1
CONFORMED COPY
EXHIBIT 4.C.3
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PLUM CREEK TIMBER COMPANY, L.P.
$150,000,000
8.73% SENIOR NOTES DUE AUGUST 1, 2009
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SENIOR NOTE AGREEMENT
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Dated as of August 1, 1994
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TABLE OF CONTENTS
1. AUTHORIZATION OF ISSUE OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. PURCHASE AND SALE OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. CONDITIONS OF CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3A. Opinion of Purchaser's Special Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3B. Opinion of Company's Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3C. Representations and Warranties; No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3D. Sale of Notes to Other Purchasers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3E. Purchase Permitted by Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3F. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3G. Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4. PREPAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4A. Optional Prepayment With Yield-Maintenance Premium . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4B. Notice of Optional Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4C. Partial Payments Pro Rata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4D. Retirement of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4E. Payments on Business Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5A. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5B. Inspection of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5C. Covenant to Secure Notes Equally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5D. Partnership Existence, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5E. Payment of Taxes and Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5F. Compliance with Laws, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5G. Maintenance of Properties; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6A. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6B. Lien, Indebtedness and Other Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6B(1) Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6B(2) Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6B(3) Loans, Advances, Investments and Contingent Liabilities . . . . . . . . . . . . . . . . . . . 18
6B(4) Sale of Stock and Debt of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6B(5) Merger and Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6B(6) Harvesting Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6B(7) Sale and Lease-Back . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6B(8) Certain Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6B(9) Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6C. Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6D. Issuance of Stock by Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7A. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7B. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8. REPRESENTATIONS, COVENANTS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8A. Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8B. General Partner Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8C. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8D. Partnership Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8E. Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8F. Business; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8G. Changes, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8H. Tax Returns and Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8I. Franchises, Licenses, Agreements, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8J. Actions Pending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8K. Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8L. Compliance with Other Instruments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8M. Governmental Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
8N. Foreign Assets Control Regulations, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
8O. Offering of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8P. Regulation G, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8Q. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8R. Status Under Certain Federal Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8S. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8T. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8U. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9. REPRESENTATIONS OF THE PURCHASER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
10. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10A. Yield-Maintenance Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10B. Other Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
11A. Note Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
11B. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
11C. Consent to Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
11D. Solicitation of Holders of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
11E. Form, Registration, Transfer and Exchange of Notes; Lost Notes . . . . . . . . . . . . . . . . . . . . 65
11F. Persons Deemed Owners; Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
11G. Non-Recourse Nature of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
11H. Survival of Representations and Warranties; Entire Agreement . . . . . . . . . . . . . . . . . . . . . 66
11I. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
11J. Disclosure to Other Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
11K. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
11L. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
11M. Substitution of Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
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11N. Satisfaction Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
11O. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
11P. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
PURCHASER SCHEDULE
Exhibit A - Form of Note
Exhibit B-1 - Form of Opinion of Purchaser's Counsel
Exhibit B-2 - Form of Opinion of Company's Counsel
Exhibit D - Liens
Exhibit E - Investments
Exhibit F - Environmental Notices
Exhibit 8G - Material Transactions
Exhibit 8K - Property Titles
Exhibit 8T - Environmental Permits and Licenses
Schedule 10B(1) - Investment Policy
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PLUM CREEK TIMBER COMPANY, L.P.
999 Third Avenue
Seattle, Washington 98104
As of August 1, 1994
To each of the Purchasers
listed in the attached
Purchaser Schedule
Dear Purchaser:
The undersigned, Plum Creek Timber Company, L.P. (herein called the "Company"),
a Delaware limited partnership, hereby agrees with you as follows:
1. AUTHORIZATION OF ISSUE OF NOTES
The Company will authorize the issue of its senior promissory
notes (herein called the "Notes") in the aggregate principal amount of
$150,000,000, to be dated the date of issue thereof, to mature August 1, 2009,
to bear interest on the unpaid balance thereof from the date thereof to but
excluding the date the principal thereof shall have become due and payable at
the rate of 8.73% per annum and on overdue principal, premium and interest at
the rate specified therein, and to be substantially in the form of Exhibit A
attached hereto. The term "Notes" as used herein shall include each Note
delivered pursuant to any provision of this Agreement or the other Note
Agreements referred to in paragraph 2 and each Note delivered in substitution
or exchange for any such Note pursuant to any such provision.
2. PURCHASE AND SALE OF NOTES
The Company hereby agrees to sell to you and, subject to the
terms and conditions herein set forth, you agree to purchase from the Company
the aggregate principal amount of Notes set forth opposite your name in the
Purchaser Schedule attached hereto at 100% of such aggregate principal amount.
The Company will deliver to you, at the offices of Debevoise & Plimpton at 875
Third Avenue, New York, New York 10022, one or more Notes registered in your
name or in the name of your nominee, evidencing the aggregate principal amount
of Notes to be purchased by you and in
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the denomination or denominations specified with respect to you in the
Purchaser Schedule, against payment of the purchase price thereof by transfer
of immediately available funds for credit to the Company's account #12336-14205
at Bank of America, Seattle, Washington, ABA #121-000- 358, Message: Attn:
Global Agency #5596-Ref: Plum Creek Timber Co., L.P. on the date of closing,
which shall be August 1, 1994, or any other date on or before August 1, 1994
upon which the Company, you and the other purchasers referred to in the
penultimate sentence of this paragraph 2 may mutually agree (herein called the
"closing" or the "date of closing"). If at the closing the Company shall fail
to tender such Notes to you as provided above in this paragraph 2, or any of
the conditions specified in paragraph 3 shall not have been fulfilled to your
satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement, without thereby waiving any other rights you
may have by reason of such failure or such nonfulfillment. Concurrently with
the execution and delivery of this Agreement, the Company is entering into
other Note Agreements (herein called the "Other Note Agreements") substantially
identical with this Agreement (except as to the identity of the purchaser and
the principal amount of Notes to be purchased) with the other purchasers
(herein called the "Other Purchasers") named in the Purchaser Schedule. The
sale to you and the sales to the Other Purchasers are to be separate and
several sales.
3. CONDITIONS OF CLOSING
Your obligation to purchase and pay for the Notes to be purchased by
you hereunder is subject to the satisfaction, on or before the date of closing,
of the following conditions:
3A. OPINION OF PURCHASER'S SPECIAL COUNSEL
You shall have received from Debevoise & Plimpton, who are
acting as special counsel for you in connection with this transaction, an
opinion satisfactory to you and substantially in the form of Exhibit B-1
attached hereto and including such other matters as you may reasonably request.
3B. OPINION OF COMPANY'S COUNSEL
You shall have received from James A. Kraft, Vice President,
Law for the Company, a favorable opinion satisfactory to you and substantially
in the form of Exhibit B-2
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attached hereto and including such other matters as you may reasonably request.
3C. REPRESENTATIONS AND WARRANTIES; NO DEFAULT
The representations and warranties contained in paragraph 8
shall be true in all material respects on and as of the date of closing, except
to the extent of changes caused by the transactions herein contemplated; there
shall exist on the date of closing no Event of Default or Default; and the
Company shall have delivered to you an Officers' Certificate, dated the date of
closing, to both such effects.
3D. SALE OF NOTES TO OTHER PURCHASERS
The Company shall have sold to the Other Purchasers the Notes
to be purchased by them at the closing and shall have received payment in full
therefor.
3E. PURCHASE PERMITTED BY APPLICABLE LAWS
The purchase of and payment for the Notes to be purchased by
you on the date of closing on the terms and conditions herein provided
(including the use of the proceeds of such Notes by the Company) shall not
violate any applicable law or governmental regulation (including, without
limitation, section 5 of the Securities Act or Regulation G, T or X of the
Board of Governors of the Federal Reserve System), shall not subject you to any
tax, penalty, liability or other onerous condition under or pursuant to any
applicable law or governmental regulation, and shall be permitted by the laws
and regulations of each jurisdiction to which you are subject, but without
recourse to provisions (such as section 1405(a)(8) of the New York Insurance
Law) permitting limited investments by life insurance companies without
restriction as to the character of the particular investment. If required by
you, you shall have received an Officers' Certificate of the Company certifying
as to such matters of fact as you may reasonably specify to enable you to
determine whether such purchase is permitted.
3F. INSURANCE
The Company shall have delivered to you an Officers'
Certificate, dated the date of closing, certifying that insurance with respect
to its properties and business complying with the provisions of paragraph 5G
(including, without limitation, the provisions of paragraph 5G permit-
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ting the Company to self-insure) is in full force and effect.
3G. PROCEEDINGS
All proceedings taken or to be taken in connection with the
transactions contemplated hereby and all documents incident thereto shall be
satisfactory in substance and form to you, and you shall have received all such
counterpart originals or certified or other copies of such documents as you may
reasonably request.
If the above conditions (other than the conditions stated in
paragraph 3D) are satisfied, the obligation of the Company to sell to you the
Notes to be purchased by you hereunder is subject to the tendering by the Other
Purchasers of the purchase price of the Notes to be purchased by them pursuant
to the Other Note Agreements on the date of closing.
4. PREPAYMENTS
The Notes shall be subject to prepayment under the
circumstances set forth in paragraph 4A.
4A. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE PREMIUM
The Notes shall be subject to prepayment, in whole at any time
or from time to time in part (other than in the case of any prepayment pursuant
to paragraph 6B(5)(viii) or 6B(6), in multiples of $5,000,000), at the option
of the Company, at 100% of the principal amount so prepaid plus interest
thereon to the prepayment date and the Yield-Maintenance Premium, if any, with
respect to each Note.
4B. NOTICE OF OPTIONAL PREPAYMENT
The Company shall give the holder of each Note irrevocable
written notice of any prepayment pursuant to paragraph 4A not less than 20
Business Days prior to the prepayment date, specifying such prepayment date and
the principal amount of the Notes, and of the Notes held by such holder, to be
prepaid on such date and stating that such prepayment is to be made pursuant to
paragraph 4A. Notice of prepayment having been given as aforesaid, the
principal amount of the Notes specified in such notice, together with interest
thereon to the prepayment date and together with the premium, if any, herein
provided, shall become due and payable on such prepayment date. The Company
shall deliver (i) two
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(2) Business Days prior to each prepayment pursuant to paragraph 4A an
Officers' Certificate stating whether a Yield-Maintenance Premium is payable in
connection with such prepayment and setting forth the calculations made in
making such determination based on an estimate of such Yield-Maintenance
Premium and (ii) on the date of such prepayment, an Officers' Certificate
stating whether such Yield-Maintenance Premium is payable and setting forth the
actual calculation.
4C. PARTIAL PAYMENTS PRO RATA
Upon any partial prepayment of the Notes, the principal amount
so prepaid shall be allocated to all Notes at the time outstanding (including,
for the purpose of this paragraph 4C only, all Notes prepaid or otherwise
retired or purchased or otherwise acquired by the Company or any of its
Subsidiaries or Affiliates other than by prepayment pursuant to paragraph 4A)
in proportion to the respective outstanding principal amounts thereof.
4D. RETIREMENT OF NOTES
The Company shall not, and shall not permit any of its
Subsidiaries or Affiliates to, prepay or otherwise retire in whole or in part
prior to their stated final maturity (other than a prepayment pursuant to
paragraph 4A or upon acceleration of such final maturity pursuant to paragraph
7A), or purchase or otherwise acquire, directly or indirectly, Notes held by
any holder unless the Company or such Subsidiary or Affiliate shall have
offered to prepay or otherwise retire or purchase or otherwise acquire, as the
case may be, the same proportion of the aggregate principal amount of Notes
held by each other holder of Notes at the time outstanding upon the same terms
and conditions. Any Notes so prepaid or otherwise retired or purchased or
otherwise acquired by the Company or any of its Subsidiaries or Affiliates
shall not be deemed to be outstanding for any purpose under this Agreement,
except as provided in paragraph 4C.
4E. PAYMENTS ON BUSINESS DAYS
If the date specified for any required payment under this
Agreement falls on a day that is not a Business Day, the payment shall be made
on the next succeeding Business Day and interest shall be payable to the date
of such payment.
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5. AFFIRMATIVE COVENANTS
5A. FINANCIAL STATEMENTS
The Company covenants that it will deliver to each Significant
Holder in duplicate:
(i) as soon as available, but not later than 90 days
after the end of each fiscal year, a copy of the audited combined
balance sheet of the Company and its combined Subsidiaries as of the
end of such year and the related combined statement of income and
combined statement of cash flows for such fiscal year, setting forth
in each case in comparative form the figures for the previous fiscal
year, and accompanied by the opinion of Coopers & Lybrand, or another
nationally recognized independent public accounting firm, which report
shall state that such combined financial statements present fairly the
financial position for the dates specified and the results of
operations for the periods indicated in conformity with generally
accepted accounting principles applied on a basis consistent with
prior years;
(ii) as soon as available, but not later than 120 days
after the end of each fiscal year, a copy of a combining balance sheet
of the Company and each of its Subsidiaries as at the end of such
fiscal year and the related combining statement of income and
combining statement of cash flows for such fiscal year, all in
reasonable detail and satisfactory in scope to the Required Holder(s)
and unaudited but certified by an appropriate Responsible Officer as
having been used in connection with the preparation of the financial
statements referred to in clause (i) of this paragraph 5A;
(iii) as soon as available, but not later than 45 days
after the end of each fiscal quarter (other than the last fiscal
quarter) of each year, a copy of the unaudited combined balance sheet
of the Company and its combined Subsidiaries as of the end of such
quarter and the related combined statement of income and combined
statement of cash flows for the period commencing on the first day and
ending on the last day of such quarter, in each case setting forth in
comparative form figures for the corresponding period in the preceding
fiscal year, all in reasonable detail and satisfactory in scope to the
Required Holder(s) (information in detail and scope comparable to
information required to
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be included in a Quarterly Report on Form 10-Q shall be deemed to be
satisfactory for such purposes), such combined balance sheets to be as
of the end of such quarter and such combined statements of income and
combined statements of cash flows to be for such quarterly period and
for the period from the beginning of the fiscal year to the end of
such quarter, and certified by an appropriate Responsible Officer as
being complete and correct and presenting fairly the financial
position for the dates specified and the results of operations of the
Company and the Subsidiaries for the periods indicated in conformity
with generally accepted accounting principles applied on a consistent
basis;
(iv) as soon as available, but not later than 45 days
after the end of each fiscal quarter (other than the last fiscal
quarter) of each year, a copy of the unaudited combining balance sheet
of the Company and each of its Subsidiaries, and the related combining
statement of income and combining statement of cash flows for such
quarter, in each case setting forth in comparative form figures for
the corresponding period in the preceding fiscal year, all in
reasonable detail and satisfactory in scope to the Required Holder(s),
(information in detail and scope that would normally be required on
interim financial statements, except as provided for in this
paragraph, shall be deemed to be satisfactory for such purposes), such
combining balance sheets to be as of the end of such quarter and such
combining statements of income and combining statements of cash flows
to be for such quarterly period and for the period from the beginning
of the fiscal year to the end of such quarter, and certified by an
appropriate Responsible Officer of the Company as having been used in
connection with the preparation of the financial statements referred
to in clause (iii) of this paragraph 5A;
(v) to the extent not delivered pursuant to clauses (i),
(ii), (iii) and (iv) above, promptly upon transmission thereof, copies
of all such financial statements as are delivered to the Mortgage
Noteholders pursuant to the Mortgage Note Agreements;
(vi) to the extent not delivered pursuant to clause (i),
(ii), (iii), (iv) or (v), promptly upon transmission thereof, copies
of all such financial statements, proxy statements, notices and
reports as it
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sends to its public security holders and copies of all registration
statements (without exhibits) and all reports which it files with the
Securities and Exchange Commission and any governmental body or agency
succeeding to the functions of the Securities and Exchange Commission;
(vii) as soon as practicable, and in any event within 10
Business Days after the Company, any of its Subsidiaries or any
Related Person knows of the occurrence or existence or expected
occurrence or existence of any event or condition or series of events
or conditions with respect to any Plan or Plans which are reasonably
likely to result in (a) a material liability to the Company, any of
its Subsidiaries or any Related Person pursuant to ERISA or the Code
(other than liability for PBGC premiums or regular periodic
contributions to any such Plan or Plans) or (b) the imposition of a
Lien on any of the assets or other properties of the Company, any of
its Subsidiaries or any Related Person pursuant to ERISA or the Code,
the Company shall deliver to each Significant Holder a statement
signed by the Chief Financial Officer of the Company setting forth
details respecting such event or condition or series of events or
conditions and the action, if any, that the Company, any of its
Subsidiaries or any Related Person proposes to take with respect
thereto (and a copy of any notice, report or other written
communication, or a written description of any oral communication,
with or from the PBGC, the Internal Revenue Service or the Department
of Labor with respect to such event or condition or series of events
or conditions); and
(viii) with reasonable promptness, such other information
and financial data as such Significant Holder may reasonably request.
Together with each delivery of financial statements required by clauses (i) and
(iii) above, the Company will deliver to each Significant Holder an Officers'
Certificate demonstrating (with computations in reasonable detail) compliance
by the Company and its Subsidiaries with the provisions of paragraph 6
(including, without limitation, paragraph 6A) and stating that there exists no
continuing Event of Default or Default, or, if any continuing Event of Default
or Default exists, specifying the nature and period of existence thereof and
what action the Company proposes to take or is taking with respect thereto.
Together with each delivery of
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financial statements required by clause (i) above, the Company will deliver to
each Significant Holder a certificate of such accountants stating that, in
making the audit necessary to the certification of such financial statements,
they have obtained no knowledge of any Event of Default or Default continuing,
or, if they have obtained knowledge of any Event of Default or Default
continuing, specifying the nature and period of existence thereof. Such
accountants, however, shall not be required to engage in any auditing
procedures other than those procedures required by generally accepted auditing
standards, and shall not be liable to anyone by reason of their failure to
obtain knowledge of any Event of Default or Default which would not be
disclosed in the course of an audit conducted in accordance with generally
accepted auditing standards. Notwithstanding the foregoing provisions of this
paragraph 5A, the Company shall not be required to deliver any financial
statements or other documents (other than documents or information which have
become public information) to any Person engaged in any Permitted Business in
competition with the Company or any Subsidiary. The Company also covenants
that forthwith upon the chief executive officer, principal financial officer or
principal accounting officer of the Company or the General Partner becoming
aware of an Event of Default and within 5 Business Days after the chief
executive officer, principal financial officer or principal accounting officer
of the Company or the General Partner becomes aware of a Default, it will
deliver to each Significant Holder an Officers' Certificate specifying the
nature and period of existence thereof and what action the Company proposes to
take with respect thereto, provided, however, no such officer shall be
obligated to provide a certificate with respect to any such Event of Default or
Default that has been cured on or before the date upon which such officer
becomes aware thereof.
5B. INSPECTION OF PROPERTY
The Company covenants that it will permit any Person
designated in writing by (a) you or (b) any Significant Holder or Significant
Holders of not less than 5% in aggregate principal amount of the Notes at the
time outstanding (other than any Person acting on behalf of any holder which is
engaged in any Permitted Business in competition with the Company or any
Subsidiary), at such holder's or holders' expense, to visit and inspect any of
the properties of the Company and its Subsidiaries, to examine the books and
financial records of the Company and its Subsidiaries and make copies thereof
or extracts therefrom and to discuss the affairs, finances and accounts of the
Company or
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any of such corporations with the principal officers of the Company and its
independent public accountants, all upon reasonable notice and at such
reasonable times and as often as such holder or holders may reasonably request.
5C. COVENANT TO SECURE NOTES EQUALLY
The Company covenants that, if it shall create or assume any
Lien upon any of its property or assets, whether now owned or hereafter
acquired, other than Liens permitted by the provisions of paragraph 6B(1)
(unless prior written consent to the creation or assumption thereof shall have
been obtained pursuant to paragraph 11C), it will make or cause to be made
effective provision whereby the Notes will be secured by such Lien equally and
ratably with any and all other Debt thereby secured so long as any such other
Debt shall be so secured.
5D. PARTNERSHIP EXISTENCE, ETC.
Except as permitted by paragraph 6B(5) the Company covenants
that it will, and will cause each of its Restricted Subsidiaries to, at all
times preserve and keep in full force and effect its partnership or corporate
existence, as the case may be, and rights and franchises material to its
business, and those of each of its Restricted Subsidiaries, and will qualify,
and cause each of its Restricted Subsidiaries to qualify, to do business in any
jurisdiction where the failure to do so would have a material adverse effect on
the business, condition (financial or other), assets, properties or operations
of the Company or the Company and its Restricted Subsidiaries taken as a whole,
provided that the corporate existence of any Restricted Subsidiary or any
rights and franchises of the Company or any Restricted Subsidiary may be
terminated if, in the good faith judgment of the Company, such termination is
in the best interests of the Company and would not have a material adverse
effect on the business, condition (financial or other), assets, properties or
operations of the Company or the Company and its Restricted Subsidiaries taken
as a whole.
5E. PAYMENT OF TAXES AND CLAIMS
The Company covenants that it will, and will cause each of its
Restricted Subsidiaries to, pay all material taxes, assessments and other
governmental charges imposed upon it or any of its properties or assets or in
respect of any of its franchises, business, income or profits before any
penalty accrues thereon, and all material claims (in-
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cluding, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law have or
may become a Lien upon any of its properties or assets, provided that no such
tax, assessment, charge or claim need be paid if it is being contested in good
faith by appropriate proceedings promptly instituted and diligently conducted
and if such accrual or other appropriate provision, if any, as shall be
required by generally accepted accounting principles shall have been made
therefor.
5F. COMPLIANCE WITH LAWS, ETC.
The Company covenants that it will, and will cause each of its
Subsidiaries to, comply with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority, the noncompliance with
which would materially adversely affect the business, condition (financial or
other), assets, properties or operations of the Company or the Company and its
Restricted Subsidiaries taken as a whole.
