As filed with the Securities and Exchange Commission on February 8, 2000
REGISTRATION NO. 333-88017
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
POST-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
------------------------
AMERICAN TISSUE INC.
(Exact name of registrant as specified in its charter)
Delaware 2621 22-3601876
(State or other jurisdiction of (Primary S.I.C. (I.R.S. Employer
Incorporation or organization) Code Number) Identification No.)
and the additional registrants listed on
Schedules A and B hereto, each a Subsidiary Guarantor
135 Engineers Road
Hauppauge, New York 11788
(516) 435-9000
(Address, including zip code, and telephone number,
including area code, of registrant's principal
executive offices)
------------------------
Edward I. Stein
Executive Vice President
and Chief Financial Officer
135 Engineers Road
Hauppauge, New York 11788
(516) 435-9000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------
copies to:
Nicholas J. Kaiser, Esq.
Mandel Resnik & Kaiser P.C.
220 East 42nd Street
New York, New York 10017
(212) 573-0093
------------------------
<PAGE>
SCHEDULE A
Corporate Subsidiary Guarantors
<TABLE>
<CAPTION>
State or Other
Jurisdiction of
Name of Registrant as Specified Incorporation or Primary S.I.C. I.R.S. Employer
in its Charter Organization Code No. Identification No.
- ---------------------------------------------- ---------------- -------------- ------------------
<S> <C> <C> <C>
American Tissue Corporation New York 2679 11-2581696
American Cellulose Mill Corp. New York 2621 14-1662473
American Tissue Mills of New Hampshire, Inc. New York 2621 11-3207742
American Tissue Mills of New York, Inc. New York 2621 11-3237164
American Tissue Mills of Oregon, Inc. New York 2621 11-3128800
American Tissue Mills of Wisconsin, Inc. New York 2621 11-3200361
American Tissue - New Hampshire Electric, Inc. New Hampshire 4911 02-0267018
Berlin Mills Railway, Inc. New Hampshire 6517 38-1906080
Gilpin Realty Corp. New York 6519 11-3307581
Tagsons Papers, Inc. New York 2621 11-3206044
</TABLE>
<PAGE>
SCHEDULE B
Limited Liability Company Guarantors
<TABLE>
<CAPTION>
State or Other
Jurisdiction of
Name of Registrant as Specified Incorporation or Primary S.I.C. I.R.S. Employer
in its Charter Organization Code No. Identification No.
- ---------------------------------------------- ---------------- -------------- ------------------
<S> <C> <C> <C>
American Tissue Mills of Greenwich LLC New York 2621 11-3322564
American Mills of Neenah LLC New York 2621 13-3333241
Calexico Tissue Company LLC New York 2679 11-3358355
Coram Realty LLC New York 6519 11-3351366
Engineers Road, LLC New York 6519 11-3301000
Grand LLC New York 6519 11-3078510
Hydro of America LLC Delaware 4911 11-3486634
Landfill of America LLC Delaware 4953 11-3486638
Markwood LLC New York 6519 11-3507579
100 Realty Management LLC New York 6519 11-3373587
Paper of America LLC Delaware 2621 11-3486633
Pulp & Paper of America LLC New York 2621 11-3485021
Pulp of America LLC Delaware 2611 11-3486632
Railway of America LLC Delaware 6517 02-0509929
Saratoga Realty LLC New York 6519 11-3378103
Unique Financing LLC New York 7359 11-3331213
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company is incorporated under the laws of the State of Delaware.
Section 145 of the Delaware General Corporation Law ("Section 145"), inter alia,
provides that a Delaware corporation may indemnify any persons who were, are or
are threatened to be made, parties to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such corporation), by
reason of the fact that such person is or was an officer, director, employee or
agent of such corporation, or is or was serving at the request of such
corporation as a director, officer employee or agent of another corporation or
enterprise. The indemnity may include expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding, provided such
person acted in good faith and in a manner he reasonably believed to be in or
not opposed to the corporation's best interests and, with respect to any
criminal action or proceeding, had no reasonable cause to believe that his
conduct was illegal. A Delaware corporation may indemnify any persons who are,
were or are threatened to be made, a party to any threatened, pending or
completed action or suit by or in the right of the corporation by reason of the
fact that such person was a director, officer, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection with the defense or settlement
of such action or suit, provided such person acted in good faith and in a manner
he reasonably believed to be in or not opposed to the corporation's best
interests, provided that no indemnification is permitted without judicial
approval if the officer, director, employee or agent is adjudged to be liable to
the corporation. Where an officer, director, employee or agent is successful on
the merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses which such officer or
director has actually and reasonably incurred.
The Company's certificate of incorporation, as amended, provides for the
indemnification of directors and officers of the Company to the fullest extent
permitted by the Delaware General Corporation Law.
Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or enterprise,
against any liability asserted against him and incurred by him in any such
capacity, arising out of his status as such, whether or not the corporation
would otherwise have the power to indemnify him under Section 145.
The Company has applied for insurance covering all of the Company's
directors and officers against certain liabilities for actions taken in such
capacities, including liabilities under the Securities Act of 1933.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) A list of exhibits included as part of this Registration Statement is
set forth in the Exhibit Index which immediately precedes such exhibits and is
incorporated herein by reference
(b)
SCHEDULE II
AMERICAN TISSUE INC.
VALUATION AND QUALIFYING ACCOUNTS
(AMOUNTS IN 000s)
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- -------------------------------------------- ------------ ---------- ------------- -------------
Description Balance at Charged to Write-off of Balance at
beginning of expenses uncollectible end of period
period accounts
<S> <C> <C> <C> <C>
Allowance for doubtful accounts
September 30, 1997 ......................... $ 453 $1,120 $ 193 $1,380
September 30, 1998 ......................... $1,380 $ 560 $1,857 $ 83
September 30, 1999 ......................... $ 83 $ 915 $ 385 $ 613
</TABLE>
ITEM 22. UNDERTAKINGS.
The undersigned registrants undertake:
(1) To file, during any period in which offers or sales are being
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
II - 1
<PAGE>
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which individually or in
the aggregate, represent a fundamental change in the information
set forth in the registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
(2) that, for purposes of determining any liability under the Securities
Act of 1933 (the "Securities Act"), each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at the time shall be deemed to be
the initial bona fide offering thereof.
(3) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) that, for the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(5) to respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this form,
within one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
(6) to supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it became
effective.
(7) insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrants pursuant to the provisions described under Item 20 or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrants will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II - 2
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE
To the Board of Directors and
Stockholder of American Tissue Inc.:
We have audited, in accordance with generally accepted auditing standards, the
consolidated financial statements of American Tissue Inc. (the "Company")
included in this registration statement and have issued our report thereon dated
December 10,1999. Our audits were made for the purpose of forming an opinion on
the basic financial statements taken as a whole. The accompanying schedule is
the responsibility of the Company's management and is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not a part
of the basic financial statements. This schedule has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Melville, New York
December 10, 1999
II - 3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective-Amendment No. 1 to this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Village of Hauppauge, State of New York, on February 8, 2000.
AMERICAN TISSUE INC.
By: /s/ Mehdi Gabayzadeh
----------------------
Name: Mehdi Gabayzadeh
Title: President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to this Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
<S> <C> <C>
/s/ Nourollah Elghanayan Chairman of the Board and Director February 8, 2000
- -------------------------
Nourollah Elghanayan
/s Mehdi Gabayzadeh President and Chief Executive February 8, 2000
- ------------------------- Officer (Principal Executive Officer
Mehdi Gabayzadeh and Director)
/s/ Edward I. Stein Executive Vice President and Chief February 8, 2000
- ------------------------- Financial Officer (Principal
Edward I. Stein Financial and Accounting Officer)
/s/ Andrew Rush Director February 8, 2000
- -------------------------
Andrew Rush
</TABLE>
II - 4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of the
subsidiary guarantors listed on Schedule A to the cover page of this
registration statement has duly caused this Post-Effective Amendment No. 1 to
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Village of Hauppauge, State of New York, on
February 8, 2000.
On behalf of each Subsidiary
Guarantor listed on Schedule A to
the cover page of this registration
statement
By: /s/ Mehdi Gabayzadeh
------------------------
Name: Mehdi Gabayzadeh
Title: President and Chief Executive Officer
By: /s/ Nourollah Elghanayan
------------------------
Name: Nourollah Elghanayan
Title: Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to this Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
<S> <C> <C>
/s/ Mehdi Gabayzadeh President and Chief Executive February 8, 2000
- -------------------------- Officer (Principal Executive Officer
Mehdi Gabayzadeh and Director)
/s/ Edward I. Stein Executive Vice President and Chief February 8, 2000
- ------------------------- Financial Officer (Principal
Edward I. Stein Financial and Accounting Officer)
/s/ Nourollah Elghanayan Chairman of the Board and Director February 8, 2000
- -------------------------
Nourollah Elghanayan
</TABLE>
II - 5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of the
subsidiary guarantors listed on Schedule B hereto has fully caused this
Post-Effective Amendment No. 1 to this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the Village of
Hauppauge, State of New York, on February 8, 2000.
On behalf of each Limited Liability
Company Guarantor listed on Schedule
B to the cover page of this
registration statement
By: /s/ Mehdi Gabayzadeh
---------------------
Name: Mehdi Gabayzadeh
Title: Manager
By: /s/ Nourollah Elghanayan
------------------------
Name: Nourollah Elghanayan
Title: Manager
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to this Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
<S> <C> <C>
/s/ Mehdi Gabayzadeh President and Chief Executive February 8, 2000
- ------------------------- Officer (Principal Executive Officer
Mehdi Gabayzadeh and Manager)
/s/ Edward I. Stein Executive Vice President and Chief February 8, 2000
- ------------------------- Financial Officer (Principal
Edward I. Stein Financial and Accounting Officer)
/s/ Nourollah Elghanayan Manager February 8, 2000
- -------------------------
Nourollah Elghanayan
</TABLE>
II - 6
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ -----------
3.1 Certificate of Incorporation of American Tissue Inc., as amended**
3.2 By-Laws of American Tissue Inc.**
3.3 Certificate of Incorporation of American Tissue Corporation, as
amended**
3.4 By-Laws of American Tissue Corporation, as amended**
3.5 Certificate of Incorporation of American Cellulose Mill Corp., as
amended**
3.6 By-Laws of American Cellulose Mill Corp.**
3.7 Articles of Organization of American Tissue Mills of Greenwich LLC**
3.8 Operating Agreement of American Tissue Mills of Greenwich LLC, as
amended**
3.9 Articles of Organization of American Tissue Mills of Neenah LLC**
3.10 Operating Agreement of American Tissue Mills of Neenah LLC, as
amended**
3.11 Certificate of Incorporation of American Tissue Mills of New
Hampshire, Inc., as amended**
3.12 By-Laws of American Tissue Mills of New Hampshire, Inc., as
amended**
3.13 Certificate of Incorporation of American Tissue Mills of New York,
Inc., as amended**
3.14 By-Laws of American Tissue Mills of New York, Inc.**
3.15 Certificate of Incorporation of American Tissue Mills of Oregon,
Inc., as amended**
3.16 By-Laws of American Tissue Mills of Oregon, Inc.**
3.17 Certificate of Incorporation of American Tissue Mills of Wisconsin,
Inc., as amended**
3.18 By-Laws of American Tissue Mills of Wisconsin, Inc.**
3.19 Certificate of Amendment to Record of Organization of Berlin Mills
Railway, Inc.**
3.20 Amendment to By-Laws of Berlin Mills Railway, Inc.**
3.21 Articles of Organization Calexico Tissue Company LLC**
3.22 Operating Agreement of Calexico Tissue Company LLC, as amended**
3.23 Certificate of Incorporation of American Tissue - New Hampshire
Electric Inc., as amended**
3.24 By-Laws of American Tissue - New Hampshire Electric Inc., as
amended**
3.25 Articles of Organization of Coram Realty LLC**
3.26 Operating Agreement with Coram Realty LLC, as amended**
3.27 Articles of Organization of Engineers Road, LLC**
3.28 Operating Agreement of Engineers Road, LLC, as amended**
3.29 Articles of Organization of Grand LLC, as amended**
<PAGE>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
3.30 Operating Agreement of Grand LLC, as amended**
3.31 Certificate of Incorporation of Gilpin Realty Corp., as amended**
3.32 By-Laws of Gilpin Realty Corp.**
3.33 Certificate of Formation of Hydro of America LLC**
3.34 Operating Agreement of Hydro of America LLC, as amended**
3.35 Certificate of Formation of Landfill of America LLC**
3.36 Operating Agreement of Landfill of America LLC, as amended**
3.37 Articles of Organization of Markwood LLC**
3.38 Operating Agreement of Markwood LLC, as amended**
3.39 Articles of Organization of 100 Realty Management LLC**
3.40 Operating Agreement of 100 Realty Management LLC, as amended**
3.41 Certificate of Formation of Paper of America LLC**
3.42 Operating Agreement of Paper of America LLC, as amended**
3.43 Articles of Organization of Pulp & Paper of America LLC, as
amended**
3.44 Operating Agreement of Pulp & Paper of America LLC, as amended**
3.45 Certificate of Formation of Pulp of America LLC**
3.46 Operating Agreement of Pulp of America LLC, as amended**
3.47 Certificate of Formation of Railway of America LLC**
3.48 Operating Agreement of Railway of America LLC, as amended**
3.49 Articles of Organization of Saratoga Realty LLC**
3.50 Operating Agreement of Saratoga Realty LLC, as amended**
3.51 Certificate of Incorporation of Tagsons Papers, Inc., as amended**
3.52 By-Laws of Tagsons Papers, Inc.**
3.53 Articles of Organization of Unique Financing LLC, as amended**
3.54 Operating Agreement of Unique Financing LLC, as amended**
4.1 Indenture dated as of July 9, 1999 among American Tissue Inc., each
Subsidiary Guarantor and The Chase Manhattan Bank, as Trustee**
4.2 Form of 12 1/2% Series B Senior Secured Notes**
4.3 Form of Subsidiary Guarantees**
4.4 Purchase Rights Agreement dated as of July 9, 1999 among American
Tissue Inc., each Subsidiary Guarantor and Donaldson, Lufkin &
Jenrette Securities Corporation**
4.5 Registration Rights Agreement dated as of July 9, 1999, by and among
American Tissue Inc., each Subsidiary Guarantor and Donaldson,
Lufkin & Jenrette Securities Corporation**
- 2 -
<PAGE>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
4.6 Security Agreement dated as of July 9, 1999, made by American Tissue
Inc. and each of the Subsidiary Guarantors in favor of the Trustee**
4.7 Form of Mortgage, Assignment of Leases, Security Agreement and
Fixture Filing dated as of July 9, 1999 between each of the
following Subsidiary Guarantors in favor of the Trustee: American
Tissue Mills of Greenwich LLC relating to premises at Mill Road,
Greenwich, New York; America Tissue Mills of New Hampshire, Inc.
relating to premises at 116 Lost Road, Winchester, New Hampshire;
American Tissue Mills of Neenah LLC relating to premises at 249 Lake
Street, Neenah, Wisconsin; American Tissue Mills of New York, Inc.
relating to premises at 510 South Main Street, Mechanicville, New
York; American Tissue Mills of Wisconsin, Inc. relating to premises
at 858 West Leather Avenue, Tomahawk, Wisconsin; Berlin Mills
Railway, Inc. relating to premises in Gorham, New Hampshire; Coram
LLC relating to premises at 466-468 Mill Road, Coram, New York;
Crown Vantage-New Hampshire Electric, Inc., relating to premises in
Berlin and Gorham, New Hampshire; Engineers Road LLC relating to
premises at 135 Engineers Road, Hauppauge, New York; Gilpin Realty
Corp. relating to premises at 45 Gilpin Avenue, Hauppauge, New York;
