<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT TO APPLICATION OR REPORT
FILED PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
PLUM CREEK TIMBER COMPANY, L.P.
AMENDMENT NO. 1
The undersigned Registrant hereby amends the following items of its
Annual Report for 1993 on Form 10-K as set forth in the pages attached hereto:
<TABLE>
<S> <C>
Cover Page Disclosure of Delinquent Filers
Item 10 Directors and Executive Officers of the Registrant
Item 11 Executive Compensation
Item 12 Security Ownership of Certain Beneficial Owners
and Management
Item 13 Certain Relationships and Related Transactions
Item 14 Exhibits, Financial Statement Schedules, and Reports on Form 8-K
</TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company, L.P.,
its General Partner
Date: April 14, 1994 By: DIANE M. IRVINE
------------------------------------
Diane M. Irvine,
Vice President and Chief
Financial Officer
<PAGE> 2
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-10239
PLUM CREEK TIMBER COMPANY, L.P.
(Exact name of registrant as specified in its charter)
999 Third Avenue, Seattle, Washington 98104-4096
Telephone: (206) 467-3600
Organized in the I.R.S. Employer
State of Delaware Identification No.
91-1443693
Securities registered pursuant to Section 12(b) of the Act:
Depositary Units, Representing Limited Partner Interests
The above securities are registered on the New York Stock Exchange.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to
filing requirements for the past 90 days. Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the
Part of the Form 10-K into which the document is incorporated: None.
<PAGE> 3
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS OF THE GENERAL PARTNER OF THE REGISTRANT
The following seven persons are currently Directors of PC Advisory
Corp. I ("Corp. I"), a Delaware corporation and the indirect general partner of
Plum Creek Management Company, L.P. (the "General Partner"), a Delaware limited
partnership, which is the general partner of the Registrant. The seven were
elected by unanimous written consent of the stockholders of Corp. I to hold
office until the Annual Meeting of Stockholders in 1994 and until their
successors are duly elected and qualified.
Ian B. Davidson (Age 62) -- Mr. Davidson was elected a Director of
Corp. I in December 1992 and is a member of both the Audit Committee and the
Compensation Committee and is Chairman of the Conflicts Committee of the Board
of Directors. Since 1970, Mr. Davidson has been Chairman and Chief Executive
Officer of D. A. Davidson & Co. Mr. Davidson also serves as a Director of
Energy West, Great Falls Capital Corp., the DADCO Companies, and on the Board
of Governors of the Pacific Stock Exchange.
George M. Dennison (Age 58) -- Dr. Dennison was elected a Director of
Corp. I effective February 22, 1994. Since 1990, Dr. Dennison has been
President and Professor of History at The University of Montana. From 1987 to
1990, Dr. Dennison was Provost and Vice President for Academic Affairs and
Professor of History at Western Michigan University.
Rick R. Holley (Age 42) -- Mr. Holley was elected a Director of
Corp. I effective January 1, 1994. Mr. Holley became President and Chief
Executive Officer of the General Partner on January 1, 1994. Mr. Holley was
Vice President and Chief Financial Officer of the General Partner from December
1992 to December 1993 and was Vice President and Chief Financial Officer of the
former general partner of the Registrant, Plum Creek Management Company, from
April 1989 to December 1992. From September 1985 to June 1989, Mr. Holley was
Vice President of Finance and Planning for the Registrant's predecessor, Plum
Creek Timber Company, Inc.
David D. Leland (Age 58) -- Mr. Leland became a Director and Chairman
of the Board of Directors of Corp. I in December 1992 and is a member of the
Compensation Committee of the Board of Directors. Mr. Leland was President and
Chief Executive Officer of the General Partner from December 1992 to December
1993. Mr. Leland was a Director and President and Chief Executive Officer of
the former general partner of the Registrant, Plum Creek Management Company,
from April 1989 to December 1992. From May 1983 to June 1989, Mr. Leland was
President and Chief Executive Officer and a Director of the Registrant's
predecessor, Plum Creek Timber Company, Inc.
2
<PAGE> 4
William E. Oberndorf (Age 40) -- Mr. Oberndorf was elected a Director
of Corp. I in November 1992 and is Chairman of the Compensation Committee of
the Board of Directors. Mr. Oberndorf is Vice President and Treasurer of Corp.
I. Since 1991, Mr. Oberndorf's principal occupation has been as a Managing
Director of SPO Partners & Co., an affiliate of the Registrant. From 1982 to
1991, Mr. Oberndorf was a general partner of San Francisco Partners II, L.P.
Mr. Oberndorf serves as a Director for Bell & Howell Holdings Company.
William J. Patterson (Age 32) -- Mr. Patterson became a Director of
Corp. I in November 1992 and is Chairman of the Audit Committee and a member
of the Compensation Committee of the Board of Directors. Mr. Patterson is a
Vice President of Corp. I. Since 1991, Mr. Patterson's principal occupation
has been as a Managing Director of SPO Partners & Co., an affiliate of the
Registrant. From 1989 to 1991, Mr. Patterson was an associate with San
Francisco Partners II, L.P. From 1987 to 1989, Mr. Patterson was a student at
the Graduate School of Business at Stanford University.
John H. Scully (Age 49) -- Mr. Scully was elected a Director of Corp.
I in November 1992 and is a member of the Compensation Committee of the Board
of Directors. Mr. Scully is President of Corp. I. Since 1991, Mr. Scully's
principal occupation has been as a Managing Director of SPO Partners & Co., an
affiliate of the Registrant. From 1969 to 1991, Mr. Scully was a general
partner of San Francisco Partners II, L.P. Mr. Scully serves as a Director for
Bell & Howell Holdings Company.
EXECUTIVE OFFICERS OF THE GENERAL PARTNER OF THE REGISTRANT
The names, ages, offices and periods of service as executive officers
of the General Partner are listed below. There are no family relationships
among them.
<TABLE>
<CAPTION>
OFFICER
NAME AGE OFFICE SINCE(d)
- ---- ---- ------ --------
<S> <C> <C> <C>
Rick R. Holley (a)(b) 42 President and Chief Executive Officer 1989
Charles P. Grenier (a) 44 Executive Vice President 1989
Robert E. Manne(a) 49 Executive Vice President 1989
Diane M. Irvine(c) 35 Vice President and Chief Financial Officer 1994
James A. Kraft (e) 39 Vice President, Law 1989
Keith B. Sletten (a) 51 Vice President, Human Resources 1989
</TABLE>
(a) Served during the past five years in managerial or executive capacity
with the Registrant's predecessor, Plum Creek Timber Company, Inc.,
the General Partner's predecessor, Plum Creek Management Company, and
the General Partner.
(b) During 1993, Mr. Holley was Vice President and Chief Financial Officer
of the General Partner. On January 1, 1994, Mr. Holley became
President and Chief Executive Officer of the General Partner.
3
<PAGE> 5
(c) On February 7, 1994, Ms. Irvine became Vice President and Chief
Financial Officer of the General Partner. Ms. Irvine was a Partner
with Coopers & Lybrand from October 1993 to February 1994 and was a
Manager with Coopers & Lybrand from July 1987 to September 1993.
(d) Includes periods of time as an executive officer with the General
Partner and with the former general partner of Registrant, Plum Creek
Management Company.
(e) Served during the past five years in managerial or executive capacity
with the parent of the Registrant's former general partner, Burlington
Resources Inc. ("BR"), the General Partner's predecessor, Plum Creek
Management Company, and the General Partner.
Executive officers of the General Partner are appointed annually at
the second quarterly meeting of the Board of Directors of Corp. I.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
William E. Oberndorf, a Director of Corp. I, failed to report in a
timely manner on a Form 5 for 1993 the acquisition by him on June 24, 1993 of
450 Units, on a pre-split basis, of the Registrant. The Units were acquired by
Mr. Oberndorf through the expiration by its terms of a trust established by the
will of a relative and at no time prior to June 24, 1993 did Mr. Oberndorf have
investment power over the 450 Units. The Units were reported on a Form 5 by
Mr. Oberndorf on March 1, 1994.
Other than the one late reporting noted above, the Registrant is not
aware of any reporting violations regarding Section 16(a).
4
<PAGE> 6
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth a summary of compensation for the three
fiscal years ended December 31, 1993 for the President and Chief Executive
Officer and the four other most highly compensated executive officers of the
Registrant for services rendered in all capacities. Compensation amounts are
on an accrual basis and include amounts deferred at the officer's election.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
----------------------------------- (b)(c) (b)(d)(e)(f)(g)
OTHER ANNUAL ALL OTHER
NAME & PRINCIPAL COMPENSATION COMPENSATION
POSITION (a) YEAR SALARY ($) BONUS ($) ($) ($)
- ---------------- ---- ---------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C>
David D. Leland 1993 $287,500 $300,000 $ 32 $557,735
President & Chief Executive 1992 $270,000 $270,000 $237 $367,713
Officer 1991 $261,667 $270,000
Robert E. Manne 1993 $152,717 $ 92,430 $102 $366,531
Vice President, 1992 $145,000 $ 87,630 $192 $316,112
Corporate Marketing 1991 $138,625 $ 83,850
and Cascades Region
Rick R. Holley 1993 $149,733 $ 90,840 $ 10 $377,470
Vice President and 1992 $139,567 $ 84,840 $111 $331,784
Chief Financial Officer 1991 $129,233 $ 78,240
Charles P. Grenier 1993 $148,433 $ 90,060 $ 20 $366,131
Vice President, Rocky 1992 $139,083 $ 84,060 $249 $315,335
Mountain Region 1991 $132,833 $ 80,400
James A. Kraft 1993 $123,633 $ 62,650 $ 37 $279,232
Vice President, Law 1992 $114,467 $ 57,650 $ 15 $283,332
and Corporate Affairs 1991 $109,500 $ 55,150
</TABLE>
- --------------
(a) Principal position as of December 31, 1993.
(b) In accordance with the transitional provisions applicable to the
revised rules on executive officer and director compensation
disclosure adopted by the Securities and Exchange Commission, as
formally interpreted by the Commission's Staff, amounts for Other
Annual Compensation and All Other Compensation are excluded for fiscal
year 1991.
5
<PAGE> 7
(c) Other Annual Compensation represents interest on deferred compensation
which exceeds 120% of the applicable federal long-term rate.
(d) All Other Compensation includes participation in the Incentive Sharing
Plan ("IS Plan"). The IS Plan provided for cash incentive payments by
the General Partner to eligible key employees of the General Partner
and the Registrant and its subsidiaries. The incentive payments were
made from a pool consisting of an amount between 25% and 50% of the
incentive cash distributions paid by the Registrant to the General
Partner during any year. Payments made by the General Partner to IS
Plan participants were not reimbursed by the Registrant. Compensation
in 1993 from the IS Plan to Messrs. Leland, Manne, Holley, Grenier,
and Kraft totalled $474,153, $331,907, $331,907, $331,907 and
$252,882, respectively.
(e) All Other Compensation includes matching thrift contributions in the
Plum Creek Thrift and Profit Sharing Plan for Messrs. Leland, Manne,
Holley, Grenier, and Kraft totaling $10,613, $10,613, $9,413, $10,613,
and $10,613, respectively, and includes matching thrift contributions
in the Plum Creek Supplemental Benefits Plan for Messrs. Leland,
Manne, Holley, Grenier, and Kraft totaling $72,969, $24,011, $36,150,
$23,611, and $15,737, respectively.
(f) No restricted depositary units ("Units") were awarded in 1993. As of
December 31, 1993, restricted Units which had been awarded but had yet
to vest for Messrs. Manne, Holley, Grenier, and Kraft totaled 43,200,
43,200, 43,200, and 25,200, respectively, and were valued as of
December 31, 1993 at $1,128,600, $1,128,600, $1,128,600, and $658,350,
respectively. Mr. Leland had no restricted Units as of December 31,
1993, "See Employment Contracts." Participants are entitled to cash
payments, equal to cash distributions paid on the Registrant's
publicly traded Units, with respect to non-vested Unit awards.
(g)
LONG-TERM INCENTIVE PLAN AWARDS IN 1993
<TABLE>
<CAPTION>
PERFORMANCE PERIOD
NAME NUMBER OF UARS UNTIL MATURATION
---- -------------- ------------------
<S> <C> <C>
Rick R. Holley 525,000 December 31, 1998
Robert E. Manne 375,000 December 31, 1998
Charles P. Grenier 375,000 December 31, 1998
James A. Kraft 225,000 December 31, 1998
</TABLE>
Effective October 1, 1993, the Board of Directors of Corp. I approved
a long-term incentive plan ("LTIP"). The LTIP will be administered by
a committee of the Board of Directors ("Committee"). Pursuant to the
determination of the Committee, Unit
6
<PAGE> 8
Appreciation Rights ("UARs") were granted to four senior executives
effective October 31, 1993.
The terms of the UARs granted provide for five Unit Value targets with
the first Unit Value target set at 115% of a base Unit value of $20
(the approximate market price of the Units at the time the LTIP was
initiated) and each subsequent Unit Value target at 115% of the
previous target. Consequently, the five Unit Value targets are
$23.00, $26.45, $30.42, $34.98, and $40.23, respectively.
A Unit Value target is attained when the Unit Value (defined as the
sum of the current market price of a Unit and all cash distributions
paid by the Registrant on or after January 1, 1994) equals or exceeds
the Unit Value target for 75 calendar days during any 90 consecutive
calendar day period. Upon attaining each Unit Value target prior to
December 31, 1998, (the "Performance Period") a percentage of the UARs
are triggered equal, respectively in turn, to 10%, 15%, 20%, 25%, and
30% of the UARs awarded to a participant. Upon attaining each Unit
Value target prior to the end of the Performance Period, a
participant's account will be credited with a number of Shadow Units
determined by multiplying the number of UARs triggered by
approximately 0.503.
Once Shadow Units have been credited to a participant's account,
additional Shadow Units will be credited to the participant's account
with respect to subsequent cash distributions made by the Registrant.
The number of additional Shadow Units to be so credited is equal to
the per Unit distribution amount multiplied by the number of Shadow
Units currently credited to the participant's account divided by the
market price of the Units on the distribution date.
Each Shadow Unit credited to a participant's account represents the
participant's right to receive an actual Unit upon the occurrence of a
realization event which is defined as the earliest of the expiration
of the Performance Period, a change in control or the participant's
termination of employment either involuntarily without cause or
voluntarily with good reason or as a result of permanent disability or
the participant's death. If the participant's employment is
terminated either voluntarily without good reason or involuntarily for
cause prior to the occurrence of a realization event, the participant
forfeits any Shadow Units credited to his or her account and any UARs
granted to the participant under the LTIP.
7
<PAGE> 9
PENSION PLAN
Estimated annual benefit levels under the supplemental, non-qualified
pension plan of the Registrant ("Pension Plan"), based on earnings and years of
credited service at age 65, are as follows:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
---------------------YEARS OF SERVICE----------------------
REMUNERATION 15 20 25 30
- ------------ -- -- -- --
<S> <C> <C> <C> <C>
$ 100,000 $ 22,485 $ 29,980 $ 37,475 $ 44,970
$ 300,000 $ 70,485 $ 93,980 $117,475 $140,970
$ 500,000 $118,485 $157,980 $197,475 $236,970
$ 700,000 $166,485 $221,980 $277,475 $332,970
$ 900,000 $214,485 $285,980 $357,475 $428,970
$1,100,000 $262,485 $349,980 $437,475 $524,970
$1,300,000 $310,485 $413,980 $517,475 $620,970
$1,500,000 $358,485 $477,980 $597,475 $716,970
</TABLE>
Years of service under the Pension Plan as of December 31, 1993 for
Messrs. Leland, Manne, Holley, Grenier, and Kraft were 11, 8, 11, 7, and 10,
respectively. Benefit accruals under the Pension Plan are based on the gross
amount of earnings, including incentive bonuses and IS Plan payments, but
excluding all commissions and other extra or added compensation or benefits of
any kind or nature.
The Pension Plan formula for retirement at age 65 is 1.1% of the
highest five-year average earnings, plus .5% of the highest five-year average
earnings in excess of one-third of the FICA taxable wage base in effect during
the year of termination, times the number of years of credited service up to a
maximum of 30 years. An early retirement supplement equal to 1% of the highest
five-year average earnings up to one- third of the FICA taxable wage base in
effect in the year of termination, times the number of years of credited
service up to a maximum of 30 years, is payable until age 62. Both the basic
benefit and the supplement are reduced by 2% for each year the employee's
actual retirement date precedes the date the employee would have attained age
65, or the date the employee could have retired after attaining age 60 with 30
years of credited service, if earlier. In addition, the basic benefit and the
supplemental benefit will be reduced by any previously accrued and distributed
benefits, increased for an assumed interest factor, under the BR Pension Plan,
under which participation was terminated on December 31, 1992 for the officers
of the general partner of the Registrant. Years of service under the Pension
Plan at age 65 for Messrs. Leland, Manne, Holley, Grenier, and Kraft would be
17, 24, 30, 27, and 30, respectively.
8
<PAGE> 10
EMPLOYMENT CONTRACTS
Mr. Leland has an agreement providing for employment ("Primary
Agreement") with the General Partner until May 31, 1994 at a minimum annual
salary of $270,000. In addition, Mr. Leland has an agreement to repay the
Registrant 90,000 Units valued at $14.17 per Unit in the event of voluntary
termination of employment prior to June 1, 1994. Originally awarded in 1989
and scheduled to vest in 1993 and 1994, the vesting of 105,000 of Mr. Leland's
restricted Units was accelerated in December 1992.
Mr. Holley has an agreement providing for employment as an executive
officer of the General Partner until May 31, 1994 at a minimum annual salary of
$141,400.
Mr. Manne has an agreement providing for employment as an executive
officer of the General Partner until May 31, 1994 at a minimum annual salary of
$146,050.
Mr. Grenier has an agreement providing for employment as an executive
officer of the General Partner until May 31, 1994 at a minimum annual salary of
$140,100.
Mr. Kraft has an agreement providing for employment as an executive
officer of the General Partner until May 31, 1994 at a minimum annual salary
of $115,300.