5G. MAINTENANCE OF PROPERTIES; INSURANCE
The Company covenants that it will maintain or cause to be
maintained in good repair, working order and condition (normal wear and tear
excepted) all properties used or useful in the business of the Company and its
Restricted Subsidiaries and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements thereof except where the failure
to make such repair, renewal or replacement would not have a material adverse
effect on the business, condition (financial or other), assets, properties or
results of operations of the Company or the Company and its Restricted
Subsidiaries taken as a whole. The Company will maintain or cause to be
maintained, with financially sound and reputable insurers, insurance with
respect to its properties and business and the properties and business of its
Restricted Subsidiaries against loss or damage of the kinds customarily insured
against by corporations of established reputation of similar size engaged in
the same or similar business and similarly situated, of such types and in such
amounts as are customarily carried under similar circumstances by such other
corporations, provided that the Company may self-insure with respect to its
properties and business and the properties and business of its Restricted
Subsidiaries to the extent consistent with the practice of corporations of
established
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reputation of similar size engaged in the same or similar business and
similarly situated.
6. NEGATIVE COVENANTS
6A. RESTRICTED PAYMENTS
The Company covenants that it will not and will not permit any
Subsidiary to directly or indirectly pay, declare, order, make or set apart any
sum for any Restricted Payment, except that the Company may make, pay or set
apart during each calendar quarter one or more Restricted Payments if
(i) such Restricted Payments are in an aggregate amount not
exceeding the amount by which Available Cash with respect to the
immediately preceding calendar quarter exceeds any amount contributed
to Available Cash with respect to such immediately preceding calendar
quarter by any Subsidiary if and to the extent that the payment of
such amount as a dividend or distribution to the Company has not been
made and is not at the time permitted by the terms of such
Subsidiary's charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to such
Subsidiary, provided that in determining Available Cash with respect
to such immediately preceding calendar quarter, the Company will
include in the amount of the reserves established during such quarter
pursuant to clause (b)(iv) of the definition of Available Cash an
amount not less than 50% of the aggregate amount of all interest in
respect of the Notes to be paid on the interest payment date
immediately following such immediately preceding calendar quarter, and
the Company will not reduce the amount of the reserves so included, in
determining Available Cash for any calendar quarter subsequent to such
immediately preceding calendar quarter pursuant to clause (a)(iii) of
the definition of Available Cash, unless and until the amount of
interest in respect of which such amount has been reserved has in fact
been paid, and
(ii) immediately after giving effect to any such proposed
action no condition or event shall exist which constitutes an Event of
Default or Material Default.
The Company will not, in any event, directly or indirectly declare, order, pay
or make any Restricted Payment except in cash.
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6B. LIEN, INDEBTEDNESS AND OTHER RESTRICTIONS
The Company covenants that it will not, and will not permit
any Restricted Subsidiary to:
6B(1) LIENS
Create, assume or suffer to exist any Lien upon any of its
property or assets, whether now owned or hereafter acquired, securing Debt,
except
(i) Liens for taxes, assessments or other governmental
charges the payment of which is not at the time required by paragraph
5E,
(ii) Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers and materialmen and similar liens
incurred in the ordinary course of business for sums not yet due or
the payment of which is not at the time required by paragraph 5E,
(iii) Liens incurred or deposits made incidental to the
conduct of its business or the ownership of its property including,
without limitation, a) pledges or deposits in connection with worker's
compensation, unemployment insurance and other social security
legislation, (b) deposits to secure insurance, the performance of
bids, tenders, contracts, leases, licenses, franchises and statutory
obligations, each in the ordinary course of business, and c) other
obligations which were not incurred or made in connection with the
borrowing of money, the obtaining of advances or credit or the payment
of the deferred purchase price of property and which do not in the
aggregate materially detract from the value of its property or assets
or materially impair the use of such property or assets in the
operation of its business,
(iv) any attachment or judgment Lien, unless the judgment
it secures shall not, within 45 days after the entry thereof, have
been discharged or execution thereof stayed pending appeal, or shall
not have been discharged within 45 days after expiration of any such
stay,
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(v) leases or subleases granted to others, easements,
rights-of-way, restrictions and other similar charges or encumbrances,
which, in each case, and in the aggregate, do not materially interfere
with the ordinary conduct of the business of the Company or any
Restricted Subsidiary,
(vi) Liens on property or assets of any Restricted
Subsidiary securing obligations of such Restricted Subsidiary owing to
the Company or another Restricted Subsidiary,
(vii) any Lien existing prior to the time of acquisition
upon any property acquired by the Company or any Restricted Subsidiary
after the date of closing through purchase, merger or consolidation or
otherwise, whether or not assumed by the Company or such Subsidiary,
or placed upon property at (or within 30 days after) the later of the
time of acquisition or the completion of construction by the Company
or any Restricted Subsidiary to secure all or a portion of (or to
secure Debt incurred to pay all or a portion of) the purchase price
thereof, provided that (w) any such Lien does not encumber any other
property of the Company or such Restricted Subsidiary, (x) the Debt
secured by such Lien is not prohibited by the provisions of paragraph
6B(2), (y) the aggregate principal amount of the Debt secured by any
such Lien at no time exceeds 80% of the cost to the Company and its
Restricted Subsidiaries of the property subject to such Lien, and (z)
the aggregate outstanding principal amount (without duplication) of
the Debt secured by all such Liens and the Debt of all Restricted
Subsidiaries at no time (a) during the period commencing on the date
of closing and ending on June 8, 1999 exceeds $25,000,000, (b) during
the period commencing on June 9, 1999 and ending June 8, 2004 exceeds
$50,000,000, and (c) thereafter exceeds $100,000,000,
(viii) Liens on the accounts, rights to payment for goods
sold or services rendered that are evidenced by chattel paper or
instruments, and rights against persons who guarantee payment or
collection of the foregoing, and on the Company's inventory and on the
proceeds (as defined in the Uniform Commercial Code in any applicable
jurisdiction) thereof securing the obligations of the Company under
the Revolving Credit Facility (and any extension, renewal, refunding
or refinancing thereof) permitted by paragraph 6B(2)(iv),
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(ix) from and after the time that the Facilities
Subsidiary becomes a Restricted Subsidiary, Liens on the accounts,
rights to payment for goods sold or services rendered that are
evidenced by chattel paper or instruments, and rights against persons
who guarantee payment or collection of the foregoing, and on the
Facilities Subsidiary's inventory and on the proceeds (as defined in
the Uniform Commercial Code in any applicable jurisdiction) thereof
securing the obligations of the Facilities Subsidiary under the
Facilities Subsidiary's Revolving Credit Facility (and any extension,
renewal, refunding or refinancing thereof) permitted by paragraph
6B(2)(x),
(x) Liens existing on the property or assets of the
Company or any Subsidiary on the date of closing and set forth on
Exhibit D hereto, and
(xi) any Lien renewing, extending, refunding or
refinancing any Lien permitted by clause (vii) of this paragraph
6B(1), provided that the principal amount secured is not increased and
the Lien is not extended to other property and further provided, that
the maturity of the Lien is not extended beyond the maturity date of
the Debt which, at the time the Lien was initially placed upon the
property secured thereby, Responsible Representatives declare would
have been the maturity date of Debt customary for the type of asset
being financed;
6B(2) DEBT
Create, incur, assume or suffer to exist any Funded or Current
Debt, except
(i) Funded Debt represented by the Notes and the 11 1/8%
Senior Notes,
(ii) Funded Debt which is unsecured and is incurred by the
Company to finance the making of capital improvements, expansions and
additions to the Company's property (including Timberlands), plant and
equipment, provided that the aggregate outstanding principal amount of
such Funded Debt shall at no time exceed $20,000,000,
(iii) Funded or Current Debt of any Restricted Subsidiary
owing to the Company or to a Restricted Subsidiary,
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(iv) Debt, not in excess of an aggregate principal amount
of $15,000,000 at any time outstanding, incurred by the Company
pursuant to the Revolving Credit Facility (and any extension, renewal,
refunding or refinancing thereof, including any refunding or
refinancing in an amount in excess of the principal amount then
outstanding under the Revolving Credit Facility), or any other Debt
pursuant to a bank credit facility which is unsecured or is secured by
Liens permitted by paragraph 6B(1)(viii), provided that the Company
shall not suffer to exist any Debt permitted by this clause (iv) on
any day unless there shall have been a period of at least 45
consecutive days within the 12 months immediately preceding such day
during which the Company shall have been free from all Debt permitted
by this clause (iv),
(v) Debt represented by the Guarantee in an amount not
greater than $145,100,000 at any time,
(vi) the Company's guarantee of obligations incurred by
the Facilities Subsidiary pursuant to the Facilities Subsidiary's
Revolving Credit Facility (and any extension, renewal, refunding or
refinancing thereof permitted by clause (iv) of paragraph 6B(2) of the
Mortgage Note Agreements), provided that the aggregate outstanding
principal amount of such Debt shall at no time exceed $20,000,000, and
provided, further, that such guarantee shall be subordinated to the
Notes upon the earlier of (x) January 31, 1995, and (y) the date of
any extension, renewal, refunding or refinancing thereof by
subordination provisions substantially the same as those contained in
paragraph 7I of the Mortgage Note Agreements,
(vii) the Company's guarantee of Funded Debt (and related
obligations not constituting Debt) incurred by the Facilities
Subsidiary to finance the making of capital improvements, expansions
and additions to the Facilities Subsidiary's properties pursuant to
the Facilities Subsidiary's Facility, provided that such guarantee
shall be subordinated to the Notes by subordination provisions
substantially the same as those contained in paragraph 7I of the
Mortgage Note Agreements, and provided, further, that the aggregate
outstanding principal amount of such Funded Debt shall at no time
exceed $20,000,000,
(viii) Funded Debt of the Company or any Restricted
Subsidiary secured by a Lien permitted by clause (vii)
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of paragraph 6B(1), provided that immediately after the acquisition of
the property subject to such Lien or upon which such Lien is placed
(or, if later, the incurrence of the Debt secured by such Lien), the
Company could incur at least $1 of additional Funded Debt pursuant to
clause (ix) below,
(ix) Funded Debt of the Company (other than Funded Debt
owing to a Restricted Subsidiary) in addition to that otherwise
permitted by the foregoing clauses of this paragraph 6B(2), including
guarantees of Debt to the extent permitted by paragraph 6B(3) and not
otherwise permitted by the foregoing clauses of this paragraph 6B(2),
provided that, on the date the Company becomes liable with respect to
any such additional Funded Debt and immediately after giving effect
thereto and to the concurrent retirement of any other Funded Debt, the
ratio of Pro Forma Free Cash Flow to Maximum Pro Forma Annual Interest
Charges is not less than 2.25 to 1.0,
(x) from and after the time that the Facilities
Subsidiary becomes a Restricted Subsidiary, Debt incurred by the
Facilities Subsidiary pursuant to the Facilities Subsidiary's
Revolving Credit Facility (and any extension, renewal, refunding or
refinancing thereof, including any refunding or refinancing in an
amount in excess of the principal amount then outstanding under the
Facilities Subsidiary's Revolving Credit Facility), or any other Debt
incurred by the Facilities Subsidiary pursuant to a bank credit
facility which is unsecured or is secured by Liens permitted by
paragraph 6B(1)(ix), not in excess of an aggregate principal amount of
$20,000,000 at any time outstanding, provided that to the extent that
the Facilities Subsidiary is a Restricted Subsidiary, the Facilities
Subsidiary shall not suffer to exist any Debt permitted by this clause
(x) on any day unless there shall have been a period of at least 45
consecutive days within the 12 months immediately preceding such day
during which the Facilities Subsidiary shall have been free from all
Debt permitted by this clause (x), and
(xi) from and after the time that the Facilities
Subsidiary or any Designated Immaterial Subsidiary becomes a
Restricted Subsidiary, Debt of the Facilities Subsidiary or any such
Designated Immaterial Subsidiary outstanding at the time the
Facilities Subsidiary or such Designated Immaterial Subsidiary
becomes a Re-
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stricted Subsidiary, provided that (a) immediately after the
Facilities Subsidiary or any such Designated Immaterial Subsidiary
becomes a Restricted Subsidiary, the Company could incur at least $1
of additional Funded Debt pursuant to clause (ix) above (the
Facilities Subsidiary or any such Designated Immaterial Subsidiary
shall be deemed to be a Restricted Subsidiary for the four consecutive
fiscal quarters immediately prior to its becoming a Restricted
Subsidiary for purposes of determining Pro Forma Free Cash Flow), and
(b) the aggregate amount (without duplication) of such Debt and all
other Debt, in each case, secured by Liens permitted by clause (vii)
of paragraph 6B(1) does not violate subclause (z) of the proviso to
such clause (vii);
provided that notwithstanding any other provision in this paragraph 6B(2),
other than as provided in paragraph 6B(2)(vi), any guarantee issued by the
Company of any Funded Debt or Current Debt of any Subsidiary shall be
subordinated to the Notes by subordination provisions substantially the same as
those contained in paragraph 7I of the Mortgage Note Agreements;
6B(3) LOANS, ADVANCES, INVESTMENTS AND CONTINGENT LIABILITIES
Make or permit to remain outstanding any loan or advance to,
or guarantee, endorse or otherwise be or become contingently liable, directly
or indirectly, in connection with the obligations, stock or dividends of, or
own, purchase or acquire any stock, obligations or securities of, or any other
interest in, or make any capital contribution to, any Person (all of the
foregoing, other than Designated Repurchases permitted by paragraph 6A hereof,
being referred to herein as "Investments"), except that the Company or any
Restricted Subsidiary may
(i) make Investments in the Facilities Subsidiary,
provided that the Company will not make or permit any Restricted
Subsidiary to make any such Investment (including any guaranty of
obligations of the Facilities Subsidiary not otherwise permitted by
this paragraph 6B(3)) unless (a) immediately after giving effect to
such Investment, no Event of Default or Default, or "Default" or
"Event of Default" as defined in the Mortgage Note Agreements, shall
exist, (b) immediately prior to giving effect to such Investment, no
Default or Event of Default (other than under clause (xvi) of
paragraph 7A) shall exist, and (c) immediately after
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giving effect to such Investment, the ratio of Pro Forma Free Cash
Flow to Maximum Pro Forma Annual Interest Charges is not less than 2.5
to 1.0,
(ii) own, purchase or acquire real or personal property to
be used in the ordinary course of its business,
(iii) own, purchase or acquire investments of the type
specified in, and in accordance with the requirements and limitations
of, the Investment Policy,
(iv) continue to own Investments owned on the date of
closing as set forth on Exhibit E,
(v) endorse negotiable instruments for collection in the
ordinary course of business,
(vi) become and be obligated under the Guarantee and under
the guarantees permitted by clauses (vi) and (vii) of paragraph 6B(2),
and acquire and own subordinated subrogation rights upon performance
of such guarantees,
(vii) make advances in the ordinary course of conducting
the business of the Company or any Restricted Subsidiary, including
deposits permitted under paragraph 6B(1)(iii), advances to employees
for travel, relocation and other employment related expenses, advances
to contractors performing services for the Company or such Restricted
Subsidiary, advances to owners of timber or timber properties to
acquire rights to harvest timber and other similar advances,
(viii) make Investments in Restricted Subsidiaries, or any
entity which immediately after such Investment will be a Restricted
Subsidiary, and
(ix) make Investments not otherwise permitted by this
paragraph 6B(3) in entities engaged solely in a Permitted Business,
provided that the cumulative aggregate amount of such Investments at
original cost (including the principal amount of any obligations
guaranteed to the extent such guarantees are not otherwise permitted
by this paragraph 6B(3)) made pursuant to this clause (ix) between the
date of closing and any date thereafter shall not exceed the greater
of $30,000,000 or 60% of the average annual Pro Forma Free Cash Flow
for the two fiscal years preceding such date;
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6B(4) SALE OF STOCK AND DEBT OF SUBSIDIARIES
Sell or otherwise dispose of, or part with control of, any
shares of stock or Debt of any Subsidiary, except to the Company or a
Restricted Subsidiary, and except that all shares of stock and Debt of any
Subsidiary (other than the Facilities Subsidiary) at the time owned by or owed
to the Company and its Restricted Subsidiaries may be sold as an entirety for a
cash consideration which represents the fair value (as determined in good faith
by the Responsible Representatives of the General Partner) at the time of sale
of the shares of stock and Debt so sold; provided that the assets of such
Subsidiary do not include any assets which could not be disposed of pursuant to
the provisions of paragraph 6B(5) unless the conditions to the sale of such
assets set forth in paragraph 6B(5) are complied with, and further provided
that, at the time of such sale, such Subsidiary shall not own, directly or
indirectly, any shares of stock or Debt of any other Subsidiary (unless all of
the shares of stock and Debt of such other Subsidiary owned, directly or
indirectly, by the Company and its Subsidiaries are simultaneously being sold
as permitted by this paragraph 6B(4));
6B(5) MERGER AND SALE OF ASSETS
Merge or consolidate with any other Person or sell, lease or
transfer or otherwise dispose of any assets (other than inventory sold in the
ordinary course of business) except that
(i) any Restricted Subsidiary may merge with the Company
(provided that the Company shall be the continuing or surviving
corporation) or with any one or more other Restricted Subsidiaries,
(ii) any Restricted Subsidiary may sell, lease, transfer
or otherwise dispose of any of its assets to the Company or a
Restricted Subsidiary,
(iii) any Restricted Subsidiary may merge or consolidate
with any other entity, provided that, immediately after giving effect
to such merger or consolidation, (a) the continuing or surviving
entity of such merger or consolidation shall be a solvent corporation
or partnership organized under the laws of any State of the United
States of America and shall constitute a Restricted Subsidiary, (b) no
Event of Default or Material Default shall exist, and (c) following
the
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merger, the entity surviving the merger is not engaged in any business
other than a Permitted Business,
(iv) the Company may merge or consolidate with, or sell or
dispose of all or substantially all of its assets to, any other
entity, provided that (a) either (x) the Company shall be the
continuing or surviving entity (in the case of any such merger), or
(y) the successor or acquiring entity shall be a solvent corporation
or partnership organized under the laws of any State of the United
States of America and shall expressly assume in writing all of the
obligations of the Company under this Agreement and on the Notes,
including all covenants herein and therein contained, and such
successor or acquiring corporation or partnership shall succeed to and
be substituted for the Company with the same effect as if it had been
named herein as a party hereto, provided, however, that no such sale
shall release the Company from any of its obligations and liabilities
under this Agreement or the Notes unless such sale is followed by the
complete liquidation of the Company and substantially all the assets
of the Company immediately following such sale are distributed in such
liquidation, and (b) immediately after such merger or consolidation or
such sale or other disposition, (x) no Event of Default or Material
Default shall exist, (y) the Company could incur at least $1 of
additional Funded Debt pursuant to paragraph 6B(2)(ix), and (z) the
entity surviving the merger or consolidation or to which such assets
have been transferred is not engaged in any business other than a
Permitted Business,
(v) the Company or any Restricted Subsidiary may sell
Designated Acres for the fair value thereof as reasonably determined
in good faith by the Responsible Representatives,
(vi) the Company and its Restricted Subsidiaries may
exchange Timberlands with other Persons in the ordinary course of
business, provided that (a) the fair value of the Timberlands plus any
net cash proceeds received in such exchange is, in the good faith
judgment of the Responsible Representatives, not less than the fair
value of Timberlands exchanged plus any other consideration paid, (b)
such exchange would not materially and adversely affect the business,
property or assets, condition or results of operations of the Company
and its Restricted Subsidiaries on a combined basis or of the
Facilities Subsidiary or impair the ability of the
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Company to perform its obligations hereunder or under the Notes, and
(c) any properties shall be deemed sold to the extent of cash proceeds
received and such sales shall be allowed only to the extent otherwise
permitted by this paragraph 6B(5),
(vii) the Company and its Restricted Subsidiaries may sell
properties for not less than the fair value thereof as determined in
good faith by the Responsible Representatives, provided that the
aggregate net proceeds of such sales in any calendar year do not
exceed an amount (the "Permitted Amount") equal to (a) in the calendar
year 1994, $3,210,000 and (b) in each calendar year thereafter, the
sum of (1) the Permitted Amount for the preceding calendar year plus
(2) an increase equal to the percentage increase, if any, in the
consumer price index for goods and services for the United States, as
published by the U.S. Bureau of Labor Statistics, or successor
publication, for such preceding calendar year, times such Permitted
Amount, and
(viii) the Company and its Restricted Subsidiaries may
otherwise sell for cash properties in an amount not less than the fair
value thereof as determined in good faith by the Responsible
Representatives if and only if (a) immediately after giving effect to
such proposed sale, no condition or event shall exist which
constitutes an Event of Default or Material Default, (b) the net
proceeds of any such sale (x) are distributed to all holders of
Qualified Debt pro rata based upon outstanding principal balances at
the time of such distribution for application (either immediately or
within 180 days after such sale) to the repayment of such Qualified
Debt, which, in the case of the Notes, shall be a prepayment pursuant
to paragraph 4A, or (y) are applied, within 180 days after such sale,
to the purchase of productive assets in the same line of business, (c)
the net proceeds of any such sale are either (x) distributed
immediately upon receipt thereof to holders of Qualified Debt in
accordance with subclause (b)(x) above for application (either
immediately or within 180 days, and if in the case of the Notes such
application is not made immediately, such application shall be made
pursuant to an escrow agreement satisfactory in form and substance to
the Required Holder(s)) to repayment of such Qualified Debt, or (y) if
in excess of $25,000,000, placed immediately upon receipt thereof in
an escrow or cash collateral account or accounts, pursuant to an
agreement or agreements in
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form and substance reasonably satisfactory to holders of 66 2/3% of
the outstanding principal balance of the Qualified Debt, for the
purpose of application in accordance with subclause (b)(y) above,
provided that to the extent that the aggregate amount of net proceeds
from all such asset sales received by the Company in a period of
twelve consecutive months is equal to an amount greater than
$50,000,000, the amount of such proceeds that exceeds $50,000,000 plus
all net proceeds from any subsequent sales of more than $5,000,000
during such period of twelve consecutive months shall be placed
immediately upon receipt thereof in such escrow or cash collateral
account, and (d) immediately after giving effect to such sale (giving
effect on a pro forma basis to any proposed retirement of Qualified
Debt out of the proceeds thereof), the Company could incur $1 of
additional Funded Debt pursuant to paragraph 6B(2)(ix);
6B(6) HARVESTING RESTRICTIONS
In any calendar year, harvest Timber on the Timberlands then
owned by the Company in excess of the amount set forth for such calendar year
in the following table:
Maximum MMBF to
Calendar Year Be Harvested
------------- -------------
1994 through 1996 700 MMBF
1997 through 2000 675 MMBF
2001 through 2009 625 MMBF
plus, in each year, the amount, if any, by which (a) the sum of (x) the
cumulative amount set forth in the table above for the years preceding such
year of determination and (y) 735 MMBF, exceeds (b) the cumulative amount
actually harvested in such years preceding such year of determination;
unless (a) the net cash proceeds from such excess harvest are either (i)
distributed to all holders of Qualified Debt pro rata based upon outstanding
principal balances at the time of such distribution for application (either
immediately or within 180 days after such excess harvest) to the repayment of
such Qualified Debt, which, in the case of the Notes, shall be a prepayment
pursuant to paragraph 4A, or (ii) applied, within 180 days after any such
excess harvest, to purchase Timber (including Timber on Timberlands pur-
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chased) having a fair value (in the good faith judgment of the Responsible
Representatives) not less than the fair value of the Timber subject to such
excess harvest and (b) the net proceeds of any such excess harvest are either
(i) distributed immediately upon receipt thereof to holders of Qualified Debt
in accordance with subclause (a)(i) above for application (either immediately
or within 180 days, and if in the case of the Notes such application is not
made immediately, such application shall be made pursuant to an escrow
agreement satisfactory in form and substance to the Required Holder(s)) to
repayment of such Qualified Debt, or (ii) if in excess of $25,000,000, placed
immediately upon receipt thereof in an escrow or cash collateral account or
accounts, pursuant to an agreement or agreements in form and substance
reasonably satisfactory to holders of 66 2/3% of the outstanding principal
balance of the Qualified Debt, for the purpose of application in accordance
with subclause (a)(ii) above;
6B(7) SALE AND LEASE-BACK
Enter into any arrangement with any lender or investor or to
which such lender or investor is a party providing for the leasing by the
Company or any Restricted Subsidiary of real or personal property which has
been or is to be sold or transferred by the Company or any Restricted
Subsidiary to such lender or investor or to any Person to whom funds have been
or are to be advanced by such lender or investor on the security of such
property or rental obligations of the Company or any Restricted Subsidiary,
provided that this paragraph 6B(7) shall not apply to any property sold
pursuant to clause (vii) of paragraph 6B(5);
6B(8) CERTAIN CONTRACTS
Enter into or be a party to
(i) any contract providing for the making of loans,
advances or capital contributions to any Person, or for the purchase
of any property from any Person, in each case in order primarily to
enable such Person to maintain working capital, net worth or any other
balance sheet condition or to pay debts, dividends or expenses, or
(ii) any contract for the purchase of materials, supplies
or other property or services if such contract (or any related
document) requires that payment for such materials, supplies or other
property or services
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shall be made regardless of whether or not delivery of such materials,
supplies or other property or services is ever made or tendered,
provided that nothing in this clause (ii) shall prevent the Company
from (a) entering into take-or-pay contracts in the ordinary course of
business with the United States Forest Service, the Bureau of Land
Management, the Washington Department of Natural Resources or similar
state or federal governmental agencies, or (b) making payments in
satisfaction of contracts with such Persons which contracts are deemed
by the Responsible Representatives to be disadvantageous to perform,
or
(iii) any contract to rent or lease (as lessee) any real or
personal property if such contract (or any related document) provides
that the obligation to make payments thereunder is absolute and
unconditional under conditions not customarily found in commercial
leases then in general use or requires that the lessee purchase or
otherwise acquire securities or obligations of the lessor, or
(iv) any contract for the sale or use of materials,
supplies or other property, or the rendering of services, if such
contract (or any related document) requires that payment for such
materials, supplies or other property, or the use thereof, or payment
for such services, shall be subordinated to any indebtedness (of the
purchaser or user of such materials, supplies or other property or the
Person entitled to the benefit of such services) owed or to be owed to
any Person, or
(v) any other contract which in economic effect, is
substantially equivalent to a guarantee
except as permitted by the provisions of clauses (i), (v), (vi), (vii), (viii)
or (ix) of paragraph 6B(3);
6B(9) TRANSACTIONS WITH AFFILIATES
Directly or indirectly engage in any transaction (including,
without limitation, the purchase, sale or exchange of assets or the rendering
of any service) with any Affiliate except in the ordinary course of and
pursuant to the reasonable requirements of the Company's or such Restricted
Subsidiary's business and upon fair and reasonable terms that are no less
favorable to the Company or such Restricted Subsidiary, as the case may be,
than those which might be obtained in an arm's length transaction at the time
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from Persons which are not such an Affiliate. The foregoing shall not prohibit
Designated Repurchases otherwise permitted by this Agreement.