Landfill of America LLC relating to premises in Success, New
Hampshire; Paper of America LLC relating to premises in Gorham, New
Hampshire; Pulp of America LLC relating to premises in Berlin, New
Hampshire; and Saratoga Realty LLC relating to premises at 3
Duplainville Road, Saratoga Springs, New York**
4.8 Leasehold Mortgage, Assignment of Leases, Security Agreement and
Fixture Filing dated as of July 9, 1999 between Grand LLC, as
mortgagor, and the Trustee, as mortgagee**
4.9 Leasehold Deed of Trust, Assignment of Leases, Security Agreement
and Fixture Filing dated as of July 9, 1999 made by American Tissue
Mills of Oregon, Inc., as grantor, to Ticor Title Insurance Company,
as trustee for the benefit of the Trustee, as beneficiary**
5.1 Opinion of Mandel, Resnik & Kaiser P.C.**
10.1 Amended and Restated Loan and Security Agreement dated July 9, 1999
among American Tissue Inc., certain subsidiaries of American Tissue
Inc., certain lenders and LaSalle Bank National Association, for
itself and as agent for the other lenders**
10.2 Existing Lien Intercreditor Agreement dated as of July 9, 1999 among
American Tissue Inc., each of the Subsidiary Guarantors, the
Trustee, Bank United, The Roslyn Savings Bank and LaSalle Bank
National Association**
10.3 Consent and Intercreditor Agreement dated as of July 9, 1999 among
American Tissue Mills of Oregon, Inc., American Tissue Corporation,
the Trustee and Boise Cascade Corporation**
10.4 Asset Purchase Agreement dated March 24, 1999 by and among Crown
Paper Co., Crown Vantage-New Hampshire Electric, Inc., Berlin Mills
Railway, Inc., as Seller, and American Tissue Holdings Inc. (now
known as American Tissue Inc.) and Pulp & Paper of America LLC, as
Buyer**
10.5 Instrument of Assumption of Liabilities dated July 9, 1999 made by
Pulp & Paper of America LLC and its subsidiaries in favor of Crown
Vantage, Inc. and its subsidiaries**
10.6 Pulp Purchase Agreement dated March 24, 1999 between Crown Paper Co.
and Pulp & Paper of America LLC**
- 3 -
<PAGE>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
10.7 Paper Brokerage Agreement dated March 24, 1999 between Crown Paper
Co. and Pulp & Paper of America LLC**
10.8 Strategic Alliance Agreement dated March 24, 1999 between Crown
Paper Co. and Pulp & Paper of America LLC**
10.9 Lease dated August 1, 1998 between American Tissue Mills of Neenah
LLC and Lakeview Real Estate LLC relating to premises located at 249
North Lake Street, Neenah, Wisconsin**
10.10 Lease dated June 1, 1998 between American Tissue Corporation and
Huntington LLC relating to premises located 1 Arnold Drive,
Huntington, New York**
10.11 Lease dated January 18, 1996 between American Tissue Corporation and
Reckson Operating Partnership, L.P. relating to premises located at
85 Nicon Court, Hauppauge, New York**
10.12 Lease dated in February 1990 between American Tissue Corporation and
Vanderbilt Associates relating to premises located at 110 Plant
Avenue, Hauppauge, New York**
10.13 NOVATION AGREEMENT dated as of July 9, 1999 among Super American
Tissue Inc., Nourollah Elghanayan, Mehdi Gabayzadeh, Lakeview Real
Estate LLC and Huntington LLC**
10.14 Lease dated August 15, 1996 between American Tissue Corporation and
Swimline Corporation relating to premises located at 56 Vanderbilt
Motor Parkway, Commack, New York**
10.15 Lease Agreement dated as of March 20, 1998 between Waterford
Industrial Development Authority and Grand LLC relating to premises
located in Waterford, New York**
10.16 Agreement dated November 23, 1992 between American Tissue Mills of
Oregon, Inc. and Boise Cascade, as amended by the Amendment dated
January 1, 1999 among the same parties and American Tissue
Corporation, as amended January 1, 1999**
10.16A Exhibits to Agreement dated November 23, 1992, as amended January 1,
1999 previously filed as Exhibit 10.16 as part of Amendment No. 3 to
this registration statement*
10.17 Lease Agreement dated December 15, 1995 between American Tissue
Corporation and Curtiss-Wright Flight Systems/Shelby, Inc. relating
to premises located at Passaic Street, Wood-Ridge, New Jersey**
10.18 Loan Agreement dated December 15, 1995 between American Tissue
Corporation and Curtiss-Wright Flight Systems/Shelby, Inc.**
10.19 Lease Agreement dated as of November 1, 1997 between St. Lawrence &
Atlantic Railroad Company and Berlin Mills Railway Inc.**
10.20 Service Agreement dated as of November 1, 1997 between Crown Paper
Co. and St. Lawrence & Atlantic Railroad Company**
10.21 Note and Mortgage dated October 27, 1998 made by Grand LLC in favor
of Security Mutual Life Insurance Company of New York relating to
premises located in Halfmoon, New York**
10.22 Consolidated Mortgage Note and Consolidated Mortgage dated December
29, 1997 made by Saratoga Realty LLC in favor of Bank United
relating to premises located at 3 Duplainville Road, Saratoga
Springs, New York**
- 4 -
<PAGE>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
10.23 Consolidated Mortgage Note and Consolidated Mortgage dated October
17, 1997 made by Grand LLC in favor of Bank United relating to
premises located at Bell's Lane, Waterford, New York**
10.24 Consolidated Mortgage Note and Consolidated Mortgage dated July 21,
1998 made by Gilpin Realty Corp., Coram Realty LLC, Engineers Road
LLC and Huntington LLC in favor of The Roslyn Savings Bank relating
to premises located at 135 Engineers Road, Hauppauge, New York,
466-468 Mill Road, Coram, New York and 45 Gilpin Avenue, Hauppauge,
New York**
10.25 Mortgage Note and Deed of Trust dated as of April 19, 1999 made by
Calexico Tissue Company LLC in favor of Bank United**
10.26 Agency Loan Promissory Note and Agency Loan Deed of Trust dated in
May 1997 made by Calexico Tissue Company LLC in favor of Community
Development Agency of the City of Calexico**
10.27 Reimbursement Promissory Note and Reimbursement Deed of Trust dated
in July 1997 made by Calexico Tissue Company LLC in favor of
Community Development Agency of the City of Calexico**
10.28 Agreement to Supply Sand and Gravel in Place dated October 30, 1997
between John Hancock Mutual Life Insurance Company and Crown Paper
Co.**
10.29 Roundwood Supply Agreement dated June 28, 1999 between Prime Timber
Company LLC and Crown Paper Co.**
10.30 Northeast Roundwood Supply Agreement dated October 30, 1997 between
John Hancock Mutual Life Insurance Company and Crown Paper Co.**
10.31 Cooperative Agreement dated June 19, 1995 between Kimberly-Clark
Corporation and United Paperworker's International Union, AFL-CIO,
and Local No. 482**
10.32 Labor Agreement dated as of June 24, 1997 between Crown Vantage and
United Paperworkers International Union, AFL-CIO, and its United
Brotherhood Local Union No. 75**
10.33 Labor Agreement dated July 15, 1997 between Crown Paper Co. and
Office and Professional Employees International Union, Local 6**
10.34 Agreement dated December 12, 1994 between American Tissue
Corporation and American Tissue Mills de Mexico S.A. de C.V.**
12.1 Computation of ratio of earnings to fixed charges**
21.1 Subsidiaries of American Tissue Inc.**
23.1 Consent of Arthur Andersen LLP**
23.2 Consent of Holtz Rubenstein & Co., LLP**
- 5 -
<PAGE>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
23.3 Consent of Ernst & Young LLP*
23.4 Consent of Mandel, Resnik & Kaiser P.C. (included in Exhibit 5.1)**
23.5 Consent of Bognar Enterprises**
24.1 Powers of Attorney (included in signature pages)**
25.1 Statement of Eligibility of Trustee on Form T-1**
27.1 Financial Data Schedule**
99.1 Form of Letter of Transmittal**
99.2 Form of Notice of Guaranteed Delivery**
99.3 Form of Letter to Record Holders of Old Notes**
99.4 Form of Letter to Beneficial Holders of Old Notes**
- ------------------
* Filed herewith
** Previously filed
- 6 -
INDEX OF EXHIBITS
A. Paper machine
B. Mill
B1. Real Property
C. Accounting Code
D. Storage Facilities
E. Pulp Agreement
F. Insurance Requirements
G. Warehouse Site Lease
Exhibit 1 - Description of Warehouse Site Lease Property
H. Brokerage Agreement between BCC and Koplik Paper Associates
I. Promissory Note
J. Agreement to Sell Property
K. Capitalization and Depreciation Policies
L. Agreements Provided
M. Memorandum of Lease
N. Required Capital Improvements
O. Letter from Koplik
P. Paper Mix of Products
Q. Assignment and Assumption Agreement
R. Deed of Trust
S. Financial Projections
-39-
<PAGE>
EXHIBIT A
NO. 3 MACHINE
The No. 3 Paper Machine located at the Mill, more particularly described as
all machinery, equipment and component parts located above the sole plate and
all spare parts at the Mill relating exclusively to the No. 3 Paper Machine
including, without limitation, the following:
Beloit 258" Fourdrinier tissue paper making machine No. 3 consisting of
steel air cushioned controlled flow stock inlet, 5 rectifier and distributing
rolls, PH meter; wet end control panel, removable suspended fourdrinier section
with 258" x 73' wire, suction boxes, rubber covered wire rolls with doctors, 32"
suction couch roll, 48" brass suction breast roll, 28" rubber covered pressure
roll, 32" top suction press, suction roll on 32" rubber covered roll, rubber
covered felt rolls, 32" rubber covered second press roll on 40" rubber covered
suction roll, 3 felt guides and stretchers for 262" x 108' and 262" x 71' wet
felts, press section control panel, 12' Yankee dryer, two 40" rubber covered
suction pressure rolls, suction box, Beloit high velocity hood, pneumatic loaded
skinning, creping and cleaning doctors, dry end control board, drum reel with
36" drum and sliding shaft, roll lowering device, reel control panel, unwind
stand with direct double belt drive, pneumatic pressure device, iron carrier
roll, 2-drum slitter and 252" rewinder with galvanized iron hood, pneumatic roll
transfer and hoist, 21" x 40' roller bed belt conveyor, control board for
rewinder, control
<PAGE>
board for transfer conveyor and hoist, pneumatic roll breaker and ejector,
3-stop holding table, together with all motors, drives, pumps, stock preparation
facilities, motor generator sets, compressors, cranes, hoists, process piping,
process wiring, spare parts, furniture and apparatus (including wire stringing
device, skids, tables, hand tools, lockers, storage racks, miscellaneous
equipment), all being located in No. 3 Machine Building; also spare parts and
apparatus and equipment auxiliary to and supporting the operation of No. 3
Machine wherever the same be situated.
The following spare parts:
Reducers Storage Reference Number
- -------- ------------------------
1 - #3 Rectifier Roll 443-29-040
1 - Head Box Rectifier Roll 1 & 2 ###-##-####
1 - #3 Saveall Repulper 443-92-020
1 - Suction Couch Roll 443-92-052
1 - Top & Bottom Cal Roll Dr. 443--92--053
1 - Reel Drive 443-92-052
1 - Wire Turning Roll 443-92-180
1 - Suction Press and Top Press 443--92--057
1 - Bottom Press Roll 1st 443-92-058
1 - Calendar Drive 443-80-030
Pumps
Semens 505 Vac. Pump
Fans
Wet End Hood Exhaust 853-26-075
<PAGE>
Miscellaneous
Rotating Ass. For Fan Pump
Gears to rebuild Yankee Dryer gearbox
H-3 Core Cutter
Roll Wrap equipment
Spare Yankee Motor 1250HP/900 RPM Motor #1347
8 - Modified 2300 volt starter
1 - South End Motor Generator set.
Rolls
1 - Yankee dryer
1 - Couch roll - 309/30" dia.
1 - Pressure Roll Top - 301/40" dia.
2 - Pressure Roll Bottom - 301 and 304/40" dia.
2 - Combine Cal Plane - 316 and 323/27.672 dia.
1 - #1 Wire Roll Hand - 31003/20" dia.
1 - #2 Wire, Roll Stretch - 31101/20" dia.
3 - Felt Rolls 33015, 33018 and 33103/18.750 dia.
1 - Mt. Hope Winder 7" dia.
Rolling Stock
1 - #6 Grab Truck
1 - #8 Tow Tractor
1 - #11 Tow Tractor
24 - Roll Carts (makes two trains)
1 - #3 Lift Truck
<PAGE>
EXHIBIT B
Leased Property
<PAGE>
EXHIBIT B
All of that real property together with the tenements, hereditiments and
appurtenances situate, lying, and being in Columbia County, State of Oregon,
dounded and particularly described as follows, to-wit;
Parcel: A parcel of land in the Thomas H. Smith Donation Land Claim No. 40
in Sections 9 and 10, Lot 7 of said Section 9, and Lots 1 and 2 of said
Section 10, all in Township 4 North. Range 1 West of Willamette Meridian,
Columbia County, Oregon, more particularly described as follows:
Beginning at a point in said Lot 7 which Is 1425.31 feet distant South 190
17' 25" West from the Southwesterly corner of Block 70 in the City St.
Helens, Columbia County, Oregon; thence South 68(degrees) 51' East for a
distance of 174.09 feet to the most Southeasterly corner of Terrace Street
in Hawley Addition to St. Helens, Oregon; thence North 29(degrees) 00' East
along the most Easterly line of Terrace Street for a distance of 356.14
feet to the most Easterly corner of said Terrace Street: thence North
61(degrees) 00' West along the Northeasterly line of said Terrace Street
for a distance of 420.0 feet to its intersection with the Northeasterly
prolongation of the Northwesterly line of Lot 9 of Block 12, said Hawley
Addition, said point of intersection being marked with an iron pipe; thence
South 68(degrees) 51' East for a distance of 1,193.31 feet to a point
marked by an iron pipe on the Northwesterly Line of the right of way of
Spokane, Portland and Seattle Railway Company: thence South 21(degrees) 09'
West along said Northwesterly right of way Line for a distance of 310.10
feet to a point which is 50 feet distant North 68(degrees) 51' West from a
point on the center line of Spokane, Portland and Seattle Railway Company's
railroad, which is located by beginning at the point of the intersection of
the center line of Columbia Street with the Southerly line of Cowlitz
Street in said City of St. Helens and running thence South 16(degrees) 57'
East for a distance of 670 feet to the point of beginning of a 1,910.08
foot radius curve to the right, Southerly along said curve through a
central angle of 38(degrees) 06' for a distance of 1,270 feet to the end of
said curve, and South 21(degrees) 09' West tangent to said curve for a
distance of 2,827.8 feet thence South 68(degrees) 51' East for a distance
of 25 feet to a point 25 feet distant Northwesterly from, when measured at
right angles to, said railroad center line; thence South 21(degrees) 09'
West parallel to said center line for a distance of 1,671.5 feet to a
point; then South 68(degrees) 51' East a distance of 25 feet to the center
line of the Spokane, Portland and Seattle Railway Company right way; thence
Southwesterly along the center line of the right of way of Spokane,
Portland and Seattle Railway Company to its intersection with a line
bearing South 68(degrees) 51' East from a point which is 2,191.00 feet
distant South 21(degrees) 09' West from the point of beginning; thence
North 68(degrees) 5' West to said point, which is 2191.00 feet distant
South 21(degrees) 09' West from the point of beginning; thence continuing
North 68(degrees) 51' West (or a distance of 1,093.3 feet to a point in the
center of Milton Creek, thence Northerly along the center of said Milton
Creek as follows: North 42(degrees) 15' East for a distance of 122.4 feet;
North 61(degrees) East for a distance of 292.6 feet; North 42(degrees) 47'
East for a distance of
<PAGE>
-2-
213.6 feet; North 17(degrees) 57' West for a distance of 587.0 feet: North
37 (degrees) 22' East for a distance of 210.0 feet; North 4 (degrees) 22'
East for a distance of 225.0 feet, and North 60 (degrees) 37' West for a
distance of 119.1 feet to the point of intersection with the Southwesterly
prolongation of the center line of Fir Street in said Hawley Addition:
thence North 29(degrees) 00' East along said Southwesterly prolongation for
a distance of 23.5 feet to a point on the South line of Brook Street in
said Hawley Addition: thence Southeasterly along said South line of Brook
Street as follows: South 61(degrees) 00' East a distance of 490.0 feet;
South 29(degrees) 00' West for a distance of 50.0 feet, and South
61(degrees) 00' East for a distance of 799.02 feet to a point which is
969.16 feet distant South 21(degrees) 09' West from the point of beginning:
thence North 21(degrees) 09' East along the Southeasterly line of said
Hawley Addition for a distance of 969.16 feet to the point of beginning,
EXCEPT that portion lying within the bounds of the Spokane, Portland and
Seattle Railway Company right of way.
Parcel 2: A parcel of land in the Thomas H. Smith Donation Land Claim No.
40 in Sections 9 and 10 and Lots 1 and 2 of said Section 10, all in
Township 4 North, Range 1 West of the Willamette Meridian, Columbia
County, Oregon, more particularly described as follows:
Beginning at a point in said Lot 1 which Is 2,108.59 feet distant South and
413.1 feet distant East from the Southwesterly corner of Block 70 of the
City of St. Helens, Columbia County, Oregon; thence North 68(degrees) 51'
West for a distance of 25 feet to the true point of beginning of this
description, said true point of beginning being also a point 25 feet
distant South 68(degrees) 51' East from the center line of the railroad of
Spokane, Portland and Seattle Railway Company at a point which is located
by beginning at the point of intersection of the center line of Columbia
Street with the Southerly line of Cowlitz Street in said City of St. Helens
and running thence South 16(degrees) 57' East for a distance of 670 feet to
the point of beginning of a 1,910.08 foot radius curve to the right; thence
Southerly along said curve through a central angle of 38(degrees) 06' for a
distance of 1270 feet to the end of said curve, the end of said curve being
hereinafter referred to as "Point A', and thence South 21(degrees) 09' West
tangent to said curve for a distance of 3,317.7 feet; thence from the true
point of beginning South 21(degrees) 09' West parallel with said railroad
center line for a distance of 1,171.5 feet to a point; thence North
68(degrees) 51' West a distance of 25 feet to the center line of the
Spokane, Portland and Seattle Railway Company right of way; thence
Southwesterly along the center line of the right of way of Spokane,
Portland and Seattle Railway Company to its intersection with a line
bearing South 68(degrees) 51' East from a point, hereinafter referred to as
"Point B", which is 2,191.00 feet distant South 21(degrees) 09' West from &
point which is 1425.1 feet distant South 19(degrees) 17'25" West from the
Southwesterly corner of said Block 70 of the City of St. Helens; thence
South 68(degrees) 51' East to a point on the low water line on the West
bank of the Willamette Slough which is 1208.20 feet distant from Point B;
thence Northerly along said low water line as follows: North 29(degrees)
53' East for a distance of 505.87 feet, thence North 30(degrees) 21' East
for a distance of 700 feet, and thence North 27(degrees) 31' East for a
distance of 603.70 feet to a point 389 feet distant South 68(degrees) 51'
East from the true point of beginning thence South 68(degrees) 51' East for
a distance of 206 feet to a point; thence North 3(degrees) 42' East for a
distance of 450.3 feet to a point on the low water line or said West bank;
thence North 17(degrees) 20' East along said low water line for a distance
of 366.8 feet; thence * North 68(degrees) 51' West for a distance of 425.5
feet to a point marked by an iron pipe on the Southeasterly line of the
right way of Spokane, Portland and Seattle Railway Company which is 50 feet
distant South 68(degrees) 51' East from the center line of the railroad of
Spokane, Portland and Seattle Railway Company at a point which is 2,517.7
feet distant South 21(degrees) 09' West from Point A; thence South
21(degrees) 09' West along said Southwesterly right of way line for a
distance of 100.0 feet; thence North 68(degrees) 51' West distance or 25
feet; thence South 21(degrees) 09' West parallel with center ??? said
railroad for a distance of 700 feet to the true point of beginning ????
that portion lying within the bounds of the Spokane, Portland and Seattle
Railway Company right of way.
<PAGE>
-3-
Parcel 3: Blocks 4, 10, 11, 12 and 13, Hawley Addition to St. Helens,
Columbia County, Oregon.
Parcel 4: Lots 1, 2, 3, 4, 5, 6, 7, and 8, Block 7, Hawley Addition to St.
Helens, Columbia County, Oregon.
Parcel 5: All tide and overflow lands fronting, abutting, and lying
Easterly of Parcel 2 hereinabove described.
Parcel 6: All booms, wharfs, docks, bridges, buildings, structures,
conveyors, hoists sewer and effluent discharge pipes, water mains and
suction pipes, conduits, conductors, wires, and all appurtenances thereto
belonging, owned by the Grantor herein lying and being Easterly of the
upland portions of Parcel 2 hereinabove described.
Parcel 7: All waterfront, riparian, boom, dock, water appropriation, and
sewage or other discharge rights and privileges with respect to the river
frontage lying and being Easterly of the upland portion of Parcel 2
hereinabove described.
Parcel 8: All walk or driveways, conveyors, sewer and effluent pipes,
culverts, water mains, conduits, conductors, wins, trackage, and all
appurtenances thereto belonging, under, upon, over, and across the railroad
right of way lying between Parcel 1 and Parcel 2 hereinabove described.
Parcel 9: All rights of the Grantor hereinunder that certain indenture
dated August 10, 1931 and recorded May 7, 1932, in Book 54, at page 260,
Deed Records of said Columbia County, between Chas. R. McCormick Lumber Co.
of Delaware and St. Helens Pulp and Paper Company.
Parcel 10: All and any other property, rights, licenses, privileges,
permits, easements, and rights of way, not enumerated above, acquired by
the Grantor herein or its predecessors in interest, in connection with the
use, ownership, or possession of the lands described in Parcel 1 and Parcel
2 hereinabove a described.
Excepting therefrom the following described parcels of property:
<PAGE>
-4-
Parcel 1
Beginning at the intersection of the South line of the H.M. Knighton
Donation Land Claim with the Southerly extension of the West line of Block
70, St. Helens, as per plat on file and of record in the Clerk's office of
Columbia County, Oregon in Section 1, Township 4 North, Range 1 West,
Willamette Meridian, Columbia County, Oregon, said point being the
Northwest corner of the first parcel described in the City of St. Helens
tract in Deed Book 177 at page 23. Deed Records of Columbia County Oregon:
thence along the Westerly line of said City of St. Helens tract South
53(degrees) 53' East a distance of 451.03 feet: thence South 8(degrees) 19'
West a distance of 590.38 feet to the South line of Section 3, a distance
of 219.26 feet; thence leaving said Westerly line of the City of St. Helens
tract North 45(degrees)07'53" West a distance of 79.28 feet; thence North
36(degrees)41'53" West a distance of 322.77 feet; thence North
28(degrees)51'40" East a distance of 220.50 feet; thence North
29(degrees)12'47" East a distance of 119.37 feet to a point on the
Southerly extension of the East line of Block 85, St. Helens; thence North
16(degrees)57'23" West along said Southerly extension of the East line of
Block 85 a distance of 208.12 feet to said South line of said H.M. Knighton
Donation Land Claim; thence North 71(degrees)30' East along said South line
of the H.M. Knighton Donation Land Claim a distance of 80.03 feet to the
True Point of Beginning. CONTAINING 6.86 acres more or less.
Subject to and excepting all easements, reservations, restrictions and
mineral rights of record.
This conveyance shall be subject to Grantor's right of reverter as follows:
If the property is determined by the Grantee or any successor fire
protection provider to be excess property or is not used for fire related
purposes for a period of three (3) years, and there are no written development
plans to use or continue to use the property for a fire training site or other
fire prevention or
Bargain and Sale Deed with Right of Reverter - 1
<PAGE>
-5-
Parcel 2
Beginning at the point of intersection with the Northwesterly right-of-way
line of the S.P. & S. Railroad and the Northwesterly line of Government Lot
4 in Section 3, Township 4 North, Range 1 West of the Willamette Meridian,
Columbia County, Oregon; thence Southwesterly along the Northwesterly line
of said Government Lot 4 and Northwesterly line of Government Lot 6 of said
Section 3, 1,352.93 feet to the intersection of the prolongation
Southeasterly of the Northeasterly right-of-way line of 9th Street and the
Northwesterly line of said Government Lot 6; thence South 55(degrees)59'
East, 451.03 feet; thence South 8(degrees)19' West 593.09 feet to the South
line of said Section 3; thence West along the South line of said Section 3,
300 feet; thence South 210091 West, 226.63 feet; thence South
68(degrees)51' East, 750 feet to the Northwesterly right-of-way line of
said S.P. & S. Railroad; thence North 21(degrees)09' East along the
Northwesterly right-of-way line of said S.P. & S. Railroad right-of-way,
1,876.84 feet to the point of beginning; and
Part of Lot 1, Section 10, Township 4 North, Range 1 West of the Willamette
Meridian, Columbia County, Oregon described as follows:
Beginning at the Northeast corner of Tract 9-2 conveyed to St. Helens Paper
Corporation, a Delaware corporation, by deed recorded May 7, 1964 in Book
154, page 896, Deed Records of Columbia County, Oregon; thence South
21(degrees)09' West, 100.86 feet; thence South 41(degrees)42' West, 128.16
feet; thence South 21(degrees)09' West 84 feet; thence North 68(degrees)51'
West, 415 feet; thence North 21(degrees)09' East 304.86 feet to the
Northwesterly line of said Tract 9-2; thence South 68(degrees)51' East
along the Northwesterly line of said Tract 9-2, 460 feet to the point of
beginning
Subject to:
1. Right, title and interest of the State of Oregon in and to that
portion of the above premises lying between ordinary high and low
water.
2. The rights of fishing, navigation and commerce in the State of Oregon,
the Federal Government and the public in and to that portion thereof
lying below the ordinary high water mark of the Columbia River.
3. A slope easement from St. Helens Pulp and Paper Co., an Oregon
corporation, to Chas. R. McCormick Lumber Co., of Delaware, a Delaware
corporation, recorded May 7, 1932 in book 54, page 260, Deed Records
of Columbia County, Oregon.
<PAGE>
FLOOR PLAN
[GRAPHIC OMITTED]
<PAGE>
11/12/92
7:00 am EST
EXHIBIT C
COSTING/BILLING METHOD AT ST. HELENS PAPER MILL
1. All costs are initially accumulated by responsibility/ department area
and by specific accounts within those areas. Costs charged to #3 paper
machine will begin with the effective date of this Agreement, beginning
with the start of day shift at 7:00 a.m., with the first and last month
charges to be on a pro rata basis determined as a percentage of calendar
days for the month which the Agreement is in force except for those charges
which can be specifically determined in which event the actual charges will
be used.