Mr. Leland's Primary Agreement and the agreements for Messrs. Manne,
Holley, Grenier, and Kraft include provisions that in the event of termination
of employment prior to May 31, 1994 for reasons other than cause, death,
permanent disability, or voluntarily without good reason, the participant is
entitled to receive within 10 days: (1) current base salary from the date of
termination through May 31, 1994, and (2) a lump-sum pension benefit
determined under the BR Pension Plan and the BR Supplemental Benefits Plan in
effect on December 31, 1992, calculated as though the employee were 60 years of
age on the date of determination, had 30 years of credited service under the
plans, and had received 6% salary increases through age 60. The pension
benefit so calculated to be actuarially reduced based on the employee's actual
age on the date of determination and to be reduced by any previously accrued
and distributed benefits plus assumed interest. Certain other rights under the
Primary Agreement and agreements were waived by Messrs. Manne, Holley, Grenier,
and Kraft as a condition to (i) the grant of UARs under the LTIP, and (ii) the
designation of said executives as participants in the Registrant's new annual
Management Incentive Plan that went into effect January 1, 1994.
DIRECTOR COMPENSATION
Directors of Corp. I receive an annual retainer of $30,000 plus $1,000
for each Board of Directors meeting and committee meeting attended. The
chairmen of the Audit Committee, the Compensation Committee, and the Conflicts
Committee of the Board of Directors each receive an additional annual retainer
of $5,000. Directors may defer all or part of their compensation.
9
<PAGE> 11
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1993, Mr. Leland served as President and Chief Executive
Officer of the General Partner and as a Director on the Board of Directors of
Corp I. As a Director, Mr. Leland served on the Compensation Committee of the
Board of Directors.
10
<PAGE> 12
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
BENEFICIAL OWNERSHIP
To the knowledge of the Registrant, there were no beneficial owners of
more than five percent of the Registrant's Units outstanding on March 31, 1994.
SECURITY OWNERSHIP OF MANAGEMENT
The following table shows the total number of Units held by the
directors of Corp. I, the executive officers of the General Partner, and all
directors of Corp. I and executive officers of the General Partner as a group,
in each case, as of March 31, 1994.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP OF
NAME OF INDIVIDUAL OR IDENTITY OF GROUP DEPOSITARY UNITS PERCENT OF CLASS
--------------------------------------- ---------------- ----------------
<S> <C> <C>
Directors
Ian B. Davidson 17,406 0.04%
George M. Dennison 0 0.00%
Rick R. Holley(a) 135,681(f) 0.33%
David D. Leland(b) 135,975 0.33%
William E. Oberndorf 778,356(c) 1.92%
William J. Patterson 0(d) 0.00%
John H. Scully 825,300(e) 2.03%
Executive Officers
Charles P. Grenier 121,772(f) 0.30%
James A. Kraft 57,823(f) 0.14%
Robert E. Manne 117,932(f) 0.29%
12 Executive Officers & Directors as a
Group 1,302,945 3.21%
========= =====
</TABLE>
- --------------
(a) Mr. Holley became President and Chief Executive Officer of the General
Partner on January 1, 1994.
(b) During all of 1993, Mr. Leland was President and Chief Executive
Officer of the General Partner.
11
<PAGE> 13
(c) Includes 415,083 Units owned by Main Street Partners, L.P., 155,217
Units owned by San Francisco Partners II, L.P., and 180,000 Units
owned by the General Partner as to which Mr. Oberndorf has shared
voting and dispositive power. Mr. Oberndorf shares control of and has
an indirect pecuniary interest in the General Partner's 2% interest in
the Registrant. Mr. Oberndorf disclaims beneficial ownership of the
180,000 Units owned by the General Partner and disclaims that the
General Partner's 2% interest in the Partnership constitutes a
security.
(d) Mr. Patterson has an indirect pecuniary interest in the General
Partner's 2% interest in the Registrant. Mr. Patterson disclaims that
the General Partner's 2% interest in the Registrant constitutes a
security.
(e) Includes 415,083 Units owned by Main Street Partners, L.P., 155,217
Units owned by San Francisco Partners II, L.P., and 180,000 Units
owned by the General Partner as to which Mr. Scully has shared voting
and dispositive power. Mr. Scully shares control of and has an
indirect pecuniary interest in the General Partner's 2% interest in
the Registrant. Mr. Scully disclaims beneficial ownership of the
180,000 Units owned by the General Partner and disclaims that the
General Partner's 2% interest in the Registrant constitutes a
security.
(f) Includes non-vested restricted Units granted to such person under the
General Partners' Unit Awards Plan and Shadow Units credited to
participant's accounts under the terms of the LTIP. Upon vesting, the
participants are entitled to receive one Unit for each restricted Unit
that vests and one Unit for each Shadow Unit that vests. Non-vested
restricted Units for Messrs. Holley, Grenier, Kraft, and Manne totaled
43,200, 43,200, 25,200, and 43,200, respectively, and non-vested
Shadow Units under the terms of the LTIP credited to the participant's
accounts for Messrs. Holley, Grenier, Kraft, and Manne totaled 66,321,
47,372, 28,423, and 47,372, respectively. Messrs. Holley, Grenier,
Kraft, and Manne disclaim beneficial ownership of both the non-vested
restricted Units and the non-vested Shadow Units under the LTIP.
CHANGES IN CONTROL
On December 31, 1992, BR disposed of its controlling interest in the
Registrant. On that date, the previous general partner of the Registrant,
which was indirectly owned by BR, was merged into the General Partner, which
became the successor general partner of the Registrant. As a result of the
merger, Corp. I, a Delaware corporation controlled by Messrs. Scully and
Oberndorf and the sole general partner of PC Advisory Partners I, L.P.
("Advisory I"), a Delaware limited partnership, which is the managing general
partner of the General Partner, acquired indirect control of the Registrant.
The limited partner interests in the General Partner are owned
directly and indirectly by certain limited partnerships (the "Upper Tier
Partnerships"), the general partner or managing general partner of which (as
the case may be) is also Advisory I.
12
<PAGE> 14
Under a Distribution Support Agreement dated as of June 8, 1989 (the
"Distribution Support Agreement") by and between BR and the Registrant, BR
agreed with the Registrant that it would make cash contributions to the
Registrant for the quarterly periods ending on or prior to June 30, 1994 to
generally permit the Registrant to distribute quarterly a minimum level of cash
to the Registrant's Unitholders. In connection with the above-mentioned merger
certain of the Upper Tier Partnerships and certain other affiliates of the
General Partner agreed to indemnify BR against its obligations to make the
above-described payments and granted a subordinated security interest to BR.
In addition, certain of the Upper Tier Partnerships have granted to BR the
right to purchase their economic interests in the General Partner if the
indemnitors should fail to perform on their indemnities to BR. Accordingly, if
BR were required to advance funds to the Registrant under the Distribution
Support Agreement and the indemnitors were to fail to reimburse BR for such
advance, the exercise by BR of its remedies might result in a further change of
control of the Registrant.
13
<PAGE> 15
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On April 8, 1993, the Board of Directors of Corp. I approved a
proposal for the Registrant to purchase, on a pre December 6, 1993 three for
one Unit split basis, 1,250,000 Deferred Participation Interests ("DPIs") of
the Registrant. Messrs. Oberndorf, Patterson, and Scully had an indirect
beneficial ownership of, and an indirect pecuniary interest in, the DPIs. The
proposal was subject to a number of conditions including approval by an
independent committee of the Board of Directors, Unitholder approval and the
negotiation of a final binding agreement.
On August 12, 1993, the Registrant held a special meeting of the
Unitholders to approve the proposal to redeem the 1,250,000 DPIs. Approval was
obtained and on August 30, 1993, the Registrant redeemed the 1,250,000 DPIs for
$49.50 per DPI, plus direct costs associated with redeeming the DPIs.
14
<PAGE> 16
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(2) Financial Statement Schedules
The following schedules are filed as a part of this Form 10-K/A:
<TABLE>
<S> <C>
Schedule V. Property, Plant and Equipment Page 16
Schedule VI. Accumulated Depreciation, Depletion, and Amortization
of Property, Plant and Equipment Page 17
Schedule X. Supplementary Income Statement Information Page 18
Report of Independent Accountants Page 19
</TABLE>
(3) List of Exhibits
Each exhibit set forth below and in the Index to Exhibits is
filed as a part of this report. Exhibits not incorporated by reference to a
prior filing are designated by an asterisk ("*"); all exhibits not so
designated are incorporated herein by reference to a prior filing as indicated.
Exhibits designated by a positive sign ("+") indicates management contracts or
compensatory plans or arrangements required to be filed as an exhibit to this
report.
15
<PAGE> 17
SCHEDULE V
PLUM CREEK TIMBER COMPANY, L.P.
PROPERTY, PLANT AND EQUIPMENT
(In Thousands)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E Column F
-------- -------- -------- -------- -------- --------
Balance at Balance
Beginning Additions at End
Classification of Year at Cost Retirements Other of Year
--------------------------------------- -------- -------- ----------- ----- -------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1993
Timber and Logging Roads - $263,264 $241,361 $ 791 ($21,659)(1) $482,175
Net............................... 26,554 18,135 102 0 44,587
-------- -------- ------ ------- --------
Timberlands......................... $289,818 $259,496 $ 893 ($21,659) $526,762
======== ======== ====== ======= ========
Property, Plant and Equipment:
Land, Building and Improvements... $ 41,876 $ 1,289 $ 8 (2) $ 43,173
Machinery and Equipment........... 174,684 23,827 1,150 (8)(3) 197,353
-------- -------- ------ ------- --------
$216,560 $ 25,116 $1,150 $ 0 $240,526
======== ======== ====== ======= ========
Year Ended December 31, 1992
Timber And Logging Roads - Net...... $283,130 $ 5,277 $2,554 ($22,589)(4) $263,264
Timberlands......................... 25,932 2,085 1,383 (80)(5) 26,554
-------- -------- ------ ------- --------
$309,062 $ 7,362 $3,937 ($22,669) $289,818
======== ======== ====== ======= ========
Property, Plant and Equipment:
Land, Building and Improvements... $ 41,207 $ 390 $1,781 $ 2,060 (6) $ 41,876
Machinery and Equipment........... 162,420 17,863 3,559 (2,040)(7) 174,684
-------- -------- ------ ------- --------
$203,627 $ 18,253 $5,340 $ 20 $216,560
======== ======== ====== ======= ========
Year Ended December 31, 1991
Timber and Logging Roads - Net...... $306,176 $ 5,926 $1,162 ($27,810)(8) $283,130
Timberlands......................... 25,893 163 124 0 25,932
-------- -------- ------ ------- --------
$332,069 $ 6,089 $1,286 ($27,810) $309,062
======== ======== ====== ======= ========
Property, Plant and Equipment:
Land, Building and Improvements... $ 43,759 $ 277 $ 270 ($ 2,559)(9) $ 41,207
Machinery and Equipment........... 157,323 5,032 421 486 (10) 162,420
-------- -------- ------ ------- --------
$201,082 $ 5,309 $ 691 ($ 2,073) $203,627
======== ======== ====== ======= ========
</TABLE>
(1) Includes depletion based on stumpage volumes for the year.
(2) Includes a category reclass of $8.
(3) Includes a category reclass of ($8).
(4) Includes depletion based on stumpage volumes for the year and a category
reclassification of $80 and adjustment of $12.
(5) Includes a category reclass of ($80).
(6) Includes a category reclass of $2,200 for a Manufacturing facility sale
and ($140) category reclassification.
(7) Includes a category reclass of ($2,200) for a Manufacturing facility
sale and $160 category reclassification.
(8) Includes depletion based on stumpage volumes for the period.
(9) Includes ($2,200) reserve for the anticipated sale of a Manufacturing
facility and ($359) category reclassification.
(10) Includes a $359 category reclassification and $127 in adjustments.
16
<PAGE> 18
SCHEDULE VI
PLUM CREEK TIMBER COMPANY, L.P.
ACCUMULATED DEPRECIATION, DEPLETION, AND AMORTIZATION OF PROPERTY, PLANT AND
EQUIPMENT
(In Thousands)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E Column F
-------- -------- -------- -------- -------- --------
Balance at Additions Balance
Beginning Charged to at End
Classification of Year Expenses Retirements Other of Year
-------------------------- ------- -------- ----------- ----- -------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1993
Property, Plant and Equipment:
Land, Building and Improvements....... $ 5,351 $ 1,419 $ 0 $0 $ 6,770
Machinery and Equipment............... 56,565 15,692 1,134 0 71,123
------- ------- ------ -- -------
$61,916 $17,111 $1,134 $0 $77,893
======= ======= ====== == =======
Year Ended December 31, 1992
Property, Plant and Equipment:
Land, Building and Improvements....... $ 4,134 $ 1,430 $ 213 $0 $ 5,351
Machinery and Equipment............... 43,589 14,896 1,920 0 56,565
------- ------- ------ -- -------
$47,723 $16,326 $ 2,133 $0 $61,916
======= ======= ======= == =======
Year Ended December 31, 1991
Property, Plant and Equipment:
Land, Building and Improvements....... $ 2,769 $ 1,437 $ 72 $0 $ 4,134
Machinery and Equipment............... 29,949 13,739 99 0 43,589
------- ------- ------ -- -------
$32,718 $15,176 $ 171 $0 $47,723
======= ======= ====== == =======
</TABLE>
17
<PAGE> 19
SCHEDULE X
PLUM CREEK TIMBER COMPANY, L.P.
SUPPLEMENTARY INCOME STATEMENT INFORMATION
(In Thousands)
<TABLE>
<CAPTION>
Column A Column B
-------- --------
Charged to
Costs and
Expenses
--------
<S> <C>
Year Ended December 31, 1993
Maintenance and repairs............................................................... $24,440
Taxes, other than payroll and income taxes
Property............................................................................ $ 5,267
Other............................................................................... $ 1,043
Year Ended December 31, 1992
Maintenance and repairs............................................................... $21,793
Taxes, other than payroll and income taxes
Property............................................................................ $ 4,084
Other............................................................................... $ 3,561
Year Ended December 31, 1991
Maintenance and repairs............................................................... $19,251
Taxes, other than payroll and income taxes
Property............................................................................ $ 4,158
Other............................................................................... $ 4,141
</TABLE>
18
<PAGE> 20
REPORT OF INDEPENDENT ACCOUNTANTS
To the Unitholders and Directors of the General Partner of
Plum Creek Timber Company, L.P.
Our report on the combined financial statements of Plum Creek Timber Company,
L.P. as of December 31, 1993 and 1992, and for each of the three years in the
period ended December 31, 1993 is included in its 1993 Annual Report on Form
10-K. In connection with our audits of such financial statements, we have also
audited the related combined financial statement schedules listed in the Index
of the Form 10-K/A, Amendment No. 1 to the aforementioned Form 10-K.
In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements as a whole, present
fairly, in all material respects, the information required to be included
therein.
COOPERS & LYBRAND
Seattle, Washington
January 28, 1994
19
<PAGE> 21
<TABLE>
<CAPTION>
Exhibit
Designation Nature of Exhibit
- ----------- -----------------
<S> <C>
3.A* Amended and Restated Agreement of Limited Partnership of Plum Creek Timber Company, L.P. dated June 8, 1989,
as amended to date (conformed composite version). See Attached Exhibit.
3.B.1 Certificate of Limited Partnership of Plum Creek Limited Partnership, L.P., as filed with the Secretary of
State of the state of Delaware on April 12, 1989 (Form S-1, Regis. No. 33-28094, filed May, 1989).
3.B.2 Certificate of Limited Partnership of Plum Creek Manufacturing, L.P. as filed with the Secretary of State of
the state of Delaware on December 27, 1990.
4.A Form of Deposit Agreement by and among Plum Creek Timber Company, L.P. and The First National Bank of Boston,
dated as of May 1989, (Form S-1, Regis. No. 33-28094, filed May, 1989).
4.B Form of Transfer Application (Form S-1, Regis. No. 33-28094, filed May, 1989).
4.C.1* Senior Note Agreement, dated May 31, 1989, 11 1/8 percent Senior Notes due June 8, 2007, Plum Creek Timber
Company, L. P. (Form 10-Q, No. 1-10239, filed August, 1989). Amendment No. 1, consent and waiver dated
January 1, 1991 to Senior Note Agreement, dated May 31, 1989, 11 1/8 percent Senior Notes due June 8, 2007,
Plum Creek Timber Company, L.P. (Form 8 Amendment No. 1, filed April 1991). Amendment No. 2, consent and
waiver dated September 1, 1993 to the Senior Note Agreement. See attached Exhibit.
4.C.2* Mortgage Note Agreement, dated May 31, 1989, 11 1/8 percent First Mortgage Notes due June 8, 2007, Plum Creek
Manufacturing, Inc. (Form 10-Q, No. 1- 10239, filed August, 1989). Amendment No. 1, consent and waiver dated
January 1, 1991 to Mortgage Note Agreement, dated May 31, 1989, 11 1/8 percent First Mortgage Notes due
June 8, 2007, Plum Creek Manufacturing, Inc., now Plum Creek Manufacturing, L.P. (Form 8 Amendment No. 1,
filed April 1991). Amendment No. 2, consent and waiver dated September 1, 1993 to the Mortgage Note Agreement.
See attached Exhibit.
4.C.3* Reducing Revolving Line of Credit, dated October 28, 1993, due November 1, 2001, Plum Creek Timber Company, L.P.
See attached Exhibit.
10.B Form of Distribution Agreement dated May, 1989 by and between Burlington Resources and Plum Creek Timber Company,
L.P. (Form S-1, Regis. No. 33- 28094, filed May, 1989).
10.C.1+ Employment Agreement, as modified by waiver and agreement dated June 9, 1989 with David D. Leland. (Form 10-Q,
No. 1- 10239, filed August, 1989).
10.C.2*+ Employment Agreement dated June 9, 1989 with Charles P. Grenier. (Form 10- Q, No. 1-10239, filed August, 1989).
Amendment No.1, Release and Waiver of Rights dated January 28, 1994. See attached exhibit.