6C. CONDUCT OF BUSINESS
The Company covenants that it will not, and will not permit
any Subsidiary to, engage in any business other than Permitted Businesses.
6D. ISSUANCE OF STOCK BY SUBSIDIARIES
The Company covenants that it will not permit any Subsidiary
(either directly, or indirectly by the issuance of rights or options for, or
securities convertible into, such shares) to issue, sell or otherwise dispose
of any shares of any class of its stock or partnership or other ownership
interests (other than directors' qualifying shares) except to the Company or a
Restricted Subsidiary and except to the extent that holders of minority
interests may be entitled to purchase stock by reason of preemptive rights.
7. EVENTS OF DEFAULT
7A. ACCELERATION
If any of the following events shall occur and be continuing
for any reason whatsoever (and whether such occurrence shall be voluntary or
involuntary or come about or be effected by operation of law or otherwise):
(i) the Company defaults in the payment of any principal
or of premium on any Note when the same shall become due, either by
the terms thereof or otherwise as herein provided; or
(ii) the Company defaults in the payment of any interest
on any Note for more than 10 days after the date due; or
(iii) the Company or any Restricted Subsidiary (a) defaults
in any payment of principal of or interest on any other obligation for
money borrowed (or any payment obligation under the Guarantee, any
Capital Lease Obligation, any obligation under a conditional sale or
other title retention agreement, any obligation issued or assumed as
full or partial payment for property whether or not secured by a
purchase money mortgage or
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any obligation under notes payable or drafts accepted representing
extensions of credit) beyond any period of grace provided with respect
thereto, or (b) fails to perform or observe any other agreement, term
or condition contained in any agreement under which any such
obligation is created within any applicable grace period provided
therein (or if any other event thereunder or under any such agreement
shall occur and be continuing) and the effect of such failure or other
event is (x) to then cause such obligation to become due prior to any
stated maturity or (y) to then permit the holder or holders of such
obligation (or a trustee on behalf of such holder or holders) to cause
such obligation to become due prior to any stated maturity, provided
that the aggregate outstanding principal amount of all obligations as
to which such payment defaults shall occur and be continuing or such
failures or other events causing or permitting acceleration shall
occur and be continuing exceeds $5,000,000; or
(iv) any representation or warranty made by the Company
herein or in any writing furnished in connection with or pursuant to
this Agreement shall be false in any material respect on the date as
of which made; or
(v) the Company fails to perform or observe any agreement
contained in the last sentence of paragraph 5A or in paragraph 6; or
(vi) the Company fails to perform or observe any other
agreement, term or condition contained herein and such failure shall
not be remedied within 30 consecutive days after written notice
thereof shall have been received by the Company from any holder of any
Note; or
(vii) the Company or the General Partner or any Restricted
Subsidiary makes a general assignment for the benefit of creditors or
is generally not paying its debts as such debts become due; or
(viii) any decree or order for relief in respect of the
Company or the General Partner or any Restricted Subsidiary is entered
under any bankruptcy, reorganization, compromise, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or
similar law, whether now or hereafter in effect (herein called the
"Bankruptcy Law"), of any jurisdiction; or
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(ix) the Company or the General Partner or any Restricted
Subsidiary petitions or applies to any tribunal for, or consents to,
the appointment of, or taking possession by, a trustee, receiver,
custodian, liquidator or similar official of the Company or the
General Partner or any Restricted Subsidiary, or of any substantial
part of the assets of the Company or the General Partner or any
Restricted Subsidiary, or commences a voluntary case under the
Bankruptcy Law of the United States or any proceedings (other than
proceedings for the voluntary liquidation and dissolution of a
Restricted Subsidiary) relating to the Company or the General Partner
or any Restricted Subsidiary under the Bankruptcy Law of any other
jurisdiction; or
(x) any such petition or application is filed, or any
such proceedings as described in clause (ix) above are commenced,
against the Company or the General Partner or any Restricted
Subsidiary and the Company or the General Partner or such Restricted
Subsidiary by any act indicates its approval thereof, consent thereto
or acquiescence therein, or an order, judgment or decree is entered
appointing any such trustee, receiver, custodian, liquidator or
similar official, or approving the petition in any such proceedings,
and such order, judgment or decree remains unstayed and in effect for
more than 60 consecutive days; or
(xi) any order, judgment or decree is entered in any
proceedings against the Company or the General Partner or any
Restricted Subsidiary decreeing the dissolution, winding-up or
liquidation of the Company or the General Partner or any Restricted
Subsidiary and such order, judgment or decree remains unstayed and in
effect for more than 60 consecutive days; or
(xii) any order, judgment or decree is entered in any
proceedings against the Company or any Restricted Subsidiary decreeing
a split-up of the Company or such Restricted Subsidiary which requires
the divestiture of assets representing a substantial part, or the
divestiture of the stock of or partnership or other ownership interest
in a Subsidiary whose assets represent a substantial part, of the
combined assets of the Company and its Restricted Subsidiaries
(determined in accordance with generally accepted accounting
principles) or which requires the divestiture of assets, or stock of
or partnership or other ownership interest in a Subsidiary, which
shall have contributed a substantial
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part of the combined net income of the Company and its Restricted
Subsidiaries (determined in accordance with generally accepted
accounting principles) for any of the three fiscal years then most
recently ended, and such order, judgment or decree remains unstayed
and in effect for more than 60 consecutive days; or
(xiii) a final judgment (which is non-appealable or has not
been stayed pending appeal or as to which all rights to appeal have
been expired or been exhausted) in an amount in excess of $5,000,000
is rendered against the Company or any Restricted Subsidiary and,
within 60 consecutive days after entry thereof, such judgment is not
discharged or execution thereof stayed pending appeal, or within 60
consecutive days after the expiration of any such stay, such judgment
is not discharged; or
(xiv) this Agreement shall at any time, for any reason,
cease to be in full force and effect or shall be declared to be null
and void in whole or in any material part by the final judgment (which
is nonappealable or has not been stayed pending appeal or as to which
all rights to appeal have expired or been exhausted) of any court or
other governmental or regulatory authority having jurisdiction in
respect thereof, or the validity or the enforceability of this
Agreement shall be contested by or on behalf of the Company, or the
Company shall renounce this Agreement, or deny that it is bound by the
terms hereof or has any further liability hereunder; or
(xv) any "Event of Default" as defined in the Mortgage
Note Agreements shall exist; or
(xvi) the Facilities Subsidiary, any Subsidiary of the
Facilities Subsidiary or any Designated Immaterial Subsidiary,
immediately after they become Restricted Subsidiaries under the
definition of "Restricted Subsidiary" contained in paragraph 10B,
shall have any Debt outstanding which is not permitted by clause (x)
or (xi) of paragraph 6B(2) insofar as it relates to such Facilities
Subsidiary, Subsidiary of the Facilities Subsidiary or Designated
Immaterial Subsidiary; or
(xvii) if any of the events or conditions or series of events or
conditions described in subparagraph (vii) of paragraph 5A occurs
which events or conditions or series of events or conditions have, or
could reason-
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ably be expected to have, a material adverse effect on the
business, condition (financial or other), assets, properties or
operations of the Company or the Company and its Restricted
Subsidiaries taken as a whole;
then (a) if such event is an Event of Default specified in clause (viii), (ix)
or (x) of this paragraph 7A with respect to the Company, all of the Notes at
the time outstanding shall automatically become immediately due and payable at
par together with interest accrued thereon, without presentment, demand,
protest or notice of any kind, all of which are hereby waived by the Company,
and (b) if such event is any other continuing Event of Default, the holder or
holders of a majority of the aggregate principal amount of the Notes at the
time outstanding may at its or their option, by notice in writing to the
Company, declare all of the Notes to be, and all of the Notes shall thereupon
be and become, immediately due and payable together with interest accrued
thereon and together with the Yield-Maintenance Premium, if any, with respect
to each Note, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Company and the Company shall give notice
in writing of such declaration to the other holders, provided that (x) if such
event is a continuing Event of Default specified in clause (i) or (ii) of this
paragraph 7A in respect of any Note, any Significant Holder may, at its option,
by notice in writing to the Company, declare the Notes held by such Significant
Holder to be, and all of such Notes shall thereupon be and become, immediately
due and payable together with interest accrued thereon and together with the
Yield-Maintenance Premium, if any, with respect to each such Note, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Company, (y) if any Significant Holder shall have declared
all of the Notes held by such Significant Holder to be due and payable pursuant
to clause (x) of this proviso, then the Company shall give notice in writing of
such declaration to the other holders and any other holder may at any time
thereafter and until the later of (A) the expiration of 60 days after such
other holder shall have received notice from the Company of such declaration
and (B) the date on which all Events of Default and Defaults have been cured or
waived pursuant to paragraph 11C, by notice in writing to the Company, declare
all of the Notes held by such other holder to be immediately due and payable,
together with interest accrued thereon and together with the Yield- Maintenance
Premium, if any, with respect to each such Note without presentment, demand,
protest or any other notice of any kind, all
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35
of which are hereby waived by the Company, and (z) the Yield-Maintenance
Premium, if any, with respect to each Note shall be due and payable upon any
such declaration only if (1) such event is a continuing Event of Default
specified in any of clauses (i) through (vi), inclusive, (xiii), (xiv), (xv),
(xvi) and (xvii) of this paragraph 7A, (2) the holder or holders effecting such
declaration shall have given to the Company, at least 10 Business Days before
such declaration, written notice stating its or their intention so to declare
the Notes to be immediately due and payable and identifying one or more such
Events of Default whose occurrence on or before the date of such notice permits
such declaration and (3) one or more of the Events of Default so identified
shall be continuing at the time of such declaration.
At any time after the principal of, and interest accrued on,
any or all of the Notes are declared due and payable, the holders of not less
than 66 2/3% aggregate principal amount of the Notes then outstanding, by
written notice to the Company, may rescind and annul any such declaration and
its consequences if (x) the Company has paid all overdue interest on the Notes,
the principal of and premium, if any, on any Notes which have become due
otherwise than by reason of such declaration, and interest on such overdue
principal and premium and (to the extent permitted by applicable law) any
overdue interest in respect of such Notes at a rate per annum from time to time
equal to the greater of (i) 9.73% or (ii) the rate of interest publicly
announced by Morgan Guaranty Trust Company of New York from time to time in New
York as its Prime Rate plus 2.0%, (y) all Events of Default and Defaults, other
than non-payment of amounts which have become due solely by reason of such
declaration, have been cured or waived pursuant to paragraph 11C, and (z) no
judgment or decree has been entered for the payment of any monies due pursuant
to the Notes or this Agreement; but no such rescission and annulment shall
extend to or affect any subsequent Event of Default or Default or impair any
right consequent thereon.
7B. OTHER REMEDIES
If any Event of Default shall occur and be continuing, the
holder of any Note may proceed to protect and enforce its rights under this
Agreement and such Note by exercising such remedies as are available to such
holder in respect thereof under applicable law, either by suit in equity or by
action at law, or both, whether for specific performance of any covenant or
other agreement contained
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in this Agreement or in aid of the exercise of any power granted in this
Agreement. No remedy conferred in this Agreement upon the holder of any Note
is intended to be exclusive of any other remedy, and each and every such remedy
shall be cumulative and shall be in addition to every other remedy conferred
herein or now or hereafter existing at law or in equity or by statute or
otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES
The Company represents, covenants and warrants:
8A. ORGANIZATION
The Company is a limited partnership duly organized, validly
existing and in good standing under the Delaware Revised Uniform Limited
Partnership Act and has all requisite partnership power and authority to own
and operate its properties, to conduct its business as currently conducted, to
enter into this Agreement, to issue and sell the Notes and to carry out the
terms of this Agreement and the Notes.
8B. GENERAL PARTNER NET WORTH
On the date of closing the General Partner will have a net
worth (excluding its interest in the Company and any notes receivable from or
payable to the Company) at least equal to the amount sufficient to meet the tax
requirements for a general partner of a Delaware limited partnership (based on
the fair market value of its assets).
8C. SUBSIDIARIES
The General Partner owns 2% and the Company owns 98% of the
limited partnership interest in Manufacturing. The General Partner owns 4% and
the Company owns 96% of the issued and outstanding stock of Marketing. The
Facilities Subsidiary Stock has been duly authorized and validly issued, is
fully paid and non-assessable and is owned free and clear of any Liens. The
Facilities Subsidiary has issued no rights, warrants or options to acquire or
instruments convertible into or exchangeable for any equity interest in the
Facilities Subsidiary. On the date of closing the Company will have no
Subsidiaries other than the Facilities Subsidiary.
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8D. PARTNERSHIP INTERESTS
The only general partner of the Company is the General
Partner, which on the date of closing will own a 2% interest in the Company.
8E. QUALIFICATION
The Company is duly qualified or registered for the
transaction of business and in good standing as a foreign limited partnership
in each of the State of Idaho, the State of Montana and the State of
Washington, which are the only jurisdictions in which the failure so to qualify
or be registered would have a material adverse effect on the business, property
or assets, condition, or results of operations of the Company, or on the
ability of the Company to perform its obligations under this Agreement and the
Notes.
8F. BUSINESS; FINANCIAL STATEMENTS
(a) The Company and its Subsidiaries have not engaged in
any business or activities prior to the date of this Agreement other than (i)
owning, acquiring and disposing of Timber and Timberlands, and (ii) owning and
operating lumber mills, plywood and fiberboard manufacturing plants, and wood
chip plants. The Company and its Subsidiaries do not have any significant
assets other than Timber, Timberlands and the facilities described in clause
(ii) above, and, after giving effect to the application of the proceeds of the
Notes in accordance with paragraph 8S, on the date of closing will not have any
significant liabilities other than the Notes, the 11 1/8% Senior Notes, the
Guarantee and the Mortgage Notes or indebtedness under the Bank of America
Revolving Credit Agreement or the ABN Revolving Credit Agreements.
(b) The Company has delivered or caused to be delivered
to you complete and correct copies of (i) the Company's Form 10-K as filed with
the Securities and Exchange Commission on March 14, 1994 and the Company's Form
10-Q as filed with the Securities and Exchange Commission on May 2, 1994
(together, the "1934 Act Reports") and (ii) the memorandum dated May 1994
prepared by the Company for use in connection with the Company's private
placement of the Notes, as supplemented by supplementary information including
but not limited to that supplementary information included in the Slide
Presentation of June 16, 1994 (such memorandum, as so supplemented, being
herein collectively called the "Memorandum"). The annual financial statements
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38
and schedules included in the 1934 Act Reports have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
throughout the period specified and present fairly the financial position for
the dates specified, and the results of their operations and cash flows of the
Company for the respective periods specified. The quarterly financial
statements and schedules included in the 1934 Act Reports present fairly the
financial position for the dates specified and the results of operations for
the quarterly periods presented. The pro forma financial information set forth
in the Memorandum is based upon assumptions stated in the Memorandum that are
reasonable in all material respects and the financial projections contained
therein are reasonable based upon such reasonable assumptions and the best
information available to the officers of the Company.
8G. CHANGES, ETC.
Except as contemplated by this Agreement or disclosed in
Exhibit 8G, subsequent to December 31, 1993, (a) neither the Company nor the
Facilities Subsidiary has incurred any material liabilities or obligations,
direct or contingent, or entered into any material transactions not in the
ordinary course of business, and (b) there has not been (i) any material
adverse change in the financial condition or operations of the Company or the
Facilities Subsidiary or (ii) any Restricted Payment of any kind declared, paid
or made by the Company.
8H. TAX RETURNS AND PAYMENTS
The Company has filed all tax returns required by law to be
filed by it (or obtained extensions with respect thereto) and has paid all
material taxes, assessments and other material governmental charges levied upon
it, or any of its properties, assets, income or franchises which are due and
payable by it, other than those which are not past due or delinquent or the
non-payment of which is permitted by paragraph 5E.
8I. FRANCHISES, LICENSES, AGREEMENTS, ETC.
Except as disclosed in Exhibit 8T, the Company is in
possession of and operating in substantial compliance with all franchises,
grants, authorizations, approvals, licenses, permits, easements, consents,
certificates and orders required to own or lease its properties and to permit
the conduct of its business, except for those franchises,
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39
grants, authorizations, approvals, licenses, permits, easements, consents,
certificates and orders the failure of which to be obtained, given or complied
with would not individually or in the aggregate materially and adversely affect
the business, property or assets, condition or operations of the Company or
impair the ability of the Company to perform its obligations hereunder or under
the Notes or impair the validity or enforceability of this Agreement or the
Notes.
8J. ACTIONS PENDING
There is no action, suit, investigation or proceeding pending
or, to the knowledge of the Company, threatened against the Company, or any
properties or rights of the Company, by or before any court, arbitrator or
administrative or governmental body which questions the validity of this
Agreement or the Notes or any action taken or to be taken pursuant to this
Agreement or the Notes or which would be reasonably likely to result in any
material adverse change in the business, property or assets, condition or
operations of the Company, or in the inability of the Company to perform its
obligations hereunder or under the Notes.
8K. TITLE TO PROPERTIES
Except as disclosed in Exhibit 8K, the Company has good title
to its real properties (other than properties which it leases) and good title
to all of its other properties and assets, subject to no Lien of any kind
except Liens permitted by paragraph 6B(1), and except such Liens as do not
materially interfere with the full ownership and enjoyment of such properties
and assets. All leases necessary in any material respect for the conduct of
the respective businesses of the Company and its Subsidiaries are valid and
subsisting and are in full force and effect.
8L. COMPLIANCE WITH OTHER INSTRUMENTS, ETC.