All costs will be exclusively designated as direct, indirect, capital, or
excluded, as defined in this exhibit. No indirect or excluded cost will
become a direct cost unless American Tissue consents thereto. American
Tissue's consent must be first secured for any new cost account which Boise
Cascade shall desire to charge directly to the #3 paper machine, which
consent shall not be unreasonably withheld.
2. Direct costs are defined as those costs which can be directly and
exclusively attributed to #3 paper machine and the Real Property, as
defined in this Agreement. Those costs include pulp and other direct costs.
A. Pulp - See exhibit E for price formula. Volume consumed by #3 paper
machine to be calculated by scale weight of paper produced, less
weight for finishing materials, less weight of additives retained in
the sheet, less moisture content in finished paper, plus 2% paper
machine sewer loss, divided by .90 to convert to air dry tons of pulp
consumed less the air dry weight (determined by mill scales) of pulp
and/or converting waste furnished by American Tissue and used in the
#3 paper machine. The split between long fiber and blend is to be
determined by stock preparation records. Additive retention and
moisture are determined by instrument measurement and tests. Finishing
materials will be calculated monthly according to finishing and/or #3
paper machine department records, purchases and physical inventory.
Boise Cascade believes this to be the most accurate method to
determine pulp volume. If American Tissue desires to use a more
accurate alternative method to calculate and/or measure pulp volume,
including any or all of the components used to calculate pulp volume,
including but not limited to sewer loss
<PAGE>
determination, it will be used if Boise Cascade consents, which
consent will not be unreasonably withheld, and provided American
Tissue agrees to pay any additional costs associated, with using such
methods.
B. Other Direct Costs - in addition to pulp, these are all costs directly
and exclusively attributable to #3 paper machine and will be directly
charged to the operations of #3 Paper Machine. Such costs are:
o Labor accounts, including load, which are directly and exclusively
attributable to the #3 paper machine.
o Maintenance labor for hours performed on #3 paper machine at a charge
out rate that includes an appropriate share of unallocated labor,
material and maintenance department costs which are not directly
charged to other departments.
o Operating supplies - clothinq, roll covers, chemicals, lubricants and
other supplies.
o Maintenance materials - as directly charged.
o Contract maintenance - as directly charged.
o Professional fees - external technical support, including programming,
if necessary.
o Other expenses - memberships, publications, travel for crew and staff
of machine and related expenses, meetings.
Included in direct costs will be direct consumptions of:
o Dyes for H-3 and chemicals, per stock preparation records.
o Fuel (natural gas or propane) - metered x mill rate.
o Steam - metered steam x cost/1000 lbs. as determined as average power
boiler steam by mill records.
o Power - metered x mill rate. Should Boise Cascade elect to construct
an electrical power generation facility at or for the St. Helens mill,
power will be charged to the #3 paper machine at the rate applicable
to continuing external power purchaser at the mill. If there are no
external purchases the rate will be set at the large industrial
contract rate of the local utility.
-2-
<PAGE>
American Tissue may purchase power from outside sources to the extent
permitted under Boise Cascade's then current contractual arrangements.
American Tissue is responsible to provide production and product
delivery scheduling services and will bear the costs of such services
as well as any outbound freight and any other costs incurred after
delivery of product to the carrier at the mill loading dock.
3. Indirect Costs-These are costs which cannot be directly attributed to #3
paper machine but are costs which #3 paper machine will share with other
mill areas. These indirect costs are for the departments and activities as
listed in exhibit 2A as defined by example in the St. Helens
mill responsibility statements, examples of which are attached as exhibit
2B.
#3 paper machine charges for indirect costs will be billed monthly at a
rate of 13.8% for those departments involved with activities directly
associated with only the paper machine operations in the mill and not
exclusively associated with any single machine, and are: stock preparation,
paper machine general, finishing, warehousing, and shipping as listed in
exhibits 2A and 2B. These indirect costs shall be for total operating
costs, except for stock preparation indirect charges, which shall be only
for costs which are not variable, as variable stock preparation costs will
be direct charged to the machines. Should American Tissue choose to provide
facilities to allow direct charges for finishing, warehousing, and/or
shipping, the allocated indirect costs for such specific activities which
become direct will be eliminated and replaced by direct charges.
#3 paper machine charges for indirect costs will be billed monthly at a
rate of 6.0% for those departments and activities associated with general
mill operations, but not directly attributable to any specific production
area. This 6.0% allocation applies to all departments and activities as
listed in exhibits 2A and 2B, except those which are identified in the
preceding paragraph as indirect costs associated with only the paper
machine operations. This includes total costs as defined by exhibit 2B
except for burden; no depreciation will be charged for existing facilities
in place as of the date of this Agreement. Depreciation charges for new
capital assets is defined in the third paragraph of item 4 below. All real
estate taxes shall include any real estate taxes, including taxes related
to the Paper Machine whether assessed as real property or personal
property, as billed to either or both American Tissue and Boise cascade for
assets at the St. Helen's site and at all times be deemed indirect costs
with the 6% rate applicable thereto. If Boise Cascade shall add any new
facility which causes a definable material, increase in indirect costs, the
percent of indirect costs
-3-
<PAGE>
payable by American Tissue will be appropriately adjusted. This shall not
apply to modifications or improvements of existing facilities.
4. Capital Costs - The owners of the #3 paper machine will be directly
responsible for any capital improvements or capital repairs to the #3 paper
machine, the building which houses the #3 paper machine, and any equipment
or facility modifications which are directly attributable to the #3 paper
machine. Boise Cascade shall provide mill utility services including steam,
power, water, air, and pollution control, to be available at required
levels for the #3 paper machine in its current configuration as of the date
of this Agreement. Boise Cascade shall make reasonable efforts to supply
additional services as may be requested by American Tissue in connection
with any capital modification or otherwise, but any capital costs required
to provide such additional services shall be the responsibility of American
Tissue as a direct cost. Any capital repairs or improvements made directly
to the #3 paper machine shall be the property of American Tissue.
Boise Cascade may, but shall not be obligated to, provide engineering
support for feasibility studies, capital estimates, or project management
as requested by American Tissue. These services will be charged directly to
American Tissue, with Boise Cascade employee time billed at a rate
equivalent to that charged to its own capital projects Any capital
estimates performed by Boise Cascade are not warranted as to their
accuracy.
Depreciation for capital costs incurred subsequent to the date of this
Agreement for any of the departments or activities as described in Exhibit
2A will be added to the cost of such department or activity and charged to
the #3 paper machine as described in Exhibit C, paragraph 3. The capital
costs will not otherwise be passed on to American Tissue.
5. Excluded Costs-Excluded costs are for departments that are directly and
exclusively associated with the pulp mill, or the fine paper machines or
new facilities which do not directly or indirectly benefit #3 paper
machine, or which do not otherwise directly or indirectly benefit the
maintenance, use and operation of the #3 paper machine. Excluded costs will
not be charged to #3 paper machine.
Boise Cascade makes no representation, warranty or covenant that the costs
described in Exhibit 2A and set forth in the responsibility statements in
Exhibit 2B bear any relationship to costs that may be incurred in the
future. The costs set forth in the responsibility statement are for
illustrative purposes only. In no event will any cost charged to American
Tissue be duplicative.
-4-
<PAGE>
EXHIBIT 2A
COSTING/BILLING METHOD AT ST. HELENS PAPER MILL
The description of costs and services as described in this exhibit are for
illustrative purposes only and are not intended to completely encompass or
describe each charge to be allocated to the applicable area. Other miscellaneous
charges as generally described in exhibit 2B are accumulated in the department
cost centers and will be allocated to the #3 paper machine as indirect costs at
the appropriate percentage as defined for that cost center in each case
consistent with the provisions of Exhibit C.
AREA/COST CENTER SERVICE
Stock Prep (13.8%) Preparation of pulp to headbox, addition of
necessary chemicals/additives and proper
consistency, as well as color dyes as
required.
PM General (13.8%) Costs associated with the general operations
of the paper machine, but not specific to any
one machine.
Roll Preparation of rolls for shipping, wrapping,
Finishing (13.8%) labeling.
Shipping (13.8%) Storage and handling, as well as placing in
truck/pig (i.e. TOFC or COFC) for shipment of
product.
Power Electrical demand, substation lease,
Distribution (6.0%) maintenance costs, and miscellaneous costs.
Variable power costs will be metered and
direct billed to #3 paper machine as defined
in Exhibit C.
Pollution (6.0%) Treatment of paper machine waste water and
associated solids load from machine services.
Landfill operating and maintenance costs.
Technical (6.0%) Costs for managing waste systems, air, water,
and landfill. Testing, monitoring and general
compliance to control orders. Analytical
support for mill process control and
improvements. Technical issues.
-5-
<PAGE>
AREA/COST CENTER SERVICE
Quality
Services (6.0%) Testing of product qualities to standards.
Engineering Capital spending management, management of
Services/ Energy mill processes and physical assets.
Management (6.0%) Recommendations for improvements,
replacements and upgrades to facilities as
required. Project management. Includes
operating expenses, whereas costs for capital
projects are directly charged to the capital
cost of such projects.
Purchasing/ Stores Provide the mill with all goods and services
(6.0%) as necessary to operate, including raw
materials, maintenance materials, and
supplies.
Yard (6.0%) General mill appearance, cleanup, and general
work around mill, but not for any specific
department. Includes maintenance of grounds,
roads, and other general site areas.
Human Hiring, firing, personnel management, fringe
Resources (6.0%) benefits management, labor negotiations,
communications management, recruiting,
training, safety, employee selections,
workmen's compensation
Controller (6.0%) Processing of payroll, accounts payable,
budgets, financial reporting.
Data Financial computer, supplies and maintenance
Processing (6.0%) for the IBM AS 400.
Mill Loaded administrative salaries, engineering
Manager/Salaried studies, mill managers office expenses,
SG&A(6.0%) regulatory fines.
Process Staff costs and outside consultant/contractor
Control (6.0%) costs to maintain and improve mill process
controls.
Taxes (6.0%) Property taxes
Insurance (6.0%) Boiler machinery, fire, accident, liability,
and business interruption. Specific
provisions for insurance coverage are defined
in Exhibit F.
Operating Loaded salaries for operating staff.
Salaries (6.0%)
-6-
<PAGE>
EXHIBIT E
1. QUANTITY. Subject to the terms and conditions hereof:
(a) Each calendar year commencing with 1993, American Tissue is required
to purchase a minimum of 35,000 short air dry tons ("SADT") of Boise
Cascade's St. Helens mill's pulp per year ("Pulp") and a minimum of
2,500 SADT per calendar month.
(b) Each calendar year commencing with 1993, Boise Cascade is required to
have available to American Tissue up to 45,000 SADT of Pulp and a
minimum of 4,000 SADT available in any calendar month.
(c) Boise Cascade is required to have available to American Tissue no less
than 20 tons per day of a pulp product generally known as "Blend" (or
"Blended Pulp") which is produced from a combination of wood chips and
sawdust. Amounts of Blend over 20 tons will be provided to American
Tissue only if available.
(d) From the date of this Agreement through December 31, 1992, Boise
Cascade will sell and American Tissue will buy an amount of Pulp equal
to volumes and blend fibre mix consistent with the above amounts,
pro-rated, and also consistent with orders that Boise Cascade now has.
2. PULP SPECIFICATIONS. St. Helens pulp is provided in two forms, as "long
fiber" and "Blend". St. Helens Pulp specifications are as follows:
Brightness -- 84 GE, minimum 81 / for "Blend" and "long fiber"
Strength - 1% CED Viscosity
---------------------------
"Long Fiber" -- 130+ average; minimum 70
"Blend"-- 30+ average, minimum 20
Dirt
----
Shives -- "long fiber" as 10 ppm maximum
"Blend" -- 10 ppm maximum
Specks -- "long fiber" -- 15 ppm maximum
"Blend" -- 30 ppm maximum
3. PRICE.
(a) The "long fiber" pulp price shall be calculated by taking the weighted
average U.S. and Canadian selling price per SADT for Northern Softwood
Market Pulp as produced at Boise Cascade's Wallula Wash mill for the
<PAGE>
calendar month less any applicable freight, cash discounts, and broker
fees, then subtracting incremental drying costs for Wallula Market
pulp, all calculated based on the weighted average SADT cost per ton
for that month. Incremental drying costs are defined as all steam and
electricity used directly for pulp drying together with market pulp
baling materials and 10% of Daily and Annual Costs per ton (a/k/a
Fixed Costs associated with the pulp drying equipment at Wallula), as
calculated at the Wallula mill in accordance with general mill
accounting standards. For "blend" pulp, American Tissue shall pay to
Boise Cascade for each ton furnished an amount equal to 90% of the
price of "long fiber" pulp.
(b) Payment will be made on or before the last day of each month against
the invoice for the immediately preceding month which shall be
received by American Tissue no later than the 10th day of the month
payment is due.
(c) Should Wallula cease U.S. and Canadian sales of pulp, the parties will
meet to agree to a market value indicator. Should the parties be
unable to reach agreement for any reason, each party shall select an
arbitrator, who shall in turn between them select one more. The three
arbitrators shall determine a pricing methodology to calculate the
price of Pulp*. The arbitrators shall have the following minimum
qualifications: Individuals with generally accepted expertise in the
pulp and paper industry.
* such that the price to be paid by American Tissue under the new
pricing methodology is consistent with the price that would have
been paid had sales continued.
4. WEIGHT AND MOISTURE
See Exhibit C.
5. LIABILITY
The liability of Boise Cascade arising from delivery of Pulp which is
defective shall be limited to the cost or replacing such Pulp to American
Tissue, plus one-half of out-of-pocket freight costs incurred by American
Tissue as a result of the defective Pulp, plus Direct Costs and Indirect
Costs associated with production of tissue rejected by American Tissue's
customers as a result of the detective pulp.
6. QUALITY
Boise Cascade warrants that the quality of the Pulp delivered hereunder
will be with the Pulp specifications set forth in paragraph 2 of this
Exhibit E and will be fit for the purpose of producing paper consistent
with the grades and specifications heretofore produced on the No. 3 Paper
Machine at St. Helens (see Exhibit P). THE FOREGOING
-2-
<PAGE>
WARRANTY IS EXCLUSIVE AND IS IN LIEU OF ALL OTHER WARRANTIES CONCERNING THE
QUALITY OF THE PULP (WHETHER WRITTEN, ORAL, OR IMPLIED) INCLUDING WARRANTY OF
MERCHANTABILITY IN OTHER RESPECTS THAN EXPRESSLY SET FORTH ABOVE AND WARRANTY OF
FITNESS FOR A PARTICULAR PURPOSE.
-3-
<PAGE>
EXHIBIT F
Insurance Requirements
A. Boise Cascade's Obligation to Provide Insurance. Boise Cascade shall
provide for workers' compensation insurance as required by the laws of the state
of Oregon for each employee of Boise Cascade. Boise Cascade shall maintain a
commercial general liability policy, in the amount of $2 million, with American
Tissue named as an additional insured. Boise Cascade shall maintain a fire and
extended coverage insurance policy or an all-risk insurance policy in an amount
equal to the new replacement cost of the Paper Machine and the Real Property,
which policy may, at Boise Cascade's option, be a part of a policy covering all
of Boise Cascade's property at the St. Helens mill. Proceeds from the policy (or
any policy obtained by American Tissue) with respect to loss or damage to the
Paper Machine or the Real Property shall be applied to repair, replace, or
rebuild the Paper Machine and the Real Property. The deductible portion of the
property insurance procured by Boise Cascade shall be for the account of
American Tissue, and American Tissue shall have no claim against Boise Cascade
with respect to the deductible. The deductible with respect to the Paper Machine
and the Real Property shall be no greater than $2,000,000.00 (which may be
adjusted upward by Boise Cascade from time to time consistent with its insurance
for other Mill property), except that the deductible shall be reduced to no more
than $500,000.00 with respect to the Paper Machine and Real Property at the time
that Boise Cascade shall be subordinated pursuant to Section 4 hereof; American
Tissue shall be billed as a Direct Cost for any additional premium paid by Boise
Cascade to reduce the deductible on the Paper Machine and the Real Property to
$500,000.00. If a loss occurs which affects the Paper Machine or Real Property
and the Mill, the deductible shall be prorated between Boise Cascade and
American Tissue in proportion to the loss suffered to the Mill on the one hand,
and to the Paper Machine and the Real Property on the other hand; provided that
American Tissue's proportionate share of the deductible shall not exceed the
then applicable deductible amount set forth in the preceding sentence. American
Tissue shall have the option at any time to obtain its own property insurance
with coverages reasonably acceptable to Boise Cascade and with a deductible
consistent with the previous provisions. Boise Cascade shall be given a
certificate of insurance with respect to the policy and shall be named as a loss
payee as its interests may appear. Each party waives any claim against the other
party with respect to damage or liability to the other party's property; there
shall be no subrogated claim by either party's insurance carrier against the
other party.
B. Insurance Procurement Obligations of American Tissue. American Tissue shall
provide for workers' compensation insurance as required by the laws of the state
of Oregon for each employee of American Tissue. American Tissue shall require
each contractor hired by it, and all of their respective
<PAGE>
subcontractors, to provide a full indemnity running in favor of American Tissue
and Boise Cascade to protect, indemnify, and hold American Tissue and Boise
Cascade harmless from and against any and all claims, demands, and causes of
action, including reasonable attorneys' fees of any nature whatsoever, for
injury or death of persons or loss of or damage to property occurring on the St.
Helens mill property or in any manner growing out of or connected with the
indemnifying party's work except damage or injury occasioned by the sole
negligence of Boise Cascade or American Tissue. In addition, each contract
entered into between American Tissue and a contractor and any of their
respective subcontractors with respect to any work performed on the Paper
Machine or the Real Property shall contain, in substance, provisions which are
no less favorable to Boise Cascade and American Tissue than the following
insurance provisions, and American Tissue shall provide the necessary
administrative functions to ensure the insurance provisions are complied with by
the contractors and subcontractors:
_.0 INSURANCE.
_.1 Contractor's Liability Insurance. During the performance of the
Work, contractor, at its cost and expense, shall purchase and maintain the
insurance set forth in this section. The insurance shall be purchased and
maintained in companies reasonably acceptable to American Tissue and Boise
Cascade and shall be primary with no right of contribution.
_.1.1 Workers' Compensation and Employers' Liability. Workers'
Compensation insurance shall be provided as required by the law of the
state of Oregon. Employers' Liability insurance shall be provided in
amounts not less than $1,000,000 each accident for bodily injury by
accident, $1,000,000 policy limit for bodily injury by disease, and
$1,000,000 for each employee for bodily injury by disease.
_.1.2 General Liability. Contractor shall maintain a Commercial
General Liability (Occurrence) policy, which policy shall include coverage
for premises and operations, products and completed operations, contractual
liability, broad form property damage, including completed operations,
explosion, collapse and underground hazards, and personal injury liability.
The policy shall have a combined single limit for bodily injury and
property damage of $5,000,000 each occurrence; $5,000,000 for personal
injury liability; $5,000,000 aggregate for products/completed operations;
and $5,000,000 general aggregate.
.1.3 Automobile Liability, contractor shall maintain an Automobile
Liability policy with a combined single limit for bodily injury and
property damage of not less than $5,000,000 for each accident. The policy
shall cover all owned, hired, and nonowned automobiles used in the
performance of the Work and shall include coverage for Automobile
Contractual Liability.
-2-
<PAGE>
_.2 Insurance Certificate. Contractor shall not be permitted to begin Work
without first delivering to American Tissue and Boise Cascade certificates from
Contractor's insurers evidencing the above-referenced coverage and:
_2.1 Except for the coverage provided pursuant to subsection -.1.1,
shall name American Tissue and Boise Cascade, and their respective
subsidiaries, affiliates, directors, officers, and employees as additional
insureds with respect to liability or any claims of liability arising out
of the Work performed by contractor that affords the additional insureds
the same coverage as if the additional insureds were the named insured,
including coverage for the joint or sole negligence of the additional
insureds. The parties intend this provision to be a waiver of immunity
under any applicable Workers' Compensation laws to the extent permitted by
law;
_.2.2 shall provide on its face that the policies it represents will
not be terminated, amended, or allowed to expire without 30 days' prior
written notice to American Tissue and Boise Cascade; and
_.2.3 Shall provide on its face that the policies it represents
contain a severability of interests clause, generally providing, "the
insurance afforded applies separately to each insured against whom claim is
made or suit is brought, except with respect to the limits of the company's
liability."
_.3 Contractor's Property Insurance. During the performance of the Work,
Contractor shall procure and maintain fire and extended coverage property damage
insurance covering the full insurable value of all of the tools and equipment
used in the performance of the Work, whether located at the site or at some
other location. Contractor shall also require its Subcontractors to carry such
insurance.
_.4 Deductibles. Contractor may purchase the above required insurance
policies with such reasonable deductibles as it may elect; provided that losses
not covered by reason of such deductible shall be for the account of Contractor.
_.5 Parties' Waiver of Insured Claims. Contractor waives any and all rights
that Contractor might have against American Tissue or Boise Cascade to recover
all or part of any loss or damage insured or insurable by the insurance policies
carried or required to be carried by Contractor. Contractor shall require
Subcontractors and sub-subcontractors to provide similar waivers each in favor
of all other parties enumerated in this subsection _.5.
