with at least five (5) Business Day’s prior written notice to Seller) this Agreement and any or all rights, interests or obligations hereunder to any wholly-owned subsidiary of Purchaser; provided, however, that notwithstanding any such assignment, Purchaser shall remain a Party to this Agreement and shall remain, jointly and severally with such assignee, responsible and liable for the performance of all the obligations of Purchaser and any such assignee under this Agreement. Any such assignee shall, as a condition to such assignment, execute a joinder agreement in form reasonably acceptable to Seller and Purchaser, pursuant to which such assignee shall become a Party to this Agreement and, jointly and severally with Purchaser, be bound by and responsible and liable for, all the obligations of Purchaser and such assignee under this Agreement.

11.10 Enforcement .

(a) The Parties hereto agree that irreparable damage would occur in the event that any of the provisions of any Transaction Document were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Parties hereto shall be entitled to an injunction or injunctions to prevent breaches of any Transaction Document and to enforce specifically the terms and provisions of each Transaction Document in any Federal court, located in the State of Delaware or, if such Federal courts do not have subject matter jurisdiction, in any Delaware state court, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the Parties hereto (a) consents to submit itself to the personal jurisdiction of any Federal court located in the State of Delaware or, if such Federal courts do not have subject matter jurisdiction, of any Delaware state court in the event any dispute arises out of any Transaction Document or any Transaction, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (c) agrees that it will not bring any action relating to any Transaction Document or any Transaction in any court other than any Federal court sitting in the State of Delaware or any Delaware state court and (d) waives any right to trial by jury with respect to any action related to or arising out of any Transaction Document or any Transaction.

(b) In lieu of seeking determination by court proceeding under Section 11.10(a) above, any controversy or claim arising out of or relating to this Agreement may also be determined by arbitration in accordance with the International Arbitration Rules of the American Arbitration Association. The tribunal shall consist of three (3) arbitrators. The seat of the arbitration shall be New York. The language of the arbitration shall be English. The Parties hereto agree that the tribunal constituted under this clause shall have the power to grant the relief of specific performance in appropriate circumstances, and further agree, for the avoidance of doubt, that any competent court of its jurisdiction may enforce an order of the tribunal for specific performance. By agreeing to arbitration pursuant to this clause, the Parties hereto waive irrevocably their right to any form of appeal, review or recourse to any state court or other judicial authority, in as far as such waiver may validly be made, save that the Parties do

not intend to deprive any competent court of its jurisdiction to issue a pre-arbitral injunction, pre-arbitral attachment or other order in aid of the arbitration proceedings or the enforcement of any award.

11.11 Waiver and Amendment . Any term or condition of this Agreement may be waived at any time by the Party which is entitled to the benefit thereof, but only if such waiver is evidenced by a writing signed by such Party which makes specific reference to this Agreement. No failure on the part of any Party to exercise, and no delay in exercising any right, power or remedy created hereunder, shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or remedy by any Party preclude any other or further exercise thereof or the exercise of any other right, power or remedy. No waiver by any Party of any breach of or default in any term or condition of this Agreement shall constitute a waiver of or assent to any succeeding breach of or default in the same or any other term or condition hereof. This Agreement shall not be altered, supplemented or amended except by an instrument in writing signed by each of the Parties hereto. All remedies hereunder are cumulative and are not exclusive of any other remedies, equitable or legal.

[ no further text on this page ]

IN WITNESS WHEREOF, each of Seller and Purchaser has duly executed this Agreement as of the date first written above.

PURCHASER:

NIPPON PAPER INDUSTRIES CO., LTD.

By: /s/ Fumio Manoshiro

Name: Fumio Manoshiro

Title: President

SELLER:

WEYERHAEUSER NR COMPANY

By: /s/ Devin W. Stockfish

Name: Devin W. Stockfish

Title: SVP, General Counsel and
Corporate Secretary

[ Signature Page to Asset Purchase Agreement ]

Appendix

Glossary of Defined Terms



Term	Location
$	Section 11.03
Accounting Firm	Section 2.03(b)
Accounting Principles	Section 2.03(d)
Accrued Vacation Days	Section 6.06(i)
Acquisition	Section 1.01
Acquisition Proposal	Section 11.03
Action	Section 11.03
Adjusted Purchase Price	Section 2.03(c)
affiliate	Section 11.03
Agreement	Preamble
Ancillary Agreements	Section 11.03
Annual Balance Sheets	Section 4.04(a)
Annual Business Financial Statements	Section 4.04(a)
Antitrust Proceeding	Section 11.03
Appraisal Firm	Section 9.01(a)
Arrangement	Section 1.03(b)
Asset Conveyance Documents	Section 2.02(a)
Assumed Benefit Assets	Section 1.02(a)(xiv)
Assumed Liabilities	Section 1.04(a)
Avoided Breach	Section 6.15
AWPPW	Section 11.03
Balance Sheet	Section 4.04(b)
Business	Section 11.03
Business 401(k) Plan	Section 6.06(h)(i)
Business Benefit Agreement	Section 11.03
Business Benefit Plan	Section 11.03
Business Day	Section 11.03
Business Employee	Section 11.03
Business Insurance Policies	Section 1.02(a)(xv)
Business Material Adverse Effect	Section 11.03
Business Material Agreements	Section 4.14(a)
CBA	Section 4.08
Closing	Section 2.01
Closing Date	Section 2.01
Closing Date Payment	Section 2.02
Closing Working Capital	Section 2.03(a)
Code	Section 11.03
Confidentiality Agreement	Section 6.02(e)
Consents	Section 11.03
Contracts	Section 1.02(a)(viii)
control	Section 11.03
Controlled Group Liability	Section 4.07(b)

A-1



Cowlitz Agreement	Section 11.03
Current Assets	Section 2.03(d)
Current Liabilities	Section 2.03(d)
DOJ	Section 6.04(a)
DPA	Section 3.03(b)
Effect	Section 11.03
Employee List	Section 6.06(a)
Environmental Laws	Section 11.03
Environmental Liabilities	Section 11.03
ERISA	Section 11.03
Exchange Act	Section 11.03
Excluded Assets	Section 1.02(b)
Excluded Contracts	Section 1.02(b)(xv)
FTC	Section 6.04(a)
GAAP	Section 11.03
Governmental Approval	Section 3.03(b)
Governmental Entity	Section 3.03(b)
Hazardous Materials	Section 11.03
HSR Act	Section 3.03(b)
Income Tax	Section 11.03
Indemnified Party	Section 10.04(a)
Indemnifying Party	Section 10.04(a)
Intellectual Property License Agreement	Section 11.03
Intellectual Property Rights	Section 11.03
Inventory	Section 1.02(a)(ii)
IRS	Section 11.03
Judgment	Section 3.03(a)
knowledge of Purchaser	Section 11.03
knowledge of Seller	Section 11.03
Law	Section 3.03(a)
Leased Real Property	Section 4.12(b)
Liabilities	Section 11.03
Liabilities Assumption Documents	Section 2.02(b)
Liability Cap	Section 10.01(a)(iii)
Liens	Section 11.03
Losses	Section 10.01(a)
Material Customers	Section 4.16(a)
Material Suppliers	Section 4.16(b)
Notice of Disagreement	Section 2.03(b)
Non-U.S. Assumed Benefit Plan	Section 4.07(c)
Owned Real Property	Section 4.12(a)
Permits	Section 1.02(a)(vii)
Permitted Liens	Section 11.03
Person	Section 11.03

A-2



Post-Closing Tax Period	Section 11.03
Pre-Closing Tax Period	Section 11.03
Prime Rate	Section 11.03
Purchase Price	Section 1.01
Purchaser	Preamble
Purchaser 401(k) Plan	Section 6.06(h)(i)
Purchaser Disclosure Letter	Article III
Purchaser Flexible Spending Account Plan	Section 6.06(m)
Purchaser Indemnitees	Section 10.01(a)
Purchaser Material Adverse Effect	Section 11.03
Purchaser Portion	Section 1.05(a)
Purchaser Welfare Plans	Section 6.06(g)(i)
Records	Section 1.02(a)(xii)
Release	Section 11.03
Representatives	Section 11.03
Retained Liabilities	Section 1.04(b)
Retained Names	Section 1.02(b)(xi)
Review Law	Section 11.03
Scheduled Intellectual Property	Section 1.02(a)(v)
Seller	Preamble
Seller Disclosure Letter	Article IV
Seller Flexible Spending Account Plan	Section 6.06(m)
Seller Group	Section 11.03
Seller Indemnitees	Section 10.02(a)
Seller Parent	Section 11.03
Seller Portion	Section 1.04(b)
Severance Obligations	Section 11.03
Site Services Agreements	Section 11.03
Statement	Section 2.03(a)
Straddle Period	Section 11.03
subsidiary	Section 11.03
Tangible Personal Property	Section 1.02(a)(iii)
Tax or Taxes	Section 11.03
Tax Accountant	Section 9.04(c)
Tax Return	Section 11.03
Taxing Authority	Section 11.03
Third Party Claim	Section 10.04(a)
Title Commitment	Section 4.12(a)
Title Company	Section 4.12(a)
Title Policy	Section 6.13
Transaction Documents	Section 11.03
Transactions	Section 11.03
Transfer Taxes	Section 11.03
Transfer Time	Section 6.06(b)

A-3



Transferred Assets	Section 1.02(a)
Transferred Contracts	Section 1.02(a)(viii)
Transferred Employee	Section 11.03
Transferred Intellectual Property	Section 1.02(a)(vi)
Transferred Licensed Intellectual Property	Section 1.02(a)(vi)
Transferred Inventory	Section 1.02(a)(ii)
Transferred Permits	Section 1.02(a)(vii)
Transferred Real Property	Section 1.02(a)(i)
Transferred Technology	Section 1.02(a)(vi)
Transition Services Agreement	Section 6.16
WARN Act	Section 6.06(o)
WC Target	Section 2.03(c)
Welfare Benefit Claims	Section 6.06(g)(iii)
Working Capital	Section 2.03(d)

A-4

Schedule of Omitted Exhibits and Schedules

The following exhibits and schedules to this Exhibit 2.1 have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The company will furnish a copy of any such omitted exhibits and schedules to the Securities and Exchange Commission upon request but may request confidential treatment for any exhibit or schedule so furnished.

Seller's Disclosure Letter dated June 15, 2016

Exhibit A Form of Intellectual Property License Agreement

Exhibit B Site Services Agreement

Exhibit C Wood Chip Supply Agreement

EXHIBIT 2.2

EXECUTION VERSION

PURCHASE AGREEMENT

Dated as of the 1st day of May, 2016,

Between

WEYERHAEUSER NR COMPANY

and

INTERNATIONAL PAPER COMPANY

TABLE OF CONTENTS

Page

ARTICLE I

Purchase and Sale of the Transferred Equity Interests and the Transferred Assets



SECTION 1.01.	Purchase and Sale	1
SECTION 1.02.	Transferred Assets and Excluded Assets	1
SECTION 1.03.	Consents of Certain Assignments	6
SECTION 1.04.	Assumption of Liabilities	7
SECTION 1.05.	Shared Contracts	10
SECTION 1.06.	Risk of Loss	11
SECTION 1.07.	Disclaimer of Representations and Warranties	11
SECTION 1.08.	Misallocated Transfers	12
SECTION 1.09.	Alberta Order	12

ARTICLE II

Closing and Post-Closing Purchase Price Adjustment



SECTION 2.01.	Closing	13
SECTION 2.02.	Transactions To Be Effected at the Closing	13
SECTION 2.03.	Post-Closing Purchase Price Adjustment	15
SECTION 2.04.	Withholding Taxes	17

ARTICLE III

Representations and Warranties of Purchaser



SECTION 3.01.	Organization, Standing and Power	18
SECTION 3.02.	Authority; Execution and Delivery; Enforceability	18
SECTION 3.03.	Availability of Funds	19
SECTION 3.04.	GST Registration	20

ARTICLE IV

Representations and Warranties of Seller



SECTION 4.01.	Organization, Standing and Power; Capital Structure of the Transferred Entity	20
SECTION 4.02.	Authority; Execution and Delivery; Enforceability	21
SECTION 4.03	No Conflicts; Governmental Approvals	22
SECTION 4.04.	SEC Documents; Financial Statements; Undisclosed Liabilities	22
SECTION 4.05.	Absence of Certain Changes or Events	23
SECTION 4.06.	Taxes	23
SECTION 4.07.	Employee and Related Matters; ERISA	25
SECTION 4.08.	Labor and Equipment	27
SECTION 4.09.	Litigation	28
SECTION 4.10.	Compliance with Applicable Laws	28
SECTION 4.11.	Environmental Matters	28
SECTION 4.12.	Real Property	29
SECTION 4.13.	Intellectual Property	31
SECTION 4.14.	Material Agreements	32
SECTION 4.15.	Sufficiency of Assets	35
SECTION 4.16.	Permits	35
SECTION 4.17.	Insurance	35
SECTION 4.18.	Asbestos	35
SECTION 4.19.	Anti-Corruption	36
SECTION 4.20.	Pre-Closing Capital Expenditures	36

ARTICLE V

Covenants Relating to Conduct of Business



SECTION 5.01.	Conduct of Business	36
SECTION 5.02.	Notice of Changes	39
SECTION 5.03.	No Control of Seller's Business	40

ARTICLE VI

Additional Agreements



SECTION 6.01.	No Use of Certain Retained Names	40
SECTION 6.02.	Access to Information; Confidentiality	41
SECTION 6.03.	Reasonable Best Efforts	43
SECTION 6.04.	Antitrust Notification and Other Regulatory Filings	43
SECTION 6.05.	Notices	45
SECTION 6.06.	Non-Solicitation	46
SECTION 6.07.	Employee Matters	46
SECTION 6.08.	Fees and Expenses	56
SECTION 6.09	Public Announcements	57
SECTION 6.10	Certain Agreements	57
SECTION 6.11	Bulk Transfer Laws	58
SECTION 6.12	Refunds and Remittances	58
SECTION 6.13	Leased Vehicles and Forklifts	58
SECTION 6.14	Financial Information	59
SECTION 6.15	Seller's Covenant Not to Solicit for Employment	59
SECTION 6.16	Insurance Matters	59
SECTION 6.17	Real Property Matters	60
SECTION 6.18	Port Wentworth Project	63
SECTION 6.19	Replacement of Credit Support Obligations	63
SECTION 6.20	Transition Planning	64
SECTION 6.21	Further Assurances	65
SECTION 6.22	Termination of Affiliate Agreements	65
SECTION 6.23	Business NDAs	65

ARTICLE VII

Conditions Precedent



SECTION 7.01.	Conditions to Each Party's Obligation	65
SECTION 7.02.	Conditions to Obligations of Seller	66
SECTION 7.03.	Conditions to Obligations of Purchaser	66
SECTION 7.04.	Frustration of Closing Conditions	67

iii

ARTICLE VIII

Termination, Amendment and Waiver



SECTION 8.01.	Termination	67
SECTION 8.02.	Effect of Termination	68
SECTION 8.03.	Amendment	68
SECTION 8.04.	Extension; Waiver	68
SECTION 8.05.	Procedure for Termination, Amendment, Extension or Waiver	69

ARTICLE IX

Tax Matters



SECTION 9.01.	Purchase Price Allocations	69
SECTION 9.02.	Transfer Taxes	70
SECTION 9.03.	Straddle Period	71
SECTION 9.04.	Preparation of Tax Returns	71
SECTION 9.05.	Tax Refunds	72
SECTION 9.06.	Carryforwards and Carrybacks	73
SECTION 9.07.	Section 338 Election	73
SECTION 9.08.	Certificate of Non-Foreign Status	73
SECTION 9.09.	Research and Development	73
SECTION 9.10.	Section 22 Election	73
SECTION 9.11.	Subsection 20(24) Election	73
SECTION 9.12	Tax-Deferred Exchange	73

ARTICLE X

Indemnification



SECTION 10.01.	Indemnification by Seller	75
SECTION 10.02.	Indemnification by Purchaser	76
SECTION 10.03.	Indemnification for Tax Matters	77
SECTION 10.04.	Indemnification Procedures	78
SECTION 10.05.	Indemnification as Sole and Exclusive Remedy	81
SECTION 10.06.	Calculation of Indemnity Payments	82
SECTION 10.07.	Additional Matters	82
SECTION 10.08.	Environmental Access, Control and Cooperation	83

ARTICLE XI

General Provisions



SECTION 11.01.	Survival of Representations and Warranties and Agreements	84
SECTION 11.02.	Notices	85
SECTION 11.03.	Definitions	86
SECTION 11.04.	Interpretation; Disclosure Letters	98
SECTION 11.05.	Severability	99
SECTION 11.06.	Counterparts	99
SECTION 11.07.	Entire Agreement; No Third-Party Beneficiaries	99
SECTION 11.08.	Governing Law	100
SECTION 11.09.	Assignment	100
SECTION 11.10.	Enforcement	100

Annex 1 Glossary of Defined Terms

Exhibit A Form of Intellectual Property License Agreement

Exhibit B Form of Site Services Agreements

Exhibit C Form of Supply Agreements

Exhibit D Form of Sublease

Exhibit E Form of Data Processing Agreement

Exhibit F Transferred Entity Share Purchase Agreement

THIS PURCHASE AGREEMENT (this “ Agreement ”) dated this 1st day of May, 2016, between Weyerhaeuser NR Company, a Washington corporation (“ Seller ”), and International Paper Company, a New York corporation (“ Purchaser ”).

WHEREAS Purchaser wishes to purchase, or cause one or more of its subsidiaries designated by Purchaser (each, a “ Purchaser Sub ”) to purchase, from Seller, and Seller wishes to sell to Purchaser and any such Purchaser Subs, (1) the Transferred Equity Interests and (2) the Transferred Assets, upon the terms and subject to the conditions of this Agreement; and

WHEREAS capitalized terms used but not defined elsewhere in this Agreement shall have the meanings set forth in Section 11.03.

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

Purchase and Sale of the Transferred Equity Interests and the Transferred Assets

SECTION 1.01. Purchase and Sale . Upon the terms and subject to the conditions of this Agreement, at the Closing, Seller shall, and shall cause all other applicable members of the Seller Group to, sell, transfer, assign and deliver to Purchaser, or, if requested by Purchaser, one or more Purchaser Subs, and Purchaser shall, or shall cause one or more Purchaser Subs to, purchase, acquire and accept from Seller and any such member of the Seller Group, all of Seller’s and such members’ right, title and interest in, to and under (a) the Transferred Equity Interests and (b) all the Transferred Assets (other than the assets of the Transferred Entity) for (i) an aggregate purchase price of (A) $2,200,000,000 in cash plus (B) the Lease Buyout Amount, if any (the “ Purchase Price ”), which Purchase Price is subject to adjustment as set forth in Sections 2.03 and 6.04(d), and (ii) the assumption (including through the Transferred Entity) of the Assumed Liabilities. The purchase and sale of the Transferred Equity Interests and the Transferred Assets and the assumption of the Assumed Liabilities are collectively referred to in this Agreement as the “ Acquisition ”.

SECTION 1.02. Transferred Assets and Excluded Assets . (a) For purposes of this Agreement, “ Transferred Assets ” means all of the properties, assets, goodwill and rights (including lease, license and other contractual rights) of whatever kind or nature, real or personal, tangible or intangible, that are owned by Seller or any other member of the Seller Group and used or held for use primarily in, or arise primarily out of or relate primarily to, the Business or the operation or conduct of the Business, including the following (in each case, other than the Excluded Assets):

(i) all owned real property, leaseholds and other interests in real property of Seller or any other member of the Seller Group used or held for use primarily in the operation or conduct of the Business, including the owned real property, leaseholds and other interests in real property set forth in Sections 1.02(a)(i)(A) and 1.02(a)(i)(B) of the Seller Disclosure Letter, in each case together with Seller’s and any other member of the Seller Group’s right, title and interest in, to and under all plants, facilities, buildings,

structures, improvements and fixtures thereon, all easements and rights of way pertaining thereto or accruing to the benefit thereof and all other appurtenances and real property rights pertaining thereto (the “ Transferred Real Property ”);

(ii) (A) all raw materials, works-in-process, finished goods and products, supplies, parts and other inventories owned by Seller or any other member of the Seller Group (“ Inventory ”) that as of the close of business on the Business Day before the Closing Date are located on the Transferred Real Property and (B) all other Inventory as of the close of business on the Business Day before the Closing Date that are used or held for use primarily in the operation or conduct of the Business or produced by the Business for use in or sale by the Business (collectively, the items described in this clause (ii) being the “ Transferred Inventory ”);

(iii) (A) all other tangible personal property owned by Seller or any other member of the Seller Group, including all machinery, equipment, furniture, furnishings, tools and vehicles owned by Seller or any other member of the Seller Group (“ Tangible Personal Property ”), that as of the close of business on the Business Day before the Closing Date is located on the Transferred Real Property (and interests therein), (B) all other Tangible Personal Property and interests therein owned by Seller or any other member of the Seller Group as of the close of business on the Business Day before the Closing Date that are used or held for use primarily in the operation of the Business and (C) all Tangible Personal Property and interests therein set forth in Section 1.02(a)(iii) of the Seller Disclosure Letter, excluding from this clause (iii) the Transferred Vehicles and Forklifts;

(iv) all accounts receivable of Seller or any other member of the Seller Group to the extent arising out of the operation or conduct of the Business;

(v) all Intellectual Property Rights that are owned by Seller or any other member of the Seller Group and that are used or held for use primarily in the operation or conduct of the Business (the “ Transferred Intellectual Property ”), a schedule of patents, patent applications, trademark registrations, trademark applications, domain names, social media usernames, copyright registrations, copyright applications, (a summary of) trade secrets and Software developed by or at the request of Seller that are material to the Business and that are Transferred Intellectual Property (“ Scheduled Intellectual Property ”) being set forth in Section 1.02(a)(v) of the Seller Disclosure Letter;

(vi) all permits, licenses, franchises, approvals, consents, authorizations, waivers, grants, concessions, exemptions or orders of, or registrations, certificates or declarations with, any Governmental Entity (“ Permits ”) (including any pending applications therefor) that are held by Seller or any other member of the Seller Group and used or held for use primarily in the operation or conduct of the Business, in each case to the extent such Permits are transferable (the “ Transferred Permits ”);

(vii) (A) all contracts, agreements (including confidentiality agreements, joint development agreements, toll manufacturing agreements, engineering agreements and

consulting agreements), leases (including equipment leases), subleases (including equipment subleases), licenses (including equipment licenses and to software and other Intellectual Property Rights), notes, bonds, debentures, indentures, guarantees, commitments and all other legally binding instruments, arrangements and understandings, whether or not in writing (“ Contracts ”), to which Seller or any other member of the Seller Group is a party or by which Seller or any other member of the Seller Group is bound and which are set forth as Business Material Agreements in Section 1.02(a)(vii) of the Seller Disclosure Letter (excluding from this clause (vii)(A) Shared Contracts, Contracts relating to the Transferred Vehicles and Forklifts and Contracts that are the subject of Section 4.14(a)(viii)), and (B) all other Contracts to which Seller or any other member of the Seller Group is a party or by which Seller or any other member of the Seller Group is bound that are used or held for use primarily in, or that arise primarily out of the operation or conduct of the Business (excluding from this clause (vii)(B) Shared Contracts, Contracts relating to the Transferred Vehicles and Forklifts and Contracts that are the subject of Section 4.14(a)(viii)) (the foregoing collectively, the “ Transferred Contracts ”);

(viii) all rights of Seller or any other member of the Seller Group in and to products sold or leased (including products returned after the Closing Date and rights of Seller or any other member of the Seller Group of rescission, replevin, set-off and reclamation) primarily in the operation or conduct of the Business;

(ix) all credits, prepaid expenses, rebates, deferred charges, advance payments, security deposits and prepaid items (except for those related to Taxes arising out of, related to or in respect of a Retained Liability) that are used or held for use primarily in, or that arise primarily out of the operation or conduct of the Business;

(x) all rights, claims, causes of action and credits owned by Seller or any other member of the Seller Group to the extent relating to any Transferred Asset or any Assumed Liability, including any such item arising under any guarantee, warranty, indemnity, right of recovery, right of set-off or similar right in favor of Seller or any other member of the Seller Group in respect of any Transferred Asset or any Assumed Liability;

(xi) subject to Section 6.02, all books, records and other documents (including all books of account, ledgers, general, financial, accounting and Transferred Employee personnel records, Tax Returns and other Tax records related to the Transferred Entity (including work papers and supporting documentation) files, invoices, customers’ and suppliers’ lists, other distribution lists, operating, production and other manuals, manufacturing and quality control records and procedures, billing records, sales and promotional literature) (in all cases, in any form or medium) (“ Records ”) of Seller or any other member of the Seller Group that (A) are used or held for use solely in, relate solely to or that arise solely out of the conduct or operation of the Business or (B) are located at the Transferred Real Property;

(xii) [Intentionally Omitted];

(xiii) all goodwill of Seller or any other member of the Seller Group generated by or associated with the Business or the Transferred Assets;

(xiv) all assets of any Business Benefit Plan to the extent such assets are expressly assumed by Purchaser pursuant to Section 6.07 (collectively, the “ Assumed Benefit Plan Assets ”);

(xv) all insurance policies that relate solely to the Business (collectively, the “ Business Insurance Policies ”) and all rights and claims thereunder and any proceeds thereof;

(xvi) subject to Section 1.05, all rights related to the Purchaser Portion of any Shared Contract;

(xvii) all cash and cash equivalents (x) of the Transferred Entity or (y) generated since the date of the Balance Sheet from the sale of any asset that, if held by Seller or any other member of the Seller Group on the Closing Date, would constitute a Transferred Asset, other than (i) sales of Inventory or obsolete assets in the ordinary course of business consistent with past practice and (ii) sales or factoring of accounts receivable pursuant to the Accounts Receivable Programs in the ordinary course of business consistent with past practice;

(xviii) subject to Section 6.13, the Transferred Vehicles and Forklifts; and

(xix) all other assets, properties, goodwill and rights of Seller or any other member of the Seller Group reflected on the Balance Sheet or set forth in Section 1.02(a)(xix) of the Seller Disclosure Letter.

For purposes of this Agreement (i) whether any property, asset, goodwill or right owned by Seller or any other member of the Seller Group meets a standard of “used or held for use primarily in, or arising primarily out of or relating primarily to” the Business (or any similar standard), for purposes of establishing whether it constitutes a Transferred Asset, shall be determined by considering the period from the date of the Balance Sheet to the Closing Date, and not merely the Closing Date and (ii) the assets of the Transferred Entity shall constitute Transferred Assets to the extent that they meet the definition of “Transferred Assets”.

(b) For the purposes of this Agreement, “ Excluded Assets ” shall mean the following assets owned by Seller or any other member of the Seller Group to the extent such assets would otherwise constitute Transferred Assets:

(i) all assets set forth in Section 1.02(b)(i) of the Seller Disclosure Letter;

(ii) all cash and cash equivalents, other than the cash and cash equivalents described in Section 1.02(a)(xviii);

(iii) all insurance policies, other than the Business Insurance Policies, and all rights and claims thereunder and any proceeds thereof, other than as described in Section 6.16;

(iv) all rights, claims, causes of action and credits to the extent relating to any Excluded Asset or any Retained Liability, including any such item to the extent arising under any guarantee, warranty, indemnity or similar right in favor of Seller or any other member of the Seller Group in respect of any Excluded Asset or any Retained Liability;

(v) all shares of capital stock of, or other equity interests in, Seller, any affiliate of Seller or any other Person (in each case, other than the Transferred Entity);

(vi) all assets (other than the Assumed Benefit Plan Assets) relating to any employee benefit plan in which any employee of Seller or any of its affiliates participates;

(vii) subject to Section 6.02, all Records relating to the Business that form part of Seller’s or any other member of the Seller Group’s (other than Records of the Transferred Entity) general ledger or that are personnel records of any individual who is not a Transferred Employee, other than the records described in Section 1.02(a)(xi);

(viii) all Records prepared in connection with the sale or transfer of the Business, including bids received from third parties and analyses relating to the Business and Business NDAs;

(ix) all rights of Seller or any other member of the Seller Group (other than the Transferred Entity) under this Agreement or any other Transaction Document;

(x) (A) the names and marks set forth in Section 1.02(b)(x) of the Seller Disclosure Letter and any name or mark derived from, similar to or including any of the foregoing (in each case, in any style or design) (collectively, the “ Retained Names ”), (B) all Intellectual Property Rights other than the Transferred Intellectual Property and (C) all “shrink wrap” Software licenses, “commercially available off the shelf software packages” and “click through” SaaS agreements and Software licenses;

(xi) all owned real property, leaseholds and other interests in real property held by Seller or any other member of the Seller Group (other than the Transferred Real Property), including the real estate interests set forth in Section 1.02(b)(xi) of the Seller Disclosure Letter, in each case together with all right, title and interest in, to and under all plants, facilities, buildings, structures, improvements and fixtures thereon and all easements and rights of way pertaining thereto or accruing to the benefit thereof and all other appurtenances and real property rights pertaining thereto and all related leases;

(xii) all Permits set forth in Section 1.02(b)(xii) of the Seller Disclosure Letter;

(xiii) all Contracts set forth in Section 1.02(b)(xiii) of the Seller Disclosure Letter;

(xiv) all accounts receivable accrued prior to the Closing pursuant to which a payment is owed (A) by any member of the Seller Group to any other member of the Seller Group or (B) by the Seller Business to the Business;

(xv) any refund or credit of Taxes attributable to any Retained Tax Liability;

(xvi) (A) all tangible personal property and interests therein set forth in Section 1.02(b)(xvi) of the Seller Disclosure Letter and (B) all logs, lumber, wood chips and other wood fiber located on the Closing Date on real property held by Seller or any other member of the Seller Group other than the Transferred Real Property, except to the extent that such logs, lumber, wood chips or other wood fiber are included as Current Assets on the Statement;

(xvii) except as provided pursuant to any Ancillary Agreement, all rights to receive, and all rights with respect to the delivery of, corporate-level services of the type provided as of the date of this Agreement to the Business by Seller or any of its affiliates, including assets used or held for use by Seller in connection with such corporate-level services (other than assets that are used solely by the Transferred Employees); and

(xviii) subject to Section 1.05, all rights related to the Seller Portion of any Shared Contract.

SECTION 1.03. Consents to Certain Assignments . (a) Notwithstanding anything in this Agreement to the contrary, this Agreement shall not constitute an agreement to assign, directly or indirectly, any asset or any claim or right or any benefit arising under or resulting from such asset if an attempted direct or indirect assignment thereof, without the consent of a third party or Governmental Approval, would constitute a breach, default, violation or other contravention of the rights of such third party or Governmental Entity or applicable Law, would be ineffective with respect to any party to an agreement concerning such asset, claim or right, or would in any way adversely affect the rights of Seller or any other member of the Seller Group or, upon transfer, Purchaser or the Transferred Entity under such asset, claim or right. If any direct or indirect transfer or assignment by Seller to Purchaser or any Purchaser Sub, or any direct or indirect acquisition or assumption by Purchaser or any Purchaser Sub, of any interest in, or liability, obligation or commitment under, any asset, claim or right requires the consent of a third party or Governmental Approval, then such transfer or assignment or assumption shall be made subject to such consent or Governmental Approval being obtained. For the purposes of this Section 1.03, Governmental Approval shall not refer to the approvals described in Section 4.03(b).

(b) If any such consent or Governmental Approval referred to in Section 1.03(a) is not obtained prior to the Closing, the Closing shall nonetheless take place, subject to Section 2.01 and the satisfaction of the conditions set forth in Article VII and unless this Agreement is terminated in accordance with Article VIII, and, thereafter, Purchaser and Seller shall cooperate (each at its own expense) in any lawful and commercially reasonable arrangement proposed by Purchaser under which Purchaser shall obtain, or cause one or more Purchaser Subs to obtain (without infringing upon the legal rights of such third party or

Governmental Entity or violating any applicable Law), the economic claims, rights and benefits under the asset, claim or right (including, in the case of the Georgia Power Contract, the Monthly Capacity Payments and the Green Credits (as such terms are defined in the Georgia Power Contract)), with respect to which such consent or Governmental Approval has not been obtained in accordance with this Agreement. Purchaser shall, or shall cause one or more Purchaser Subs to, assume any related economic burden with respect to the asset, claim or right with respect to which such consent or Governmental Approval has not been obtained in accordance with this Agreement.

(c) If and when any such consent or Governmental Approval referred to in Section 1.03(a) is obtained after the Closing, the assignment of the asset, claim or right to which such consent or Governmental Approval relates shall be promptly effected in accordance with the terms of this Agreement without the payment of additional consideration. Seller and Purchaser shall, and shall cause their respective affiliates to, use commercially reasonable efforts to obtain such third party consents and/or Governmental Approvals as promptly as practicable. The parties shall cooperate in minimizing all fees and expenses incidental to the performance of this Section 1.03 and such fees and expenses shall be borne by the parties pursuant to Section 6.08. On the Closing Date, Seller shall deliver to Purchaser a schedule setting forth all material assets, claims or rights the transfer or assignment of which by Seller or the acquisition or assumption of which by Purchaser is subject to any third party consent or Governmental Approval.

SECTION 1.04. Assumption of Liabilities . (a) Upon the terms and subject to the conditions of this Agreement, including the indemnification provisions of Section 10.01 and the provisions of Section 1.04(b), Purchaser shall, effective as of the Closing, (1) agree to cause the Transferred Entity to pay, perform and discharge when due, all of its Liabilities, and (2) assume, and shall pay, perform and discharge when due, or cause one or more Purchaser Subs to assume, pay, perform and discharge when due, all Liabilities of Seller or any other member of the Seller Group (other than the Transferred Entity), in each case to the extent such Liabilities arise out of or relate to the Transferred Assets, the Business or the operation or conduct of the Business prior to, on or after the Closing Date, other than the Retained Liabilities (clauses (1) and (2) collectively, the “ Assumed Liabilities ”), which Assumed Liabilities shall include (in each case, (A) regardless of whether such Liabilities arose prior to, on or after the Closing Date and (B) excluding the Retained Liabilities):

(i) all Liabilities to the extent included as Current Liabilities on the Statement, as finally determined after resolution of all disputes in accordance with Article II;

(ii) all ordinary course Liabilities to the extent arising out of, or relating to, the operation or conduct of the Business or the ownership of the Transferred Assets prior to the Closing;

(iii) all Liabilities of Seller or any other member of the Seller Group under the Transferred Contracts and the Transferred Permits;

(iv) all accounts payable and accrued liabilities to the extent such Liabilities arise out of or relate to the operation or conduct of the Business;

(v) all Liabilities of Seller or any other member of the Seller Group to the extent arising out of or relating to products manufactured or sold by the Business at any time, including Liabilities for refunds, adjustments, allowances, repairs, exchanges, returns and warranty, product liability, merchantability and other claims to the extent relating to such products;

(vi) all Liabilities of Seller or any other member of the Seller Group to the extent arising as a result of being the owner, lessee or occupant of, or the operator of the activities conducted at, the Transferred Real Property;

(vii) all Environmental Liabilities of Seller or any other member of the Seller Group to the extent at any time arising out of or relating to the Business, the Transferred Real Property, the ownership, operation or conduct of the Business or the ownership or operation of, or activities conducted at, the Transferred Real Property;

(viii) all Liabilities of Seller or any other member of the Seller Group in respect of any Action, pending or threatened, and claims, whether or not presently asserted, to the extent at any time arising out of or relating to the operation or conduct of the Business;

(ix) (A) all Liabilities of Seller or any other member of the Seller Group with respect to the Transferred Employees and their dependents and beneficiaries arising out of or relating to any Assumed Benefit Plan or Assumed Benefit Agreement and (B) the Liabilities expressly assumed by Purchaser pursuant to Section 6.07;

(x) all Liabilities of Seller or any other member of the Seller Group for (A) Taxes arising out of or relating to or in respect of the Business or the Transferred Assets or the Transferred Entity for any Post-Closing Tax Period, including the Post-Closing Tax Period of a Straddle Period; (B) any Transfer Tax relating to the transfer of the Transferred Entity; (C) 50% of any Transfer Taxes not described in the foregoing clause (B); and (D) Taxes imposed on the Transferred Entity attributable to a loss of the exemption granted by the SEZ Permit resulting from the purchase of the Transferred Equity Interests pursuant to this Agreement or any action taken by the Transferred Entity, Purchaser or any of their affiliates after the Closing other than (x) in the ordinary course of business consistent with past practice or (y) pursuant to an agreement that Seller or any other member of the Seller Group entered into prior to the Closing;

(xi) all Liabilities of Seller or any other member of the Seller Group reflected on the Balance Sheet to the extent such Liabilities arise out of or relate to the Transferred Assets, the Business or the operation or conduct of the Business, other than Liabilities discharged after the date of the Balance Sheet;

(xii) all Liabilities with respect to the Columbus Industrial Revenue Bonds;

(xiii) subject to Section 1.05, all Liabilities related to the Purchaser Portion of any Shared Contract;

(xiv) all Liabilities arising out of or relating to workers’ compensation claims of any Transferred Employees, as specifically set forth in Section 6.07(g)(v);

(xv) subject to Section 6.13, all Liabilities related to the Transferred Vehicles and Forklifts; and

(xvi) all Liabilities for Assumed Credit Support Obligations.