10.C.3*+ Employment Agreement dated June 9, 1989 with Rick R. Holley. (Form 10-Q, No. 1- 10239, filed August, 1989).
Amendment No. 1, Release and Waiver of Rights, dated January 28, 1994. See attached exhibit.
</TABLE>
20
<PAGE> 22
<TABLE>
<S> <C>
10.C.4*+ Employment Agreement dated August 3, 1989 with James A. Kraft. (Form 10-Q, No. 1- 10239, filed August, 1989).
Amendment No. 1, Release and Waiver of Rights, dated January 28, 1994. See attached exhibit.
10.C.5*+ Employment Agreement dated June 9, 1989 with Robert E. Manne. (Form 10-Q, No. 1- 10239, filed August, 1989).
Amendment No. 1. Release and Waiver of Rights, dated January 28, 1994. See attached exhibit.
10.D.1* $15 million Revolving Credit Agreement by and between Plum Creek Timber Company, L.P. and Algemene Bank Nederland
N.V. as agent, dated as of November 22, 1989. (Form 10-K, No. 1-10239, filed March, 1990). Amendment dated
January 1, 1991 to $15 million Revolving Credit Agreement by and between Plum Creek Timber Company, L.P. and
Algemene Bank Nederland N.V. as agent, dated as of November 22, 1989. (Form 8 Amendment No. 1, filed April 1991).
Amendment No. 2 dated September 1, 1993. See attached exhibit.
10.D.2 $20 million Revolving Credit Agreement by and between Plum Creek Manufacturing Company, Inc. and Algemene Bank
Nederland N.V. as agent, dated as of November 22, 1989. (Form 10-K, No. 1-10239, filed March, 1990) Amendment
dated January 1, 1991 to $20 million Revolving Credit Agreement by and between Plum Creek Manufacturing, Inc.,
now Plum Creek Manufacturing, L.P., and Algemene Bank Nederland N.V. as agent, dated as of November 22, 1989.
(Form 8 Amendment No. 1, filed April 1991).
10.D.3 $20 million Revolving Credit Agreement by and between Plum Creek Manufacturing Company, Inc. and Plum Creek
Timber Company, L.P., dated as of December 1, 1989. (Form 10-K, No. 1-10239, filed March, 1990). Amendment
dated January 1, 1991 to $20 million Revolving Credit Agreement by and between Plum Creek Manufacturing, Inc.,
now Plum Creek Manufacturing, L.P., and Plum Creek Timber Company, L.P., dated as of December 1, 1989.
(Form 8 Amendment No. 1, filed April 1991).
10.E.1+ 1988 Stock Option Incentive Plan, Burlington Northern Inc. (Form S-8, No. 33-22493, filed June 15, 1988).
Appendix A, 1988 Stock Option Incentive Plan, Burlington Northern Inc. (filed November 29, 1989).
10.E.2+ Incentive Sharing Plan, Plum Creek Management Company. (Form 10-K, No. 1-10239, filed March, 1990). Amendment
number 1, dated April 1991, Incentive Sharing Plan, Plum Creek Management Company. (Form 10-Q, No. 1-10239, filed
May, 1991).
10.E.3+ Unit Awards Plan, PCTC, Inc. (Form 10-K, No. 1-10239, filed March, 1990). Amendment number 1, dated April 1991,
to Unit Awards Plan, PCTC, Inc. (Form 10-Q, No. 1-10239, filed May, 1991).
10.E.4+ Incentive Compensation Plan, Plum Creek Management Company. (Form 8 Amendment No. 1, filed April, 1990).
Amendment dated January 1, 1991 to Incentive Compensation Plan, Plum Creek Management Company. (Form 8 Amendment
No. 1, filed April 1991).
10.E.5+ Retirement Plan for Directors, Plum Creek Management Company. (Form 8 Amendment No. 1, filed April 1991).
10.E.6*+ Long-term Incentive Plan, Plum Creek Management Company, L.P. See attached exhibit.
10.E.7*+ Management Incentive Plan, Plum Creek Management Company, L.P. See attached exhibit.
</TABLE>
21
<PAGE> 23
<TABLE>
<S> <C>
21 Subsidiaries of the Registrant. (Form 8 Amendment No. 1, filed April 1991).
24 Power of Attorney (Form S-1, Regis. No. 33-28094, filed May,1989).
</TABLE>
22
<PAGE> 1
EXHIBIT 3.A
ANNEX B
TO
PROXY STATEMENT
COPY OF THE PARTNERSHIP AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated as of
June 8, 1989, is entered into by and among Plum Creek Management
Company, a Delaware corporation, as the General Partner and David D. Leland as
the Organizational Limited Partner, together with any other Persons who become
Partners in the Partnership as provided herein. In consideration of the
covenants, conditions and agreements contained herein, the parties hereto hereby
agree as follows:
ARTICLE I
ORGANIZATIONAL MATTERS
1.1 Formation and Continuation. The General Partner and the Organizational
Limited Partner have previously formed the Partnership as a limited partnership
pursuant to the provisions of the Delaware Act and hereby amend and restate the
original Agreement of Limited Partnership in its entirety. Subject to the
provisions of this Agreement, the General Partner and the Organizational Limited
Partner hereby continue the Partnership as a limited partnership pursuant to the
provisions of the Delaware Act. Except as expressly provided herein to the
contrary, the rights and obligations of the Partners and the administration,
dissolution and termination of the Partnership shall be governed by the Delaware
Act. The Partnership Interest of each Partner shall be personal property for all
purposes.
1.2 Name. The name of the Partnership shall be "Plum Creek Timber Company,
L.P." The Partnership's business may be conducted under any other name or names
deemed advisable by the General Partner, including the name of the General
Partner or any Affiliate thereof. The words "Limited Partnership," "L.P.,"
"Ltd." or similar words or letters shall be included in the Partnership's name
where necessary for the purposes of complying with the laws of any jurisdiction
that so requires. The General Partner in its sole discretion may change the name
of the Partnership at any time and from time to time and shall notify the
Limited Partners of such change in the next regular communication to Limited
Partners, provided, however, that without the consent of the holders of 66 2/3%
of the outstanding Units, the General Partner shall not cease to use the name,
"Plum Creek".
1.3 Registered Office; Principal Office. The address of the registered
office of the Partnership in the State of Delaware shall be located at The
Corporation Trust Center, 1209 Orange Street, New Castle County, Wilmington,
Delaware 19801, and the registered agent for service of process on the
Partnership in the State of Delaware at such registered office shall be The
Corporation Trust Company. The principal office of the Partnership shall be 999
Third Avenue, Seattle, Washington 98104 or such other place as the General
Partner may from time to time designate by notice to the Limited Partners. The
Partnership may maintain offices at such other place or places within or outside
the State of Delaware as the General Partner deems advisable.
1.4 Power of Attorney. (a) Each Limited Partner and each Assignee hereby
constitutes and appoints each of the General Partner and, if a Liquidator shall
have been selected pursuant to Section 14.3 hereof, the Liquidator severally
(and any successor to either thereof by merger, transfer, assignment, election
or otherwise) and authorized officers and attorneys-in-fact of each, with full
power of substitution, as its true and lawful agent and attorney-in-fact, with
full power and authority in its name, place and stead, to:
(i) execute, swear to, acknowledge, deliver, file and record in the
appropriate public offices (A) all certificates, documents and other
instruments (including, without limitation, this Agreement and the
Certificate of Limited Partnership and all amendments or restatements
thereof) that the General Partner or the Liquidator deems appropriate or
necessary to form, qualify or continue the existence or qualification of,
the Partnership as a limited partnership (or a partnership in which the
limited partners have limited liability) in the State of Delaware and in
all other jurisdictions in which the Partnership may conduct business or
own property; (B) all instruments that the General Partner or the
Liquidator deems
B-1
<PAGE> 2
appropriate or necessary to reflect any amendment, change, modification or
restatement of this Agreement or the Deposit Agreement in accordance with
their respective terms; (C) all conveyances and other instruments or
documents that the General Partner or the Liquidator deems appropriate or
necessary to reflect the dissolution and liquidation of the Partnership
pursuant to the terms of this Agreement, including, without limitation, a
certificate of cancellation; (D) all instruments relating to the admission,
withdrawal, removal or substitution of any Partner pursuant to, or other
events described in, Article XI, XII, XIII or XIV hereof or the Capital
Contribution of any Partner; (E) all certificates, documents and other
instruments relating to the determination of the rights, preferences and
privileges of any class or series of Units or other securities issued
pursuant to Section 4.4 hereof; and (F) all agreements and other
instruments (including, without limitation, a certificate of merger)
relating to a merger or consolidation of the Partnership pursuant to
Article XVI hereof;
(ii) execute, swear to, acknowledge and file all ballots, consents,
approvals, waivers, certificates and other instruments appropriate or
necessary, in the sole discretion of the General Partner or the Liquidator,
to make, evidence, give, confirm or ratify any vote, consent, approval,
agreement or other action which is made or given by the Partners hereunder
or is consistent with the terms of this Agreement or appropriate or
necessary, in the sole discretion of the General Partner or the Liquidator,
to effectuate the terms or intent of this Agreement; provided, that when
required by Section 15.3 hereof or any other provision of this Agreement
which establishes a percentage of the Limited Partners or of the Limited
Partners of any class or series required to take any action, the General
Partner or the Liquidator may exercise the power of attorney made in this
subsection (ii) only after the necessary vote, consent or approval of the
Limited Partners or of the Limited Partners of such class or series; and
(iii) on behalf of the Limited Partners and the Assignees, enter into
the Deposit Agreement and to deposit Certificates in the Deposit Account
pursuant to the Deposit Agreement.
Nothing contained herein shall be construed as authorizing the General Partner
to amend this Agreement except in accordance with Article XV hereof or as may be
otherwise expressly provided for in this Agreement.
(b) The foregoing power of attorney is hereby declared to be irrevocable
and a power coupled with an interest, and it shall survive and not be affected
by the subsequent death, incompetency, disability, incapacity, dissolution,
bankruptcy or termination of any Limited Partner or Assignee and the transfer of
all or any portion of such Limited Partner's or Assignee's Partnership Interest
and shall extend to such Limited Partner's or Assignee's heirs, successors,
assigns and personal representatives. Each such Limited Partner or Assignee
hereby agrees to be bound by any representation made by the General Partner or
the Liquidator, acting in good faith pursuant to such power of attorney; and
each such Limited Partner or Assignee hereby waives any and all defenses which
may be available to contest, negate or disaffirm the action of the General
Partner or the Liquidator, taken in good faith under such power of attorney.
Each Limited Partner or Assignee shall execute and deliver to the General
Partner or the Liquidator, within 15 days after receipt of the General Partner's
or the Liquidator's request therefor, such further designation, powers of
attorney and other instruments as the General Partner or the Liquidator deems
necessary to effectuate this Agreement and the purposes of the Partnership.
1.5 Term. The Partnership commenced upon the filing of the Certificate of
Limited Partnership in accordance with the Delaware Act and shall continue in
existence until the close of Partnership business on December 31, 2047, or until
the earlier termination of the Partnership in accordance with the provisions of
Article XIV hereof.
1.6 Possible Restrictions on Transfer. Notwithstanding anything to the
contrary contained herein, in the event of (i) the enactment (or imminent
enactment) of any legislation, (ii) the publication of any temporary or final
regulation by the Treasury Department, (iii) any ruling by the Internal Revenue
Service or (iv) any judicial decision, that, in any such case, in the Opinion of
Counsel, would result in the taxation of the Partnership for federal income tax
purposes as a corporation or as an association taxable as a corporation, then,
either (a) the General Partner may impose such restrictions on the transfer of
Units or Partnership Interests as may be required, in the Opinion of Counsel, to
prevent the taxation of the Partnership for federal income tax purposes as a
corporation or as an association taxable as a corporation, including making any
amendments
B-2
<PAGE> 3
to this Agreement as the General Partner in its sole discretion may determine to
be necessary or appropriate in order to impose such restrictions, provided, that
any such amendment to this Agreement which would result in the delisting or
suspension of trading of any class of Units on any National Securities Exchange
on which such class of Units is then traded must be approved by the holders of
at least 66 2/3% of the outstanding Units of such class (excluding for purposes
of such determination any Units of such class owned by the General Partner and
its Affiliates) or (b) upon the recommendation of the General Partner and the
approval by the holders of at least 66 2/3% of the outstanding Units (excluding
for purposes of such determination any Units owned by the General Partner and
its Affiliates), the Partnership may be converted into and reconstituted as a
trust or any other type of legal entity (the "New Entity") in the manner and on
other terms so recommended and approved. In such event, the business of the
Partnership shall be continued by the New Entity and the Units shall be
converted into equity interests of the New Entity in the manner and on the terms
so recommended and approved. Notwithstanding the foregoing, no such
reconstitution shall take place unless the Partnership shall have received an
Opinion of Counsel to the effect that the liability of the Limited Partners for
the debts and obligations of the New Entity shall not, unless such Limited
Partners take part in the control of the business of the New Entity, exceed that
which otherwise had been applicable to such Limited Partners as limited partners
of the Partnership under the Delaware Act.
ARTICLE II
DEFINITIONS
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
"Additional Limited Partner" means a Person admitted to the Partnership as
a Limited Partner pursuant to Section 12.4 hereof and who is shown as such on
the books and records of the Partnership.
"Adjusted Capital Account" shall mean the Capital Account maintained for
each Partner as of the end of each fiscal year of the Partnership (a) increased
by any amounts which such Partner is obligated to restore under the standards
set by Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (or is deemed obligated
to restore under Treasury Regulation Sections 1.704-1T(b)(4)(iv)(f) and
1.704-1T(b)(4)(iv)(h)(5)) and (b) decreased by (i) the amount of all losses and
deductions that, as of the end of such fiscal year, are reasonably expected to
be allocated to such Partner in subsequent years under Sections 704(e)(2) and
706(d) of the Code and Treasury Regulation Section 1.751-1(b)(2)(ii), and (ii)
the amount of all distributions that, as of the end of such fiscal year, are
reasonably expected to be made to such Partner in subsequent years in accordance
with the terms of this Agreement or otherwise to the extent they exceed
offsetting increases to such Partner's Capital Account that are reasonably
expected to occur during (or prior to) the year in which such distributions are
reasonably expected to be made (other than increases pursuant to a minimum gain
chargeback pursuant to Sections 5.1(d)(i) or 5.1(d)(ii)). The foregoing
definition of Adjusted Capital Account is intended to comply with the provisions
of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.
"Adjusted Property" means any property the Carrying Value of which has been
adjusted pursuant to Section 4.6(d)(i) or (d)(ii) hereof. Once an Adjusted
Property is deemed distributed by, and recontributed to, the Partnership for
federal income tax purposes upon a termination thereof pursuant to Section 708
of the Code, such property shall thereafter constitute a Contributed Property
until the Carrying Value of such property is further adjusted pursuant to
Section 4.6(d)(i) or (d)(ii) hereof.
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by, or is under common control
with, the Person in question. As used herein, the term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
"Agreed Allocation" shall mean any allocation, other than a Required
Allocation, of an item of income, gain, deduction or loss pursuant to the
provisions of Section 5.1, including a Curative Allocation (if appropriate to
the context in which the term "Agreed Allocations" is used).
B-3
<PAGE> 4
"Agreed Value" of any Contributed Property means the fair market value of
such property or other consideration at the time of contribution as determined
by the General Partner using such reasonable method of valuation as it may
adopt; provided, however, that the Agreed Value of any property deemed
contributed to the Partnership for federal income tax purposes upon termination
and reconstitution thereof pursuant to Section 708 of the Code shall be
determined in accordance with Section 4.6(c)(i) hereof. Subject to Section
4.6(c)(i) hereof, the General Partner shall, in its sole discretion, use such
method as it deems reasonable and appropriate to allocate the aggregate Agreed
Value of Contributed Properties contributed to the Partnership in a single or
integrated transaction among each separate property on a basis proportional to
their fair market values.
"Agreement" means this Amended and Restated Agreement of Limited
Partnership, as it may be amended, supplemented or restated from time to time.
"Assignee" means a Non-citizen Assignee or a Person to whom one or more
Units have been transferred in a manner permitted under this Agreement and who
has executed and delivered a Transfer Application as required by this Agreement,
but who has not become a Substituted Limited Partner.
"Available Cash" means, with respect to any calendar quarter, (a) the sum
of:
(i) the Partnership's net income (or net loss) (excluding gain on the
sale of any Capital Asset) for such quarter,
(ii) the amount of depletion, depreciation, amortization and other
noncash charges (less noncash credits) utilized in determining net income
of the Partnership for such quarter,
(iii) the amount of any reduction in reserves of the Partnership of
the types referred to in (b)(v) below,
(iv) proceeds received by the Partnership from the sale of any of the
Designated Acres, and
(v) any Cash from Capital Transactions received by the Partnership
during such quarter in specific contemplation that such Cash from Capital
Transactions will be used to refund or refinance any payment of Debt of the
type specified in clause (b)(i) below which was made in any of the two
prior quarters,
less (b) the sum of:
(i) all payments of principal on Debt made by the Partnership in such
quarter (excluding any payments of principal on Debt made with Cash from
Capital Transactions received by the Partnership during such quarter or the
immediately preceding four quarters),
(ii) capital expenditures made by the Partnership during such quarter
(excluding any capital expenditures for such quarter made with Cash from
Capital Transactions received by the Partnership during such quarter or the
immediately preceding four quarters, and capital expenditures which the
General Partner anticipates will be financed with Cash from Capital
Transactions to be received by the Partnership prior to the end of the next
succeeding quarter),
(iii) the amount of any capital expenditures, or investments as
specified in clause (b)(iv) below, made by the Partnership in the
immediately preceding quarter which was anticipated would be financed from
Cash from Capital Transactions but which have not been financed from such
source prior to the end of the quarter succeeding the quarter in which any
such capital expenditure or investment was made,
(iv) investments in any Subsidiary, Affiliate or any such other entity
to the extent that such investments are not otherwise included under
clauses (b)(i), (ii) or (iii) above (excluding any such investments made
with Cash from Capital Transactions received by the Partnership during such
quarter or the immediately preceding four quarters, or which the General
Partner anticipates will be made, with Cash from Capital Transactions to be
received by the Partnership prior to the end of the next succeeding
quarter);
(v) the amount of any reserves of the Partnership established during
such quarter which are necessary or appropriate (A) to provide funds for
the future payment of items of the types specified in clauses (b)(i) and
(b)(ii) above, (B) to provide additional working capital, (C) to provide
funds for cash distributions with respect to any one or more of the next
four quarters or (D) to provide funds for the future payment of interest in
an amount equal to the interest to be accrued in the next quarter.