The Company is not in violation of any term of the Partnership
Agreement or of any term of any other agreement or instrument to which it is a
party or by which it or any of its properties is bound or any term of any
applicable law, ordinance, rule or regulation of any governmental authority or
any term of any applicable order, judgment or decree of any court, arbitrator
or governmental authority, the consequences of which violation would be
reasonably likely to have a material adverse effect on its business, property
or assets, condition or operations or on the abil-
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40
ity of the Company to perform its obligations under this Agreement or the
Notes, and the execution, delivery and performance by the Company of this
Agreement and the Notes will not result in any violation of or be in conflict
with or constitute a default under any such term or result in the creation of
(or impose any obligation on the Company to create) any Lien (other than the
Liens contemplated by this Agreement) upon any of the properties or assets of
the Company, pursuant to any such term except for Liens permitted by paragraph
6B(1); and there is no such term which materially adversely affects or in the
future would be likely to materially adversely affect the business, property or
assets, condition or operations of the Company, or the ability of the Company
to perform its obligations under this Agreement or the Notes.
8M. GOVERNMENTAL CONSENT
No consent, approval or authorization of, or declaration or
filing with, any governmental authority is required for the valid execution,
delivery and performance by the Company of this Agreement or the valid offer,
issue, sale and delivery of the Notes pursuant to this Agreement.
8N. FOREIGN ASSETS CONTROL REGULATIONS, ETC.
Neither the issue and sale of the Notes by the Company nor its
use of the proceeds thereof as contemplated by this Agreement will violate any
of the regulations administered by the Office of Foreign Assets Control, United
States Department of the Treasury, including, without limitation, the Foreign
Assets Control Regulations, the Transaction Control Regulations, the Cuban
Assets Control Regulations, the Foreign Funds Control Regulations, the Iranian
Assets Control Regulations, the Iranian Transactions Regulations, the Iraqi
Sanctions Regulations, the Haitian Transactions Regulations, the Libyan
Sanctions Regulations, and the Soviet Gold Coin Regulations (31 C.F.R.,
Subtitle B, Chapter V, as amended) or the restrictions set forth in Executive
Orders No. 12543 (Libya), 12544 (Libya), 12801 (Libya), 12722 (Iraq) or 12724
(Iraq), 12775 (Haiti), 12779 (Haiti), 12808 (Yugoslavia), 12810 (Yugoslavia) or
12831 (Yugoslavia), as amended, of the President of the United States of
America or of any rules or regulations issued thereunder.
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8O. OFFERING OF NOTES
Neither the Company nor any agent acting on behalf of the
Company has, directly or indirectly, offered the Notes or any similar security
of the Company for sale to, or solicited any offers to buy the Notes or any
similar security of the Company from, or otherwise approached or negotiated
with respect thereto with any Person other than 73 institutional investors, and
neither the Company nor any agent acting on behalf of the Company has taken or
will take any action which would subject the issuance or sale of the Notes to
the provisions of section 5 of the Securities Act or to the provisions of any
securities or Blue Sky law of any applicable jurisdiction.
8P. REGULATION G, ETC.
The Company does not own or have any present intention of
acquiring any "margin stock" as defined in Regulation G (12 CFR Part 207) of
the Board of Governors of the Federal Reserve System (herein called "margin
stock"). None of the proceeds of the sale of the Notes will be used, directly
or indirectly, for the purpose, whether immediate, incidental or ultimate, of
purchasing or carrying any margin stock or for the purpose of maintaining,
reducing or retiring any indebtedness which was originally incurred to purchase
or carry any stock that is currently a margin stock or for any other purpose
which might constitute this transaction a "purpose credit" within the meaning
of such Regulation G. Neither the Company nor any agent acting on its behalf
has taken or will take any action which might cause this Agreement or the Notes
to violate Regulation G, Regulation T or any other regulation of the Board of
Governors of the Federal Reserve System or to violate the Securities Exchange
Act of 1934, as amended, in each case as in effect now or as the same may
hereafter be in effect.
8Q. ERISA
(a) Neither the Company nor any of its Subsidiaries has
breached the fiduciary rules of ERISA or engaged in any prohibited transaction
which, in any such case, could reasonably be expected to result in any direct
or indirect material liability (including, without limitation, as a result of
an indemnification obligation) to the Company or any of its Subsidiaries in
connection with a suit for damages or pursuant to section 409, 502(i) or 502(l)
of ERISA or section 4975 of the Code, which liability, either individually or
in the aggregate, has had or could reasonably be
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expected to have a material adverse effect on the business, condition
(financial or other), assets, properties or operations of the Company or the
Company and its Restricted Subsidiaries taken as a whole.
(b) None of the Company, any of its Subsidiaries or any
Related Person has incurred any direct or indirect material liability
(including, without limitation, as a result of an indemnification obligation)
under or pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, which liability has
had or could reasonably be expected to have a material adverse effect on the
business, condition (financial or other), assets, properties or operations of
the Company or the Company and its Restricted Subsidiaries taken as a whole.
No event, transaction or condition has occurred or exists or, to the Company's
best knowledge, is expected to occur or exist with respect to any Plan that
could reasonably be expected to result in any direct or indirect material
liability to the Company, any of its Subsidiaries or any Related Person
(including, without limitation, as a result of an indemnification obligation)
under or pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, which liability has
had or could reasonably be expected to have a material adverse effect on the
business, condition (financial or other), assets, properties or operations of
the Company or the Company and its Restricted Subsidiaries taken as a whole.
There has been no reportable event (within the meaning of section 4043(b) of
ERISA) or any other event or condition with respect to any Plan which presents
a risk of the termination of, or the appointment of a trustee to administer,
any such Plan by the PBGC.
(c) Full payment (made in a timely manner such that any
incidental delay in making a payment, if any, has not resulted in any Lien or
any material liability to the Company, any of its Subsidiaries or any Related
Person) has been made of all amounts which the Company, any of its Subsidiaries
or any Related Person is required under applicable law, the terms of each Plan
or any collective bargaining agreement to have paid as contributions to each
such Plan, and no accumulated funding deficiency (as defined in section 302 of
ERISA or section 412 of the Code), whether or not waived, exists or is expected
to exist with respect to any Plan (other than a Multiemployer Plan).
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(d) The present value of the accumulated benefit
obligations (whether or not vested) under each Plan (other than a Multiemployer
Plan), determined as of the end of each such Plan's most recently ended Plan
year on the basis of the actuarial assumptions specified for funding purposes
in each such Plan's actuarial valuation report for such Plan year, each of
which assumptions is reasonable and in compliance with section 412 of the Code,
did not exceed the current value of the assets of each such Plan allocable to
such accumulated benefit obligations by an amount which could have a material
adverse effect on the business, condition (financial or other), assets,
properties or operations of the Company or the Company and its Restricted
Subsidiaries taken as a whole, and no event has occurred since such date that
could reasonably be expected to cause the present value of such accumulated
benefit obligations to increase by a material amount. The terms "present
value" and "current value" shall have the meanings assigned to such terms in
section 3 of ERISA, and the term "accumulated benefit obligations" shall have
the meaning assigned to such term in Statement of Financial Accounting
Standards No. 87.
(e) None of the Company, any of its Subsidiaries or any
Related Person has incurred or expects to incur any withdrawal liability under
Title IV of ERISA with respect to any Multiemployer Plan or any Plan that is a
"multiple employer plan" within the meaning of section 4063 or 4064 of ERISA,
which liability has had or could reasonably be expected to have a material
adverse effect on the business, condition (financial or other), assets,
properties or operations of the Company or the Company and its Restricted
Subsidiaries taken as a whole. The aggregate withdrawal liability of the
Company, its Subsidiaries and the Related Persons with respect to all
Multiemployer Plans and Plans that are "multiple employer plans" within the
meaning of section 4063 or 4064 of ERISA, determined as if a complete
withdrawal had occurred on the date hereof, does not exceed $25,000,000. No
Multiemployer Plan is insolvent or in reorganization within the meaning of
section 4241 or 4245 of ERISA.
(f) The "expected postretirement benefit obligation"
(determined as of the last day of the Company's most recently ended fiscal year
in accordance with Financial Accounting Standards Board Statement No. 106,
without regard to liabilities attributable to continuation coverage mandated by
section 4980B of the Code) of the Company and its Subsidiaries under Plans
which are "employee welfare benefit
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plans" (as defined in section 3(1) of ERISA) did not exceed $1,000,000.
(g) The execution and delivery of this Agreement and the
Other Note Agreements and the issuance and sale of the Notes hereunder and
thereunder will not involve any transaction which is subject to the
prohibitions of section 406 of ERISA or in connection with which a tax could be
imposed pursuant to section 4975 of the Code. With respect to each employee
benefit plan identified in writing to the Company in accordance with paragraph
9(c), neither the Company nor any "affiliate" thereof (as defined in section
V(c) of Prohibited Transaction Class Exemption 84-14 (the "QPAM Exemption"))
has at this time, and has not exercised at any time within the preceding year,
the authority to appoint or terminate the "QPAM" (as defined in the QPAM
Exemption) identified in accordance with paragraph 9(c) as manager of any of
the assets of any plan identified in accordance with paragraph 9(c), or to
negotiate the terms of any management agreement with such QPAM on behalf of any
such plan, the Company is not an "affiliate" (as defined in section V(c) of the
QPAM Exemption) of such QPAM, and the Company is not a party in interest with
respect to any plan identified in accordance with paragraph 9(c). The
representations by the Company in this subparagraph (g) of paragraph 8Q are
made in reliance upon and subject to the accuracy of your representation in
paragraph 9 of this Agreement and the respective representations of the Other
Purchasers in paragraph 9 of the Other Note Agreements as to the source of the
funds to be used to pay the purchase price of the Notes to be purchased by you
and the Other Purchasers and assumes the continued applicability and validity
of paragraph (b) of Department of Labor Interpretive Bulletin 75-2, 29 C.F.R.
Section 2509.75-2.
As used in this paragraph 8Q, the terms "employee benefit plan" and "party in
interest" have the respective meanings assigned to such terms in section 3 of
ERISA.
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8R. STATUS UNDER CERTAIN FEDERAL STATUTES
The Company is not (i) an "investment company" or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended, (ii) a "holding company" or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company or of
a "subsidiary company" of a "holding company", as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended, (iii) a "public
utility" as such term is defined in the Federal Power Act, as amended, nor (iv)
a "rail carrier or a person controlled by or affiliated with a "rail carrier",
within the meaning of Title 49, U.S.C., and neither the Company, the General
Partner nor the Facilities Subsidiary is a "carrier" to which 49 U.S.C. Section
11301(b)(1) is applicable.
8S. USE OF PROCEEDS
The Company will apply the proceeds of the sale of the Notes
to you and the Other Purchasers to repay amounts owing under the Bank of
America Revolving Credit Agreement.
8T. ENVIRONMENTAL MATTERS
(a) Except as disclosed in Exhibit 8T, to the Company's
knowledge, the Company and its Subsidiaries are in compliance in all material
respects with all Environmental Laws applicable to them or to real property
owned or leased by them, or to the ownership, use, operation or occupancy
thereof except where the failure to be in compliance with such Environmental
Laws would not result in liability of the Company or any of its Subsidiaries in
an aggregate amount in excess of $25,000,000. To the Company's knowledge,
neither the Company, its Subsidiaries nor any other Person acting at the
direction of or on behalf of the Company has engaged in any activity in
violation of any provision of any applicable Environmental Laws, which
violation could reasonably be expected to have a material adverse effect on the
business, condition (financial or other), assets, properties or operations of
the Company or the Company and its Restricted Subsidiaries taken as a whole.
(b) Except as permitted by paragraph 8I or as disclosed
in Exhibit 8T, the Company has or will have on the date of closing all
environmental permits or licenses necessary for the conduct of its business as
conducted on the date of closing and, as to any such permit or license that has
expired or is about to expire or is needed for the pro-
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posed conduct of its business, the Company has or will have timely and
properly applied for renewal or receipt of the same. Exhibit F lists all
material notices from Federal, state or local environmental agencies to the
Company citing environmental violations that have not been finally resolved and
disposed of; no such violation, individually or in the aggregate is reasonably
expected to have a material adverse effect on the business, property or assets,
condition or operations of the Company, and the Company is acting in compliance
with all such notices. Notwithstanding any such notice, the Company is
currently operating in compliance with the limits set forth in such
environmental permits or licenses except for such noncompliance as could not
reasonably be expected to have a material adverse effect on the business,
condition (financial or other), assets, properties or operations of the Company
or the Company and its Restricted Subsidiaries taken as a whole and the Company
has no knowledge of any threatened or pending proceeding for the revocation,
loss or termination of any such environmental permits or licenses.
Neither the Company nor any of its Subsidiaries is subject to
any order or decree of any governmental authority under any Environmental Laws,
which order or decree would reasonably be likely to result in a material
adverse effect on the business, condition (financial or other), assets,
properties or operations of the Company or the Company and its Restricted
Subsidiaries taken as a whole, nor is there any basis for such order or decree.
(c) All facilities located on the real property owned by
the Company or the Facilities Subsidiary on the date of closing which are
subject to regulation by the Federal Resource Conservation and Recovery Act, as
in effect on the date hereof, are and to the knowledge of the Company (or the
Facilities Subsidiary, as the case may be) have been operated in material
compliance with such Act and the Company (or the Facilities Subsidiary, as the
case may be) has not received or, to the knowledge of the Company (or the
Facilities Subsidiary, as the case may be) upon reasonable inquiry, has not
been threatened with, a notice of violation under such Act regarding such
facilities which can reasonably be expected to have a material adverse effect
on the business, property or assets, conditions or operations of the Company
(or the Facilities Subsidiary, as the case may be), or the ability of the
Company to perform its obligations under this Agreement or the Notes.
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(d) Except as disclosed in Exhibit 8T, with respect to
the real property owned by the Company (or the Facilities Subsidiary, as the
case may be) on the date of closing, there has not occurred to the best
knowledge of the Company (or the Facilities Subsidiary, as the case may be) (i)
any Release of any Hazardous Substance in a Reportable Quantity, (ii) any
discharge of any substance into ground, surface, or navigable waters for which
a notice of violation has been received or threatened under any Federal, state
or local laws, rules or regulations concerning water pollution, or (iii) any
assertion of any Lien pursuant to Federal, state or local environmental law
resulting from any use, spill, discharge or clean-up of any hazardous or toxic
substance or waste, which occurrence can reasonably be expected to have a
material adverse effect on the business, property or assets, condition or
operations of the Company (or the Facilities Subsidiary, as the case may be).
As used in this paragraph, the terms "Release," "Hazardous Substance," and
"Reportable Quantity" shall have the meanings assigned such terms under the
Comprehensive Environmental Response Compensation and Liability Act (CERCLA).
8U. DISCLOSURE
Neither this Agreement, the Memorandum, the 1934 Act Reports
nor any other document, certificate or statement furnished to you by or on
behalf of the Company in writing, in connection herewith contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein and therein not misleading.
There is no fact peculiar to the Company which materially adversely affects or
in the future may (so far as the Company can now reasonably foresee) materially
adversely affect the business, property or assets, condition or results of
operations of the Company and which has not been set forth in this Agreement,
the Memorandum or the 1934 Act Reports or in the other documents, certificates
and statements in writing furnished to you by or on behalf of the Company prior
to the date hereof in connection with the transactions contemplated hereby.
9. REPRESENTATIONS OF THE PURCHASER
You represent, and in making this sale to you it is
specifically understood and agreed, that you are not acquiring the Notes to be
purchased by you hereunder with a view to or for sale in connection with any
distribution thereof within the meaning of the Securities Act, provided that
the disposition of your property shall at all times be
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and remain within your control. You understand that the Notes have not been
registered under the Securities Act and may be resold only if registered
pursuant to the provisions of the Securities Act or if an exemption from
registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to register the Notes. You also represent that at least one of
the following statements is an accurate representation as to the source of
funds to be used by you to pay the purchase price of the Notes purchased by you
hereunder:
(a) you are an insurance company subject to state
regulation and no part of the funds being used by you to pay the
purchase price of the Notes being purchased by you hereunder
constitutes assets allocated to any separate account maintained by you
in which any employee benefit plan or its related trust has any
interest and, assuming the continued applicability and validity of
paragraph (b) of Department of Labor Interpretive Bulletin 75-2, 29
C.F.R. Section 2509.75-2, no part of such funds constitutes assets of
any employee benefit plan solely for purposes of determining whether
such purchase is a prohibited transaction under ERISA or the Code; or
(b) you are an insurance company subject to state
regulation and to the extent that any part of the funds being used by
you to pay the purchase price of the Notes being purchased by you
hereunder constitutes assets allocated to any separate account
maintained by you, (i) such separate account is an "insurance company
pooled separate account" within the meaning of Prohibited Transaction
Class Exemption 90-1, in which case you have disclosed to the Company
the name of each employee benefit plan whose assets in such separate
account exceed 10% of the total assets or are expected to exceed 10%
of the total assets of such account as of the date of such purchase
(and for the purposes of this subparagraph (b), all employee benefit
plans maintained by the same employer or employee organization are
deemed to be a single plan), or (ii) such separate account contains
only the assets of a specific employee benefit plan, complete and
accurate information as to the identity of which you have delivered to
the Company; or
(c) all of the funds being used by you to pay the
purchase price of the Notes being purchased by you
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hereunder constitute assets of an "investment fund" (within the
meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of
the QPAM Exemption), no employee benefit plan's assets which are
included in such investment fund, when combined with the assets of all
other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM, the conditions of Part I(g) of the QPAM
Exemption are satisfied and the identity of such QPAM and the names of
each employee benefit plan whose assets are included in such
investment fund have been disclosed to the Company; or
(d) you are not an insurance company and all or a portion of
the funds to be used by you to pay the purchase price of the Notes
being purchased by you hereunder does not constitute assets of any
employee benefit plan (other than a governmental plan exempt from the
coverage of ERISA) and the remaining portion, if any, of such funds
consists of funds which may be deemed to constitute assets of one or
more specific employee benefit plans, complete and accurate
information as to the identity of each of which you have delivered to
the Company.
As used in this paragraph 9, the terms "employee benefit plan", "party in
interest" and "separate account" shall have the respective meanings assigned to
such terms in section 3 of ERISA.
10. DEFINITIONS
For the purpose of this Agreement, the terms defined in
paragraphs 1 and 2 shall have the respective meanings specified therein, and
the following terms shall have the meanings specified with respect thereto
below:
10A. YIELD-MAINTENANCE TERMS
"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which commercial banks in New York City are required or
authorized to be closed.
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"Called Principal" shall mean, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to paragraph 4A
(including partial prepayments made pursuant to paragraphs 6B(5)(viii) and
6B(6)) or is declared to be immediately due and payable pursuant to paragraph
7A, as the context requires.
"Discounted Value" shall mean, with respect to the Called
Principal of any Note, the amount obtained by discounting all Remaining
Scheduled Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a discount
factor (applied on a semiannual basis) equal to 50 basis points above the
Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" shall mean, with respect to the Called
Principal of any Note, the yield to maturity implied by (i) the yields
reported, as of 10:00 A.M. (New York City time) on the Business Day next
preceding the Settlement Date with respect to such Called Principal, on the
display designated as the USD page in the Bloomberg Financial Markets Service
(or such other display as may replace the USD page in the Bloomberg Financial
Markets Service) for actively traded U.S. Treasury securities having a maturity
equal to the Remaining Life of such Called Principal as of such Settlement
Date, or if such yields shall not be reported as of such time or the yields
reported as of such time shall not be ascertainable, (ii) the Treasury Constant
Maturity Series yields reported, for the latest day for which such yields shall
have been so reported as of the Business Day next preceding the Settlement Date
with respect to such Called Principal, in Federal Reserve Statistical Release
H.15 (519) (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the Remaining Life of
such Called Principal as of such Settlement Date. Such implied yield shall be
determined, if necessary, by (a) converting U.S. Treasury bill quotations to
bond-equivalent yields in accordance with accepted financial practice and (b)
interpolating linearly between reported yields.
"Remaining Life" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) which will elapse between the Settlement Date with respect to
such Called Principal and August 1, 2009.
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"Remaining Scheduled Payments" shall mean, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due on or after the Settlement Date with respect
to such Called Principal if no payment of such Called Principal were made prior
to its scheduled due date.
"Settlement Date" shall mean, with respect to the Called
Principal of any Note, the date on which such Called Principal is to be prepaid
pursuant to paragraph 4A (including partial prepayments made pursuant to
paragraphs 6B(5)(viii) and 6B(6)) or is declared to be immediately due and
payable pursuant to paragraph 7A, as the context requires.
"Yield-Maintenance Premium" shall mean, with respect to any
Note, a premium equal to the excess, if any, of the Discounted Value of the
Called Principal of such Note over the sum of (i) such Called Principal plus
(ii) interest accrued thereon as of (including interest due on) the Settlement
Date with respect to such Called Principal. The Yield-Maintenance Premium
shall in no event be less than zero.
10B. OTHER TERMS
"ABN Revolving Credit Agreements" shall mean the credit
agreements (i) between the Company, ABN AMRO Bank N.V. ("ABN") as agent, and
certain other lenders pursuant to which the lenders thereunder provide credit
facilities to the Company in an aggregate principal amount not to exceed
$15,000,000 and (ii) between Marketing, Manufacturing, ABN, as agent, and
certain other lenders pursuant to which the lenders thereunder provide credit
facilities to Marketing and Manufacturing in an aggregate principal amount not
to exceed $20,000,000.
"Affiliate" shall mean any Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with,
the Company, except a Restricted Subsidiary. A Person shall be deemed to
control a corporation or other entity if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such corporation or other entity, whether through the ownership of
voting securities, by contract or otherwise.