(b) Notwithstanding any other provision of this Agreement to the contrary, (1) Purchaser shall not assume or have any liability in respect of any Retained Liability, each of which shall be retained and shall be paid, performed and discharged when due by Seller or the other applicable member of the Seller Group and (2) as between the parties to this Agreement, the Transferred Entity shall not be obliged to pay, perform and discharge any Liability that is a Retained Liability (and Seller shall indemnify the Purchaser Indemnitees in accordance with Article X from and against any Liability of the Transferred Entity that is a Retained Liability but continues to be a Liability of the Transferred Entity after the Closing by operation of Law). For the purposes of this Agreement, “ Retained Liabilities ” shall mean the following Liabilities of Seller or any other member of the Seller Group:

(i) all Liabilities to the extent not arising out of or relating to the Business, the Transferred Assets or the ownership or operation thereof, in each case as currently conducted, owned, leased, occupied or operated;

(ii) all Liabilities to the extent arising out of or relating to Excluded Assets;

(iii) (A) all Liabilities incurred under or with respect to any Business Benefit Plan or any Business Benefit Agreement that is not an Assumed Benefit Plan or Assumed Benefit Agreement and (B) all other employment and employee Liabilities arising out of or relating to the operation or conduct of the Business to the extent such Liabilities are expressly retained by Seller pursuant to Section 6.07;

(iv) all Liabilities for (A) Taxes arising out of or relating to or in respect of any business, asset, property or operation of Seller or any other member of the Seller Group (including the Business, the Transferred Assets and the Transferred Entity) for any Pre-Closing Tax Period, including the Pre-Closing Tax Period of a Straddle Period other than any Taxes imposed on the Transferred Entity described in Section 1.04(a)(x)(D) and (B) 50% of any Transfer Taxes (other than any Transfer Taxes relating to the transfer of the Transferred Entity) (collectively, the “ Retained Tax Liabilities ”);

(v) all Liabilities incurred or arising prior to the Closing under any Transferred Contract or Transferred Permit, to the extent such Liabilities do not arise out of or relate to the Business or the operation or conduct thereof;

(vi) all Liabilities of Seller or any other member of the Seller Group to the extent arising from or relating to any business or line of business disposed of or discontinued, or any facility or other real property disposed of, by the Business or the Transferred Entity prior to the Closing, including under any agreement providing for the sale of any such business, line of business, facility or real property;

(vii) all accounts payable incurred prior to the Closing pursuant to which a payment is owed (A) by any member of the Seller Group to any other member of the Seller Group or (B) by the Business to the Seller Business;

(viii) all Liabilities for Indebtedness, other than Liabilities with respect to the Columbus Industrial Revenue Bonds;

(ix) all Retained Environmental Liabilities;

(x) all Liabilities of Seller or any other member of the Seller Group arising pursuant to the terms of this Agreement or any Ancillary Agreement;

(xi) all Liabilities for fees and expenses of Seller in connection with the Transactions pursuant to the terms of this Agreement and any of the Ancillary Agreements (including all accounting, transactional, legal, brokerage or other fees and expenses)(but excluding all fees and expenses that Purchaser is required to bear pursuant to the terms of this Agreement or any of the Ancillary Agreements);

(xii) subject to Section 1.05, all Liabilities related to the Seller Portion of any Shared Contract;

(xiii) other than as set forth in Section 1.04(a)(xiv), all Liabilities arising out of or relating to workers’ compensation claims of any present or former employee of the Business, employed at present, former, sold or discontinued facilities;

(xiv) any Liability to the lessors with respect to any Transferred Vehicle or Forklift for which a price per item has been included in the Lease Buyout Amount and paid to Seller or any other member of the Seller Group;

(xv) all Liabilities with respect to Historic Remains;

(xvi) all Liabilities set forth in Section 1.04(b)(xvi) of the Seller Disclosure Letter; and

(xvii) all Liabilities for Retained Credit Support Obligations.

SECTION 1.05. Shared Contracts . (a) The parties shall, and shall cause their respective subsidiaries to, use their commercially reasonable efforts to work together (and, if necessary and desirable, to work with the third party to any Shared Contract) in an effort to divide, partially assign, modify and/or replicate (in whole or in part) the respective rights and obligations under and in respect of any Shared Contract, such that (i) Purchaser is the beneficiary

of the rights and is responsible for the obligations related to the portion of such Shared Contract relating to the Business (the “ Purchaser Portion ”), which rights shall be a Transferred Asset and which obligations shall be an Assumed Liability, and (ii) a member of the Seller Group is the beneficiary of the rights and is responsible for the obligations related to such Shared Contract not relating to the Business (the “ Seller Portion ”), which rights shall be an Excluded Asset and which obligations shall be a Retained Liability. If the parties or their respective affiliates are not able to enter into an arrangement to divide, partially assign, modify and/or replicate (in whole or in part) the rights and obligations under and in respect of any such Shared Contract as contemplated by the immediately preceding sentence prior to the Closing, the Closing shall, subject to Section 2.01 and the satisfaction of the conditions set forth in Article VII and unless this Agreement is terminated in accordance with Article VIII, nonetheless take place on the terms set forth herein and, thereafter, Purchaser and Seller shall, and shall cause their respective subsidiaries to, use their commercially reasonable efforts to cooperate (each at its own expense) in any lawful, contractually permissible and commercially reasonable arrangement under which, following the Closing and until the date on which the division, partial assignment, modification and/or replication of such Shared Contract as contemplated by the immediately preceding sentence is effected, Purchaser shall receive the interest in the benefits and obligations of the Purchaser Portion under such Shared Contract and a member of the Seller Group shall receive the interest in the benefits and obligations of the Seller Portion under such Shared Contract.

(b) Seller and Purchaser shall, and shall cause their respective subsidiaries to, (i) treat for all Tax purposes the portion of each Shared Contract inuring to its respective businesses as assets owned by, and/or liabilities of, as applicable such party or such party’s applicable subsidiary, as applicable, as of the Closing and (ii) neither report nor take any Tax position (on a Tax Return or otherwise) inconsistent with such treatment (unless required by applicable Law).

SECTION 1.06. Risk of Loss . Until the Closing, any loss of or damage to the Transferred Assets from fire, casualty or any other occurrence shall be the sole responsibility of Seller; provided , however , that no such loss or damage shall have any effect on the Purchase Price, the Closing Date Payment or the Adjusted Purchase Price, or cause the Closing to fail to occur, in each case, solely as a result of this sentence. As of the time of Closing, title to all Transferred Assets shall be transferred to Purchaser and Purchaser shall thereafter bear all risk of loss associated with the Transferred Assets and be solely responsible for procuring adequate insurance to protect the Transferred Assets against any such loss.

SECTION 1.07. Disclaimer of Representations and Warranties . EXCEPT AS MAY EXPRESSLY BE SET FORTH IN THIS AGREEMENT OR IN ANY OTHER TRANSACTION DOCUMENT, (A) NONE OF SELLER OR ANY MEMBER OF THE SELLER GROUP MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE TRANSFERRED ENTITY, THE TRANSFERRED ASSETS, THE ASSUMED LIABILITIES, THE ACKNOWLEDGED CANADIAN OBLIGATIONS, OR THE BUSINESS, ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (INCLUDING ANY CONSENTS OR APPROVALS REQUIRED IN CONNECTION THEREWITH) OR THE BUSINESS, ASSETS, CONDITION OR PROSPECTS (FINANCIAL OR OTHERWISE) OF,

OR ANY OTHER MATTER INVOLVING, THE TRANSFERRED ENTITY, THE TRANSFERRED ASSETS, THE ASSUMED LIABILITIES, THE ACKNOWLEDGED CANADIAN OBLIGATIONS, OR THE BUSINESS, (B) ALL OF THE TRANSFERRED ASSETS TO BE TRANSFERRED OR THE ASSUMED LIABILITIES OR THE ACKNOWLEDGED CANADIAN OBLIGATIONS TO BE ASSUMED OR TRANSFERRED IN ACCORDANCE WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT SHALL BE TRANSFERRED OR ASSUMED ON AN “AS IS, WHERE IS” BASIS, AND ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE ARE HEREBY EXPRESSLY DISCLAIMED, (C) NONE OF THE PARTIES HERETO OR ANY OTHER PERSON MAKES ANY REPRESENTATION OR WARRANTY WITH RESPECT TO ANY INFORMATION, DOCUMENTS OR MATERIAL MADE AVAILABLE IN CONNECTION WITH THE DUE DILIGENCE INVESTIGATION OF THE BUSINESS OR THE NEGOTIATION AND ENTERING INTO OF THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY AND (D) NEITHER SELLER NOR ANY OTHER PERSON SHALL BE SUBJECT TO ANY LIABILITY OR RESPONSIBILITY WHATSOEVER TO PURCHASER OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE STOCKHOLDERS, CONTROLLING PERSONS OR REPRESENTATIVES ON ANY BASIS (INCLUDING IN CONTRACT OR TORT, UNDER SECURITIES LAWS OR OTHERWISE) RESULTING FROM OR BASED UPON SELLER’S FURNISHING, DISCLOSING OR OTHERWISE MAKING AVAILABLE ANY INFORMATION, DOCUMENTS OR MATERIAL IN ANY FORM TO PURCHASER OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE STOCKHOLDERS, CONTROLLING PERSONS OR REPRESENTATIVES, INCLUDING IN ANY DATA ROOM OR MANAGEMENT PRESENTATIONS (FORMAL OR INFORMAL) AND INCLUDING ANY FINANCIAL STATEMENTS AND ANY PROJECTIONS, FORECASTS, BUDGETS, ESTIMATES OR OTHER FORWARD-LOOKING INFORMATION, OR THE USE OF ANY SUCH INFORMATION. PURCHASER HAS NOT RELIED UPON, AND SHALL NOT RELY UPON, ANY STATEMENTS BY SELLER OR ANY OTHER MEMBER OF THE SELLER GROUP OTHER THAN THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT, THE CERTIFICATE DESCRIBED IN SECTION 7.03(C) OR ANY OTHER TRANSACTION DOCUMENT.

SECTION 1.08. Misallocated Transfers . In the event that, at any time or from time to time after the Closing, any party hereto (or any of its subsidiaries) shall receive or otherwise possess any asset or be liable for any Liability that is allocated to any other Person pursuant to this Agreement or any other Transaction Document, such party shall promptly transfer or assign, or cause to be transferred or assigned, such asset or Liability to the Person so entitled thereto, and the relevant party will cause such entitled Person to accept such asset or assume such Liability. Prior to any such transfer, the Person receiving or possessing such asset shall hold such asset in trust for any such other Person.

SECTION 1.09. Alberta Order . Unless Seller shall have filed the same prior to the date hereof, Purchaser shall file or cause to be filed with FOLA as promptly as practicable after the date hereof a duly completed application for the Alberta Order, together with all

documentation and any supplemental information that may be required for the Alberta Order and requested by the FOLA in connection therewith pursuant to the FOLR, and include in such application a request for acceleration of any applicable waiting or review periods, to the extent available under the FOLR. Any such application and submission by Purchaser shall be in compliance with the applicable requirements of the FOLR and shall be approved by Seller in advance of submission to the FOLA (such approval not to be unreasonably withheld, conditioned or delayed). Each of Seller and Purchaser shall furnish to the other such necessary information and reasonable assistance as the other may reasonably request in connection with the preparation of any application or submission that is necessary under the FOLR in order to obtain the Alberta Order. Each of Seller and Purchaser shall keep each other apprised of the status of any communications with, and any inquiries or requests for additional information from, the FOLA and any other applicable Governmental Entity and shall comply with any such inquiry or request as promptly as practicable. Each party shall use its reasonable best efforts to obtain the Alberta Order as promptly as practicable, and neither party shall extend, directly or indirectly, any waiting or review period in connection with the Alberta Order.

ARTICLE II

Closing and Post-Closing Purchase Price Adjustment

SECTION 2.01. Closing . Unless this Agreement is terminated in accordance with Article VIII, the closing (the “ Closing ”) of the Acquisition shall take place at the offices of Debevoise & Plimpton LLP, 919 Third Avenue, New York, New York 10022 at 10:00 a.m. on the second Business Day following the satisfaction (or, to the extent permitted by Law, waiver by the parties entitled to the benefit thereof) of the conditions set forth in Article VII, or at such other place, time and date as shall be agreed in writing between Seller and Purchaser. The date on which the Closing occurs is referred to in this Agreement as the “ Closing Date ”.

SECTION 2.02. Transactions To Be Effected at the Closing .

(a) At the Closing: Seller shall deliver or cause to be delivered (i) to Purchaser or, if requested by Purchaser, one or more Purchaser Subs, a duly notarized share transfer instrument governed by the laws of Poland conveying the Transferred Equity Interests to Purchaser or the applicable Purchaser Subs, as applicable, in the form attached hereto as Exhibit F (the “ Transferred Entity Share Purchase Agreement ”), under which the shares of the Transferred Entity are to be transferred, subject to the conditions therein, free and clear of all Liens (other than Liens created by Purchaser) and (ii) to Purchaser (A) (w) duly executed deeds or the jurisdictional equivalent (in recordable form) for each Owned Real Property (other than with regard to the Transferred Poland Real Property), (x) if Title Policies are obtained by Purchaser, reasonable and customary owner’s affidavits executed and delivered by Seller or another applicable member of the Seller Group in favor of the Title Company in order to permit the Title Company to delete from Purchaser’s title insurance policies such general exceptions to title as are customarily omitted for the applicable jurisdiction in which an Owned Real Property is located on the basis of an owner’s affidavit, and any other documents reasonably requested by the Title Company in connection with the issuance of the Title Policies (excluding Surveys,

which are to be handled in accordance with Section 6.17(a)), (y) based on the amount allocated pursuant to Section 9.01(a) for each Transferred Real Property, executed copies of state, county and local transfer declarations and tax forms, if and as applicable, with respect to the transfer of the Transferred Assets, and (z) bills of sale, assignments and other instruments of transfer relating to the Transferred Assets (other than the assets of the Transferred Entity), in each case, transferred to Purchaser free and clear of any Liens (other than Permitted Liens and Liens created by Purchaser), (B) a complete and correct copy (recorded on a DVD or similar medium) of the electronic data room created and maintained by or on behalf of Seller in connection with the contemplated sale of the Business and (C) all such other certificates and documents required to be delivered to Purchaser at or prior to the Closing pursuant to this Agreement or any Ancillary Agreement (the Transferred Entity Share Purchase Agreement, together with the documents in clauses (ii)(A) and (ii)(C) above, collectively, the “ Asset Conveyance Documents ”) (it being understood that the certificates, deeds, bills of sale, assignments, instruments of transfer, agreements and other documents referred to in clauses (i), (ii)(A) and (ii)(C) above shall not require Seller to make any additional representations, warranties or covenants, expressed or implied, not contained in this Agreement or the Ancillary Agreements; provided , however , that the deeds for the Owned Real Property shall be bargain and sale deeds with covenants against grantor’s acts (also known as “special warranty” deeds) or the equivalent in the jurisdiction where the Owned Real Property is located).

(b) At the Closing: Purchaser shall deliver, or cause one or more Purchaser Subs to deliver, to Seller (i) payment, by wire transfer of immediately available funds to one or more accounts designated in writing by Seller (such designation to be made at least three Business Days prior to the Closing Date), in an amount equal to (A) the Purchase Price, plus or minus, as applicable (B) an estimate, prepared by Seller and delivered to Purchaser at least three Business Days prior to the Closing Date, of any adjustment to the Purchase Price under Section 2.03 (the amount of the Purchase Price plus or minus such estimate of any adjustment under Section 2.03 being hereinafter called the “ Closing Date Payment ”), (ii) duly executed counterparts of the Asset Conveyance Documents and duly executed assumption agreements and other instruments of assumption providing for the assumption of the Assumed Liabilities, (iii) counterparts of each of the Ancillary Agreements and (iv) all such other certificates and documents required to be delivered to Seller at or prior to the Closing pursuant to this Agreement or any Ancillary Agreement (the documents in clauses (ii) and (iv), collectively, the “ Liabilities Assumption Documents ”) (it being understood that the deeds, bills of sale, assignments, instruments of transfer, agreements and other documents referred to in clauses (ii) and (iv) shall not require Purchaser to make any additional representations, warranties or covenants, expressed or implied, not contained in this Agreement or the Ancillary Agreements).

(c) Seller shall prepare the estimates contemplated by clause (i)(B) of Section 2.02(b) (along with the components thereof) in good faith and, to the extent practicable, in a manner consistent with the Accounting Principles and the sample calculations set forth in Section 2.03(d) of the Seller Disclosure Letter, and shall provide Purchaser with reasonable supporting documentation and reasonable access to the personnel of Seller and the other members of the Seller Group responsible for preparing such estimates. Seller shall consider in good faith any revisions to such estimates proposed by Purchaser prior to the Closing. No position taken by Purchaser or Seller prior to the Closing with respect to such estimates nor any

failure of Purchaser to object to such estimates shall prejudice the rights of the parties with respect to the post-Closing adjustments provided in Section 2.03 or delay or postpone the Closing Date.

SECTION 2.03. Post-Closing Purchase Price Adjustment . (a) The Statement . Within 90 days after the Closing Date, Purchaser shall prepare and deliver to Seller a statement (the “ Statement ”), setting forth (i) the Working Capital of the Business as of the close of business on the Closing Date (the “ Closing Working Capital ”), (ii) the Eligible Capital Expenditures prior to the close of business on the day prior to the Closing Date (the “ Closing Eligible Capital Expenditures ”), (iii) the Debt Amount as of the close of business on the Closing Date and (iv) the Annualized Business Three Month Net Sales Amount. The Statement shall be prepared in a manner consistent with the Accounting Principles and the sample calculations set forth in Section 2.03(d) of the Seller Disclosure Letter. Seller shall provide reasonable assistance to Purchaser in the preparation of the Statement and shall provide Purchaser reasonable access at all reasonable times to the personnel, properties, books and records of Seller and the other members of the Seller Group (in each case, to the extent such personnel, properties, books and records relate to the Business) for such purpose.

(b) Objections; Resolution of Disputes . The Statement shall become final and binding upon the parties on the 30th day following delivery thereof, unless Seller gives written notice of its disagreement with the Statement (a “ Notice of Disagreement ”) to Purchaser prior to such date. Any Notice of Disagreement shall (i) specify in reasonable detail the nature of any disagreement so asserted and Seller’s calculation of Closing Working Capital, the Closing Eligible Capital Expenditures, the Debt Amount and the Annualized Business Three Month Net Sales Amount, (ii) only include disagreements based on mathematical errors or based on the Closing Working Capital, the Closing Eligible Capital Expenditures, the Debt Amount or the Annualized Business Three Month Net Sales Amount not being calculated in accordance with this Section 2.03 and (iii) be accompanied by a certificate of an executive officer of Seller certifying that the matters specified in the Notice of Disagreement are consistent with the requirements of Section 2.03(d). If a Notice of Disagreement is received by Purchaser in a timely manner, then the Statement (as revised in accordance with this sentence) shall become final and binding upon the parties on the earlier of (A) the date Seller and Purchaser resolve in writing any differences they have with respect to the matters specified in the Notice of Disagreement and (B) the date any disputed matters are finally resolved in writing by the Accounting Firm. During the 30-day period following the delivery of a Notice of Disagreement, Seller and Purchaser shall seek in good faith to resolve in writing any differences that they may have with respect to the matters specified in the Notice of Disagreement. At the end of such 30-day period, Seller and Purchaser shall submit to an independent accounting firm (the “ Accounting Firm ”) for determination of any and all matters that remain in dispute and were properly included in the Notice of Disagreement. The dispute resolution by the Accounting Firm shall be an expert determination under the relevant Laws of the State of New York. The Accounting Firm shall be PricewaterhouseCoopers LLP or, if such firm is unable or unwilling to act, such other nationally recognized independent public accounting firm as shall be agreed upon by the parties hereto in writing. Seller and Purchaser shall use commercially reasonable efforts to cause the Accounting Firm to render a decision in writing resolving the matters submitted to the Accounting Firm within 30 days of receipt of the submission. Neither Seller nor Purchaser

shall have any ex parte communications with the Accounting Firm without the prior written consent of the other party. Absent fraud, bad faith or manifest error, the determination of the Accounting Firm shall be final and binding on the parties and judgment may be entered upon such determination in any court having jurisdiction over the party against which such determination is to be enforced. The cost of any determination (including the fees and expenses of the Accounting Firm and reasonable attorney fees and expenses of the parties) pursuant to this Section 2.03 shall be borne by Purchaser and Seller in inverse proportion as they may prevail on matters resolved by the Accounting Firm, which proportionate allocations shall also be determined by the Accounting Firm at the time the determination of the Accounting Firm is rendered on the merits of the matters submitted. Other than the fees and expenses referred to in the immediately preceding sentence, the fees and disbursements of Seller’s independent auditors shall be borne by Seller and the fees and disbursements of Purchaser’s independent auditors shall be borne by Purchaser.

(c) Adjustment Payment . If the Closing Working Capital exceeds the Target Working Capital, the Purchase Price shall be increased by the amount by which Closing Working Capital exceeds the Target Working Capital, and if the Closing Working Capital is less than the Target Working Capital, the Purchase Price shall be decreased by the amount by which Closing Working Capital is less than the Target Working Capital. In addition to the foregoing adjustment, (i) the Purchase Price shall be decreased by an amount equal to the Debt Amount and (ii) the Purchase Price shall be increased by an amount equal to the Closing Eligible Capital Expenditures. The Purchase Price as so increased or decreased under this Section 2.03(c) shall hereinafter be referred to as the “ Adjusted Purchase Price ”. If the Closing Date Payment is less than the Adjusted Purchase Price, Purchaser shall, and if the Closing Date Payment is more than the Adjusted Purchase Price, Seller shall, within 10 Business Days after the Statement becomes final and binding on the parties, make payment by wire transfer in immediately available funds in an amount equal to the absolute value of the difference between the Adjusted Purchase Price and the Closing Date Payment to one or more accounts designated in writing at least two Business Days prior to such payment by the party entitled to receive such payment, plus interest thereon at a rate of 5% per annum, calculated on the basis of the actual number of days elapsed divided by 365, from and including the Closing Date to but excluding the date of payment.

(d) Certain Definitions and Calculations . The term “ Working Capital ” means Current Assets minus Current Liabilities. The terms “ Current Assets ” and “ Current Liabilities ” mean the current assets and current liabilities, respectively, of the Business, excluding all items with respect to Taxes, all amounts included in the Debt Amount, all Excluded Assets and all Retained Liabilities. Current Assets and Current Liabilities shall be determined as follows: (i) first, the methods, policies, principles, methodologies and rules set forth in Section 2.03(d) of the Seller Disclosure Letter shall be applicable, without regard to whether such methods, policies, principles, methodologies and rules are consistent with GAAP, (ii) second, to the extent not covered by Section 2.03(d) of the Seller Disclosure Letter, the methods, policies, principles, methodologies and rules as were used by Seller in the preparation of the Balance Sheet shall be applicable, without regard to whether such methods, policies, principles, methodologies and rules are consistent with GAAP, and (iii) third, to the extent no relevant method, policy, principle, methodology or rule is applicable pursuant to the foregoing clauses (i) and (ii), GAAP, applied in a manner consistent with Seller’s historical methods, policies, principles,

methodologies and rules, excluding any effects of the Transactions, shall be applicable. The foregoing principles are referred to in this Agreement as the “ Accounting Principles ”.

The Closing Working Capital, the Closing Eligible Capital Expenditures, the Debt Amount and the Annualized Business Three Month Net Sales Amount are to be calculated as of close of business on the Closing Date in accordance with the Accounting Principles. The scope of the disputes to be resolved by the Accounting Firm as provided in Section 2.03(b) shall be solely limited to whether such calculation was done in accordance with this Section 2.03 (including the Accounting Principles), and whether there were mathematical errors in the Statement. The Accounting Firm’s determination of any amount in dispute must be within the range of values assigned to such amount by the parties hereto. The Accounting Firm is not authorized or permitted to make any other determination or adjustment based on GAAP if the Accounting Principles can be determined pursuant to clauses (i) and (ii) of the definition thereof. Without limiting the generality of the foregoing, no determination of the Accounting Firm shall be applicable as to the determination of the accuracy of any representation or warranty in this Agreement or as to compliance by the parties with any of their covenants in this Agreement (other than (A) whether the Statement calculation was done in accordance with this Section 2.03 (including the Accounting Principles) and (B) whether there were any mathematical errors in the Statement).

(e) Post-Closing Books and Records . Following the Closing, Purchaser shall not take any actions with respect to the accounting books and records of the Business on which the Statement is to be based that would affect the Statement. During the period of time from and after the Closing Date through the resolution of any adjustment to the Purchase Price contemplated by this Section 2.03, Purchaser shall afford to Seller and its Representatives reasonable access during normal business hours to all the properties, systems, books, Contracts, personnel and Records of the Business relevant to the adjustment contemplated by this Section 2.03.

SECTION 2.04. Withholding Taxes . Notwithstanding anything in this Agreement to the contrary, Purchaser and its affiliates shall be entitled to deduct and withhold from any amounts payable pursuant to this Agreement such amounts as are required to be deducted or withheld under the Code or any applicable provision of state, local or foreign Tax law (collectively, the “ Withholding Taxes ”). To the extent that amounts are so deducted or withheld, such deducted or withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Seller or any other member of the Seller Group in respect of which such deduction or withholding was made, and Purchaser shall provide to the respective member of the Seller Group written notice of the amounts so deducted or withheld. Any amounts so withheld shall be applied by Purchaser and its affiliates to satisfy Withholding Taxes. Purchaser and its affiliates shall remit any such amounts deducted or withheld from any such payment to the applicable Taxing Authority. For the avoidance of doubt, Withholding Taxes do not include Transfer Taxes with respect to the Transferred Entity.

ARTICLE III

Representations and Warranties of Purchaser

As of the date hereof and (unless otherwise stated in this Article III) as of the Closing Date, Purchaser represents and warrants to Seller that, except as disclosed in the manner contemplated in Section 11.04, in the letter, dated as of the date hereof, from Purchaser to Seller (the “ Purchaser Disclosure Letter ”):

SECTION 3.01. Organization, Standing and Power . Purchaser is duly organized, validly existing and in good standing under the Laws of the State of New York. Purchaser has all requisite power and authority necessary to enable it to own, lease or otherwise hold its properties and assets and to conduct its business as currently conducted, other than such franchises, licenses, permits, authorizations and approvals the lack of which, individually or in the aggregate, has not had and would not reasonably be expected to have a Purchaser Material Adverse Effect.

SECTION 3.02. Authority; Execution and Delivery; Enforceability .
(%3) Purchaser has all requisite power and authority to execute and deliver each Transaction Document to which it is or is contemplated to be a party, to perform its obligations thereunder and to consummate the Transactions. The execution, delivery and performance by Purchaser of each Transaction Document to which it is or is contemplated to be a party and the consummation by Purchaser of the Transactions have been duly authorized by the Board of Directors of Purchaser, and no other corporate action or proceeding on the part of Purchaser is necessary to authorize the Transaction Documents or the consummation of the Transactions. Purchaser has duly executed and delivered this Agreement, and, assuming due authorization, execution and delivery by Seller, this Agreement constitutes Purchaser’s legal, valid and binding obligation, enforceable against Purchaser in accordance with its terms (except insofar as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally or by principles governing the availability of equitable remedies). Prior to the Closing, Purchaser will have duly executed and delivered each other Transaction Document to which it is or is contemplated to be a party, and, assuming due authorization, execution and delivery by the other parties thereto, each other Transaction Document to which it is or is contemplated to be a party will constitute its legal, valid and binding obligation, enforceable against it in accordance with its terms (except insofar as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally or by principles governing the availability of equitable remedies).

(b) No vote or consent of the holders of any class or series of capital stock of Purchaser is necessary to approve this Agreement or the consummation of the Transactions.

SECTION 3.03. No Conflicts; Governmental Approvals . (a) The execution and delivery by Purchaser of each Transaction Document to which it is a party do not, the execution and delivery by Purchaser of each Transaction Document to which it is contemplated to be a party will not, and the consummation of the Transactions and compliance with the terms

hereof and thereof will not, conflict with, or result in any violation of or default (or an event that, with or without notice or lapse of time or both, would become a default) under, or give rise to a right of termination, cancelation or acceleration of any obligation or to loss of a material benefit under, or to increased, additional, accelerated or guaranteed rights or entitlements of any Person under, or result in the creation of any Lien upon any of the properties or assets of Purchaser or any of its subsidiaries under, any provision of (i) the certificate or articles of incorporation and the bylaws or comparable organizational documents of Purchaser or any of its subsidiaries, (ii) any Contract to which Purchaser or any of its subsidiaries is a party or by which any of their respective properties or assets is bound or (iii) subject to the filings, consents and other matters referred to in Section 3.03(b), any judgment, order or decree issued, promulgated or entered into by or with any Governmental Entity (“ Judgment ”) or statute, law (including common law), ordinance, rule or regulation promulgated or entered into by or with any Governmental Entity (“ Law ”) applicable to Purchaser or any of its subsidiaries or their respective properties or assets, other than, in the case of clauses (ii) and (iii) above, any such item that, individually or in the aggregate, has not had and would not reasonably be expected to have a Purchaser Material Adverse Effect.

(b) No consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, or permit (“ Governmental Approval ”) from, any Federal, state, provincial, local, municipal, domestic, foreign or multinational government, court of competent jurisdiction, regulatory or administrative agency or commission or other governmental authority or instrumentality (a “ Governmental Entity ”) is required to be obtained or made by or with respect to Purchaser or any of its subsidiaries in connection with the execution, delivery and performance of any Transaction Document to which Purchaser is a party or the consummation of the Transactions, other than (i) compliance with and filings and notifications under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”), and any other Review Laws, (ii) compliance with and filings and notifications under Section 203 of the Federal Power Act and any directly related section or regulation thereunder (the “ Power Act ”), or an order of the Power Act disclaiming jurisdiction over the Transactions (the “ FERC Approval ”), (iii) compliance with and filings and notifications under applicable Environmental Laws, (iv) those that may be required solely by reason of Seller’s, or another member of the Seller Group’s (as opposed to any third party’s) participation in the Acquisition and the other Transactions, (v) compliance with and filings by Purchaser under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), (vi) compliance by Purchaser with the rules and regulations of the NYSE, (vii) an order in council under Section 14(1) of FOLR stating that the Acquisition, as it relates to the ownership interests in the Canadian Transferred Assets constituting Owned Real Property being acquired by Purchaser or an affiliate of Purchaser, is excluded from the operation of the FOLR, subject to the conditions set forth in such order (the “ Alberta Order ”) and (viii) such other Governmental Approvals the failure to obtain or make that, individually or in the aggregate, have not had and would not reasonably be expected to have a Purchaser Material Adverse Effect.

SECTION 3.04. Availability of Funds . (a) Purchaser has, or will have at the Closing, sufficient cash to pay, or cause to be paid, the Closing Date Payment and any other amounts required to be paid at Closing or as a result of a Purchase Price adjustment under Article II in connection with the consummation of the Transactions and to pay all related fees and

expenses of Purchaser and its subsidiaries, and there will be no restriction on the use of such cash for such purposes. Purchaser has the financial resources and capabilities to fully perform all of its obligations under this Agreement and the other Transaction Documents.

SECTION 3.05. GST Registration . Purchaser, or any Purchaser Sub that will acquire the Canadian Transferred Assets, will register for GST purposes under Part IX of the Excise Tax Act (Canada) and will provide its registration number to Seller prior to the Closing.

ARTICLE IV

Representations and Warranties of Seller

As of the date hereof and (unless as otherwise stated in this Article IV) as of the Closing Date, Seller represents and warrants to Purchaser that, except as disclosed in the manner contemplated in Section 11.04, in the letter, dated as of the date hereof, from Seller to Purchaser (the “ Seller Disclosure Letter ”):

SECTION 4.01. Organization, Standing and Power; Capital Structure of the Transferred Entity . (a) Each of Seller and the Transferred Entity is duly organized, validly existing and in good standing (or its equivalent status) under the Laws of the jurisdiction in which it is organized and has all requisite power and authority, and the Seller Group possesses all governmental franchises, licenses, permits, authorizations and approvals, necessary to enable it to own, lease or otherwise hold its properties, assets and rights which constitute Transferred Assets and to conduct the Business as currently conducted, other than such franchises, licenses, permits, authorizations and approvals the lack of which, individually or in the aggregate, has not had and would not reasonably be expected to have a Business Material Adverse Effect. Each of Seller and the Transferred Entity is duly qualified to do business in each jurisdiction where the nature of the Business or the ownership or leasing of the Transferred Assets makes such qualification necessary or the failure to so qualify has had or would reasonably be expected to have a Business Material Adverse Effect. Immediately prior to the Closing, the Transferred Entity will not own, lease or otherwise hold any material asset that does not constitute a Transferred Asset. Seller has delivered to Purchaser true and complete copies of Seller’s and the Transferred Entity’s certificate or articles of incorporation and bylaws or comparable organizational documents, in each case, as amended to the date hereof.

(b) As of the date hereof, the capital stock of the Transferred Entity consists solely of 290,100 shares, with each having a nominal value of 50 zloty , which constitutes all of the equity interests of the Transferred Entity. All the outstanding shares of capital stock of the Transferred Entity have been duly authorized, validly issued and are fully paid and non-assessable and are owned directly by Weyerhaeuser EU Holdings, Inc. and indirectly by Seller, in each case, free and clear of all Liens. There does not exist any shareholder resolution requiring (whether prior to, on or after the Closing) the contribution of additional capital or other

payments in respect of the capital stock of the Transferred Entity. At the Closing, Seller will transfer and deliver (or cause to be transferred and delivered) to Purchaser or one or more of the Purchaser Subs good and valid title to the Transferred Equity Interests, free and clear of all Liens. Except as provided in Section 4.01(b) of the Seller Disclosure Letter, there are no options, warrants, rights, convertible or exchangeable securities, “phantom” stock or other equity rights, stock or other equity appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which Seller or the Transferred Entity is a party or by which any of them is bound (A) obligating Seller or the Transferred Entity to issue, deliver, sell, repurchase, redeem or otherwise acquire or cause to be issued, delivered, sold, repurchased, redeemed or otherwise acquired additional shares of capital stock or other equity or voting interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity or voting interest in, the Transferred Entity, (B) obligating Seller or the Transferred Entity to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (C) that give any Person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of shares of capital stock of or other equity or voting interests in the Transferred Entity.

SECTION 4.02. Authority; Execution and Delivery; Enforceability . (a) Seller and each member of the Seller Group has all requisite power and authority to execute and deliver each Transaction Document to which it is or is contemplated to be a party, to perform its obligations thereunder and to consummate the Transactions. The execution, delivery and performance by Seller and each member of the Seller Group of each Transaction Document to which it is or is contemplated to be a party and the consummation by Seller and each other member of the Seller Group of the Transactions have been duly authorized by the Board of Directors of Seller, and no other corporate action or proceeding on the part of Seller or any other member of the Seller Group is necessary to authorize the Transaction Documents or the consummation of the Transactions. Seller has duly executed and delivered this Agreement, and, assuming due authorization, execution and delivery by Purchaser, this Agreement constitutes Seller’s legal, valid and binding obligation, enforceable against Seller in accordance with its terms (except insofar as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally or by principles governing the availability of equitable remedies). Prior to the Closing, Seller and each other member of the Seller Group will have duly executed and delivered each other Transaction Document to which it is or is contemplated to be a party, and, assuming due authorization, execution and delivery by the other parties thereto, each other Transaction Document to which it is or is contemplated to be a party will constitute its legal, valid and binding obligation, enforceable against it in accordance with its terms (except insofar as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally or by principles governing the availability of equitable remedies).

(b) No vote or consent of the holders of any class or series of capital stock of Seller is necessary to approve this Agreement or the consummation of the Transactions.