If American Tissue shall pert on any work on the Paper Machine or the Real
Property, American Tissue shall have the same obligations with respect to
indemnity and insurance
-3-
<PAGE>
(which insurance shall state that it is primary to any insurance provided by
Boise Cascade) as imposed on a Contractor pursuant to this Exhibit F. Boise
Cascade may increase the insurance amounts required from time to time to adjust
for inflation.
-4-
<PAGE>
EXHIBIT G
WAREHOUSE SITE LEASE
THIS WAREHOUSE SITE LEASE ("Lease") is made and entered into by and between
BOISE CASCADE CORPORATION, a Delaware corporation ("Lessor"), and AMERICAN
TISSUE MILLS OF OREGON, INC., a New York corporation ("Lessee")
WITNESSETH:
WHEREAS, Lessor and Lessee have previously entered into an Agreement dated
November 23, 1992, ("Main Agreement") regarding the No. 3 Paper Machine located
at the St. Helens, Oregon, pulp and paper mill operated by Lessor; and
WHEREAS, Lessor is the owner of certain real property located in Columbia
County, state of Oregon; and
WHEREAS, Lessee has exercised its option in accordance with Section 28 of
the Main Agreement to lease the Premises (as defined below).
NOW, THEREFORE, in consideration of the mutual covenants and conditions set
forth herein, the parties agree as follows:
1. Premises. Lessor hereby leases to Lessee and Lessee hereby hires from
Lessor those certain premises located in Columbia County, Oregon, more
particularly described on Exhibit 1 attached hereto and by this reference made a
part hereof ("Premises").
2. Main Agreement. This Lease shall be construed consistently with the
terms and conditions of the Main Agreement, certain of which are referred to
herein. Capitalized terms not
<PAGE>
defined herein shall have the same meanings as set forth in the Main Agreement.
3. Term. The term of this Lease shall be for a period commencing the day
and year determined pursuant to Section 28 of the vain Agreement and terminating
on the date of expiration or earlier termination of the Main Agreement.
4. Rental. During the ten of this Lease, Lessee shall pay to Lessor the sum
of $10.00 per month as rental for the Premises, said payments to be made monthly
on the 15th day of each month during the term of this Lease. Additionally, all
Direct Costs and Capital Costs attributable to the use, operation, and
maintenance of the Premises and any improvements thereon shall be paid to Lessor
by Lessee subject to and in accordance with the applicable tens of the Main
Agreement.
5. Use and Maintenance of Premises. Lessor acknowledges that Lessee intends
to utilize the Premises to build and maintain a storage, shipping and/or
finishing facility and offices incidental thereto and Lessor hereby consents to
such use by Lessee, subject to the terms and conditions hereinafter set forth.
The Premises shall not be used for any other purpose whatsoever. Lessee shall
not commit, or suffer to be committed, any waste upon the Premises, nor allow or
cause said Premises to be used for any unlawful purpose. The use, operation and
maintenance of the Premises shall be subject to and in accordance with the
applicable terms of the Main Agreement. Lessee shall be solely responsible for
the cost and expense of all repairs required, both structural and nonstructural,
and for the
-2-
<PAGE>
maintenance of the buildings or other improvements now on or hereafter placed on
the Premises covered by this Lease (collectively, the "Building"). Additionally,
Lessee shall remove and relocate the buildings, underground utilities, and other
improvements existing on the Premises as of the date of the Main Agreement to
the extent required and shall be responsible for all costs and expenses related
thereto. Any building and other improvements made to the Premises after the date
of the Main Agreement shall be removed by Lessor, at Lessor's sole cost and
expense, at or about the date of commencement of this Lease. Additionally, all
repairs, maintenance, and improvements to the Building shall be scheduled so as
to minimize disruption to Lessor's operations.
6. Condition of Premises. Lessee hereby acknowledges that it has inspected
the Premises, knows the condition thereof, and is entering into this Lease for
the occupancy of the Premises with full knowledge of the condition of the
Premises. Except as otherwise set forth herein, Lessor makes no further warranty
or representation as to the condition of the Premises or their fitness for use
by Lessee. Lessee shall be responsible for and shall obtain all permits and
licenses required for its use of the Premises and construction of the Building.
7. Representations. Lessor and Lessee acknowledge that the applicable
representations and covenants contained in subsections 5(d) and 5(e) of the Main
Agreement shall apply with equal force to the Premises and this Lease and are
specifically incorporated herein by reference.
-3-
<PAGE>
8. Laws and Regulations. Lessee shall comply with all federal, state, and
local laws, rules, and regulations relating to the use and occupancy of the
Premises and construction of the Building.
9. Liens and Encumbrances. Lessee shall not take any affirmative action to
create or suffer any lien or encumbrance to remain against the Premises or the
Building undischarged as of record by bonding or otherwise for a period in
excess of 30 days following Lessee's receipt of notice of any such lien or
encumbrance.
10. Utilities. Lessee shall assume and pay for the installation and hookup
of all utilities and all utility services provided to the Building. Lessee shall
be responsible for any and all costs associated with the use of the Building,
including any costs for reconnecting or rerouting any utilities required as a
result of Lessee's use of the Building.
11. Insurance. The applicable insurance provisions of the Main Agreement
relating to the Real Property shall apply to this Lease; provided however,
Lessee shall, at all times during the term of this Lease, at its own cost and
expense, maintain fire and extended coverage insurance in an amount equal to new
replacement cost of the Building. Lessor shall not be liable to Lessee for any
loss or damage to Lessee's property, which is required to be covered by
insurance as provided in this Lease, and there shall be no subrogated claim by
Lessee's insurance carrier against Lessor.
-4-
<PAGE>
12. Removal of Property. At any time during the tea of this Lease, Lessee
may remove its furnishings, equipment, and other personal property from the
Premises, provided that Lessee shall reimburse Lessor for the cost of repairing
any damage to the Premises caused by such removal. Lessee shall not remove any
other property, including the warehouse or associated conveyance systems during
the term or at the termination of this Lease. All personal property not removed
from the Premises within 30 days from the date of expiration of this Lease shall
become the sole property of Lessor.
13. Inspection. Lessor shall have the right to inspect the Premises and the
Building at all reasonable times and places for whatever purpose reasonably
deemed necessary or reasonable by Lessor.
14. Default. In the event Lessee fails to perform any of the material
terms, provisions, or conditions contained in this Lease on its part to be
performed as and when required to be performed, Lessor shall give notice to
Lessee in writing specifying the default; and in the event Lessee shall fail,
refuse, or neglect to correct said default within 30 days from the date of
mailing of the notice of said default, then Lessor shall have the right, at its
sole option, to terminate this Lease and to expel Lessee from the Premises and
retake possession and exercise any other remedy provided by law; provided,
however, that in the event a non-monetary default cannot be cured by the
exercise of reasonable diligence within such period of 30 days, no such
termination shall be effective if Lessee shall commence,
-5-
<PAGE>
within such 30-day period, the steps necessary to cure such default and shall
thereafter proceed with reasonable diligence to complete the steps necessary to
cure such default. The 30-day notice period shall be reduced to 10 days in the
case of a monetary default. Any default of a material provision of this Lease by
Lessee shall also constitute a default of the Main Agreement.
15. Assignment. Lessee shall have the same right to assign this Lease as it
has to assign the Main Agreement.
16. Improvements. Lessee shall not make any improvements to the Premises
without first providing Lessor with prior written notice. Any improvements to
the Premises shall be subject to Lessor's consent to detailed plans and
specifications. Such consent shall not be unreasonably withheld or delayed.
Lessee shall be responsible for obtaining all applicable permits and approvals
for any improvements. Lessor shall cooperate with Lessee in connection with
Lessee's improvement of the Premises. Any improvement by Lessee shall not
materially interfere with Lessor's access to Lessor's No. 4 Paper Machine.
17. Easement. During the term of this Lease, Lessor hereby grants to Lessee
a right of ingress and egress to the Premises. Lessee hereby grants to Lessor a
right of ingress and egress through the Premises and the Building to the extent
same is required by Lessor's reasonable business needs. Lessee shall in no way
interfere with Lessor's unrestricted access to the No. 4 Paper Machine building
underneath the second floor conveyance
-6-
<PAGE>
system which will be connecting the No. 3 Paper Machine to the Premises.
18. Miscellaneous. The terms and conditions contained in Sections 20
through 26 and 29 through 31 of the Main Agreement are specifically incorporated
herein and made a part hereof.
-7-
<PAGE>
EXHIBIT 1
FLOOR PLAN
[GRAPHIC OMITTED]
<PAGE>
Exhibit H
[LOGO]
General Offices Boise Cascade Corporation
One Jefferson Square
P.O. Box 50
Boise, Idaho 83728-0001
208/384-6161
Fax: 208/384-7298
Telex: 170 362 VIA TRT
October 20, 1992
Kenneth Koplik, president
Koplik Paper Associates
505 Park Avenue
New York City, NY 10022
Subject: Fee Arrangement
Dear Ken:
This letter will serve as our agreement with you concerning your assistance in
identifying American Tissue Corporation as a potential purchaser for Boise
Cascade Corporation's No. 3 tissue machine ("Paper Machine") located in our St.
Helens, Oregon, mill.
1. Should American Tissue purchase the Paper Machine on or before December 31,
1992, your fee is $250,000.
2. The fee will be earned at closing and shall be due and payable immediately
thereafter.
3. Should American Tissue not purchase the Paper Machine, no fee shall be
payable to you.
4. If any dispute shall arise between you and Boise Cascade which results in
litigation, the prevailing party in such litigation, as determined by the
court, shall be entitled to an award of reasonable attorneys' fees in an
amount determined by the court.
5. You shall not at any time represent to any person that you have any power
or authority to enter into a contract, agreement, lease, or other
instrument binding or obligating Boise Cascade to sell or lease the Paper
Machine on any terms or conditions, and nothing herein shall be construed
to authorize or empower you to bind or obligate Boise Cascade. You shall
not at any time represent to any person that you have any authority to
obligate Boise Cascade to pay to any person any fee or commission on
account of any sale or lease of the paper
<PAGE>
Page 2
October 20, 1992
Machine procured by such person, and nothing herein shall be construed to
authorize or empower you to so bind or obligate Boise Cascade. You shall
not at any time make any representations or warranties with regard to the
Paper Machine to any person, and nothing herein shall be construed to
authorize or empower you to so bind or obligate Boise Cascade.
If the foregoing terms are acceptable to you, please sign the enclosed copy of
this letter and return it to Boise Cascade at the address set forth on this
letterhead, directed to attention.
Very truly yours,
BOISE CASCADE CORPORATION
/s/ Tom Carlile
Tom Carlile
Director, Finance & Planning
White Paper Division
CFW/CW21012A
AGREED TO AND ACCEPTED this 26th day of October, 1992.
/s/ Kenneth Koplik
- --------------------
Kenneth Koplik
President
<PAGE>
EXHIBIT I
PROMISSORY NOTE
$4,000,000.00 November 23, 1992
American Tissue Mills of Oregon, Inc. ("Maker") promises to pay to the
order of Boise Cascade Corporation ("Payee") at Boise, Idaho, the principal
amount of $4,000,000.00, together with interest on the unpaid principal balance
hereof from time to time outstanding calculated at the annual interest rate set
forth below from November 23, 1992, until said principal amount is paid in full
as set forth below.
For the first six months beginning on the date of this promissory note,
interest only on the principal balance hereof shall be payable by Maker monthly,
in arrears, with the annual rate of interest calculated at the Prime Rate plus
1%. Prime Rate is defined as the "base rate on corporate loans as posted by at
least 75% of the nation's 30 largest banks" as quoted by the next edition of the
Wall Street Journal immediately following the Reference Date (hereinafter
defined). Such monthly interest only payments shall commence on the date which
is one month from the date hereof and shall continue monthly thereafter through
and including the date which is six months from the date hereof, for a total of
six such monthly payments of interest only.
Commencing on the date which is seven months from the date hereof, and
continuing monthly thereafter through and including the date which is
twenty-nine months from the date hereof, Maker
<PAGE>
shall make monthly payments in reduction of principal of $83,000.00 each,
together with interest on the unpaid principal balance of this note from time to
time outstanding, calculated at the annual interest rate equal to the Prime Rate
plus 3%.
The Prime Rate is reset monthly. The date on which the Prime Rate is set
for each monthly installment payable hereunder (Reference Date) is the first day
of the monthly period for which such installment is due. If the Reference Date
is not a banking day, the next preceeding banking day shall be the Reference
Date. Any sum received hereunder shall be allocated first to accrued and unpaid
interest and then to the unpaid principal balance hereof.
The entire unpaid principal balance hereof, together with all accrued,
unpaid interest thereon, shall be paid in full on the date which is thirty
months after the date of this note.
Maker shall have the right to prepay this note in whole or in part at any
time(s) without penalty or premium.
This Note is secured by a grant of a security interest pursuant to an
agreement of even date herewith between Maker and Payee, and it is agreed that
in the case of default in the payment of any monthly installment of principal or
interest due under this note after ten days' prior written notice of such
-2-
<PAGE>
default has been given by Payee to Maker by certified mail, return receipt
requested, then, at the election of Payee or the then legal holder hereof (which
election may be made upon notice to Maker, any time after the occurrence of said
default and after the expiration of the ten-day cure period referred to above
until such time as such default may be cured), the entire unpaid principal
balance hereof, together with accrued unpaid interest thereon, shall at once
become due and payable at the place of payment aforesaid, and in such event
Maker shall pay all reasonable costs and reasonable attorneys' fees incurred by
Payee in the enforcement of this note.
Maker hereby waives presentment for payment, notice of dishonor, protest
and notice of protest.
AMERICAN TISSUE MILLS OF
OREGON, INC.
By: ______________________________
Title: ___________________________
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<PAGE>
EXHIBIT J
AGREEMENT TO SELL PROPERTY
Pursuant to the Agreement dated as of November 23, 1992 (the "Agreement"),
by and between Boise Cascade Corporation ("Seller") and American Tissue Mills of
Oregon, Inc. ("Purchaser"), for and in consideration of the sum of Five Million
($5,000,000.00) Dollars paid or payable to Seller, Seller does hereby bargain,
sell, transfer, assign, convey and warrants to Purchaser good and marketable
title, free and clear of any and all liens, restrictions, reservations, security
interests (except the security interest created pursuant to Section 4 of the
Agreement), claims and encumbrances, the Paper Machine described in Schedule 1
annexed hereto and made a part hereof and located on the parcel of land
described in Schedule 2 annexed hereto and made a part hereof.
This instrument shall be deemed a statutory warranty deed of equipment.
To have and to hold the Machine onto Purchaser, its permitted successors
and assigns, forever, subject to Seller's security interest and option rights
under the Agreement and all other terms and conditions of the Agreement.
If Purchaser shall abandon the Machine, in the absence of execution and
delivery by Purchaser of documentation evidencing abandonment of the Machine
pursuant to Section 16 of the Agreement, Purchaser shall be deemed to have given
to Seller the title warranties contemplated by Sections 15 and 16 of the
Agreement.
Purchaser may not transfer any interest in the Paper Machine without
complying with the requirements of Section 17 of the Agreement, including the
requirement of obtaining Seller's prior written consent.
Witness, the due execution hereof as of the 23rd day of November, 1992.
Boise Cascade Corporation
By: ________________________
Its: _______________________
JL21118B
<PAGE>
STATE OF IDAHO )
) ss.
County of ______ )
This instrument was acknowledged before me on ______________________, 1992,
by __________________, as ______________ of Boise Cascade Corporation., a(n)
Delaware corporation.
[SEAL]
________________________________________
Notary Public for Idaho
My commission expires: ________________
SELLER'S NAME AND ADDRESS:
Boise Cascade Corporation
One Jefferson Square
P0 Box 50
Boise, Idaho 83728-0001
PURCHASER'S NAME AND ADDRESS:
American Tissue Mills of Oregon,
50 Cabot Court
Hauppauge, New York 11788
AFTER RECORDING RETURN TO:
American Tissue Mills of Oregon,
50 Cabot Court
Hauppauge, New York 11788
Attn: Mr. Medhi Gabayzadeh
Executive Vice President
2
<PAGE>
STATE OF OREGON )
) ss.
County of Columbia )
I certify that the within instrument was received for record on the _____
day of ______________, 1992, at ____ o'clock __M., and recorded in
book/reel/volume No. ____ on page _____ and/or as
fee/file/instrument/microfilm/reception No. _____, Record of Deeds of said
County.
Witness my hand and seal of County affixed.
_______________________________
NAME TITLE
By: ________________, Deputy
3
<PAGE>
SCHEDULE 1
(Paper Machine Description)
See attached.
4
<PAGE>
SCHEDULE 2
(Legal Description
See attached.
5
<PAGE>
SCHEDULE 1
NO. 3 MACHINE
The No. 3 Paper Machine located at the Mill, more particularly described as
all machinery, equipment and component parts located above the sole plate and
all spare parts at the Mill relating exclusively to the No. 3 Paper Machine
including, without limitation, the following:
Beloit 258" Fourdrinier tissue paper making machine No. 3 consisting of
steel air cushioned controlled flow stock inlet, 5 rectifier and distributing
rolls, PH meter, wet end control panel, removable suspended fourdrinier section
with 258" x 73' wire, 3 suction boxes, rubber covered wire rolls with doctors,
32" suction couch roll, 48" brass suction breast roll, 28" rubber covered
pressure roll, 32" top suction press, suction roll on 32" rubber covered roll,
rubber covered felt rolls, 32" rubber covered second press roll on 40" rubber
covered suction roll, 3 felt guides and stretchers for 262" x 108' and 262" x
71' wet felts, press section control panel, 12' Yankee dryer, two 40" rubber
covered suction pressure rolls, suction box, Beloit high velocity hood,
pneumatic loaded skinning, creping and cleaning doctors, dry end control board,
drum reel with 36" drum and sliding shaft, roll lowering device, reel control
panel, unwind stand with direct double belt drive, pneumatic pressure device,
iron carrier roll, 2-drum slitter and 252" rewinder with galvanized iron hood,
pneumatic roll transfer and hoist, 21" x 40' roller bed belt conveyor, control
board for rewinder, control
<PAGE>
board for transfer conveyor and hoist, pneumatic roll breaker and ejector,
3-stop holding table, together with all motors, drives, pumps, stock preparation
facilities, motor generator sets, compressors, cranes, hoists, process piping,
process wiring, spare parts, furniture and apparatus (including wire stringing
device, skids, tables, hand tools, lockers, storage racks, miscellaneous
equipment), all being located in No. 3 Machine Building; also spare parts and
apparatus and equipment auxiliary to and supporting the operation of No. 3
Machine wherever the same be situated.
The following spare parts:
Reducers Storage Reference Number
- -------- ------------------------
1 - #3 Rectifier Roll 443-29-040
1 - Head Box Rectifier Roll 1 & 2 443-29-017
1 - #3 Saveall Repulper 443-92-020
1 - Suction Couch Roll 443-92-051
1 - Top & Bottom Cal Roll Dr. 443-92-053
1 - Reel Drive 443-92-052
1 - Wire Turning Roll 443-92-180
1 - Suction Press and Top Press 443-92-057
1 - Bottom Press Roll 1st 443-92-058
1 - Calender Drive 443-80-030
Pumps
- -----
Semens 505 Vac. Pump
Fans
- ----
Wet End Hood Exhaust 853-26-075
<PAGE>
Miscellaneous
- -------------
Rotating Ass. For Fan Pump
Gears to rebuild Yankee Dryer gearbox
H-3 Core Cutter
Roll Wrap equipment
Spare Yankee Motor 1250HP/900 RPM Motor #1347
8 - Modified 2300 volt starter
1 - South End Motor Generator set.
Rolls
- -----
1 - Yankee Dryer
1 - Couch Roll - 309/30" dia.
1 - Pressure Roll Top - 301/40" dia.
2 - Pressure Roll Bottom - 301 and 304/40" dia.
2 - Combine Cal Plane - 316 and 323/27.672 dia.
1 - #1 Wire Roll Hand-- 31003/20" dia.
1 - #2 Wire Roll Stretch - 31101/20" dia.
3 - Felt Rolls 33015, 33018 and 33103/18.750 dia.
1 - Mt. Hope Winder 7" dia.