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"Available Cash" shall mean, with respect to any calendar
quarter, (a) the sum of:
(i) the Company's net income (or net loss) (excluding
gain on the sale of any Capital Asset) for such quarter,
(ii) the amount of depletion, depreciation, amortization
and other noncash charges utilized in determining net income of the
Company for such quarter,
(iii) the amount of any reduction in reserves of the
Company of the types referred to in clause (b)(iv) below,
(iv) proceeds received by the Company from the sale of
Designated Acres, and
(v) any Cash from Capital Transactions received by the
Company during such quarter in specific contemplation that such Cash
from Capital Transactions will be used to refund or refinance any
payment of Debt of the type specified in clause (b)(i) below which
made in either of the two immediately preceding quarters,
less (b) the sum of:
(i) all payments of principal on Debt made by the Company
in such quarter (excluding any payments of principal on Debt made with
Cash from Capital Transactions received by the Company during such
quarter or, to the extent such Cash from Capital Transactions remains
available, received by the Company during the four immediately
preceding quarters),
(ii) capital expenditures made by the Company during such
quarter (excluding any capital expenditures for such quarter made with
Cash from Capital Transactions received by the Company during such
quarter or, to the extent such Cash from Capital Transactions remains
available, received by the Company during the four immediately
preceding quarters, and capital expenditures which the General Partner
reasonably anticipates will be financed with Cash from Capital
Transactions within 90 days from the end of such quarter),
(iii) the amount of any capital expenditures made by the
Company in a prior quarter which was anticipated would be financed
from Cash from Capital Transactions
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but which have not been financed from such source within 90 days from
the end of such quarter,
(iv) the amount of any reserves of the Company established
during such quarter which are necessary or appropriate (A) to provide
funds for the future payment of items of the types specified in
clauses (b)(i) and (b)(ii) above, (B) to provide additional working
capital, (C) to provide funds for cash distributions with respect to
any one or more of the next four quarters, or (D) to provide funds for
the future payment of interest in an amount equal to the interest to
be accrued in the next quarter,
(v) the amount of any noncash items of income utilized in
determining net income of the Company for such quarter,
(vi) the amount of any Investments (other than guarantees,
contingent liabilities or endorsements, except to the extent payments
are actually made under such guarantees, contingent liabilities or
endorsements) made by the Company during such quarter pursuant to
clause (i), (viii) or (ix) of paragraph 6B(3) (or in the case of any
Subsidiary, Investments (other than guarantees, contingent liabilities
or endorsements, except to the extent payments are actually made under
such guarantees, contingent liabilities or endorsements) of similar
type) to the extent not included in capital expenditures or payments
on principal on Debt made by the Company during such quarter
(excluding any such Investments for such quarter made with Cash from
Capital Transactions received by the Company during such quarter or,
to the extent such Cash from Capital Transactions remains available,
received by the Company during the four immediately preceding
quarters, and Investments which the General Partner reasonably
anticipates will be financed with Cash from Capital Transactions
within 90 days from the end of such quarter), and
(vii) the amount of any Investments (other than guarantees,
contingent liabilities or endorsements, except to the extent payments
are actually made under such guarantees, contingent liabilities or
endorsements) made by the Company in a prior quarter pursuant to
clause (i), (viii) or (ix) of paragraph 6B(3) (or in the case of any
Subsidiary, Investments (other than guarantees, contingent liabilities
or endorsements,
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except to the extent payments are actually made under such guarantees,
contingent liabilities or endorsements) of similar type) to the extent
not included in capital expenditures made by the Company during such
quarter which was anticipated would be financed from Cash from Capital
Transactions but which have not been financed from such source within
90 days from the end of such quarter,
provided, however, (i) net proceeds to the Company from the issuance of SPUs
(as such term is defined in the Partnership Agreement) shall be deemed to be
Available Cash, and shall be deemed to be received, for purposes of determining
Available Cash, during the quarter in respect of which such SPUs are issued,
even if such cash is received by the Company after the last day of such
quarter, and (ii) any disbursements made of the types described in clauses
(b)(i), (ii), (iii), (vi) and (vii) or reserves established, in accordance with
clause (b)(iv), within 45 days after the end of any quarter as to which SPUs
were purchased in respect of such quarter in accordance with the Distribution
Support Agreement shall be deemed to be made or established, for purposes of
determining Available Cash, within such quarter if the General Partner so
determines, provided that the aggregate amount of such disbursements made or
reserves established which are so determined as being made within such quarter
shall not exceed the aggregate dollar amount of SPUs purchased in respect of
such quarter.
Notwithstanding the foregoing, "Available Cash" shall not take
into account any reductions in reserves or disbursements made or reserves
established after commencement of the dissolution and liquidation of the
Company. In determining "Available Cash", (i) all items under clauses (a)(i),
(ii), (iii), (iv) and (v) above and all items under clauses (b)(i), (ii),
(iii), (iv), (v), (vi) and (vii) above shall be calculated on a combined basis
with any Subsidiary of the Company whose income is accounted for on a
consolidated or combined basis with the Company and, in accordance therewith,
"Available Cash" shall include a percentage of each such item of each such
Subsidiary equal to the Company's percentage ownership interest in such
Subsidiary, provided, however, that the items under clauses (a)(i), (ii),
(iii), (iv) and (v) above shall only be included in Available Cash to the
extent that the General Partner determines such amount to be legally available
for dividends or distributions to the Company by such Subsidiary; (ii) the
amount of net income and the amount of depletion, depreciation, amortization
and other noncash charges, utilized in
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determining net income shall be determined, with respect to the Company, by the
General Partner in accordance with generally accepted accounting principles
and, with respect to any Subsidiary, by its Board of Directors (or by such
other body or Person which has the ultimate management authority of such
Subsidiary) in accordance with generally accepted accounting principles; (iii)
the net income of any Subsidiary shall be determined on an after-tax basis;
(iv) the amount of any reductions in, or additions to, reserves for purposes of
clauses (a)(iii) and (b)(iv) above shall be determined, with respect to the
Company, by the General Partner in its reasonable good faith judgment and, with
respect to any Subsidiary, by its Board of Directors (or by such other body or
Person which has the ultimate management authority of such Subsidiary) in its
reasonable good faith judgment; and (v) any determination of whether any
capital expenditures or Investments are financed, or anticipated to be
financed, with Cash from Capital Transactions for purposes of clause (b)(ii) or
(b)(vi) above shall be made, with respect to the Company, by the General
Partner in its reasonable good faith judgment and, with respect to any
Subsidiary, by its Board of Directors (or by such other body or Person which
has the ultimate management authority of such Subsidiary) in its reasonable
good faith judgment.
"Bank of America Revolving Credit Agreement" shall mean the
credit agreement between the Company, Bank of America National Trust and
Savings Association, as Administrative Agent, and certain other lenders
pursuant to which the lenders thereunder provide credit facilities to the
Company in an aggregate principal amount not to exceed $260,000,000 and any
extension, renewal, refunding or refinancing thereof provided that such
renewal, refunding or refinancing shall not contain terms which are any less
favorable to the Purchasers.
"Bankruptcy Law" shall have the meaning specified in clause
(viii) of paragraph 7A.
"Board Foot" shall mean a unit of measurement one foot square
and one inch thick.
"Business Day" shall mean any day other than a Saturday,
Sunday or other day on which commercial banking institutions in New York, New
York or Seattle, Washington are authorized or required by law, regulation or
executive order to be closed.
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"Capital Asset" shall mean any asset on the Company's or any
Subsidiary's balance sheet, as the case may be, other than inventory, accounts
receivable or any other current asset and assets disposed of in connection with
normal retirements or replacements.
"Capital Lease Obligation" shall mean, with respect to any
Person, any rental obligation which, under generally accepted accounting
principles, is or will be required to be capitalized on the books of such
Person, taken at the amount thereof accounted for as indebtedness (net of
interest expenses) in accordance with such principles.
"Capital Transaction" shall mean (i) borrowings and sales of
debt securities (other than for working capital purposes and other than for
items purchased on open account in the ordinary course of business) by the
Company, (ii) sales of equity interests by the Company (other than the issuance
of SPUs) and (iii) sales or other voluntary or involuntary dispositions of any
assets of the Company (other than (x) sales or other dispositions of inventory
in the ordinary course of business, (y) sales or other dispositions of other
current assets including receivables and accounts and (z) sales or other
dispositions of assets as a part of normal retirements or replacements), in
each case prior to the commencement of the dissolution and liquidation of the
Company provided, that in determining Cash from Capital Transactions, items
(i), (ii) and (iii) above shall include, with respect to each Subsidiary of the
Company whose income is accounted for on a consolidated or combined basis with
the Company, a percentage of each such item of such Subsidiary equal to the
Company's percentage ownership interest in such Subsidiary.
"Cash from Capital Transactions" shall mean at any date, such
amounts of cash as are determined by the General Partner to be cash made
available to the Company from or by reason of a Capital Transaction.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Company's knowledge" or "knowledge of the Company" shall mean
the actual knowledge of Rick R. Holley, President and Chief Executive Officer,
Charles P. Grenier, Executive Vice President, Robert E. Manne, Executive Vice
President, Diane M. Irvine, Vice President and Chief Financial Officer, James
A. Kraft, Vice President Law,
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Susanna N. Duke, Director, Law and Secretary and Mitchell Leu, Environmental
Engineer and any successor to the offices and officers, such persons being the
principal persons employed by the Company ultimately responsible for
environmental operations and compliance, ERISA and legal matters relating to
the Company.
"Debt" shall mean, as to any Person, as of any date of
determination, without duplication, (i) all indebtedness of such Person for
borrowed money or for the deferred purchase price of property or services, (ii)
all amounts owed by such Person to banks or other Persons in respect of
reimbursement obligations under letters of credit, surety bonds and other
similar instruments guaranteeing payment or other performance of obligations by
such Person, (iii) all indebtedness for borrowed money or for the deferred
purchase price of property or services secured by any Lien on any property
owned by such Person, to the extent attributable to such Person's interest in
such property, even though such Person has not assumed or become liable for the
payment thereof, (iv) lease obligations of such Person which, in accordance
with generally accepted accounting principles, should be capitalized, (v) lease
obligations of such Person under leases which have a term (including any option
to renew exercisable at the discretion of the lessee thereunder) longer than 10
years or under leases under which the lessor, pursuant to an agreement with
such Person, has acquired the property specifically for the purpose of leasing
it to such Person, (vi) obligations payable out of the proceeds of production
from property of such Person, even though such Person has not assumed or become
liable for the payment thereof, and (vii) any obligations of any other Person
of the type described in the above clauses (i) through and including (vi),
inclusive, which are guaranteed or in effect guaranteed by such Person through
any agreement (contingent or otherwise) to purchase, repurchase or otherwise
acquire such obligation or any security therefor, or to provide funds for the
payment or discharge of such obligation (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or to maintain
the solvency or any balance sheet or other financial condition of the obligor
of such obligation, or to make payment for any products, materials or supplies
or for any transportation or services regardless of the non-delivery or
nonfurnishing thereof, in any such case if the purpose or intent of such
agreement is to provide assurance that such obligation will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the
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holders of such obligation will be protected against loss in respect thereof.
"Designated Acres" shall mean up to an aggregate of 114,000
acres owned by the Company which (based on the good faith determination of the
Responsible Representatives that such acres have at the time such determination
is made a higher value as recreational, residential, grazing or agricultural
property than for timber production) may be reasonably designated by the
General Partner at the time of the sale thereof as constituting Designated
Acres (such aggregate number of acres to be determined over the term of
existence of this Agreement).
"Designated Immaterial Subsidiary" shall mean any entity which
would otherwise be a Restricted Subsidiary and which at any time is designated
by the Company as a Designated Immaterial Subsidiary, provided that no such
designation of any entity as a Designated Immaterial Subsidiary shall be
effective unless (i) at the time of such designation, such entity does not own
any shares of stock or Debt of any Restricted Subsidiary which is not
simultaneously being designated as a Designated Immaterial Subsidiary, (ii)
immediately after giving effect to such designation, (a) the Company could
incur at least $1 of additional Funded Debt pursuant to clause (ix) of
paragraph 6B(2), and (b) no condition or event shall exist which constitutes an
Event of Default or Material Default, (iii) the Company is permitted to make
the Investment in such entity resulting from such designation pursuant to, and
within the limitations specified in, clause (ix) of paragraph 6B(3), treating
the aggregate book value (including equity in retained earnings) of the
Investments of the Company and its Subsidiaries in such entity immediately
prior to such designation as the cost of such Investment, and provided,
further, that if at any time all Designated Immaterial Subsidiaries on a
combined basis would be a "significant subsidiary" (assuming the Company is the
registrant) within the meaning of Regulation S-X (17 CFR Part 210) the Company
shall designate one or more Designated Immaterial Subsidiaries which are
directly owned by the Company and its Restricted Subsidiaries as Restricted
Subsidiaries such that the condition in this proviso is no longer applicable
and the entities so designated shall no longer be Designated Immaterial
Subsidiaries. Any entity which has been designated a Designated Immaterial
Subsidiary shall not thereafter become a Restricted Subsidiary except pursuant
to a designation required by the last proviso in the preceding sentence, and
any Designated Immaterial Subsidiary which has been designated a Restricted
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Subsidiary pursuant to the last proviso of the preceding sentence shall not
thereafter be redesignated as a Designated Immaterial Subsidiary.
"Designated Repurchases" shall mean and include purchases,
redemptions or other acquisitions, in each case at a price not to exceed fair
market value, of the publicly traded limited partnership interests in the
Company, which are retired by the Company within six months of such purchase,
redemption or other acquisition.
"Distribution Support Agreement" shall mean the Distribution
Support Agreement, dated as of June 8, 1989, between the Company and Burlington
Resources Inc., a Delaware corporation.
"11 1/8% Senior Note Agreements" shall mean the Note
Agreements, dated as of May 31, 1989 and amended as of January 1, 1991, April
22, 1993, September 1, 1993 and May 20, 1994, providing for the issuance and
sale by the Company of its 11 1/8% Senior Notes to the purchasers listed in the
schedule of purchasers attached thereto.
"11 1/8% Senior Notes" shall mean the 11 1/8% Senior Notes Due
June 8, 2007 of the Company issued and sold pursuant to the 11 1/8% Senior Note
Agreements.
"Environmental Laws" shall mean Federal, state, local and
foreign laws, rules or regulations relating to emissions, discharges, releases
or threatened releases of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or wastes into the environment (including,
without limitation, air, surface water, ground water or land), or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, chemicals or
industrial, toxic or hazardous substances or wastes.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"Event of Default" shall mean any of the events specified in
paragraph 7A, provided that there has been satisfied any requirement in
connection with such event for the giving of notice, or the lapse of time, or
the happening of any further condition, event or act, and "Default" shall mean
any of such events, whether or not any such requirement has been satisfied.
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"Facilities Subsidiary" shall mean, collectively,
Manufacturing and Marketing.
"Facilities Subsidiary's Facility" shall mean any facility
pursuant to which the Facilities Subsidiary may incur Debt for purposes of
making capital improvements, additions to, or expansions of, property, plant
and equipment of the Facilities Subsidiary or its Subsidiaries.
"Facilities Subsidiary's Revolving Credit Facility" shall mean
any facility pursuant to which the Facilities Subsidiary may obtain revolving
credit, takedown credit, the issuance of standby and payment letters of credit
and backup for the issuance of commercial paper.
"Facilities Subsidiary Stock" shall mean, collectively, the
limited partner interest of the Company in Manufacturing and the capital stock
of Marketing that is owned by the Company.
"Funded Debt" shall mean, without duplication, any Debt
payable more than one year from the date of the creation thereof. "Current
Debt" shall mean, without duplication, any Debt payable on demand or within a
period of one year from the date of the creation thereof; provided that any
Debt shall be treated as Funded Debt, regardless of its term, if such Debt is
renewable pursuant to the terms thereof or of a revolving credit or similar
agreement effective for more than one year after the date of the creation of
such Debt, or may be payable out of the proceeds of similar Debt pursuant to
the terms of such Debt or of any such agreement.
"General Partner" shall mean Plum Creek Management Company,
L.P., a limited partnership organized and existing under the laws of the State
of Delaware, and its successors and assigns.
"Guarantee" shall mean the guarantee in paragraph 7 of the
Mortgage Note Agreements.
"Investment Policy" shall mean the Corporate Investment Policy
of the Company, as it exists on April 5, 1993 and as attached hereto as
Schedule 10B(1).
"Investments" shall have the meaning specified in paragraph
6B(3).
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"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement, any
lease in the nature thereof, and the filing of or agreement to give any
financing statement under the Uniform Commercial Code of any jurisdiction).
"Manufacturing" shall mean Plum Creek Manufacturing, L.P., a
Delaware limited partnership.
"Marketing" shall mean Plum Creek Marketing, Inc., a Delaware
corporation.
"Material Default" shall mean any continuing Default as to
which a written notice of such Default (which notice has not been rescinded)
shall have been received by the Company or the General Partner from any holder
of any Note, or any continuing Event of Default.
"Maximum Pro Forma Annual Interest Charges" shall mean, as of
any date, the highest total amount payable during any period of four
consecutive fiscal quarters, commencing with the fiscal quarter in which such
date occurs and ending with the fiscal quarter in which August 1, 2009 occurs,
by the Company and its Restricted Subsidiaries on a combined basis, after
eliminating all intercompany transactions, in respect of interest charges ((a)
including amortization of debt discount and expense and imputed interest on
Capital Lease Obligations and on other obligations included in Debt which do
not have stated interest, (b) assuming, in the case of fluctuating interest
rates which cannot be determined in advance, that the rate in effect on such
date will remain in effect throughout such period, and (c) treating the
principal amount of all Debt outstanding as of such date under a revolving
credit or similar agreement as maturing and becoming due and payable on the
scheduled maturity date thereof, without regard to any provision permitting
such maturity date to be extended) on all Debt of the Company and its
Restricted Subsidiaries outstanding on such date (excluding the Guarantee and
the guarantees of the Facilities Subsidiary's Facility and the Facilities
Subsidiary's Revolving Credit Facility but including, to the extent not already
included, all other Debt outstanding on such date which is guaranteed or in
effect guaranteed by the Company or any Restricted Subsidiaries), after giving
effect to any Debt proposed to be created on such date and to the concurrent
retirement of any other Debt.
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"MMBF" shall mean one million Board Feet.
"Mortgage Note Agreements" shall mean the Note Agreements,
dated as of May 31, 1989 and amended as of January 1, 1991, April 22, 1993,
September 1, 1993, and May 20, 1994, providing for the issuance and sale by the
Facilities Subsidiary of its 11 1/8% First Mortgage Notes to the purchasers
listed in the schedule of purchasers attached thereto.
"Mortgage Noteholder" shall mean and include each holder from
time to time of a Mortgage Note issued under the Mortgage Note Agreements.
"Mortgage Notes" shall mean the 11 1/8% First Mortgage Notes
of the Facilities Subsidiary issued and sold pursuant to the Mortgage Note
Agreements.
"Multiemployer Plan" shall mean any Plan which is a
"multiemployer plan" (as such term is defined in section 4001(a)(3) of ERISA).
"Officers' Certificate" shall mean, as to any corporation, a
certificate executed on its behalf by the Chairman of the Board of Directors
(if an officer) or its President or one of its Vice Presidents and its
Treasurer, or Controller or one of its Assistant Treasurers or Assistant
Controllers, and, as to any partnership, a certificate executed on behalf of
such partnership by its general partner in a manner which would qualify such
certificate as an Officers' Certificate of such general partner hereunder.
"Partnership Agreement" shall mean the Amended and Restated
Agreement of Limited Partnership of the Company, as in effect on the date of
closing, and as the same may, from time to time be amended, modified or
supplemented in accordance with the terms thereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any governmental authority succeeding to any of its functions.
"Permitted Business" shall mean any business engaged in by the
Company or the Facilities Subsidiary on the date of closing, and any business
substantially similar or related to any such business, which shall not include
pulp or paper manufacturing.
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"Person" shall mean and include an individual, a partnership,
a joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
"Plan" shall mean an "employee benefit plan" (as defined in
section 3(3) of ERISA) which is or has been established or maintained, or to
which contributions are or have been made, by the Company, any of its
Subsidiaries or any Related Person or with respect to which the Company, any of
its Subsidiaries or any Related Person may have any liability.
"Pro Forma Free Cash Flow" as of any date shall mean (i) net
income of the Company and its Restricted Subsidiaries on a combined basis
(excluding (a) gain on the sale of any Capital Asset, (b) non-cash items of
income, and (c) any distributions or other income received from, or equity of
the Company or any Restricted Subsidiary in the earnings of, any entity which
is not a Restricted Subsidiary) for the period of four consecutive fiscal
quarters immediately prior to such date determined in accordance with generally
accepted accounting principles plus depreciation, depletion, amortization and
other noncash charges, interest expense on Debt and provision for income taxes,
minus (ii) capital expenditures made by the Company and its Restricted
Subsidiaries during such period of four consecutive fiscal quarters to maintain
their respective operations.
"Qualified Debt" shall mean, as to the Company, as of any date
of determination, without duplication, all outstanding indebtedness of the
Company for borrowed money, including, without limitation, Debt represented by
the Notes and the 11-1/8% Senior Notes.
"Related Person" shall mean, as of any date of determination,
any trade or business, whether or not incorporated, which, together with the
Company or any of its Subsidiaries, is treated as a single employer under
section 414(b) or (c) of the Code or the regulations promulgated thereunder.
"Required Holder(s)" shall mean for the purpose of paragraph
11C the holder or holders of at least 55% of the aggregate principal amount of
the Notes from time to time outstanding, and for all other purposes the holder
or holders of at least 66 2/3% of the aggregate principal amount of the Notes
from time to time outstanding.
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"Responsible Officer" means the chief executive officer, the
president or any vice president of the General Partner, or any other officer
having substantially the same authority and responsibility; or, with respect to
compliance with financial covenants, the chief financial officer or the
treasurer of the General Partner, or any other officer having substantially the
same authority and responsibility.
"Responsible Representatives" shall mean (a) in the case of
any transaction in which the value of any assets disposed of or received have a
value of less than $5,000,000 or in which payments made are less than
$5,000,000, the chief executive officer, chief financial officer or chief
operating officer of the Company, and (b) in the case of any other transaction,
the Board of Directors of the General Partner.
"Restricted Payment" shall mean (a) any payment or other
distribution, direct or indirect, in respect of any partnership interest in the
Company, except a distribution payable solely in additional partnership
interests in the Company, and (b) any payment, direct or indirect, on account
of the redemption, retirement, purchase or other acquisition of any partnership
interest in the Company including, without limitation, any Designated
Repurchase; or, if the Company is at any time reorganized as or changed (by
merger, sale of assets or otherwise) into a corporation, (i) any dividend or
other distribution, direct or indirect, on account of any shares of any class
of stock of the Company now or hereafter outstanding, except a dividend payable
solely in shares of stock of the Company, and (ii) any redemption, retirement,
purchase or other acquisition, direct or indirect, of any shares of any class
of stock of the Company, now or hereafter outstanding, or of any warrants,
rights or options to acquire any such shares, except to the extent that the
consideration therefor consists of shares of stock of the Company.