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provided, however (i) net proceeds to the Partnership from the issuance of SPUs
shall be deemed to be Available Cash, and shall be deemed to be received, for
purposes of determining Available Cash, during the quarter in respect of which
such SPUs are issued, even if such cash is received by the Partnership after the
last day of such quarter, and (ii) any disbursements made of the types described
in clauses (b)(i)-(iii), or reserves established, in accordance with clause
(b)(v), within 45 days after the end of any quarter as to which SPUs were
purchased in respect of such quarter in accordance with the Distribution Support
Agreement shall be deemed to be made or established, for purposes of determining
Available Cash, within such quarter if the General Partner so determines,
provided that the aggregate amount of such disbursements made or reserves
established which are so determined as being made within such quarter shall not
exceed the aggregate dollar amount of SPUs purchased in respect of such quarter.
Notwithstanding the foregoing, "Available Cash" shall not take into account
any reductions in reserves or disbursements made or reserves established after
commencement of the dissolution and liquidation of the Partnership. In
determining "Available Cash", (i) all items under clauses (a)(i)-(v) above and
all items under clauses (b)(i)-(v) above shall be calculated on a combined basis
with any Subsidiary of the Partnership whose income is accounted for on a
combined basis with the Partnership and, in accordance therewith, "Available
Cash" shall include a percentage of each such item of each such Subsidiary equal
to the Partnership's percentage ownership interest in such Subsidiary, provided,
however, that the items under clauses (a)(i)-(v) above shall only be included in
Available Cash to the extent that the General Partner determines such amount to
be legally available for dividends or distributions to the Partnership by such
Subsidiary, (ii) the amount of net income and the amount of depletion,
depreciation, amortization and other noncash charges utilized in determining net
income shall be determined, with respect to the Partnership, by the General
Partner in accordance with generally accepted accounting principles and, with
respect to any Subsidiary, by its Board of Directors (or by such other body or
Person which has the ultimate management authority of such Subsidiary) in
accordance with generally accepted accounting principles, (iii) the net income
of any Subsidiary shall be determined on an after-tax basis, (iv) the amount of
any reductions in, or additions to, reserves for purposes of clauses (a)(iii)
and (b)(v) above shall be determined, with respect to the Partnership, by the
General Partner in its sole discretion as it deems appropriate and, with respect
to any Subsidiary, by its Board of Directors (or by such other body or Person
which has the ultimate management authority of such Subsidiary) in its sole
discretion as it deems appropriate and (v) any determination of whether any
capital expenditures or investments are financed, or anticipated to be financed,
with Cash from Capital Transactions for purposes of clauses (b)(ii) and (b)(iv)
above shall be made, with respect to the Partnership, by the General Partner in
its sole discretion as it deems appropriate and, with respect to any Subsidiary,
by its Board of Directors (or by such other body or person which has the
ultimate management authority of such Subsidiary) in its sole discretion as it
deems appropriate.
"Base Quarterly Deficiency" means, with respect to any Unit and as to any
calendar quarter within the Support Period, the excess, if any, of (a) the
Minimum Quarterly Amount, determined with respect to such calendar quarter, over
(b) the amount of any Available Cash, distributed with respect to such calendar
quarter, to the holder of such Unit pursuant to Section 5.4(a) hereof.
"Book-Tax Disparity" shall mean with respect to any item of Contributed
Property or Adjusted Property, as of the date of any determination, the
difference between the Carrying Value of such Contributed Property or Adjusted
Property and the adjusted basis thereof for federal income tax purposes as of
such date. A Partner's share of the Partnership's Book-Tax Disparities in all of
its Contributed Property and Adjusted Property will be reflected by the
difference between such Partner's Capital Account balance as maintained pursuant
to Section 4.6 and the hypothetical balance of such Partner's Capital Account
computed as if it had been maintained strictly in accordance with federal income
tax accounting principles.
"Burlington" means Burlington Resources Inc., a Delaware corporation.
"Business Day" means Monday through Friday of each week, except that a
legal holiday recognized as such by the government of the United States or the
State of New York shall not be regarded as a Business Day.
"Capital Account" means the capital account maintained for a Partner,
Assignee or Special Limited Partner pursuant to Section 4.6 hereof.
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"Capital Asset" means any asset on the Partnership's or Facilities
Subsidiary's balance sheet, as the case may be, other than inventory, accounts
receivable or any other current asset and assets disposed of in connection with
normal retirements or replacements.
"Capital Contribution" means any cash, cash equivalents or the Net Agreed
Value of Contributed Property which a Partner contributes to the Partnership
pursuant to Section 4.1, 4.3, 4.4, 4.6(c)(i), or 13.3(c) hereof.
"Capital Transactions" means (i) borrowings and sales of debt securities
(other than for working capital purposes and other than for items purchased on
open account in the ordinary course of business) by the Partnership, (ii) sales
of equity interests by the Partnership (other than sales of SPUs) and (iii)
sales or other voluntary or involuntary dispositions of any assets of the
Partnership (other than (x) sales or other dispositions of inventory in the
ordinary course of business, (y) sales or other dispositions of other current
assets including receivables and accounts and (z) sales or other dispositions of
assets as a part of normal retirements or replacements), in each case prior to
the commencement of the dissolution and liquidation of the Partnership provided,
that in determining "Cash from Capital Transactions", items (i)-(iii) above
shall include, with respect to each Subsidiary of the Partnership whose income
is accounted for on a consolidated or combined basis with the Partnership, a
percentage of each such item of such Subsidiary equal to the Partnership's
percentage ownership interest in such Subsidiary.
"Carrying Value" means (a) with respect to a Contributed Property, the
Agreed Value of such property reduced (but not below zero) by all depreciation,
depletion (computed as a separate item of deduction), amortization and cost
recovery deductions charged to the Partners' Capital Accounts, and (b) with
respect to any other Partnership property, the adjusted basis of such property
for federal income tax purposes, all as of the time of determination. The
Carrying Value of any property shall be adjusted from time to time in accordance
with Sections 4.6(d)(i) and 4.6(d)(ii) hereof, and to reflect changes, additions
or other adjustments to the Carrying Value for dispositions and acquisitions of
Partnership properties, as deemed appropriate by the General Partner.
"Cash from Capital Transactions" means, at any date, such amounts of cash
as are determined by the General Partner to be cash made available to the
Partnership from or by reason of a Capital Transaction.
"Certificate" means a certificate issued by the Partnership evidencing
ownership of one or more Partnership Interests.
"Certificate of Limited Partnership" means the Certificate of Limited
Partnership filed with the Secretary of State of the State of Delaware as
referenced in Section 6.2 hereof, as such Certificate may be amended and/or
restated from time to time.
"Citizenship Certification" means a properly completed certificate in such
form as may be specified by the General Partner by which an Assignee or a
Limited Partner certifies that he (and if he is a nominee holding for the
account of another Person, that to the best of his knowledge such other Person)
is an Eligible Citizen.
"Closing Date" means the first date on which Units are sold by the
Partnership to the Underwriters pursuant to the provisions of the Underwriting
Agreement.
"Closing Price" for any day means the last sale price on such day, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices on such day, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Units of a class are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal National Securities
Exchange on which the Units of such class are listed or admitted to trading or,
if the Units of a class are not listed or admitted to trading on any National
Securities Exchange, the last quoted price on such day or, if not so quoted, the
average of the high bid and low asked prices on such day in the over-the-counter
market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System or such other system then in use, or, if on any such
day the Units of a class are not quoted by any such organization, the average of
the closing bid and asked prices on such day as furnished by a professional
market maker making a market in the Units of such class
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selected by the Board of Directors of the General Partner, or, if on any such
day no market maker is making a market in the Units of such class, the fair
value of such Units on such day as determined reasonably and in good faith by
the Board of Directors of the General Partner using any reasonable method of
valuation.
"Code" means the Internal Revenue Code of 1986, as amended and in effect
from time to time, as interpreted by the applicable regulations thereunder. Any
reference herein to a specific section or sections of the Code shall be deemed
to include a reference to any corresponding provision of future law.
"Contributed Property" means each property or other asset, in such form as
may be permitted by the Delaware Act, but excluding cash, contributed to the
Partnership (or deemed contributed to the Partnership on termination and
reconstitution thereof pursuant to Section 708 of the Code). Once the Carrying
Value of a Contributed Property is adjusted pursuant to Section 4.6(d)(i)
hereof, such property shall no longer constitute a Contributed Property for
purposes of Section 5.1 hereof, but shall be deemed an Adjusted Property for
such purposes.
"Contributing Partner" means each Partner contributing (or deemed to have
contributed on termination and reconstitution of the Partnership pursuant to
Section 708 of the Code or otherwise) a Contributed Property.
"Conversion Date" means with respect to each Deferred Participation
Interest, the date on which such Deferred Participation Interest is converted,
in accordance with the provisions of Section 5.7, into Units.
"Cumulative Base Deficiency" means an amount, attributable to any Unit and
determined with respect to all preceding calendar quarters, which equals the
excess of (a) the sum resulting from adding together the Base Quarterly
Deficiency, if any, as to such Unit for each of such preceding calendar quarters
within the Support Period, over (b) the sum of any distributions made to the
holder of such Unit (or his predecessors) with respect to any preceding calendar
quarters pursuant to Section 5.4(b) hereof.
"Curative Allocation" shall mean any allocation of an item of income, gain,
deduction, loss or credit pursuant to the provisions of Section 5.1(d)(xi).
"Current Market Price" shall have the meaning assigned to such term in
Section 17.1(a) hereof.
"Debt" means, as to any Person, as of any date of determination, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services, (b) all amounts owed by such Person to banks or
other Persons in respect of reimbursement obligations under letters of credit,
surety bonds and other similar instruments guaranteeing payment or other
performance of obligations by such Person, (c) all indebtedness for borrowed
money or for the deferred purchase price of property or services secured by any
lien on any property owned by such Person, to the extent attributable to such
Person's interest in such property, even though such Person has not assumed or
become liable for the payment thereof, (d) lease obligations of such Person
which, in accordance with generally accepted accounting principles, should be
capitalized, and (e) such other obligations of such Person as the General
Partner may determine in its sole discretion are appropriate.
"Deferred Participation Interest" means, a Partnership Interest issued
pursuant to Section 4.3(a) which Partnership Interest confers upon the holder
thereof only the rights and obligations specifically provided in Section 5.7 of
this Agreement.
"Delaware Act" means the Delaware Revised Uniform Limited Partnership Act,
6 Del. C. 17-101, et seq., as it may be amended from time to time, and any
successor to such statute.
"Departing Partner" means a former General Partner, as of the effective
date of any withdrawal or removal of such former General Partner pursuant to
Section 13.1 hereof.
"Deposit Account" means the account established by the Depositary pursuant
to the Deposit Agreement.
"Deposit Agreement" means the Deposit Agreement among the General Partner,
in its capacity both as General Partner and as attorney-in-fact for the Limited
Partners, the Partnership and the Depositary, as it may be amended or restated
from time to time.
"Depositary" means the bank or other institution appointed by the General
Partner in its sole discretion to act as depositary for the Depositary Units
pursuant to the Deposit Agreement, or any successor to it as depositary.
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"Depositary Receipt" means a depositary receipt, issued by the Depositary
or agents appointed by the Depositary in accordance with the Deposit Agreement,
evidencing ownership of one or more Depositary Units.
"Depositary Unit" means a depositary unit representing a Unit on deposit
with the Depositary pursuant to the Deposit Agreement.
"Designated Acres" means up to an aggregate of 150,000 acres of property
owned by the Partnership which may be designated by the General Partner at the
time of the sale thereof as constituting Designated Acres (such aggregate number
of acres to be determined over the term of the Partnership).
"Distribution Support Agreement" means the agreement, dated as of the
Closing Date, between Burlington and the Partnership relating to the purchase of
SPUs.
"Economic Risk of Loss" shall have the meaning set forth in Treasury
Regulation Section 1.704-1T(b)(4)(iv)(k)(1).
"Eligible Citizen" means a Person qualified to own interests in real
property in jurisdictions in which the Partnership does business or proposes to
do business from time to time, and whose status as a Limited Partner or Assignee
does not or would not subject the Partnership to a substantial risk of
cancellation or forfeiture of any of their property or any interest therein.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
any successor to such statute.
"Facilities Subsidiary" means Plum Creek Manufacturing, Inc., a Delaware
corporation, 95% of the common stock of which is held by the Partnership on the
Closing Date and 5% of the common stock of which is held by the General Partner
on the Closing Date.
"First Liquidation Target Amount" means an amount, determined with respect
to any Unit, which equals, as of the date of its determination, the sum of (a)
the Unrecovered Capital, if any, attributable to such Unit, plus (b) the
Cumulative Base Deficiency, if any, attributable to such Unit, plus (c) the
First Target Amount, with respect to the calendar quarter as to which such
determination is made.
"First Target Amount" means $0.65 per Unit (or, with respect to the period
commencing on the Closing Date and ending on June 30, 1989, the product of $0.65
multiplied by a fraction the numerator of which is the number of days in such
period and the denominator of which is 91), subject to adjustment in accordance
with Sections 5.6 and 9.6 hereof.
"Fourth Liquidation Target Amount" means an amount, determined with respect
to any Unit, which equals, as of the date of its determination, the sum of (a)
the Third Liquidation Target Amount, if any, attributable to such Unit, plus (b)
the excess, if any, of the Fourth Target Amount over the Third Target Amount,
determined with respect to the calendar quarter as to which such determination
is made.
"Fourth Target Amount" means $0.85 per Unit (or, with respect to the period
commencing on the Closing Date and ending on June 30, 1989, the product of $0.85
multiplied by a fraction the numerator of which is the number of days in such
period and the denominator of which is 91), subject to adjustment in accordance
with Sections 5.6 and 9.6 hereof.
"General Partner" means Plum Creek Management Company, a Delaware
corporation, and its successors as general partner of the Partnership.
"General Partner Equity Value" means, as of any date of determination, the
fair market value of the General Partner's Partnership Interest, as determined
by the General Partner using whatever reasonable method of valuation it may
adopt; provided, however, if any such valuation occurs at a time that the
General Partner or an Affiliate of the General Partner holds Management Units,
Deferred Participation Interests or Units, such Partnership Interests must be
taken into account in determining the General Partner Equity Value.
"Incentive Distribution" means any amount of cash distributed to the
General Partner in its capacity as general partner, pursuant to Sections 5.4(e),
5.4(f), 5.4(g) or 5.4(h) which exceeds that amount equal to 2% of the aggregate
amount of cash then being distributed pursuant to such provisions.
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"Indemnitee" means the General Partner, any Departing Partner, any Person
who is or was an Affiliate of the General Partner or any Departing Partner, any
Person who is or was an officer, director, employee, agent or trustee of the
General Partner or any Departing Partner or any Affiliate of the General Partner
or Departing Partner, or any Person who is or was serving at the request of the
General Partner or any Departing Partner or any Affiliate of the General Partner
or Departing Partner as a director, officer, employee, agent or trustee of
another Person, including any Subsidiary.
"Initial Limited Partners" means PCTC and the Underwriters upon being
admitted to the Partnership in accordance with Section 4.3 hereof.
"Initial Offering" means the initial offering of Depositary Units to the
public, as described in the Registration Statement.
"Initial Unit Price" means the initial price per Unit at which the
Underwriters will offer the Units to the public for sale as set forth on the
cover page of the prospectus first issued at or after the time the Registration
Statement filed in connection with the sale of Units contemplated by the
Underwriting Agreement first became effective.
"Issue Price" means the price at which a Unit is purchased from the
Partnership, less any sales commission or underwriting discount charged to the
Partnership.
"Limited Partner" means each Initial Limited Partner, each Substituted
Limited Partner, each Additional Limited Partner and any Departing Partner upon
the change of its status from General Partner to Limited Partner pursuant to
Section 13.3 hereof and, solely for purposes of Articles IV, V and VI hereof and
Sections 14.3 and 14.4 hereof, shall include an Assignee and, solely for
purposes of Article VII hereof, shall include a Special Limited Partner and
holders of Deferred Participation Interests.
"Limited Partner Equity Value" means, as of any date of determination, the
amount equal to the product of (a) the total number of Units outstanding
(immediately prior to an issuance of Units or distribution of cash or
Partnership property), other than Units held by the General Partner or an
Affiliate of the General Partner, multiplied by (b) (i) in the case of a
valuation required by Section 4.6(d)(i) (other than valuations caused by sales
of a de minimis quantity of Units) the Issue Price or (ii) in the case of a
valuation required by Section 4.6(d)(ii) (or a valuation required by Section
4.6(d)(i) caused by sales of a de minimis quantity of Units) the Closing Price.
"Liquidator" means the General Partner or other Person approved pursuant to
Section 14.3 hereof who performs the functions described therein.
"Management Unit" means a Unit issued pursuant to Section 4.3(a) which Unit
confers upon the holder thereof all of the rights and obligations of a Limited
Partner, provided, however, that such Unit will be subject to the provisions of
Section 4.6(c)(ii) hereof if it also constitutes a Restricted Interest.
"Minimum Gain Attributable to Partner Nonrecourse Debt" means that amount
determined in accordance with the principles of Treasury Regulation Section
1.704-1T(b)(4)(iv)(h)(6).
"Minimum Quarterly Amount" means $0.60 per Unit per calendar quarter (or,
with respect to the period commencing on the Closing Date and ending on June 30,
1989, the product of $0.60 multiplied by a fraction, the numerator of which is
the number of days in such period and the denominator of which is 91), subject
to adjustment in accordance with Sections 5.6 and 9.6 hereof.