SECTION 4.03. No Conflicts; Governmental Approvals . (a) The execution and delivery by Seller and each other member of the Seller Group of each Transaction Document to which it is a party do not, the execution and delivery by Seller and each other member of the Seller Group of each Transaction Document to which it is contemplated to be a party will not, and the consummation of the Transactions and compliance with the terms hereof and thereof will not, conflict with, or result in any violation of or default (or an event that, with or without notice or lapse of time or both, would become a default) under, or give rise to a right of termination, cancelation or acceleration of any obligation or to a loss of a material benefit under, or to increased, additional, accelerated or guaranteed rights or entitlements of any Person under, or result in the creation of any Lien upon any issued and outstanding shares of capital stock or other equity interests of the Transferred Entity or upon any of the Transferred Assets, Assumed Liabilities or the Business or give rise to an option to purchase or otherwise acquire any part of the Transferred Real Property that has not been waived under, any provision of (i) the certificate or articles of incorporation or the bylaws or comparable organizational documents of Seller or any other member of the Seller Group, (ii) any Transferred Contract or Shared Contract or (iii) subject to the filings, consents and other matters referred to in Section 4.03(b), any Judgment or Law applicable to Seller Parent, any of its subsidiaries, any other member of the Seller Group, the Business, the Transferred Equity Interests or the Transferred Assets, other than, in the case of clauses (ii) and (iii) above, any such item that, individually or in the aggregate, has not had and would not reasonably be expected to have a Business Material Adverse Effect.

(b) No Governmental Approval of any Governmental Entity is required to be obtained or made by or with respect to Seller or any of its subsidiaries in connection with the execution, delivery and performance of any Transaction Document to which Seller or any other member of the Seller Group is a party or the consummation of the Transactions, other than (i) compliance with and filings and notifications under the HSR Act and any other Review Laws, (ii) compliance with and filings and notifications under the Power Act, or an order of the Power Act disclaiming jurisdiction over the Transactions, (iii) compliance with and filings and notifications under applicable Environmental Laws, (iv) those that may be required solely by reason of Purchaser’s (as opposed to any third party’s) participation in the Acquisition and the other Transactions, (v) compliance with and filings by Seller Parent with the SEC under the Exchange Act, (vi) compliance by Seller Parent with the rules and regulations of the NYSE, (vii) the Alberta Order and (viii) such other Governmental Approvals, registrations, declarations, filings or permits the failure to obtain or make that, individually or in the aggregate, have not had and would not reasonably be expected to have a Business Material Adverse Effect.

SECTION 4.04. SEC Documents; Financial Statements; Undisclosed Liabilities . (a) With respect to the Business only, Seller Parent has not filed any documents with the SEC since January 1, 2014 under Section 13(a) or 15(d) of the Exchange Act which, as of their respective dates (or, if amended or superseded by a filing prior to the date hereof, then on the date of such filing), contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

(b) Section 4.04(b) of the Seller Disclosure Letter sets forth (i) an audited balance sheet with respect to the Business at December 31, 2015 (together with the notes thereto,

the “ Balance Sheet ”) and the related audited statements of operations and cash flows for the year ended December 31, 2015 (together with the notes thereto and the Balance Sheet, the “ 2015 Business Financial Statements ”) and (ii) audited balance sheets with respect to the Business at December 31, 2014 and December 31, 2013 (together with the notes thereto, the “ 2014 and 2013 Balance Sheets ”) and the related audited statements of operations, business unit equity and cash flows for the years ended December 31, 2014 and December 31, 2013 (together with the notes thereto, the 2014 and 2013 Balance Sheets, and the 2015 Business Financial Statements, the “ Business Financial Statements ”). The Business Financial Statements (A) were prepared in accordance with the books of account and other financial records of Seller and its subsidiaries, (B) present fairly in all material respects the financial position of the Business and the results of its operations and changes in cash flows as of the dates thereof and for the periods covered thereby and, (C) were prepared in accordance with GAAP, in a manner and using accounting principles consistent with Seller’s historical financial statements (except as may be indicated in the notes thereto).

(c) Except as reflected or reserved against on the Balance Sheet, the Assumed Liabilities do not include any Liabilities of any nature other than Liabilities that (i) were incurred in the ordinary course of business in a manner consistent with past practice and not in violation of this Agreement or (ii) have not had and would not reasonably be expected to have a Business Material Adverse Effect.

(d) The Business has established and maintained a system of internal accounting controls sufficient to provide reasonable assurances that, in all material respects, (i) transactions are executed in accordance with management’s general or specific authorization, transactions are recorded as necessary (A) to permit the preparation of financial statements in conformity with GAAP and (B) to maintain accountability for items, (ii) access to assets is permitted in accordance with management’s general or specific authorization and (iii) recorded accountability for items is compared with actual levels at reasonable intervals and appropriate action is taken with respect to any differences.

SECTION 4.05. Absence of Certain Changes or Events . Except as specifically contemplated by this Agreement or the other Transaction Documents, from the date of the Balance Sheet to the date hereof, the Business has been conducted only in the ordinary course consistent with past practice, and there has not been any Effect that, individually or in the aggregate, has had or would reasonably be expected to have a Business Material Adverse Effect. Since the date of the Balance Sheet, there has not been any action or omission by Seller or any other member of the Seller Group that would, if taken during the period from the date hereof through the Closing Date, constitute a breach of paragraph (a), clause (ii) of paragraph (b), paragraph (c), paragraph (d), clauses (iii) and (iv) of paragraph (e), paragraph (f), paragraph (g), clause (ii) of paragraph (h), or any of paragraphs (i) through (o) of Section 5.01.

SECTION 4.06. Taxes . (a) With respect to the Transferred Assets or the Business, for all periods through and including the Closing Date, (i) Seller or any other member of the Seller Group has (A) duly and timely filed each Tax Return required to be filed (taking into account extensions) and all such Tax Returns were true, complete and correct in all material respects, (B) timely paid all material Taxes other than Taxes being contested in good faith and

which have been properly reserved for and (C) complied in all material respects with all legal requirements relating to the withholding and payment of Taxes, and (ii) no material Lien for Taxes exists due to a failure to pay any Tax and no outstanding claims for material Taxes have been asserted in writing.

(b) For all periods through and including the Closing Date, (i) each Tax Return required to be filed (taking into account extensions) by or on behalf of or including the Transferred Entity has been duly and timely filed, and all such Tax Returns were true, complete and correct in all material respects, (ii) all material Taxes owed by the Transferred Entity have been timely paid, other than Taxes being contested in good faith and which have been properly reserved for and (iii) the Transferred Entity has complied in all material respects with all legal requirements relating to the withholding and payment of Taxes.

(c) Neither the Transferred Entity nor Seller (with respect to the Transferred Assets or the Business) has participated in any (i) reportable transaction (as such term is defined in Treasury Regulation Section 1.6011-4) or (ii) transaction, understanding or arrangement that is the same as or substantially similar to any type of transaction that a Taxing Authority in any jurisdiction in which the Transferred Entity is subject to Tax has determined to be a “tax shelter” or “tax avoidance” transaction and identified as such by notice, regulation or other form of published guidance.

(d) No material Taxes with respect to the Transferred Assets, the Business or the Transferred Entity are currently under audit, examination or investigation by any Taxing Authority or the subject of any ongoing judicial or administrative proceeding, contest or litigation. No Taxing Authority has asserted or threatened in writing to assert any deficiency, claim or issue with respect to material Taxes or any adjustment to material Taxes with respect to the Transferred Assets, the Business or the Transferred Entity with respect to any taxable period for which the period of assessment or collection remains open, and no extension or waiver of any period of assessment or collection that remains open has been executed by or on behalf of the Transferred Entity. No adjustment that would materially increase the Tax liability of the Transferred Entity has been made in writing by a Taxing Authority during any audit of any taxable period which would reasonably be expected to be made in an audit of any subsequent Tax period. Neither Seller nor any other member of the Seller Group (with respect to the Transferred Assets, the Business or the Transferred Entity) has received or applied for a Tax ruling or entered into a closing agreement pursuant to Section 7121 of the Code (or any predecessor provision or any similar provision of state, local or non-U.S. Law), in either case that would be binding upon the Transferred Entity or with respect to the Transferred Assets after the Closing Date, other than, for the avoidance of doubt, the SEZ Permit.

(e) The Transferred Entity (i) is not, and has not been, a member of any affiliated, consolidated, combined or unitary group or other fiscal unity for purposes of filing Tax Returns or paying Taxes and (ii) does not have any liability for the Taxes of any Person (whether under Treasury Regulation Section 1.1502-6 or any similar provision of state, local or non-U.S. Law, as a transferee or successor, pursuant to any tax sharing or indemnity agreement or other contractual agreements, or otherwise). On or prior to the Closing Date, any (x) intercompany debt and (y) tax sharing or similar agreements or arrangements between the Transferred Entity,

on the one hand, and Seller or any of its affiliates, on the other hand (excluding, for the avoidance of doubt, this Agreement) will be terminated such that, after the Closing, the Transferred Entity shall not have any right, obligation or liability thereunder.

(f) To the knowledge of Seller, the Transferred Entity is not subject to net income taxation by a national jurisdiction other than the national jurisdiction in which it is organized. As of the date of the Agreement, the Transferred Entity has not received notice in writing of any claim made by a Taxing Authority in a jurisdiction where it does not file a Tax Return that it is or may be subject to taxation by such jurisdiction.

(g) To the knowledge of Seller, all interest paid or accrued on the Columbus Industrial Revenue Bonds for a Pre-Closing Tax Period is exempt from taxation for all U.S. federal income tax purposes.

(h) Schedule 4.06(h) of the Seller Disclosure Letter lists Contracts related to material Taxes pursuant to which a state or local tax abatement or other tax benefit has been granted to Seller (with respect to the Business or the Transferred Assets) or the Transferred Entity by any Governmental Entity in connection with the conduct or operation of the Business and that may transfer to the Purchaser.

(i) The Transferred Entity is not, and has never been, classified as a disregarded entity or partnership for U.S. federal income tax purposes.

(j) Canadian Seller is registered for GST purposes under Part IX of the Excise Tax Act (Canada) and its registration number is 103440624.

(k) Canadian Seller is not a non-resident of Canada for purposes of the Income Tax Act (Canada) and all Canadian Transferred Assets will be transferred to Purchaser or the applicable Purchaser Sub by Canadian Seller.

SECTION 4.07. Employee and Related Matters; ERISA .

(a) Section 4.07(a) of the Seller Disclosure Letter sets forth, as of the date of this Agreement, each material Business Benefit Plan and material Business Benefit Agreement, other than any material Business Benefit Plan or material Business Benefit Agreement mandated by applicable Law. Seller has delivered or made available to Purchaser true, complete and correct copies of the following with respect to each Business Benefit Plan and Business Benefit Agreement required to be listed in Section 4.07(a) of the Seller Disclosure Letter, if applicable: (A) a copy of the applicable Business Benefit Plan or Business Benefit Agreement (or, in the case of any such Business Benefit Plan or Business Benefit Agreement that is unwritten, a description of the material terms thereof); (B) all material related plan documents; (C) the most recent annual report on Form 5500 filed with respect to each such Business Benefit Plan, with all attachments required to have been filed with the IRS or the Department of Labor or any similar material reports filed with any comparable Governmental Entity in any non-U.S. jurisdiction having jurisdiction over any such Business Benefit Plan, and all schedules thereto; (D) the most recent summary plan description for each such Business Benefit Plan; (E) the most recent actuarial valuation report for each such Business Benefit Plan; (F) all material communications

received from or sent to the IRS, the Pension Benefit Guaranty Corporation, the Department of Labor or any other Governmental Entity, in the case of any Assumed Benefit Plan; and (G) all amendments and modifications to any such Business Benefit Plan or related document. To the knowledge of Seller, neither the Seller nor any of its subsidiaries has communicated to any Business Employee any intention or commitment to materially amend or modify any Assumed Benefit Plan or Assumed Benefit Agreement or to establish or implement any other material employee or retiree benefit or compensation plan or arrangement.

(b) Each Assumed Benefit Plan has been and is now administered in all material respects in accordance with its terms and is in compliance with all provisions of ERISA, the Code and all applicable Laws. As of the date of this Agreement, none of the Assumed Benefit Plans is intended to qualify under Section 401 of the Code or is subject to Title IV of ERISA. No member of the Seller Group contributes to or is obligated to contribute to, or within the three years preceding the date of this Agreement contributed to or was obligated to contribute to, any multiemployer plan, as defined in Section 3(37) of ERISA, on behalf of any Business Employee. With respect to Seller or any Person or entity that would be treated as a single employer with Seller for purposes of Section 414(b), (c), (m) or (o) of the Code, there does not exist, nor do any circumstances exist that would reasonably be expected to result in, any Controlled Group Liability that would result in any liability, at or after the Closing, to Purchaser or any entity that, together with Purchaser, is treated as a single employer under Section 414(b), (c), (m) or (o) of the Code. For purposes of this Agreement, “ Controlled Group Liability ” means any and all Liabilities (i) under Title IV of ERISA, other than for payments of premiums to the Pension Benefit Guaranty Corporation, (ii) under Section 302 or 4068(a) of ERISA, (iii) under Section 412(n) or 4971 of the Code and (iv) for violation of the continuation coverage requirements of Section 601 et seq . of ERISA and Section 4980B of the Code or the group health requirements of Sections 9801 et seq . of the Code and Sections 701 et seq . of ERISA. No event has occurred, and no condition or circumstance exists, that could reasonably be expected to subject Purchaser or any Assumed Benefit Plan that is a “group health plan” as defined in Section 733(a)(1) of ERISA to penalties or excise taxes under Sections 4980D, 4980H, or 49801 of the Code or any other provision of the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, or any amendments thereto or regulations and guidance issued thereunder.

(c) The execution and delivery of the Transaction Documents does not, and the consummation of the Transactions and compliance with the terms hereof and thereof will not (alone or in conjunction with any other event), (i) result in any material payment becoming due to any Business Employee under any Assumed Benefit Plan or Assumed Benefit Agreement, (ii) materially increase any benefits otherwise payable to any Business Employee under any Assumed Benefit Plan or Assumed Benefit Agreement, (iii) result in the acceleration of time of payment or vesting of any such benefits under any Assumed Benefit Plan or Assumed Benefit Agreement to any material extent, or (iv) limit the ability of Purchaser or its subsidiaries to amend, modify or terminate any Assumed Benefit Plan or Assumed Benefit Agreement.

(d) With respect to each Assumed Benefit Plan that is subject to Laws other than those of the United States (each, a “ Non-U.S. Assumed Benefit Plan ”), as of the date of this Agreement, each such Non-U.S. Assumed Benefit Plan (i) has been maintained, in all material

respects, in accordance with its terms and applicable legal requirements, (ii) if intended to qualify for special tax treatment, meets, in all material respects, the requirements for such treatment and (iii) if required to be funded and/or book reserved, is funded and/or book reserved, as appropriate, in accordance with applicable Law based on reasonable actuarial assumptions. No Non-U.S. Business Benefit Plan is a “multi-employer plan”, as defined in Section 1(1)(ii) of the Employment Pension Plans Act (Alberta). No Non-U.S. Business Benefit Plan that is an Assumed Benefit Plan is a “registered pension plan” (as defined under Section 248(1) of the Income Tax Act (Canada).

SECTION 4.08. Labor and Employment . (a) Section 4.08(a) of the Seller Disclosure Letter contains a list, as of the date of this Agreement, of each collective bargaining, works council or other labor union contract or arrangement that covers one or more Business Employees (each, a “ CBA ”).

(b) Except as set forth on Section 4.08(b) of the Seller Disclosure Letter, as of the date of this Agreement, there are no (i) strikes, work stoppages, lockouts or arbitrations pending or, to the knowledge of Seller, threatened against or involving Seller or its subsidiaries by any Business Employees or (ii) unfair labor practice charges, grievances or complaints pending, or to the knowledge of Seller, threatened against Seller or any of its subsidiaries by or on behalf of any Business Employee or group of Business Employees.

(c) With respect to the Business Employees, Assumed Benefit Agreements and Assumed Benefit Plans, Seller and its subsidiaries are, and have been since January 1, 2014, in compliance in all material respects with all applicable Laws and regulations, including labor, employment, fair employment practices, worker classification, wage and hour laws, terms and conditions of employment, workers’ compensation, occupational safety and health requirements, plant closings, wages and hours, withholding of taxes, employment discrimination, disability rights or benefits, equal opportunity, labor relations, employee leave issues and unemployment insurance and related matters. Except as disclosed in Section 4.08(c) of the Seller Disclosure Letter, and except, in the cases of clauses (ii) and (iii), for instances that, individually or in the aggregate, have not or would not reasonably be expected to result in material liability, neither the Seller nor any of its subsidiaries has received written notice of (i) any unfair labor practice charge or complaint against the Seller or any of its subsidiaries pending before the National Labor Relations Board or any other Governmental Entity on behalf of any Business Employee or group of Business Employees, (ii) any charge or complaint against the Seller or any of its subsidiaries concerning any Business Employees pending before the Equal Employment Opportunity Commission or any other Governmental Entity responsible for the prevention of unlawful employment practices or (iii) any complaint or lawsuit against the Seller or any of its subsidiaries concerning any Business Employee alleging employment discrimination or violations of occupational safety and health requirements pending before a court of competent jurisdiction.To the knowledge of Seller, all individuals who provide services to Seller or any of its Subsidiaries with respect to the Business have at all times been accurately classified by Seller or such subsidiaries with respect to such services as an employee or a non-employee. To the knowledge of Seller, all Business Employees have at all times been appropriately classified for purposes of the Fair Labor Standard Act of 1938, as amended.

SECTION 4.09. Litigation . Except as set forth in Section 4.09 of the Seller Disclosure Letter, there is no (a) Action pending or, to the knowledge of Seller, threatened by or against or affecting Seller or any other member of the Seller Group that relates to the Business, the Transferred Equity Interests or the Transferred Assets that is or is reasonably expected to be material to the Business or (b) Judgment outstanding against Seller or any other member of the Seller Group that relates to the Business, the Transferred Equity Interests or the Transferred Assets that either (i) is the subject of a default or (ii) is or is reasonably expected to be material to the Business. This Section 4.09 does not relate to environmental matters, which are the subject of Section 4.11.

SECTION 4.10. Compliance with Applicable Laws . With respect to the Business, the Transferred Equity Interests and the Transferred Assets, (i) Seller and all other members of the Seller Group are, and have been since January 1, 2014, in compliance with all applicable Laws, except for instances of non-compliance that, individually or in the aggregate, have not had and would not reasonably be expected to have a Business Material Adverse Effect and (ii) neither Seller nor any other member of the Seller Group has received any written communication since January 1, 2014 from a Governmental Entity that alleges that Seller or any other member of the Seller Group is not in compliance in any material respect with any applicable Law. This Section 4.10 does not relate to Tax matters, which are the subject of Section 4.06, or Environmental Laws, which are the subject of Section 4.11.

SECTION 4.11. Environmental Matters . (a) Except for those matters that, individually or in the aggregate, have not had and would not reasonably be expected to have a Business Material Adverse Effect:

(i) with respect to the Business, the Transferred Equity Interests and the Transferred Assets, Seller and its subsidiaries are, and have been since January 1, 2014, in compliance with all Environmental Laws;

(ii) since January 1, 2014, neither Seller nor any of its subsidiaries has received any written notice that alleges that the Business or any of the Transferred Assets is in violation of, or has liability under, any Environmental Law, which alleged violation or liability has not been materially resolved as of the date hereof;

(iii) (A) Seller and its subsidiaries have obtained and are in compliance with all permits, licenses and governmental authorizations pursuant to Environmental Laws (collectively, “ Environmental Permits ”) necessary for the operation of the Business as currently conducted and the use of the Transferred Assets as currently used, (B) all such Environmental Permits are valid and in good standing and (C) neither Seller nor any of its subsidiaries has been advised by any Governmental Entity of any actual or potential change in the status or terms and conditions of any such Environmental Permit;

(iv) as of the date of this Agreement, there are no Actions pursuant to any Environmental Law (“ Environmental Proceedings ”) pending or, to the knowledge of Seller, threatened that have been asserted against or affecting Seller or any of its subsidiaries relating to the Business or the Transferred Assets;

(v) as of the date of this Agreement, to the knowledge of Seller there have been no Releases of any Hazardous Material by the Business at, on, under or from the Transferred Real Property that have formed the basis of any pending Environmental Proceeding against Seller or any of its subsidiaries or that have formed the basis of any ongoing investigation or remediation pursuant to Environmental Laws by Seller or any of its subsidiaries; and

(vi) as of the date of this Agreement, neither Seller nor any of its subsidiaries has assumed, either contractually or by operation of Law, any liabilities or obligations that have formed the basis of any Action pursuant to any Environmental Law against Seller or any of its subsidiaries or that have formed the basis of any investigation or remediation pursuant to Environmental Laws by Seller or any of its subsidiaries, in each case relating to the Business or the Transferred Assets.

(b) Seller has provided Purchaser with copies of all Phase I environmental site assessments identified in Section 4.11(b) of the Seller Disclosure Letter and all other material environmental investigation reports and environmental risk assessments that, to the knowledge of Seller, are in its possession, relate to the Business or the Transferred Real Property and were conducted in the past three years, in each case except to the extent that any such assessments or reports are privileged.

(c) The representations and warranties in this Section 4.11 and Section 4.18 constitute the sole and exclusive representations and warranties of Seller with respect to environmental matters.

SECTION 4.12. Real Property . (a) Section 1.02(a)(i)(A) of the Seller Disclosure Letter lists all real property that is owned by Seller or any other member of the Seller Group and that is used or held for use primarily in the operation or conduct of the Business, together with the address by which it is commonly known or its tax block and lot number or other legal description (together with the interests of Seller or such other member of the Seller Group in any structures or improvements thereon and easements or other similar rights appurtenant thereto, the “ Owned Real Property ”).

(b) Other than a certain portion of the premises used or held for use in the operation of the Business under the WTC Lease, Section 1.02(a)(i)(B) of the Seller Disclosure Letter lists all real property in which Seller or any other member of the Seller Group holds leasehold or subleasehold interests and that is used or held for use primarily in the operation or conduct of the Business (the items so listed, together with the interests of Seller or such other member of the Seller Group in any structures or improvements thereon and easements or other similar rights appurtenant thereto, the “ Leased Real Property ”). Seller has made available to Purchaser a true and complete copy of each lease agreement under which the Leased Real Property is held. Each such lease agreement is in full force and effect, there is no default under any such lease agreement (other than the Material Lease) by Seller or any other member of the Seller Group or, to the knowledge of Seller, by any other party thereto that has had or would reasonably be expected to have a Business Material Adverse Effect and there is no material

default under the Material Lease by Seller or any other member of the Seller Group or, to the knowledge of Seller, any other party thereto.

(c) Except for those agreements of record or otherwise set forth in Section 1.02(a)(vii), 4.12(c) or 4.14 of the Seller Disclosure Letter, neither Seller nor any other member of the Seller Group has entered into a Material Third Party Lease. Seller has made available to Purchaser a true and complete copy of each Material Third Party Lease. Each such Material Third Party Lease is in full force and effect, and there is no default under any such lease agreement by Seller or any other member of the Seller Group or, to the knowledge of Seller, by any other party thereto that has had or would reasonably be expected to have a Business Material Adverse Effect.

(d) Seller or another applicable member of the Seller Group has (x) good and valid fee simple title to the Owned Real Property, (y) valid leasehold interests in the Leased Real Property and (z) good and valid title to all other Transferred Assets, in each case free of any Liens, except for (i) Liens consisting of zoning, building, land use or planning restrictions, permits, easements, rights of way, encroachments, covenants and other similar restrictions which do not materially impair the use of such property in the conduct or operation of the Business as presently conducted, (ii) Liens for current Taxes, assessments or governmental charges or levies on property not yet due and payable, or which are being contested in good faith, (iii) mechanics’, carriers’, workmen’s, materialmen’s, repairmen’s and similar Liens arising in the ordinary course of business or by operation of Law with respect to which any amount that is past due is not material, (iv) Liens which have been placed by any developer, landlord or other third party on any Leased Real Property and subordination or similar agreements relating thereto, (v) in the case of any Transferred Asset that represents the right to use property of a third party, Liens created by such third party or that encumber such third party’s interest in such property or created in the instrument establishing Seller’s right to use such property, (vi) Liens discharged at or prior to Closing, (vii) Liens, leases and other real estate instruments, agreements and reserved mineral rights set forth in Section 4.12 or 1.02(a)(vii) of the Seller Disclosure Letter, (viii) any existing oil, gas, other liquid or gaseous hydrocarbons and/or any other mineral or subsurface rights associated with the Owned Real Property that is not recorded with a member of the Seller Group, (ix) in respect of Intellectual Property Rights, non-exclusive licenses of Intellectual Property Rights granted in the ordinary course of business consistent with past practice and (x) other categories of non-monetary Liens not addressed above (including any conditions that may be shown by a current, accurate survey or physical inspection of an Owned Real Property, in either case performed prior to Closing) that would not, individually or in the aggregate, reasonably be expected to materially and adversely affect the use of such assets in conduct of the Business (clauses (i) through (x) collectively, the “ Permitted Liens ”). All monetary Liens that are not Permitted Liens affecting the Owned Real Property or the Leased Real Property will be discharged by Seller at or prior to Closing except those Liens (a) granted in connection with the Columbus Industrial Revenue Bonds or (b) recorded against the Owned Real Property located in Port Wentworth, Georgia in connection with a possible adverse judgment as a result of that certain complaint with respect to personal injuries designated in Section 4.12(d) of the Seller Disclosure Letter.

(e) Seller acknowledges that the Historic Remains have been discovered in an area that is part of the real property owned by the Transferred Entity and Seller hereby represents and warrants that all members of the Seller Group have been in compliance with all applicable Laws pertaining to the Historic Remains. No member of the Seller Group has received any written notice from a Governmental Entity that (i) alleges that any member of the Seller Group is in violation of any Laws applicable to the Historic Remains or (ii) indicates any intention to exercise any right of eminent domain, expropriation or right of purchase affecting the Transferred Poland Real Property due to the existence or treatment of the Historic Remains.

SECTION 4.13. Intellectual Property . (a) After giving effect to the Transactions contemplated in this Agreement (including the Intellectual Property License Agreement), Purchaser will have all of Seller’s rights, title and interest in the Transferred Intellectual Property. Seller is the sole and exclusive owner of, and has valid title to, the Transferred Intellectual Property, free and clear of all Liens other than Permitted Liens. Neither Seller nor any of its subsidiaries has granted an exclusive license to any Transferred Intellectual Property, and no license fees of any kind material to the Business are currently required to be paid by Seller to any Person in the conduct of the Business as currently conducted. Notwithstanding any other representations, Seller makes no representation with respect to whether patent applications listed in the Scheduled Intellectual Property will be issued by the applicable Governmental Entity or if issued, whether practicing any of the claims in any such patents infringes or will infringe any claims of any third party’s patents.

(b) Except for those matters that, individually or in the aggregate, have not had and would not reasonably be expected to have a Business Material Adverse Effect, as of the date of this Agreement, no claims are pending or, to the knowledge of Seller, threatened against Seller by any Person (i) claiming infringement or misappropriation of such Person’s Intellectual Property Rights in the conduct of the Business as currently conducted or (ii) challenging the validity, ownership, patentability, enforceability, registrability or use of any of the Transferred Intellectual Property. Except for those matters that, individually or in the aggregate, have not been and would not reasonably be expected to have a Business Material Adverse Effect, other than as set forth in Section 4.13(b) of the Seller Disclosure Letter, as of the date of this Agreement, to the knowledge of Seller, no Person is infringing or misappropriating the rights of Seller or any of its subsidiaries with respect to any Transferred Intellectual Property Rights.

(c) With respect to the Transferred Intellectual Property that is the subject of an application, registration or issuance as of the date hereof, all due and owed maintenance fees and renewal filings with respect to each registration, issuance and application have been paid or filed, as the case may be, except for failures to pay or file that, individually or in the aggregate, have not had and would not reasonably be expected to have a Business Material Adverse Effect.

(d) To the knowledge of Seller, none of the Transferred Intellectual Property that is material to the Business has been or is being used by Seller or any other member of the Seller Group in a manner that would reasonably be expected to result in the cancellation or unenforceability of such Transferred Intellectual Property.

SECTION 4.14 Material Agreements . (a) Section 1.02(a)(vii) of the Seller Disclosure Letter sets forth all the Business Material Agreements as of the date hereof, except for the Contracts set forth in Section 1.02(b)(xiii) of the Seller Disclosure Letter. For purposes of this Agreement, the term “ Business Material Agreements ” means any of the following Contracts to which Seller or any other member of the Seller Group is a party and that is used or held for use primarily in, or that arises primarily out of the operation or conduct of the Business:

(i) any written employment or severance or similar Contract with any Business Employee that has an aggregate future liability in excess of $500,000 per annum or any collective bargaining agreement or other Contract with any labor union;

(ii) any covenant not to compete or restricting the development, marketing or distribution of the products of the Business that materially limits the conduct of the Business as currently conducted, including any Contract that grants any exclusive rights to make, sell or distribute the Business’s products or services;

(iii) any Contract for the purchase or sale of materials, supplies, equipment, raw materials, packaging or commodities (other than spot purchase or sales orders for Inventory in the ordinary course of business) which has an aggregate future liability to any Person in excess of $5,000,000 and is not terminable by notice of not more than 90 days for a cost of less than $25,000;

(iv) any management, service, consulting or other similar Contract (other than Contracts for services in the ordinary course of business, including transportation and warehousing Contracts) which has an aggregate future liability to any Person in excess of $2,000,000 and is not terminable by notice of not more than 90 days for a cost of less than $25,000;

(v) any Contract under which Seller or any other member of the Seller Group has borrowed any money from, or issued any note, bond, debenture or other evidence of Indebtedness (other than accounts payable with respect to purchase Contracts and orders in the ordinary course of business) to, any Person (other than Seller or any of its subsidiaries) or any other note, bond, debenture or other evidence of Indebtedness (other than accounts payable with respect to purchase Contracts and orders in the ordinary course of business) of Seller or any of its subsidiaries (other than in favor of Seller or any of its subsidiaries) in any such case which, individually, is in excess of $1,000,000;

(vi) any Contract (including any “take-or-pay” or “keep well” agreement) under which (A) any Person (other than Seller or any of its subsidiaries) has directly or indirectly guaranteed Indebtedness, liabilities or obligations of Seller or any other member of the Seller Group or (B) Seller or any of its subsidiaries has directly or indirectly guaranteed Indebtedness, liabilities or obligations of any Person, other than Seller or any of its subsidiaries (in each case other than endorsements for the purpose of collection in the ordinary course of business), in any such case which, individually, is in excess of $1,000,000;

(vii) any Contract granting (i) a Lien upon any Owned Real Property, Leased Real Property, any other Transferred Asset or any of the Transferred Equity Interests, which Lien is not a Permitted Lien or (ii) an option, right of first offer, right of first refusal or other contractual right (including installment contracts) to purchase, dispose of, force the disposal of or lease (except for any rights to extend existing leases) any Owned Real Property or any portion thereof;

(viii) (A) any material Affiliate Agreement, other than (i) employee agreements, (ii) agreements for the purchase of logs, lumber, wood chips and wood fiber, (iii) agreements for services described in Section 1.02(b)(xvii) and (iv) agreements for site services at Grande Prairie and New Bern and (B) any Contract with any officer, director or employee of Seller or any of its affiliates (in each case, other than Contracts relating to or arising out of the employment of such officer, director or employee by Seller or such affiliate of Seller);

(ix) any lease, sublease or other similar Contract with any Person (other than Seller or any of its subsidiaries) under which Seller or any other member of the Seller Group is a lessor or sublessor of, or makes available for use to any Person (other than Seller or any of its subsidiaries) (A) (x) any Owned Real Property, (y) any Leased Real Property, or (z) any portion of any premises that Seller or any other member of the Seller Group is otherwise entitled to occupy, in each case that specifies annual payments in excess of $500,000 and is other than pursuant to this Agreement (each a “ Material Third Party Lease ”) or (B) any tangible personal property owned by Seller or any other member of the Seller Group that specifies annual payments in excess of $500,000;

(x) any lease or similar Contract with any Person (other than Seller or any other member of the Seller Group) under which Seller or any other member of the Seller Group is lessee of, or holds or uses, any machinery, equipment, vehicle or other tangible personal property owned by any Person, which lease or similar Contract has an aggregate future liability in excess of $500,000 and is not terminable by notice of not more than 90 days for a cost of less than $25,000;

(xi) any Contracts relating to the Transferred Vehicles and Forklifts;

(xii) any Contract with any Person (other than Seller or any other member of the Seller Group) that relates to the formation, creation, governance or control of any partnership, joint venture or similar arrangement that is material to the Business;

(xiii) any Contract with any Person (other than Seller or any other member of the Seller Group) providing for indemnification of any Person with respect to liabilities relating to the Business, the Transferred Equity Interests or the Transferred Assets, other than the constitutive documents of Seller any other member of the Seller Group, and marketing agreements, property leases and other commercial agreements entered into in the ordinary course of business;

(xiv) any Contract that requires Seller or any other member of the Seller Group to use any supplier or third party for all or substantially all of Seller’s or such member’s

requirements or needs or requires Seller or any other member of the Seller Group to provide to other parties “most favored nation” pricing;

(xv) any stock purchase agreement, asset purchase agreement or other acquisition or divestiture agreement, including, but not limited to, any agreement relating to the acquisition, sale, lease or disposal of any material asset constituting part of the Business or Transferred Assets (other than with respect to (A) sales of Inventory in the ordinary course of business consistent with past practice and (B) pursuant to the Accounts Receivable Programs) for aggregate consideration in excess of $500,000 and under which Seller or any other member of the Seller Group has any future liability for any continuing indemnity, “earn-out”, contingent purchase price, deferred purchase price or other obligations that could exceed $500,000;

(xvi) any Shared Contract;

(xvii) any Contract requiring any capital commitment or capital expenditure (including any series of related expenditures) by Seller or any of its affiliates of more than $1,000,000;

(xviii) any Contract by which any Person is granted a license other than in the ordinary course of business, or that settles or releases any material claims by or against Seller, with respect to any Transferred Intellectual Property, that is material to the Business or by which any Person grants to Seller or any of its subsidiaries Intellectual Property Rights that are material to the Business, but excluding all “shrink wrap” Software licenses, “commercially available off the shelf software packages” and “click through” SaaS agreements and Software licenses; or

(xix) any other Contract that has an aggregate future liability to any Person in excess of $10,000,000 and is not terminable by notice of not more than 90 days for a cost of less than $50,000, other than (i) purchase orders or sales orders entered into in the ordinary course of business consistent with past practice after the date hereof and not in violation of this Agreement and (ii) Contracts in respect of (A) Leased Real Property listed in Section 1.02(a)(i)(B) of the Seller Disclosure Letter or (B) licensed Transferred Intellectual Property listed in Section 1.01(a)(v) of the Seller Disclosure Letter.

(b) Each of the Business Material Agreements set forth or required to be set forth in Section 1.02(a)(vii) of the Seller Disclosure Letter or entered into after the date hereof in accordance with Section 5.01 is or will be valid, binding on Seller or another member of the Seller Group and in full force and effect (except to the extent any of them expires in accordance with its terms). Neither Seller nor any other member of the Seller Group, nor, to the knowledge of Seller, any other party to any Business Material Agreement, has violated any provisions of, or committed or failed to perform any act that, with or without notice, lapse of time, or both, would constitute a default under the provisions of any Business Material Agreement, except for violations or defaults that, individually or in the aggregate, have not had and would not reasonably be expected to have, a Business Material Adverse Effect. Neither Seller nor any of its affiliates has, within the past twelve months, provided or received written notice of any

intention of any party to terminate any Business Material Agreement. True and complete copies of each written Business Material Agreement (and a summary of each oral Business Material Agreement) (A) listed in Section 1.02(a)(vii) of the Seller Disclosure Letter (including all written modifications and amendments thereto and waivers thereunder) have been made available to Purchaser prior to the date hereof and (B) entered into after the date of this Agreement (including all written modification and amendments thereto and waivers thereunder) will have been made available to Purchaser prior to the Closing.

SECTION 4.15. Sufficiency of Assets . (a) The assets and properties of the Transferred Entity and the Transferred Assets, together with Purchaser’s rights under this Agreement and the Ancillary Agreements, constitute all the assets, properties and rights necessary and reasonably required to permit the Business to continue to be conducted immediately following the Closing in a manner that is generally consistent with the manner in which the Business was conducted during the period reflected in the 2015 Business Financial Statements (other than due to the absence of the rights and services listed on Section 4.15 of the Seller Disclosure Letter).

(b) The tangible assets and properties of the Transferred Entity and the Transferred Assets, taken as a whole, are in all material respects (i) adequate for the purposes for which such assets are currently used or held for use and (ii) in good repair and operating condition (subject to normal wear and tear).