Rolling Stock
- -------------
1 - #6 Grab Truck
1 - #8 Tow Tractor
1 - #11 Tow Tractor
24 - Roll Carts (makes two trains)
1 - #3 Lift Truck
<PAGE>
SCHEDULE 2
All of that real property together with the tenements, hereditiments and
appurtenances situate, lying, and being in Columbia County, State of Oregon,
dounded and particularly described as follows, to-wit;
Parcel: A parcel of land in the Thomas H. Smith Donation Land Claim No. 40
In Sections 9 and 10, Lot 7 of said Section 9, and Lots 1 and 2 of said
Section 10, all in Township 4 North. Range 1 West of Willamette Meridian,
Columbia County, Oregon, more particularly described as follows:
Beginning at a point in said Lot 7 which is 1425.31 feet distant South
19(degrees) 17' 25" West from the Southwesterly center of Block 70 in the
center St. Helens, Columbia County, Oregon; thence South 68(degrees) 51'
East for a distance of 174.09 feet to the most Southeasterly corner of
Terrace Street in Hawley Addition to St. Helens, Oregon; thence North
29(degrees) 00' East along the most Easterly line of Terrace Street for a
distance of 356.14 feet to the most Easterly corner of said Terrace Street:
thence North 61(degrees) 00' West along the Northeasterly line of said
Terrace Street for a distance of 420.0 feet to its intersection with the
Northeasterly prolongation of the Northwesterly line of Lot 9 of Block 12,
said Hawley Addition, said point of intersection being marked with an iron
pipe; thence South 68(degrees) 51' East for a distance of 1,193.31 feet to
a point marked by an iron pipe on the Northwesterly Line of the right of
way of Spokane, Portland and Seattle Railway Company; thence South
21(degrees) 09' West along said Northwesterly right of way Line for a
distance of 310.10 feet to a point which is 50 feet distant North
68(degrees) 51' West from a point on the center line of Spokane, Portland
and Seattle Railway Company's railroad, which is located by beginning at
the point of the intersection of the center line of Columbia Street with
the Southerly line of Cowlitz Street in said City of St. Helens and running
thence South 16(degrees) 57' East for a distance of 670 feet to the point
of beginning of a 1,910.08 foot radius curve to the right, Southerly along
said curve through a central angle of 38(degrees) 06' for a distance of
1,270 feet to the end of said curve, and South 21(degrees) 09' West tangent
to said curve for a distance of 2,827.8 feet thence South 68(degrees) 51'
East for a distance of 25 feet to a point 25 feet distant Northwesterly
from, when measured at right angles to, said railroad center line; thence
South 21(degrees) 09' West parallel to said center line for a distance of
1,671.5 feet to a point; then South 68(degrees) 51' East a distance of 25
feet to the center line of the Spokane, Portland and Seattle Railway
Company right way; thence Southwesterly along the center line of the right
of way of Spokane, Portland and Seattle Railway Company to its intersection
with a line bearing South 68(degrees) 51' East from a point which is
2,191.00 feet distant South 21(degrees) 09' West from the point of
beginning; thence North 68(degrees) 51' West to said point, which is
2191.00 feet distant South 21(degrees) 09' West from the point of
beginning; thence continuing North 68(degrees) 51' West (or a distance of
1,093.3 feet to a point in the center of Milton Creek, thence Northerly
along the center of said Milton Creek as follows: North 42(degrees) 15'
East for a distance of 122.4 feet; North 61(degrees) East for a distance of
292.6 feet; North 42(degrees) 47' East for a distance of
<PAGE>
-2-
213.6 feet; North 17(degrees) 57' West for a distance of 587.0 feet: North
37 (degrees) 22' East for a distance of 210.0 feet; North 4 (degrees) 22'
East for a distance of 225.0 feet, and North 60 (degrees) 37' West for a
distance of 119.1 feet to the point of intersection with the Southwesterly
prolongation of the center line of Fir Street in said Hawley Addition:
thence North 29(degrees) 00' East along said Southwesterly prolongation for
a distance of 23.5 feet to a point on the South line of Brook Street in
said Hawley Addition: thence Southeasterly along said South line of Brook
Street as follows: South 61(degrees) 00' East a distance of 490.0 feet;
South 29(degrees) 00' West for a distance of 50.0 feet, and South
61(degrees) 00' East for a distance of 799.02 feet to a point which is
969.16 feet distant South 21(degrees) 09' West from the point of beginning:
thence North 21(degrees) 09' East along the Southeasterly line of said
Hawley Addition for a distance of 969.16 feet to the point of beginning,
EXCEPT that portion lying within the bounds of the Spokane, Portland and
Seattle Railway Company right of way.
Parcel 2: A parcel of land in the Thomas H. Smith Donation Land Claim No.
40 in Sections 9 and 10 and Lots 1 and 2 of said Section 10, all in
Township 4 North, Range 1 West of the Willamette Meridian, Columbia
County, Oregon, more particularly described as follows:
Beginning at a point in said Lot 1 which Is 2,108.59 feet distant South and
413.1 feet distant East from the Southwesterly corner of Block 70 of the
City of St. Helens, Columbia County, Oregon; thence North 68(degrees) 51'
West for a distance of 25 feet to the true point of beginning of this
description, said true point of beginning being also a point 25 feet
distant South 68(degrees) 51' East from the center line of the railroad of
Spokane, Portland and Seattle Railway Company at a point which is located
by beginning at the point of intersection of the center line of Columbia
Street with the Southerly line of Cowlitz Street in said City of St. Helens
and running thence South 16(degrees) 57' East for a distance of 670 feet to
the point of beginning of a 1,910.08 foot radius curve to the right; thence
Southerly along said curve through a central angle of 38(degrees) 06' for a
distance of 1270 feet to the end of said curve, the end of said curve being
hereinafter referred to as "Point A', and thence South 21(degrees) 09' West
tangent to said curve for a distance of 3,317.7 feet; thence from the true
point of beginning South 21(degrees) 09' West parallel with said railroad
center line for a distance of 1,171.5 feet to a point; thence North
68(degrees) 51' West a distance of 25 feet to the center line of the
Spokane, Portland and Seattle Railway Company right of way; thence
Southwesterly along the center line of the right of way of Spokane,
Portland and Seattle Railway Company to its intersection with a line
bearing South 68(degrees) 51' East from a point, hereinafter referred to as
"Point B", which is 2,191.00 feet distant South 21(degrees) 09' West from a
point which is 1425.1 feet distant South 19(degrees) 17'25" West from the
Southwesterly corner of said Block 70 of the City of St. Helens; thence
South 68(degrees) 51' East to a point on the low water line on the West
bank of the Willamette Slough which is 1208.20 feet distant from Point B;
thence Northerly along said low water line as follows. North 29(degrees)
53' East for a distance of 505.87 feet, thence North 30(degrees) 21' East
for a distance of 700 feet, and thence North 27(degrees) 31' East for a
distance of 603.70 feet to a point 389 feet distant South 68(degrees) 51'
East from the true point of beginning thence South 68(degrees) 51' East for
a distance of 206 feet to a point; thence North 3(degrees) 42' East for a
distance of 450.3 feet to a point on the low water line or said West bank;
thence North 17(degrees) 20' East along said low water line for a distance
of 366.8 feet; thence * North 68(degrees) 51' West for a distance of 425.5
feet to a point marked by an iron pipe on the Southeasterly line of the
right way of Spokane, Portland and Seattle Railway Company which is 50 feet
distant South 68(degrees) 51' East from the center line of the railroad of
Spokane, Portland and Seattle Railway Company at a point which is 2,517.7
feet distant South 21(degrees) 09' West from Point A; thence South
21(degrees) 09' West along said Southwesterly right of way line for a
distance of 100.0 feet; thence North 68(degrees) 51' West distance or 25
feet; thence South 21(degrees) 09' West parallel with center line in said
railroad for a distance of 700 feet to the true point of beginning EXCEPT
that portion lying within the bounds of the Spokane, Portland and Seattle
Railway Company right of way.
<PAGE>
-3-
Parcel 3: Blocks 4, 10, 11, 12 and 13, Hawley Addition to St. Helens,
Columbia County, Oregon.
Parcel 4: Lots 1, 2, 3, 4, 5, 6, 7, and 8, Block 7, Hawley Addition to St.
Helens, Columbia County, Oregon.
Parcel 5: All tide and overflow lands fronting, abutting, and lying
Easterly of Parcel 2 hereinabove described.
Parcel 6: All booms, wharfs, docks, bridges, buildings, structures,
conveyors, hoists sewer and effluent discharge pipes, water mains and
suction pipes, conduits, conductors, wires, and all appurtenances thereto
belonging, owned by the Grantor herein lying and being Easterly of the
upland portions of Parcel 2 hereinabove described.
Parcel 7: All waterfront, riparian, boom, dock, water appropriation, and
sewage or other discharge rights and privileges with respect to the river
frontage lying and being Easterly of the upland portion of Parcel 2
hereinabove described.
Parcel 8: All walk or driveways, conveyors, sewer and effluent pipes,
culverts, water mains, conduits, conductors, wins, trackage, and all
appurtenances thereto belonging, under, upon, over, and across the railroad
right of way lying between Parcel 1 and Parcel 2 hereinabove described.
Parcel 9: All rights of the Grantor hereinunder that certain indenture
dated August 10, 1931 and recorded May 7, 1932, in Book 54, at page 260,
Deed Records of said Columbia County, between Chas. R. McCormick Lumber Co.
of Delaware and St. Helens Pulp and Paper Company.
Parcel 10: All and any other property, rights, licenses, privileges,
permits, easements, and rights of way, not enumerated above, acquired by
the Grantor herein or its predecessors in interest, in connection with the
use, ownership, or possession of the lands described in Parcel 1 and Parcel
2 hereinabove a described.
Excepting therefrom the following described parcels of property:
<PAGE>
-4-
Parcel 1
Beginning at the intersection of the South line of the H.M. Knighton
Donation Land Claim with the Southerly extension of the West line of Block
70, St. Helens, as per plat on file and of record in the Clerk's office of
Columbia County, Oregon in Section 1, Township 4 North, Range 1 West,
Willamette Meridian, Columbia County, Oregon, said point being the
Northwest corner of the first parcel described in the City of St. Helens
tract in Deed Book 177 at page 23. Deed Records of Columbia County Oregon:
thence along the Westerly line of said City of St. Helens tract South
55(degrees) 53' East a distance of 451.03 feet: thence South 8(degrees) 19'
West a distance of 590.38 feet to the South line of Section 3, a distance
of 219.26 feet; thence leaving said Westerly line of the City of St. Helens
tract North 45(degrees)07'53" West a distance of 79.28 feet; thence North
36(degrees)41'53" West a distance of 322.77 feet; thence North
28(degrees)51'40" East a distance of 220.50 feet; thence North
29(degrees)12'47" East a distance of 119.37 feet to a point on the
Southerly extension of the East line of Block 85, St. Helens; thence North
16(degrees)57'23" West along said Southerly extension of the East line of
Block 85 a distance of 208.12 feet to said South line of said H.M. Knighton
Donation Land Claim; thence North 71(degrees)30' East along said South line
of the H.M. Knighton Donation Land Claim a distance of 80.03 feet to the
True Point of Beginning. CONTAINING 6.86 acres more or less.
Subject to and excepting all easements, reservations, restrictions and
mineral rights of record.
This conveyance shall be subject to Grantor's right of reverter as follows:
If the property is determined by the Grantee or any successor fire
protection provider to be excess property or is not used for fire related
purposes for a period of three (3) years, and there are no written development
plans to use or continue to use the property for a fire training site or other
fire prevention or
Bargain and Sale Deed with Right of Reverter - 1
<PAGE>
-5-
Parcel 2
Beginning at the point of intersection with the Northwesterly right-of-way
line of the S.P. & S. Railroad and the Northwesterly line of Government Lot
4 in Section 3, Township 4 North, Range 1 West of the Willamette Meridian,
Columbia County, Oregon; thence Southwesterly along the Northwesterly line
of said Government Lot 4 and Northwesterly line of Government Lot 6 of said
Section 3, 1,352.93 feet to the intersection of the prolongation
Southeasterly of the Northeasterly right-of-way line of 9th Street and the
Northwesterly line of said Government Lot 6; thence South 55(degrees)59'
East, 451.03 feet; thence South 8(degrees)19' West 593.09 feet to the South
line of said Section 3; thence West along the South line of said Section 3,
300 feet; thence South 21(degrees)09' West, 226.63 feet; thence South
68(degrees)51' East, 750 feet to the Northwesterly right-of-way line of
said S.P. & S. Railroad; thence North 21(degrees)09' East along the
Northwesterly right-of-way line of said S.P. & S. Railroad right-of-way,
1,876.84 feet to the point of beginning; and
Part of Lot 1, Section 10, Township 4 North, Range 1 West of the Willamette
Meridian, Columbia County, Oregon described as follows:
Beginning at the Northeast corner of Tract 9-2 conveyed to St. Helens Paper
Corporation, a Delaware corporation, by deed recorded May 7,
1964 in Book 154, page 896, Deed Records of Columbia County, Oregon; thence
South 21(degrees)09' West, 100.86 feet; thence South 41(degrees)42' West,
128.16 feet; thence South 21(degrees)09' West 84 feet; thence North
68(degrees)51' West, 415 feet; thence North 21(degrees)09' East 304.86 feet
to the Northwesterly line of said Tract 9-2; thence South 68(degrees)51'
East along the Northwesterly line of said Tract 9-2, 460 feet to the point
of beginning
Subject to:
1. Right, title and interest of the State of Oregon in and to that
portion of the above premises lying between ordinary high and low
water.
2. The rights of fishing, navigation and commerce in the State of Oregon,
the Federal Government and the public in and to that portion thereof
lying below the ordinary high water mark of the Columbia River.
3. A slope easement from St. Helens Pulp and Paper Co., an Oregon
corporation, to Chas. R. McCormick Lumber Co., of Delaware, a Delaware
corporation, recorded May 7, 1932 in book 54, page 260, Deed Records
of Columbia County, Oregon.
<PAGE>
Exhibit K
Corporation Financial Manual
[LOGO] Number 41
Boise Cascade Page 3 of 19
Corporation Date Issued March 1, 1991
Supersedes June 15, 1990
Approved [init.]
Title PROPERTY AND EQUIPMENT
POLICY
.09 Authorization for Expenditures
A. Capitalization - All assets capitalized must be supported by an
approved AFE, except that no AFE is required for office equipment
less than $2,000 and property and equipment less than $15,000,
excluding autos, trucks, and rolling stock (see Policy No. 121,
Authorization for Expenditure (AFE)).
B. Dispositions - The disposition of property or equipment must be
supported by an approved AFE when either fair market value or net
book value, exceeds $500,000 for the Paper and Timber & Wood
Products Divisions, $250,000 for all other divisions or when an
entire line of business, regardless of dollar amount, is being
sold (see Policy No. 121, Authorization for Expenditures (AFE)).
.10 Environmental Assessment
Prior to entering into a binding contract to acquire or dispose of
real property, an environmental assessment of the property shall be
conducted in accordance with the provisions of corporate policy No.
13.10, Environmental Contamination Review in Real Estate Acquisitions
and Dispositions. This includes owned and leased property, except
leases or subleases of commercial space in multitenant structures.
.11 Criteria for Capitalization
Expenditures for tangible assets, including leasehold improvements,
used in the normal conduct of business will be capitalized if the
asset has an assigned life of two or more years and a value in excess
of the amounts listed below:
(1) Office furniture and equipment $1,000
(2) Primary manufacturing facilities
(e.g., papermills, sawmills, plywood plants) $5,000
(3) Converting operations (e.g., container
plants), retail and wholesale
distribution outlets, and miscellaneous
operations $3,000
When applying the capitalization limit, related items must be
considered as a unit (e.g., a desk and chair, or motors and related
material handling assembly). If related items are obtained separately,
the aggregate cost must be compared against the capitalization limits.
Therefore, each unit or project with a cost exceeding the specified
limit will be capitalized.
MKO1212B/3
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Corporation Financial Manual
[LOGO] Number 41
Boise Cascade Page 4 of 19
Corporation Date Issued March 1, 1991
Supersedes June 15, 1990
Approved [init.]
Title PROPERTY AND EQUIPMENT
Expenditures for real property, regardless of tract size or value,
will be capitalized.
.12 Expenditures Related to Existing Capitalized Assets
A. Expenditures will be capitalized if they
(1) Represent additions to property or equipment; or
(2) Are for alterations which substantially increase
productivity; or
(3) Extend the useful life beyond original estimates by at least
25%; however, the useful life must be extended by one year
or more; or
(4) Replace major components (e.g., roof replacement).
B. Partial Retirement - If a major component is replaced, the
remaining book value of the old component will be retired in
accordance with the provisions of Section .18 of this policy and
the Property Accounting Users Manual.
.13 Payables for the Purchase of Assets
Payables for the purchase of assets should be recorded when the risks
of ownership have passed. For goods or equipment purchased, this
generally takes place when title passes, typically the date the items
are received or, if the terms are F.O.B. shipping point, the date
shipped. However, if title or possession is retained by the seller for
security reasons or for the convenience of the buyer, the payable
should nevertheless be recorded if the substantive risks of ownership
have passed. Amounts due under construction contracts, including
retainages, should be recorded as they become billable. Payables for
items received subject to testing or installation should also be
recorded unless it is probable that the items will not be accepted or
installed. On the other hand, no liability should be recorded for
items received on consignment until title passes or on bailment. (See
Policy No. 45, Capitalized Interest, for a discussion of how accounts
payable associated with major capital projects are included in the
computation of capitalized interest.)
MKO1212B/4
<PAGE>
Corporation Financial Manual
[LOGO] Number 41
Boise Cascade Page 5 of 19
Corporation Date Issued March 1, 1991
Supersedes June 15, 1990
Approved [init.]
Title PROPERTY AND EQUIPMENT
.14 Depreciation
Depreciation will begin the month following the date an asset is
placed in service using the straight-line or units-of-production
depreciation method. Pulp and paper mill asset lives will be 20 years
for manufacturing equipment and 10 years for process control
equipment. Asset lives for other property and equipment at pulp and
paper mills and for other operations should be in accordance with
Section 21C and Appendix I.
PROCEDURES
.15 Additions to Property and Equipment
A. Purchased Assets - The cost of purchased assets shall include the
cash price plus freight, sales tax, installation, and other
acquisition costs necessary to render the asset suitable for its
intended use. The cost of data processing equipment shall include
the cost of software that is an Integral part of the hardware.
B. Constructed Assets - When assets are constructed, the following
types of expenditures will be capitalized:
(1) Materials, including freight, sales tax, and installation
costs.
(2) Direct and indirect construction labor including payroll
load.
(3) Stores, materials, and expendable tools used during
construction.
(4) Temporary facilities to supply water, power, tool storage,
etc.
(5) Company and outside engineering costs actually utilized in
construction of project.
(6) Clean-up costs following project completion.
(7) Alteration of existing assets to tie into the new facility.
(8) Demolition of existing fixed assets where the only reason
for such retirement is to construct or install the capital
addition.
(9) Interest expense incurred In conjunction with major capital
additions will be capitalized as part of the asset cost (see
Policy No. 45, Capitalized Interest).
C. Land - When purchasing land, the basic land cost will be
segregated from depreciable assets and must be in enough detail
to allow cost determination at the time of subsequent disposal,
should it occur.
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Corporation Financial Manual
[LOGO] Number 41
Boise Cascade Page 6 of 19
Corporation Date Issued March 1, 1991
Supersedes June 15, 1990
Approved [init.]
Title PROPERTY AND EQUIPMENT
D. Buildings - Generally, the only items to be capitalized as
buildings should be those items which do not qualify as tangible
personal property or other tangible property. Items of other
tangible property include: extra piling, concrete, or steel
installed in a building's foundation to support machinery; extra
materials installed in a building wall or roof to support
machinery, craneways, hoists, utility lines, piping, conveyors,
etc.; special purpose structures such as digester buildings,
recovery boiler buildings, and lime kiln buildings. See Appendix
III for an expanded listing of assets considered to be other
tangible property. It is extremely important to carefully review
assets which might initially appear to be real property but in
fact may be other tangible property. For income tax purposes,
other tangible property can be depreciated over a relatively
short life compared to the depreciation period for real property.
It is also important that a realistic book life be assigned to
these assets.
Items classified as buildings will be broken down into components
and depreciated over the estimated life of the Individual
components (see Appendix IV). The information necessary to
capitalize the components can be obtained from engineers and
contractors when a building is constructed or from appraisers
when a building is purchased. In some cases it may be necessary
to allocate costs between the building components and other
tangible property. The estimated useful lives, including
engineering lives, of the individual components will be based on
the physical and economic factors encountered in the specific
building, region or Industry. Questions regarding the useful life
of a particular component should be referred to the Property
Accounting Department.
.16 Additions to Leased Property and Equipment
A. Additions Owned by Lessee - Additions or replacements to leased
property and equipment, the ownership of which Is retained by the
lessee, will be capitalized in accordance with the rules outlined
above and will be recorded in nonleased fixed asset accounts.
B. Additions Owned by Lessor - Additions or replacements to leased
assets in which the ownership reverts to the lessor will be
recorded as follows:
(1) Additions or replacements that have a useful life equal to
or shorter than the lease period will be recorded in the
nonleased fixed asset accounts.
(2) Assets or replacements that have a useful life greater than
the lease period will be recorded as leasehold improvements.
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Corporation Financial Manual
[LOGO] Number 41
Boise Cascade Page 11 of 19
Corporation Date Issued March 1, 1991
Supersedes June 15, 1990
Approved [init.]
Title PROPERTY AND EQUIPMENT
APPENDIX I
.24 Useful Lives
The following list specifies averages or ranges for a broad class of
assets. Specific physical and economic factors must be considered in
the actual assignment of lives. These guidelines are for new units.