"MQA" means Minimum Quarterly Amount.
"NASDAQ" means the National Association of Securities Dealers, Inc.
Automated Quotation System.
"National Securities Exchange" means an exchange registered with the
Securities and Exchange Commission under Section 6(a) of the Exchange Act.
"Net Agreed Value" means (a) in the case of any Contributed Property, the
Agreed Value of such property reduced by any liabilities either assumed by the
Partnership upon such contribution or to which such property is subject when
contributed and (b) in the case of any property distributed to a Partner or
Assignee
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by the Partnership, the Partnership's Carrying Value of such property at the
time such property is distributed, reduced by any indebtedness either assumed by
such Partner or Assignee upon such distribution or to which such property is
subject at the time of distribution as determined under Section 752 of the Code.
"Net Income" shall mean, for any taxable period, the excess, if any, of the
Partnership's items of income and gain (other than those items attributable to
dispositions constituting Termination Capital Transactions) for such taxable
period over the Partnership's items of loss and deduction (other than those
items attributable to dispositions constituting Termination Capital
Transactions) for such taxable period. The items included in the calculation of
Net Income shall be determined in accordance with Section 4.6(b) and shall not
include any items specially allocated under Section 5.1(d). Once an item of
income, gain, loss or deduction that has been included in the initial
computation of Net Income is subjected to a Required Allocation or a Curative
Allocation, Net Income or the resulting Net Loss, whichever the case may be,
shall be recomputed without regard to such item.
"Net Loss" shall mean, for any taxable period, the excess, if any, of the
Partnership's items of loss and deduction (other than those items attributable
to dispositions constituting Termination Capital Transactions) for such taxable
period over the Partnership's items of income and gain (other than those items
attributable to dispositions constituting Termination Capital Transactions) for
such taxable period. The items included in the calculation of Net Loss shall be
determined in accordance with Section 4.6(b) and shall not include any items
specially allocated under Section 5.1(d). Once an item of income, gain, loss or
deduction that has been included in the initial computation of Net Loss is
subjected to a Required Allocation or a Curative Allocation, Net Loss or the
resulting Net Income, whichever the case may be, shall be recomputed without
regard to such item.
"Net Termination Gain" shall mean, for any taxable period, the sum, if
positive, of all items of income, gain or loss recognized by the Partnership
from Termination Capital Transactions occurring in such taxable period. The
items included in the determination of Net Termination Gain shall be determined
in accordance with Section 4.6(b) and shall not include any items of income,
gain or loss specially allocated under Section 5.1(d). Once an item of income,
gain or loss that has been included in the initial computation of Net
Termination Gain is subjected to a Required Allocation or a Curative Allocation,
Net Termination Gain or the resulting Net Termination Loss, whichever the case
may be, shall be recomputed without regard to such item.
"Net Termination Loss" shall mean, for any taxable period, the sum, if
negative, of all items of income, gain or loss recognized by the Partnership
from Termination Capital Transactions occurring in such taxable period. The
items included in the determination of Net Termination Loss shall be determined
in accordance with Section 4.6(b) and shall not include any items of income,
gain or loss specially allocated under Section 5.1(d). Once an item of gain or
loss that has been included in the initial computation of Net Termination Loss
is subjected to a Required Allocation or a Curative Allocation, Net Termination
Loss or the resulting Net Termination Gain, whichever the case may be, shall be
recomputed without regard to such item.
"Non-citizen Assignee" means a Person who the General Partner has
determined in its sole discretion does not constitute an Eligible Citizen and as
to whose Partnership Interest the General Partner has become the Substituted
Limited Partner, pursuant to Section 11.5 hereof.
"Nonrecourse Built-in Gain" shall mean with respect to any Contributed
Properties or Adjusted Properties that are subject to a mortgage or negative
pledge securing a Nonrecourse Liability, the amount of any taxable gain that
would be allocated to the Partners pursuant to Sections 5.2(b)(i)(A),
5.2(b)(ii)(A) or 5.2(b)(iv) if such properties were disposed of in a taxable
transaction in full satisfaction of such liabilities and for no other
consideration.
"Nonrecourse Deductions" shall mean any and all items of loss, deduction or
expenditures (described in Section 705 (a)(2)(B) of the Code) that, in
accordance with the principles of Treasury Regulation Section
1.704-1T(b)(4)(iv)(b), are attributable to a Nonrecourse Liability.
"Nonrecourse Liability" shall have the meaning set forth in Treasury
Regulation Section 1.704-1T(b)(4)(iv)(k)(3).
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"Notice of Election to Purchase" has the meaning assigned to such term in
Section 17.1(b) hereof.
"Opinion of Counsel" means a written opinion of counsel (who may be regular
counsel to the Partnership or the General Partner) in form and substance
acceptable to the General Partner.
"Organizational Limited Partner" means David D. Leland in his capacity as
the organizational limited partner of the Partnership pursuant to this
Agreement.
"outstanding" means all Units or other Partnership Securities, including
Deferred Participation Interests, that are issued by the Partnership and
reflected as outstanding on the Partnership's books and records as of the date
of determination.
"Partner" means a General Partner, a Limited Partner or a Special Limited
Partner and solely for purposes of Articles IV, V and VI hereof and Sections
14.3 and 14.4 hereof shall include an Assignee.
"Partner Nonrecourse Debt" shall have the meaning set forth in Treasury
Regulation Section 1.704-1T(b)(4)(iv)(k)(4).
"Partner Nonrecourse Deductions" shall mean any and all items of loss,
deduction or expenditure (described in Section 705(a)(2)(B) of the Code) in
accordance with the principles of Treasury Regulation Section
1.704-1T(b)(4)(iv)(h)(3), are attributable to a Partner Nonrecourse Debt.
"Partnership" means the limited partnership heretofore formed and continued
pursuant to this Agreement, and any successor thereto.
"Partnership Interest" means the interest of a Partner in the Partnership
which, in the case of a Special Limited Partner, a Limited Partner or Assignee,
shall include Units, SPUs or Deferred Participation Interests, whichever the
case may be.
"Partnership Minimum Gain" shall mean that amount determined in accordance
with the principles of Treasury Regulation Sections 1.704-1T(b)(4)(iv)(a) and
1.704-1T(b)(4)(iv)(c).
"Partnership Securities" has the meaning assigned to such term in Section
4.4(a) hereof.
"Partnership Year" means the fiscal year of the Partnership, which shall be
the calendar year.
"PCTC" means Plum Creek Timber Company, Inc., a Delaware corporation and a
wholly-owned Subsidiary of Burlington.
"Per Unit Capital Amount" means, as of any date of determination, the
Capital Account, stated on a per Unit basis, underlying any Unit held by a
Public Unitholder.
"Percentage Interest" means, as of the date of such determination, (a) as
to the General Partner in its capacity as such, 2%, (b) as to any Limited
Partner or Assignee holding Units, the product of (i) 98% multiplied by (ii) the
quotient of the number of Units held by such Limited Partner or Assignee divided
by the total number of all Units then outstanding; provided, however, that
following any issuance of additional Units by the Partnership pursuant to
Section 4.4 hereof, proper adjustment shall be made to the Percentage Interest
represented by each Unit to reflect such issuance.
"Person" means an individual or a corporation, partnership, trust,
unincorporated organization, association or other entity.
"Public Unitholder" means a Person other than the General Partner or any
Affiliate of the General Partner who holds Units.
"Purchase Date" means the date determined by the General Partner as the
date for purchase of all outstanding Units (other than Units owned by the
General Partner and its Affiliates) pursuant to Section 17.1(b) hereof.
"Recapture Income" means any gain recognized by the Partnership (computed
without regard to any adjustment required by Sections 734 or 743 of the Code)
upon the disposition of any property or asset of the
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Partnership, which gain is characterized as ordinary income because it
represents the recapture of deductions previously taken with respect to such
property or asset.
"Record Date" means the date established by the General Partner for
determining (a) the identity of Limited Partners (or Assignees, if applicable)
entitled to notice of, or to vote at, any meeting of Limited Partners or
entitled to vote by ballot or give approval of Partnership action in writing
without a meeting or entitled to exercise rights in respect of any other lawful
action of Limited Partners, or (b) the identity of Record Holders entitled to
receive any report or distribution.
"Record Holder" means the Person in whose name a Unit is registered on the
books of the Transfer Agent, as of the opening of business on a particular
Business Day.
"Redeemable Units" means any Units for which a redemption notice has been
given and has not been withdrawn, under Section 11.6 hereof.
"Registration Statement" means the Registration Statement on Form S-1
(Registration No. 33-28094), as it has been or as it may be amended or
supplemented from time to time, filed by the Partnership with the Securities and
Exchange Commission under the Securities Act to register the offering and sale
of the Units in the Initial Offering.
"Required Allocations" shall mean any allocation (or limitation imposed on
any allocation) of an item of income, gain, deduction or loss pursuant to (a)
the proviso-clauses of Sections 5.1(b)(ii), 5.1(b)(iii) and 5.1(b)(iv) or (b)
Sections 5.1(d)(i), 5.1(d)(ii), 5.1(d)(iv), 5.1(d)(v), 5.1(d)(vi), 5.1(d)(vii)
and 5.1(d)(ix), such allocations (or limitations thereon) being directly or
indirectly required by the Treasury regulations promulgated under Section 704(b)
of the Code.
"Residual Gain" or "Residual Loss" shall mean any item of gain or loss, as
the case may be, of the Partnership recognized for federal income tax purposes
resulting from a sale, exchange or other disposition of Contributed Property or
Adjusted Property, to the extent such item of gain or loss is not allocated
pursuant to the first sentence of Sections 5.2(b)(i)(A) or 5.2(b)(ii)(A) to
eliminate Book-Tax Disparities.
"Restricted Interest" means any Management Unit and any Deferred
Participation Interest, prior to its conversion to a Unit pursuant to Section
5.7(b), which is held by a Person who holds both such Management Units and such
Deferred Participation Interests. Once any such Unit is transferred and no
longer held by a Person who holds both such Management Units and such Deferred
Participation Interests, it will no longer constitute a Restricted Interest.
"Second Liquidation Target Amount" means an amount, determined with respect
to any Unit, which equals, as of the date of its determination, the sum of (a)
the First Liquidation Target Amount, if any, attributable to such Unit, plus (b)
the excess, if any, of the Second Target Amount over the First Target Amount,
with respect to the calendar quarter as to which such determination is made.
"Second Target Amount" means $0.70 per Unit (or, with respect to the period
commencing on the Closing Date and ending on June 30, 1989, the product of $0.70
multiplied by a fraction, of which the numerator is equal to the number of days
in such period and of which the denominator is 91), subject to adjustment in
accordance with Sections 5.6 and 9.6 hereof.
"Securities Act" means the Securities Act of 1933, as amended, and any
successor to such statute.
"Special Limited Partner" shall mean Burlington or an Affiliate of
Burlington upon being issued SPUs by the Partnership or upon transfer of such
SPUs to Burlington or such Affiliate of Burlington prior to redemption of all
such SPUs issued.
"Special Limited Partner Book Capital" means, as of any date of
determination, the amount equal to the sum of the balances of the Capital
Accounts of all Special Limited Partners, determined pursuant to Section 4.6
(prior to any adjustment pursuant to Section 4.6(d) arising upon the present
event requiring a valuation of the Partnership's assets).
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"SPU" means a Partnership Interest issued pursuant to Section 4.4 hereof
and in accordance with the Distribution Support Agreement, which Partnership
Interest shall confer upon the holder thereof only the rights and obligations
specifically provided in this Agreement with respect to SPUs (and no other
rights otherwise available to holders of a Partnership Interest) and the
Distribution Support Agreement.
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity interests is owned, directly or
indirectly, by such Person, and, with respect to the Partnership, shall include
the Facilities Subsidiary.
"Substituted Limited Partner" means a Person who is admitted as a Limited
Partner to the Partnership pursuant to Section 12.2 hereof in place of and with
all the rights of a Limited Partner and who is shown as a Limited Partner on the
books and records of the Partnership.
"Support Period" means the period commencing on the Closing Date and ending
on the earlier of June 30, 1994 or such earlier date of termination as provided
for in the Distribution Support Agreement.
"Termination Capital Transaction" shall mean any sale, transfer or other
disposition of any Partnership property occurring upon or incident to the
liquidation and winding-up of the Partnership pursuant to Article XIV.
"Third Liquidation Target Amount" means an amount, determined with respect
to any Unit, which equals, as of the date of its determination, the sum of (a)
the Second Liquidation Target Amount, if any, attributable to such Unit, plus
(b) the excess, if any, of the Third Target Amount over the Second Target
Amount, determined with respect to the calendar quarter as to which such
determination is made.
"Third Target Amount" means $0.75 per Unit (or, with respect to the period
commencing on the Closing Date and ending on June 30, 1989, the product of $0.75
multiplied by a fraction, of which the numerator is equal to the number of days
in such period and of which the denominator is 91), subject to adjustment in
accordance with Sections 5.6 and 9.6 hereof.
"Timberlands Conveyance and Assumption Agreement" means the conveyance
agreement between the Partnership and PCTC (or its successors) wherein, among
other things, PCTC is to contribute to the Partnership undivided interests in
certain timberlands and other assets in exchange for a limited partner interest
in the Partnership consisting of 150,000 Management Units and 1,250,000 Deferred
Participation Interests.
"Trading Day" has the meaning assigned to such term in Section 17.1(a)
hereof.
"Transfer Agent" means the Depositary or any bank, trust company or other
Person appointed by the Partnership to act as transfer agent for the Units.
"Transfer Application" means an application and agreement for transfer of
Depositary Units in the form set forth on the back of a Depositary Receipt or in
a form substantially to the same effect in a separate instrument.
"Underwriter" means each Person named as an underwriter in the Underwriting
Agreement who purchases Units pursuant thereto.
"Underwriting Agreement" means the Underwriting Agreement among the
Underwriters, the Partnership, the General Partner, the Facilities Subsidiary,
Plum Creek Timber Company, Inc. and Burlington.
"Unit" means a Partnership Interest of a Limited Partner or Assignee in the
Partnership (not including SPUs and, prior to the termination of the Support
Period, not including a Deferred Participation Interest) representing a
fractional part of the Partnership Interests of all Limited Partners and
Assignees; provided, however, that in the event any class or series of Units
issued pursuant to Section 4.4 hereof shall have designations, preferences or
special rights such that a Unit of such class or series shall represent a
greater or lesser part of the Partnership Interests of all Limited Partners or
Assignees than a Unit of any other class or series of Units, the Partnership
Interest represented by such class or series of Units shall be determined in
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accordance with such designations, preferences or special rights. Unless
otherwise specifically indicated to the contrary, "Units" includes Depositary
Units.
"Unrealized Gain" attributable to any item of Partnership property means,
as of any date of determination, the excess, if any, of (a) the fair market
value of such property (as determined under Section 4.6(d) hereof) as of such
date, over (b) the Carrying Value of such property as of such date (prior to any
adjustment to be made pursuant to Section 4.6(d) hereof) as of such date.
"Unrealized Loss" attributable to any item of Partnership property means,
as of any date of determination, the excess, if any, of (a) the Carrying Value
of such property as of such date (prior to any adjustment to be made pursuant to
Section 4.6(d) hereof) as of such date, over (b) the fair market value of such
property (as determined under Section 4.6(d) hereof) as of such date.
"Unrecovered Capital" means, at any time, (a) with respect to a Unit, the
Initial Unit Price, less the sum of all distributions theretofore made in
respect of such Unit constituting, and which for purposes of determining the
priority of such distribution is treated as constituting, Cash from Capital
Transactions, (b) with respect to a SPU, the excess, if any, of (i) the cash
amount of the Capital Contribution made pursuant to Section 4.4 in exchange for
such SPU, over (ii) any amount previously distributed pursuant to Section 5.4(d)
or 13.4 towards the redemption of such SPU and (c) with respect to a Deferred
Participation Interest, prior to its conversion into a Unit pursuant to Section
5.7(b), the excess, if any, of (i) the Net Agreed Value of the undivided
interest in the Contributed Property conveyed to the Partnership pursuant to
Section 4.3(a) in exchange for such Deferred Participation Interest, over (ii)
any amount previously distributed pursuant to Section 13.4 towards the
redemption of such Deferred Participation Interest.
ARTICLE III
PURPOSE
3.1 Purpose and Business. The purpose and nature of the business to be
conducted by the Partnership shall be (i) to conduct any business that may be
lawfully conducted by a limited partnership organized pursuant to the Delaware
Act, including, without limitation, the acquisition, development, ownership,
management, operation, leasing and disposition of timberlands and the production
and sale of forest products, (ii) to enter into any partnership, joint venture
or other similar arrangement to engage in any of the foregoing or the ownership
of interests in any entity engaged in any of the foregoing, including the
ownership of common stock of the Facilities Subsidiary, and (iii) to do anything
necessary or incidental to the foregoing (including, without limitation, the
making of capital contributions or loans to the Facilities Subsidiary).
3.2 Powers. The Partnership shall be empowered to do any and all acts and
things necessary, appropriate, proper, advisable, incidental to or convenient
for the furtherance and accomplishment of the purposes and business described
herein and for the protection and benefit of the Partnership.
ARTICLE IV
CAPITAL CONTRIBUTIONS
4.1 Initial Contributions. In order to form the Partnership under the
Delaware Act, the General Partner has made an initial Capital Contribution to
the Partnership in the amount of $20 and the General Partner has accepted a
Capital Contribution to the Partnership in the amount of $980 from the
Organizational Limited Partner for an interest in the Partnership, and the
Organizational Limited Partner has been admitted as a limited partner of the
Partnership.
4.2 Return of Initial Contribution. As of the Closing Date, after giving
effect to the transactions contemplated by Section 4.3 hereof, the interest in
the Partnership of the Organizational Limited Partner shall be terminated, the
Capital Contribution by the Organizational Limited Partner as an initial Capital
Contribution shall be refunded and the Organizational Limited Partner shall
withdraw as a limited partner of the Partnership. 98% of any interest or other
profit which may have resulted from the investment or other use
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of such initial Capital Contributions shall be allocated and distributed to the
Organizational Limited Partner, the balance thereof shall be allocated and
distributed to the General Partner.