SECTION 4.16. Permits . Seller and the other members of the Seller Group hold all Permits material to the operation of the Business as currently conducted and the use of the Transferred Assets as currently used. All such Permits are validly held by Seller or such member of the Seller Group and, during the three years immediately preceding the date of this Agreement, Seller and each other member of the Seller Group have complied in all material respects with the terms and conditions of each such Permit. During the twelve months immediately preceding the date of this Agreement, neither Seller nor any other member of the Seller Group has received written notice of any Action against Seller or any other member of the Seller Group seeking any revocation or material modification of any such Permits. All such material Permits that are held by Seller and the other members of the Seller Group as of the date of this Agreement are listed in Section 4.16 of the Seller Disclosure Letter.

SECTION 4.17. Insurance . Section 4.17 of the Seller Disclosure Letter contains a complete and correct list and summary description of all material insurance policies maintained by or with respect to the Business, the Transferred Entity or the Transferred Assets, including the Business Insurance Policies (if any) and the Seller Insurance Policies. The insurance policies set forth in Section 4.17 of the Seller Disclosure Letter are in full force and effect, all premiums due thereon have been paid and each of Seller and each other member of the Seller Group has complied in all material respects with the terms and provisions thereof.

SECTION 4.18. Asbestos . Neither Seller nor any other member of the Seller Group, nor, to the knowledge of Seller, any of its or their predecessors, has manufactured, produced or sold any products containing asbestos or asbestos-containing materials in connection with the operations of the Business or use of the Transferred Assets. There are no Actions

pending or, to the knowledge of Seller, threatened against Seller, any other member of the Seller Group or its or their predecessors in connection with, arising out of or relating to the alleged or actual presence or Release of, or exposure to, asbestos or asbestos-containing materials in any form in or at any of the Transferred Assets or in connection with the operations of the Business.

SECTION 4.19. Anti-Corruption . Since January 1, 2014, no member of the Seller Group nor any of their respective affiliates has committed any violation of any Law governing international business activities, including export control laws, trade and economic sanctions laws, U.S. anti-boycott provisions, the Foreign Corrupt Practices Act of 1977, as amended (the “ FCPA ”), including the rules and regulations promulgated thereunder, the Corruption of Foreign Public Officials Act (Canada), the UK Bribery Act 2010, or any similar Law which has as a purpose the prevention of bribery, money laundering or terrorist financing (including the criminal money laundering provisions set forth in Title 18 of the United States Code). To the knowledge of Seller, no member of the Seller Group nor any of their respective affiliates is currently or has since January 1, 2014 been the target or subject of any inquiry, investigation, settlement, plea agreement or enforcement action by a Governmental Entity involving an alleged or suspected violation of any Law governing international business activities, including export control laws, trade and economic sanctions laws, U.S. anti-boycott provisions, the FCPA, the UK Bribery Act 2010, the Corruption of Foreign Public Officials Act (Canada), or any similar Law which has as a purpose the prevention of bribery, money laundering or terrorist financing.

SECTION 4.20. Pre-Closing Capital Expenditures .

(a) Seller has made available to Purchaser the budget for the Port Wentworth Project (the “ Port Wentworth Budget ”), a copy of which is set forth on Section 4.20(a) of the Seller Disclosure Letter. The Port Wentworth Budget reflects Seller’s good faith and reasonable estimate, as of the date hereof, of the capital expenditure requirements for the Port Wentworth Project.

(b) Seller has made available to Purchaser a budget for the sustaining maintenance and repair capital expenditures of the Business from May 1, 2016 through and including December 31, 2017 (the “ Pre-Closing Maintenance CapEx Budget ”), a copy of which is set forth on Section 4.20(b) of the Seller Disclosure Letter. The Pre-Closing Maintenance CapEx Budget sets forth Seller’s good faith and reasonable estimates, as of the date hereof, of the expected sustaining maintenance and repair capital expenditures of the Business, on a monthly basis, during such period.

ARTICLE V

Covenants Relating to Conduct of Business

SECTION 5.01. Conduct of Business . Except for matters set forth in Section 5.01 of the Seller Disclosure Letter, otherwise expressly permitted by this Agreement and the other Transaction Documents, required by applicable Law or consented to in writing by Purchaser, from the date hereof to the Closing Date, Seller shall, and shall cause all other

members of the Seller Group to, conduct the Business in all material respects in the ordinary course of business in a manner consistent with past practice and, to the extent consistent therewith, use commercially reasonable efforts to preserve the current business organization of the Business, maintain the material rights, licenses (including with respect to Intellectual Property Rights), other agreements and permits of the Business, keep available the services of the Business Employees and preserve the material business relationships of the Business with Intellectual Property Rights licensors, customers, suppliers, distributors and others with whom the Business deals in the ordinary course of business. In addition, and without limiting the generality of the foregoing, except for matters set forth in Section 5.01 of the Seller Disclosure Letter, otherwise expressly permitted by this Agreement and the other Transaction Documents, required by applicable Law or consented to in writing by Purchaser, from the date hereof to the Closing Date, Seller shall not, and shall not permit any other member of the Seller Group to, do any of the following with respect to the Business, the Transferred Equity Interests or the Transferred Assets:

(a) acquire or agree to acquire, in a single transaction or a series of related transactions, whether by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, limited liability company, joint venture, association or other business organization or division thereof or any other Person, if any of the foregoing is material, individually or in the aggregate, to the Business (solely to the extent a substantial portion of the assets acquired constitutes Transferred Assets), except for capital expenditures and acquisitions of Inventory, in each case in the ordinary course of business consistent with past practice that result in the purchase of a substantial portion of the assets of such Person;

(b) (i) adopt, enter into, terminate, amend, extend or renew any CBA, Business Benefit Plan or Business Benefit Agreement, other than in the ordinary course of business consistent with past practice with respect to any Business Benefit Plan or Business Benefit Agreement in which both Business Employees and individuals other than Business Employees participate, and in a manner that does not disproportionately benefit the Business Employees, (ii) increase in any manner the compensation or benefits of, or pay any bonus to, any Business Employee, other than increases in base salary or wages or payments of bonuses in the ordinary course of business consistent with past practice, or (iii) accelerate the vesting or payment of, or fund or in any other way secure the payment of, any compensation or benefits under any Assumed Benefit Plan or Assumed Benefit Agreement, except, in each case, as required by applicable Law, as required pursuant to this Agreement, as required pursuant to the terms of any CBA, Business Benefit Plan or Business Benefit Agreement as in effect as of the date hereof or as would not result in Purchaser or its subsidiaries incurring any material Liabilities;

(c) make any material change in the Business’s financial accounting, principles and practices in effect on the date of the Balance Sheet, except insofar as may have been required by any applicable Law or a change in GAAP (solely to the extent such change would be binding on Purchaser);

(d) sell, transfer, lease (as lessor), license or otherwise dispose of or make subject to any Lien (other than Permitted Liens) (i) any equity interest that, if held on the Closing Date, would constitute an interest in the Transferred Entity or (ii) any asset that, if held on the Closing Date, would constitute a Transferred Asset (other than any Transferred Intellectual Property), except dispositions of inventory, obsolete assets or accounts receivable pursuant to the Accounts Receivable Programs, in each case, in the ordinary course of business consistent with past practice;

(e) (i) enter into or amend any lease (whether such lease is an operating or capital lease and including any Material Third Party Lease) other than (A) renewals of existing leases in the ordinary course of business consistent with past practice or in accordance with their terms, (B) leases entered into in the ordinary course of business consistent with past practice with annual lease payments not in excess of $500,000, or (C) leases or amendments entered into in the ordinary course of business consistent with past practice that, when aggregated with the other leases at the Transferred Real Property, do not materially impair the operation or conduct of the Business, (ii) enter into or amend any agreements (other than renewals of existing agreements in accordance with their terms) granting any oil, gas, other liquid or gaseous hydrocarbons and/or any other mineral/subsurface rights associated with the Owned Real Property, (iii) authorize or make any capital expenditure other than (A) Extraordinary Maintenance and Repair Expenditures, (B) for maintenance, repairs and replacements of less than $5,000,000 in the aggregate in any month, (C) in accordance with Section 6.18 and (D) for which Seller and its affiliates shall be solely obligated and which shall not constitute an Assumed Liability or Eligible Capital Expenditures or (iv) fail to make any Extraordinary Maintenance and Repair Expenditures consistent with past practice (and in any case in which there is no applicable past practice, as if Seller (x) had not entered into this Agreement and (y) intended to continue to own and operate the Business);

(f) waive or amend any confidentiality agreement between Seller or any other member of the Seller Group and any Person (other than Seller or any other member of the Seller Group) to the extent such waiver or amendment adversely affects the confidentiality of material information related to the Business;

(g) enter into any agreement or arrangement that would, after the Closing Date, limit or restrict Purchaser or its subsidiaries (including the Transferred Entity) from engaging in any business in any geographic area;

(h) (i) except in the ordinary course of business consistent with past practice, modify, amend, enter into or terminate any Business Material Agreement (other than any Affiliate Agreement), or (ii) waive, release or assign any material rights or claims of Seller or any other member of the Seller Group primarily relating to the Business, the Transferred Equity Interests or the Transferred Assets;

(i) settle any Action if such settlement would require any payment of an amount in excess of $200,000 individually or $500,000 in the aggregate by Purchaser or the Transferred Entity, or would obligate Purchaser or the Transferred Entity to take any material

action, or restrict Purchaser or the Transferred Entity in any material respect from taking any action, in each case at or after the Closing Date;

(j) with respect to the Transferred Entity, the Transferred Assets or the Business, make, change or revoke any material Tax election, change any Tax accounting period or method of Tax accounting, file any material amended Tax Return or claim for refund, enter into any material closing agreement, settle or compromise any audit, claim for refund or other proceeding relating to a material amount of Tax; provided , however , that each member of the Seller Group, other than the Transferred Entity, may amend its Tax Returns with respect to Income Taxes;

(k) (i) incur, assume or guarantee any Indebtedness other than short-term borrowings incurred in the ordinary course of business consistent with past practice and letters of credit and surety bonds issued in the ordinary course of business consistent with past practice or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than, in the case of this clause (ii), such items in an amount not to exceed $150,000 individually or $750,000 in the aggregate;

(l) consummate any “spin-off” of all or any portion of the Transferred Assets or the Transferred Entity;

(m) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization, or any other transaction that would preclude or be inconsistent in any material respect with, or hinder or delay in any material respect, the Transactions;

(n) amend the organizational documents of the Transferred Entity;

(o) issue, deliver, sell, grant, pledge or otherwise encumber any shares of capital stock or other equity interests, options, warrants, rights, convertible or exchangeable securities, “phantom” stock or other equity rights, stock or other equity appreciation rights, equity-based performance units or any other equity or equity-based interests in the Transferred Entity or make any changes (by merger, combination, reorganization or otherwise) in the capital structure of the Transferred Entity;

(p) transfer any assets or Liabilities between the Business, on the one hand, and the Seller Business, on the other hand, other than (i) any transfer of Excluded Assets or Retained Liabilities, (ii) any transfer of Inventory in the ordinary course of business consistent with past practice or (iii) any transfer of cash or cash equivalents; or

(q) authorize any of, or commit or agree to take any of, the foregoing actions.

SECTION 5.02. Notice of Changes . Between the date of this Agreement and the Closing, Seller shall (i) promptly advise Purchaser orally and in writing of any Effect that has had or would reasonably be expected to have a Business Material Adverse Effect, (ii) give prompt notice to Purchaser of any representation or warranty made by it contained in any Transaction Document that is qualified as to materiality or Material Adverse Effect

becoming untrue or inaccurate in any respect or any such representation or warranty that is not so qualified becoming untrue or inaccurate in any material respect, (iii) give prompt notice to Purchaser of the failure by it to comply with or satisfy in any material respect any covenant, condition or agreement to be complied with or satisfied by it under any Transaction Document and (iv) give prompt notice to Purchaser of the occurrence of (or, to the knowledge of Seller, the threat of) any material strike, slowdown, picketing, work stoppage, concerted refusal to work overtime or other similar labor activity with respect to any Business Employee; provided , however , that in any case, no such notification shall affect the representations, warranties, covenants or agreements of the parties or the conditions to the obligations of the parties under the Transaction Documents.

SECTION 5.03. No Control of Seller’s Business . Nothing contained in this Agreement is intended to give Purchaser, directly or indirectly, the right to control or direct the operations of the Seller Business or, prior to the Closing, the Business. Prior to the Closing, Seller shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its businesses and operations.

ARTICLE VI

Additional Agreements

SECTION 6.01. No Use of Certain Retained Names . Purchaser shall, and shall cause its affiliates (including, after the Closing, the Transferred Entity) to, promptly, and in any event within 60 days after the Closing Date, (a) make all necessary filings and take all other necessary actions to discontinue any references to the Retained Names, (b) revise print advertising, product labeling and all other information or other materials, including any Internet or other electronic communications vehicles, to delete all references to the Retained Names and (c) change signage and stationery and otherwise discontinue use of the Retained Names, except with respect to the Transferred Inventory. In no event shall Purchaser or any of its affiliates (including, after the Closing, the Transferred Entity) use any Retained Names more than 60 days after the Closing in any manner or after the Closing for any purpose different from the use of such Retained Names by any member of the Seller Group during the 90-day period preceding the Closing Date. With respect to the Transferred Inventory, Purchaser may continue to sell such inventory, notwithstanding that it or its labeling or packaging bears one or more of the Retained Names, for a period of time after the Closing not to exceed six months. None of the foregoing provisions of this Section 6.01 shall be construed to obligate Purchaser or any of its affiliates (including, after the Closing, the Transferred Entity) to require any wholesaler, retailer or other merchant or customer of the Business to conduct itself in accordance therewith. After the Closing Date, Purchaser and its affiliates (including, after the Closing, the Transferred Entity) shall file applications to amend or terminate any certificate of assumed name or d/b/a filings, within 30 days after Purchaser or any of its affiliates (including, after the Closing, the Transferred Entity) shall have become aware of such assumed name or d/b/a filing so as to eliminate the right of Purchaser and its affiliates (including, after the Closing, the Transferred Entity) to use the Retained Names in such assumed name or d/b/a filing.

SECTION 6.02. Access to Information; Confidentiality . (a) Until the Closing, upon reasonable written notice, and except in the case of an Action by Purchaser against Seller, Seller shall, and shall cause its subsidiaries to, with respect to the Business only and to the extent permitted by Law, afford to Purchaser and its Representatives reasonable access during normal business hours to all their properties, plants, books, systems, Contracts, commitments, personnel and Records relating to the Business (including (A) such access as is reasonably necessary for Purchaser to engage in timely and informed consultation with Seller with respect to the Port Wentworth Project and (B) financial Records, but excluding Tax Returns that are included in Section 1.02(b)(vii) (provided that work papers (or the relevant portions thereof) related thereto shall be made available to Purchaser upon its reasonable request) and Records that are included in Section 1.02(b)(viii)).

(b) From and after the Closing until the sixth anniversary of the date hereof, upon reasonable written notice, (i) Seller shall, and shall cause its subsidiaries to, the extent permitted by Law, afford Purchaser and its Representatives reasonable access during normal business hours to information relating to the Business, the Transferred Assets and the Assumed Liabilities for Tax, compliance, reporting or other reasonable business purposes and, during such period, Seller shall, and shall cause its subsidiaries to, furnish promptly to Purchaser, to the extent permitted by Law, all other information with respect to or concerning the Transactions as Purchaser may reasonably request and (ii) Purchaser shall, and shall cause its subsidiaries to, to the extent permitted by Law, afford Seller and its Representatives reasonable access during normal business hours to information relating to the Business, the Excluded Assets and the Retained Liabilities for Tax, compliance, reporting or other reasonable business purposes and, during such period, Purchaser shall, and shall cause its subsidiaries to, furnish promptly to Seller, to the extent permitted by Law, all other information with respect to or concerning the Transactions as Seller may reasonably request, in each case except in the case of an Action by one party against the other.

(c) Notwithstanding anything to the contrary in Section 6.02(a) or 6.02(b), any party may withhold (i) any documents (or portions thereof) or information that such party is obligated to keep confidential from the requesting party pursuant to the terms of a confidentiality agreement with a third party, (ii) any document (or portions thereof) or information which may constitute privileged attorney-client communications or attorney work product and the transfer of which, or the provision of access to which, as reasonably determined by such party’s counsel, constitutes a waiver of any such privilege (except that, after the Closing, Seller shall not withhold under this clause (ii) any such document or information relating to an Assumed Liability) and (iii) any document (or portions thereof) or information relating to pricing or other matters that are highly competitively sensitive if the exchange of such document (or portions thereof) or information, as reasonably determined by such party’s counsel, might reasonably result in a violation of antitrust Laws by such party or any of its affiliates. If any material is withheld by such party pursuant to the proviso to the preceding sentence, such party shall inform the other party as to the general nature of what is being withheld, and the parties shall use reasonable best efforts to obtain any consents necessary, or restructure the form of access, so as to permit the access requested. If so reasonably requested by Purchaser, Seller and Purchaser shall enter into a customary joint defense agreement with respect to the documents and information accessed pursuant to this Section 6.02. In respect of any request after the Closing

Date, the party requesting such access agrees to reimburse the other party promptly for all reasonable and necessary out-of-pocket costs and expenses incurred in connection with any such request; provided , however , that such other party shall first consult with the requesting party with respect to costs and expenses of third-party service providers that are expected to be incurred in connection with the request before incurring such costs and expenses and shall not, without the consent of the requesting party, incur such third-party service provider costs and expenses if it would not have incurred such costs and expenses in response to its own need for comparable information arising in its other businesses. Upon Purchaser’s execution of a work paper access letter in customary form, Purchaser shall be afforded reasonable access by Seller to all information used by Seller and the other members of the Seller Group in the preparation of the Business Financial Statements.

(d) After the Closing Date, except in the case of an Action by one party against another party, each party hereto shall use commercially reasonable efforts to make available to each other party, upon written request, the former, current and future directors, officers, employees and other Representatives of the Business as witnesses, to the extent that any such Person (giving consideration to business demands of such directors, officers, employees and other Representatives) may reasonably be required in connection with any Action in which the requesting party may from time to time be involved, regardless of whether such Action is a matter with respect to which indemnification may be sought hereunder. The requesting party shall bear all costs and expenses in connection therewith.

(e) After the Closing Date, Seller and Purchaser shall keep confidential, and shall cause their respective affiliates and instruct their respective Representatives to keep confidential, all confidential or non-public information received from the other party hereunder (including, in the case of Seller, the Purchaser Disclosure Letter) except as required by applicable Law or administrative process and except for information which is available to the public, other than as a result of a breach of this Section 6.02(e). Seller shall have the right to make and retain copies of all Transferred Assets that are the subject of Section 1.02(a)(xi) for Tax, compliance, reporting or other reasonable business purposes and, with respect to any such Transferred Assets that are confidential or non-public, Seller shall keep confidential any such copies in accordance with this Section 6.02(e). The covenant set forth in this Section 6.02(e) shall terminate three years after the Closing Date.

(f) Effective as of the Closing, information relating to the Business shall be deemed not to constitute Confidential Information (as defined in the Confidentiality Agreement) under the Confidentiality Agreement and Common Interest Information (as defined in the JDA) under the JDA, and information relating to the Seller Business shall remain Confidential Information (as defined in the Confidentiality Agreement) under the Confidentiality Agreement and information relating to the Purchaser and the Seller Business shall remain Common Interest Information (as defined in the JDA) under the JDA; provided , however , that if Purchaser has complied with its obligations under the last sentence of this Section 6.02(f), neither Purchaser nor any of its affiliates or Representatives (other than any Transferred Employee) shall have any liability for any unauthorized disclosure of information relating to the Seller Business by any Transferred Employee. Prior to the Closing, Seller shall, and shall cause its affiliates (including the Transferred Entity) to, take such steps as it may deem necessary to remove, erase, delete or

otherwise destroy all Seller information (whether in print, electronic or other forms) that does not constitute a Transferred Asset and that is in the possession of any Business Employee who will become a Transferred Employee after the Closing. After the Closing Date, Purchaser shall, and shall cause its affiliates (including the Transferred Entity) to, instruct all Transferred Employees to promptly remove, erase, delete or otherwise destroy all Seller information (whether in print, electronic or other forms) in the possession of any Transferred Employee that does not constitute a Transferred Asset.

(g) Subject to Section 6.02(f), all information provided to Purchaser pursuant to Section 6.02(a) shall be held by Purchaser as Confidential Information (as defined in the Confidentiality Agreement) and shall be subject to the Confidentiality Agreement.

(h) Except as set forth in Section 6.02(f), this Section 6.02 shall be without prejudice to the Common Interest, Confidentiality and Joint Defense Agreement (the “ JDA ”) entered into on behalf of the parties as of March 31, 2016, which agreement shall continue in full force and effect in accordance with its terms.

SECTION 6.03. Reasonable Best Efforts . (a) Subject to the terms and conditions set forth in this Agreement, and except as expressly provided in Section 6.04, each of the parties hereto shall use reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable to cause the Closing to occur in an expeditious manner, including using reasonable best efforts to (i) obtain all necessary or advisable actions or non-actions, waivers, consents and approvals from Governmental Entities and third parties, make all necessary or advisable registrations and filings (including filings with Governmental Entities, if any) and obtain an approval or waiver from, or avoid an action or proceeding by, any Governmental Entity or third party, (ii) obtain all necessary or advisable consents, approvals or waivers from third parties and (iii) defend against any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or any other Transaction Document or the consummation of the Transactions, including actions to have any stay or temporary restraining order entered by any court or other Governmental Entity vacated or reversed. Purchaser and Seller shall not, and shall not permit any of their respective affiliates to, make any acquisitions of any Person or business or acquire any equity interests or pulp mill (or like facility) that would reasonably be expected to result in any of the conditions set forth in Article VII not being satisfied.

(b) Except as expressly provided in Section 6.04(c) and (d), Seller and Purchaser shall use reasonable best efforts to have any restraint or prohibition of the type described in Section 7.01(b) or 7.01(e) terminated as promptly as practicable.

SECTION 6.04. Antitrust Notification and Other Regulatory Filings . (a) Each of Seller and Purchaser shall (i) file or cause to be filed as promptly as practicable, but in no event later than 15 Business Days following the execution and delivery of this Agreement (unless otherwise agreed by Seller and Purchaser), with the United States Federal Trade Commission (the “ FTC ”) and the United States Department of Justice (the “ DOJ ”) all notification and report forms that may be required, in the reasonable opinion of Purchaser, for the Transactions, (ii) file or cause to be filed as promptly as practicable filings that may be

necessary or advisable, in the reasonable opinion of Purchaser, with any other applicable Governmental Entities pursuant to any other Review Law and (iii) include in each such filing, notification and report form referred to in the immediately preceding clauses (i) and (ii) a request for early termination or acceleration of any applicable waiting or review periods, to the extent available under the applicable Review Laws. Any such filing, notification and report form and supplemental information shall be in substantial compliance with the applicable requirements of the HSR Act and other Review Laws. In addition, each of Seller and Purchaser shall file or cause to be filed as promptly as practicable, but in no event later than five Business Days following the execution and delivery of this Agreement, appropriate filings with the Federal Energy Regulatory Commission (the “ FERC ”) in connection with obtaining the FERC Approval, which filings shall be in substantial compliance with the applicable requirements of the Power Act. Each of Seller and Purchaser shall furnish to the other such necessary information and reasonable assistance as the other may reasonably request in connection with its preparation of any filing or submission that is necessary or advisable under the HSR Act and other Review Laws and the Power Act. Each of Seller and Purchaser shall keep each other apprised of the status of any communications with, and any inquiries or requests for additional information from, the FTC, the DOJ, the FERC and any other applicable Governmental Entity and shall comply with any such inquiry or request as promptly as practicable. The parties shall promptly furnish to each other complete copies of any written submissions to any Governmental Entity in connection with this Section 6.04, subject to any reasonable redactions to protect highly competitively sensitive or otherwise confidential information. Each party shall use its reasonable best efforts to obtain the FERC Approval, expiration or termination of any waiting periods under the HSR Act, and any clearances required or advisable under other Review Laws for the consummation of the Transactions as promptly as practicable.

(b) Seller and Purchaser shall use reasonable best efforts to cause the expiration or termination of the applicable waiting periods under the HSR Act and any other Review Law and the receipt of the FERC Approval as soon as practicable. Seller and Purchaser agree not to extend, directly or indirectly, any such waiting period or enter into any agreement with a Governmental Entity to delay or not to consummate the Transactions to be consummated on the Closing Date, except with the prior written consent of the other party (which consent shall not be unreasonably withheld, conditioned or delayed); provided , however , that Purchaser may, following consultation with Seller, elect to withdraw and re-file its HSR notification and report form once so long as Purchaser has a good faith basis to conclude that doing so is reasonably likely to prevent the issuance of a “second request” in connection with the HSR Act. Seller and Purchaser agree not to have any substantive contact with any Governmental Entity in respect of any filing or proceeding contemplated by this Section 6.04 unless it consults with the other party in advance and, to the extent permitted by such Governmental Entity, gives the other party the opportunity to participate. Seller shall not make any offer, acceptance or counter-offer to or otherwise engage in negotiations with any Governmental Entity with respect to any proposed settlement, consent decree, commitment or remedy, except as specifically agreed with Purchaser.

(c) If any Regulatory Legal Proceeding is instituted (or threatened to be instituted) challenging any of the Transactions, Seller and Purchaser shall use reasonable best efforts to contest such Regulatory Legal Proceeding until each such Regulatory Legal Proceeding is resolved pursuant to a settlement or a final nonappealable court order. Purchaser shall be

entitled, in consultation with Seller, to direct the defense with respect to any Regulatory Legal Proceeding. Nothing in this Agreement shall restrict Purchaser from opposing by refusing to consent to, through litigation or otherwise, any request, attempt or demand by any Governmental Entity or other person for any divestiture, hold separate condition, or any other conditions, restrictions or requirements with respect to the assets or business of Purchaser or any of its affiliates (including the Transferred Assets); provided that Purchaser shall be permitted to refuse to provide its consent to any divestiture described in the proviso in Section 6.04(d) (through litigation or otherwise) only so long as (i) doing so would not reasonably be expected to prevent the Closing from occurring by the Outside Date and (ii) Purchaser is not doing so merely to delay the Closing.

(d) Notwithstanding anything in this Agreement to the contrary, Purchaser shall not be required to do or agree to do any of the following: (i) agree to sell or otherwise dispose of, hold separate (through the establishment of a trust or otherwise), or divest all or any material portion of the business, assets or operations of Purchaser or any of its affiliates or the business, assets or operations to be acquired by Purchaser pursuant hereto, (ii) create, terminate, or divest any material relationships, ventures, contractual rights or obligations of Purchaser or its affiliates or material relationships, ventures, contractual rights or obligations to be acquired by Purchaser pursuant hereto, (iii) agree to or otherwise become subject to any material limitations on (A) the right of Purchaser to control or operate its business (including the business to be acquired by Purchaser pursuant hereto) or assets (including the Transferred Assets) or (B) the right of Purchaser to exercise full rights of ownership of its business (including the business to be acquired by Purchaser pursuant hereto) or assets (including the Transferred Assets) and (iv) propose, negotiate, commit to or agree to do or permit to be done any of the foregoing, in each case as may be required under or with respect to any Review Law or the Power Act in order to cause the conditions to Closing to be satisfied in a timely manner; provided , however , that Purchaser shall, if necessary to resolve any objections that a Governmental Entity may assert under any Review Law with respect to the Transactions, agree to divest up to two of the facilities described in Section 6.04(d) of the Purchaser Disclosure Letter. If, prior to the Closing, Purchaser agrees with any Governmental Entity as contemplated by the foregoing sentence to divest more than one such facility to a third party, the Purchase Price shall be reduced by $50,000,000. If the Purchase Price is so reduced and Purchaser is thereafter irrevocably released from such divestiture obligation with respect to, and permitted to retain, all but one such facility or all such facilities, Purchaser shall, within five Business Days of such release, pay to Seller in cash by wire transfer of same day funds $50,000,000, plus interest thereon at a rate of 5% per annum, calculated on the basis of the actual number of days elapsed divided by 365, from and including the Closing Date to but excluding the date of payment.

SECTION 6.05. Notices . Between the date of this Agreement and the Closing, Purchaser shall give prompt notice to Seller of (i) any representation or warranty made by it contained in any Transaction Document that is qualified as to materiality or Material Adverse Effect becoming untrue or inaccurate in any respect or any such representation or warranty that is not so qualified becoming untrue or inaccurate in any material respect or (ii) the failure by it to comply with or satisfy in any material respect any covenant, condition or agreement to be complied with or satisfied by it under any Transaction Document; provided , however , that in either case, no such notification shall affect the representations, warranties,

covenants or agreements of the parties or the conditions to the obligations of the parties under the Transaction Documents.

SECTION 6.06. Non-Solicitation . Seller shall not, and shall not authorize or permit any of its subsidiaries to, and shall use commercially reasonable efforts to cause their respective Representatives not to, directly or indirectly, (a) solicit, initiate or knowingly encourage, or take any other action to knowingly facilitate, the making of any Acquisition Proposal or (b) enter into, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any Person any confidential information with respect to, any Acquisition Proposal, except to notify any such Person of the existence of this Section 6.06.

SECTION 6.07. Employee Matters . (a) Employee List . Section 6.07(a) of the Seller Disclosure Letter sets forth a list of the Business Employees as of the date hereof (the “ Employee List ”), identified by Seller identification number (not by name), with (i) each Business Employee’s title, base salary, wage rate or annualized fixed or guaranteed remuneration, start date, target bonus, 2016 long-term incentive grant value, employment status (i.e., part-time or full-time, exempt or non-exempt), an indication of whether or not such Business Employee’s employment is governed by a CBA, whether the Business Employee is active, inactive or on leave of absence and total recognized service and (ii) each Canada Business Employee’s date of birth and work permit status and type, in each case, subject to Seller’s obligations under applicable data privacy Laws or any other obligations to maintain the confidentiality of such information under applicable Law. Seller shall deliver to Purchaser an update to the Employee List at a reasonable time prior to the Closing Date and such update shall also include each Business Employee’s accrued and earned vacation days or other annual leave.

(b) Continuation of Employment . (i) In the event the employment of a Business Employee does not automatically transfer to Purchaser or its subsidiaries on or after the Closing Date by operation of applicable Law (including through the Transferred Entity), then, no later than the earliest to occur of (A) in the case of each Switzerland Business Employee and each Hong Kong Business Employee, 30 days prior to the Closing Date, and in the case of each other Business Employee, 20 days prior to the Closing Date, (B) the date required by applicable Law, any Business Benefit Agreement or any applicable CBA, and (C) in the case of each Canada Business Employee, the date required to avoid the minimum severance benefits required by the Alberta Employment Standards Code, and in the case of all other Business Employees, the date required to avoid any Severance Obligations, Purchaser shall make offers of employment, effective as of 12:01 a.m. on the Closing Date (the “ Transfer Time ”), to each Business Employee. Offers pursuant to this Section 6.07(b) shall (1) be in a form reasonably acceptable to Seller, (2) comply with applicable Law, any applicable CBA and this Section 6.07 and (3) provide for terms and conditions of employment which, in the case of each Canada Business Employee, are sufficient to avoid all Severance Obligations other than the minimum severance benefits required by the Alberta Employment Standards Code, and in the case of all other Business Employees, are sufficient to avoid all Severance Obligations.

(ii) Without limiting the generality of the foregoing, subject to the terms of any applicable CBA and applicable Law, any U.S. Business Employee who accepts such offer of employment and is not actively at work on the Closing Date by reason of

disability leave or other extended leave protected by applicable Law shall become an employee of Purchaser or its subsidiaries only if such U.S. Business Employee returns from such leave within the twelve-month period immediately following the Closing Date (or any such longer period during which Seller or its subsidiaries, or Purchaser or its subsidiaries, are required by applicable Law to employ such U.S. Business Employee upon his or her return from such leave) and is able to perform substantially the same functions and responsibilities required of the position that such U.S. Business Employee held prior to such leave with such accommodations as may be required by applicable Law, in which case such U.S. Business Employee shall commence employment with Purchaser as of the date such U.S. Business Employee returns from such leave and can perform such functions and responsibilities, rather than the Closing Date (all references in this Agreement to the Transfer Time with respect to any such Business Employee shall be construed as references to the time, if any, such U.S. Business Employee commences active employment with Purchaser or its subsidiaries). Any Non-U.S. Business Employee who accepts such offer of employment and is not actively at work on the Closing Date by reason of disability leave or other extended leave protected by applicable Law shall nonetheless become an employee of Purchaser or its subsidiaries on the Closing Date.

(iii) In the event the employment of a Business Employee can transfer automatically to Purchaser or its subsidiaries upon the Closing Date or later by operation of applicable Law (including through the Transferred Entity), Seller and Purchaser shall, and shall cause their respective subsidiaries to, take all actions under applicable Law and all other actions as are necessary or appropriate such that the employment of such Business Employee will transfer to Purchaser or its subsidiaries automatically as of the Transfer Time or such later time. Transfers of employment pursuant to this Section 6.07(b)(iii) shall comply with applicable Law, any applicable CBA and this Section 6.07.

(iv) Effective as of the applicable Transfer Time, each Transferred Employee shall cease to be eligible to accrue benefits under any Business Benefit Plan (other than any Business Benefit Plan maintained by the Transferred Entity).

(v) Nothing herein shall be construed as a representation or guarantee by Seller or any other member of the Seller Group that any particular Business Employee or Business Employees will accept the offer of employment from Purchaser or will continue in employment with Purchaser following the Transfer Time.

(vi) For the avoidance of doubt, Seller shall retain all Liabilities in respect of any individuals who had been employees of the Business, but who ceased to be employed in the Business prior to the date hereof, and all Business Employees who do not become Transferred Employees; provided that Purchaser shall be liable for any Severance Obligations that are allocated to Purchaser under Section 6.07(j).

(c) Prior Service Credit . From and after the applicable Transfer Time, Purchaser shall give or cause the appropriate subsidiary of Purchaser (including the Transferred Entity) to give to each Transferred Employee full credit for purposes of eligibility to participate,

vacation accrual and other paid time off, severance or separation entitlements (whether under a CBA, statute or common law), long-service pay and vesting under any employee benefit plan or arrangement provided, maintained or contributed to by Purchaser or any of its subsidiaries (including the Transferred Entity) for such Transferred Employee’s service with Seller and its subsidiaries, and with any predecessor employer, to the extent recognized by Seller and its subsidiaries and affiliates for such purposes immediately prior to the applicable Transfer Time, except to the extent such credit would result in the duplication of benefits for the same period of service. Purchaser shall be responsible for the provision of all such obligations arising in respect of services performed after the Closing. Notwithstanding the foregoing, Purchaser and its subsidiaries (including the Transferred Entity) shall not be required to provide credit for such service for benefit accrual purposes under any employee benefit plan or arrangement of Purchaser or its subsidiaries (including the Transferred Entity) that is a defined benefit pension plan, except (i) to the extent required under any applicable CBA or applicable Law or (ii) with respect to any Geneva Pension Plan that is sponsored by Weyerhaeuser International Inc. immediately prior to the Closing Date and is an Assumed Benefit Plan; provided that , in no event shall the Purchaser’s provision of such credit result in a duplication of benefits.

(d) Continuation of Compensation and Benefits . Without limiting the generality of Section 6.07(b), during the applicable Continuation Period Purchaser shall, and shall cause its subsidiaries (including the Transferred Entity) to, provide each Transferred Employee with his or her applicable Specified Compensation and Benefits.

(e) Assumption of Liabilities . Except as otherwise expressly provided in this Agreement or in Section 6.07(e) of the Seller Disclosure Letter, Seller shall remain solely responsible for all employment and employee benefit-related matters, obligations, liabilities and commitments with respect to all Transferred Employees and their dependents and beneficiaries (regardless of when or where such matters, obligations, liabilities and commitments arose or arise or were or are incurred) under or with respect to any Business Benefit Plan or Business Benefit Agreement other than any Assumed Benefit Plan or Assumed Benefit Agreement, including any required notice of termination, termination or severance pay (contractual, statutory or at common law) arising under circumstances other than those described in Section 6.07(j), together with all wages, bonuses, vacations, vacation pay (including days in lieu), benefits, source deductions and other remuneration accrued prior to the Closing.

(f) Cash Bonus and Incentive Compensation Plans; Retention Arrangements . (i) Seller shall, or shall cause its subsidiaries to, pay each Transferred Employee as soon as practicable following the Closing, but in any event no later than the times required under each such plan or arrangement, an amount equal to the amount such Transferred Employee would have been eligible to receive under the terms of the bonus and incentive compensation plans or arrangements of Seller and its subsidiaries, other than those maintained by the Transferred Entity, for services rendered prior to the date that the employee becomes a Transferred Employee, calculated as if the Transferred Employee had been employed by the Seller on the last day of the year including the applicable Transfer Time and assuming achievement of applicable goals and conditions at target performance levels based on the assumption used to record accruals in the Business Financial Statements, multiplied by a fraction, the numerator of which

shall be the number of days which have elapsed in such year through the Transfer Time and the denominator of which is 365.