A. Office Furniture and Fixtures
(desks, files, chairs, safes) 10 years
B. Office Machines
(typewriters, calculators, communication,
duplication, and copying machines) 3-10 years
C. Data Processing Equipment
Microcomputers (PCs) 3-5 years
Mini-Computers and Peripherals 3-5 years
Mainframes and Peripherals 3-5 years
Uninterruptible Power Systems 5-10 years
Power Distribution Units 5-10 years
D. Transportation Equipment
1. Aircraft 6-10 years
2. Automobiles 3-5 years
3. Trucks and buses 3-7 years
(includes only vehicles used
over the road)
4. Trailers and trailer mounted 6-10 years
containers
5. Railroad cars 15 years
6. Vessels, barges, tugs, and similar 18 years
water transportation
E. Land Improvements 7-20 years
(paved surfaces, sidewalks, canals,
drainage facilities, sewers, wharves,
bridges, fences, landscaping)
F. Building Components See Section .15 D
MKO1212B/11
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Corporation Financial Manual
[LOGO] Number 41
Boise Cascade Page 12 of 19
Corporation Date Issued March 1, 1991
Supersedes June 15, 1990
Approved [init.]
Title PROPERTY AND EQUIPMENT
G. Leasehold Improvements
1. Operating leases (noncapitalized leases):
(a) Lease term (including renewal periods that are likely
to be accepted)
2. Capitalized leases:
(a) If the ownership reverts to the lessor, the
improvements will be amortized over the lease term as
defined in policy No. 43, Capitalized Leases.
(b) If the ownership of the Improvements remains with Boise
Cascade Corporation, the improvements will be
depreciated over the lives outlined in this appendix.
H. Logging and Road Building Equipment 6 years
I. Sawmill
Manufacturing Equipment 12 years
Process Control Equipment 5 years
Example: Headrig setwork
J. Plywood and Other Wood Products
Manufacturing Equipment 12 years
Process Control Equipment 5 years
Example: Lathe following system
K. Equipment Used In Wholesale or Retail Trade 10 years
L. Pulp and Paper
Manufacturing Equipment 20 years
Process Control Equipment 10 years
Example: Bases weight and system moisture
control system
M. Paper Finishing and Conversion Equipment 12 years
MKO1212B/12
<PAGE>
EXHIBIT L
1. February 21, 1992, letter from C. Norman Beckert to Gary Margason with
attachment.
2. December 19, 1989, letter from C. N. Beckert to Douglas Kuns with
attachments, including Power Purchase and Option Agreement.
3. Public Utility Commission of Oregon Order dated October 13, 1989, with
attachments. (Agreements between Northwest Natural Gas Company and Boise
Cascade Corporation: Special Firm Service Agreement dated September 30,
1988; High- Volume Interruptable Transportation Agreement dated September
30, 1988, and Amendment dated November 1990; and Letter Agreement dated
March 14, 1989.]
4. Transportation Agreement and Amendments between Northwest Pipeline
Association and Boise Cascade.
5. Gas Purchase Contract dated November 1, 1989, with June 5, 1991, letter
from Randy Schultz to Norm Beckert.
6. Labor Agreement with Association of Western Pulp & Paper Workers and Local
No. 1 Dated March 15, 1990.
<PAGE>
EXHIBIT M
MEMORANDUM OF LEASE
NAME AND ADDRESS OF LESSOR: Boise Cascade Corporation
One Jefferson Square
P.O. Box 50
Boise, Idaho 83728-0001
NAME AND ADDRESS OF LESSEE: American Tissue Mills of
Oregon, Inc.
50 Cabot Court
Hauppauge, New York 11788
LEASED PREMISES: Land and Building
known as No. 3 Paper Machine
Building at mill premises
known as Boise Cascade
St. Helens, Oregon, pulp and paper
mill, as set forth on the annexed
diagram. Any leasehold improvements
subsequently installed by Lessee
are subject to a security interest
in favor of Lessor. Lessor also has
a security interest in and an
option to purchase the paper
machine located on the leased
premises under certain
circumstances.
DATE 0F EXECUTION OF LEASE: November 23, 1992.
TERM OF LEASE: Approximately, Twenty (20) years
commencing November 23, 1992 and
ending December 31, 2012.
OPTION TO LEASE: Lessee has option to lease
additional real property adjacent
to the premises for the purpose of
constructing warehouse, finishing
and/or shipping facilities.
-2-
<PAGE>
This memorandum of lease is for information purposes only. The provisions of the
Lease shall control the rights, duties and responsibilities of the parties.
In witness whereof, the parties have duly executed this Memorandum of Lease as
of the 23rd day of November, 1992.
Boise Cascade Corporation, Lessor
By: _______________________________
American Tissue Mills of Oregon,
Inc., Lessee
By: _______________________________
STATE OF )
) ss.
COUNTY OF )
This instrument was acknowledged before me on ____________________,
1992, by _____________________________________, as ___________________________
of Boise Cascade Corporation.
__________________________________
Notary Public
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
This instrument was acknowledged before me on ____________________, 1992, by
Medhi Gabayzadeh, as Executive Vice-President of American Tissue Mills of
Oregon, Inc.
__________________________________
Notary Public
After recording, return to: Mandel and Resnik, P.C.
220 East 42nd Street
New York, New York 10017
Attn: Barry H. Mandel, Esq.
DP2lO16C.V3
<PAGE>
All of that real property together with the tenements, hereditiments and
appurtenances situate, lying, and being in Columbia County, State of Oregon,
dounded and particularly described as follows, to-wit;
Parcel: A parcel of land in the Thomas H. Smith Donation Land Claim No. 40
In Sections 9 and 10, Lot 7 of said Section 9, and Lots 1 and 2 of said
Section 10, all in Township 4 North. Range 1 West of Willamette Meridian,
Columbia County, Oregon, more particularly described as follows:
Beginning at a point in said Lot 7 which is 1425.31 feet distant South 190
17' 25" West from the Southwesterly center of Block 70 in the center St.
Helens, Columbia County, Oregon; thence South 68(degrees) 51' East for a
distance of 174.09 feet to the most Southeasterly corner of Terrace Street
in Hawley Addition to St. Helens, Oregon; thence North 29(degrees) 00' East
along the most Easterly line of Terrace Street for a distance of 356.14
feet to the most Easterly corner of said Terrace Street; thence North
61(degrees) 00' West along the Northeasterly line of said Terrace Street
for a distance of 420.0 feet to its intersection with the Northeasterly
prolongation of the Northwesterly line of Lot 9 of Block 12, said Hawley
Addition, said point of intersection being marked with an iron pipe; thence
South 68(degrees) 51' East for a distance of 1,193.31 feet to a point
marked by an iron pipe on the Northwesterly Line of the right of way of
Spokane, Portland and Seattle Railway Company; thence South 21(degrees) 09'
West along said Northwesterly right of way Line for a distance of 310.10
feet to a point which is 50 feet distant North 03(degrees) 51'West from a
point on the center line of Spokane, Portland and Seattle Railway Company's
railroad, which is located by beginning at the point of the intersection of
the center line of Columbia Street with the Southerly line of Cowlitz
Street in said City of St. Helens and running thence South 16(degrees) 57'
East for a distance of 670 feet to the point of beginning of a 1,910.08
foot radius curve to the right, Southerly along said curve through a
central angle of 39(degrees) 00' for a distance of 1,270 feet to the end of
said curve, and South 21(degrees) 09' West tangent to said curve for a
distance of 2,827.8 feet thence South 68(degrees) 51' East for a distance
of 25 feet to a point 25 feet distant Northwesterly from, when measured at
right angles to, said railroad center line; thence South 21(degrees) 09'
West parallel to said center line for a distance of 1,671.5 feet to a
point; then South 68(degrees) 51' East a distance of 25 feet to the center
line of the Spokane, Portland and Seattle Railway Company right way; thence
Southwesterly along the center line of the right of way of Spokane,
Portland and Seattle Railway Company to its intersection with a line
bearing South 68(degrees) 51' East from a point which is 2,191.00 feet
distant South 21(degrees) 09' West from the point of beginning; thence
North 68(degrees) 5' West to said point, which is 2191.00 feet distant
South 21(degrees) 09' West from the point of beginning; thence continuing
North 68(degrees) 51' West (or a distance of 1,093.3 feet to a point in the
center of Milton Creek, thence Northerly along the center of said Milton
Creek a follows: North 42(degrees) 15' East for a distance of 122.4 feet;
North 61(degrees) East for a distance of 292.6 feet; North 42(degrees) 47'
East for a distance of
<PAGE>
-2-
213.6 feet; North 17(degrees) 57' West for a distance of 587.0 feet: North
37 (degrees) 22' East for a distance of 210.0 feet; North 4 (degrees) 22'
East for a distance of 225.0 feet, and North 60(degrees) 37' West for a
distance of 119.1 feet to the point of intersection with the Southwesterly
prolongation of the center line of Fir Street in said in said Hawley
Addition; thence North 29(degrees) 00' East along said Southwesterly
prolongation for a distance of 23.5 feet to a point on the South line of
Brook Street in said Hawley Addition; thence Southeasterly along said South
line of Brook Street as follows: South 61(degrees) 00' East a distance of
490.0 feet; South 29(degrees) 00' West for a distance of 50.0 feet, and
South 61(degrees) 00' East for a distance of 799.02 feet to a point which
is 969.16 feet distant South 21(degrees) 09' West from the point of
beginning; thence North 21(degrees) 09' East along the Southeasterly line
of said Hawley Addition for a distance of 969.16 feet to the point of
beginning, EXCEPT that portion lying within the bounds of the Spokane,
Portland and Seattle Railway Company right of way.
Parcel 2: A parcel of land in the Thomas H. Smith Donation Land Claim No.
40 in Sections 9 and 10 and Lots 1 and 2 of said Section 10, all in
Township 4 North, Range 1 West of the Williamette Meridian, Columbia
County, Oregon, more particularly described as follows:
Beginning at a point in said Lot 1 which Is 2,108.59 feet distant South and
413.1 feet distant East from the Southwesterly corner of Block 70 of the
City of St. Helens, Columbia County, Oregon; thence North 68(degrees) 51'
West for a distance of 25 feet to the true point of beginning of this
description, said true point of beginning being also a point 25 feet
distant South 68(degrees) 51' East from the center line of the railroad of
Spokane, Portland and Seattle Railway Company at a point which is located
by beginning at the point of intersection of the center line of Columbia
Street with the Southerly line of Cowlitz Street in said City of St. Helens
and running thence South 16(degrees) 57' East for a distance of 670 feet to
the point of beginning of a 1,910.08 foot radius curve to the right; thence
Southerly along said curve through a central angle of 38(degrees) 06' for a
distance of 1270 feet to the end of said curve, the end of said curve being
hereinafter referred to as "Point A', and thence South 21(degrees) 09' West
tangent to said curve for a distance of 3,317.7 feet; thence from the true
point of beginning South 210 09' West parallel with said railroad center
line for a distance of 1,171.5 feet to a point; thence North 68(degrees)
51' West a distance of 25 feet to the center line of the Spokane, Portland
and Seattle Railway Company right of way; thence Southwesterly along the
center line of the right of way of Spokane, Portland and Seattle Railway
Company to its intersection with a line bearing South 68(degrees) 51' East
from a point, hereinafter referred to as "Point B", which is 2,191.00 feet
distant South 21(degrees) 09' West from & point which is 1425.1 feet
distant South 19(degrees) 17'25" West from the Southwesterly corner of said
Block 70 of the City of St. Helens; thence South 68(degrees) 51' East to a
point on the low water line on the West bank of the Willamette Slough which
is 1208.20 feet distant from Point B; thence Northerly along said low water
line as follows. North 29(degrees) 53' East for a distance of 505.87 feet,
thence North 30(degrees) 21' East for a distance of 700 feet, and thence
North 27(degrees) 31' East for a distance of 603.70 feet to a point 389
feet distant South 68(degrees) 51' East from the true point of beginning
thence South 68(degrees) 51' East for a distance of 206 feet to a point;
thence North 3(degrees) 42' East for a distance of 450.3 feet to a point on
the low water 1ine or said West bank; thence North 17(degrees) 20' East
along said low water line for a distance of 366.8 feet; thence * North
68(degrees) 51' West for a distance of 425.5 feet. to a point marked by an
iron pipe on the Southeasterly line of the right way of Spokane, Portland
and Seattle Railway Company which is 50 feet distant South 68(degrees) 51'
East from the center line of the railroad of Spokane, Portland and Seattle
Railway Company at a point which is 2,517.7 feet distant South 21(degrees)
09' West from Point A; thence South 21(degrees) 09' West along said
Southwesterly right of way line for a distance of 100.0 feet; thence North
68(degrees) 51' West distance or 25 feet; thence South 21(degrees) 09' West
parallel with center ??? said railroad for a distance of 700 feet to the
true point of beginning ???? that portion lying within the bounds of the
Spokane, Portland and Seattle Railway Company right of way.
<PAGE>
-3
Parcel 3: Blocks 4, 10, 11, 12 and 13, Hawley Addition to St. Helens,
Columbia County, Oregon.
Parcel 4: Lots 1, 2, 3, 4, 5, 6, 7, and 8, Block 7, Hawley Addition to St.
Helens, Columbia County, Oregon.
Parcel 5: All tide and overflow lands fronting, abutting, and lying
Easterly of Parcel 2 hereinabove described.
Parcel 6: All booms, wharfs, docks, bridges, buildings, structures,
conveyors, hoists sewer and effluent discharge pipes, water mains and
suction pipes, conduits, conductors, wires, and all appurtenances thereto
belonging, owned by the Grantor herein lying and being Easterly of the
upland portions of Parcel 2 hereinabove described.
Parcel 7: All waterfront, riparian, boom, dock, water appropriation, and
sewage or other discharge rights and privileges with respect to the river
frontage lying and being Easterly of the upland portion of Parcel 2
hereinabove described.
Parcel 8: All walk or driveways, conveyors, sewer and effluent pipes,
culverts, water mains, conduits, conductors, wins, trackage, and all
appurtenances thereto belonging, under, upon, over, and across the railroad
right of way lying between Parcel 1 and Parcel 2 hereinabove described.
Parcel 9: All rights of the Grantor hereinunder that certain indenture
dated August 10, 1931 and recorded May 7, 1932, in Book 54, at page 260,
Deed Records of said Columbia County, between Chas. R. McCormick Lumber Co.
of Delaware and St. Helens Pulp and Paper Company.
Parcel lO: All and any other property, rights, licenses, privileges,
permits, easements, and rights of way, not enumerated above, acquired by
the Grantor herein or its predecessors in interest, in connection with the
use, ownership, or possession of the lands described in Parcel 1 and Parcel
2 hereinabove a described.
Excepting therefrom the following described parcels of property:
<PAGE>
Parcel 1
Beginning at the intersection of the South line of the H.M. Knighton
Donation Land Claim with the Southerly extension of the West line of Block
70, St. Helens, as per plat on file and of record in the Clerk's office of
Columbia County, Oregon in Section 1, Township 4 North, Range 1 West,
Williamette Meridian, Columbia County, Oregon, said point being the
Northwest corner of the first parcel described in the City of St. Helens
tract in Deed Book 177 at page 23. Deed Records of Columbia County Oregon:
thence along the Westerly line of said City of St. Helens tract South______
East a distance of 451.03 feet: thence South 8(degrees) 19' West a distance
of 590.38 feet to the South line of Section 3, a distance of 219.26 feet;
thence leaving said Westerly line of the City of St. Helens tract North
45(degrees)07'53" West a distance of 79.28 feet; thence North
36(degrees)41'53" West a distance of 322.77 feet; thence North
28(degrees)51'40" East a distance of 220.50 feet; thence North
29(degrees)12'47" East a distance of 119.37 feet to a point on the
Southerly extension of the East line of Block 85, St. Helens; thence North
16(degrees)57'23" West along said Southerly extension of the East line of
Block 85 a distance of 208.12 feet to said South line of said H.M. Knighton
Donation Land Claim; thence North 71(degrees)30' East along said South line
of the H.M. Knighton Donation Land Claim a distance of 80.03 feet to the
True Point of Beginning. CONTAINING 6.86 acres more or less.
Subject to and excepting all easements, reservations, restrictions and
mineral rights of record.
This conveyance shall be subject to Grantor's right of reverter as follows:
If the property is determined by the Grantee or any successor fire
protection provider to be excess property or is not used for fire related
purposes for a period of three (3) years, and there are no written development
plans to use or continue to use the property for a fire training site or other
fire prevention or
Bargain and Sale Deed with Right of Reverter - 1
<PAGE>
-5-
Parcel 2
Beginning at the point of intersection with the Northwesterly right-of-way
line of the S.P. & S. Railroad and the Northwesterly line of Government Lot
4 in Section 3, Township 4 North, Range 1 West of the Willamette Meridian,
Columbia County, Oregon; thence Southwesterly along the Northwesterly line
of said Government Lot 4 and Northwesterly line of Government Lot 6 of said
Section 3, 1,352.93 feet to the intersection of the prolongration
Southeasterly of the Northeasterly right-of-way line of 9th Street and the
Northwesterly line of said Government Lot 6; thence South 55(degrees)59'
East, 451.03 feet; thence South 8(degrees)19' West 593.09 feet to the South
line of said Section 3; thence West along the South line of said Section 3,
300 feet; thence South 21(degrees)09' West, 226.63 feet; thence South
68(degrees)51' East, 750 feet to the Northwesterly right-of-way line of
said S.P. & S. Railroad; thence North 21(degrees)09' East along the
Northwesterly right-of-way line of said S.P. & S. Railroad right-of-way,
1,876.84 feet to the point of beginning; and
Part of Lot 1, Section 10, Township 4 North, Range 1 West of the Willamette
Meridian, Columbia County, Oregon described as follows:
Beginning at the Northeast corner of Tract 9-2 conveyed to St. Helens Paper
Corporation, a Delaware corporation, by deed recorded May 7,
1964 in Book 154, page 896, Deed Records of Columbia County, Oregon; thence
South 21(degrees)09' West, 100.86 feet; thence South 41(degrees)42' West,
128.16 feet; thence South 21(degrees)09' West 84 feet; thence North
68(degrees)51' West, 415 feet; thence North 21(degrees)09' East 304.86 feet
to the Northwesterly line of said Tract 9-2; thence South 68(degrees)51'
East along the Northwesterly line of said Tract 9-2, 460 feet to the point
of beginning
Subject to:
1. Right, title and interest of the State of Oregon in and to that
portion of the above premises lying between ordinary high and low
water.
2. The rights of fishing, navigation and commerce in the State of Oregon,
the Federal Government and the public in and to that portion thereof
lying below the ordinary high water mark of the Columbia River.
3. A slope easement from St. Helens Pulp and Paper Co., an Oregon
corporation, to Chas. R. McCormick Lumber Co., of Delaware, a Delaware
corporation, recorded May 7, 1932 in book 54, page 260, Deed Records
of Columbia County, Oregon.
<PAGE>
EXHIBIT N
REQUIRED CAPITAL IMPROVEMENTS
- Head Box and breast roll replacement
- 3 Ply Winder capability
- Profile Control for moisture, weight, and caliper
- Yankee Drive upgrade
- Roll Wrap replacement
<PAGE>
KOPLIK PAPER ASSOCIATES
505 PARK AVENUE
NEW YORK, NY 10022
(212] 339-1811
EXHIBIT O
---------
November 13, 1992
Mr. Tom Carlile
Director, Finance and Planning
Boise Cascade Corporation
One Jefferson Square
P.O. Box 5O
Boise, Idaho 83728-001
Re: Agreement dated October 10, 1992
between Boise Cascade Corporation and
Koplik Paper Associates ("Agreement")
Dear Tom:
This will acknowledge that Koplik Paper Associates ("Koplik") will look solely
to American Tissue Mills of Oregon, Inc, ("American") for payment of the fee
which way become due and owing to Koplik as a result of the purchase by American
from Boise Cascade Corporation ("Boise") of the paper machine designated No. 3
at St. Helen's, Oregon.
Boise's obligation under the Agreement is hereby deemed cancelled, null and
void, and Koplik releases Boise from any and all liability with respect to the
Agreement.
Very truly yours,
Koplik Paper Associates
By:/s/ Kenneth E. Koplik
---------------------
Kenneth E. Koplik
TELEX 420018 TWX (710)581-5392 FAX (212) 838-8790
<PAGE>
EXHIBIT P
JANUARY 1992
#3 PAPER MACHINE PRODUCTION - 3383 TONS
NOTE: THE # OF REELS IS BASED ON # OF PAPER TESTS THE DATE IS THE END OF RUN
OLD GRADE #
SPEC CODE WEIGHT DATE REELS
- ---------- -------------- -----
3002--05 123 9 01/01/92 12 SPEC CODE CONVERSIONS
3002--05 647 9 01/03/92 21 1000'S = MARKING TISSUE, ETC.
2101--17 647 12 01/04/92 4 2000'S = GOWNSTOCK & NAPKIN
2101--17 513 12 01/04/92 4 3000'S = TISSUE
2101--17 937 12 01/04/92 3 4000'S = FACIAL
2101--17 422 12 01/05/92 2 5000'S = WADDING
3002--05 423 9 01/06/92 15 6000'S = TOWEL
2202--16 181 10.5 01/06/92 4 7000'S = CARRIER
2301--16 181 11 01/06/92 3
2402--16 181 10.5 01/07/92 5 COLOR CODE CONVERSIONS
2002--03 181 14 01/07/92 7 100'S = WHITE
2402--16 181 10.5 01/07/92 6 200'S = MANILA, ETC.