4.3 Initial Limited Partners. (a) Prior to the Closing Date, PCTC shall
contribute to the Partnership undivided interests in those assets described in
the Timberlands Conveyance and Assumption Agreement in exchange for 150,000
Management Units and 1,250,000 Deferred Participation Interests and, as of the
Closing Date, PCTC shall be admitted to the Partnership as an Initial Limited
Partner in respect of such Management Units and Deferred Participation
Interests.
(b) On the Closing Date, and as will then be required by the Underwriting
Agreement, each Underwriter shall contribute to the Partnership, in exchange for
the number of Units then specified in the Underwriting Agreement to be purchased
by such Underwriter at such Time of Delivery, an amount in cash equal to the
Issue Price for such Units (as then specified in the Underwriting Agreement)
multiplied by such number of Units being so purchased. Upon receipt of such
Capital Contribution, each Underwriter shall be admitted to the Partnership as
an Initial Limited Partner in respect of the Units so issued to it.
4.4 Issuances of Additional Units and Other Securities. (a) The General
Partner is hereby authorized to cause the Partnership to issue, in addition to
the Units issued pursuant to Section 4.3 hereof, such additional Units, or
classes or series thereof, or options, rights, warrants or appreciation rights
relating thereto, or SPUs or any other type of equity security that the
Partnership may lawfully issue, any unsecured or secured debt obligations of the
Partnership or debt obligations of the Partnership convertible into any class or
series of equity securities of the Partnership (collectively, "Partnership
Securities"), for any Partnership purpose, at any time or from time to time, to
the Partners or to other Persons for such consideration and on such terms and
conditions as shall be established by the General Partner in its sole
discretion, all without the approval of any Limited Partners. The General
Partner shall have sole discretion, subject to the guidelines set forth in this
Section 4.4 and the requirements of the Delaware Act, in determining the
consideration and terms and conditions with respect to any future issuance of
Partnership Securities.
(b) Notwithstanding any provision of this Agreement to the contrary,
additional Partnership Securities to be issued by the Partnership pursuant to
this Section 4.4 shall be issuable from time to time in one or more classes, or
one or more series of any of such classes, with such designations, preferences
and relative, participating, optional or other special rights, powers and
duties, including rights, powers and duties senior to existing classes and
series of Partnership Securities, all as shall be fixed by the General Partner
in the exercise of its sole and complete discretion, subject to Delaware law,
including, without limitation, (i) the allocations of items of Partnership
income, gain, loss, deduction and credit to each such class or series of
Partnership Securities; (ii) the right of each such class or series of
Partnership Securities to share in Partnership distributions; (iii) the rights
of each such class or series of Partnership Securities upon dissolution and
liquidation of the Partnership; (iv) whether such class or series of additional
Partnership Securities is redeemable by the Partnership and, if so, the price at
which, and the terms and conditions upon which, such class or series of
additional Partnership Securities may be redeemed by the Partnership; (v)
whether such class or series of additional Partnership Securities is issued with
the privilege of conversion and, if so, the rate at which, and the terms and
conditions upon which, such class or series of Partnership Securities may be
converted into any other class or series of Partnership Securities; (vi) the
terms and conditions upon which each such class or series of Partnership
Securities will be issued, deposited with the Depositary, evidenced by
Depositary Receipts and assigned or transferred; and (vii) the right, if any, of
each such class or series of Partnership Securities to vote on Partnership
matters, including matters relating to the relative rights, preferences and
privileges of each such class or series.
(c) Notwithstanding the terms of Sections 4.4(a) and 4.4(b) hereof, during
the Support Period, the Partnership shall not issue an aggregate of more than
3,750,000 additional Units (excluding for purposes of such determination Units
issued pursuant to the Underwriter's over-allotment option) or other Partnership
Securities on a parity with the Units with respect to distributions, income,
losses or upon liquidation nor shall the Partnership issue any other Partnership
Securities having rights to distributions or in liquidation ranking prior or
senior to the Units, without the prior approval of a majority of the outstanding
Units (excluding Units held by the General Partner and its Affiliates). After
the Support Period, the Partnership shall not issue any
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other Partnership Securities having rights to distributions or in liquidation
ranking prior or senior to the Units, without the prior approval of a majority
of the outstanding Units (excluding Units held by the General Partner and its
Affiliates).
(d) The General Partner is hereby authorized and directed to take all
actions which it deems appropriate or necessary in connection with each issuance
of Units, SPUs or other Partnership Securities pursuant to Section 4.4(a) hereof
and to amend this Agreement in any manner which it deems appropriate or
necessary to provide for each such issuance, to admit Additional Limited
Partners in connection therewith and to specify the relative rights, powers and
duties of the holders of the Partnership Securities being so issued.
(e) The General Partner shall do all things necessary to comply with the
Delaware Act and is authorized and directed to do all things it deems to be
necessary or advisable in connection with any future issuance of Partnership
Securities, including compliance with any statute, rule, regulation or guideline
of any federal, state or other governmental agency or any National Securities
Exchange on which the Depositary Units or other Partnership Securities are
listed for trading.
4.5 No Preemptive Rights. No Person shall have any preemptive,
preferential or other similar right with respect to (a) additional Capital
Contributions; (b) issuance or sale of any class or series of Units, SPUs or
other Partnership Securities, whether unissued, held in the treasury or
hereafter created; (c) issuance of any obligations, evidences of indebtedness or
other securities of the Partnership convertible into or exchangeable for, or
carrying or accompanied by any rights to receive, purchase or subscribe to, any
such Units or Partnership Securities; (d) issuance of any right of subscription
to or right to receive, or any warrant or option for the purchase of, any such
Units or Partnership Securities; or (e) issuance or sale of any other securities
that may be issued or sold by the Partnership.
4.6 Capital Accounts. (a) The Partnership shall maintain for each Partner
owning Units or Deferred Participation Interests a separate Capital Account with
respect to such Units or Deferred Participation Interests, in accordance with
the rules of Treasury Regulation Section 1.704-1(b)(2)(iv). Such Capital Account
shall be increased by (i) the amount of all Capital Contributions made to the
Partnership with respect to such Units or Deferred Participation Interests
pursuant to this Agreement and (ii) all items of Partnership income and gain
(including income and gain exempt from tax) computed in accordance with Section
4.6(b) hereof and allocated with respect to such Units or Deferred Participation
Interests pursuant to Section 5.1 hereof, and decreased by (x) the amount of
cash or Net Agreed Value of all actual and deemed distributions of cash or
property made with respect to such Units or Deferred Participation Interests
pursuant to this Agreement and (y) all items of Partnership deduction and loss
computed in accordance with Section 4.6(b) hereof and allocated with respect to
such Units or Deferred Participation Interests pursuant to Section 5.1 hereof.
The Partnership shall maintain for the General Partner a separate Capital
Account with respect to its Partnership Interest, held in its capacity as a
general partner, in accordance with the rules of Treasury Regulation Section
1.704-1(b)(2)(iv). Such Capital Account shall be increased by (i) the amount of
all Capital Contributions made to the Partnership with respect to such
Partnership Interest pursuant to this Agreement and (ii) all items of
Partnership income and gain (including income and gain exempt from tax) computed
in accordance with Section 4.6(b) hereof and allocated with respect to such
Partnership Interest pursuant to Section 5.1 hereof, and decreased by (x) the
amount of cash or Net Agreed Value of all actual and deemed distributions of
cash or property made with respect to such Partnership Interest pursuant to this
Agreement and (y) all items of Partnership deduction and loss computed in
accordance with Section 4.6(b) hereof and allocated with respect to such
Partnership Interest pursuant to Section 5.1.
The Partnership shall maintain a separate Capital Account with respect to
SPUs issued to any Special Limited Partner in accordance with the rules of
Treasury Regulation Section 1.704-1(b)(2)(iv). Such Capital Account shall be
increased by (i) all Capital Contributions made to the Partnership by such
Special Limited Partner in exchange for such SPUs and (ii) all items of
Partnership income and gain (including income and gain exempt from tax) computed
in accordance with Section 4.6(b) hereof and allocated to such Partner pursuant
to Section 5.1 hereof, and decreased by (x) the amount of cash or the Net Agreed
Value of any property distributed by the Partnership to such Special Limited
Partner in redemption of such SPUs, and
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(y) all items of Partnership deduction and loss computed in accordance with
Section 4.6(b) and allocated to such Special Limited Partner pursuant to Section
5.1.
(b) For purposes of computing the amount of any item of income, gain,
deduction or loss to be reflected in the Partners' Capital Accounts, the
determination, recognition and classification of any such item shall be the same
as its determination, recognition and classification for federal income tax
purposes (including any method of depreciation, cost recovery or amortization
used for that purpose), provided, that:
(i) All fees and other expenses incurred by the Partnership to promote
the sale of (or to sell) a Partnership Interest that can neither be
deducted nor amortized under Section 709 of the Code, if any, shall, for
purposes of Capital Account maintenance, be treated as an item of deduction
at the time such fees and other expenses are incurred and shall be
allocated among the Partners pursuant to Section 5.1 hereof.
(ii) Except as otherwise provided in Treasury Regulation Section
1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss
and deduction shall be made without regard to any election under Section
754 of the Code which may be made by the Partnership and, as to those items
described in Section 705(a)(1)(B) or 705(a)(2)(B) of the Code, without
regard to the fact that such items are not includable in gross income or
are neither currently deductible nor capitalized for federal income tax
purposes.
(iii) Any income, gain or loss attributable to the taxable disposition
of any Partnership property (including any disposition of a timber
interest) shall be determined as if the adjusted basis of such property
(or, in the case of certain timber dispositions, the "adjusted depletion
basis" of such timber) as of such date of disposition were equal in amount
to the Partnership's Carrying Value with respect to such property as of
such date. The adjusted basis or adjusted depletion basis, whichever the
case may be, determined upon sales or other dispositions of timber units
included in a timber account shall not, in the aggregate, exceed the
Partnership's total Carrying Value with respect to all of the timber units
included in such timber account.
(iv) In accordance with the requirements of Section 704(b) of the
Code, any deductions for depreciation, cost recovery or amortization
attributable to any Contributed Property shall be determined as if the
adjusted basis of such property as of the date it was acquired by the
Partnership was equal to the Agreed Value of such property. Upon an
adjustment pursuant to Section 4.6(d) hereof to the Carrying Value of any
Partnership property subject to depreciation, cost recovery or
amortization, any further deductions for such depreciation, cost recovery
or amortization attributable to such property shall be determined (A) as if
the adjusted basis of such property were equal to the Carrying Value of
such property immediately following such adjustment and (B) using a rate of
depreciation, cost recovery or amortization derived from the same method
and useful life (or, if applicable, the remaining useful life) as is
applied for federal income tax purposes; provided, however, that, if the
asset has a zero adjusted basis for federal income tax purposes,
depreciation, cost recovery or amortization deductions shall be determined
using any reasonable method that the General Partner may adopt.
(v) Any depletion deductions separately determined, in accordance with
the principles of Section 611 of the Code, with respect to a separate
timber account shall be computed as if the aggregate adjusted basis of the
timber units included in such timber account on the date of such
determination was equal in amount to the Partnership's Carrying Value with
respect to such timber account as of such date. The depletion allowance
separately determined with respect to a timber account shall not, in the
aggregate, exceed the Partnership's total Carrying Value with respect to
all of the timber units included in such timber account. This provision
shall only apply to depletion separately stated as an item of deduction, as
opposed to depletion amounts treated as a reduction of amounts realized or
included as a cost of goods sold (which depletion amounts are the subject
of Section 4.6(b)(iii)).
(vi) If the Partnership's adjusted basis in a depreciable or cost
recovery property is reduced for federal income tax purposes pursuant to
Section 48(q)(1) or 48(q)(3) of the Code, the amount of such reduction
shall solely for purposes hereof be deemed to be an additional depreciation
or cost recovery deduction in the year such property is placed in service
and shall be allocated among the Partners
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pursuant to Section 5.1 hereof. Any restoration of such basis pursuant to
Section 48(q)(2) of the Code shall, to the extent possible, be allocated in
the same manner to the Partners to whom such deemed deduction was
allocated.
(c)(i) Except as otherwise provided in Sections 4.6(c)(ii) and 4.6(c)(iii),
a transferee of a Partnership Interest shall succeed to a pro rata portion of
the Capital Account of the transferor relating to the Partnership Interest so
transferred; provided, however, that, if the transfer causes a termination of
the Partnership under Section 708(b)(1)(B) of the Code, the Partnership's
properties shall be deemed to have been distributed in liquidation of the
Partnership to the Partners (including the transferee of a Partnership Interest)
pursuant to Sections 14.3 and 14.4 and recontributed by such Partners in
reconstitution of the Partnership. In such event, the Carrying Values of the
Partnership properties shall be adjusted immediately prior to such deemed
distribution pursuant to Section 4.6(d)(ii) hereof and such adjusted Carrying
Values shall then constitute the Agreed Values of such properties upon such
deemed contribution to the reconstituted Partnership. The Capital Accounts of
such reconstituted Partnership shall be maintained in accordance with the
principles of this Section 4.6.
(ii) Immediately prior to the sale, exchange or other disposition of a
Restricted Unit by the General Partner or an Affiliate of the General Partner,
the Capital Account maintained with respect to such Restricted Units for such
Person shall be allocated between the Restricted Units transferred and the
Restricted Units retained by such Person in the manner provided herein below:
(A) In the case of a transfer, to either an unaffiliated third party
or an Affiliate, of Deferred Participation Interests which constitute
Restricted Units to the transferor, the Capital Account maintained with
respect to the transferor's Restricted Units will (1) first, be allocated
to the Management Units retained, if any, in an amount equal to the product
of (a) the number of such Management Units retained and (b) the Per Unit
Capital Amount, (2) second, be allocated to the Deferred Participation
Interests transferred in an amount equal to the product of (a) the number
of such Deferred Participation Interests transferred and (b) the Per Unit
Capital Amount and (3) third, any remaining balance in the Capital Account
will be allocated to the Deferred Participation Interests retained.
Following any such allocation, the transferor's Capital Account, if any,
will have a balance equal to the sum of the amounts allocated under clauses
(1) and (3) hereinabove, and the transferee's Capital Account established
with respect to the transferred Deferred Participation Interests will have
a balance equal to the amount allocated under clause (2) hereinabove.
(B) In the case of a transfer, to either an unaffiliated third party
or an Affiliate, of Management Units which constitute Restricted Units to
the transferor, the Capital Account maintained with respect to the
transferor's Restricted Units will (1) first, be allocated to the
Management Units transferred in an amount equal to the product of (a) the
number of such Management Units transferred and (b) the Per Unit Capital
Amount, and (2) second, any remaining balance in the Capital Account will
be allocated to the Restricted Units retained. Following any such
allocation, the transferor's Capital Account, if any, will have a balance
equal to the amount allocated under clause (2) hereinabove and the
transferee's Capital Account established with respect to the transferred
Management Units will have a balance equal to the amount allocated under
clause (1) hereinabove.
(iii) Immediately prior to the sale, exchange or other disposition of a
Deferred Participation Interest (not otherwise constituting a Restricted Unit)
by the General Partner or an Affiliate of the General Partner, the Capital
Account maintained for such Person with respect to such Units will (1) first, be
allocated to the Deferred Participation Interests transferred in an amount equal
to the product of (a) the number of such Deferred Participation Interests
transferred and (b) the Per Unit Capital Amount, and (2) second, any remaining
balance in such Capital Account will be retained by the transferor, regardless
of whether it has retained any Deferred Participation Interests. Following any
such allocation, the transferor's Capital Account, if any, maintained with
respect to the retained Deferred Participation Interests, if any, will have a
balance equal to the amount allocated under clause (2) hereinabove, and the
transferee's Capital Account established with respect to the transferred
Deferred Participation Interests will have a balance equal to the amount
allocated under clause (1) hereinabove.
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(d)(i) Consistent with the provisions of Treasury Regulation Section
1.704-1(b)(2)(iv)(f), on an issuance of additional Units for cash or Contributed
Property or the conversion of the General Partner's Partnership Interest to
Units pursuant to Section 13.3(b), the Capital Accounts of all Partners and the
Carrying Value of each Partnership property immediately prior to such issuance
shall be adjusted upward or downward to reflect any Unrealized Gain or
Unrealized Loss attributable to such Partnership property, as if such Unrealized
Gain or Unrealized Loss had been recognized on an actual sale of each such
property immediately prior to such issuance and had been allocated to the
Partners at such time pursuant to Section 5.1 hereof. In determining such
Unrealized Gain or Unrealized Loss the aggregate cash amount and fair market
value of all Partnership assets (including cash or cash equivalents) immediately
prior to the issuance of Partnership Interests shall be determined by the
General Partner using such reasonable method of valuation as it may adopt;
provided, however, the General Partner, in arriving at such valuation, must take
fully into account the Limited Partner Equity Value, the General Partner Equity
Value, and the Special Limited Partner Book Capital, at such time. The General
Partner shall allocate such aggregate value among the assets of the Partnership
(in such manner as it determines in its sole discretion to be reasonable) to
arrive at a fair market value for individual properties.
(ii) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f),
immediately prior to any actual or deemed distribution to a Partner of any
Partnership property (other than a distribution of cash that is not in
redemption or retirement of a Partnership Interest), the Capital Accounts of all
Partners and the Carrying Value of such Partnership property shall be adjusted
upward or downward to reflect any Unrealized Gain or Unrealized Loss
attributable to such Partnership property, as if such Unrealized Gain or
Unrealized Loss had been recognized in a sale of each such property immediately
prior to such distribution for an amount equal to its fair market value, and had
been allocated to the Partners, at such time, pursuant to Section 5.1 hereof.