(ii) Effective as of the Closing Date, the Transferred Entity shall retain all liability for compensation payable to the Transferred Employees under each cash-based bonus or incentive compensation plan or arrangement maintained by the Transferred Entity, whether relating to performance periods elapsed prior to or following the applicable Transfer Time, and following the applicable Transfer Time at the times required under each such plan or arrangement, Purchaser shall, or shall cause its subsidiaries (including the Transferred Entity) to, make any and all payments to the Transferred Employees required in accordance with the terms of such plans or arrangements with respect to such performance periods, in each case, in an amount no less than the amount each Transferred Employee would have been eligible to receive for the applicable performance period had such Transferred Employee remained an employee of Seller or its subsidiaries through the requisite date (or, in the case of any such Transferred Employee whose employment terminates following the Transfer Time and prior to such requisite date under circumstances entitling such Transferred Employee to a prorated payment under such plan or arrangement, through the date of such termination), based on actual achievement of applicable performance goals.

(iii) For the avoidance of doubt, Seller shall, or shall cause its subsidiaries to, retain all liability, without limitation, for retention arrangements including the retention letter agreements set forth in Section 6.07(f)(iii) of the Seller Disclosure Letter and comply with each such arrangement pursuant to its terms as in effect as of the Closing Date. The Liabilities described in the immediately preceding sentence shall be Retained Liabilities.

(g) Certain Welfare Benefits Matters . (i) Effective as of immediately following the Closing and applicable to claims incurred with respect to any Transferred Employee (or any dependent or beneficiary thereof) after the applicable Transfer Time, Purchaser shall, and shall cause its subsidiaries (including the Transferred Entity) to, have in effect for the benefit of the Transferred Employees employee welfare benefit plans, programs and arrangements providing access to medical, dental, health, non-occupational short-term disability and long-term disability benefits and any other employee welfare benefit plans, programs and arrangements required by applicable Law, but (without limiting the generality of Sections 6.07(b) or 6.07(d)) expressly excluding any retiree medical benefits (collectively, the “ Purchaser Welfare Plans ”). Purchaser shall, and shall cause its subsidiaries (including the Transferred Entity (A) waive all limitations as to pre-existing conditions, exclusions and waiting periods and actively-at-work requirements with respect to participation and coverage requirements applicable to the Transferred Employees and their dependents and beneficiaries under the Purchaser Welfare Plans, to the extent waived under the applicable corresponding Business Benefit Plan immediately prior to the applicable Transfer Time, and (B) provide each Transferred Employee and his or her eligible dependents and beneficiaries with credit under the terms of the Purchaser Welfare Plans for any co-payments and deductibles paid under the applicable corresponding Business Benefit Plans prior to the applicable Transfer Time in the calendar year in which the applicable Transfer Time occurs for purposes of satisfying any

applicable deductible or out-of-pocket requirements (and any annual and lifetime maximums) under any Purchaser Welfare Plan in which such Transferred Employee participates.

(ii) From and after the Closing Date, Purchaser shall assume all Liabilities of Seller and its subsidiaries (including the Transferred Entity) to the Transferred Employees (and their eligible dependents and beneficiaries) in respect of health insurance under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, the Health Insurance Portability and Accountability Act of 1996, Sections 601 et seq . and Sections 701 et seq . of ERISA, Section 4980B and Sections 9801 et seq . of the Code and applicable state or similar Laws, which Liabilities shall be Assumed Liabilities.

(iii) From and after the applicable Transfer Time, Seller and its subsidiaries (other than the Transferred Entity) shall retain all Liabilities in accordance with the Business Benefit Plans for payment of all medical, dental, vision, health, non-occupational short-term disability benefit and long-term disability benefit claims (collectively, “ Welfare Benefit Claims ”) incurred under such plans prior to the applicable Transfer Time with respect to any Transferred Employee (or any dependent or beneficiary thereof), which Liabilities shall be Retained Liabilities, and Purchaser and its subsidiaries (including the Transferred Entity) shall not assume any Liability with respect to such Welfare Benefit Claims, except that such Liabilities shall be Assumed Liabilities, to the extent required by applicable Law or to the extent such Welfare Benefit Claims (A) are incurred under any Assumed Benefit Plan or (B) are insured under an insurance policy in respect of which (1) the Transferred Entity (or, as of the Closing, Purchaser or its subsidiaries) becomes the beneficiary or (2) a Transferred Employee (or any dependent or beneficiary thereof) is the beneficiary and such insurance policy transfers with such Transferred Employee pursuant to applicable Law to Purchaser and its subsidiaries (including the Transferred Entity) as of the Closing. For the purposes of this Section 6.07(g)(iii) and Section 6.07(g)(i), a claim shall be deemed to be incurred as follows: (i) life, accidental death and dismemberment, and business travel accident insurance benefits and long-term disability benefits, upon the death, disability or accident giving rise to such benefits, (ii) health, dental and prescription drug benefits (including in respect of any hospital confinement), upon provision of such services, materials or supplies, and (iii) non-occupational short-term disability benefits, upon the occurrence of the event giving rise to the claim for such benefit payment.

(iv) Seller shall, or shall cause its subsidiaries to, provide each Canada Business Employee and New Bern Business Employee who has satisfied the eligibility criteria to receive benefits under the post-retirement health and life insurance plans of Seller and its affiliates (other than the requirement to have terminated employment) (such plans, collectively, the “ Seller Retiree Welfare Plans ”) as of immediately prior to the applicable Transfer Time with welfare benefit coverage under the applicable Seller Retiree Welfare Plan from and after the applicable Transfer Time in accordance with the terms of the applicable Seller Retiree Welfare Plans.

(v) From and after the Closing Date, (A) all claims for workers’ compensation benefits for Business Employees that are incurred prior to the Closing Date (or prior to

the applicable Transfer Time, in the case of U.S. Inactive Employees) shall be covered under the workers’ compensation plans of Seller and its subsidiaries and (B) all claims for workers’ compensation benefits for Transferred Employees that are incurred on or following the Closing Date (or on or following the applicable Transfer Time, in the case of U.S. Inactive Employees) shall be covered under the workers’ compensation plans of Purchaser and its subsidiaries. A claim for workers’ compensation benefits shall be deemed to be incurred when the event giving rise to the claim (the “ Workers’ Compensation Event ”) occurs. If the Workers’ Compensation Event occurs over a period both preceding and following the Closing Date (or preceding and following the applicable Transfer Time, in the case of U.S. Inactive Employees), the claim shall be jointly covered under the workers’ compensation plans of Seller and its subsidiaries and the workers’ compensation plans of Purchaser and its subsidiaries, and shall be equitably apportioned among such plans based upon the relative periods of time that the Workers’ Compensation Event transpired preceding and following the Closing Date (or preceding and following the applicable Transfer Time, in the case of U.S. Inactive Employees).

(h) Tax-Qualified Savings/401(k) Plan/Seller’s Deferred Compensation Plan/Canada Registered Pension Plan .

(i) Without limiting the generality of Sections 6.07(b)(i)(3) and 6.07(d), effective no later than the Closing Date, Purchaser or its affiliates shall have in effect one or more defined contribution plans that include a qualified cash or deferred arrangement within the meaning of Section 401(k) of the Code (and a related trust exempt from tax under Section 501(a) of the Code) (collectively, the “ Purchaser 401(k) Plan ”). Each Transferred Employee participating in a Business Benefit Plan that is a defined contribution plan that includes a qualified cash or deferred arrangement within the meaning of Section 401(k) of the Code (the “ Business 401(k) Plan ”) as of immediately prior to the applicable Transfer Time shall be fully vested in his or her account balance under the Business 401(k) Plan. Each Transferred Employee participating in the Business 401(k) Plan immediately prior to the applicable Transfer Time shall become a participant in the Purchaser 401(k) Plan as of the applicable Transfer Time and each other Transferred Employee shall be eligible to participate in the Purchaser 401(k) Plan, subject to any applicable waiting period.

(ii) Purchaser shall cause the Purchaser 401(k) Plan to accept a “direct rollover” to such Purchaser 401(k) Plan of the account balances of each Transferred Employee (other than any portion thereof pertaining to an outstanding loan to the Transferred Employee) under the Business 401(k) Plan in which such Transferred Employee participates, if such direct rollover is elected in accordance with applicable Law by such Transferred Employee.

(iii) From and after the Closing Date, Seller and its subsidiaries shall retain all assets and Liabilities under Seller’s nonqualified deferred compensation plan maintained for the benefit of the Business Employees in the United States and such liabilities shall be Retained Liabilities.

(iv) Effective no later than the Closing Date, Purchaser or its affiliates shall have in effect a “registered pension plan” (within the meaning of Section 248(l) of the Income Tax Act (Canada)) that contains a “money purchase provision” (within the meaning of Section 147.1(1) of the Income Tax Act (Canada). Each Canada Business Employee who becomes a Transferred Employee and participates in a registered pension plan of Seller as of immediately prior to the applicable Transfer Time shall be offered enrollment in the money purchase provision of Purchaser’s corresponding registered pension plan in Canada as of the applicable Transfer Time.

(i) Accrued Vacation . Effective as of the applicable Transfer Time, to the extent permitted by applicable Law or the terms of any applicable CBA, Purchaser shall assume Liability for all vacation days or other annual leave (other than “banked” vacation days, as such term is used under Seller’s vacation policies) accrued or earned but not yet taken by each Transferred Employee as of the applicable Transfer Time, as determined pursuant to Seller’s policies and reflected on Seller’s books and records (the “ Accrued Vacation Days ”), which Liabilities shall be Assumed Liabilities. Seller shall pay each Transferred Employee, within 20 Business Days following the applicable Transfer Time, an amount equal to any “banked” vacation days standing to such Transferred Employee’s credit as of the applicable Transfer Time. In the event that any Transferred Employee is entitled under applicable Law or the terms of any applicable CBA to be paid for any Accrued Vacation Days on or after the applicable Transfer Time, (i) Purchaser or its applicable subsidiary or, solely to the extent required by applicable Law or the terms of any applicable CBA (as reasonable determined by Seller), Seller or its applicable subsidiary, shall pay any required amounts to such Transferred Employee, (ii) such amounts, whether or not paid by Seller or its applicable subsidiary, shall remain Assumed Liabilities and (iii) to the extent any such amounts are paid by Seller or its subsidiaries, Seller or the applicable subsidiary shall be entitled to indemnification pursuant to Section 10.02 with respect thereto. From and after the applicable Transfer Time, Purchaser shall, and shall cause its subsidiaries (including the Transferred Entity) to, honor all the Accrued Vacation Days for which payment is not made pursuant to the immediately preceding sentence. In the event that Purchaser is required by applicable Law or the terms of any applicable CBA to assume any “banked” vacation days standing to a Transferred Employee’s credit as of the applicable Transfer Time, Liability for such “banked” vacation days shall remain Retained Liabilities and Purchaser shall be entitled to indemnification pursuant to Section 10.02 with respect thereto.

(j) Severance . (i) The parties intend that Transferred Employees shall have continuous and uninterrupted employment immediately before and immediately after the applicable Transfer Time, and that, except as provided in Section 6.07(l) for purposes of any severance or termination benefit plan, program, policy, agreement or arrangement of Seller, Purchaser or any of their respective subsidiaries or affiliates, the Transactions shall not constitute a severance of employment of any Transferred Employee prior to or upon the consummation of the Transactions. Without limiting the generality of Sections 6.07(b)(i)(3) and 6.07(d), Purchaser shall, and shall cause its subsidiaries (including the Transferred Entity) to, provide each Transferred Employee whose employment is terminated by Purchaser or its subsidiaries (including the Transferred Entity) during the applicable Continuation Period with severance benefits that are no less favorable than the severance benefits that would have been provided to such Transferred Employee in the event of such a termination of employment under the

applicable CBA, Business Benefit Plan or Business Benefit Agreement as in effect with respect to such Transferred Employee as of immediately prior to the Closing Date, taking into account such Transferred Employee’s service with Seller and its subsidiaries (including the Transferred Entity) or with any predecessor employer and such Transferred Employee’s service with Purchaser and its subsidiaries (including the Transferred Entity).

(ii) Assumed Liabilities shall include any Liabilities that may result from claims made by any Business Employee for any Severance Obligations (A) directly resulting from any failure by Purchaser or its subsidiaries to comply with this Section 6.07 or (B) arising out of, relating to or in connection with (1) any failure by Purchaser or its subsidiaries to offer employment to such Business Employee, such Business Employee’s refusal to accept an offer of employment from Purchaser or its subsidiaries that fails to comply with this Section 6.07, or such Business Employee’s refusal to commence employment with or objection to the automatic transfer of employment to Purchaser and its subsidiaries under terms and conditions of employment that fail to comply with this Section 6.07, including in each case Seller’s termination of employment of any such Business Employee or (2) Purchaser’s or its subsidiary’s employment or termination of employment of any Transferred Employee on or following the applicable Transfer Time. In the event that, pursuant to applicable Law or applicable CBA, any action or omission by Purchaser or any of its subsidiaries at or after the Transfer Time to amend or otherwise modify any terms and conditions of a Transferred Employee's employment causes (x) the offer of employment to such Transferred Employee to not provide for the terms and conditions of employment required by Section 6.07(b)(i) or (y) the transfer of such Transferred Employee's employment to Purchaser to not have occurred automatically by operation of applicable Law or to otherwise not comply with Section 6.07(b)(iii), then, for purposes of this Section 6.07(j), any Liabilities that may result from claims made by such Transferred Employee for any Severance Obligations shall be deemed to directly result from a failure by Purchaser or its subsidiaries to comply with this Section 6.07, as described in Section 6.07(j)(ii)(A). In the event that any Business Employee does not become a Transferred Employee as a result of any of the circumstances described in Sections 6.07(j)(ii)(A) or 6.07(j)(ii)(B)(1) and Seller and its subsidiaries are not permitted at Applicable Law or an applicable CBA to terminate the employment of such Business Employee within the 90-day period following the Closing Date (or, in the case of any U.S. Inactive Employee, within the 90-day period after the employee returns to work) or following a legally or contractually mandated notice period thereafter, then an amount equal to the value of the Severance Obligations that such Business Employee (or U.S. Inactive Employee) would have received if Seller or its subsidiaries had been permitted to terminate his or her employment on the Closing Date shall be treated as an Assumed Liability and Seller shall be entitled to indemnification under Section 10.02 with respect thereto. Under no circumstances shall Purchaser bear any liability for severance payments or termination benefits with respect to (i) a Business Employee to whom an offer of employment that complies with the pertinent provisions of Section 6.07 is made but who declines to accept such offer or (ii) a Business Employee to whom an offer of employment that complies with the pertinent provisions of Section 6.07 is made and who accepts such offer but who, other than as a result of any action or omission by Purchaser or any of its subsidiaries described in this Section 6.07(j), is

nevertheless entitled to severance payments or termination benefits under an employee benefit plan of Seller or any of its affiliates.

(k) Seller Pension Plans . Except with respect to any Liabilities that transfer to Purchaser or its subsidiaries pursuant to applicable Law (including through the Transferred Entity), (i) from and after the Closing Date, Seller and its subsidiaries shall retain all assets and Liabilities under (A) Seller’s tax-qualified and nonqualified defined benefit pension plans maintained for the benefit of the Business Employees and (B) each “registered pension plan” (within the meaning of Section 248(l) of the Income Tax Act (Canada)) that is sponsored, administered or contributed to by the Seller or any of its subsidiaries, whether in respect of a “defined benefit provision” or a “money purchase provision” (as each is defined in Section 147.1(l) of the Income Tax Act (Canada)), which Liabilities shall be Retained Liabilities. In respect of the plans described in the foregoing clauses (A) and (B), Seller shall make payments to Transferred Employees with vested rights thereunder in accordance with the terms of the applicable plan and applicable Law, as in effect from time to time and, effective as of the applicable Transfer Time, each Transferred Employee shall cease active benefit accrual in such plans and service performed for, and compensation earned from, any employer other than Seller or its subsidiaries (or their predecessors, to the extent recognized under the applicable plan), shall not be taken into account for any purpose under the applicable plan. As of the applicable Transfer Time, each Transferred Employee who participates in a defined benefit pension plan shall be fully vested in his or her accrued benefits thereunder.

(l) Collectively Bargained Employees . (i) From and after the Closing Date, Purchaser shall, and shall cause its subsidiaries (including the Transferred Entity) to, comply with the terms of, and assume all Liabilities and obligations of Seller and its subsidiaries (including the Transferred Entity) with respect to, each CBA as in effect as of immediately prior to the Closing Date, and to comply with all applicable Laws with respect thereto, until such time as Purchaser or its subsidiaries (including the Transferred Entity) negotiate an alternative contract or bargaining agreement or agreements. Such Liabilities shall be Assumed Liabilities. Without limiting the generality of Sections 6.07(b)(iv), 6.07(c), 6.07(k) and 6.07(n) and this Section 6.07(l), until such time as Purchaser or its subsidiaries (including the Transferred Entity) negotiate an alternative contract or bargaining agreement or agreements: (A) Purchaser shall, and shall cause its subsidiaries to, comply with the terms of the CBA identified on Schedule 6.07(l) of the Seller Disclosure Letter as in effect as of immediately prior to the Closing Date with respect to all obligations to provide defined benefit pension benefits to the Transferred Employees covered by such CBA; (B) Purchaser shall, and shall cause its subsidiaries to, give credit to each Transferred Employee covered by such CBA for purposes of eligibility for early retirement reduction factors with respect to such defined benefit pension benefits for such Transferred Employee’s service with Seller and its subsidiaries, and with any predecessor employer, to the same extent recognized by Seller and its subsidiaries and affiliates immediately prior to the applicable Transfer Time; (C) each Transferred Employee covered by such CBA shall cease active benefit accrual in Seller’s tax-qualified defined benefit pension plan as of the applicable Transfer Time; and (D) Seller and its subsidiaries shall not give credit to any Transferred Employee covered by such CBA for any purpose under Seller’s tax-qualified defined benefit pension plan for such Transferred Employee’s service with Purchaser and its subsidiaries and affiliates or age attained following the applicable Transfer Time.

(ii) Purchaser agrees to recognize the unions set forth on Section 6.07(l) of the Seller Disclosure Letter as the sole and exclusive collective bargaining agents as of the Closing Date and immediately thereafter for the Transferred Employees represented by such unions as of immediately prior to the Closing Date.

(iii) Without limiting the generality of Section 6.07(e), Purchaser acknowledges and agrees that all grievances, references, arbitrations and unfair labor practice charges under any CBA that are made, filed, commenced or instituted before or after the Closing Date, including those based substantially on events or circumstances that occurred, existed or were initiated before the Closing Date, will be Assumed Liabilities.

(iv) Notwithstanding anything to the contrary in this Section 6.07, Purchaser further agrees that the provisions of this Section 6.07 shall be subject to any applicable provision of a CBA in respect of Transferred Employees, to the extent such provision of this Section 6.07 is inconsistent with or otherwise in conflict with the provisions of any such CBA.

(m) Flexible Spending Account Plans . From and after the Closing Date, for purposes of the account balances of the Seller flexible spending account plan maintained in the United States with respect to Transferred Employees and their dependents (the “ Seller Flexible Spending Account Plan ”), which Liabilities shall be Retained Liabilities, Seller shall treat Transferred Employees who made elections under the Seller Flexible Spending Account Plan for the plan year in which the Closing Date occurs as if they are terminated employees.

(n) No Benefit Plan Transfers . Notwithstanding anything herein to the contrary, other than (i) as required by applicable Law with respect to an Assumed Benefit Plan or Assumed Benefit Agreement or (ii) as a result of direct rollovers from the Seller 401(k) Plan to the Purchaser 401(k) Plan, there shall be no transfer of assets from any Business Benefit Plan to any employee benefit plan or arrangement maintained by Purchaser or its subsidiaries, except as otherwise may be agreed by and between both parties.

(o) WARN Act . Purchaser shall provide any required notice under the Worker Adjustment and Retraining Notification Act, as amended, and any similar Federal, state or local Law or regulation (collectively, the “ WARN Act ”), and to otherwise comply with the WARN Act with respect to any “plant closing” or “mass layoff” (as defined in the WARN Act) or group termination or similar event affecting Business Employees (including as a result of the consummation of the Transactions) and occurring on or after the Closing. Purchaser shall not, and shall cause its subsidiaries (including the Transferred Entity) not to, take any action after the Closing Date that would cause any termination of employment of any employees by Seller or its subsidiaries that occurs on or before the Closing Date to constitute a “plant closing” or “mass layoff” or group termination under the WARN Act or that would create any liability or penalty to Seller or its subsidiaries for any employment terminations under applicable Law, and Purchaser shall indemnify Seller and its subsidiaries against all Liabilities in respect of any claim brought as a result of any such action. Seller shall notify Purchaser prior to the Closing of any layoffs of any Business Employees in the 90-day period prior to the Closing.

(p) Work Permit; Consultation . In the event that any Transferred Employee requires a work permit or employment pass or other approval for his or her employment to continue with Purchaser or its subsidiaries (including the Transferred Entity) following the Closing, Purchaser shall use its best efforts to ensure that any necessary applications are promptly made and to secure the necessary permit, pass or other approval. Purchaser shall comply with all applicable Laws relating to notification of works councils, unions and relevant governmental bodies, and negotiations with works councils and/or unions in respect of the Transactions and shall bear all expenses of any compensation resulting from negotiations with works councils and/or unions.

(q) Employment Tax Reporting Responsibility . Purchaser and Seller hereby agree to follow the standard procedure for United States employment tax reporting as provided in Section 4 of Rev. Proc. 2004-53, 2004-2 C.B. 320. Accordingly, Seller shall have United States employment tax reporting responsibilities up to and including the Closing Date for Transferred Employees; and Purchaser shall have United States employment tax reporting responsibilities for Transferred Employees effective following the Closing Date.

(r) Transfer Regulations . To the extent applicable, the parties hereto acknowledge the application of the Transfer Regulations and acknowledge and agree that they shall, and shall cause their respective subsidiaries to, comply with the Transfer Regulations.

(s) Administration . Following the date hereof, the parties hereto shall reasonably cooperate in all matters reasonably necessary to effect the transactions contemplated by this Section 6.07, including exchanging information and data relating to workers’ compensation, employee benefits and employee benefit plan coverage (except to the extent prohibited by applicable Law), encouraging the Business Employees to accept Purchaser’s offers of employment made pursuant to Section 6.07(b), obtaining any Governmental Approvals required hereunder and obtaining the work permits or employment passes or other approvals and notifying and negotiating with works councils, unions and relevant governmental bodies as described in Section 6.07(p).

(t) No Third Party Beneficiaries . No provision of this Section 6.07 shall create any third party beneficiary rights in any current or former employee (including any beneficiary or dependent thereof) of Seller or its subsidiaries (including the Transferred Entity). Nothing herein shall (i) guarantee employment for any period of time or preclude the ability of Purchaser and its subsidiaries (including the Transferred Entity) to terminate the employment of any Transferred Employee at any time and for any reason, (ii) require Purchaser or its subsidiaries to continue any employee benefit plans or arrangements or prevent the amendment, modification or termination thereof after the Closing Date or (iii) amend any Business Benefit Plan or Business Benefit Agreement or other employee benefit plans or arrangements.

SECTION 6.08. Fees and Expenses . Except as otherwise expressly provided in any Transaction Document, all fees and expenses (including fees, commissions and expenses of financial institutions, brokers, investment bankers, financial advisors, legal counsel, auditors and title companies) incurred in connection with the Transactions shall be paid by the party incurring such fees or expenses. Notwithstanding the foregoing, Seller and Purchaser shall

share equally (i) any and all fees and out-of-pocket expenses (other than attorneys’ fees) that may be reasonably required in connection with obtaining, whether before or after the Closing, the consents referred to in Section 1.03(a), and (ii) the filing fees required under the HSR Act, Power Act and the other applicable Review Laws. This Section 6.08 does not relate to (i) Transfer Taxes, which are the subject of Section 9.02 and (ii) the fees and expenses allocated pursuant to Section 6.17.

SECTION 6.09. Public Announcements . Seller, on the one hand, and Purchaser, on the other hand, shall consult with each other and shall mutually agree upon any press release or other public statements with respect to the Transactions and shall not issue any such press release or make any such public statement prior to such consultation and agreement, other than any press release or other public statement that only contains information and statements that have been previously approved by the parties pursuant to this Section 6.09, except as may be required by applicable Law, court process or by obligations pursuant to any listing agreement with any U.S. national securities exchange, in which case the party proposing to issue such press release or make such public announcement shall use commercially reasonable efforts to consult in good faith with the other party before issuing any such press release or making any such public announcement and shall allow the other party reasonable time to comment on such release or announcement in advance of such issuance.

SECTION 6.10. Certain Agreements . (a) At the Closing, Seller and Purchaser (or a Purchaser Sub, as applicable) shall enter into an Intellectual Property License Agreement in substantially the form set forth in Exhibit A.

(b) At the Closing, Seller and Purchaser (or a Purchaser Sub, as applicable) shall enter into Site Services Agreements in substantially the form set forth in Exhibit B (subject to Section 6.17(c)(i)) providing for the goods and services described therein.

(c) At the Closing, Seller and Purchaser (or a Purchaser Sub, as applicable) shall enter into Supply Agreements in substantially the form set forth in Exhibit C providing for the supply of goods and services described therein.

(d) At the Closing, Seller and Purchaser (or a Purchaser Sub, as applicable) shall enter into a Sublease Agreement in substantially the form set forth in Exhibit D.

(e) As of the date hereof, Seller and a European Economic Area Purchaser Sub shall enter into a Data Processing Agreement in substantially the form set forth in Exhibit E.

(f) At the Closing, Seller and a European Economic Area Purchaser Sub shall enter into the Transferred Entity Share Purchase Agreement in substantially the form set forth in Exhibit F.

(g) Purchaser acknowledges that, as of the Closing, neither Seller nor any other member of the Seller Group shall have any obligation to provide any support or other goods or services to Purchaser or the Business other than those services expressly required to be provided pursuant to the Ancillary Agreements.

SECTION 6.11. Bulk Transfer Laws . Purchaser hereby waives compliance by Seller and any other member of the Seller Group with the provisions of any so called “bulk transfer laws” of any jurisdiction in connection with the Acquisition.

SECTION 6.12. Refunds and Remittances . After the Closing, if Seller or any of its affiliates receives any refund or other amount which is a Transferred Asset or is otherwise properly due and owing to Purchaser and the Purchaser Subs in accordance with the terms of this Agreement, Seller promptly shall remit, or shall cause to be remitted, such amount to Purchaser, or the relevant Purchaser Sub as designated by Purchaser, at the address set forth in Section 11.02. After the Closing, if Purchaser or any of its affiliates receives any refund or other amount which is an Excluded Asset or is otherwise properly due and owing to Seller or any of its affiliates in accordance with the terms of this Agreement, Purchaser promptly shall remit, or shall cause to be remitted, such amount to Seller at the address set forth in Section 11.02. After the Closing, if Purchaser or any of its affiliates receives any refund or other amount which is related to claims (including workers’ compensation), litigation or other matters for which Seller is responsible hereunder, and which amount is not a Transferred Asset, or is otherwise properly due and owing to Seller in accordance with the terms of this Agreement, Purchaser promptly shall remit, or cause to be remitted, such amount to Seller at the address set forth in Section 11.02. After the Closing, if Seller or any of its affiliates receives any refund or other amount which is related to claims (including workers’ compensation), litigation or other matters for which Purchaser is responsible hereunder, and which amount is not an Excluded Asset, or is otherwise properly due and owing to Purchaser and the Purchaser Subs in accordance with the terms of this Agreement, Seller promptly shall remit, or cause to be remitted, such amount to Purchaser, or the relevant Purchaser Sub as designated by Purchaser at the address set forth in Section 11.02.

SECTION 6.13. Leased Vehicles and Forklifts . The parties understand and agree that the vehicles and forklifts set forth on Section 6.13 of the Seller Disclosure Letter (as amended prior to the Closing in accordance with this Section 6.13) are part of Seller’s “lease pool” and are used on the Transferred Real Property or in connection with the ownership, operation or conduct of the Business (the “ Transferred Vehicles and Forklifts ”). The parties shall, and shall cause their respective subsidiaries to, use their commercially reasonable efforts to work together (and, if necessary and desirable, to work with the third party to any applicable Contract) in an effort to transfer the Transferred Vehicles and Forklifts to Purchaser’s “lease pool” and/or to Purchaser pursuant to arrangements between Purchaser and the applicable lessor, in each case, in a lawful, contractually permissible and commercially reasonable manner. If the parties or their respective affiliates are not able to enter into arrangements to transfer any of the Transferred Vehicles and Forklifts pursuant to the immediately preceding sentence prior to the Closing, the Closing shall, subject to Section 2.01 and the satisfaction of the conditions set forth in Article VII and unless this Agreement is terminated in accordance with Article VIII, nonetheless take place and Purchaser shall purchase such Transferred Vehicles and Forklifts from Seller at a price per item to be calculated in accordance with the applicable Contract pursuant to which Seller or the applicable member of the Seller Group leases such item, each of which is listed in Section 6.13 of the Seller Disclosure Letter (the sum of such per item prices, if any, the “ Lease Buyout Amount ”), which Lease Buyout Amount, if any, (i) shall be included in the Purchase Price as provided for in Section 1.01 and (ii) shall be delivered by Seller to the

applicable lessor of such Transferred Vehicles and Forklifts. Seller shall be permitted to update Section 6.13 of the Seller Disclosure Letter to reflect any changes to the Seller’s “lease pool” following the execution of this Agreement (to the extent such changes are permissible under Section 5.01), which updated Section 6.13 (x) shall be delivered to Purchaser at least ten business days prior to the Closing Date and (y) shall constitute Section 6.13 of the Seller Disclosure Letter for all purposes of this Agreement from and after the date of its delivery. At least ten Business Days prior to the Closing Date, Seller shall provide Purchaser with (1) its calculation, in reasonable detail, of the Lease Buyout Amount and (2) reasonable backup documentation. Notwithstanding anything in this Agreement to the contrary, in no event shall any Contract to which Seller or any other member of the Seller Group is a party or by which Seller or any other member of the Seller Group is bound and which provides for the lease of the Transferred Vehicles and Forklifts to Seller or such member of the Seller Group constitute a Shared Contract.

SECTION 6.14. Financial Information .

(a) Monthly Financial Information . Prior to the Closing, within 20 days after each calendar month, Seller shall deliver to Purchaser a complete and correct copy of the internal monthly reporting package for the Business for such month prepared in a manner consistent with the practices of the Business prior to the date hereof.

(b) Other Information . Until the second anniversary of the Closing Date, Seller shall, and shall cause each other member of the Seller Group and their respective officers, employees and advisers, to, provide to Purchaser, at Purchaser’s request, information reasonably required to satisfy Purchaser’s disclosure or reporting obligations under the Securities Act or Exchange Act, including such information and financial data relating to the Business as Purchaser shall reasonably request. Until the second anniversary of the Closing Date, upon Purchaser’s request, Seller shall request that the present and former independent accountants of Seller provide reasonable assistance to Purchaser to the extent necessary to satisfy such obligations, subject to Purchaser satisfying any requirements such independent accountants reasonably have in connection with the provision of such assistance.

SECTION 6.15. Seller’s Covenant Not to Solicit for Employment . For a period of two years from and after the Closing Date, Seller shall not, and shall cause its subsidiaries not to, solicit, recruit or hire any Transferred Employee; provided , however , that this Section 6.15 shall not apply to (a) solicitation in the form of a general advertisement or solicitation program that is not specifically targeted at such individuals, or any hiring as a result thereof, or (b) the employment of any Transferred Employee whose employment by the Business has been terminated at least 12 months prior to the date of hire by Seller.

SECTION 6.16. Insurance Matters. In the event that, prior to the Closing Date, any Transferred Asset that is covered under a third-party insurance policy maintained by Seller or under which Seller can make a claim (a “ Seller Insurance Policy ”) suffers any damage, destruction or other loss, Seller shall surrender to Purchaser after the Closing Date any insurance proceeds received by Seller under any Seller Insurance Policy with respect to such damage, destruction or loss, less any proceeds applied to the physical restoration of such asset or to

otherwise respond to such loss. Seller shall make available to Purchaser the rights and benefits of any Seller Insurance Policy covering the Business, including the Transferred Assets and Assumed Liabilities, with respect to insured events or occurrences prior to the Closing Date (whether or not claims relating to such events or occurrences are made prior to or after the Closing Date); provided , however , that the benefits of such insurance shall be subject to (and recovery thereon shall be reduced by the amount of) any applicable deductibles and co-payment provisions or any payment or reimbursement obligations of Seller in respect thereof. Seller shall use commercially reasonable efforts to pursue claims, or to assist Purchaser in pursuing claims, under the applicable Seller Insurance Policies with respect to any such injury, damage, destruction or other loss occurring prior to the Closing Date.

SECTION 6.17. Real Property Matters .

(a) Survey .

(i) Seller shall or shall cause a member of the Seller Group to, as soon as practicable, and in no event later than the Closing Date, deliver to Purchaser and the Title Company, (a) an ALTA survey of each Owned Real Property (including the Shared Facilities in New Bern, North Carolina, after taking into account the Subdivision, but excepting the Transferred Poland Real Property and the Owned Real Property in Canada), prepared in accordance with the “Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys” jointly established and adopted by ALTA and the National Society of Professional Surveyors, Inc. in 2016, or local equivalent thereof, (b) a land surveyor’s report for the Transferred Poland Real Property, and (c) an up-to-date real property report (the “ RPR ”) in respect of the Owned Real Property located in Canada, including the Shared Facilities in Grande Prairie, after taking into account the Subdivision (any of such surveys or reports, a “ Survey ”, and collectively, the “ Surveys ”). The Seller shall or shall cause a member of the Seller Group to submit the RPR to the applicable municipal authority for a certificate of compliance and shall provide a copy of such certificate to Purchaser and the Title Company upon issuance. If the applicable municipal authority refuses to issue a certificate of compliance in respect of the RPR prior to Closing, then the Seller shall or shall cause a member of the Seller Group to promptly commence and diligently prosecute until Closing an application or applications for any additional permits or relaxations as may be required for issuance of the certificate of compliance.

(ii) The cost of all Surveys shall be paid by Seller; provided, however, that any Table A items requested by Purchaser (in addition to Table A items listed in Schedule 6.17 of the Seller Disclosure Letter) will be at Purchaser’s sole cost and expense. None of the Surveys shall be deemed to be Asset Conveyance Documents or Ancillary Agreements for the purposes of this Agreement, and Purchaser hereby acknowledges that any Permitted Lien that may remain on any Title Policy as a result of any Survey as of the Closing Date shall not be deemed to be a failure of any condition set forth in Article VII.

(b) Liens . Subject to Section 4.12(d), Seller shall discharge and satisfy, at or prior to the Closing, at Seller’s sole cost and expense, all monetary Liens encumbering the Transferred Assets other than Permitted Liens and Liens created by Purchaser. With respect to any non-monetary Liens encumbering the Transferred Assets that are not Permitted Liens, Seller shall use commercially reasonable efforts to discharge and satisfy such Liens, at or prior to the Closing, at Seller’s sole cost and expense, and if Purchaser obtains a Title Policy for any Owned Real Property that is encumbered by any such Lien, such obligation may be satisfied by Seller causing the Title Company to omit any such Lien from the Title Policy, including through Seller’s payment of an escrow deposit or by Seller’s indemnification of the Title Company in respect of any such Lien.

(i) The parties acknowledge and agree that the Exhibit “A”s to the Site Services Agreements set forth an initial assessment representing the parties’ good faith estimates of the descriptions of the applicable site services. As soon as reasonably practicable after the date of this Agreement, but in any event prior to Closing, the parties will cooperate in good faith to define with greater specificity the services outlined on Exhibit “A”s to the Site Services Agreements and confirm the costs associated with such services.

(ii) All out-of-pocket costs and expenses incurred in connection with this Section 6.17(c) shall be shared equally by the parties. The parties shall cooperate to minimize all such costs and expenses.

(iii) Seller and Purchaser shall negotiate in good faith to, as promptly as practicable after the date of this Agreement, but in any event prior to Closing, agree on a sharing mechanism and finalize related documentation with respect to the real property located in Tokyo, Japan and used in the operation or conduct of the Business. In the event the parties cannot agree on a sharing mechanism and finalize related documentation with respect to the real property located in Tokyo, Japan by the Closing Date, upon Purchaser’s request, if permitted by applicable Law, Seller shall grant Purchaser a license to use the portion of such premises currently used in the operation or conduct of the Business on market terms.