"Restricted Subsidiary" shall mean any Wholly-Owned Subsidiary
other than (a) any Designated Immaterial Subsidiary and (b) the Facilities
Subsidiary or any Subsidiary directly or indirectly owned by the Facilities
Subsidiary, provided that after the Mortgage Notes shall have been paid in full
and retired, the Facilities Subsidiary and its Subsidiaries shall become and be
Restricted Subsidiaries.
"Revolving Credit Facility" shall mean any facility pursuant
to which the Company may obtain revolving cred-
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it, take-down credit, the issuance of standby and payment letters of credit
and back-up for the issuance of commercial paper.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Significant Holder" shall mean (i) you, so long as you shall
hold (or be committed under this Agreement to purchase) any Note, or (ii) any
other insurance company, bank, financial institution, public or governmental
retirement or pension fund or other similar institutional holder of Notes,
whether acting for itself or in a trust, agency or other fiduciary capacity.
"Subsidiary" shall mean any corporation, partnership or other
entity a majority of (i) the total combined voting power of all classes of
Voting Stock of which or (ii) the outstanding equity interests of which shall,
at the time as of which any determination is being made, be owned by the
Company either directly or through Subsidiaries.
"Timber" shall mean standing trees not yet harvested.
"Timberlands" shall mean the timberlands owned as of the date
of closing and any timberlands acquired by the Company or any Subsidiary after
the date of closing.
"Transferee" shall mean any direct or indirect transferee of
all or any part of any Note purchased by you under this Agreement.
"Voting Stock" shall mean, with respect to any corporation or
other entity, any shares of stock or other ownership interests of such
corporation or entity whose holders are entitled under ordinary circumstances
to vote for the election of directors of such corporation or to manage any such
other entity (irrespective of whether at the time stock or ownership interests
of any other class or classes shall have or might have voting power by reason
of the happening of any contingency).
"Western Europe" shall mean Belgium, Denmark, France, Germany,
Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain and the United
Kingdom.
"Wholly-Owned Subsidiary" shall mean any Subsidiary organized
under the laws of any state of the United
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States of America which conducts the major portion of its business in the
United States of America and all of the stock or other ownership interests of
every class of which, except director's qualifying shares, and except in the
case of the Facilities Subsidiary not more than 5% of the outstanding Voting
Stock shall, at the time as of which any determination is being made, be owned
by the Company either directly or through Wholly-Owned Subsidiaries.
11. MISCELLANEOUS
11A. NOTE PAYMENTS
The Company agrees that, so long as you shall hold any Note,
it will make payments of principal thereof and premium, if any, and interest
thereon, which comply with the terms of this Agreement, by wire or electronic
funds transfer of immediately available funds for credit to your account or
accounts as specified in the Purchaser Schedule attached hereto, or such other
account or accounts in the United States as you may designate in writing,
notwithstanding any contrary provision herein or in any Note with respect to
the place of payment. You agree that, before disposing of any Note, you will
make a notation thereon (or on a schedule attached thereto) of all principal
payments previously made thereon and of the date to which interest thereon has
been paid. The Company agrees to afford the benefits of this paragraph 11A to
any Transferee which shall have made the same agreement as you have made in
this paragraph 11A.
11B. EXPENSES
Whether or not the transactions contemplated by this Agreement
shall be consummated, the Company will pay and will indemnify and hold you and
each holder of any Notes harmless in respect of all reasonable expenses in
connection with such transactions and in connection with any amendments or
waivers (whether or not the same become effective) under or in respect of this
Agreement or the Notes, including: (a) the cost and expenses of preparing and
reproducing this Agreement or the Notes, of furnishing all opinions by counsel
for the Company and all other opinions referred to herein (including any
opinions requested by Debevoise & Plimpton (or another firm selected by you and
the other holders as your special counsel) as to any legal matter arising
hereunder) and all certificates on behalf of the Company or any of its
Subsidiaries or Affiliates, and of the performance of and compliance with all
agreements and conditions contained
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herein on the part of the Company to be performed or complied with, (b) the
cost of delivering to your principal office, insured to your satisfaction, the
Notes sold to you hereunder and any Notes delivered to you upon any
substitution of Notes pursuant to paragraph 11E and of your delivering any
Notes, insured to your satisfaction, upon any such substitution, (c) the
reasonable fees, expenses and disbursements of your special counsel in
connection with such transactions and any such amendments or waivers (whether
or not such amendments or waivers become effective), (d) the reasonable
out-of-pocket expenses incurred by you in connection with such transactions
(including the costs and expenses incurred in connection with obtaining a
private placement number) and any such amendments or waivers and (e) the cost
and expenses, including attorneys' fees, incurred by you or any Transferee in
enforcing any rights under this Agreement or the Notes or in responding to any
subpoena or any other legal process issued in connection with this Agreement or
the transactions contemplated hereby or thereby or by reason of your or any
Transferee's having acquired any Note (as to any Person, other than under
circumstances in which such Person has contravened the understanding contained
in the second sentence of paragraph 9), including without limitation costs and
expenses incurred in any bankruptcy case. The Company shall have no obligation
to pay any legal fees incurred by you or any other holder other than the
reasonable fees of special counsel for you and the other holders. The Company
also will pay, and will indemnify and hold you and each holder of any Notes
harmless from, all claims in respect of the fees, if any, of brokers and
finders (unless engaged by you or any of the Other Purchasers) and any and all
liabilities with respect to any and all taxes including interest and penalties
which may be payable in respect of the execution, delivery, filing or recording
of this Agreement, the issue of the Notes and any amendment or waiver under or
in respect of this Agreement or the Notes. In furtherance of the foregoing, on
the date of closing the Company will pay the fees and disbursements of
Debevoise & Plimpton, your special counsel, which are reflected as unpaid in
the statement of your special counsel delivered to the Company on or prior to
the date of closing. The obligations of the Company under this paragraph 11B
shall survive the transfer of any Note or portion thereof or interest therein
by you or any Transferee and the payment of any Note.
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11C. CONSENT TO AMENDMENTS
This Agreement may be amended, and the Company may take any
action herein prohibited, or omit to perform any act herein required to be
performed by it, if the Company shall obtain the written consent to such
amendment, action or omission to act, of the Required Holder(s) except that,
without the written consent of the holder or holders of all Notes at the time
outstanding, no amendment to this Agreement shall change the maturity of any
Note, or change the principal of, or the rate or time of payment of interest or
any premium payable with respect to any Note, or affect the time, amount or
allocation of any required prepayments, or alter or amend the right of any
Significant Holder to declare all of the Notes held by such Significant Holder
to be due and payable in accordance with the provisions of paragraph 7A, or
reduce the proportion of the principal amount of the Notes required with
respect to any consent. Each holder of any Note at the time or thereafter
outstanding shall be bound by any consent authorized by this paragraph 11C,
whether or not such Note shall have been marked to indicate such consent, but
any Notes issued thereafter may bear a notation referring to any such consent.
No course of dealing between the Company and the holder of any Note nor any
delay in exercising any rights hereunder or under any Note shall operate as a
waiver of any rights of any holder of such Note. As used herein and in the
Notes, the term "this Agreement" and references thereto shall mean this
Agreement as it may from time to time be amended or supplemented.
11D. SOLICITATION OF HOLDERS OF NOTES
The Company will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of this
Agreement, the Other Note Agreements or the Notes unless each holder of any
Note shall concurrently be informed thereof in writing by the Company and shall
be afforded the opportunity to consider the same and shall be supplied by the
Company with sufficient information to enable it to make an informed decision
with respect thereto. Executed or true and correct copies of any waiver or
consent effected pursuant to the provisions of paragraph 11C shall be delivered
by the Company to each holder of outstanding Notes forthwith following the date
on which the same shall have been executed and delivered by the holder or
holders of the requisite percentage of outstanding Notes. The Company will
not, directly or indirectly, pay or cause to be paid any remuneration, whether
by way of supple-
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mental or additional interest, fee or otherwise, to any holder of any
Note as consideration for or as an inducement to the entering into by any such
holder of any Note of any waiver or amendment of any of the terms and
provisions of this Agreement, the Other Note Agreements or the Notes unless
such remuneration is concurrently paid, on the same terms, ratably to each
holder of the then outstanding Notes.
11E. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES
The Notes are issuable as registered notes without coupons in
minimum denominations equal to the lesser of (a) $1,000,000 (except as may be
necessary to reflect any principal amount not evenly divisible by $1,000,000)
and (b) the aggregate principal amount of Notes purchased by you hereunder (the
"Minimum Note Amount"). The Company shall keep at its principal office a
register in which the Company shall provide for the registration of Notes and
of transfers of Notes. Upon surrender for registration of transfer of any Note
at the principal office of the Company, the Company shall, at its expense,
execute and deliver one or more new Notes of like tenor and of a like aggregate
principal amount, registered in the name of such transferee or transferees,
provided that no transfer shall be made to any Transferee which does not
acquire Notes in a principal amount equal to not less than the lesser of the
Minimum Note Amount or the entire principal amount of the Notes owned by the
transferor thereof, and no holder shall transfer any Notes if thereafter such
holder retains ownership of Notes and the aggregate principal amount retained
is less than the Minimum Note Amount. At the option of the holder of any Note,
such Note may be exchanged for other Notes of like tenor and of any authorized
denominations, of a like aggregate principal amount, upon surrender of the Note
to be exchanged at the principal office of the Company. Whenever any Notes are
so surrendered for exchange, the Company shall, at its expense, execute and
deliver the Notes which the holder making the exchange is entitled to receive.
Every Note surrendered for registration of transfer or exchange shall be duly
endorsed, or be accompanied by a written instrument of transfer duly executed,
by the holder of such Note or such holder's attorney duly authorized in
writing. Any Note or Notes issued in exchange for any Note or upon transfer
thereof shall carry the rights to unpaid interest and interest to accrue which
were carried by the Note so exchanged or transferred, so that neither gain nor
loss of interest shall result from any such transfer or exchange. Upon receipt
of written notice from the holder of any Note
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of the loss, theft, destruction or mutilation of such Note and, in the case of
any such loss, theft or destruction, upon receipt of such holder's unsecured
indemnity agreement, or in the case of any such mutilation upon surrender and
cancellation of such Note, the Company will make and deliver a new Note, of
like tenor, in lieu of the lost, stolen, destroyed or mutilated Note.
11F. PERSONS DEEMED OWNERS; PARTICIPATIONS
Prior to due presentment for registration of transfer, the
Company may treat the Person in whose name any Note is registered as the owner
and holder of such Note for the purpose of receiving payment of principal of
and premium, if any, and interest on such Note and for all other purposes
whatsoever, whether or not such Note shall be overdue, and the Company shall
not be affected by notice to the contrary. You may without the consent of the
Company sell participations in principal amounts of not less than the Minimum
Note Amount or, in the case of any sale by a holder holding Notes in an
aggregate principal amount less than the Minimum Note Amount, such aggregate
principal amount of Notes so held, to one or more Persons who agree to be bound
by the provisions of paragraph 11J in all or a portion of your rights in the
Note or Notes held by you.
11G. NON-RECOURSE NATURE OF LIABILITY
Notwithstanding anything to the contrary contained in this
Agreement, you hereby acknowledge and agree that neither the General Partner,
stockholder nor any general partner or limited partner, officer, employee,
servant, controlling Person, executive, director or agent, as such, of the
General Partner, nor any past, present or future general partner or limited
partner, as such, of the General Partner, shall have any liability to you or
any Transferee (such liability, including such as may arise by operation of
law, being hereby expressly waived) for the payment of any sums now or
hereafter owing by the Company under this Agreement or under the Notes or for
the performance of any of the obligations of the Company contained herein.
11H. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT
All representations and warranties contained herein or made in
writing by or on behalf of the Company in connection herewith shall survive the
execution and delivery of this Agreement and the Notes, the transfer by you of
any
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71
Note or portion thereof or interest therein and the payment of any Note, and
may be relied upon by any Transferee, regardless of any investigation made at
any time by or on behalf of you or any Transferee. All representations,
warranties and covenants contained herein made by you or any holder shall
survive the execution and delivery of this Agreement and the Notes, and may be
relied upon by the Company and its successors and assigns. No holder of any
Notes (including you) shall be responsible for the truth, correctness or
performance of the representations or warranties of any other holder (including
any Transferee). Subject to the preceding sentences, this Agreement and the
Notes embody the entire agreement and understanding between you and the Company
and supersede all prior agreements and understandings relating to the subject
matter hereof.
11I. SUCCESSORS AND ASSIGNS
All covenants and other agreements in this Agreement contained
by or on behalf of any of the parties hereto shall bind and inure to the
benefit of the respective successors and assigns of the parties hereto
(including, without limitation, any Transferee) whether so expressed or not.
11J. DISCLOSURE TO OTHER PERSONS
You agree to use your best efforts to keep any information
(other than information which has become public information) delivered or made
available by the Company or the General Partner to you (including any
information obtained pursuant to paragraph 5A or 5B) in connection with or
pursuant to this Agreement which is proprietary in nature and clearly indicated
to be confidential information, confidential from any one other than Persons
employed or retained by you who are or are expected to become engaged in
evaluating, approving, structuring or administering the Notes; provided that
nothing herein shall prevent any holder of any Notes from disclosing such
information to (i) such holder's trustees, directors, officers, employees,
agents and professional consultants, (ii) any other holder of any Notes, (iii)
any Person to whom such holder offers to sell such Note or any part thereof
which has agreed in writing to be bound by the provisions of this paragraph
11J, (iv) any Person to whom such holder sells or offers to sell a
participation in all or any part of such Notes who has agreed in writing to be
bound by the provisions of this paragraph 11J, (v) any federal or state
regulatory authority having jurisdiction over such holder, (vi) the National
Association of Insurance Commissioners or any similar organization or
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72
(vii) any other Person to whom such delivery or disclosure may be necessary or
appropriate (a) in compliance with any law, rule, regulation or order
applicable to such holder, (b) in response to any subpoena or other legal
process, (c) in connection with any litigation to which such holder is a party
or (d) in order to protect such holder's investment in such Note to the extent
reasonably required in connection with the exercise of any remedy hereunder.
11K. NOTICES
All written communications provided for hereunder shall be
sent by first class mail or nationwide overnight delivery service (with charges
prepaid) and (i) if to you, addressed to you at the address specified for such
communications in the Purchaser Schedule attached hereto, or at such other
address as you shall have specified to the Company in writing, (ii) if to any
other holder of any Note, addressed to such other holder at such address as
such other holder shall have specified to the Company in writing or, if any
such other holder shall not have so specified an address to the Company, then
addressed to such other holder in care of the last holder of such Note which
shall have so specified an address to the Company, and (iii) if to the Company,
addressed to it at 999 Third Avenue, Suite 2300, Seattle, Washington 98104, or
at such other address as the Company shall have specified to the holder of each
Note in writing; provided, however, that any such communication to the Company
may also, at the option of the holder of any Note, be delivered by any other
means either to the Company at its address specified above or to any officer of
the Company.
11L. DESCRIPTIVE HEADINGS
The descriptive headings of the several paragraphs of this
Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
11M. SUBSTITUTION OF PURCHASER
You shall have the right to substitute any one of your
affiliates as the purchaser of the Notes which you have agreed to purchase
hereunder, by written notice to the Company, which notice shall be signed by
both you and such affiliate, shall contain such affiliate's agreement to be
bound by this Agreement and shall contain a confirmation by such affiliate of
the accuracy with respect to it of the representations set forth in paragraph
9. Upon receipt of such notice, wherever the word "you" is used in this Agree-
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ment (other than in this paragraph 11M), such word shall be deemed to
refer to such affiliate in lieu of you. In the event such affiliate is so
substituted as a purchaser hereunder and such affiliate thereafter transfers to
you all of the Notes then held by such affiliate, upon receipt by the Company
of notice of such transfer, wherever the word "you" is used in this Agreement
(other than in paragraph 11M), such word shall no longer be deemed to refer to
such affiliate, but shall refer to you, and you shall have all the rights of an
original holder of the Notes under this Agreement.
11N. SATISFACTION REQUIREMENT
If any agreement, certificate or other writing, or any action
taken or to be taken, is by the terms of this Agreement required to be
satisfactory to you or to the Required Holder(s), the determination of such
satisfaction shall be made by you or the Required Holder(s), as the case may
be, in the sole and exclusive judgment (exercised in good faith) of the Person
or Persons making such determination.
11O. GOVERNING LAW
THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE
OF NEW YORK.
11P. COUNTERPARTS
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, and it shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart.
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74
If you are in agreement with the foregoing, please sign the
form of acceptance on the enclosed counterpart of this letter and return the
same to the Company, whereupon this letter shall become a binding agreement
between you and the other parties hereto.
Very truly yours,
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company,
L.P., as General Partner
By: /s/ Diane M. Irvine
-------------------------------------
Name: Diane M. Irvine
Title: Vice President and Chief
Financial Officer
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The foregoing Agreement is hereby accepted as of the date first above written.
CENTRAL LIFE ASSURANCE COMPANY
By: /s/ Keith Gunzenhauser
-----------------------------------
Name: Keith Gunzenhauser
Title: Executive Vice
President-Finance
FARM BUREAU LIFE
INSURANCE COMPANY
By: /s/ Richard D. Warming
-----------------------------------
Name: Richard D. Warming
Title: VP-Chief Investment
Officer
FBL INSURANCE COMPANY
By: /s/ Richard D. Warming
------------------------------------
Name: Richard D. Warming
Title: VP-Chief Investment
Officer
FIRST COLONY LIFE
INSURANCE COMPANY
By: /s/ J. Alden Butler
------------------------------------
Name: J. Alden Butler
Title: Senior Vice President
GOLDMAN, SACHS & CO.
By: /s/ Richard Coppersmith
------------------------------------
Name: Richard Coppersmith
Title: VP
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76
GUARANTEE MUTUAL LIFE COMPANY
By: /s/ Beth A. True
------------------------------------
Name: Beth A. True
Title: Director-Investment
Administration
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: /s/ Bruce E. Gaudette
------------------------------------
Name: Bruce E. Gaudette
Title: Vice President
MUTUAL OF OMAHA
INSURANCE COMPANY
By: /s/ M.G. Echtenkamp
------------------------------------
Name: M.G. Echtenkamp
Title: Second Vice President
OHIO CASUALTY
INSURANCE COMPANY
By: /s/ Richard B. Kelly
------------------------------------
Name: Richard B. Kelly
Title: Senior Investment
Officer
PRINCIPAL MUTUAL LIFE
INSURANCE COMPANY
By: /s/ Warren Shank
------------------------------------
Name: Warren Shank
Title: Counsel
By: /s/ Nora M. Everett
------------------------------------
Name: Nora M. Everett
Title: Counsel
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77
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: /s/ Angela Brock-Kyle
------------------------------------
Name: Angela Brock-Kyle
Title: Associate Director
TRANSAMERICA LIFE INSURANCE
AND ANNUITY COMPANY
By: /s/ John M. Casparian
------------------------------------
Name: John M. Casparian
Title: Investment Officer
TRANSAMERICA OCCIDENTAL LIFE
INSURANCE COMPANY
By: /s/ John M. Casparian
------------------------------------
Name: John M. Casparian
Title: Investment Officer
UNITED MUTUAL LIFE
INSURANCE COMPANY
By: /s/ M.G. Echtenkamp
------------------------------------
Name: M.G. Echtenkamp
Title: Second Vice President
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PURCHASER SCHEDULE
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
CENTRAL LIFE ASSURANCE COMPANY $5,000,000
(1) All payments on account of the Notes shall be made by wire transfer of
immediately available funds to:
Central Life Assurance Company
Account No. 000-756
Norwest Bank Iowa, N.A.
7th and Walnut Street
Des Moines, Iowa 50304
ABA No. 073-000-228
(2) All notice of and written communication of payment information should
be directed to:
Central Life Assurance Company
611 Fifth Avenue
Des Moines, Iowa 50309
Attn: Vice President - Private Placements
(3) All other communications should be directed to:
Central Life Assurance Company
611 Fifth Avenue
Des Moines, Iowa 50309
Attn: Vice President - Private Placements
(4) Securities should be delivered to:
Central Life Assurance Company
611 Fifth Avenue
Des Moines, Iowa 50309
Attn: Diane Cortese
(5) Tax Identification No. 42-0175-020
79
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
FARM BUREAU LIFE INSURANCE COMPANY $3,000,000
(registered in the name
of Auer & Company)
(1) All payments on account of the Notes shall be made by wire transfer of
immediately available funds to:
Bankers Trust Co.
ABA No. 021-001-033
Private Placement Processing No. 99-991-145
For credit to #098642
Farm Bureau Life Insurance Co.
Description of Payment
(2) All financial reports (in duplicate) should be sent to:
FARM BUREAU LIFE INSURANCE COMPANY
5400 University Avenue
West Des Moines, IA 50266
Attn: Investment Dept.
BANKERS TRUST COMPANY
16 Wall Street, 4th Floor
New York, NY 10005
Attn: Rich McCormick
(3) Securities should be delivered to:
BANKERS TRUST COMPANY
16 Wall Street, 4th Floor
New York, NY 10005
Attn: Rich McCormick
(4) Taxpayer Identification No. 42-0623913
2
80
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
FBL INSURANCE COMPANY $2,000,000
(registered in the name
of Auer & Company)
(1) All payments on account of the Notes shall be made by wire transfer of
immediately available funds to:
Bankers Trust Co.
ABA No. 021-001-033
Private Placement Processing No. 99-991-145
For credit to #098644
FBL Insurance Company
Description of Payment
(2) All financial reports (in duplicate) should be sent to:
FBL INSURANCE COMPANY
5400 University Avenue
West Des Moines, IA 50266
Attn: Investment Dept.