Any Unrealized Gain or Unrealized Loss attributable to such property shall be
allocated in the same manner as Net Termination Gain or Net Termination Loss
pursuant to Section 5.1(c) hereof; provided, however, that, in making any such
allocation, Net Termination Gain or Net Termination Loss actually realized shall
be allocated first and; provided, further, that in allocating any Unrealized
Gain upon the constructive termination resulting from the Initial Offering,
Section 5.1(c)(i)(B) will be applied as if it required that 100% of such
Unrealized Gain be allocated among the Limited Partners, in accordance with
their respective Percentage Interests. In determining such Unrealized Gain or
Unrealized Loss the aggregate cash amount and fair market value of all
Partnership assets (including cash or cash equivalents) immediately prior to a
distribution shall (A) in the case of a deemed distribution occurring as a
result of a termination of the Partnership pursuant to Section 708 of the Code,
be determined and allocated in the manner provided in Section 4.6(d)(i) or (B)
in the case of a liquidating distribution pursuant to Section 14.3 or 14.4, be
determined and allocated by the Liquidator using such reasonable methods of
valuation as it may adopt. Notwithstanding anything to the contrary provided
herein, the preceding provisions of this subsection 4.6(d)(ii) shall not be
applied to distributions of cash in redemption or retirement of a Partnership
Interest (and no such adjustment shall be made) unless the adjustment therein
described is necessary to maintain the economic uniformity of the Units within
each class of publicly traded Units.
4.7 Interest. No interest shall be paid by the Partnership on Capital
Contributions or on balances in Partners' Capital Accounts.
4.8 No Withdrawal. No Partner shall be entitled to withdraw any part of
his Capital Contribution (including with respect to SPUs) or his Capital Account
or to receive any distribution from the Partnership, except as provided in
Section 4.2 hereof, and Articles V, XIII and XIV hereof.
4.9 Loans from Partners. Loans by a Partner to the Partnership shall not
constitute Capital Contributions. If any Partner shall advance funds to the
Partnership in excess of the amounts required hereunder to be contributed by it
to the capital of the Partnership, the making of such excess advances shall not
result in any increase in the amount of the Capital Account of such Partner. The
amount of any such excess advances shall be a debt obligation of the Partnership
to such Partner and shall be payable or collectible only out of the Partnership
assets in accordance with the terms and conditions upon which such advances are
made.
4.10 No Fractional Units. No fractional Units shall be issued by the
Partnership.
4.11 Splits and Combinations. (a) Subject to Section 4.11(d) hereof, the
General Partner may make a pro rata distribution of Units or Partnership
Securities to all Record Holders or may effect a subdivision or combination of
Units or other Partnership Securities; provided, however, that after any such
distribution,
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subdivision or combination, each Partner shall have the same Percentage Interest
in the Partnership as before such distribution, subdivision or combination.
(b) Whenever such a distribution, subdivision or combination of Units or
Partnership Securities is declared, the General Partner shall select a Record
Date as of which the distribution, subdivision or combination shall be effective
and shall send notice of the distribution, subdivision or combination at least
20 days prior to such Record Date, to each Record Holder as of the date not less
than 10 days prior to the date of such notice. The General Partner also may
cause a firm of independent public accountants selected by it to calculate the
number of Units to be held by each Record Holder after giving effect to such
distribution, subdivision or combination. The General Partner shall be entitled
to rely on any certificate provided by such firm as conclusive evidence of the
accuracy of such calculation.
(c) Promptly following any such distribution, subdivision or combination,
the General Partner may cause Depositary Receipts to be issued to the Record
Holders of Units as of the applicable Record Date representing the new number of
Units held by such Record Holders, or the General Partner may adopt such other
procedures as it may deem appropriate to reflect such distribution, subdivision
or combination; provided, however, that in the event any such distribution,
subdivision or combination results in a smaller total number of Units
outstanding, the General Partner shall require, as a condition to the delivery
to a Record Holder of such new Depositary Receipt, the surrender of any
Depositary Receipt held by such Record Holder immediately prior to such Record
Date.
(d) The Partnership shall not issue fractional Units upon any distribution,
subdivision or combination of Units. If a distribution, subdivision or
combination of Units would result in the issuance of fractional Units but for
the provisions of Section 4.10 and this Section 4.11(d), each fractional Unit
shall be rounded to the nearest whole Unit (and a 0.5 Unit shall be rounded to
the next higher Unit).
ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS
5.1 Allocations For Capital Account Purposes. For purposes of maintaining
the Capital Accounts and in determining the rights of the Partners among
themselves, the Partnership's items of income, gain, loss and deduction
(computed in accordance with Section 4.6(b) hereof) shall be allocated among the
Partners in each taxable year (or portion thereof) as provided herein below.
(a) Net Income. After giving effect to the special allocations set
forth in Section 5.1(d), all items of income, gain, loss and deduction
taken into account in computing Net Income for such taxable period shall be
allocated in the same manner as such Net Income is allocated hereunder:
(i) First, 100% to the General Partner until the aggregate Net
Income allocated to the General Partner pursuant to this Section
5.1(a)(i) for the current taxable year and all previous taxable years is
equal to the aggregate Net Losses allocated to the General Partner
pursuant to Section 5.1(b)(v) for all previous taxable years;
(ii) Second, 100% to Partners holding Deferred Participation
Interests, in the proportion of the number of Deferred Participation
Interests held by each such Partner to the total number of Deferred
Participation Interests then outstanding, until the aggregate Net Income
allocated to such Partners pursuant to this Section 5.1(a)(ii) for the
current taxable year and all previous taxable years is equal to the
aggregate Net Losses allocated to such Partners pursuant to Section
5.1(b)(iv) for all previous taxable years;
(iii) Third, 100% to the Special Limited Partners, in the
proportion of the number of SPUs held by each such Partner to the total
number of SPUs then outstanding, until the aggregate Net Income
allocated to the Special Limited Partners pursuant to this Section
5.1(a)(iii) for the current taxable year and all previous taxable years
is equal to the aggregate Net Losses allocated to the Special Limited
Partners pursuant to Section 5.1(b)(iii) for all previous taxable years;
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(iv) Fourth, 100% to the Limited Partners, in accordance with their
respective Percentage Interests, until the aggregate Net Income
allocated to the Limited Partners pursuant to this Section 5.1(a)(iv)
for the current taxable year and all previous taxable years is equal to
the aggregate Net Losses allocated to the Limited Partners pursuant to
Section 5.1(b)(ii) for all previous taxable years; and
(v) Fifth, the balance, if any, 100% to the General Partner and the
Limited Partners in accordance with their respective Percentage
Interests.
(b) Net Losses. After giving effect to the special allocations set
forth in Section 5.1(d), all items of income, gain, loss and deduction
taken into account in computing Net Losses for such taxable period shall be
allocated in the same manner as such Net Losses are allocated hereunder:
(i) First, 100% to the General Partner and the Limited Partners, in
accordance with their respective Percentage Interests, until the
aggregate Net Losses allocated pursuant to this Section 5.1(b)(i) for
the current taxable year and all previous taxable years is equal to the
aggregate Net Income allocated to such Partners pursuant to Section
5.1(a)(v) for all previous taxable years;
(ii) Second, 100% to the Limited Partners, in accordance with their
respective Percentage Interests; provided, that Net Losses shall not be
allocated pursuant to this Section 5.1(b)(ii) to the extent that such
allocation would cause any Limited Partner to have a deficit balance in
its Adjusted Capital Account at the end of such taxable year (or
increase any existing deficit balance in its Adjusted Capital Account);
(iii) Third, 100% to the Special Limited Partners, in the
proportion of the number of SPUs held by each such Partner to the total
number of SPUs then outstanding; provided, that Net Losses shall not be
allocated pursuant to this Section 5.1(b)(iii) to the extent that such
allocation would cause any Special Limited Partner to have a deficit
balance in its Adjusted Capital Account at the end of such taxable year
(or increase any existing deficit balance in its Adjusted Capital
Account);
(iv) Fourth, if such taxable period ends prior to the conversion of
the last outstanding Deferred Participation Interest, pursuant to
Section 5.7(b) hereof, 100% to the Partners holding Deferred
Participation Interests, in the proportion of the number of Deferred
Participation Interests held by each such Partner to the total number of
Deferred Participation Interests then outstanding; provided, that Net
Losses shall not be allocated pursuant to this Section 5.1(b)(iv) to the
extent that such allocation would cause any Partner holding such
Deferred Participation Interests to have a deficit balance in its
Adjusted Capital Account at the end of such taxable year (or increase
any existing deficit balance in its Adjusted Capital Account); and
(v) Fifth, the balance, if any, 100% to the General Partner.
(c) Net Termination Gains and Losses. After giving effect to the
special allocations set forth in Section 5.1(d), all items of gain and loss
taken into account in computing Net Termination Gain or Net Termination
Loss for such taxable period shall be allocated in the same manner as such
Net Termination Gain or Net Termination Loss is allocated hereunder. All
allocations under this Section 5.1(c) shall be made after Capital Account
balances have been adjusted by all other allocations provided under this
Section 5.1 and after all distributions of Available Cash provided under
Section 5.4 have been made with respect to the taxable period ending on the
Liquidation Date.
(i) If a Net Termination Gain is recognized (or deemed recognized
pursuant to Section 4.6(d)) from Termination Capital Transactions, such
Net Termination Gain shall be allocated between the General Partner and
the Limited Partners in the following manner (and the Capital Accounts
of the Partners shall be increased by the amount so allocated in each of
the following
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subclauses, in the order listed, before an allocation is made pursuant
to the next succeeding subclause):
(A) First, to each Partner having a deficit balance in its
Capital Account, in the proportion of such deficit balance to the
deficit balances in the Capital Accounts of all Partners, until each
such Partner has been allocated Net Termination Gain equal to any
such deficit balance in its Capital Account;
(B) Second, 98% to the Limited Partners, in accordance with
their respective Percentage Interests, and 2% to the General Partner
until each Limited Partner's Capital Account (determined on a per
Unit basis) in respect of its Units is equal to the sum of (1) the
Unrecovered Capital attributable to each such Unit plus (2) the
Cumulative Base Deficiency, if any, attributable to each such Unit;
(C) Third, 98% to the Limited Partners, in accordance with their
respective Percentage Interests, and 2% to the General Partner until
each Limited Partner's Capital Account (determined on a per Unit
basis) in respect of its Units is equal to the First Liquidation
Target Amount, determined with respect to each such Unit;
(D) Fourth, if such Termination Capital Transaction occurs (or
is deemed to occur) prior to the conversion of the last outstanding
Deferred Participation Interest, pursuant to Section 5.7(b) hereof,
100% to the Partners holding such Deferred Participation Interests,
in the ratio of the number of Deferred Participation Interests held
by each such Partner to the total number of Deferred Participation
Interests then outstanding, in the amount which will increase the
Capital Account balance of each such Partner maintained with respect
to such Deferred Participation Interests to that amount which equals
its Unrecovered Capital attributable to such Deferred Participation
Interests, determined for the taxable year (or portion thereof) to
which this allocation of gain relates;
(E) Fifth, if such Termination Capital Transaction occurs (or is
deemed to occur) prior to the redemption of all SPUs then
outstanding, 100% to the Special Limited Partners holding such SPUs,
in the proportion of the number of SPUs held by each such Partner to
the total number of SPUs then outstanding, in the amount which will
increase the Capital Account balance of each such Special Limited
Partner maintained with respect to such SPUs to that amount which
equals its Unrecovered Capital attributable to such SPUs, determined
for the taxable year (or portion thereof) to which this allocation of
gain relates;
(F) Sixth, 88% to the Limited Partners, in accordance with their
respective Percentage Interests, and 12% to the General Partner until
each Limited Partner's Capital Account (determined on a per Unit
basis) is equal to the Second Liquidation Target Amount, determined
with respect to each such Unit;
(G) Seventh, 78% to the Limited Partners, in accordance with
their respective Percentage Interests, and 22% to the General Partner
until each Limited Partner's Capital Account (determined on a per
Unit basis) is equal to the Third Liquidation Target Amount,
determined with respect to each such Unit;
(H) Eighth, 68% to the Limited Partners, in accordance with
their respective Percentage Interests, and 32% to the General Partner
until each Limited Partner's Capital Account (determined on a per
Unit basis) is equal to the Fourth Liquidation Target Amount,
determined with respect to each such Unit; and
(I) Finally, the balance if any, 63% to all Limited Partners, in
accordance with their respective Percentage Interests, and 37% to the
General Partner.
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(ii) If a Net Termination Loss is recognized (or deemed recognized
pursuant to Section 4.6.(d)) from Termination Capital Transactions, such
Net Termination Loss shall be allocated to the Partners in the following
manner:
(A) First, 100% to the General Partner and the Limited Partners
in proportion to, and to the extent of, the positive balances in
their respective Capital Accounts;
(B) Second, if such Termination Capital Transaction occurs (or
is deemed to occur) prior to the redemption of all SPUs outstanding,
100% to the Special Limited Partners, in the proportion of the number
of SPUs held by each such Partner to the total number of SPUs then
outstanding, to the extent of the positive balances in their
respective Capital Accounts maintained with respect to such SPUs;
(C) Third, if such Termination Capital Transaction occurs (or is
deemed to occur) prior to the conversion of the last outstanding
Deferred Participation Interest, pursuant to Section 5.7(b) hereof,
100% to the Partners holding Deferred Participation Interests, in the
proportion of the number of Deferred Participation Interests held by
each such Partner to the total number of Deferred Participation
Interests then outstanding, to the extent of the positive balances in
their respective Capital Accounts maintained with respect to such
Deferred Participation Interests; and
(D) Fourth, the balance, if any, 100% to the General Partner.
(d) Special Allocations. Notwithstanding any other provision of this
Section 5.1, the following special allocations shall be made for such
taxable period:
(i) Partnership Minimum Gain Chargeback. Notwithstanding any other
provision of this Section 5.1, if there is a net decrease in Partnership
Minimum Gain during any Partnership taxable period, each Partner shall
be allocated items of Partnership income and gain for such period (and,
if necessary, subsequent periods) in proportion to, and to the extent
of, an amount equal to the greater of (A) the portion of such Partner's
share of the net decrease in Partnership Minimum Gain during such
taxable period that is allocable (in accordance with the principles set
forth in Treasury Regulation Section 1.704-1T(b)(4)(iv)(e)(2)) to the
disposition of Partnership property subject to one or more Nonrecourse
Liabilities of the Partnership, or (B) the deficit balance in such
Partner's Adjusted Capital Account at the end of such taxable period
(modified, as appropriate, by Treasury Regulation Section 1.704-
1T(b)(4)(iv)(e)(2)). The items to be so allocated shall be determined in
accordance with Treasury Regulation Section 1.704-1T(b)(4)(iv)(e) and,
for purposes of this Section 5.1(d), each Partner's Adjusted Capital
Account balance shall be determined, and the allocation of income or
gain required hereunder shall be effected, prior to the application of
any other allocations pursuant to this Section 5.1(d) with respect to
such taxable period. This Section 5.1(d)(i) is intended to comply with
the Partnership Minimum Gain chargeback requirement in Treasury
Regulation Section 1.704-1T(b)(iv)(4)(e) and shall be interpreted
consistently therewith.
(ii) Chargeback of Minimum Gain Attributable to Partner Nonrecourse
Debt. Notwithstanding the other provisions of this Section 5.1 (other
than Section 5.1(d)(i)), if there is a net decrease in Minimum Gain
Attributable to Partner Nonrecourse Debt during any Partnership taxable
period, any Partner with a share of Minimum Gain Attributable to Partner
Nonrecourse Debt at the beginning of such taxable period shall be
allocated items of Partnership income and gain for such period (and, if
necessary, subsequent periods) in proportion to, and to the extent of,
an amount equal to the greater of (A) the portion of such Partner's
share of the net decrease in the Minimum Gain Attributable to Partner
Nonrecourse Debt that is allocable (in accordance with the principles
set forth in Treasury Regulation Section 1.704-1T(b)(4)(iv)(h)(4)) to
the disposition of Partnership property subject to such Partner
Nonrecourse Debt, or (B) the deficit balance in such Partner's Adjusted
Capital Account at the end of such taxable period (modified, as
appropriate, by Treasury Regulation Section 1.704-1T(b)(4)(iv)(h)(4)).
The items to be so allocated shall be determined in a manner consistent
with the principles of Treasury Regulation Section 1.704-
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1T(b)(4)(iv)(e) and, for purposes of this Section 5.1(d), each Partner's
Adjusted Capital Account balance shall be determined and the allocation
of income or gain required hereunder shall be effected, prior to the
application of any other allocations pursuant to this Section 5.1(d),
other than Section 5.1(d)(i), with respect to such taxable period. This
Section 5.1(d)(ii) is intended to comply with the chargeback of items of
income and gain requirement in Treasury Regulation Section
1.704-1T(b)(4)(iv)(h)(4) and shall be interpreted consistently
therewith.
(iii) Priority Allocations. All or a portion of the remaining
items of Partnership gross income or gain for the taxable period, if
any, shall be allocated 100% to the General Partner until the aggregate
amount of such items allocated to the General Partner under this
paragraph (iii) for the current taxable period and all previous taxable
periods is equal to the cumulative amount of cash distributed to the
General Partner as an Incentive Distribution from the Closing Date to a
date 45 days after the end of the current taxable period.
(iv) Qualified Income Offset. Except as provided in Sections
5.1(d)(i) and 5.1 (d)(ii), in the event any Partner unexpectedly
receives any adjustments, allocations or distributions described in
Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6) (modified, as
appropriate, by Treasury Regulation Sections 1.704-1T(b)(4)(iv)(e)(3)
and 1.704-1T(b)(4)(iv)(h)(4)), items of Partnership income and gain
shall be specifically allocated to such Partner in an amount and manner
sufficient to eliminate, to the extent required by the Treasury
regulations, the deficit balance, if any, in its Adjusted Capital
Account created by such adjustments, allocations or distributions as
quickly as possible; provided, that an allocation pursuant to this
Section 5.1(d)(iv) shall be made only if and to the extent that such
Partner would have a deficit balance in its Adjusted Capital Account
after all other allocations provided in this Section 5.1 have been
tentatively made as if this Section 5.1(d)(iv) was not in the Agreement.