(iv) The Parties acknowledge and agree that the Business includes only portions of the operations conducted at Seller’s facilities (the “ Shared Facilities ”) located in New Bern, North Carolina and Grande Prairie, Alberta, Canada. With respect to the Shared Facilities, Seller shall use commercially reasonable efforts to, by the Closing Date:

(A) secure any Governmental Approvals required for separation of the Business from the other operations conducted at these facilities, subject to such modifications as may be required or requested by Governmental Entities; and

(B) accomplish any formal subdivision of land on which the Shared Facilities are located (the “ Subdivision ”), in accordance with Governmental

Approvals, so as to be able to convey the fee interests in the subdivided portions that constitute Owned Real Property to Purchaser.

If any Subdivision has not occurred prior to the Closing Date, (i) the subject Owned Real Property as described in Section 1.02(a)(i)(A) shall continue to be deemed Transferred Real Property, and (ii) Seller or the applicable member of Seller Group shall, pursuant to an agreement in a form acceptable to both Seller and Purchaser, lease, license, or otherwise grant Purchaser the right to occupy the applicable portions of the Shared Facilities for which the Subdivision has not been accomplished (which agreement will be triple net, and rent will be $1/year) until the completion of such Subdivision. Once the Subdivision has been completed, Seller shall convey to Purchaser the portions of the Shared Facilities constituting Owned Real Property for no additional consideration beyond the Purchase Price (it being agreed that Seller and Purchaser shall pay their respective shares of any costs associated with obtaining endorsements and/or extended title coverage, recording costs and other transfer costs, including transfer taxes, as if such transfer occurred on the Closing Date).

(v) With respect to the logging truck staging area/lot that is used solely in the conduct of Seller Business but that is located on the Owned Real Property of the Shared Facilities in Grande Prairie, Seller and Purchaser shall negotiate in good faith, as promptly as practicable after the date of this Agreement but in any event prior to Closing, a mutually agreeable lease agreement. Purchaser shall lease such area/lot to Seller at no cost. The term of this lease agreement shall be five (5) years after the Closing Date, with Seller’s right to two (2) five (5) year extension options. This lease agreement shall be deemed an Ancillary Agreement to be entered into on the Closing Date.

(d) Surface Use Agreement . With respect to the Owned Real Property located at Columbus, Mississippi, Seller and Purchaser shall negotiate in good faith to, as promptly as practicable after the date of this Agreement, but in any event prior to Closing, a customary form of surface use agreement with respect to the exploitation of such interests by Seller (or its lessees or assigns) in a form reasonably approved by Seller and Purchaser.

(e) Seller represents that the (i) Lowndes County, Mississippi Solid Waste Disposal Variable-Rate Demand Refunding Revenue Bonds (Weyerhaeuser Company Project) Series 1989, and (ii) Lowndes County, Mississippi Solid Waste Disposal Variable-Rate Demand Refunding Revenue Bonds (Weyerhaeuser Company Project) Series 1999 have been terminated by their terms, prepaid, redeemed or defeased. Seller shall use reasonable best efforts to cause (A) the (i) Lease Agreement, dated December 1, 1989, between the Lowndes County, Mississippi, as lessor and Seller, as lessee, and (ii) Lease Agreement, dated November 1, 1999, between the Lowndes County, Mississippi, as lessor and Seller, as lessee, to be terminated, (B) the assets subject to such leases be conveyed back to Seller and (C) to be obtained a waiver of the right of first refusal pursuant to that certain Amended Restrictive and Protective Covenants for Golden Triangle Industrial Park dated October 21, 1999, or a letter confirming that such right of first refusal is non-applicable, from the Lowndes County Development Authority with respect to any unimproved property located within the industrial park of Golden Triangle Industrial Park, in each case, as promptly as practicable after the date of this Agreement, but in any event prior to Closing.

SECTION 6.18. Port Wentworth Project .

(a) Beginning promptly after the date hereof and until the Closing, Seller shall (i) use its reasonable best efforts to cause the construction of the Port Wentworth Project to proceed diligently on a timeline for achievement of Commercial Operation on or before the Project Completion Deadline, (ii) operate in all material respects within the Port Wentworth Budget (provided that the timing for expenditures may fluctuate from month to month in the ordinary course of the project), (iii) deliver to Purchaser materials describing the details of the actions and expenditures relating to the Port Wentworth Project as Purchaser may reasonably request (except in the case of an Action by Purchaser against Seller), (iv) keep Purchaser informed of the status of the Port Wentworth Project and any material developments with respect thereto, and (v) consult with Purchaser with respect to the Port Wentworth Project and consider in good faith any comments provided by Purchaser with respect thereto. Seller shall not take any action pursuant to this Section 6.18 that would reasonably be expected to have an adverse and material effect on the Port Wentworth Project, the Business or the Transferred Assets without Purchaser’s prior written consent.

(b) If Seller has not obtained any third party consent necessary to assign (or cause to be assigned) the Georgia Power Contract to Purchaser (or a Purchaser Sub) as of the date that is 18 months after the Closing Date and Seller has not provided or will not for any reason continue to provide Purchaser with the economic claims, rights and benefits of the Georgia Power Contract pursuant to Section 1.03(b), Seller shall, on such date, pay to Purchaser an amount in cash equal to $25,000,000, which amount shall constitute Purchaser’s sole remedy with respect to the failure to obtain such consent or provide such benefits; provided , however , that Seller shall have no obligation to make such payment if Seller has not been able to provide Purchaser with the economic claims, rights and benefits of the Georgia Power Contract pursuant to Section 1.03(b) or to obtain any necessary consents to assign (or cause to be assigned) the Georgia Power Contract to Purchaser (or a Purchaser Sub) under Section 1.03(c) because Purchaser has materially breached its obligations under Section 1.03 as it relates to the Georgia Power Contract and Purchaser fails to cure any such breach within 10 Business Days after receipt of written notice from Seller (with a description in reasonable detail of such breach).

SECTION 6.19. Replacement of Credit Support Obligations . (a) Purchaser recognizes that Seller and certain of its affiliates and third parties have provided credit support to the Business, the Transferred Assets or the Transferred Entity pursuant to the Credit Support Obligations set forth in Section 6.19 of the Seller Disclosure Letter. With respect to the Credit Support Obligations set forth in Section 6.19 of the Seller Disclosure Letter, on or prior to the Closing Date, Purchaser agrees to use commercially reasonable efforts to provide replacement guarantees, letters of credit, surety bonds or other assurances of payment, and Purchaser and Seller shall cooperate to obtain any necessary release effective as of the Closing in form and substance reasonably satisfactory to Purchaser and Seller with respect to all such Credit Support Obligations. If Purchaser has not obtained the complete and unconditional release of Seller and its affiliates from any Credit Support Obligation set forth in Section 6.19 of the Seller Disclosure Letter as of the Closing Date (each such Credit Support Obligation, until such time as such Credit Support Obligation is so released, a “ Seller Continuing Credit Support Obligation ”), then (i) Purchaser shall continue to use its commercially reasonable efforts to obtain promptly the

complete and unconditional release of Seller and its affiliates from each Seller Continuing Credit Support Obligation until such release is obtained and (ii) any demand or draw upon, or withdrawal from, any Seller Continuing Credit Support Obligation or any cash or other collateral required to be posted in connection with or in the place of any Seller Continuing Credit Support Obligation and the carrying costs of any cash collateral, the fronting fee costs, and any other out-of-pocket third party costs and expenses resulting from a Seller Continuing Credit Support Obligation (“ Assumed Credit Support Obligations ”), shall be Assumed Liabilities hereunder.

(b) With respect to any Credit Support Obligations pursuant to which the Business, the Transferred Assets or the Transferred Entity provide credit support to the Seller Business, on or prior to the Closing Date, Seller agrees to use commercially reasonable efforts to provide replacement guarantees, letters of credit, surety bonds or other assurances of payment, and Purchaser and Seller shall cooperate to obtain any necessary release effective as of the Closing in form and substance reasonably satisfactory to Purchaser and Seller with respect to all such Credit Support Obligations. If Seller has not obtained the complete and unconditional release of Purchaser, its affiliates, the Business, the Transferred Assets and the Transferred Entity, as applicable, from any such Credit Support Obligation as of the Closing Date (each such Credit Support Obligation, until such time as such Credit Support Obligation is so released, a “ Business Continuing Credit Support Obligation ”), then (i) Seller shall continue to use its commercially reasonable efforts to obtain promptly the complete and unconditional release of Purchaser, its affiliates, the Business, the Transferred Assets and the Transferred Entity, as applicable, from each Business Continuing Credit Support Obligation until such release is obtained and (ii) any demand or draw upon, or withdrawal from, any Business Continuing Credit Support Obligation or any cash or other collateral required to be posted in connection with or in the place of any Business Continuing Credit Support Obligation and the carrying costs of any cash collateral, the fronting fee costs, and any other out-of-pocket third party costs and expenses resulting from a Business Continuing Credit Support Obligation (“ Retained Credit Support Obligations ”), shall be Retained Liabilities hereunder.

SECTION 6.20. Transition Planning . Each of Purchaser and Seller shall cooperate with the other and use its reasonable best efforts to prepare, as promptly as practicable after the date hereof, for the separation of the Business from Seller and its affiliates on the Closing Date without the need for the provision of transition services by Seller. In the event that Purchaser reasonably determines that, notwithstanding compliance by each of Purchaser and Seller with the foregoing sentence, transition services from Seller to Purchaser in respect of the Business will be required in order to permit Purchaser to operate the Business on and after the Closing Date in all material respects as it is currently conducted, Seller and Purchaser shall negotiate in good faith and enter into at Closing a transition services agreement reasonably acceptable to each of them providing for such transition services (the “ Transition Services Agreement ”). Such determination by Purchaser shall be made no later than five days after the date on which Seller notifies Purchaser, in writing, that it reasonably believes that the Closing will take place 20 days after the date of such notice. The Transition Services Agreement, if any, shall (i) have a term of no more than one year, (ii) provide for pricing to be paid by Purchaser for services thereunder that is consistent with the cost for such services reflected on the 2015 Business Financial Statements, (iii) not require the provision of any services that have not historically been provided by Seller to the Business and (iv) not require the provision of services

that are not required to permit Purchaser to operate the Business on and after the Closing Date in all material respects as it is currently conducted.

SECTION 6.21. Further Assurances . From time to time, prior to and following the Closing, as and when requested by any party, each party shall execute and deliver, or cause to be executed and delivered, all such documents and instruments and shall take, or cause to be taken, all such further or other actions, as such other party may reasonably deem necessary or desirable to consummate the transactions contemplated by this Agreement and to effectuate and evidence the transfer of assets and Liabilities contemplated hereby, including, executing and delivering such assignments, deeds, bills of sale, consents and other instruments as the other party may reasonably request as necessary or desirable for such purpose.

SECTION 6.22. Termination of Affiliate Agreements . Prior to or effective as of the Closing, Seller shall terminate or cause to be terminated all Affiliate Agreements, except for any Affiliate Agreements listed on Section 6.22 of the Seller Disclosure Letter.

SECTION 6.23. Business NDAs . Prior to the Closing, Seller shall: (i) identify to Purchaser the number of Business NDAs that Seller has entered into; (ii) to the extent permitted by the applicable Business NDA, identify to Purchaser the names of the counterparties to each Business NDA; and (iii) to the extent permitted by the applicable Business NDA, provide a copy of each Business NDA to Purchaser. From and after the Closing until the third anniversary of the Closing Date, upon Purchaser’s reasonable request and at Purchaser’s sole cost and expense, Seller shall, with the cooperation of Purchaser, use reasonable best efforts to seek remedies on behalf of Purchaser under any Business NDA in response to any material breach of such Business NDA.

ARTICLE VII

Conditions Precedent

SECTION 7.01. Conditions to Each Party’s Obligation . The obligations of Purchaser and Seller to effect the Acquisition are subject to the satisfaction (or, to the extent permitted by Law, waiver by each of Purchaser and Seller) on or prior to the Closing Date of the following conditions:

(a) any waiting period (and any extension thereof) applicable to the Acquisition under the HSR Act shall have been terminated or shall have expired;

(b) no temporary restraining order, cease trading order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Acquisition shall have been issued under or with respect to any U.S. Review Law and remain in effect;

(c) any of the Governmental Approvals under other Review Laws listed in Section 7.01 of the Seller Disclosure Letter, the absence of which would constitute a violation of Law or prohibit the consummation of the Acquisition, shall have been obtained;

(d) the FERC Approval shall have been obtained and shall have become a Final Order; and

(e) no other temporary restraining order, cease trading order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition (other than as described in Section 7.01(b)) preventing the consummation of the Acquisition shall be in effect.

SECTION 7.02. Conditions to Obligations of Seller . The obligation of Seller to effect the Acquisition is further subject to the satisfaction (or, to the extent permitted by Law, waiver) on or prior to the Closing Date of the following conditions:

(a) (i) the representations and warranties of Purchaser set forth in Sections 3.01 and 3.02 shall be true and correct on and as of the Closing Date as though made on the Closing Date and (ii) all other representations and warranties of Purchaser set forth in this Agreement shall be true and correct, disregarding all qualifications or limitations as to “materiality”, “Purchaser Material Adverse Effect” and words of similar import set forth therein, on and as of the date hereof and the Closing Date as though made on the Closing Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct on and as of such earlier date), except, in the case of this clause (ii), for any failure to be true and correct that would not, individually or in the aggregate, reasonably be expected to have a Purchaser Material Adverse Effect;

(b) Purchaser shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing Date;

(d) Purchaser shall have executed and delivered to Seller each of the Ancillary Agreements to which Purchaser is a party.

SECTION 7.03. Conditions to Obligations of Purchaser . The obligation of Purchaser to effect the Acquisition is further subject to the satisfaction (or, to the extent permitted by Law, waiver) on or prior to the Closing Date of the following conditions:

(a) (i) the representations and warranties of Seller set forth in Sections 4.01 and 4.02 shall be true and correct on and as of the Closing Date as though made on the Closing Date, (ii) the representations and warranties of Seller set forth in Section 4.15(a) shall be true and correct on and as of the Closing Date as though made on the Closing Date in all material respects and (iii) all other representations and warranties of Seller set forth in this Agreement shall be true and correct, disregarding all qualifications or limitations as to “materiality”, “Business Material Adverse Effect” and words of similar import set forth therein, on and as of the date hereof and the Closing Date as though made on the Closing Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and

warranties shall be true and correct on and as of such earlier date), and except, in the case of this clause (iii), for any failure to be true and correct that would not, individually or in the aggregate, reasonably be expected to have a Business Material Adverse Effect;

(b) Seller shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing Date;

(c) Purchaser shall have received a certificate signed on behalf of Seller by an executive officer of Seller certifying the satisfaction by Seller of the conditions set forth in Sections 7.03(a), 7.03(b) and 7.03(d);

(d) since the date hereof, there shall not have been any Effect that, individually or in the aggregate, has had or would reasonably be expected to have a Business Material Adverse Effect;

(e) Seller shall have executed and delivered to Purchaser each of the Ancillary Agreements to which Seller is a party;

(f) the Alberta Order shall have been obtained (and be in full force and effect) and shall not include any conditions that, individually or in the aggregate, would reasonably be expected to have a material and adverse effect on Purchaser’s ability to operate the Business after Closing as it relates to the Canadian Transferred Assets constituting Owned Real Property in substantially the manner as it is currently operated ( provided , however , that in no event shall a condition requiring Purchaser to use such Owned Real Property substantially as it is currently used be deemed to cause such a material and adverse effect); and

(g) either (A) Purchaser and Seller shall have entered into the Transition Services Agreement or (B) Purchaser shall not have made a determination that a Transition Services Agreement is reasonably required in accordance with Section 6.20.

SECTION 7.04. Frustration of Closing Conditions . Neither Purchaser nor Seller may rely on the failure of any condition set forth in this Article VII to be satisfied if such failure was caused by such party’s failure to act in good faith or to use commercially reasonable efforts to cause the Closing to occur, as required by Sections 6.03 and 6.04.

ARTICLE VIII

Termination, Amendment and Waiver

SECTION 8.01. Termination . This Agreement may be terminated and the Acquisition and the other Transactions abandoned at any time prior to the Closing:

(a) by mutual written consent of Seller and Purchaser;

(b) by either Seller or Purchaser:

(i) if the Closing has not occurred on or prior to the date that is 12 months after the date hereof (the “ Outside Date ”), unless the failure to consummate the Acquisition is the result of a material breach of any Transaction Document by the party seeking to terminate this Agreement; provided , however , that either party may extend the Outside Date by three (3) months if, at the time of such extension, the only conditions in Article VII not capable of being satisfied are the conditions set forth in Section 7.01 and the extending party is not at such time in material breach of any of its obligations under this Agreement, including its obligations under Sections 6.03 and 6.04;

(iii) if any Governmental Entity shall have enacted a Law that prohibits or makes illegal the consummation of the Acquisition; or

(c) by Seller, if Purchaser breaches or fails to perform in any respect of any of its representations, warranties or covenants contained in any Transaction Document, which breach or failure to perform (i) would give rise to the failure of a condition set forth in Section 7.02(a) or 7.02(b) and (ii) cannot be or has not been cured within 30 days after the giving of written notice to Purchaser of such breach, unless Seller is then in material breach of any representation, warranty or covenant contained in any Transaction Document; or

(d) by Purchaser, if Seller breaches or fails to perform in any respect of any of its representations, warranties or covenants contained in any Transaction Document, which breach or failure to perform (i) would give rise to the failure of a condition set forth in Section 7.03(a) or 7.03(b) and (ii) cannot be or has not been cured within 30 days after the giving of written notice to Seller of such breach, unless Purchaser is then in material breach of any representation, warranty or covenant contained in any Transaction Document.

SECTION 8.02. Effect of Termination . If this Agreement is terminated and the Transactions are abandoned as described in Section 8.01, this Agreement shall become null and void and of no further force and effect, except for Sections 6.02(g) and 6.02(h), Section 6.08, 6.09, Section 6.17(a)(ii), Section 6.17(c)(ii), this Section 8.02 and Article XI. Notwithstanding the foregoing, a termination of this Agreement shall not relieve any party hereto from any liability or damages resulting from any breach by such party of any of its representations, warranties, covenants or agreements set forth in this Agreement or any other Transaction Document.

SECTION 8.03. Amendment . This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.

SECTION 8.04. Extension; Waiver . At any time prior to the Closing Date, the parties hereto may, to the extent permitted by Law, (a) extend the time for the performance of any of the obligations or other acts of the other parties, (b) waive any inaccuracies in the representations and warranties contained in this Agreement or in any document delivered

pursuant to this Agreement or (c) waive compliance with any of the agreements or conditions contained in this Agreement. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.

SECTION 8.05. Procedure for Termination, Amendment, Extension or Waiver . A termination of this Agreement pursuant to Section 8.01, an amendment of this Agreement pursuant to Section 8.03 or an extension or waiver pursuant to Section 8.04 shall, in order to be effective, require in the case of any of the parties hereto, action by its Board of Directors or the duly authorized designee of its Board of Directors.

ARTICLE IX

Tax Matters

SECTION 9.01. Purchase Price Allocations . (a) Allocation . Within 90 days following the date of this Agreement, Purchaser shall provide to Seller (and Seller shall cooperate with Purchaser and provide such information as is reasonably requested by Purchaser to enable Purchaser to provide to Seller) the fair market value of (i) the Transferred Equity Interests, (ii) the Canadian Transferred Assets and (iii) the Transferred Intellectual Property, and shall allocate an amount of the Purchase Price (and any other items required to be treated as purchase price for Tax purposes) to each of the Transferred Equity Interests, the Canadian Transferred Assets and the Transferred Intellectual Property in an amount equal to such fair market value, and Seller and Purchaser shall attempt to mutually agree to such allocations; provided , however , that if Seller and Purchaser are unable to agree on such allocation within 30 days following the date on which Purchaser provides the allocations to Seller, Seller and Purchaser shall mutually agree on an independent appraisal firm (the “ Appraisal Firm ”) to determine the fair market value of the Transferred Equity Interests, the Canadian Transferred Assets and the Transferred Intellectual Property. The opinion of the Appraisal Firm shall be rendered within 150 days following the date of this Agreement and shall be conclusive and binding on the parties, which shall allocate an amount of Purchase Price (and any other items required to be treated as purchase price for Tax purposes) to each of the Transferred Equity Interests, the Canadian Transferred Assets and the Transferred Intellectual Property in an amount equal to their fair market value as determined by the Appraisal Firm (such amounts as are agreed by the parties or determined by the Appraisal Firm, the “ Equity Allocation ,” the “ Canadian Allocation ,” and the “ Intellectual Property Allocation ” respectively). No later than 45 days prior to the Closing Date, Purchaser shall provide to Seller (and Seller shall cooperate with Purchaser and provide such information as is reasonably requested by Purchaser to enable Purchaser to provide to Seller) the fair market value of the Transferred Real Property. Seller shall have 10 days to review such allocation, and if Seller and Purchaser are unable to agree on such allocation, the fair market value of the Transferred Real Property shall be determined by the Appraisal Firm prior to the Closing Date (such amounts as are agreed by the parties or determined by the Appraisal Firm, the “ Real Property Allocation ,”). No later than 90 days prior to the due date (taking into account extensions) for the United States federal income Tax Return of Seller for the taxable period including the Closing Date (the “ Return Date ”), Purchaser shall propose an

allocation (the “ Asset Allocation ”, and together with the Equity Allocation, the “ Allocations ”) of the Purchase Price (and any other items required to be treated as purchase price for Tax purposes), among the Transferred Assets and the assets of the Transferred Entity that are treated as acquired pursuant to Section 9.07, taking into account the Equity Allocation, the Canadian Allocation, the Intellectual Property Allocation and the Real Property Allocation. Seller shall have 10 days to review such proposed allocation and if Seller does not inform Purchaser in writing of any dispute within such period, such proposed allocation shall be conclusive and binding on the parties. In the event there is a dispute and Seller and Purchaser are unable to resolve such dispute within 5 days, Seller and Purchaser shall refer such dispute to the Appraisal Firm, who shall only determine as to the matters in dispute. The conclusions of the Appraisal Firm shall be rendered no later than 10 days prior to the Return Date and shall be conclusive and binding on the parties. Seller and Purchaser shall adjust the Allocations from time to time as mutually agreed to reflect any adjustments to the Purchase Price hereunder (with any dispute to be resolved by the Appraisal Firm). All fees and expenses of the Appraisal Firm shall be shared equally by Seller and Purchaser. The Acknowledged Canadian Obligations are not included in the Assumed Liabilities for the purposes of this Section 9.01; however, the Acknowledged Canadian Obligations are recognized and accounted for in the Purchase Price.

(b) The allocation described in Section 9.01(a) must comply with the requirements of Section 1060 of the Code and Treasury Regulations thereunder and any applicable local Laws. Seller, on the one hand, and Purchaser, on the other hand, agree that they shall and shall cause their respective affiliates to (i) cooperate in good faith in preparing Internal Revenue Service Form 8594, (ii) furnish a copy of such Form 8594 to the other in draft form within a reasonable period of time prior to its filing due date, (iii) report the sale and purchase of the Transferred Equity Interests and the Transferred Assets for United States and all other applicable Tax purposes in accordance with such allocations and cooperate in complying with all Tax filings (including providing any supporting documentation in connection with such filings) required by the sale and purchase of the Transferred Assets and the Transferred Equity Interests under applicable Laws and (iv) not take any position inconsistent with such allocations on any of their respective Tax Returns, in any refund claim, in any litigation or otherwise. The parties shall promptly inform one another of any challenge with respect to such allocations by any Governmental Entity, and agree to consult and keep one another informed with respect to the status of, and any discussion, proposal or submission with respect to, such challenge.

SECTION 9.02. Transfer Taxes . (a) Subject to Section 9.02(b), Seller, on the one hand, and Purchaser, on the other hand, agree to share equally all Transfer Taxes applicable to the conveyance and transfer from Seller to Purchaser (and any Purchaser Sub) of the Transferred Assets (excluding Transfer Taxes relating to the transfer of the Transferred Entity). Seller and its affiliates, on the one hand, and Purchaser and its affiliates, on the other hand, shall cooperate in making all filings, returns, reports and forms, as and when required, to comply with the provisions of any applicable tax Laws. Purchaser shall prepare and file any filings in respect of Transfer Taxes resulting from the transfer of the Transferred Entity. Seller and Purchaser and their respective affiliates shall cooperate in minimizing any Transfer Taxes.

(b) Upon the Closing, Purchaser shall, or shall cause the applicable Purchaser Sub to, and Seller shall cause Canadian Seller to, execute jointly an election under 167 of the

Excise Tax Act (Canada) so that no GST will be payable in connection with the transfer of the Canadian Transferred Assets. Purchaser shall file such election no later than the filing date for its GST return for the reporting period in which the sale of the Canadian Transferred Assets takes place. Notwithstanding anything to the contrary in this Agreement, Purchaser shall indemnify and hold harmless each Seller Indemnitee in respect of any GST, penalties, interest, or other amounts which may be assessed against any such Seller Indemnitee as a result of the transactions hereunder not being eligible for such election or as a result of Purchaser’s failure to file the election within the prescribed time.

(c) If any payment made by Seller, Canadian Seller or Purchaser as the result of a breach, modification or termination of this Agreement, or of any Transaction Document, is deemed by the Excise Tax Act (Canada) to include GST, or is deemed by any applicable provincial or territorial legislation to include a similar value added or multi-staged Tax, the amount of such payment shall be increased by the rate of any such tax deemed to be included in the payment.

SECTION 9.03. Straddle Period . Any Taxes (other than Taxes described in Section 9.02) imposed with respect to a Straddle Period shall be allocated between the portion of the Straddle Period ending on the Closing Date and the portion beginning the day after the Closing Date in the following manner: (i) in the case of a real property, property, intangibles or other similar ad valorem Tax (collectively, “ Property Tax ”) for a Straddle Period, the amount of such Tax allocable to each portion of the Straddle Period shall be the total amount of such Tax for the period in question multiplied by a fraction, the numerator of which is the total number of days in such portion of such Straddle Period and the denominator of which is the total number of days in such Straddle Period, and (ii) in the case of all other Taxes for a Straddle Period, such Taxes shall be allocated to each portion of the Straddle Period based on an interim closing of the books at the close of business on the Closing Date. For the avoidance of doubt, solely for purposes of allocating any Property Tax paid or payable in connection with any of the Transferred Assets pursuant to clause (i), (x) the Straddle Period shall be the tax period of the Taxing Authority for which such Property Tax is assessed which includes the Closing Date, (y) such tax period shall begin on the date the Lien for such Property Tax attaches to the relevant property (the “ Lien Date ”) and shall end on the day before the next succeeding Lien Date for such Property Tax and (z) the date of adoption or effectiveness of any state or local budget shall not constitute or otherwise affect the Lien Date for any such Property Tax. Solely for purposes of calculating prorations pursuant to clause (i), Purchaser shall be deemed to be in title to the Transferred Assets, and therefore entitled to the income and responsible for the expenses, for the entire day of the Closing Date.

SECTION 9.04. Preparation of Tax Returns . (a) Seller Responsibility . Except as otherwise provided in Section 9.02(a) and Section 9.04(c), Seller shall make all determinations with respect to and shall file (A) any Seller Group U.S. federal consolidated Tax Returns for all taxable periods, (B) any consolidated, combined or unitary state Tax Return for all taxable periods that includes Seller or one or more members of the Seller Group, (C) all other Tax Returns of the Transferred Entity, or related to the Business or the Transferred Assets, for any period ending on or before the Closing Date, and (D) any property Tax Returns relating to personal property with Lien Dates that occur prior to the Closing, provided that any Tax Returns

described in clauses (C) and (D) shall be prepared in a manner not inconsistent with practices, accounting methods, elections and conventions used with respect to such Tax Returns for preceding Tax Periods.

(b) Purchaser Responsibility . Except as otherwise provided in Section 9.04(c), Purchaser shall make all determinations with respect to and shall file (A) all Tax Returns of the Transferred Entity for any Straddle Period and any Post-Closing Tax Period and (B) any property Tax Returns relating to personal property with Lien Dates that occur after the Closing.

(c) Straddle Periods . To the extent Purchaser has responsibility for preparing and filing a Straddle Period Tax Return, it shall prepare such Tax Return in a manner not inconsistent with practices, accounting methods, elections and conventions used with respect to such Tax Returns for preceding Tax periods. Purchaser shall use reasonable best efforts to make any Tax Returns and work papers in respect of a Straddle Period available for review by Seller sufficiently in advance of the due date for filing such Tax Returns to provide Seller with a meaningful opportunity to analyze, comment on and dispute such Tax Returns and for such Tax Returns to be modified, as reasonably requested by Seller before filing. In the event of any disagreement between Purchaser, on the one hand, and Seller, on the other hand, such disagreement shall be resolved by an accounting firm of international reputation mutually agreeable to Purchaser and Seller (the “ Tax Accountant ”), and any such determination by the Tax Accountant shall be final. The fees and expenses of the Tax Accountant shall be borne equally by Purchaser and Seller. If the Tax Accountant does not resolve any differences between Purchaser and Seller with respect to such Tax Return at least five days prior to the due date therefor, such Tax Return shall be filed as prepared by Purchaser and subsequently amended to reflect the Tax Accountant’s resolution.

SECTION 9.05. Tax Refunds . Seller and Purchaser shall be entitled to any refunds or credits relating to Taxes arising out of, relating to or in respect of the Transferred Assets or the Business as set forth in Article I. The amount or economic benefit of any refunds or credits of Taxes of the Transferred Entity, or of any affiliated, consolidated, combined or unitary group of which the Transferred Entity is or has been a member, for any Taxes for which Seller is responsible under Section 10.03(a) shall be for the account of Seller. The amount or economic benefit of any refunds or credits of Taxes of the Transferred Entity for any Taxes for which Purchaser is responsible under Section 10.03(b) shall be for the account of Purchaser.

(a) Each party shall forward, or cause to be forwarded, to the party entitled pursuant to this Section 9.05 to receive the amount or economic benefit of a refund or credit of Taxes the amount of such refund or credit within a reasonable amount of time after such refund is received or after such credit is allowed or applied against another Tax liability, as the case may be.

(b) If, subsequent to a Taxing Authority’s allowance of a refund or credit, such Taxing Authority reduces or eliminates such allowance, any refund or credit, plus any interest received thereon, forwarded or reimbursed under this Section 9.05 shall be returned to the party who had forwarded or reimbursed such refund or credit and interest, upon the request

of such forwarding party, in an amount equal to the applicable reduction, including any interest received thereon.

SECTION 9.06. Carryforwards and Carrybacks . To the extent permitted by Law, Purchaser shall elect to forego a carryback of any net operating losses, capital losses, credits or other Tax benefits to a taxable period, or any portion thereof, ending on or before the Closing Date.

SECTION 9.07. Section 338 Election . Seller consents to Purchaser’s timely election under Section 338 of the Code with respect to the Transferred Entity.

SECTION 9.08. Certificate of Non-Foreign Status . Seller and each affiliate that transfers assets to Purchaser and its affiliates on the Closing Date shall furnish to Purchaser on or prior to the Closing Date a certificate in form and substance reasonably satisfactory to Purchaser, duly executed and acknowledged, certifying such facts as would exempt the transactions contemplated hereby from withholding pursuant to Section 1445 of the Code and the Treasury Regulations thereunder.

SECTION 9.09. Research and Development . Purchaser and Seller agree that adjustments to research and development expenses for the purposes of determining Tax credits for research and development activities shall be governed by Section 41(f)(3) of the Code. Pursuant to Section 41(f)(3)(B) of the Code, Seller shall furnish the Purchaser information as is necessary for the application of Section 41(f)(3)(A) of the Code.

SECTION 9.10. Section 22 Election . Purchaser shall, and Seller shall cause Canadian Seller to, elect jointly in the prescribed form under section 22 of the Income Tax Act (Canada), and the corresponding provisions of any other applicable Tax Law as to the sale of the accounts receivable and designate in such election an amount equal to the portion of the Purchase Price allocated to the accounts receivable of the Business in Canada. This election, or these elections, shall be made within the time prescribed for such elections.

SECTION 9.11. Subsection 20(24) Election . Purchaser shall, and Seller shall cause Canadian Seller to, if applicable, jointly execute and file an election under subsection 20(24) of the Income Tax Act (Canada) in the manner required by subsection 20(25) of the Income Tax Act (Canada) and under the equivalent or corresponding provisions of any other applicable provincial or territorial Law, in the prescribed forms and within the time period permitted under the Income Tax Act (Canada) and under any other applicable provincial or territorial Law, as to such amount paid by Canadian Seller to Purchaser for assuming future obligations. In this regard, Purchaser and Canadian Seller acknowledge that a portion of the Canadian Transferred Assets transferred by Canadian Seller pursuant to this Agreement and having a value equal to the amount elected under subsection 20(24) of the Income Tax Act (Canada) and the equivalent provisions of any applicable provincial or territorial Law, is being transferred by Canadian Seller as a payment for the assumption of such future obligations by Purchaser.

SECTION 9.12. Tax-Deferred Exchange . Seller acknowledges the rights of Purchaser, at its option, to structure any portion of the transactions contemplated by this

Agreement so as to qualify as a tax-free exchange of like-kind property in compliance with the provisions of Section 1031 of the Code (“ Section 1031 ”). Seller agrees to use its commercially reasonable efforts, at Purchaser’s sole cost and expense, to reasonably cooperate to allow Purchaser to structure any portion of the transactions by this Agreement with respect to any of the Transferred Assets contemplated to effect a like-kind exchange in compliance with the provisions of Section 1031 and the Treasury Regulations promulgated thereunder; provided , however , that neither Seller nor any member of the Seller Group shall have any increased obligations beyond the terms of this Agreement. Accordingly, Purchaser may enter into a written exchange agreement or assignment agreement at any time prior to Closing with a “Qualified Intermediary” (as defined in Treasury Regulations Section 1.1031(k)-1(g)(4)(iii)) or an “Exchange Accommodation Titleholder” (as described in Revenue Procedure 2000-37) for the assignment of the rights of Purchaser under this Agreement with respect to the applicable Transferred Assets in whole or in part to such “Qualified Intermediary” or “Exchange Accommodation Titleholder” (in either event, an “ Intermediary ”). The Intermediary and the applicable Transferred Assets shall be designated in writing by Purchaser to Seller by no later than 45 days prior to the Closing Date, and Seller agrees to sign and deliver a written instrument (to be prepared by Purchaser) acknowledging the designation of the Intermediary and the assignment of the right, title and interest of Purchaser with respect to such designated Transferred Assets in whole or in part to the Intermediary. Upon designation of the Intermediary by Purchaser, and upon the Intermediary’s written assumption of the obligations of Purchaser hereunder, the Intermediary shall be substituted for Purchaser as the purchaser under this Agreement with respect to only such designated Transferred Assets. Seller agrees in such case to transfer title to such designated Transferred Assets to the Intermediary, and to render Seller’s performance of all of its obligations under this Agreement with respect to such designated Transferred Assets to the Intermediary; provided that all Ancillary Agreements, including the Asset Conveyance Documents, shall be in the forms agreed to by Seller and Purchaser and shall otherwise be in the forms required by the terms of this Agreement. No later than 45 days prior to the Closing Date, Purchaser (at its sole expense) will provide Seller with its determination of the purchase price for such designated Transferred Assets for purposes of the transactions contemplated by this Section 9.12 (and Seller shall cooperate with Purchaser and provide such information as is reasonably requested by Purchaser in preparing such determination). Seller shall have 10 days to review such purchase price. The parties shall cooperate in good faith to agree on such purchase price prior to the Closing Date. Purchaser shall not have the right to delay, and Purchaser shall not delay, the Closing as a result of any like-kind exchange aspects of the transaction. If Purchaser is unsuccessful in its efforts to structure any of the transactions contemplated by this Agreement as part of a like-kind exchange, such occurrence shall not be deemed or construed as the failure of a condition precedent to the Parties’ obligations under this Agreement and in such case, Closing shall proceed as if this Section 9.12 were not included in this Agreement. In the event Purchaser designates a party or entity to serve as an Intermediary, Purchaser shall unconditionally guarantee the full and timely performance by the Intermediary of each and every one of the representations, warranties, covenants, indemnities, obligations and undertakings of the Intermediary (as the successor Purchaser, hereunder, by assignment) pursuant to this Agreement and the Ancillary Agreements. As such guarantor, Purchaser shall be treated as a primary obligor with respect to such representations, warranties, covenants, indemnities, obligations and undertakings (as the case may be), and, in the event of a breach by the

Intermediary under this Agreement or the Ancillary Agreements, Seller may proceed directly against Purchaser on the guarantee without the need to join the Intermediary as a party to the action. Purchaser unconditionally waives any defense that it might have as guarantor that it would not have if it had made or undertaken these representations, warranties, covenants, indemnities, obligations and undertakings (as the case may be) directly.