BANKERS TRUST COMPANY
16 Wall Street, 4th Floor
New York, NY 10005
Attn: Rich McCormick
(3) Securities should be delivered to:
BANKERS TRUST COMPANY
16 Wall Street, 4th Floor
New York, NY 10005
Attn: Rich McCormick
(4) Taxpayer Identification No. 42-1131824
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81
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
FIRST COLONY LIFE INSURANCE COMPANY $10,000,000
(1) All payments on or in respect of the Notes to be by bank wire transfer
of Federal or other immediately available funds (identifying each
payment as "Plum Creek Timber Company, L.P., 8.73% Senior Notes, due
08/01/09") to:
Crestar Bank
Richmond, Virginia
ABA No. 0510-0002-0
Credit - 2111
Attn: Income Processing Unit Number 27955
for credit to First Colony Life Insurance
Company's
Account No. 10765400
(2) All notices and communications, including notices with respect to
payments and written confirmation of each such payment to:
FIRST COLONY LIFE INSURANCE COMPANY
700 Main Street
Lynchburg, Virginia 24504
Attn: Mr. George D. Vermilya, Jr.
(3) Securities should be delivered by registered mail to:
FIRST COLONY LIFE INSURANCE COMPANY
700 Main Street
Lynchburg, Virginia 24504
Attn: Mr. George D. Vermilya, Jr.
(4) Taxpayer Identification No. 540-596-414
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82
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
GOLDMAN, SACHS & CO. $14,000,000
(1) All payments on account of the Notes shall be made by wire transfer of
immediately available funds to:
Chase Manhattan Bank
85 Broad Street
New York, NY 10004
Account No. 930-1-011-483
Attn: John Ippolito
Ref: Plum Creek Timber Company, L.P.
(2) All notice of and written communication of payment information should
be directed to:
Chase Manhattan Bank
85 Broad Street
New York, NY 10004
Account No. 930-1-011-483
Attn: John Ippolito
Ref: Plum Creek Timber Company, L.P.
(3) All other communications should be directed to:
Chase Manhattan Bank
85 Broad Street
New York, NY 10004
Account No. 930-1-011-483
Attn: John Ippolito
Ref: Plum Creek Timber Company, L.P.
(4) Securities should be delivered to:
Chase Manhattan Bank
85 Broad Street
New York, NY 10004
Account No. 930-1-011-483
Attn: John Ippolito
Ref: Plum Creek Timber Company, L.P.
(5) Tax Identification No. 13-510-8880
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83
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
GUARANTEE MUTUAL LIFE COMPANY $3,000,000
(1) All payments on account of the Notes shall be made by wire transfer of
immediately available funds to:
Bankers Trust Company
16 Wall Street
New York, NY 10015
ABA No. 021-001-033
Credit: Guarantee Mutual Life Company
Account No. 50-035-201
(2) All notice of and written communication of payment information should
be directed to:
Guarantee Mutual Life Company
8801 Indian Hills Drive
Omaha, NE 68114
Attn: Investment Division
(3) All other communications should be directed to:
Guarantee Mutual Life Company
8801 Indian Hills Drive
Omaha, NE 68114
Attn: Investment Division
(4) Securities should be delivered to:
Guarantee Mutual Life Company
8801 Indian Hills Drive
Omaha, NE 68114
Attn: Investment Division
(5) Tax Identification No. 42-017-9235
6
84
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY $6,500,000
[IFM Traditional Account]
(1) All payments on account for the Notes shall be made by wire transfer
of immediately available funds to:
Chemical Bank
ABA No. 021-00128
Institutional Client Services
4 New York Plaza -- 4th Floor
New York, NY 10004-2413
Account No. 321-029-852
(2) All notice of and written confirmation of payment information should
be directed to:
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111
Attn: Securities Custody and Collection Dept.,
E381
Tel: (413) 788-8411
Fax: (413) 744-6263
(3) All other communications should be directed to:
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111
Tel: (413) 788-8411
Fax: (413) 744-6127
(4) Tax Identification Number: 04-1590850
7
85
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY $3,500,000
[Pension Management GIA Account]
(1) All payments on account for the Notes shall be made by wire transfer
of immediately available funds to:
Chemical Bank
ABA No. 021-00128
Institutional Client Services
4 New York Plaza -- 4th Floor
New York, NY 10004-2413
Account No. 321-029-828
(2) All notice of and written confirmation of payment information should
be directed to:
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111
Attn: Securities Custody and Collection Dept.,
E381
Tel: (413) 788-8411
Fax: (413) 744-6263
(3) All other communications should be directed to:
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111
Tel: (413) 788-8411
Fax: (413) 744-6127
(4) Tax Identification Number: 04-1590850
8
86
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
MUTUAL OF OMAHA INSURANCE COMPANY $4,000,000
(1) All principal and interest payments on the Notes shall be made by wire
transfer of immediately available funds to:
First National Bank Omaha
ABA No. 1040-00016
16th & Dodge Street
Omaha, NE 68102
For Credit to:
Mutual of Omaha Insurance Company
Account No. 26-743587
For payment on:______________
_____________________________
Interest Amount:
Principal Amount:
(2) Address for all notices in respect of payment:
Mutual of Omaha Insurance Company
Attn: Investments/Investment Accounting
Mutual of Omaha Plaza
Omaha, NE 68175
(3) Address for all other communications:
Mutual of Omaha Insurance Company
Attn: Investment Division
Mutual of Omaha Plaza
Omaha, NE 68175
(4) Address for delivery of securities
Mutual of Omaha Insurance Company
Attn: Investments/Securities Accounting
Mutual of Omaha Plaza
Omaha, NE 68175
(5) Taxpayer Identification No. 47-0246511
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87
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
OHIO CASUALTY INSURANCE COMPANY $3,000,000
(registered in the name of Elite & Co.)
(1) All payments on account of the Notes shall be made by wire transfer of
immediately available funds to:
Bank of America
ABA No. 121000358
Credit: Custody Plus Insurance
Account No. 1257-9-03422
Attn: Ohio Casualty Insurance Company
Sender's Name________________________
Credit to: QD-7-15125-1
(2) All notices of and written confirmation of payment information should
be directed to:
The Ohio Casualty Group
Jane A. Schriever, Investment Records
136 N. Third Street
Hamilton, OH 45025
Tel: (513) 867-6316
Fax: (513) 867-3964
and also to:
Bank of America
Ruth Hankins, Senior Business Manager
P.O. Box 93487
Pasadena, CA 91109-3487
or
299 N. Euclid Avenue, 4th Floor
Pasadena, CA 91101
Tel: (818) 405-3460
Fax: (818) 449-9025
(3) All other communications should be directed to:
Eric P. Scruggs, Portfolio Mngr., Prvt. Plcmt. Invstmt.
136 N. Third Street
Hamilton, OH 45025
Tel: (513) 867-3696
Fax: (513) 867-3228
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88
(4) Securities should be delivered to:
BankAmerica National Trust Company
One World Trade Center 13th Floor
New York, NY 10048
For account of CPI
Customer Account No. QD-7-15125-1
Account No. 4-09046 CPI
(5) Taxpayer Identification No. 31-0396250
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PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY $25,000,000
(1) All payments on account of the Note shall be made by wire transfer of
immediately available funds to its Account No. 014752 at Norwest Bank
Iowa, N.A., 7th & Walnut Streets, Des Moines, IA 50309, with
sufficient information to identify the source and application of such
funds, including identifying each payment as "Plum Creek Timber
Company, L.P. 8.73% Senior Notes due August 1, 2009, the Bond No.
(1-B-60129) and PPN (729237 A@ 6) of the issue.
(2) Address for all notices in respect of payment:
711 High Street
Des Moines, IA 50392-0960
Attn: Investment Accounting & Treasury - Securities
Fax: (515) 248-2643
(3) Address for all other communications:
711 High Street
Des Moines, IA 50392-0800
Attn: Investment Department Securities Division
Fax: (515) 248-2490
(4) Taxpayer Identification No. 42-0127290
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PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
TEACHERS INSURANCE AND ANNUITY $50,000,000
ASSOCIATION OF AMERICA
(1) All payments on account of Teachers Insurance and Annuity Association
of America shall be made in immediately available funds at the opening
of business on the due date by electronic funds transfer, identifying
it as PLUM CREEK TIMBER COMPANY, L.P., PPN 729237 A@ 6, $50,000,000
8.73% Senior Note due August 1, 2009 (principal or interest), through
the Automated Clearing House System to:
Morgan Guaranty Trust Company of New York
ABA No. 021-000-238
23 Wall Street
New York, NY 10015
Account of: Teachers Insurance and Annuity
Association of America
Account No. 121-85-001
On Order of: Plum Creek Timber Company, L.P.
(2) Contemporaneous with the above electronic funds transfer, mail or send
by facsimile the following information setting forth: (i) the full
name, private placement number, interest rate and maturity date of the
Notes or other obligations; (ii) the allocation of payment between
principal, interest, premium and any special payment; and (iii) the
name and address of bank from which such electronic funds transfer was
sent, to:
Teachers Insurance and Annuity
Association of America
730 Third Avenue
New York, NY 10017
Attn: Securities Accounting Division
Tel: (212) 916-4188
Fax: (212) 916-6199
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(3) All of the communications shall be delivered or mailed to:
Teachers Insurance and Annuity
Association of America
730 Third Avenue
New York, NY 10017
Attn: Securities Division
Tel: (212) 916-5724 (Angela Brock-Kyle) or
(212) 490-9000 (general number)
Fax: (212) 916-6582
(4) Securities should be delivered to:
Teachers Insurance and Annuity
Association of America
730 Third Avenue
New York, NY 10017
Attn: Timothy F. Hodgdon
Corporate Finance Law
(5) Taxpayer Identification No. 13-1624203N
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PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
TRANSAMERICA OCCIDENTAL LIFE $5,000,000
INSURANCE COMPANY
(1) All payments on account for the Notes shall be made by wire transfer
of immediately available funds to:
Bank of America NT & SA
Corporate Service Center #1233
1859 Gateway Blvd.
Concord, CA 94520
Attn: Terry Peach
ABA No. 121-000-358
Account No. 12353-04390
(2) All notice of and written confirmation of payment information should
be directed to:
TransAmerica Securities Accounting
P.O. Box 2101
Los Angeles, CA 90051-0101
Attn: Elaine S. Farrell, Manager
(3) All other communications should be directed to:
John Casparian
TransAmerica Investment Services
1150 South Olive Street
Suite 2700
Los Angeles, CA 90015
(4) Securities should be delivered to:
John Casparian
TransAmerica Investment Services
1150 South Olive Street
Suite 2700
Los Angeles, CA 90015
(5) Tax Identification Number: 95-1060502
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PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
TRANSAMERICA LIFE AND $5,000,000
ANNUITY INSURANCE COMPANY
(1) All payments on account for the Notes shall be made by wire transfer
of immediately available funds to:
Bank of America NT & SA
Corporate Service Center #1233
1859 Gateway Blvd.
Concord, CA 94520
Attn: Terry Peach
ABA No. 121-000-358
Account No. 12353-04395
(2) All notice of and written confirmation of payment information should
be directed to:
TransAmerica Securities Accounting
P.O. Box 2101
Los Angeles, CA 90051-0101
Attn: Elaine S. Farrell, Manager
(3) All other communications should be directed to:
John Casparian
TransAmerica Investment Services
1150 South Olive Street
Suite 2700
Los Angeles, CA 90015
(4) Securities should be delivered to:
John Casparian
TransAmerica Investment Services
1150 South Olive Street
Suite 2700
Los Angeles, CA 90015
(5) Tax Identification Number: 95-6140222
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PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
UNITED OF OMAHA LIFE INSURANCE COMPANY $11,000,000
(1) All principal and interest payments on the Notes shall be made by wire
transfer of immediately available funds to:
FirsTier Bank - Omaha
ABA No. 1040-0002-9
17th & Farnam Street
Omaha, NE 68102
For Credit to:
United of Omaha Life Insurance Company
Account No. 144-7-076
For payment on:______________
_____________________________
Interest Amount:
Principal Amount:
(2) Address for all notices in respect of payment:
United of Omaha Life Insurance Company
Attn: Investments/Securities Accounting
Mutual of Omaha Plaza
Omaha, NE 68175
(3) Address for all other communications:
United of Omaha Life Insurance Company
Attn: Investment Division
Mutual of Omaha Plaza
Omaha, NE 68175
(4) Address for delivery of securities
United of Omaha Life Insurance Company
Attn: Investments/Securities Accounting
Mutual of Omaha Plaza
Omaha, NE 68175
(5) Taxpayer Identification No. 47-0322111
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EXHIBIT A
PLUM CREEK TIMBER COMPANY, L.P.
8.73% Senior Note due August 1, 2009
No. R-___ New York, New York
$________ , 1994
PPN: 729237 A@ 6
FOR VALUE RECEIVED, the undersigned, PLUM CREEK TIMBER
COMPANY, L.P. (the "Company"), a limited partnership duly organized under the
Delaware Revised Uniform Limited Partnership Act, hereby promises to pay to
_______________________________________, or registered assigns, the principal
sum of ______________ DOLLARS on August 1, 2009, with interest (computed on the
basis of a 360-day year consisting of twelve 30-day months) (a) on the unpaid
balance thereof at the rate of 8.73% per annum from the date hereof, payable on
the first day of February and August in each year, commencing with the February
1 or August 1 next succeeding the date hereof, until the principal hereof shall
have become due and payable, and (b) on any overdue payment (including any
overdue prepayment) of principal, any overdue payment of premium and, to the
extent permitted by applicable law, any overdue payment of interest, payable
semiannually as aforesaid (or, at the option of the registered holder hereof,
on demand), at a rate per annum from time to time equal to the greater of (i)
9.73% or (ii) the rate of interest publicly announced by Morgan Guaranty Trust
Company of New York from time to time in New York City as its Prime Rate plus
2.0%.
Payments of principal, premium, if any, and interest are to be
made at the main office of Morgan Guaranty Trust Company of New York in New
York City or at such other place as the holder hereof shall designate to the
Company in writing, in lawful money of the United States of America.
This Note is one of the Company's 8.73% Senior Notes due
August 1, 2009 (the "Notes") issued pursuant to separate identical Senior Note
Agreements, each dated as of August 1, 1994 (the "Agreements"), between the
Company and the respective original purchasers of the Notes named in the
Purchaser Schedule attached thereto and is entitled to the benefits thereof.
As provided in the Agreements, this Note is subject to prepayment, in whole or
from time to time in part, with such premium as is specified in the Agreements.
Form of Senior Note
96
This Note is a registered Note and, as provided in the
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company shall not be affected by any notice to
the contrary.
In case an Event of Default, as defined in the Agreements,
shall occur and be continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner and with the effect provided in
the Agreements.
2
Form of Senior Note
97
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF SUCH STATE.
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company,
L.P., as General Partner
By: _______________________________
Title
3
Form of Senior Note
98
EXHIBIT B-1
August 1, 1994
To each of the Purchasers listed
in the attached Purchaser Schedule:
Plum Creek Timber Company, L.P.
8.73% Senior Notes due August 1, 2009
Dear Purchaser:
We have acted as special counsel to you and the other
purchasers listed in the attached Purchaser Schedule in connection with the
issue and sale to you and such other purchasers today by Plum Creek Timber
Company, L.P., a Delaware limited partnership (the "Company"), of $150,000,000
aggregate principal amount of its 8.73% Senior Notes due August 1, 2009 (the
"Senior Notes"), pursuant to separate Senior Note Agreements (the "Senior Note
Agreements"), each dated as of August 1, 1994, between the Company and you and
between the Company and each of such other purchasers, respectively.
Capitalized terms used in this opinion without definition have the respective
meanings specified in the Senior Note Agreements.
99
To each of the Purchasers 2 August 1, 1994
In so acting, we have participated in the preparation of the
Senior Note Agreements and the Senior Notes. We have also examined and relied
upon the representations and warranties as to factual matters contained in or
made pursuant to the Senior Note Agreements and have examined and relied upon
the originals, or copies certified or otherwise identified to our satisfaction,
of such records, documents, certificates and other instruments, and have made
such other investigations, as in our judgment are necessary or appropriate to
enable us to render the opinion expressed below.
We are of the following opinion:
1. Organization, Standing, etc. of the Company. The Company
is a limited partnership duly organized, validly existing and in good standing
under the Delaware Revised Uniform Limited Partnership Act (the "Act") amid has
all requisite partnership power and authority to enter into and carry out the
terms of the Senior Note Agreements and to issue and sell the Senior Notes.
2. Compliance with Partnership Agreement. The execution,
delivery and performance by the Company of the Senior Note Agreements and the
Senior Notes will not result in any violation of or be in conflict with or
constitute a default under any term of the Partnership Agreement.
3. Governmental Consent. No consent, approval or
authorization of, or declaration or filing with, any governmental authority on
the part of the Company is required under Federal or New York law for the valid
execution and delivery by the Company of the Senior Note Agreements or the
valid offer, issue, sale and delivery of the Senior Notes pursuant to the
Senior Note Agreements.
4. Senior Note Agreements and Senior Notes. The Senior Note
Agreements and the Senior Notes have been duly authorized by all necessary
action on the part of the Company. The Senior Note Agreement between the
Company and you and the Senior Notes purchased by you today have been duly
executed and delivered by the Company and constitute legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
of general application relating to or affecting the rights and remedies of
creditors and by general principles of equity.
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To each of the Purchasers 3 August 1, 1994
5. Securities Act. The offer, issue, sale and delivery of
the Senior Notes under the circumstances contemplated by the Senior Note
Agreements constitute exempted transactions under the registration provisions
of the Securities Act of 1933, as amended, and neither the registration of the
Senior Notes thereunder nor the qualification of an indenture in respect of the
Senior Notes under the Trust Indenture Act of 1939, as amended, is required in
connection with such offer, issue, sale and delivery.
We have reviewed the opinion, dated today and addressed to
you, of James A. Kraft, Vice President, Law for the Company. Such opinion is
satisfactory to us in scope and form, and, on the basis of such review, it is
our opinion that you are justified in relying thereon. Our review of such
opinion included such investigations and procedures as in our judgment were
necessary or appropriate in order to enable us to reach the conclusion that
your reliance thereon is reasonable under the circumstances.
We are members of the Bar of the State of New York and our
opinion is limited to the laws of the State of New York, the Delaware Revised
Uniform Limited Partnership Act and the Federal Laws of the United States of
America.
Very truly yours,
/s/ DEBEVOISE & PLIMPTON
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101
PURCHASER SCHEDULE
Central Life Assurance Company
Farm Bureau Life Insurance Company
FBL Life Insurance Company
First Colony Life Insurance Company
Goldman, Sachs & Co.
Guarantee Mutual Life Company
Massachusetts Mutual Life Insurance Company
Mutual of Omaha Insurance Company
Ohio Casualty Insurance Company
Principal Mutual Life Insurance Company
Teachers Insurance and Annuity Association
of America
Transamerica Occidental Life Insurance Company
Transamerica Life and Annuity Insurance Company
United of Omaha Life Insurance Company
102
EXHIBIT B-2
August 1, 1994
To each of the Purchasers listed
in the attached Purchaser Schedule:
Plum Creek Timber Company, L.P.
8.73% Senior Notes due August 1, 2009
Dear Purchaser:
I am the Vice President, Law of Plum Creek Management Company,
L.P., (the "General Partner") which serves as the general partner of Plum Creek
Timber Company, L.P., a Delaware limited partnership (the "Company"). In such
capacity I have acted as counsel to the Company and as such I am familiar with
transactions contemplated by those separate Senior Note Agreements, each dated
as of August 1, 1994, between the Company, you and each of the Other
Purchasers, respectively, (the "Note Agreements"). Capitalized terms used in
this opinion without definition have the respective meanings specified in the
Note Agreements.
103
To each of the Purchasers 2 August 1, 1994
In so acting, I have examined the following documents:
(a) the Notes; and
(b) the Note Agreements.
The Notes and the Note Agreements described in items (a) and
(b) above are sometimes herein collectively referred to as the "Loan
Documents". This opinion is being delivered to you pursuant to paragraph 3B of
the Note Agreements.
In such capacity, I have participated in the preparation of
the Loan Documents. For purposes of this opinion, I have (a) investigated such
questions of law, (b) examined such certificates of public officials and of
officers of the Company and other documents, as in my judgment are necessary or
appropriate to enable me to render the opinions expressed below, and (c) relied
upon the representations and warranties as to factual matters contained in or
made pursuant to the Loan Documents and in the Memorandum. In addition, I have
with your approval, assumed (i) the genuineness of the signatures of Persons
signing all Loan Documents in connection with which this opinion is rendered on
behalf of parties thereto (other than Persons signing on behalf of the
Company), (ii) the authority of all Persons signing all documents on behalf of
the parties thereto (other than Persons signing on behalf of the Company),
(iii) the authenticity of all documents submitted to me as originals, (iv) the
conformity to authentic original documents of all documents submitted to me as
certified, conformed or photostatic copies, (v) that each of the parties to the
Loan Documents other than the Company has all requisite power and authority to
execute, deliver and perform the Loan Documents to which it is a party and (vi)
the due authorization, execution and delivery of the Loan documents by all the
parties thereto other than the Company.
Based upon the foregoing, and subject to the further
assumptions and qualifications hereinafter set forth, I am of the opinion,
that:
1. The Company is a limited partnership duly organized,
validly existing and in good standing under the Delaware Revised Uniform
Limited Partnership Act and has all requisite partnership power and authority
to own and operate
2
104
To each of the Purchasers 3 August 1, 1994
its properties, to conduct its business as currently conducted, to execute and
deliver the Loan Documents, to issue and sell the Notes and to carry out the
terms of the Note Agreements and the Notes. The Company has been qualified or
registered and is in good standing as a foreign limited partnership for the
transaction of business under the laws of the States of Washington, Idaho and
Montana, which are the only jurisdictions in which the failure so to qualify or
register would be likely, in my reasonable judgment, to subject the Company to
any liability or disability which would be material to the financial condition
or operations of the Company or to have a material adverse effect upon the
ability of the Company to perform its obligations under the Loan Documents.