2401--16 181 10.5 01/08/92 3 300'S = YELLOW
7001--06 123 10.5 01/08/92 2 400'S = BUFF
7001--06 123 10.2 01/08/92 2 500'S = GREEN
2402--16 181 10 01/08/92 4 600'S = BLUE
2101--17 123 12 01/08/92 3 700'S = PINK, MAUVE
3002--05 123 9 01/10/92 16 800'S = GRAY
2101--17 123 12 01/11/92 15 900'S = MELON, ETC.
2101--17 385 12 01/12/92 8
3201--10 123 11 01/13/92 3
3002--05 423 9 01/13/92 5
2101--17 423 12 01/14/92 5
4301--05 181 13 01/14/92 4
4101--05 181 13 01/14/92 2
2001--03 123 13.8 01/14/92 3
3002--05 123 9 01/15/92 6
4101--05 181 13 01/15/92 1
2001--03 123 13.8 01/15/92 1
3002--05 123 9 01/19/92 39
6102--13 123 11 01/20/92 19
3002--05 123 9 01/21/92 8
6101--13 123 11 01/22/92 5
2602--16 181 12 01/22/92 2
2601--16 181 12 01/22/92 1
2101--17 123 12 01/23/92 8
2402--16 181 10 01/23/92 5
2101--17 123 12 01/23/92 3
6101--13 123 11 01/24/92 2
3002--05 123 9 01/25/92 14
3201--10 123 11 01/26/92 19
6101--13 123 11 01/27/92 10
<PAGE>
3201--10 123 11 01/28/92 3
2002--03 181 14 01/28/92 2
3201--10 123 11 01/28/82 7
7001--06 123 10.5 01/29/92 3
3002--05 123 9 01/31/92 24
3201--10 123 11 01/31/92 2
3002--05 123 9 01/31/92 2
MARCH 1992
#3 PAPER MACHINE PRODUCTION = 3359 TONS
NOTE:
NOTE: THE # OF REELS IS BASED ON # OF PAPER TESTS THE DATE IS THE END OF RUN
OLD GRADE #
SPEC CODE WEIGHT DATE REELS
- ---------- ------------- -----
2101--17 423 12 03/01/92 7 SPEC CODE CONVERSIONS
3002--05 123 9 03/0292 6 1000'S = MARKING TISSUE, ET
4202--11 123 9 03/02/92 6 2000'S = GOWNSTOCK & NAPKIN
3002--05 123 9 03/03 92 15 3000'S = TISSUE
1601--17 181 16 03/04/92 17 4000'S = FACIAL
2001--03 123 13.8 03/05/92 4 5000'S = WADDING
3002--05 123 9 03/06/92 11 6000'S = TOWEL
3002--05 759 9 03/06/92 4 7000'S = CARRIER
2101--17 647 12 03/06/92 6
6902--13 123 13 03/08/92 21 COLOR CODE CONVERSIONS
6901--13 123 13 03/09/92 7 100'S = WHITE
7001--06 123 10.2 03/09.92 5 200'S = MANILA, ETC.
2101--17 123 12 03/09/92 5 300'S = YELLOW
6901--13 123 13 03/10/92 17 400'S = BUFF
1702--17 123 16.6 03/11/92 8 500'S = GREEN
2001--03 123 13.8 03/11/92 4 600'S = BLUE
7001--06 123 10.5 03/11/92 2 700'S = PINK, MAUVE
4202--11 123 9 03/12/92 4 800'S = GRAY
3002--05 123 9 03/12/92 3 900'S = MELON, ETC.
6101--13 123 12 03/14/92 24
3002--05 123 9 03/15/92 5
6101--13 123 11 03/15/92 9
3002--05 123 9 03/17/92 11
3201--10 123 11 03/17/92 5
2101--17 123 12 03/18/92 6
2101--17 382 12 03/18/92 4
3002--05 385 9 03/18/92 1
3002--05 423 9 03/18/92 1
2101--17 423 12 03/18/92 4
3002--05 937 9 03/19/92 1
3002--05 647 9 03/19/92 2
4301--05 181 13 03/19/92 5
3201--10 123 11 03/20/92 8
4202--11 123 9 03/20/92 5
3002--05 123 9 03/21/92 6
2202--16 181 10 03/23/92 21
6601--04 123 13.7 03/23/92 4
-2-
<PAGE>
6801--05 123 15.3 03/23/92 3
2202--16 181 10 03/24/92 7
3002--05 123 9 03/24/92 6
2202--16 181 10 03/26/92 20
2101--17 123 12 03/26/92 2
2402--16 181 10 03/26/92 2
2201--16 181 10 03/27/92 12
2202--16 715 10 03/28/92 9
2202--16 647 10 03/29/92 8
2201--16 647 10 03/29/92 4
2201--16 385 10 03/30/92 2
6101--13 123 12 03/31/92 17
3002--05 123 9 03/31/92 3
-3-
<PAGE>
EXHIBIT Q
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS AGREEMENT, made and entered into this 23rd day of November, 1992, by
and between BOISE CASCADE CORPORATION ("Boise Cascade") and AMERICAN TISSUE
MILLS OF OREGON, INC. ("American Tissue").
W I T N E S S E T H:
WHEREAS, Boise Cascade and American Tissue have entered into an Agreement
with even date herewith (the "Main Agreement"); and
WHEREAS, the Main Agreement requires Boise Cascade to assign to American
Tissue and American Tissue to assume Boise Cascade's Tissue Agreement, as
defined below.
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions. The term "Tissue Agreement," for purposes of this
Agreement, shall mean the November 11, 1992, tissue agreement between Boise
Cascade and The Veratex Corporation and TIDI Products, Inc. Boise Cascade
represents that a copy of the Tissue Agreement, together with all extensions,
modifications, and amendments thereto, if any, is attached hereto as Exhibit Q1.
American Tissue's assumption of the Tissue Agreement, if any, shall relate only
to obligations and duties which occur and arise or which relate to events which
occur and liabilities which arise from and after the date of the assignment.
2. Consents to Assignment. Boise Cascade shall use its best efforts to
promptly obtain the required consent to the assignment of the Tissue Agreement.
Prior to the assignment, American Tissue will sell tissue paper to Boise Cascade
on the
<PAGE>
same terms as Boise Cascade is obligated to sell or perform under the Tissue
Agreement and Boise Cascade shall, at American Tissue's option, pay to American
Tissue or credit American Tissue an amount equal to the purchase price therefor,
inclusive of sales tax. If Boise Cascade is unable to obtain consent to the
assignment, American Tissue will sell tissue paper to Boise Cascade on the same
terms as Boise Cascade is obligated to sell or perform under the Tissue
Agreement for the remainder of the term thereof and Boise Cascade shall pay
American Tissue therefor as set forth in the preceding sentence.
3. Further Assurances. Each party hereby promises to deliver, upon request
of the other party, all such additional assignments, assumptions, and other
documents which may be reasonably necessary and convenient to accomplish the
intent of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the date set forth above.
BOISE CASCADE CORPORATION
By_____________________________
Title__________________________
AMERICAN TISSUE MILLS
OF OREGON, INC.
By_____________________________
Title__________________________
-2-
<PAGE>
Exhibit Q-l
THE VERATEX CORPORATION
TIDI PRODUCTS, INC.
c/o 1304 East Maple Road
Troy, Michigan 48084
313-588-2970; FAX 313-588-1779
11/11, 1992
Mr. J. Ray Barbee
Boise Cascade, White Paper Division
1800 SW First Avenue (97201-5324)
P.0. Box 1414
Portland, Oregon 97207
Re: TISSUE AGREEMENT
Dear Mr. Barbee:
As discussed Mr. John S. Sitter, President of Sitter & Associates, among
The Veratex Corporation ("Veratex"), Tidi Products, Inc. ("Tidi"), and your
company, Boise Cascade Corporation, White Paper Division ("Boise Cascade"), set
forth below are the terms and conditions upon which Boise Cascade shall sell,
and Veratex and Tidi shall purchase, certain tissue products:
1. Product -- Grade and Quality. The grade of the product or goods in
question is the so-called Boise Tissue as currently manufactured at your Boise,
St. Helens, Oregon location, No. 3 Paper Machine, 1 and 2-ply, in both white and
the other colors described in Paragraph 4 below (the "Tissue
<PAGE>
Mr. J. Ray Barbee
Vice President and General Sales Manager
Boise Cascade, White Paper Division
11/11, 1992
Page 2
Products"). Upon delivery, the Tissue Products shall be in rolls with a maximum
outside diameter of forty-five (45) inches and shall be of a quality conforming
to the prevailing specifications as shall be agreed upon from time to time by
the parties to this agreement.
2. Contract period. This agreement shall apply to the period beginning on
the date of your confirmation and agreement hereof and ending on March 31, 1993.
3. Quantity. Boise Cascade agrees to sell such amounts of the Tissue
Products as Veratex and/or Tidi shall collectively request, provided that in no
event shall Boise Cascade be obligated to sell an aggregate of more than four
hundred and seventy-five (475) short tons of the Tisette Products per month.
4. Price. The price for the Tissue Products shall be as set forth below.
(a) Veratex. The price for the Tissue Products sold to Veratex shall be as
follows:
White $815.00/ST F.O.B. Del'd to Veratex
Beige, Blue, Green,
Peach and Yellow $890.00/ST F.O.B. Del'd to Veratex
Mauve and Grey $895.00/ST F.O.B. Del'd to Veratex
The foregoing prices are collectively referred to as the "Veratex Prices".
(b) Tidi. The price for the Tissue Products sold to Tidi shall be as
follow:
White $825.00/ST F.O.B. Boise Mill
Beige, Blue, Green, $840.00/ST F.O.B. Boise Mill
Peach, and Yellow
Mauve and Grey $845.00/ST F.O.B. Boise Mill
The foregoing prices are collectively referred to as the "Tidi Prices".
5. Delivery.
<PAGE>
Mr. J. Bay Barbee
Vice President and General Sales Manager
Boise Cascade, White Paper Division
11/11, 1992
Page 3
(a) Veratex. As indicated in Paragraph 4(a) above, the Tissue Products sold
to Veratex will be delivered F.O.B. to Veratex located at 19000 Fitzpatrick,
Detroit, Michigan. Accordingly, Boise Cascade shall bear all the
responsibilities and costs up to the point of delivery, including without
limitation, insurance, risk of loss, transportation and shipping costs. In
addition to the foregoing, it is expressly acknowledged and agreed that Boise
Cascade shall pay when due the off-site storage costs incurred by Veratex with
respect to any bulk purchase orders made hereunder by Veratex as charged from
time to time by Burnham or other warehouses for the storage of any such bulk
purchase orders, provided that, in the event Boise Cascade fails to timely pay
any such costs, Veratex shall be entitled to pay same on behalf of Boise Cascade
and deduct same from any payments due Boise Cascade under this agreement.
(b) Tidi. As indicated in Paragraph 4(b) above, the Tissue Products sold to
Tidi will be F.O.B. Boise Cascade's mill located at 1300 Kaster Road, St.
Helens, Oregon.
6. Payment. One hundred percent (l00%) of the Veratex Prices and the Tidi
Prices shall be Payable net cash thirty (30) days after date of invoice or
shipment (whichever is later). It is expressly acknowledged and agreed that
Veratex shall be obligated to make payments to Boise Cascade for Tissue
Products delivered to Veratex pursuant to Paragraph 5 hereof and, likewise, Tidi
shall buy obligated to make payments to Boise Cascade for Tissue Products
delivered to Tidi pursuant to Paragraph 5 hereof.
7. Title. Although Boise Cascade shall continue to bear the
responsibilities and costs described in Paragraph 5 of this letter agreement,
ownership and title to the Tissue Products shall be transferred from Boise
Cascade to Veratex or Tidi, as the case may be, at such time as Boise Cascade
completes its performance under this agreement (or in such other manner as shall
be mutually agreed upon in writing by the parties from time to time) with
respect to the physical delivery of the Tissue Products or at such time as full
payment therefor is tendered to Boise Cascade, whichever is the earlier to occur
(which, for purposes of this agreement, includes payment of the applicable
Veratex Prices and Tidi Prices due Boise Cascade hereunder, less any applicable
credits due Veratex and/or Tidi hereunder).
8. Miscellaneous.
(a) Entire Agreement; Amendment. This letter agreement is the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof. No representation, inducement, agreement, promise, or
understanding altering, modifying, taking from or adding to the terms and
<PAGE>
Mr. J. Ray Barbee
Vice President and General Sales Manager
Boise Cascade, White Paper Division
11/11, 1992
Page 4
conditions hereof shall have any force and effect unless the same is in writing
and validly executed by the parties hereto. In connection therewith, this
agreement shall supersede any purchase order, or any inconsistency in a purchase
order, issued subsequent to the date hereof unless the same is in writing and
validly executed by the parties hereto.
(b) Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed to have been duly given if
physically delivered, telephonically transmitted via telecopier or other similar
means or three (3) days after having been deposited in the United Stares Mail,
as certified mail with return receipt requested and with postage prepaid,
addressed to the recipient as follows:
If to Boise Cascade:
Boise Cascade Corporation, White Paper Division
1800 SW First Avenue (97201-5324)
P.0. Box 1414
Portland, Oregon 97207
503-790-9721; FAX 503-790-9508
Attention Mr. J. Ray Barbee, Vice President
and General Sales Manager
If to Veratex or to Tidi:
c/o The Veratex Corporation
1304 East Maple Road
Troy, Michigan 48084
313-588-2970; FAX 313-588-1779
Attention: President
When a notice is sent hereunder, a courtesy copy shall be sent to:
Sitter & Associates
224 South Glendora, Suite B
Glendora, California 91740
818-9l4-4555; FAX 818-963-5481
Attention: Mr. John S. Sitter
The addressee so indicated for any party ray be changed by similar written
notice.
(c) Force Majeure -- Excuse by Failure of Presupposed Conditions. The
parties acknowledge and agree that, with regard to Section
<PAGE>
Mr. J. Ray Barbee
Vice President and General Sales Manager
Boise Cascade, White Paper Division
11/11, 1992
Page 5
2-615 of the Uniform Commercial Code as in effect from time to time in the State
of Michigan, being MCLA 1440.2615, the occurrence of a work stoppage or strike,
the occurrence of a material breakdown in the No. 3 Paper Machine (which cannot
be repaired in a reasonable time or at a reasonable expense) or of a material
decline in demand by third parties for the Tissue Products or related products
manufactured on the No. 3 Paper Machine (which continues for an unreasonable
period of time) shall constitute a contingency the non-occurrence of which was a
basic assumption on which this agreement was made.
(d) Taxes. Except for applicable sales taxes, which shall be the
responsibility of Veratex and/or Tidi, as the case may be, Boise Cascade shall
be responsible for all other applicable taxes, including all federal or state
income taxes, excises, assessments, impositions, tariffs, import duties, or
similar charges now or hereafter imposed by any taxing jurisdiction arising from
the manufacture, storage (not including the off-site storage of the Tissue
Products described under Paragraph 5(a) above which shall be the responsibility
of Veratex), transportation (up to the point of delivery as contemplated in this
agreement), or sale of the Tissue Products under this agreements
(e) Warranty. Boise Cascade represents and warrants to Veratex and Tidi
that it has and will convey good title, to the Tissue Products sold and
delivered hereunder free and clear of all liens, claims and encumbrances and
that the Tissue Products sold and delivered hereunder will be at least
commercially equal to the quality of such grade which Boise Cascade has
traditionally run on the No. 3 Paper Machine. EXCEPT AS SET FORTH HEREIN, BOISE
CASCADE MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED AS
TO THE MERCENTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, CONDITION, OR ANY
OTHER MATTER WITH RESPECT TO THE TISSUE PRODUCTS.
(f) Parties in Interest. This Agreement shall be binding upon and inure to
the benefit it of, and be enforceable by, the parties hereto and their
respective successors and assigns.
(g) Assignment.
(i) By Veratex and/or Tidi. Veratex and/or Tidi may assign their rights and
obligations under this agreement in connection with the sale or other
disposition of all or substantially all of their business and assets or upon
Boise Cascade's prior written consent, which consent shall not be unreasonably
withheld; provided that, Boise Cascade shall be deemed to have reasonable
grounds to withhold its consent to an assignment to a person engaged, directly
or indirectly, in the same business in which Boise Cascade is currently engaged
in and provided further that, Boise Cascade's prior written
<PAGE>
Mr. J. Ray Barbee
Vice President and General Sales Manager
Boise Cascade, White Paper Division
11/11, 1992
Page 6
consent shall not be required for any assignment by Veratex and/or Tidi to
another person which controls, is controlled by, or is wider common control with
Veratex and/or Tidi.
(ii) By Boise Cascade. Boise Cascade may assign its rights and obligations
under this agreement in connection with the sale or other disposition of all or
substantially all of its business and assets or upon Veratex's and Tidi's prior
written consent, which consent shall not be unreasonably withheld; provided
that, Veratex and/or Tidi shall be deemed to have reasonable grounds to withhold
their consent to an assignment to is person engaged, directly or indirectly, in
the same business in which Veratex and/at Tidi are currently engaged; and
provided further that, Veratex's and/or Tidi's prior written consent shall not
be required for any assignment by Boise Cascade to another person which
controls, is controlled by, or is under control with Boise Cascade.
(h) Counterparts. This agreement may be executed in any number of
counterparts, each of which shall be treated as an original but all of which,
collectively, shall constitute a single instrument.
(i) Waiver. Unless agreed in writing, the failure of any party, at any
time, to require performance by the other of any provisions hereunder shall not
affect his or its right thereafter to enforce the same, nor shall a waiver by
any party of any breach of any provisions hereof be taken or held to be a waiver
of any other breach of any term or provision of this agreement.
(5) Severability. In the event that any one or more of the provision of
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
(k) Construction: Govern Law and Captions. Except as otherwise provided
herein, this agreement shall be governed by and construed in accordance with the
laws of the State of Michigan, including, without limitation, the provisions of
the Uniform Commercial Code as in effect from time to time in the State of
Michigan, without regard to its rules regarding choice of law. The captions of
the paragraphs and the subparagraphs have been inserted as a matter of
convenience and reference only and shall nor control or affect the meaning or
construction of this agreement.
* * *
<PAGE>
Mr. J. Ray Barbee
Vice President and General Sales Manager
Boise Cascade, White Paper Division
11/11, 1992
Page 7
If Boise Cascade is in agreement with the foregoing terms and conditions,
please so indicate such agreement by signing and returning copy of this letter
agreement whereupon this letter will constitute agreement between Boise Cascade,
on the one hand, and Veratex and Tidi, on other hand, with respect to the
subject matter thereof.
Very truly yours,
THE VERATEX CORPORATION
By: /s/ [ILLEGIBLE]
-------------------
Its: Treasurer
TIDI PRODUCTS, INC.
By: /s/ [ILLEGIBLE]
--------------------
Its: Treasurer
Confirmed and Agreed:
BOISE CASCADE, WHITE PAPER DIVISION
/s/ J. Ray Barbee
By:---------------------------------
Its: Vice President
Dated: 11/11, 1992
<PAGE>
ADDENDUM TO TRUST DEED
AMONG: AMERICAN TISSUE MILLS OF OREGON, INC., ("Grantor")
a New York Corporation
AND: TICOR TITLE INSURANCE COMPANY ("Trustee")
AND: BOISE CASCADE CORPORATION, a Delaware
Corporation ("Beneficiary")
The following is incorporated into the Trust Deed to which this Addendum is
attached, as if fully set forth therein:
This Trust Deed shall not increase any obligations of Grantor under the
Agreement; rather this Trust Deed is given solely to assure Beneficiary's
security interest in the Machine. Beneficiary has agreed to subordinate its lien
on the Machine under certain circumstances to the lien of Grantor's other
lenders subject to the terms of the Agreement, solely with respect to such
lenders; this Trust Deed shall not be subordinate to any other liens. The
Agreement, including all terms, conditions, and exhibits thereof are
incorporated herein by this reference. Upon the default by Grantor under the
Agreement and failure to cure such default within any applicable cure period,
Beneficiary may foreclose upon Grantor's interest in the Machine in accordance
with applicable law. Grantor's obligations under the Agreement shall be fully
performed not later than December 31, 2012 (or 180 days thereafter* if removal
of the Machine is to occur following expiration of the Agreement).
*subject to force majeure as set forth in Section 16 of the Agreement
<PAGE>
EXHIBIT A
NO. 3 MACHINE
The No. 3 Paper Machine located at the Mill, more particularly described as
all machinery, equipment and component parts located above the sole plate and
all spare parts at the Mill relating exclusively to the No. 3 Paper Machine
including, without limitation, the following:
Beloit 258" Fourdrinier tissue paper making machine No. 3 consisting of
steel air cushioned controlled flow stock inlet, 5 rectifier and distributing
rolls, PH meter, wet end control panel, removable suspended fourdrinier section
with 258" x 73' wire, 3 suction boxes, rubber covered wire rolls with doctors,
32" suction couch roll, 48" brass suction breast roll, 28" rubber covered
pressure roll, 32" top suction press, suction roll on 32" rubber covered roll,
rubber covered felt rolls, 32" rubber covered second press roll on 40" rubber
covered suction roll, 3 felt guides and stretchers for 262" x 108' and 262" x
71' wet felts, press section control panel, 12' Yankee dryer, two 40" rubber
covered suction pressure rolls, suction box, Beloit high velocity hood,
pneumatic loaded skinning, creping and cleaning doctors, dry end control board,
drum reel with 36" drum and sliding shaft, roll lowering device, reel control
panel, unwind stand with direct double belt drive, pneumatic pressure device,
iron carrier roll, 2-drum slitter and 252" rewinder with galvanized iron hood,
pneumatic roll transfer and hoist, 21" x 40' roller bed belt conveyor, control
board for rewinder, control
<PAGE>
board for transfer conveyor and hoist, pneumatic roll breaker and ejector,
3-stop holding table, together with all motors, drives, pumps, stock preparation
facilities, motor generator sets, compressors, cranes, hoists, process piping,
process wiring, spare parts, furniture and apparatus (including wire stringing
device, skids, tables, hand tools, lockers, storage racks, miscellaneous
equipment), all being located in No. 3 Machine Building; also spare parts and
apparatus and equipment auxiliary to and supporting the operation of No. 3
Machine wherever the same be situated.