ARTICLE X

Indemnification

SECTION 10.01. Indemnification by Seller . (a) From and after the Closing Date, Seller shall indemnify, defend and hold harmless Purchaser and each of its affiliates and their respective Representatives (collectively, the “ Purchaser Indemnitees ”) from and against any and all claims, losses, damages (including, in the case of Third Party Claims, any exemplary or punitive damages whether based on contract, tort, strict liability, other Law or otherwise), liabilities, obligations, expenses or other charges (including reasonable expenses of investigation, enforcement and collection and reasonable attorneys’ and accountants’ fees and expenses associated therewith) (collectively, “ Losses ”), to the extent arising or resulting from any of the following:

(i) any Retained Liability;

(ii) (A) any breach of Section 5.01, (B) any breach of Section 6.18(a)(i) or (C) any breach of any other covenant or agreement of Seller contained in this Agreement;

(iii) any breach or inaccuracy of any representation or warranty made by Seller contained in this Agreement;

(iv) any Pre-Closing Environmental Liabilities;

(v) any Liabilities (including any third party claims) imposed on, sustained, incurred or suffered by any of the Purchaser Indemnitees to the extent arising out of or relating to the Seller Business or the assets of the Seller Business, whether occurring, arising, existing or asserted before, on or after the Closing Date (other than any Assumed Liabilities);

(vi) any fees, expenses or other payments incurred or owed by Seller or any other member of the Seller Group to any agent, broker, investment banker or other firm or Person retained or employed by it in connection with the Transactions; and

(vii) any exercise of that right of first refusal by the Lowndes County Development Authority in connection with the Transactions under that certain Amended Restrictive and Protective Covenants established by the Lowndes County Development Authority for Golden Triangle Industrial Park, dated October 21, 1999.

(b) Seller’s obligations pursuant to the provisions of Section 10.01(a) are subject to the following limitations:

(i) The Purchaser Indemnitees shall not be entitled to recover under Section 10.01(a)(ii)(A), Section 10.01(a)(iii) (except with respect to breaches or inaccuracies of the Seller Fundamental Representations) or Section 10.01(a)(iv) on any individual claim unless the Losses associated with such claim exceed $100,000, and such items shall not be aggregated for purposes of clause (ii) of this Section 10.01(b).

(ii) The Purchaser Indemnitees shall not be entitled to recover under Section 10.01(a)(ii)(A), Section 10.01(a)(iii) (except with respect to breaches or inaccuracies of the Seller Fundamental Representations) or Section 10.01(a)(iv) unless the aggregate amount of all Losses exceeds on a cumulative basis $36,000,000, and then only to the extent of such excess.

(iii) The Purchaser Indemnitees shall not be entitled to recover under Section 10.01(a)(ii)(A), Section 10.01(a)(iii) (except with respect to breaches or inaccuracies of the Seller Fundamental Representations) or Section 10.01(a)(iv) for an aggregate amount of Losses in excess of $366,000,000.

(iv) The Purchaser Indemnitees shall not be entitled to recover under Section 10.01(a)(ii)(B) unless the aggregate amount of all Losses exceeds on a cumulative basis $2,000,000, and then only to the extent of such excess.

(c) The indemnification obligations of Seller provided for in Section 10.01(a)(ii), Section 10.01(a)(iii) and Section 10.01(a)(iv) shall terminate as set forth in Section 11.01. The indemnification obligations of Seller provided for in Sections 10.01(a)(i), 10.01(a)(v), 10.01(a)(vi) and 10.01(a)(vii) shall survive indefinitely.

(d) This Section 10.01 does not apply to any indemnification related to Taxes, which are the subject of Section 10.03, other than indemnification with respect to any breach or inaccuracy of the representations and warranties made by Seller to Purchaser under Section 4.06, which are the subject of Section 10.01(a)(iii).

SECTION 10.02. Indemnification by Purchaser . (a) From and after the Closing Date, Purchaser shall indemnify, defend and hold harmless Seller, each member of the Seller Group and each of their affiliates and their respective Representatives (collectively, the “ Seller Indemnitees ”) from and against any and all Losses, to the extent arising or resulting from any of the following:

(i) any Assumed Liability (except to the extent Seller is required to indemnify the Purchaser Indemnitees from and against such Liability pursuant to Section 10.01(a));

(ii) any breach of any covenant or agreement of Purchaser contained in this Agreement;

(iii) any breach or inaccuracy of any representation or warranty made by Purchaser contained in this Agreement; and

(iv) any Liabilities (including any third party claims) imposed on, sustained, incurred or suffered by any of the Seller Indemnitees to the extent arising out of or relating to the Transferred Assets, the Transferred Entity or the operation or conduct of the Business, except to the extent Seller is required to indemnify the Purchaser Indemnitees from and against such Liabilities pursuant to Section 10.01(a).

(b) Purchaser’s obligations pursuant to the provisions of Section 10.02(a) are subject to the following limitations:

(i) The Seller Indemnitees shall not be entitled to recover under Section 10.02(a)(iii) (except with respect to breaches or inaccuracies of Purchaser Fundamental Representations) on any individual claim unless Losses associated with such claim exceed $100,000, and such items shall not be aggregated for purposes of clause (ii) of this Section 10.02(b);

(ii) The Seller Indemnitees shall not be entitled to recover under Section 10.02(a)(iii) (except with respect to breaches or inaccuracies of Purchaser Fundamental Representations) unless the aggregate amount of all Losses exceeds on a cumulative basis $36,000,000, and then only to the extent of such excess; and

(iii) The Seller Indemnitees shall not be entitled to recover under Section 10.02(a)(iii) (except with respect to breaches or inaccuracies of Purchaser Fundamental Representations) for an aggregate amount of Losses in excess of $366,000,000.

(c) The indemnification obligations of Purchaser provided for in Section 10.02(a)(ii) and 10.02(a)(iii) shall terminate as set forth in Section 11.01. The indemnification obligations of Purchaser provided for in Sections 10.02(a)(i) and 10.02(a)(iv) shall survive indefinitely.

(d) This Section 10.02 does not apply to any indemnification related to Taxes, which are the subject of Section 10.03.

SECTION 10.03. Indemnification for Tax Matters . (a) Seller shall indemnify, defend and hold harmless the Purchaser Indemnitees from and against:

(i) (A) the Retained Tax Liabilities, (B) all Liabilities for Taxes arising by virtue of the Transferred Entity having been a member of a consolidated, combined, affiliated, unitary or other similar tax group prior to the Closing, (C) all Liabilities arising by reason of the Transferred Entity or, with respect to the Business or the Transferred Assets, Purchaser and its affiliates, having liability for Taxes of another Person arising under principles of transferee or successor liability or by contract as a result of activities or transactions taking place at or prior to the Closing, or (D) Liabilities for Taxes arising from any action taken by, any failure to take any action or any use of the proceeds of the Columbus Industrial Revenue Bonds by either the Seller or any member of the Seller Group prior to the Closing Date, to the extent that any such action or failure causes the interest on the Columbus Industrial Revenue Bonds to be includable in the gross income of the holders thereof for U.S. federal income tax purposes;

(ii) 50% of Transfer Taxes (other than Transfer Taxes resulting from the transfer of the Transferred Entity);

(iii) all Liabilities for Taxes attributable to any breach by Seller of any obligations under Section 5.01(j) and Article IX; and

(iv) all Liabilities for Taxes imposed on the Transferred Entity attributable to a loss of the exemption granted by the SEZ Permit resulting from any action taken prior to the Closing by the Transferred Entity or any of its affiliates;

which, in each case, include any costs and expenses, including reasonable legal fees and expenses, attributable to such Liabilities.

(b) Purchaser shall indemnify, defend and hold harmless the Seller Indemnitees from and against:

(i) for any Post-Closing Tax Period, (A) all Liabilities for Taxes (which include any costs and expenses, including reasonable legal fees and expenses, attributable to such Tax Liabilities) of the Transferred Entity and (B) all Liabilities for Taxes (which include any costs and expenses, including reasonable legal fees and expenses, attributable to such Tax Liabilities) with respect to the Transferred Assets or the Business;

(ii) 50% of Transfer Taxes (other than Transfer Taxes resulting from the transfer of the Transferred Entity);

(iii) Transfer Taxes resulting from the transfer of the Transferred Entity;

(iv) all Liabilities for Taxes attributable to any action taken on the Closing Date after the Closing, by Purchaser or any of its affiliates (including the Transferred Entity) other than any such action expressly required by applicable Law or by this Agreement or expressly permitted by this Agreement;

(v) all Liabilities for Taxes attributable to any breach by Purchaser of its obligations under Article IX;

(vi) all Liabilities for Taxes imposed on the Transferred Entity attributable to a loss of the exemption granted by the SEZ Permit resulting from any action taken by the Transferred Entity, Purchaser or any of their affiliates after the Closing other than (x) in the ordinary course of business consistent with past practice or (y) pursuant to an agreement that the Transferred Entity entered into prior to the Closing; and

(vii) all Liabilities for Taxes imposed on the Transferred Entity attributable to a loss of the exemption granted by the SEZ Permit resulting from the purchase of the Transferred Entity pursuant to this Agreement.

SECTION 10.04. Indemnification Procedures . (a) Procedures Relating to Indemnification of Third Party Claims . If any party (the “ Indemnified Party ”) receives written

notice of the commencement of any Action or the assertion of any claim by a third party or the imposition of any penalty or assessment for which indemnity may be sought under Section 10.01 or 10.02 (a “ Third Party Claim ”), and such Indemnified Party intends to seek indemnity pursuant to this Article X, the Indemnified Party shall promptly provide the other party (the “ Indemnifying Party ”) with written notice of such Third Party Claim, stating the nature, basis and the amount thereof, to the extent known, along with copies of the relevant documents evidencing such Third Party Claim and the basis for indemnification sought. Failure of the Indemnified Party to give such notice will not relieve the Indemnifying Party from liability on account of this indemnification, except if and to the extent that the Indemnifying Party is materially prejudiced thereby. The Indemnifying Party will have 30 days from receipt of any such notice of a Third Party Claim to give notice to assume the defense thereof. If notice to the effect set forth in the immediately preceding sentence is given by the Indemnifying Party, the Indemnifying Party will have the right to assume the defense of the Indemnified Party against the Third Party Claim with counsel of its choice; provided , however , that such counsel is reasonably satisfactory to the Indemnified Party. If the Indemnifying Party does not assume the defense of such Third Party Claim within 30 days of receipt of such notice, the Indemnified Party against which such Third Party Claim has been asserted will have the right to assume and control the defense thereof without prejudice to the ability of the Indemnified Party to enforce its claim for indemnification against the Indemnifying Party under this Article X; provided , however , that the Indemnified Party shall not consent to the entry of any judgment or enter into any settlement with respect to such Third Party Claim without the consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed). So long as the Indemnifying Party has assumed the defense of the Third Party Claim in accordance herewith, (i) the Indemnifying Party shall actively pursue such defense in good faith, (ii) the Indemnified Party may retain separate co-counsel at its sole cost and expense (except as contemplated by the following sentence) and participate in the defense of the Third Party Claim, (iii) the Indemnified Party shall not file any papers or consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed) and (iv) the Indemnifying Party shall not (A) admit to any wrongdoing or (B) consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim to the extent such judgment or settlement (1) provides for (x) relief other than money damages or (y) money damages if the Indemnifying Party has not acknowledged in writing that it shall be solely responsible for such money damages, or (2) does not include as an unconditional term thereof the giving by each claimant or plaintiff to the Indemnified Party of an irrevocable release from all liability with respect to such Third Party Claim, in the case of each of clauses (A) and (B), without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld or delayed). Notwithstanding anything to the contrary in this Section 10.04, if the Indemnified Party in good faith determines that the Indemnified Party may have available to it one or more defenses or counterclaims that are inconsistent with one or more of those that may be available to the Indemnifying Party in respect of such Third Party Claim, the Indemnified Party shall have the right at all times to take over and control the defense of such Third Party Claim; provided , however , that if the Indemnified Party does so take over and control the defense of such Third Party Claim, the Indemnified Party shall not consent to the entry of any judgment or enter into any settlement with respect to such Third Party Claim without the written consent of the

Indemnifying Party (which consent shall not be unreasonably withheld or delayed). Each party shall use commercially reasonable efforts to minimize Losses from Third Party Claims and shall act in good faith in responding to, defending against, settling or otherwise dealing with such claims. The parties shall also cooperate in any such defense and give each other reasonable access to all information and records relevant thereto.

(b) Procedures Relating to Indemnification of Third Party Tax Claims . Notwithstanding Section 10.04(a), (i) if Purchaser or any of its affiliates receives notice of any Tax audit, examination or assessment (a “ Tax Claim ”) with respect to any Tax for which Seller may be responsible under Section 10.03, Purchaser shall promptly notify Seller, (ii) if Seller or any of its affiliates receives notice of any Tax Claim that could give rise to Taxes of the Transferred Entity or with respect to the Transferred Assets or the Business, Seller shall promptly notify Purchaser and (iii) if a Tax Claim includes, or could reasonably be expected to include, any claim for Taxes relating solely to a Straddle Period, Purchaser and Seller shall jointly control all proceedings taken in connection with such claim; provided , however , (1) if a Tax Claim relates to the U.S. Federal Income Taxes or state Income Taxes of Seller or any member of the Seller Group (other than Weyerhaeuser Poland) (such Tax Claim, an “ Income Tax Claim ”), Seller shall control fully all proceedings in connection with any such Income Tax Claim and shall have complete authority and discretion to settle any such Income Tax Claim without the consent of Purchaser and (2) the party responsible for preparing a property Tax Return under Section 9.04 shall control all proceedings in connection with any Tax Claims relating to such property Tax Return. Seller shall not settle or compromise any such audit, examination or proceeding with respect to any Tax Claim that it controls pursuant to this Agreement (other than an audit, examination or proceeding with respect to an Income Tax Claim) without the prior written consent of Purchaser (which consent shall not be unreasonably withheld or delayed), to the extent such settlement or compromise could reasonably be expected to adversely affect Purchaser or its affiliates.

(c) Procedures for Non-Third Party Claims . The Indemnified Party shall notify the Indemnifying Party in writing promptly of its discovery of any matter that does not involve a Third Party Claim giving rise to the claim of indemnity pursuant hereto. The failure so to notify the Indemnifying Party shall not relieve the Indemnifying Party from liability on account of this indemnification, except only to the extent that the Indemnifying Party is materially prejudiced thereby. The Indemnifying Party shall have 30 days from receipt of any such notice to give notice of dispute of the claim to the Indemnified Party. The Indemnified Party shall reasonably cooperate and assist the Indemnifying Party in determining the validity of any claim for indemnity by the Indemnified Party and in otherwise resolving such matters. Such assistance and cooperation shall include providing, at the Indemnifying Party’s expense, reasonable access to and copies of information, records and documents relating to such matters, furnishing employees to assist in the investigation, defense and resolution of such matters and providing legal and business assistance with respect to such matters.

(d) Environmental Limitations . Notwithstanding any provision to the contrary in this Agreement, with respect to any Losses arising from Pre-Closing Environmental Liabilities or with respect to breaches of the representations and warranties contained in Section 4.11 (Environmental Matters): (a) Seller shall have satisfied its obligations with respect to any remedial action to the extent such remedial action is conducted to standards applicable to

industrial properties, including the use of risk-based cleanup standards, natural attenuation, and deed restrictions so long as such use is not prohibited by the Governmental Entity overseeing such remedial action and (b) Seller shall not be required to indemnify any Purchaser Indemnitees for any such Losses (i) except to the extent such Losses are required to comply with Environmental Law in force and in effect on the Closing Date; (ii) to the extent Purchaser Indemnitees exacerbate any such Losses after the Closing Date (excluding exacerbation arising from post-Closing activities by Purchaser Indemnitees that conform to pre-Closing activities by Seller in connection with the Business as a result of which any representation or warranty in Section 4.11 was inaccurate, until such time as Purchaser Indemnitees know such activities caused such representation or warranty to be inaccurate); (iii) that result or arise from any exposure or alleged exposure to any Hazardous Materials emitted or discharged in connection with the operations of the Business or the Transferred Real Property prior to the Closing Date in compliance with Environmental Laws or applicable Environmental Permits; (iv) resulting or arising from any investigation, removal or remediation of any presence or Release of Hazardous Materials except to the extent such presence or Release existed at concentrations in soil, groundwater or other environmental media on the Closing Date such that the failure to remove or remediate such presence or Release, if known on the Closing Date, would have constituted a violation of or non-compliance with Environmental Law in force and in effect on the Closing Date; and (v) to the extent such Losses arise or result from any exposure or alleged exposure to, or any maintenance, repair, removal or disposal of, asbestos or asbestos-containing materials, other than any maintenance, repair, removal or disposal of asbestos or asbestos-containing materials required as of the Closing Date under any Environmental Law in force and effect on the Closing Date.

SECTION 10.05. Indemnification as Sole and Exclusive Remedy . The parties acknowledge and agree that, should the Closing occur, each party’s sole and exclusive remedy with respect to any and all claims for monetary relief relating to Article I, the Business, the Transferred Equity Interests, the Transferred Assets, the Excluded Assets, the Assumed Liabilities, the Retained Liabilities or any representation, warranty or covenant of the other party contained in this Agreement shall be pursuant to the indemnification provisions set forth in this Article X ; provided , however , that (i) nothing herein (including Section 11.01) shall limit in any way either party’s monetary remedies in respect of fraudulent breach of this Agreement by the other party and (ii) should the Closing occur, no party shall have, and all parties shall be deemed to have waived, any rescission rights with respect to this Agreement, the Acquisition or the other transactions contemplated hereby. In furtherance of the foregoing and subject to the indemnification provision set forth in this Article X and the proviso contained in the immediately preceding sentence, Purchaser hereby waives, from and after the Closing Date, any and all rights, claims and causes of action for monetary relief Purchaser or any other Purchaser Indemnitee may have against Seller or any of its affiliates, or their respective directors, officers and employees arising under or based upon any Law (including with respect to environmental matters generally and any matters under the Comprehensive Environmental Response, Compensation, and Liability Act or similar state or provincial law). This Section 10.05 will not apply to any breach of any Ancillary Agreement, and, notwithstanding anything to the contrary in this Agreement, neither party nor any other person shall be entitled to indemnification under this Article X for any breach of any Ancillary Agreement.

SECTION 10.06. Calculation of Indemnity Payments . (a) If any Losses are covered under any insurance policy maintained and paid for by the Indemnified Party prior to the Closing, the Indemnified Party shall use commercially reasonable efforts to pursue a claim or claims under the applicable insurance policy or policies. The amount of any Loss for which indemnification is provided under this Article X shall be net of any amounts recovered by the Indemnified Party under such insurance policies with respect to such Loss.

(b) An Indemnifying Party is authorized, in connection with payment of any Loss for which indemnification may be sought by an Indemnified Party under this Article X, to set off and apply any and all payments due to such Indemnifying Party under Section 2.03 or this Article X against any of and all of the obligations of the Indemnifying Party to such Indemnified Party under this Article X. The rights of the Indemnifying Party under this Section 10.06(b) are in addition (but without duplication) to other rights and remedies (including other rights of set-off) which such Indemnifying Party may have.

(c) The amount of any Loss for which indemnification is provided under this Article X shall be (A) increased to take account of any net Tax cost actually incurred by the Indemnified Party arising from the receipt of indemnity payments hereunder, grossed up for such increase (provided that the parties shall reasonably cooperate to minimize any such cost) and (B) reduced to take account of any net Tax benefit realized by the Indemnified Party arising from the incurrence or payment of such Loss.

(d) Notwithstanding anything in this Agreement to the contrary, (i) no indemnification may be claimed under this Article X for any Losses to the extent such Losses are included in the calculation of any adjustment to the Purchase Price pursuant to Article II, including in the case of indemnification by Seller to the extent such Losses are included as “Current Liabilities” or in the “Debt Amount” on the Statement and (ii) the amount of any Loss for which indemnification is provided under this Article X shall be, in the case of Purchaser, net of any amounts actually received by Purchaser in accordance with Section 6.16 with respect to such Loss.

(e) In the case of indemnification by Seller for any Losses that are recorded as a reserve on the Balance Sheet, the amount of recoverable Losses shall not be limited to the amount of such reserve.

SECTION 10.07. Additional Matters . (a) For all Tax purposes, Purchaser and Seller agree to treat any indemnity payment under this Agreement as an adjustment to the Purchase Price unless a final determination (which shall include the execution of an IRS Form 870-AD or successor form) provides otherwise.

(b) For purposes of this Article X only, any inaccuracy in any representation or warranty contained in this Agreement (other than any representation or warranty contained in Section 4.01(a), 4.03, 4.04(a), 4.04(b) or 4.05, the first sentence of Section 4.09, the first sentence of Section 4.12(a), the first sentence of Section 4.12(b), the first sentence of Section 4.12(d), the first sentence of Section 4.13(a), the definition of “Business Material Agreements” in Section 4.14, Section 4.15(b)(ii) and Section 4.16), and any determination of

damages resulting therefrom, shall be determined without regard to any materiality, “Material Adverse Effect” or similar qualification contained in or otherwise applicable to such representation or warranty.

(c) In no event shall an Indemnified Party be able to recover from an Indemnifying Party punitive or exemplary damages or any consequential or indirect damages that are not reasonably foreseeable (or actually foreseen by the Indemnifying Party), in each case, except if and to the extent any such damages are recovered by a third party against such Indemnified Party.

(d) If, prior to the Closing, (i) (A) either party notifies the other party of any inaccuracy of any representation or warranty of the party giving such notice contained in this Agreement or (B) Seller notifies Purchaser of any breach of any covenant or agreement contained in Section 5.01, (ii) such notice contains a clear and specific description of such inaccuracy or breach, (iii) such notice states that the effect of such inaccuracy or breach is a failure of a condition to the obligations of the party receiving such notice to effect the Acquisition as set forth in Article VII, and such statement is correct as a matter of applicable Law, and (iv) the party receiving such notice proceeds with the Closing, then the party receiving such notice shall be deemed to have waived such inaccuracy of representation or warranty or breach of covenant or agreement of the party giving such notice, and the party receiving such notice and its successors, assigns and affiliates shall not be entitled to indemnification under this Agreement, or to sue for damages or to assert any other right or remedy, for any Losses arising from any matters relating to such inaccuracy or breach. Notwithstanding the foregoing, if the party receiving such notice disputes that the statement described in clause (iii) above contained in such notice is correct as a matter of applicable Law, the Closing shall not occur until the parties have finally resolved such dispute.

(e) Except as provided in Section 10.07(d), the representations, warranties and covenants of the Indemnifying Party and the Indemnified Party’s right to indemnification with respect thereto, shall not be affected or deemed waived by reason of any investigation made by or on behalf of the Indemnified Party (including by any of its Representatives) or by reason of the fact that the Indemnified Party or any of its Representatives knew or should have known that any such representation or warranty is, was or might be inaccurate.

(f) All obligations of Seller or Purchaser under Section 10.03 to indemnify, defend and hold harmless Purchaser Indemnitee and Seller Indemnitee, as applicable, for any Losses arising or resulting from any Tax liability shall terminate at the expiration of the statute of limitations, including any applicable extensions or waivers thereof.

SECTION 10.08. Environmental Access, Control and Cooperation . With respect to any claim for indemnification by Purchaser Indemnitees for any Pre-Closing Environmental Liability or any breach of the representations and warranties contained in Section 4.11 (“ Environmental Indemnity Claims ”):

(a) Notwithstanding any provision to the contrary, (i) Seller shall have the right to assume the control and/or performance of, and shall have the right to make all final

decisions with respect to, any investigation, cleanup or other corrective or responsive action (“ Responsive Action ”) relating to any Environmental Indemnity Claim to the extent Seller’s obligation under Section 10.01(a)(ii)(A), Section 10.01(a)(iii) (except with respect to breaches or inaccuracies of the Seller Fundamental Representations) or Section 10.01(a)(iv) exceeds or has exceeded on a cumulative basis $36,000,000; provided , however , that, with respect to any Responsive Action controlled and/or performed by Seller pursuant to this Agreement, to the extent reasonably practicable from an economic and engineering standpoint, Seller shall not conduct or agree to conduct any Responsive Action in a manner that unreasonably interferes with the operations of the Business at any relevant Transferred Real Property; and (ii) Purchaser shall provide Seller, at reasonable times and after reasonable notice, access to the Transferred Real Property and Business records and employees in connection with any such control and/or performance by Seller.

(b) The Party that controls and/or performs any Responsive Action relating to any Environmental Indemnity Claim under this Agreement (the “ Controlling Party ”) shall (i) reasonably consult with the other Party (the “ Non-Controlling Party ”) regarding any such Responsive Action, including the selection of any environmental consultants and the selection of, and development of any scope of work for, any Responsive Action; (ii) provide the Non-Controlling Party with an opportunity to review and comment on any submission to any Governmental Entity reasonably in advance of such submission and shall consider such comments in good faith; and (iii) provide the Non-Controlling Party with an opportunity to (A) attend any meetings with any Governmental Entity; (B) review any documents or records relating to such Responsive Action in the Controlling Party’s control that the Non-Controlling Party may reasonably request; and (C) monitor the performance of such Responsive Action and, in the case of any intrusive investigation or cleanup, and at Non-Controlling Party’s reasonable request and expense, take split samples; provided , however , that, if Purchaser is the Controlling Party, with respect to any such Environmental Indemnity Claim that could reasonably be expected to result in Loss such that Seller’s obligation under Section 10.01(a)(ii)(A), Section 10.01(a)(iii) (except with respect to breaches or inaccuracies of the Seller Fundamental Representations) or Section 10.01(a)(iv) would exceed on a cumulative basis $36,000,000, Purchaser shall not, except as required by Law, conduct, agree to, or enter any settlement or order or make any reporting to any Governmental Entity with respect to any Responsive Action (including the selection of consultants, development and selection of a scope of work, any submissions to any Governmental Entity) without the prior written consent of the Seller, which shall not be unreasonably withheld or delayed.

(c) Any Responsive Action taken in connection with any Environmental Indemnity Claim shall be conducted in a workmanlike manner, using commercially reasonable and cost effective practices, standards and methods from an engineering standpoint.

ARTICLE XI

General Provisions

SECTION 11.01. Survival of Representations and Warranties and Agreements .

(a) The representations and warranties of the parties contained in this Agreement or in any certificate or other writing delivered pursuant hereto or in connection herewith (other than the Ancillary Agreements) shall survive the Closing until the first anniversary of the Closing Date, except that (i) the Purchaser Fundamental Representations and the Seller Fundamental Representations shall survive indefinitely or until the latest date permitted by Law, (ii) the representations and warranties contained in Section 4.11 shall survive until the third anniversary of the Closing Date and (iii) the representations and warranties contained in Section 4.06 and Section 4.07 shall survive the Closing until 60 days following the expiration of all relevant statutes of limitations (giving effect to any extensions or waivers thereof). The covenants and agreements of the parties contained in this Agreement or in any certificate or other writing delivered pursuant hereto or in connection herewith shall survive the Closing indefinitely or for the shorter period explicitly specified therein, provided , however , that none of the agreements or covenants set forth in Sections 5.02, 6.03 or 6.04, or any claim with respect thereto, shall survive the Closing Date, and all parties shall be released from all obligations and Liabilities with respect thereto, including with respect to any breach thereof, effective as of the Closing. No claim for indemnification may be brought with respect to a breach of Section 5.01 or Section 6.18 after the first anniversary of the Closing Date. Notwithstanding the preceding sentences, any breach or inaccuracy of representation or warranty or breach of covenant or agreement, in respect of which indemnification may be sought under this Agreement, shall survive the time at which it would otherwise terminate pursuant to the preceding sentences, if notice of the inaccuracy or breach thereof giving rise to such right of indemnification shall have been given to the party against whom such indemnification may be sought prior to such time.

(b) Seller shall have no obligation to indemnify Purchaser Indemnitees under Section 10.01(a)(iv) for Pre-Closing Environmental Liabilities unless Seller is provided notice asserting a claim for indemnification for such Pre-Closing Environmental Liabilities on or before the third anniversary of the Closing Date. Such obligation shall not terminate with respect to the Pre-Closing Environmental Liabilities as to which Purchaser Indemnitees provides such notice prior to such time.

SECTION 11.02. Notices . All notices, requests, claims, demands, waivers and other communications under this Agreement shall be in writing and shall be given as follows:

(i) if to Seller, to

Weyerhaeuser Company
33663 Weyerhaeuser Way South
Federal Way, WA 98003
Attention: General Counsel
Facsimile: 1–253-928-2298
Email: devin.stockfish@weyerhaeuser.com

with a copy to:

Cravath, Swaine & Moore LLP
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
Attention: Richard Hall and Erik Tavzel
Facsimile: 1-212-474-3700
Email: rhall@cravath.com and etavzel@cravath.com

(ii) if to Purchaser, to

International Paper Company
6420 Poplar Avenue
Memphis, TN 38197
Attention: General Counsel
Facsimile: 1-901-214-1248
Email: sharon.ryan@ipaper.com

with a copy to:

Debevoise & Plimpton LLP
919 Third Avenue
New York, NY 10022
Attention:    Jeffrey J. Rosen
        Michael A. Diz
Facsimile:    1-212-909-6836
Email:        jrosen@debevoise.com
        madiz@debevoise.com

or to such other address(es) as shall be furnished in writing by any such party to the other party hereto in accordance with the provisions of this Section 11.02.

SECTION 11.03. Definitions . For purposes of this Agreement:

“ Accounts Receivable Programs ” means the Receivables Purchase Agreement between Weyerhaeuser NR Company and JPMorgan Chase Bank, N.A., dated December 11, 2013, the Receivables Purchase Agreement between Weyerhaeuser Export Company and JPMorgan Chase Bank, N.A., dated December 11, 2013, the Receivables Purchase Agreement between Weyerhaeuser Sales Europe, Inc. and JPMorgan Chase Bank, N.A., dated December 11, 2013 and the Supplier Agreement between Weyerhaeuser NR Company and Citibank, N.A., dated March 8, 2013.

“ Acknowledged Canadian Obligations ” means obligations (contingent, future or otherwise) in respect of the Business in Canada, the ownership of Canadian Transferred Assets or the Canada Business Employees in respect of the Business in Canada that, solely for the purposes of Section 9.01(a), are not included in Assumed Canadian Liabilities, including obligations that are inseparably tied to the ownership and conduct of the Business in Canada, the ownership of Canadian Transferred Assets, or the Canada Business Employees in respect of the

Business in Canada, as the case may be, including environmental obligations and similar obligations in respect of the Business in Canada but, for the avoidance of doubt, excluding all Retained Liabilities.

“ Action ” means any demand, action, claim, counterclaim, suit, countersuit, arbitration, inquiry, labor grievance procedures, proceeding or investigation by or before any federal, state, local, foreign or international Governmental Entity or any arbitration or mediation tribunal.

“ Affiliate Agreement ” means any Contract relating solely to the Business to which the Seller or any of its affiliates (other than the Transferred Entity), on the one hand, and the Business or the Transferred Entity, on the other hand, are parties. “Affiliate Agreement” shall in no event include any Shared Contract.

“ Ancillary Agreements ” means the Asset Conveyance Documents, the Liabilities Assumption Documents, the Site Services Agreements, the Supply Agreements, the Sublease Agreement, the Data Processing Agreement and the Intellectual Property License Agreement.

“ Annualized Business Three Month Net Sales Amount ” means the trailing three-month net sales of the Business (measured for the three-month period ending on and including the last day of the calendar month prior to Closing) multiplied by 4.

“ Assumed Benefit Agreement ” means each Business Benefit Agreement (i) that Purchaser has expressly agreed to assume, or to cause its subsidiaries to assume, pursuant to any Transaction Document, (ii) that Purchaser or any of its subsidiaries is required to assume under applicable Law, Contract or CBA or (iii) to which the Transferred Entity is a party.

“ Assumed Canadian Liabilities ” means the Assumed Liabilities that are separate and existing liabilities in respect of the Business in Canada, the ownership of Canadian Transferred Assets, the Canada Business Employees and includes separate and existing liabilities

such as trade accounts payable and other legally accrued and fully ascertained liabilities of the Business in Canada, but excludes all Retained Liabilities.

“ Business ” means the business of Seller or any other member of the Seller Group, including the Transferred Entity, consisting of the manufacture and distribution of fluff pulp, softwood papergrade pulp and specialty chemical cellulose pulp; provided , however , that the Business shall in no event include (a) Seller’s liquid packaging business or (b) Seller’s interest in North Pacific Paper Corporation.

“ Business Benefit Agreement ” means any employment, consulting, indemnification, severance, termination, change in control, retention, bonus or similar agreement or arrangement between Seller or any of its subsidiaries, on the one hand, and any individual Business Employee, on the other hand.

“ Business Benefit Plan ” means any “employee pension benefit plan” (as defined in Section 3(2) of ERISA, whether or not subject to ERISA) “employee welfare benefit plan” (as defined in Section 3(1) of ERISA, whether or not subject to ERISA) or bonus, pension, profit sharing, deferred compensation, incentive compensation, stock or other equity ownership, stock or other equity purchase, stock or other equity appreciation, restricted stock or other equity, stock or other equity repurchase rights, stock or other equity option, phantom stock or other equity, performance, retirement, vacation, severance, disability, death benefit, hospitalization, medical or other plan, arrangement or understanding (whether or not legally binding or subject to the Laws of the United States) maintained, contributed to or required to be maintained or contributed to by Seller or any of its subsidiaries, providing benefits to any Business Employee.

“ Business Day ” means any day on which commercial banks are generally open for business in Seattle, Washington and New York, New York, other than a Saturday, a Sunday or a day observed as a holiday in Seattle, Washington under the Laws of the State of Washington or in New York, New York under the Laws of the State of New York or the Federal Laws of the United States of America.

“ Business Employee ” means (i) each director, officer, manager or employee of Seller or its subsidiaries who is solely engaged in the Business or employed by the Transferred Entity, other than those set forth in Section 11.03 of the Seller Disclosure Letter, and (ii) each other director, officer, manager or employee of Seller or its subsidiaries set forth in Section 11.03 of the Seller Disclosure Letter, including, in the case of each of clauses (i) and (ii), such individuals who are not actively at work due to vacation, holiday, illness, jury duty, bereavement leave, disability, workers’ compensation or other authorized leave of absence or other leave protected under applicable Law.

“ Business Material Adverse Effect ” means any Effect that has been or would reasonably be likely to be material and adverse to (i) the business, assets, properties, condition (financial or otherwise) or results of operations of the Business and the Transferred Assets (taken as a whole) other than an Effect relating to (A) the economy generally, (B) the industries in which the Business operates generally (including changes in prices for energy, raw materials and finished products), (C) the financial, securities and currency markets generally or (D) other than

for purposes of Section 4.03, the entering into or the public announcement or disclosure of this Agreement or the consummation or proposed consummation of the Transactions or the pendency thereof (in each of clause (A), (B) or (C), to the extent such Effect does not disproportionately affect the Business in relation to others in the same industry), or (ii) the ability of the Seller to perform its obligations under the Transaction Documents or consummate the Transactions. For purposes of so much of Section 4.05 as relates to the period between the date of this Agreement and the Closing, Business Material Adverse Effect shall also exclude any Effect (not otherwise excluded pursuant to the preceding sentence) relating to (i)(A) changes in Law, (B) any item referred to in clause (i)(A), (i)(B) or (i)(C) of the immediately preceding sentence, whether or not disproportionately affecting the Business, or (C) any change in purchasing behavior of customers of the Business, (ii) actions taken or not taken at the request of Purchaser or any of its affiliates or (iii) acts of war, armed conflicts or terrorism.

“ Business NDA ” means each nondisclosure, confidentiality or similar agreement entered into by Seller with bidders or other third parties (other than Purchaser) in connection with the disposition of the Business.

“ Canada Business Employees ” means those Business Employees who, as of immediately prior to the applicable Transfer Time (or such other time as is specified in the context where used or such other time as required under applicable Law), are principally employed in Canada or, in the case of employees on leave, who were principally employed in Canada at the time they began such leave.

“ Canadian Seller ” means Weyerhaeuser Company Limited.

“ Canadian Transferred Assets ” means the Transferred Assets used by the Canadian Seller or held in connection with the Business carried on in Canada by the Canadian Seller.

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

“ Columbus Industrial Revenue Bonds ” means (i) the Lowndes County, Mississippi Solid Waste Disposal and Pollution Control Refunding Revenue Bonds (Weyerhaeuser Company Project) Series 1992A (in the original and outstanding principal amount of $61,200,000, bearing interest at a rate of 6.80% per annum and with a maturity date of April 1, 2022) and (ii) the Lowndes County, Mississippi Solid Waste Disposal and Pollution Control Refunding Revenue Bonds (Weyerhaeuser Company Project) Series 1992B (in the original and outstanding principal amount of $27,000,000, bearing interest at a rate of 6.70% per annum and with a maturity date of April 1, 2022).