2. The Note Agreements and the Notes have been duly
authorized by all necessary partnership action on the part of the Company. The
Note Agreements between the Company and you and the Notes purchased by you
today have been duly executed and delivered on behalf of the Company, and
constitute the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, subject to the
qualifications that (a) such enforceability may be limited by bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditor's rights generally, (b) such enforceability may be
limited by public policy, and (c) the enforceability of equitable rights and
remedies is subject to equitable defenses and judicial discretion and such
enforceability may be limited by general equitable principles.
3. The Company is not in violation of any term of the
Partnership Agreement or, to my knowledge, of any term of any other agreement
or instrument to which it is a party or by which it or any of its properties is
bound or, to my knowledge, of any term of any applicable law, ordinance, rule
or regulation of any governmental authority or, to my knowledge, of any term of
any applicable order, judgment or decree of any court, arbitrator or
governmental authority, the consequences of which violations, individually or
in the aggregate, would be reasonably likely to have a material adverse effect
on its business, property or assets, condition or operations or on the ability
of the Company to perform its obligations under the Loan Documents. The
execution, delivery and performance by the Company of the Loan Documents will
not result in any violation of or be in conflict with or constitute a default
under any such term or
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105
To each of the Purchasers 4 August 1, 1994
result in the creation of (or impose any obligation on the Company to create)
any Lien (other than the Liens required by paragraph 5C of the Note Agreements)
upon any of the properties or assets of the Company.
4. No consent, approval or authorization of, or declaration
or filing with, or the taking of any other action in respect of, any
commission, authority, governmental agency or body of the United States of
America or the State of Washington, Idaho, Delaware or Montana is required for
the valid execution, delivery and performance by the Company of the Loan
Documents or the valid offer, issue, sale and delivery of the Notes pursuant to
the Note Agreements except such consents, approvals or authorizations as have
been obtained and such filings as may be required under state securities laws
or Blue Sky Laws in connection with the offer, issue, sale and delivery of the
Notes.
5. There are no legal or governmental proceedings to which
the Company is a party or to which any property or assets of the Company is
subject or which is pending or, to the best of my knowledge, threatened against
the Company which questions the validity of the Loan Documents or any actions
pursuant thereto or which would be reasonably likely to result in any material
adverse change in the business, property or assets, condition or operations of
the Company.
6. The company is not an "investment company" as defined
under the Investment Company Act of 1940, as amended, nor is the Company or the
issue and sale of the Notes by the Company subject to regulation thereunder.
7. Based upon the representations of the Purchasers contained
in the Note Agreements, the offer, issue, sale and delivery of the Notes under
the circumstances contemplated by the Note Agreements constitute exempt
transactions under the registration provisions of the Securities Act of 1933,
as amended, and neither the registration of the Notes thereunder nor the
qualification of an indenture in respect of the Notes under the Trust Indenture
Act of 1939, as amended, is required in connection with such offer, issue, sale
and delivery.
8. Based upon the representation of the Company as to the use
of the proceeds of the Notes contained in the Note Agreements, the issue and
sale of the Notes do not violate Regulation G, T or X of the Board of Governors
of the Federal Reserve System.
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106
To each of the Purchasers 5 August 1, 1994
The opinions expressed herein are based upon and limited
exclusively to the laws of the State of Washington, the Delaware Revised
Uniform Limited Partnership Act, and federal laws of the United States of
America insofar as any of such laws are applicable, and I render no opinion
with respect to any other laws, except that the opinions expressed in
paragraphs 1, 2, 3 and 4 cover the laws of the State of Idaho, Montana, New
York, Delaware or Washington, in each case, insofar as any such laws are
applicable.
This opinion is solely for your benefit in connection with the
transactions contemplated by the Note Agreements and may not be relied upon by
any Person other than you or any transferee of any Note. This opinion is not
to be quoted in whole or in part or otherwise referred to (except in a list of
closing documents in connection with the transactions described herein), nor
shall it be filed with any governmental agency or other Person without my prior
written consent. I express no opinion with respect to any matter not expressly
set forth in this opinion.
Very truly yours,
/s/ James A. Kraft
James A. Kraft
Vice President, Law
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107
PURCHASER SCHEDULE
Central Life Assurance Company
Farm Bureau Life Insurance Company
FBL Insurance Company
First Colony Life Insurance Company
Goldman, Sachs and Company
Guarantee Mutual Life Company
Massachusetts Mutual Life Insurance Company
Mutual of Omaha Insurance Company
Ohio Casualty Insurance Company
Principal Mutual Life Insurance Company
Teachers Insurance and Annuity Association of America
Transamerica Occidental Life Insurance Company
United of Omaha Life Insurance Company
108
EXHIBIT D
LIENS
Mortgage, Security Agreement and Fixture Filings dated June 8,
1989 recorded in Flathead, Lake and Lincoln Counties, Montana as supplemented
and amended by Mortgage Recording Supplements and Security Agreement and
Fixture Filings dated January 1, 1991; and Deed of Trust, Security Agreement
and Fixture Filing dated June 8, 1989 recorded in Kittitas County, Washington;
all of which were executed by Plum Creek Manufacturing, Inc. in favor of First
Interstate Bank of Washington, N.A., as Trustee, to secure the indebtedness
evidenced by the Mortgage Note Agreement dated May 31, 1989 among Plum Creek
Manufacturing, Inc., Plum Creek Timber Company, L.P. as guarantor, and each of
the purchasers of the Mortgage Notes, as amended by the Mortgage Note Agreement
Amendment, Consent and Waiver dated as of January 1, 1991 among Plum Creek
Manufacturing, Inc., Plum Creek Timber Company, L.P., Plum Creek Merger
Company, Inc., Plum Creek Manufacturing, L.P., and the several holders of the
11-1/8% First Mortgage Notes.
109
EXHIBIT E
Plum Creek Timber Company, L.P.
Permitted Investments
1. 98% interest in Plum Creek Manufacturing, L.P.
2. 96% interest in Plum Creek Marketing, Inc.
110
EXHIBIT F
Environmental notices from Federal, State and Local
Environmental Agencies to the Company citing environmental violations that have
not been finally resolved and disposed of:
EPA/North American Environmental Inc. (Clearfield, UT)
The Environmental Protection Agency ("EPA") has designated a storage
facility for hazardous substances located in Clearfield, Utah,
formerly run by North American Environmental, Inc. ("NAE"), as a
superfund site. In August, 1992, the EPA notified approximately 225
potential responsible parties ("PRP") including Plum Creek, based on
storage by the Company of hazardous waste at the site from 1989-1992.
In 1989, Plum Creek contracted with a third party to remove and
transport transformers and components ("transformers") from its
Columbia Falls, Montana facility. These transformers, which contained
polychlorinated biphenyls ("PCB"), a federally listed hazardous
substance, were transported to the NAE facility for permanent storage.
In 1992, Plum Creek contracted with certified third parties to
identify, remove, transport and dispose of the transformers.
The Company's transformers were identified, removed and transported to
Coffeyville, Kansas. They have been destroyed and certificates of
destruction have been provided to Plum Creek. To the best of Plum
Creek's knowledge, no release, leak or discharge from the transformers
occurred at the NAE facility. The EPA is encouraging a cooperative
settlement among the potential generators through a PRP steering
committee. The EPA also has issued a consent order of agreement to
PRPs with waste remaining at Freeport. The Company was not included
as a party to the cleanup agreement.
Based on the fact that Plum Creek has already removed its stored
items, has no knowledge of any release from any of its stored items
and has no orphan items, the Company believes that it should not have
any liability.
111
State of Montana / Evergreen Plywood glue pit (Kalispell, MT)
The cite of a cistern which had been used by a prior owner at Plum
Creek's Evergreen complex was placed on the "CERLIS" list of potential
Superfund sites in 1980. When the cistern was later exhumed, visibly
contaminated soil was removed and the area was refilled with clean
soil. In conjunction with the construction of a new building, the
site was excavated and samples were taken and analyzed in consultation
and cooperation with a state representative. No visible evidence of
contamination was found, and the state authorized Plum Creek to fill
the excavation and construct the new building over it. Correspondence
from the Montana Department of Health and Environmental Services
states that there is no off-site migration of contaminants and the
current status of the site is 'No Further Action.'
EPA / Somers site (Somers, MT)
Burlington Northern Railroad (the "Railroad") and predecessors had a
railroad tie processing plant located at Somers, Montana. This site
is a designated Superfund site and clean up is on-going. A
predecessor company of Plum Creek owned a portion of the land, which
now has been transferred to an affiliate of the Railroad.
Burlington Northern Railroad has taken full responsibility for the
Superfund clean up and Plum Creek does not anticipate any liability.
DOE / Old Landsburg Mine Site (Ravensdale, WA)
In March, 1990, the State of Washington Department of Ecology ("DOE")
alleged that a release or threatened release of a hazardous substance
had occurred in an area designated "The Old Landsburg Mine."
Landowners are Palmer Coking Coal Company (Palmer) and Plum Creek.
Plum Creek and other Potentially Liable Parties (PLP) are required to
respond to the DOE regarding a high priority clean up of the site
under the Model Toxics Control Act. From 1991 to the present, Plum
Creek has participated on a PLP task force which has cooperated
voluntarily with the DOE removed barrels and fenced the site and under
an Agreed Order is participating in a
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112
Remedial Investigation/Feasibility Study (RI/FS). Plum Creek does not
believe it will be ultimately liable for disposal of barrels or
hazardous waste at the site and is vigorously defending its position.
To the extent liability is assessed against Plum Creek as a landowner,
the Company believes that Palmer, by virtue of the terms of a lease
entered between 1978 and 1983, and/or Burlington Northern Inc., by
virtue of an indemnity contained in the deed that transferred the
property to Plum Creek, will be responsible.
Yakima Health District / Dump Site (Yakima County, WA)
The Yakima Health District notified Plum Creek of the existence of a
garbage dump site on lands owned by Plum Creek as well as adjacent
lands owned by Champion International Corporation ("Champion"). Plum
Creek and Champion have caused the garbage to be removed and
anticipate receiving clearance from the Yakima Health Department.
State of Montana / Columbia Falls Boiler (Columbia Falls, MT)
The State of Montana Air Quality Board (AQB) issued Plum Creek a
citation for construction of emission control equipment (an
electrostatic precipitator) on the boiler without a permit. Plum
Creek has met with the AQB and is awaiting further action.
EPA / NOV under the Clean Air Act - Evergreen Veneer Dryers (Kalispell, MT)
On May 1, 1992, the Company received a Notice of Violation ("NOV")
from the EPA under the Clean Air Act. The NOV alleges that Plum
Creek's Evergreen veneer dryers in Kalispell, Montana were not in
compliance with an air quality permit on January 15, 1992 when
allegedly visible emissions from the veneer dryers were observed by
the EPA. These dryers were also the subject of a suit filed by the
MAQB in March 1990. Prior to the January 15, 1992 alleged violation,
the Company entered into a Consent Decree with the MAQB. The Company
installed approximately $900,000 of emission control equipment on the
dryers on April 14, 1992, in order to comply with the permit and all
State and Federal visible emission limits. Plum Creek will work with
the EPA to provide information and resolve
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113
issues arising under the NOV. The EPA has not notified the Company
what sanctions, if any, the EPA would seek as a result of the NOV.
Plum Creek believes that there is no basis for the NOV and does not
expect any EPA action.
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114
EXHIBIT 8(G)
Subsequent to December 31, 1993, neither the Company nor the
Facilities Subsidiary has incurred any material liabilities or obligations or
entered into any material transactions not in the ordinary course of business.
Subsequent to December 31, 1993, there has not been any
material adverse change in the financial condition or operations of the Company
or the Facilities Subsidiary.
Subsequent to December 31, 1993, there have been the following
Restricted Payments declared, paid or made by the Company:
1. Fourth Quarter 1993 Distribution of Available Cash in the
amount of $18.8 million paid to Unitholders in the first
quarter of 1994;
2. First Quarter 1994 Distribution of Available Cash in the
amount of $18.8 million paid to Unitholders in the second
quarter of 1994;
3. Second Quarter 1994 Distribution of Available Cash in the
amount of $22.1 million declared but not payable to
Unitholders until August 26, 1994;
115
EXHIBIT 8(K)
The Company's title to the timberlands it acquired during its
formation in 1989 includes the related hard rock mineral interests. However,
the Company did not obtain the hard rock mineral interest to most of the
865,000 acres of timberland purchased in 1993 from Champion International
Corporation. In addition, the Company does not own oil and gas mineral
interests to any of its timberlands. The title to the Company's timberlands is
subject to presently existing easements, rights of way, flowage and flooding
rights, servitudes, cemeteries, camping sites, hunting and other leases,
licenses and permits, none of which materially adversely affect the value of
the timberlands or materially restrict the harvesting of timber or other
operations of the Company.
116
SCHEDULE 8 T
Plum Creek Manufacturing, L.P. is in the process of applying
for a groundwater discharge permit at the Columbia Falls complex. It has not
been determined yet whether a groundwater discharge permit will be required at
the Pablo facility.
On May 1, 1992, the Company received a Notice of Violation
("NOV") from the Environmental Protection Agency ("EPA") under the Clean Air
Act. The NOV alleges that Plum Creek's Evergreen veneer dryers in Kalispell,
Montana were not in compliance with an air quality permit on January 15, 1992
when visible emissions from the veneer dryers were observed by the EPA. These
dryers were also the subject of a suit filed by the Montana Air Quality Bureau
("MAQB") in March 1990. Prior to the January 15, 1992 alleged violation, the
Company entered into a Consent Decree with the MAQB. The Company installed
approximately $900,000 of emission control equipment on the dryers on April 14,
1992, in order to comply with the permit and all State and Federal visible
emission limits. The Company will work with the EPA to provide information and
resolve issues arising under the NOV. The EPA has not notified the Company
what sanctions, if any, the EPA would seek as a result of the NOV.
In July, 1990, the United States Fish and Wildlife Service
("USFWS") listed the Northern Spotted Owl ("Owl") as a threatened species
throughout its range in Washington, Oregon, and California under the federal
Endangered Species Act ("ESA").
At the time of the listing, the USFWS issued guidelines to be
followed by landowners in order to comply with the ESA's prohibition against
harming or harassing Owls. These guidelines were rescinded in response to an
industry lawsuit, but continue to serve as the basis for USFWS enforcement of
the ESA. The guidelines impose several requirements, including the restriction
and preclusion of harvest activities in areas within a 1.8 mile radius
(approximately 6,600 acres) of known nest sites or activity centers for pairs
of Owls or territorial single Owls ("Activity Areas"). Under the guidelines,
at least 40% in the aggregate of the area within Activity Areas has to be
maintained as suitable Owl habitat. In addition, 70 acres immediately around
nest sites has to be preserved. Under the guidelines, approximately 140,000
acres of the 330,000
117
acres in the Partnership's Cascade region lie within Activity Areas. The
Company does not have an incidental take permit that would allow the Company to
harvest below these thresholds.
The USFWS announced on December 29, 1993, that it is proposing
to draft a special rule ("Special Rule") to redefine private landowner
obligations under the ESA. In its description of the proposed Special Rule,
the USFWS indicated that the guidelines would serve as the basis for regulation
in areas of special concern ("ASC") for the Owl. Outside of the ASCs, only 70
acres around nest sites would be restricted. A substantial majority of the
Partnership's Timberlands that contain occupied Owl habitat lie within ASCs.
Accordingly, the proposed Special Rule, if adopted in its current form, is not
likely to materially alter the current level of regulation on the Partnership's
activities due to the Owl.
In March 1994, the U.S. Circuit Court of Appeals for the
District of Columbia ruled in Sweet Home Chapter of Communities for a Great
Oregon v. Babbitt, that Congress never intended habitat modifications to be a
violation of the ESA. The court therefore found invalid the regulation that
defines "harm" to a species to include habitat modification. This regulation
provides the legal basis for the guideline. The government has announced that
it will appeal the ruling. The government has also taken the position that the
ruling does not apply to areas outside of the District of Columbia circuit.
Accordingly, it is unclear whether the decision will reduce the regulatory
impact of the ESA on the Partnership.
All forest practice applications ("FPA's") within Activity
Areas must also comply with the Washington State Environmental Policy Act
("SEPA") and Forest Practices Act. In June 1992, the Washington State Forest
Practices Board (the "Board") adopted regulations which provide that SEPA will
apply to FPA's for activities on the 500 acres of habitat surrounding nest
sites or activity centers. By its terms, the rule was to have sunseted in
March 1994. In February 1994, the Board, however, extended the rule for an
additional four months.
Compliance with the ESA and SEPA is causing delays and in some
cases modification of Partnership FPA's in Owl Activity Areas and may cause
denials of future Partnership FPA'S.
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118
The ESA also prohibits the federal government from causing
jeopardy to the Owl or destroying or adversely modifying its designated
critical habitat. Private landowners are potentially affected by this
restriction if a private activity requires federal action, such as the granting
of access or federal funding. Where there is such a federal connection, the
federal agency involved must consult the USFWS to determine that the proposed
activity would not cause jeopardy to the Owl or direct or indirect adverse
modification of its designated critical habitat; or if it would, then to
propose, where possible, alternatives or modifications to the proposed
activity. The Partnership's timberlands are often intermingled with federal
land in or near areas that include the habitats of a number of threatened or
endangered species such as the Owl and grizzly bear. Thus access across
federal lands to certain of the Partnership's Timberlands in such areas has
been and, is likely to continue to be, delayed by the administrative process
and legal challenges and may be subjected to restriction under the ESA.
On June 9, 1992, the USFWS published its draft recovery plan
(the "Draft Plan") for the Owl. A recovery plan, once final is not legally
binding, but it may form the basis for future regulation. The Draft Plan
recommends that 7.5 million acres of federal land be set aside in designated
conservation areas ("DCA's") where timber harvesting and road building would be
prohibited. On July 16, 1993, the Clinton Administration proposed a new forest
policy (the "Forest Plan") that would substantially reduce harvest from public
lands in Owl forests and provide for the conservation of the Owl and numerous
other species. In April 1994, the Clinton Administration formally adopted the
Forest Plan and submitted it for judicial approval. Before the Forest Plan can
be implemented the Clinton Administration intends to implement its policies
administratively. However, it is likely to be subject to additional legal
challenges and thus, its implementation remains uncertain.
The ultimate impact of the Owl listing on the Partnership will
depend on (i) the number of Activity Areas actually found on or near
Partnership Timberlands, (ii) the availability and amount of suitable habitat
within individual Activity Areas, (iii) the outcome of the Clinton
Administration's forest policy, including the proposed Special Rule, (iv)
future regulations and restrictions placed on private and public lands, (v)
promulgation, interpretation and application of Owl regulations by both
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119
the USFWS and the Washington State Department of Natural Resources, (vi) the
impact of reduced harvests upon stumpage prices, and (vii) the outcome of
pending litigation. Although continuing uncertainty surrounding efforts to
conserve the Owl make it difficult to assess the future impact of the Owl
listing on the Partnership, at this time the General Partner does not believe
that federal and state laws and regulations related to the Owl will have a
materially adverse effect on the financial position of the Company or the
results of its operations. There can be no assurances, however, that (i)
interpretation or administration of current laws and regulations, (ii) changes
in laws or regulations, (iii) increases in the number of Owls on or near
Partnership lands, or (iv) decreases in suitable habitat adjacent to
Partnership lands will not adversely affect the operations or financial
position of the Company.
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SCHEDULE 10(B)(1)
April 5, 1993
CORPORATE INVESTMENT POLICY
I. OBJECTIVE
This policy provides guidelines for the management of the Company's
cash. It is essential that these assets be invested in a high quality
portfolio which:
. Preserves principal
. Meets liquidity needs
. Allows for appropriate diversification of investments
. Delivers good yield in relationship to the guidelines and
market conditions
The Company is adverse to incurring market risk or credit risk, and
will generally sacrifice yield in the interest of safety. Care must
always be taken to insure that the Company's reported financial
statements are never materially affected by decreases in the market
value of securities held.
II. MATURITY OR PUT
Within the constraints provided throughout this document, or by
addendum to this document, the maximum maturity or put of any
investment instrument will be within two years from the purchase
settlement date; however, the total portfolio must have an average
maturity of less than 12 months.
III. PERMISSIBLE INVESTMENTS
A. Investments will be made in U.S. dollars only.
B. The Company may own, purchase or acquire marketable direct
obligations in the following:
1. Obligations (fixed and floating rate) issued by, or
unconditionally guaranteed by the U.S.
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April 5, 1993
Treasury, or any agency thereof, or issued by any
political subdivision of any state or public agency,
2. Commercial paper rated as A-1 or better by Standard &
Poor's, and P-1 or better by Moody's (or equivalent).
3. Floating rate and fixed rate obligations of
corporations, banks and agencies including: medium
term notes and bonds, deposit notes, and euro
dollar/yankee notes and bonds.
4. Certificates of deposit, bankers acceptances and time
deposits of commercial banks, domestic or foreign,
whose short term credit ratings are A-1/P-1 (or
equivalent).
5. Repurchase agreements collateralized by U.S. Treasury
and agency securities.
6. Insurance company Funding Agreements, Investment
Contracts, or similar obligations.
7. Asset backed and mortgage backed securities.
8. Master Notes.
9. Taxable money market preferreds.
10. Tax exempt securities including municipal
bonds/notes, money market preferreds, and variable
rate demand notes.
C. Issuing institutions shall be Corporations, Trusts,
Partnerships, and Banks domiciled in the U.S., Canada, Japan
and Western Europe, or Insurance Companies domiciled in the
U.S.
IV. CREDIT REQUIREMENTS
Safety shall always be a primary consideration in structuring the
Company's investment portfolio. Credit ratings should be tied to duration as
prescribed below in order to combine safety, liquidity and acceptable market
performance:
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April 5, 1993
Minimum Credit Rating
---------------------
Duration S&P Moody's
-------- --- -------
6 months or less A- A3
6 - 18 months AA Aa2
18 months or more AAA Aaa
Original issue securities allowable under this policy with less than
twelve months to maturity may substitute the issuers short term credit
rating if that rating is A-1/P-1 or better.
V. DIVERSIFICATION
To diversify risk, no more than $2 million or 10% of the portfolio can
be invested with any one issuer. Exceptions are issues of the U.S.
Treasury or agency securities, insured or government collateralized
issues and daily money market funds.
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