The following spare parts:
Reducers Storage Reference Number
- -------- ------------------------
1 - #3 Rectifier Roll 443-29-040
1 - Head Box Rectifier Roll 1 & 2 443-29-017
1 - #3 Saveall Repulper 443-92-020
1 - Suction Couch Roll 443-92-051
1 - Top & Bottom Cal Roll Dr. 443-92-053
1 - Reel Drive 443-92-052
1 - Wire Turning Roll 443-92-180
1 - Suction Press and Top Press 443-92-057
1 - Bottom Press Roll 1st 443-92-058
1 - Calender Drive 443-80-030
Pumps
- -----
Semens 505 Vac. Pump
Fans
- ----
Wet End Hood Exhaust 853-26-075
<PAGE>
Miscellaneous
Rotating Ass. For Fan Pump
Gears to rebuild Yankee Dryer gearbox
H-3 Core Cutter
Roll Wrap equipment
Spare Yankee Motor 1250HP/900 RPM Motor #1347
8 - Modified 2300 volt starter
1 - South End Motor Generator set.
Rolls
1 - Yankee Dryer
1 - Couch Roll 1 - Pressure Roll Top - 301/40" dia.
2 - Pressure Roll Bottom - 301 and 304/40" dia.
2 - Combine Cal Plane - 316 and 323/27.672 dia.
1 - #1 Wire Roll Hand - 31003/20" dia.
1 - #2 Wire Roll Stretch - 31101/20" dia.
3 - Felt Rolls 33015, 33018 and 33103/18.750 dia.
1 - Mt. Hope Winder 7" dia.
Rolling Stock
1 - #6 Grab Truck
1 - #8 Tow Tractor
1 - #11. Tow Tractor
24 - Roll Carts (makes two trains)
1 - #3 Lift Truck
<PAGE>
[GRAPHIC OMITTED]
AREA EMERGENCY EVACUATION MAP
<PAGE>
EXHIBIT B
All of that real property together with the tenements, hereditiments and
appurtenances situate, lying, and being in Columbia County, State of Oregon,
dounded and particularly described as follows, to-wit;
Parcel: A parcel of land in the Thomas H. Smith Donation Land Claim No. 40
In Sections 9 and 10, Lot 7 of said Section 9, and Lots 1 and 2 of said
Section 10, all in Township 4 North, Range 1 West of Willamette Meridian,
Columbia County, Oregon, more particularly described as follows:
Beginning at a point in said Lot 7 which Is 1425.31 feet distant South 190
17' 25" West from the Southwesterly center of Block 70 in the center St.
Helens, Columbia County, Oregon; thence South 68(degrees) 51' East for a
distance of 174.09 feet to the most Southeasterly corner of Terrace Street
in Hawley Addition to St. Helens, Oregon; thence North 29(degrees) 00' East
along the most Easterly line of Terrace Street for a distance of 356.14
feet to the most Easterly corner of said Terrace Street; thence North
61(degrees) 00' West along the Northeasterly line of said Terrace Street
for a distance of 420.0 feet to its intersection with the Northeasterly
prolongation of the Northwesterly line of Lot 9 of Block 12, said Hawley
Addition, said point of intersection being marked with an iron pipe; thence
South 68(degrees) 51' East for a distance of 1,193.31 feet to a point
marked by an iron pipe on the Northwesterly Line of the right of way of
Spokane, Portland and Seattle Railway Company; thence South 21(degrees) 09'
West along said Northwesterly right of way Line for a distance of 310.10
feet to a point which is 50 feet distant North 03(degrees) 51'West from a
point on the center line of Spokane, Portland and Seattle Railway Company's
railroad, which is located by beginning at the point of the intersection of
the center line of Columbia Street with the Southerly line of Cowlitz
Street in said City of St. Helens and running thence South 16(degrees) 57'
East for a distance of 670 feet to the point of beginning of a 1,910.08
foot radius curve to the right, Southerly along said curve through a
central angle of 39(degrees) 00' for a distance of 1,270 feet to the end of
said curve, and South 21(degrees) 09' West tangent to said curve for a
distance of 2,827.8 feet thence South 68(degrees) 51' East for a distance
of 25 feet to a point 25 feet distant Northwesterly from, when measured at
right angles to, said railroad center line; thence South 21(degrees) 09'
West parallel to said center line for a distance of 1,671.5 feet to a
point; then South 68(degrees) 51' East a distance of 25 feet to the center
line of the Spokane, Portland and Seattle Railway Company right way; thence
Southwesterly along the center line of the right of way of Spokane,
Portland and Seattle Railway Company to its intersection with a line
bearing South 68(degrees) 51' East from a point which is 2,191.00 feet
distant South 21(degrees) 09' West from the point of beginning; thence
North 68(degrees) 5' West to said point, which is 2191.00 feet distant
South 21(degrees) 09' West from the point of beginning; thence continuing
North 68(degrees) 51' West (or a distance of 1,093.3 feet to a point in the
center of Milton Creek, thence Northerly along the center of said Milton
Creek as follows: North 42(degrees) 15' East for a distance of 122.4 feet;
North 61(degrees) East for a distance of 292.6 feet; North 42(degrees) 47'
East for a distance of
<PAGE>
-2-
213.6 feet; North 17(degrees) 57' West for a distance of 587.0 feet: North
37 (degrees) 22' East for a distance of 210.0 feet; North 4 (degrees) 22'
East for a distance of 225.0 feet, and North 60 (degrees) 37' West for a
distance of 119.1 feet to the point of intersection with the Southwesterly
prolongation of the center line of Fir Street in said in said Hawley
Addition; thence North 29(degrees) 00' East along said Southwesterly
prolongation for a distance of 23.5 feet to a point on the South line of
Brook Street in said Hawley Addition; thence Southeasterly along said South
line of Brook Street as follows: South 61(degrees) 00' East a distance of
490.0 feet; South 29(degrees) 00' West for a distance of 50.0 feet, and
South 61(degrees) 00' East for a distance of 799.02 feet to a point which
is 969.16 feet distant South 21(degrees) 09' West from the point of
beginning; thence North 21(degrees) 09' East along the Southeasterly line
of said Hawley Addition for a distance of 969.16 feet to the point of
beginning, EXCEPT that portion lying within the bounds of the Spokane,
Portland and Seattle Railway Company right of way.
Parcel 2: A parcel of land in the Thomas H. Smith Donation Land Claim No.
40 in Sections 9 and 10 and Lots 1 and 2 of said Section 10, all in
Township 4 North, Range 1 West of the Williamette Meridian, Columbia
County, Oregon, more particularly described as follows:
Beginning at a point in said Lot 1 which Is 2,108.59 feet distant South and
413.1 feet distant East from the Southwesterly corner of Block 70 of the
City of St. Helens, Columbia County, Oregon; thence North 68(degrees) 51'
West for a distance of 25 feet to the true point of beginning of this
description, said true point of beginning being also a point 25 feet
distant South 68(degrees) 51' East from the center line of the railroad of
Spokane, Portland and Seattle Railway Company at a point which is located
by beginning at the point of intersection of the center line of Columbia
Street with the Southerly line of Cowlitz Street in said City of St. Helens
and running thence South 16(degrees) 57' East for a distance of 670 feet to
the point of beginning of a 1,910.08 foot radius curve to the right; thence
Southerly along said curve through a central angle of 38(degrees) 06' for a
distance of 1270 feet to the end of said curve, the end of said curve being
hereinafter referred to as "Point A', and thence South 21(degrees) 09' West
tangent to said curve for a distance of 3,317.7 feet; thence from the true
point of beginning South 210 09' West parallel with said railroad center
line for a distance of 1,171.5 feet to a point; thence North 68(degrees)
51' West a distance of 25 feet to the center line of the Spokane, Portland
and Seattle Railway Company right of way; thence Southwesterly along the
center line of the right of way of Spokane, Portland and Seattle Railway
Company to its intersection with a line bearing South 68(degrees) 51' East
from a point, hereinafter referred to as "Point B", which is 2,191.00 feet
distant South 21(degrees) 09' West from & point which is 1425.1 feet
distant South 19(degrees) 17'25" West from the Southwesterly corner of said
Block 70 of the City of St. Helens; thence South 68(degrees) 51' East to a
point on the low water line on the West bank of the Willamette Slough which
is 1208.20 feet distant from Point B; thence Northerly along said low water
line as follows. North 29(degrees) 53' East for a distance of 505.87 feet,
thence North 30(degrees) 21' East for a distance of 700 feet, and thence
North 27(degrees) 31' East for a distance of 603.70 feet to a point 389
feet distant South 68(degrees) 51' East from the true point of beginning
thence South 68(degrees) 51' East for a distance of 206 feet to a point;
thence North 3(degrees) 42' East for a distance of 450.3 feet to a point on
the low water 1ine or said West bank; thence North 17(degrees) 20' East
along said low water line for a distance of 366.8 feet; thence * North
68(degrees) 51' West for a distance of 425.5 feet. to a point marked by an
iron pipe on the Southeasterly line of the right way of Spokane, Portland
and Seattle Railway Company which is 50 feet distant South 68(degrees) 51'
East from the center line of the railroad of Spokane, Portland and Seattle
Railway Company at a point which is 2,517.7 feet distant South 21(degrees)
09' West from Point A; thence South 21(degrees) 09' West along said
Southwesterly right of way line for a distance of 100.0 feet; thence North
68(degrees) 51' West distance or 25 feet; thence South 21(degrees) 09' West
parallel with center ??? said railroad for a distance of 700 feet to the
true point of beginning ???? that portion lying within the bounds of the
Spokane, Portland and Seattle Railway Company right of way.
<PAGE>
-3
Parcel 3: Blocks 4, 10, 11, 12 and 13, Hawley Addition to St. Helens,
Columbia County, Oregon.
Parcel 4: Lots 1, 2, 3, 4, 5, 6, 7, and 8, Block 7, Hawley Addition to St.
Helens, Columbia County, Oregon.
Parcel 5: All tide and overflow lands fronting, abutting, and lying
Easterly of Parcel 2 hereinabove described.
Parcel 6: All booms, wharfs, docks, bridges, buildings, structures,
conveyors, hoists sewer and effluent discharge pipes, water mains and
suction pipes, conduits, conductors, wires, and all appurtenances thereto
belonging, owned by the Grantor herein lying and being Easterly of the
upland portions of Parcel 2 hereinabove described.
Parcel 7: All waterfront, riparian, boom, dock, water appropriation, and
sewage or other discharge rights and privileges with respect to the river
frontage lying and being Easterly of the upland portion of Parcel 2
hereinabove described.
Parcel 8: All walk or driveways, conveyors, sewer and effluent pipes,
culverts, water mains, conduits, conductors, wins, trackage, and all
appurtenances thereto belonging, under, upon, over, and across the railroad
right of way lying between Parcel 1 and Parcel 2 hereinabove described.
Parcel 9: All rights of the Grantor hereinunder that certain indenture
dated August 10, 1931 and recorded May 7, 1932, in Book 54, at page 260,
Deed Records of said Columbia County, between Chas. R. McCormick Lumber Co.
of Delaware and St. Helens Pulp and Paper Company.
Parcel lO: All and any other property, rights, licenses, privileges,
permits, easements, and rights of way, not enumerated above, acquired by
the Grantor herein or its predecessors in interest, in connection with the
use, ownership, or possession of the lands described in Parcel 1 and Parcel
2 hereinabove a described.
Excepting therefrom the following described parcels of property:
<PAGE>
Parcel 1
Beginning at the intersection of the South line of the H.M. Knighton
Donation Land Claim with the Southerly extension of the West line of Block
70, St. Helens, as per plat on file and of record in the Clerk's office of
Columbia County, Oregon in Section 1, Township 4 North, Range 1 West,
Williamette Meridian, Columbia County, Oregon, said point being the
Northwest corner of the first parcel described in the City of St. Helens
tract in Deed Book 177 at page 23. Deed Records of Columbia County Oregon:
thence along the Westerly line of said City of St. Helens tract South______
East a distance of 451.03 feet: thence South 8(degrees) 19' West a distance
of 590.38 feet to the South line of Section 3, a distance of 219.26 feet;
thence leaving said Westerly line of the City of St. Helens tract North
45(degrees)07'53" West a distance of 79.28 feet; thence North
36(degrees)41'53" West a distance of 322.77 feet; thence North
28(degrees)51'40" East a distance of 220.50 feet; thence North
29(degrees)12'47" East a distance of 119.37 feet to a point on the
Southerly extension of the East line of Block 85, St. Helens; thence North
16(degrees)57'23" West along said Southerly extension of the East line of
Block 85 a distance of 208.12 feet to said South line of said H.M. Knighton
Donation Land Claim; thence North 71(degrees)30' East along said South line
of the H.M. Knighton Donation Land Claim a distance of 80.03 feet to the
True Point of Beginning. CONTAINING 6.86 acres more or less.
Subject to and excepting all easements, reservations, restrictions and
mineral rights of record.
This conveyance shall be subject to Grantor's right of reverter as follows:
If the property is determined by the Grantee or any successor fire
protection provider to be excess property or is not used for fire related
purposes for a period of three (3) years, and there are no written development
plans to use or continue to use the property for a fire training site or other
fire prevention or
Bargain and Sale Deed with Right of Reverter - 1
<PAGE>
-5-
Parcel 2
Beginning at the point of intersection with the Northwesterly right-of-way
line of the S.P. & S. Railroad and the Northwesterly line of Government Lot
4 in Section 3, Township 4 North, Range 1 West of the Willamette Meridian,
Columbia County, Oregon; thence Southwesterly along the Northwesterly line
of said Government Lot 4 and Northwesterly line of Government Lot 6 of said
Section 3, 1,352.93 feet to the intersection of the prolongration
Southeasterly of the Northeasterly right-of-way line of 9th Street and the
Northwesterly line of said Government Lot 6; thence South 55(degrees)59'
East, 451.03 feet; thence South 8(degrees)19' West 593.09 feet to the South
line of said Section 3; thence West along the South line of said Section 3,
300 feet; thence South 21(degrees)09' West, 226.63 feet; thence South
68(degrees)51' East, 750 feet to the Northwesterly right-of-way line of
said S.P. & S. Railroad; thence North 21(degrees)09' East along the
Northwesterly right-of-way line of said S.P. & S. Railroad right-of-way,
1,876.84 feet to the point of beginning; and
Part of Lot 1, Section 10, Township 4 North, Range 1 West of the Willamette
Meridian, Columbia County, Oregon described as follows:
Beginning at the Northeast corner of Tract 9-2 conveyed to St. Helens Paper
Corporation, a Delaware corporation, by deed recorded May 7,
1964 in Book 154, page 896, Deed Records of Columbia County, Oregon; thence
South 21(degrees)09' West, 100.86 feet; thence South 41(degrees)42' West,
128.16 feet; thence South 21(degrees)09' West 84 feet; thence North
68(degrees)51' West, 415 feet; thence North 21(degrees)09' East 304.86 feet
to the Northwesterly line of said Tract 9-2; thence South 68(degrees)51'
East along the Northwesterly line of said Tract 9-2, 460 feet to the point
of beginning
Subject to:
1. Right, title and interest of the State of Oregon in and to that
portion of the above premises lying between ordinary high and low
water.
2. The rights of fishing, navigation and commerce in the State of Oregon,
the Federal Government and the public in and to that portion thereof
lying below the ordinary high water mark of the Columbia River.
3. A slope easement from St. Helens Pulp and Paper Co., an Oregon
corporation, to Chas. R. McCormick Lumber Co., of Delaware, a Delaware
corporation, recorded May 7, 1932 in book 54, page 260, Deed Records
of Columbia County, Oregon.
<PAGE>
ST. HELENS #3 TISSUE MACHINE
PROPOSED TERMS FOR CONTRACT OPERATING AGREEMENT
Boise Cascade will provide ongoing operations of the #3 Tissue machine to the
purchaser according to the terms described herein.
Pulp Supply Two grades of bleached kraft pulp will be provided by the St.
Helens mill to the purchaser. "Long fiber" composed of 100%
softwood chips will be offered at a price equivalent to 95% of
the average net selling price recognized by Boise Cascade's
Wallula, Washington, mill. This pricing formula passes market
pulp costs for freight, drying, and high brightness bleaching
costs on as savings to the purchaser, providing an economical
softwood pulp source.
"Blend fiber" composed of approximately 60% sawdust pulp and 40%
softwood chip pulp will be offered at a discount of 8% relative
to long fiber. This provides an economical filler pulp source to
the purchaser. Exhibit 1 shows historic and projected pulp costs
and compares to other pulp sources, where it can be seen that the
proposed pricing provides pulp to the purchaser at approximately
9% below average Southern Market Pulp pricing.
Quality specifications will be provided by Boise Cascade and will
be adhered to as part of the contract agreement. The purchaser
will have the right to utilize a mix of long fiber and blend
fiber as desired within broad levels to be established in the
contract agreement. Historic average of approximately 60% long
fiber and 40% blend fiber will be used for the proforma cost
projections in this document.
Direct Costs Cost which can be specifically attributed to the #3 tissue
machine will be charged directly to the purchaser. These include
operating and maintenance labor, maintenance materials, operating
supplies, natural gas, power (energy portion), and paper machine
additives.
<PAGE>
Indirect Costs Costs which cannot be directly attributed to the #3 tissue
machine and are shared by the various mill operations (including
#3) will be charged as a fixed annual fee of $3.99MM in 1993,
escalating annually with the GNP implicit price deflator as
calculated by DRI. These costs were determined as a percentage of
the production levels that tissue currently represents in
relation to the total mill. This percentage is 13.8% for costs
associated with papermaking only, and 6.1% for costs associated
with general mill operations.
Common facilities allocation is an estimate to cover fair share
of common facility costs.
Capital Costs Capital improvements for #3 tissue machine will be the
responsibility of the purchaser.
Production Average weight for tissue has been 4.7# on an 17" x 22" basis;
future estimates are on the same basis.
ST HELENS TISSUE PROFORMA COST
<TABLE>
<CAPTION>
---- ----- ---- ----- ---- ----- ---- ----- ---- -----
1988 $/TON 1989 $/TON 1990 $/TON 1991 $/TON 1992 $/TON
---- ----- ---- ----- ---- ----- ---- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PULP 19900 549 22650 643 22872 593 15012 411 13747 380
DIRECT COSTS
GAS/STEAM 790 22 813 23 938 24 900 25 947 26
ELECTRIC 822 23 832 24 960 25 926 25 953 26
ANALINES & CHEMS 434 12 442 13 514 13 494 14 449 12
D & A 3800 105 3914 111 4031 104 4152 114 4277 118
TOTAL DIRECTS 5846 161 6000 170 6443 167 6472 177 6626 183
INDIRECT COSTS 3360 93 3498 99 3641 94 3776 103 3874 107
TOTAL ALL ABOVE 29106 804 32149 913 32956 854 25260 692 24247 670
TISSUE VOLUME 36218 35206 38578 36520 36200
PULP TRANSFER PRICE-$/SADT 544 637 587 407 376
</TABLE>
<TABLE>
<CAPTION>
---- ----- ---- ----- ---- ----- ---- ----- ---- -----
1993 $/TON 1994 $/TON 1995 $/TON 1996 $/TON 1997 $/TON
---- ----- ---- ----- ---- ----- ---- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PULP 15137 418 18244 504 21826 603 19963 551 17477 483
DIRECT COSTS
GAS/STEAM 987 27 1058 29 1111 31 1166 32 1224 34
ELECTRIC 1108 31 1069 30 1110 31 1133 31 1676 46
ANALINES & CHEMS 538 15 562 16 587 16 613 17 639 18
D & A 4405 122 4537 125 4673 129 4813 133 4958 137
TOTAL DIRECTS 7037 194 7246 200 7481 207 7725 213 8497 235
INDIRECT COSTS 3987 110 4106 113 4233 117 4373 121 4531 125
TOTAL ALL ABOVE 26161 723 29596 818 33542 927 32061 886 30504 843
TISSUE VOLUME 36200 36200 36200 36200 36200
PULP TRANSFER PRICE-$/SADT 414 499 597 546 478
</TABLE>
We consent to the reference to our firm under the caption "Experts" and in the
section entitled "Selected Historical Financial Data" and to the use of our
report dated April 23, 1999, in Amendment No. 3 of the Registration Statement
(Form S-4 No. 333-88017), and related Prospectus of American Tissue Inc.
/s/ ERNST & YOUNG LLP
San Francisco, California
February 4, 2000