“ Commercial Operation ” has the meaning assigned thereto in the Georgia Power Contract.

“ Confidentiality Agreement ” means the Confidentiality Agreement, dated as of December 4, 2015, between Seller and Purchaser, as amended by the Clean Team Confidentiality Agreement, dated as of February 10, 2016, between Seller and Purchaser.

“ Continuation Period ” means (i) in the case of any Canada Business Employee, the period commencing on the Closing Date and ending on the second anniversary thereof, and (ii) in the case of all other Business Employees, the period commencing on the Closing Date and ending on December 31 of the year following the year in which the Closing Date occurs.

“ Credit Support Obligations ” shall mean letters of credit, guarantees, surety bonds, trust agreements and other credit support instruments issued by Seller or any of its affiliates (including the Transferred Entity) or third parties on behalf of Seller or the Business.

“ Data Processing Agreement ” means the agreement to be entered into between Seller and a European Economic Area Purchaser Sub in substantially the form set forth in Exhibit E.

“ Debt Amount ” means (i) the aggregate principal amount, together with all accrued and unpaid interest thereon and all outstanding fees with respect thereto, of all outstanding indebtedness of Seller in respect of the Columbus Industrial Revenue Bonds and (ii) solely for the purposes of the Purchase Price adjustment in Section 2.03, to the extent that any Assumed Benefit Plan is a defined benefit pension plan and the aggregate liabilities accrued under such Assumed Benefit Plans determined as of the date of the most recent actuarial valuation of such plan exceed the fair market value of the aggregate assets of such Assumed Benefit Plan as of the last Business Day immediately prior to the Closing Date, the amount of such excess.

“ $ ” means lawful money of the United States of America.

“ Effect ” has the meaning given to such term in the definition of “Purchaser Material Adverse Effect” in this Section 11.03.

“ Eligible Capital Expenditures ” means, as at the day prior to the Closing Date, the sum of (i) the aggregate amount of all capital expenditures (excluding capitalized interest) made by Seller or any other member of the Seller Group on or after the date hereof with respect to the Port Wentworth Project; provided that (A) such expenditures shall have been made in accordance with this Agreement and either paid in cash or reflected as accounts payable or accrued liabilities on the Statement and (B) in no event shall the amount determined under this clause (i) exceed $60,000,000; plus (ii) the amount, if any, by which (x) the aggregate amount of all capital expenditures (excluding capitalized interest) made by Seller or any other member of the Seller Group on or after the date hereof with respect to the Business (other than the Port Wentworth Project) exceeds (y) the sum of (I) $4,000,000 multiplied by the number of calendar months between the date hereof and the day prior to the Closing Date (determined by including the number of full calendar month and any additional fractional month in such period) plus (II) the amount of Extraordinary Maintenance and Repair Expenditures made by the Seller during such period and either paid in cash or reflected as accounts payable or accrued liabilities on the Statement; minus (iii) the amount, if any, by which the amount described in clause (ii)(x) above is less than the sum of (A) $3,600,000 multiplied by the number of calendar months between the date hereof and the day prior to the Closing Date (determined by including the number of full calendar month and any additional fractional month in such period) plus (B) the amount of

Extraordinary Maintenance and Repair Expenditures made by the Seller during such period and either paid in cash or reflected as accounts payable or accrued liabilities on the Statement.

“ Environmental Laws ” means all applicable Laws, Judgments, legally binding agreements and Environmental Permits issued, promulgated or entered into by or with any Governmental Entity, relating to pollution, natural resources, protection or restoration of the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), endangered or threatened species or, as it relates to exposure to hazardous or toxic materials, human health or safety.

“ Environmental Liabilities ” means all Liabilities relating to or in respect of environmental, health or safety matters, including those arising from (i) the compliance or noncompliance with Environmental Laws, (ii) the alleged or actual presence or Release of, or exposure to, Hazardous Materials, (iii) the offsite transportation, storage, treatment, disposal or arrangement for disposal of Hazardous Materials and (iv) any other Liabilities or costs arising under Environmental Laws, including, in each case, all investigatory, cleanup and other remediation costs, administrative oversight costs, natural resources damages, property damages, personal injury damages, indemnity, contribution and similar obligations and all costs and expenses, interest, fines, penalties and other monetary sanctions in connection with any of the foregoing.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

“ Extraordinary Maintenance and Repair Expenditures ” means capital expenditures for maintenance, repairs and replacements due to casualties, accidents, extraordinary events or emergencies or other events or circumstances of a nature or kind not reflected in the Pre-Closing Maintenance CapEx Budget.

“ FOLA ” means the Foreign Ownership of Land Administration (Alberta).

“ FOLR ” means Foreign Ownership of Land Regulations (Alta Reg 160/1979).

“ GAAP ” means generally accepted accounting principles in effect in the United States at the relevant time.

“ Geneva Pension Plan ” means a defined benefit pension plan maintained for the benefit of Switzerland Business Employees.

“ Georgia Power Contract ” means the Contract for the Purchase of Firm Capacity and Energy from a Renewable Qualifying Facility Utilizing the Proxy Unit Methodology,

between Seller and Georgia Power Company, dated as of March 5, 2014, as amended by the Amendment, dated October 21, 2014.

“ GST ” means any goods and services tax and harmonized sales tax imposed under Part IX of the Excise Tax Act (Canada).

“ Historic Remains ” means those certain human remains dating to World War II located at the Transferred Poland Real Property.

“ Hong Kong Business Employees ” means those Business Employees who, as of immediately prior to the applicable Transfer Time (or such other time as is specified in the context where used or such other time as required under applicable Law), are principally employed in Hong Kong or, in the case of employees on leave, who were principally employed in Hong Kong at the time they began such leave.

“ Income Tax ” means any Tax imposed on or measured by net income, including franchise or similar Taxes measured by net income, and the Washington Business and Occupation Tax.

“ Indebtedness ” means (i) all indebtedness for borrowed money, including the aggregate principal amount of, and any accrued interest and applicable prepayment charges or premiums (including any “make-whole” or similar premium or penalty payable in connection with redemption or otherwise extinguishing such indebtedness whether or not then due) with respect to all borrowed money, purchase money financing and capitalized lease obligations and (ii) any indebtedness evidenced by any note, bond, debenture or other debt security, in the case of the foregoing clauses (i) and (ii), whether incurred, assumed, secured or unsecured and including any guarantees of such indebtedness.

“ Intellectual Property License Agreement ” means the license of Intellectual Property Rights by and between Seller and Purchaser (or a Purchaser Sub) substantially in the form attached as Exhibit A.

“ Intellectual Property Rights ” means all U.S. and foreign patents (including all provisionals, reissues, divisions, continuations, continuations-in-part, reexaminations and extensions thereof), patent applications, patent rights, copyrights (whether registered or unregistered), copyright registrations, copyright applications, trademarks (whether federal, state, registered, common law or unregistered), trademark registrations, trademark applications, service marks, trade names, business names, brand names, designs, design registrations, domain names, logos, slogans, trade styles, trade dress and other indicia of origin, trade secrets, patent disclosures, know-how, knowledge, processes, methods, designs, plans, manuals, formulae, flow charts, drawings, specifications, data, inventions and discoveries (whether or not patentable and

reduced to practice), improvements, confidential or proprietary information, customer data, Software and all rights to the foregoing.

“ IRS ” means the U.S. Internal Revenue Service.

“ knowledge of Seller ” means the actual knowledge of the persons set forth in Section 11.03 of the Seller Disclosure Letter.

“ Japan Business Employees ” means those Business Employees who, as of immediately prior to the applicable Transfer Time (or such other time as is specified in the context where used or such other time as required under applicable Law), are principally employed in Japan or, in the case of employees on leave, who were principally employed in Japan at the time they began such leave.

“ Liabilities ” means obligations, liabilities and commitments of any nature, whether known or unknown, express or implied, primary or secondary, direct or indirect, liquidated, absolute, accrued, contingent or otherwise and whether due or to become due.

“ Liens ” means all pledges, liens, claims, charges, mortgages, encumbrances and security interests of any kind or nature whatsoever.

“ Material Adverse Effect ” means a Business Material Adverse Effect or a Purchaser Material Adverse Effect, as applicable.

“ Material Lease ” means that certain Industrial Lease Agreement dated January 16, 2014, by and between Weyerhaeuser NR Company, as Tenant, and Duke Realty Limited Partnership, as Landlord, as amended by that First Amendment to Lease dated November 17, 2014, and as amended by that Second Amendment to Lease dated October 30, 2015.

“ Non-U.S. Business Employees ” means those Business Employees who are not U.S. Business Employees.

“ NYSE ” means the New York Stock Exchange.

“ Post-Closing Tax Period ” means all taxable periods beginning after the Closing Date and the portion of any Straddle Period beginning on the day after the Closing Date.

“ Port Wentworth Project ” has the meaning assigned to “Project” in the Georgia Power Contract.

“ Pre-Closing Environmental Liabilities ” means all Environmental Liabilities (other than Retained Environmental Liabilities) resulting or arising from violations of or non-compliance with Environmental Laws occurring on or prior to the Closing Date in connection

with operations at the Transferred Real Property or in connection with the conduct or operation of the Business, including liability for the investigation, removal or remediation of Hazardous Materials at, on, under or from the Transferred Real Property resulting from the presence or Release of Hazardous Materials on or prior to the Closing Date, but only to the extent such presence or Release existed at concentrations in soil, groundwater or other environmental media on the Closing Date such that the failure to remove or remediate such presence or Release, if known on the Closing Date, would have constituted a violation of or non-compliance with Environmental Law in force and in effect on the Closing Date.

“ Pre-Closing Tax Period ” means all taxable periods ending on or prior to the Closing Date and the portion of any Straddle Period ending on the Closing Date.

“ Project Completion Deadline ” means May 1, 2017.

“ Purchaser Fundamental Representations ” means the representations and warranties of Purchaser contained in Sections 3.01 and 3.02.

“ Purchaser Material Adverse Effect ” means any state of facts, change, effect, condition, development, event or occurrence (any such item, an “ Effect ”) that has been or would reasonably be likely to be material and adverse to the ability of Purchaser to perform its obligations under the Transaction Documents or consummate the Transactions.

“ Regulatory Legal Proceeding ” means any proceeding, including a pre-litigation antitrust review, seeking a preliminary injunction or other comparable legal impediment to the Acquisition or to Purchaser’s freedom to operate the Business after Closing under any Review Law or the Power Act.

“ Release ” means any actual or threatened release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the indoor or outdoor environment (including ambient air, surface water, groundwater, land surface or subsurface strata).

“ Retained Environmental Liabilities ” means all Environmental Liabilities arising out of or relating to (i) properties or facilities formerly owned, leased or operated in connection with the Business or the Transferred Assets, (ii) the off-site transportation, storage, disposal or arrangement for disposal of Hazardous Materials on or prior to the Closing Date, or (iii) all Liabilities arising out of or relating to any Action pending on or prior to the Closing Date in connection with, arising out of or relating to the alleged or actual presence or release of, or exposure to, asbestos or asbestos-containing materials in any form in or at any of the Transferred Assets or in connection with the operations of the Business.

“ Review Law ” means the HSR Act or any other Law of any applicable jurisdiction that pertains to antitrust, merger control, competition or trade regulation matters or foreign investment review (including the Investment Canada Act).

“ SEC ” means the Securities and Exchange Commission.

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC thereunder.

“ Seller Business ” means (i) the business and operations of the Seller Group other than the Business, (ii) all other businesses and operations acquired or commenced by any member of the Seller Group at any time after the Closing Date and (iii) any terminated, divested or discontinued business or operation that at the time of termination, divestiture or discontinuation did not solely relate to the Business as then conducted.

“ Seller Fundamental Representations ” means the representations and warranties of Seller contained in Sections 4.01, 4.02, those portions of Section 4.12 relating to title to the Transferred Assets, those portions of Section 4.13 relating to title to Scheduled Intellectual Property, and the first sentence of Section 4.18.

“ Seller Group ” means Seller, Seller Parent, each subsidiary of Seller and any other Person that is controlled directly or indirectly by Seller Parent. Prior to the Closing, the Seller Group shall include the Transferred Entity, and after the Closing the Seller Group shall exclude the Transferred Entity.

“ Seller Parent ” means Weyerhaeuser Company, a Washington corporation.

“ Severance Obligations ” means any statutory, contractual, common law or other severance payments or other separation benefits, whether pursuant to applicable Law, any applicable plan or policy, any applicable individual employment agreement or arrangement, any CBA or otherwise (including (i) any compensation payable during a mandatory termination notice period, (ii) any continued compensation, severance payments or other separation benefits payable pursuant to a judgment of a court having competent jurisdiction, (iii) in the case of any Hong Kong Business Employee, any 13th month bonus, accrued annual leave or long-service pay that becomes payable in connection with a termination of employment and (iv) in the case of any Japan Business Employee, any amounts payable in accordance with the Weyerhaeuser Japan Ltd. Retirement Allowance Plan) and the employer portion of any employment Taxes with respect to all such severance payments or other separation benefits.

“ SEZ Permit ” means (i) permit no. 55/PSSE issued to the Transferred Entity on October 19, 2009 for pursuing business activity in the territory of the Pomeranian Special Economic Zone (as thereafter amended) and (ii) resolution of City Council of Gdańsk no. XLII/1191/09 issued on November 26, 2009 based on which a real estate tax exemption was claimed by the Transferred Entity.

“ Shared Contract ” means each Contract identified as a “Shared Contract” in Section 1.02(a)(vii) of the Seller Disclosure Letter.

“ Site Services Agreements ” means the agreements to be entered into between Seller and Purchaser in substantially the form set forth in Exhibit B pursuant to which Seller and Purchaser shall agree to provide the goods and services described therein.

“ Software ” means all computer software, including but not limited to, application software, system software, firmware, middleware, mobile digital applications, assemblers, applets, compilers and binary libraries, including all source code and object code versions of any and all of the foregoing, in any and all forms and media, and all related documentation.

“ Specified Compensation and Benefits ” means:

(i) in the case of any each Transferred Employee who is a Non-U.S. Business Employee, (A) a base salary or wage rate that is no less favorable than that provided to such Transferred Employee by Seller as of immediately prior to the Closing, (B) incentive compensation opportunities that are no less favorable in the aggregate than those provided to such Transferred Employee as of immediately prior to the Closing and (C) subject to any obligations of Purchaser pursuant to Section 6.07(b), other employee benefits that are no less favorable in the aggregate than the employee benefits provided to such Transferred Employee as of immediately prior to the Closing; and

(ii) in the case of each Transferred Employee who is a U.S. Business Employee, (A) base salary that is no less favorable than that provided to such Transferred Employee by the Seller as of immediately prior to the Closing, (B) incentive compensation opportunities that are no less favorable in the aggregate than such opportunities provided to newly-hired employees of Purchaser in similar pay classes and (C) subject to any obligations of Purchaser pursuant to Section 6.07(b), other employee benefits that are no less favorable in the aggregate than the employee benefits provided to newly-hired employees of Purchaser in similar pay classes (but taking into account any applicable services credits provided to the Transferred Employees pursuant to the terms and conditions of this Agreement).

“ Straddle Period ” means any Tax period that includes (but does not end on) the Closing Date.

“ Sublease Agreement ” means the agreement to be entered into between Seller and Purchaser in substantially the form set forth in Exhibit D with respect to the premises located at 32901 Weyerhaeuser Way S., Federal Way, Washington 98001.

“ subsidiary ” of any Person means any corporation, partnership or other organization whether incorporated or unincorporated of which at least a majority of the securities or interests having by the terms thereof ordinary voting power to elect at least a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled (i) by such Person, (ii) by any one or more of such Person’s subsidiaries or (iii) by such Person and one or more of its subsidiaries; provided , however , that no Person that is not directly or indirectly wholly owned by any other Person shall be a subsidiary of such other Person unless such other Person controls, or has the right, power or ability to control, that Person.

“ Supply Agreements ” means the agreements to be entered into between Seller and Purchaser in substantially the form set forth in Exhibit C providing for the supply of goods and services described therein.

“ Switzerland Business Employees ” means those Business Employees who, as of immediately prior to the applicable Transfer Time (or such other time as is specified in the context where used or such other time as required under applicable Law), are principally employed in Switzerland or, in the case of employees on leave, who were principally employed in Switzerland at the time they began such leave.

“ Target Working Capital ” means (i) if the Closing occurs on or prior to June 30, 2016, $300,000,000 or (ii) if the Closing occurs thereafter, an amount equal to 20% of the Annualized Business Three Month Net Sales Amount.

“ Tax ” or “ Taxes ” means all forms of taxation imposed by any Federal, state, provincial, local, foreign or other Taxing Authority, including income, alternative minimum, accumulated earnings, personal holding company, capital stock, profits, windfall profits, gross receipts, registration, stamp, premium, severance, environmental (including taxes under section 59A of the Code), capital gains, franchise, real property, personal property, occupancy, license, occupation, disability, workers’ compensation, sales, use, excise, employment, unemployment, payroll, social security, estimated, value added, ad valorem, transfer, customs, recapture, withholding, health and other tax, duty, fee, assessment or other similar governmental charge of any kind, including any interest, penalties and additions thereto.

“ Title Company ” means (i) First American Title Insurance Company, as the lead title company and 50% co-insurer, and (ii) a nationally recognized title company selected by Purchaser and approved by Seller in its reasonable discretion, as 50% co-insurer.

“ Title Policy ” means the standard current form of American Land Title Association (ALTA) owner’s policy of title insurance, or the Title Company’s binding commitment to issue the same, insuring the fee title to the applicable Owned Real Property subject only to Permitted Liens; provided, however, that any such Title Policy shall not include nonstandard endorsements and shall not be extended policies of title insurance.

“ Transaction Documents ” means this Agreement, the Ancillary Agreements and the Confidentiality Agreement.

“ Transactions ” means the Acquisition and the other transactions contemplated by the Transaction Documents.

“ Transfer Regulations ” means the European Council Directive of March 12, 2001 (2001/23/EC), relating to the safeguarding of employees’ rights in the event of transfers of undertakings, businesses or parts of businesses and any country legislation implementing such Directive and any other similar applicable Law in other countries that relates to Business Employees.

“ Transfer Taxes ” means all sales (including bulk sales), use, transfer, recording, filing, value added, ad valorem, documentary, gross receipts, registration, conveyance, excise, license, stamp or similar Taxes and notarial or other similar fees arising out of, in connection with or attributable to the transactions effectuated pursuant to this Agreement, including (solely for the taxable period that includes the Closing Date or the date of the relevant Subdivision, as applicable) any such taxes, fees or assessments (i) arising out of any Subdivision of Owned Real Property and (ii) specifically civil law transaction tax imposed under the laws of Poland with respect to the transfer of the Transferred Entity; provided that Transfer Taxes shall not include Income Taxes or Taxes on capital gains.

“ Transferred Employee ” means each Business Employee who accepts employment with Purchaser or any of its subsidiaries as of the applicable Transfer Time and each Business Employee whose employment transfers from Seller or any of its subsidiaries to Purchaser by operation of Law (including through the Transferred Entity).

“ Transferred Entity ” means Weyerhaeuser Poland sp.zo.o.

“ Transferred Equity Interests ” means all the outstanding shares of capital stock of the Transferred Entity.

“ Transferred Poland Real Property ” means the property located in the Pomorska Special Economic Zone of Gdansk, Poland.

“ U.S. Business Employees ” means those Business Employees who, as of immediately prior to the applicable Transfer Time (or such other time as is specified in the context where used or such other time as required under applicable Law), are principally employed in the United States or, in the case of employees on leave, who were principally employed in the United States at the time they began such leave.

“ U.S. Review Laws ” means the Review Laws of the United States.

“ Washington Business and Occupation Tax ” means gross receipts tax imposed for the privilege of doing business in Washington State.

“ WTC Lease ” means that certain Lease Agreement dated February 9, 2016, by and between Federal Way Campus, LLC, as Landlord, and Weyerhaeuser NR Company, as Tenant.

SECTION 11.04. Interpretation; Disclosure Letters . When a reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are

for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”. The words “hereof”, “hereby”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. Each of the parties hereto has participated in the drafting and negotiation of this Agreement. If any ambiguity or question of intent or interpretation arises, this Agreement must be construed as if it is drafted by all the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of authorship of any of the provisions of this Agreement. Any matter disclosed in any Section of the Purchaser Disclosure Letter or the Seller Disclosure Letter shall qualify the correspondingly numbered representation and warranty or covenant and any other representation and warranty or covenant of Purchaser or Seller to the extent that the relevance of any such disclosure to such other representation and warranty or covenant is reasonably apparent from the text of such disclosure, other than the material under the heading “SEC Documents” in Section 4.04 of the Seller Disclosure Letter (which shall only qualify Section 4.04). When a reference is made in this Agreement or the Seller Disclosure Letter to information or documents being provided, made available or disclosed to Purchaser or its affiliates, such information or documents shall include any information or documents (i) furnished in the “data room” maintained by Seller at least 36 hours prior to the execution of this Agreement and to which access has been granted to Purchaser and its Representatives or (ii) otherwise provided in writing (including electronically) to Purchaser or its affiliates.

SECTION 11.05. Severability . If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule or Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible to the end that the Transactions are fulfilled to the extent possible.

SECTION 11.06. Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties hereto and delivered to the other parties.

SECTION 11.07. Entire Agreement; No Third-Party Beneficiaries . The Transaction Documents, taken together with the Purchaser Disclosure Letter and the Seller Disclosure Letter, constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the parties hereto with respect to the Transactions and are not intended to confer upon any Person other than the parties hereto any rights or remedies. In the event of any conflict between the provisions of this Agreement (including the Purchaser Disclosure Letter and the Seller Disclosure Letter and Exhibits hereto), on the one hand, and the provisions of the Confidentiality Agreement or the other Transaction Documents

(including the schedules and exhibits thereto), on the other hand, the provisions of this Agreement shall control.

SECTION 11.08. Governing Law . This Agreement shall be governed by, and construed in accordance with, the Laws of the State of Delaware, regardless of the Laws that might otherwise govern under applicable principles of conflicts of laws thereof.

SECTION 11.09. Assignment . Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of Law or otherwise by any of the parties hereto without the prior written consent of the other parties. Any purported assignment without such consent shall be void. Subject to the preceding sentences, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and assigns.

SECTION 11.10. Enforcement . The parties hereto agree that irreparable damage would occur in the event that any of the provisions of any Transaction Document were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties hereto shall be entitled to an injunction or injunctions to prevent breaches of any Transaction Document and to enforce specifically the terms and provisions of each Transaction Document in any Federal court, located in the State of Delaware or, if such Federal courts do not have subject matter jurisdiction, in any Delaware state court, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (a) consents to submit itself to the personal jurisdiction of any Federal court located in the State of Delaware or, if such Federal courts do not have subject matter jurisdiction, of any Delaware state court in the event any dispute arises out of any Transaction Document or any Transaction, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (c) agrees that it will not bring any action relating to any Transaction Document or any Transaction in any court other than any Federal court sitting in the State of Delaware or any Delaware state court and (d) waives any right to trial by jury with respect to any action related to or arising out of any Transaction Document or any Transaction.

[ Remainder of this page intentionally left blank; signature pages follow .]

100

IN WITNESS WHEREOF, each of Seller and Purchaser has duly executed this Agreement as of the date first written above.

WEYERHAEUSER NR COMPANY

By: _ /s/ Devin W. Stockfish
Name: Devin W. Stockfish
Title: SVP, General Counsel and

Corporate Secretary

INTERNATIONAL PAPER COMPANY

By: _ /s/ C. Cato Ealy
Name: C. Cato Ealy
Title: Senior Vice President

Corporate Development

[ Signature Page to Purchase Agreement ]

Annex I

Glossary of Defined Terms



Term	Location
$	Section 11.03
2014 and 2013 Balance Sheets	Section 4.04(b)
2015 Business Financial Statements	Section 4.04(b)
Accounting Firm	Section 2.03(b)
Accounting Principles	Section 2.03(d)
Accounts Receivable Programs	Section 11.03
Accrued Vacation Days	Section 6.07(i)
Acknowledged Canadian Obligations	Section 11.03
Acquisition	Section 1.01
Acquisition Proposal	Section 11.03
Action	Section 11.03
Adjusted Purchase Price	Section 2.03(c)
affiliate	Section 11.03
Affiliate Agreement	Section 11.03
Agreement	Preamble
Alberta Order	Section 3.03(b)
Allocations	Section 9.01(a)
Ancillary Agreements	Section 11.03
Annualized Business Three Month Net Sales Amount	Section 11.03
Appraisal Firm	Section 9.01(a)
Asset Allocation	Section 9.01(a)



Asset Conveyance Documents	Section 2.02(a)
Assumed Benefit Agreement	Section 11.03
Assumed Benefit Plan	Section 11.03
Assumed Benefit Plan Assets	Section 1.02(a)(xiii)
Assumed Canadian Liabilities	Section 11.03
Assumed Credit Support Obligations	Section 6.19(a)
Assumed Liabilities	Section 1.04(a)
Balance Sheet	Section 4.04(b)
Business	Section 11.03
Business 401(k) Plan	Section 1.01(h)(i)
Business Benefit Agreement	Section 11.03
Business Benefit Plan	Section 11.03
Business Continuing Credit Support Obligation	Section 6.19(b)
Business Day	Section 11.03
Business Employee	Section 11.03
Business Financial Statements	Section 4.04(b)
Business Insurance Policies	Section 1.02(a)(xv)
Business Material Adverse Effect	Section 11.03
Business Material Agreements	Section 4.14(a)
Business NDA	Section 11.03
Canada Business Employees	Section 11.03
Canadian Allocation	Section 9.01(a)
Canadian Seller	Section 11.03



Canadian Transferred Assets	Section 11.03
CBA	Section 4.08(a)
Closing	Section 2.01
Closing Date	Section 2.01
Closing Date Payment	Section 2.02(b)
Closing Eligible Capital Expenditures	Section 2.03(a)
Closing Working Capital	Section 2.03(a)
Code	Section 11.03
Columbus Industrial Revenue Bonds	Section 11.03
Commercial Operation	Section 11.03
Confidentiality Agreement	Section 11.03
Continuation Period	Section 11.03
Contracts	Section 1.02(a)(vii)
control	Section 11.03
Controlled Group Liability	Section 4.07(b)
Controlling Party	Section 10.08(b)
Credit Support Obligations	Section 11.03
Current Assets	Section 2.03(d)
Current Liabilities	Section 2.03(d)
Data Processing Agreement	Section 11.03
Debt Amount	Section 11.03
DOJ	Section 6.04(a)
Effect	Section 11.03



Eligible Capital Expenditures	Section 11.03
Employee List	Section 6.07(a)
Environmental Indemnity Claims	Section 10.08
Environmental Laws	Section 11.03
Environmental Liabilities	Section 11.03
Environmental Permits	Section 4.11(a)(iii)
Environmental Proceedings	Section 4.11(a)(iv)
Equity Allocation,	Section 9.01(a)
ERISA	Section 11.03
Exchange Act	Section 3.03(b)
Excluded Assets	Section 1.02(b)
Extraordinary Maintenance and Repair Expenditures	Section 11.03
FCPA	Section 4.19
FERC	Section 6.04(a)
FERC Approval	Section 3.03(b)
Final Order	Section 11.03
FOLA	Section 11.03
FOLR	Section 11.03
FTC	Section 6.04(a)
GAAP	Section 11.03
Geneva Pension Plan	Section 11.03
Georgia Power Contract	Section 11.03



Governmental Approval	Section 3.03(b)
Governmental Entity	Section 3.03(b)
GST	Section 11.03
Hazardous Materials	Section 11.03
Historic Remains	Section 11.03
Hong Kong Business Employees	Section 11.03
HSR Act	Section 3.03(b)
Income Tax	Section 11.03
Income Tax Claim	Section 10.04(b)
Indebtedness	Section 11.03
Indemnified Party	Section 10.04(a)
Indemnifying Party	Section 10.04(a)
Intellectual Property Allocation	Section 9.01(a)
Intellectual Property License Agreement	Section 11.03
Intellectual Property Rights	Section 11.03
Intermediary	Section 9.12
Inventory	Section 1.02(a)(ii)
IRS	Section 11.03
Japan Business Employees	Section 11.03
JDA	Section 6.02(h)
Judgment	Section 3.03(a)
knowledge of Seller	Section 11.03
Law	Section 3.03(a)



Lease Buyout Amount	Section 6.13
Leased Real Property	Section 4.12(b)
Liabilities	Section 11.03
Liabilities Assumption Documents	Section 2.02(b)
Lien Date	Section 9.03
Liens	Section 11.03
Losses	Section 10.01(a)
Material Adverse Effect	Section 11.03
Material Lease	Section 11.03
Material Third Party Lease	Section 4.14(a)(ix)
Monthly Financial Reports	Section 6.14(c)
Non-Controlling Party	Section 10.08(b)
Non-U.S. Assumed Benefit Plan	Section 4.07(d)
Non-U.S. Business Employees	Section 11.03
Notice of Disagreement	Section 2.03(b)
NYSE	Section 11.03
Outside Date	Section 8.01(b)(i)
Owned Real Property	Section 4.12(a)
Permits	Section 1.02(a)(vi)
Permitted Liens	Section 4.12(d)
Person	Section 11.03
Port Wentworth Budget	Section 4.20(a)
Port Wentworth Project	Section 11.03



Post-Closing Tax Period	Section 11.03
Power Act	Section 3.03(b)
Pre-Closing Environmental Liabilities	Section 11.03
Pre-Closing Maintenance CapEx Budget	Section 4.20(b)
Pre-Closing Tax Period	Section 11.03
Project Completion Deadline	Section 11.03
Property Tax	Section 9.03
Purchase Price	Section 1.01
Purchaser	Preamble
Purchaser 401(k) Plan	Section 6.07(h)(i)
Purchaser Disclosure Letter	Article III
Purchaser Fundamental Representations	Section 11.03
Purchaser Indemnitees	Section 10.01(a)
Purchaser Material Adverse Effect	Section 11.03
Purchaser Portion	Section 1.05(a)
Purchaser Sub	Recitals
Purchaser Welfare Plans	Section 6.07(g)(i)
Real Property Allocation	Section 9.01(a)
Records	Section 1.02(a)(xi)
Regulatory Legal Proceeding	Section 11.03
Release	Section 11.03
Representatives	Section 11.03
Responsive Action	Section 10.08(a)



Retained Credit Support Obligations	Section 6.19(b)
Retained Environmental Liabilities	Section 11.03
Retained Liabilities	Section 1.04(b)
Retained Names	Section 1.02(b)(x)
Retained Tax Liabilities	Section 1.04(b)(iv)
Return Date	Section 9.01(a)
Review Law	Section 11.03
RPR	Section 6.17(a)(i)
Scheduled Intellectual Property	Section 1.02(a)(v)
SEC	Section 11.03
Section 1031	Section 9.12
Securities Act	Section 11.03
Seller	Preamble
Seller Business	Section 11.03
Seller Continuing Credit Support Obligation	Section 6.19(a)
Seller Disclosure Letter	Article IV
Seller Flexible Spending Account Plan	Section 1.01(m)
Seller Fundamental Representations	Section 11.03
Seller Group	Section 11.03
Seller Indemnitees	Section 10.02(a)
Seller Insurance Policy	Section 6.16
Seller Parent	Section 11.03
Seller Portion	Section 1.05(a)



Seller Retiree Welfare Plans	Section 1.01(g)(iv)
Severance Obligations	Section 11.03
SEZ Permit	Section 11.03
Shared Contract	Section 11.03
Shared Facilities	Section 6.17(c)(iv)
Site Services Agreements	Section 11.03
Software	Section 11.03
Specified Compensation and Benefits	Section 11.03
Statement	Section 2.03(a)
Straddle Period	Section 11.03
Subdivision	Section 6.17(c)(iv)(B)
Sublease Agreement	Section 11.03
subsidiary	Section 11.03
Supply Agreements	Section 11.03
Survey	Section 6.17(a)(i)
Switzerland Business Employees	Section 11.03
Tangible Personal Property	Section 1.02(a)(iii)
Target Working Capital	Section 11.03
Tax	Section 11.03
Tax Accountant	Section 9.04(c)
Tax Claim	Section 10.04(b)
Tax Return	Section 11.03
Taxes	Section 11.03



Taxing Authority	Section 11.03
Third Party Claim	Section 10.04(a)
Title Company	Section 11.03
Title Policy	Section 11.03
Transaction Documents	Section 11.03
Transactions	Section 11.03
Transfer Regulations	Section 11.03
Transfer Taxes	Section 11.03
Transfer Time	Section 6.07(b)(i)
Transferred Assets	Section 1.02(a)
Transferred Contracts	Section 1.02(a)(vii)
Transferred Employee	Section 11.03
Transferred Entity	Section 11.03
Transferred Entity Share Purchase Agreement	Section 2.02(a)
Transferred Equity Interests	Section 11.03
Transferred Intellectual Property	Section 1.02(a)(v)
Transferred Inventory	Section 1.02(a)(ii)
Transferred Permits	Section 1.02(a)(vi)
Transferred Poland Real Property	Section 11.03
Transferred Real Property	Section 1.02(a)(i)
Transferred Vehicles and Forklifts	Section 6.13
Transition Services Agreement	Section 6.20
U.S. Business Employees	Section 11.03



U.S. Review Laws	Section 11.03
WARN Act	Section 1.01(o)
Washington Business and Occupation Tax	Section 11.03
Welfare Benefit Claims	Section 1.01(g)(iii)
Withholding Taxes	Section 2.04
Workers’ Compensation Event	Section 6.07(g)(v)
Working Capital	Section 2.03(d)
WTC Lease	Section 11.03

Schedule of Omitted Exhibits and Schedules

The following exhibits and schedules to this Exhibit 2.2 have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The company will furnish a copy of any such omitted exhibits and schedules to the Securities and Exchange Commission upon request but may request confidential treatment for any exhibit or schedule so furnished.

Seller Disclosure Schedule dated May 1, 2016

Exhibit A Form of Intellectual Property License Agreement

Exhibit B Form of Site Services Agreement

Exhibit C Form of Supply Agreement

Exhibit D Form of Sublease

Exhibit E Form of Data Processing Agreement

Exhibit F Transferred Entity Share Purchase Agreement

EXHIBIT 12

Weyerhaeuser Company and Subsidiaries

Computation of Ratios of Earnings to Fixed Charges and

Computation of Ratios of Earnings to Combined Fixed Charges and Preference Dividends

For the quarters ended June 30, 2016 , and 2015

(Dollar amounts in millions)



	YEAR-TO-DATE ENDED
	JUNE 2016			JUNE 2015
Available earnings:
Earnings from continuing operations before interest expense, amortization of debt expense and income taxes	$	445		$	372
Add: interest portion of rental expense	8			6
Add: distributed income of equity affiliates	32			—
Add: undistributed (income) losses of equity affiliates and income attributable to noncontrolling interests in subsidiaries	(12		)	—
Available earnings	$	473		$	378
Fixed charges:
Interest expense incurred	$	191		$	171
Amortization of debt expense	24			3
Interest portion of rental expense	8			6
Total fixed charges	223			180
Dividends on preference shares (pretax)	27			26
Total fixed charges and preference dividends	$	250		$	206
Ratio of earnings to fixed charges	2.12			2.10
Ratio of earnings to combined fixed charges and preference dividends	1.89			1.83

EXHIBIT 31

Certification Pursuant to Rule 13a-14(a)

Under the Securities Exchange Act of 1934

I, Doyle R. Simons, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of Weyerhaeuser Company.


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.


4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.


5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



	Date:	August 5, 2016

	/s/ DOYLE R. SIMONS
	Doyle R. Simons President and Chief Executive Officer

I, Russell S. Hagen, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of Weyerhaeuser Company.


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.


4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.


5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



	Date:	August 5, 2016

	/s/ RUSSELL S. HAGEN
	Russell S. Hagen Senior Vice President and Chief Financial Officer

EXHIBIT 32

Certification Pursuant to Rule 13a-14(b)

Under the Securities Exchange Act of 1934 and

Section 1350, Chapter 63 of Title 18, United States Code

Pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and section 1350, chapter 63 of title 18, United States Code, each of the undersigned officers of Weyerhaeuser Company, a Washington corporation (the “Company”), hereby certifies that:

The Company’s Quarterly Report on Form 10-Q dated August 5, 2016 (the “Form 10-Q”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.



/s/ DOYLE R. SIMONS
Doyle R. Simons President and Chief Executive Officer

Dated:	August 5, 2016

/s/ RUSSELL S. HAGEN
Russell S. Hagen Senior Vice President and Chief Financial Officer

Dated:	August 5, 2016

The foregoing certification is being furnished solely pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and section 1350, chapter 63 of title 18, United States Code and is not being filed as part of the Form 10-Q or as a separate disclosure document.