(v) Gross Income Allocations. In the event any Partner has a
deficit balance in its Capital Account at the end of any Partnership
taxable period that is in excess of the sum of (A) the amount such
Partner is obligated to restore pursuant to any provision of this
Agreement and (B) the amount such Partner is deemed to be obligated to
restore pursuant to the penultimate sentences of Treasury Regulation
Sections 1.704-1T(b)(4)(iv)(f) and 1.704-1T(b)(4)(iv)(h)(5), such
Partner shall be specially allocated items of Partnership gross income
and gain in the amount of such excess as quickly as possible; provided,
that an allocation pursuant to this Section 5.1(d)(v) shall be made only
if and to the extent that such Partner would have a deficit Capital
Account in excess of such sum after all other allocations provided for
in this Section 5.1 have been tentatively made as if Section 5.1(d)(iv)
hereof and this Section 5.1(d)(v) were not in the Agreement.
(vi) Nonrecourse Deductions. Nonrecourse Deductions for any
taxable period shall be allocated to the Partners in accordance with
their respective Percentage Interests. If the General Partner determines
in its good faith discretion that the Partnership's Nonrecourse
Deductions must be allocated in a different ratio to satisfy the safe
harbor requirements of the Treasury regulations promulgated under
Section 704(b) of the Code, the General Partner is authorized, upon
notice to the Limited Partners, to revise the prescribed ratio to the
numerically closest ratio which does satisfy such requirements.
(vii) Partner Nonrecourse Deductions. Partner Nonrecourse
Deductions for any taxable period shall be allocated 100% to the Partner
that bears the Economic Risk of Loss with respect to the Partner
Nonrecourse Debt to which such Partner Nonrecourse Deductions are
attributable in accordance with Treasury Regulation Section
1.704-1T(b)(4)(iv)(h). If more than one Partner bears the Economic Risk
of Loss with respect to a Partner Nonrecourse Debt, such Partner
Nonrecourse Deductions attributable thereto shall be allocated between
or among such Partners in accordance with the ratios in which they share
such Economic Risk of Loss.
(viii) Nonrecourse Liabilities. For purposes of Treasury Regulation
Section 1.752-1T(e)(ii)(C), the Partners agree that Nonrecourse
Liabilities of the Partnership in excess of the
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sum of (A) the amount of Partnership Minimum Gain and (B) the total
amount of Nonrecourse Built-in Gain shall be allocated among the
Partners in accordance with their respective Percentage Interests.
(ix) Code Section 754 Adjustments. To the extent an adjustment to
the adjusted tax basis of any Partnership asset pursuant to Section
734(b) or 743(b) of the Code is required, pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in
determining Capital Accounts, the amount of such adjustment to the
Capital Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases
such basis), and such item of gain or loss shall be specially allocated
to the Partners in a manner consistent with the manner in which their
Capital Accounts are required to be adjusted pursuant to such Section of
the Treasury regulations.
(x) Economic Uniformity. At the election of the General Partner
with respect to any taxable period or portion thereof, all or a portion
of the items of Partnership gross income, gain or expense for such
taxable period or portion thereof, if any, shall be allocated 100% to
each Partner holding Deferred Participation Interests during such
period or portion thereof, in the proportion of the number of Deferred
Participation Interests held by such Partner to the total number of
Deferred Participation Interests then outstanding, until each such
Partner has been allocated an amount of gross income, gain or expense
which adjusts the Capital Account maintained with respect to such
Interests to an amount equal to the product of (A) the number of
Deferred Participation Interests held by such Partner and (B) the Per
Unit Capital Amount. The purpose of this allocation is to establish
uniformity between the Capital Accounts underlying Deferred
Participation Interests and the Capital Accounts underlying Units held
by Public Unitholders. This allocation method for establishing such
economic uniformity will only be available to the General Partner if
the method for allocating the Capital Account maintained with respect
to the Deferred Participation Interests between the transferred and
retained Deferred Participation Interests pursuant to Section
4.6(c)(iii) is not applicable or does not otherwise provide such
economic uniformity to the Deferred Participation Interests.
Notwithstanding anything to the contrary provided herein, the
provisions of this subsection shall be applied to the General Partner
not later than with respect to the taxable period or portion of period
ending on the date of the temination of the Support Period.
(xi) Curative Allocation. (A) Notwithstanding any other provision
of this Section 5.1, other than the Required Allocations, the Required
Allocations shall be taken into account in making the Agreed Allocations
so that, to the extent possible, the net amount of items of income,
gain, loss and deduction allocated to each Partner pursuant to the
Required Allocations and the Agreed Allocations, together, shall be
equal to the net amount of such items that would have been allocated to
each such Partner under the Agreed Allocations had the Required
Allocations and this Curative Allocation not otherwise been provided in
this Section 5.1. Notwithstanding the preceding sentence, Required
Allocations relating to (1) Nonrecourse Deductions shall not be taken
into account except to the extent that there has been a decrease in
Partnership Minimum Gain and (2) Partner Nonrecourse Deductions shall
not be taken into account except to the extent that there has been a
decrease in Minimum Gain Attributable to Partner Nonrecourse Debts.
Allocations pursuant to this Section 5.1(d)(xi)(A) shall only be made
with respect to Required Allocations to the extent the General Partner
reasonably determines that such allocations will otherwise be
inconsistent with the economic agreement among the Partners. Further,
allocations pursuant to this Section 5.1(d)(xi)(A) shall be deferred
with respect to allocations pursuant to clauses (1) and (2) hereof to
the extent the General Partner reasonably determines that such
allocations are likely to be offset by subsequent Required Allocations.
(xii) Notwithstanding the other provisions of this Section 5.1(d)
(other than paragraphs (i) and (ii)) all or a portion of the remaining
items of Partnership gross income or gain for the taxable period, if
any, shall be allocated to each Partner who has received a deemed
distribution of Available Cash pursuant to Section 9.7 hereof until the
aggregate amount of such items allocated to each such Partner under
this paragraph (xii) for the current taxable period and all previous
taxable periods is equal to the cumulative amount of cash deemed
distributed to such Partner pursuant to Section 9.7 for the current
taxable period and all previous periods.
(B) The General Partner shall have reasonable discretion, with
respect to each taxable period, to (1) apply the provisions of Section
5.1(d)(xi)(A) hereof in whatever order is most likely to minimize the
economic distortions that might otherwise result from the Required
Allocations, and (2) divide all allocations pursuant to Section
5.1(d)(xi)(A) hereof among the Partners in a manner that is likely to
minimize such economic distortions.
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(xii) Restorative Allocation. (A) in the event (1) the
allocation described in Section 5.1(d)(x) is made pursuant to such
Section; (2) a Termination Capital Transaction occurs after such
allocation, but prior to the temrination of the Support Period; and (3)
as a result thereof there is a Net Termination Gain allocable to
periods ending on or prior to the end of the Support Period, then all
or a portion of the items of Partnership gross income or gain, if any,
for the taxable year in which such Termination Capital Transaction
occurs, shall be allocated pro rata to Partners holding Units, until
the allocation of gain or income that would have been made to the
General Partner absent the allocation made pursuant to this Section
5.1(d)(xii)(A) has instead been made to the holders of Units up to an
amount equal to the amount of the allocation previously made pursuant
to Section 5.1(d)(x). If the allocation of gain or income to Partners
holding Units pursuant to the preceding sentence is less than the
amount of the allocation previously made pursuant to Section 5.1(d)(x),
then an amount of Partnership loss or deduction for such taxable year
equal to such difference shall be allocated to the General Partner.
(B) In the event (1) the allocation described in Section
5.1(d)(x) is made pursuant to such Section; (2) a Termination Capital
Transaction occurs after such allocation, but prior to the termination
of the Support Period; and (3) as a result thereof there is a Net
Termination Loss allocable to periods ending on or prior to the end of
the Support Period, then all or a portion of the items of Partnership
loss or deduction, if any, for the taxable year in which such
Termination Capital Transaction occurs, shall be allocated to the
General Partner, until the allocation of loss or deduction that would
have been made to the Partners holding Units absent the allocation
made pursuant to this Section 5.1(d)(xii)(B) has instead been made to
the General Partner up to an amount equal to the amount of the
allocation previously made pursuant to Section 5.1(d)(x).
5.2 Allocations for Tax Purposes. (a) Except as otherwise provided
herein, for federal income tax purposes, each item of income, gain, loss and
deduction shall be allocated among the Partners in the same manner as its
correlative item of "book" income, gain, loss or deduction is allocated pursuant
to Section 5.1 hereof.
(b) In an attempt to eliminate Book-Tax Disparities attributable to a
Contributed Property or Adjusted Property, items of income, gain, loss,
depreciation, depletion and cost recovery deductions shall be allocated for
federal income tax purposes among the Partners as follows:
(i) (A) In the case of a Contributed Property, such items attributable
thereto shall be allocated among the Partners in the manner provided under
Section 704(c) of the Code that takes into account the variation between
the Agreed Value of such property and its adjusted basis at the time of
contribution; and (B) except as otherwise provided in Section 5.2(b)(iv),
any item of Residual Gain or Residual Loss attributable to a Contributed
Property shall be allocated among the Partners in the same manner as its
correlative item of "book" gain or loss is allocated pursuant to Section
5.1.
(ii) (A) In the case of an Adjusted Property, such items shall (1)
first, be allocated among the Partners in a manner consistent with the
principles of Section 704(c) of the Code to take into account the
Unrealized Gain or Unrealized Loss attributable to such property and the
allocations thereof pursuant to Section 4.6(d)(i) or (ii), and (2) second,
in the event such property was originally a Contributed Property, be
allocated among the Partners in a manner consistent with Section
5.2(b)(i)(A); and (B) except as otherwise provided in Section 5.2(b)(iv),
any item of Residual Gain or Residual Loss attributable to an Adjusted
Property shall be allocated among the Partners in the same manner as its
correlative item of "book" gain or loss is allocated pursuant to Section
5.1.
(iii) Except as otherwise provided in Section 5.2(b)(iv), all other
items of income, gain, loss and deduction shall be allocated among the
Partners in the same manner as their correlative item of "book" gain or
loss is allocated pursuant to Section 5.1.
(iv) Any items of income, gain, loss or deduction otherwise allocable
under Section 5.2(b)(i)(B), 5.2(b)(ii)(B) or 5.2(b)(iii) shall be subject
to allocation by the General Partner in a manner designed
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to eliminate, to the maximum extent possible, Book-Tax Disparities in
a Contributed Property or Adjusted Property otherwise resulting from the
application of the "ceiling" limitation (under Section 704(c) of the Code
or Section 704(c) principles) to the allocations provided under Section
5.2(b)(i)(A) or 5.2(b)(ii)(A).
(c) For the proper administration of the Partnership and for the
preservation of uniformity of the Units (or any class or classes thereof), the
General Partner shall have sole discretion to (i) adopt such conventions as it
deems appropriate in determining the amount of depreciation, amortization and
cost recovery deductions; (ii) make special allocations for federal income tax
purposes of income (including gross income) or deductions; and (iii) amend the
provisions of this Agreement as appropriate (x) to reflect the proposal or
promulgation of Treasury regulations under Section 704(b) or Section 704(c) of
the Code or (y) otherwise to preserve or achieve uniformity of the Units (or any
class or classes thereof). The General Partner may adopt such conventions, make
such allocations and make such amendments to this Agreement as provided in this
Section 5.2(c) only if such conventions, allocations or amendments would not
have a material adverse effect on the Partners, the holders of any class or
classes of Units issued and outstanding or the Partnership, and if such
allocations are consistent with the principles of Section 704 of the Code.
(d) The General Partner in its sole discretion may determine to depreciate
the portion of an adjustment under Section 743(b) of the Code attributable to
unrealized appreciation in any Adjusted Property (to the extent of the
unamortized Book-Tax Disparity) using a predetermined rate derived from the
depreciation method and useful life applied to the Partnership's common basis of
such property, despite the inconsistency of such approach with Proposed Treasury
Regulation Section 1.168-2(n) and Treasury Regulation Section 1.167(c)-1(a)(6).
If the General Partner later determines that such reporting position cannot
reasonably be taken, the General Partner may adopt a depreciation convention
under which all purchasers acquiring Units in the same month would receive
depreciation, based upon the same applicable rate as if they had purchased a
direct interest in the Partnership's property. If the General Partner chooses
not to utilize such aggregate method, the General Partner may use any other
reasonable depreciation convention to preserve the uniformity of the intrinsic
tax characteristics of any Units that would not have a material adverse effect
on the Limited Partners or the Record Holders of any class or classes of Units.
(e) Any gain allocated to the Partners upon the sale or other taxable
disposition of any Partnership asset shall, to the extent possible, after taking
into account other required allocations of gain pursuant to this Section 5.2 be
characterized as Recapture Income in the same proportions and to the same extent
as such Partners have been allocated any deductions directly or indirectly
giving rise to the treatment of such gains as Recapture Income.
(f) All items of income, gain, loss, deduction and credit recognized by the
Partnership for federal income tax purposes and allocated to the Partners in
accordance with the provisions hereof shall be determined without regard to any
election under Section 754 of the Code which may be made by the Partnership;
provided, however, that such allocations once made, shall be adjusted as
necessary or appropriate to take into account those adjustments permitted or
required by Sections 734 and 743 of the Code.
(g) Each item of Partnership income, gain, loss and deduction
attributable to a transferred Partnership Interest shall, for federal income
tax purposes, be determined on an annual basis and prorated on a monthly basis
and shall be allocated to the Partners as of the opening of the New York Stock
Exchange on the first Business Day of each month; provided, however, that (i)
except as otherwise provided in clause (ii), such items for the period
beginning on the Closing Date and ending on the last day of the month in which
the Closing Date occurs shall be allocated to Partners as of the opening of the
New York Stock Exchange on the first Business Day of the next succeeding month
or (ii) if the Underwriters' over-allotment option is exercised, such items for
the period beginning on the Closing Date and ending on the last day of the
month in which the Second Time of Delivery (as defined in the Underwriting
Agreement) occurs shall be allocated to the Partners as of the opening of the
New York Stock Exchange on the first Business Day of the next succeeding month;
and provided, further, that gain or loss on a sale or other disposition of any
assets of the Partnership other than in the ordinary course of business shall
be allocated to the Partners as of the opening of the New York Stock Exchange
on the first Business Day of the month in which such gain or loss is recognized
for
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federal income tax purposes. The General Partner may revise, alter or
otherwise modify such methods of allocation as it determines necessary, to the
extent permitted or required by Section 706 of the Code and the regulations or
rulings promulgated thereunder.
(h) Allocations that would otherwise be made to a Limited Partner under the
provisions of this Article V shall instead be made to the beneficial owner of
Units held by a nominee in any case in which the nominee has furnished the
identity of such owner to the Partnership in accordance with Section 6031(c) of
the Code or any other method acceptable to the General Partner in its sole
discretion.
5.3 Requirement and Characterization of Distributions. Within 60 days
following the end of each calendar quarter (or following the period from the
Closing Date to June 30, 1989) an amount equal to 100% of Available Cash with
respect to such quarter (or period) shall be distributed in accordance with this
Article V by the Partnership to the Partners, as of the Record Date selected by
the General Partner in its reasonable discretion. The foregoing shall not modify
in any respect the provisions of Section 4.2 hereof regarding the distribution
of any interest or other profit on the initial Capital Contributions referred to
therein. The General Partner shall have the right to determine in its sole
discretion whether a particular distribution of cash consists of Available Cash
or Cash From Capital Transactions and the amount of cash in each such category,
except to the extent it is established that such determination is contrary to
any of the express provisions in this Agreement. Except as otherwise provided in
Section 5.5(b), the Partnership shall not be obligated to make distributions of
Cash From Capital Transactions and the General Partner shall have the right to
cause the Partnership to use Cash From Capital Transactions for any purpose the
General Partner deems necessary or desirable, including but not limited to,
purchase of Units in the public market, in privately negotiated transactions or
otherwise (and in no event shall the General Partner be obligated to cause such
purchases to be made on a pro rata basis or to afford every Limited Partner an
equal opportunity to participate in the transactions involved).
5.4 Distributions. Available Cash with respect to any calendar quarter
shall be distributed as follows:
(a) First, 98% to the Limited Partners, in accordance with their
respective Percentage Interests, and 2% to the General Partner until there
has been distributed in respect of each of the outstanding Units an amount
equal to the Minimum Quarterly Amount;
(b) Second, 98% to the Limited Partners, in accordance with their
respective Percentage Interests, and 2% to the General Partner until there
has been distributed in respect of each of the outstanding Units an amount
equal to any Cumulative Base Deficiency existing as of the end of such
quarter;
(c) Third, 98% to the Limited Partners, in accordance with their
respective Percentage Interests, and 2% to the General Partner until there
has been distributed in respect of each of the outstanding Units an amount
equal to the excess of the First Target Amount over the Minimum Quarterly
Amount;
(d) Fourth, 100% to the Special Limited Partners, in proportion to the
Unrecovered Capital balance attributable to the respective SPUs held by
them, to the extent necessary to redeem any and all then outstanding SPUs
at a price equal to the Unrecovered Capital attributable thereto;
(e) Fifth, 88% to the Limited Partners, in accordance with their
respective Percentage Interests, and 12% to the General Partner until there
has been distributed in respect of each of the outstanding Units an amount
equal to the excess of the Second Target Amount over the First Target
Amount;
(f) Sixth, 78% to the Limited Partners, in accordance with their
respective Percentage Interests, and 22% to the General Partner until there
has been distributed in respect of each of the outstanding Units an amount
equal to the excess of the Third Target Amount over the Second Target
Amount;
(g) Seventh, 68% to the Limited Partners, in accordance with their
respective Percentage Interests and 32% to the General Partner until there
has been distributed in respect of each of the outstanding Units an amount
equal to the Fourth Target Amount over the Third Target Amount; and
(h) Finally, the balance, if any, 63% to the Limited Partners, in
accordance with their respective Percentage Interests, and 37% to the
General Partner.
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5.5 Distributions of Cash from Capital Transactions. (a) Cash from Capital
Transactions which the General Partner determines in accordance with Section 5.3
to distribute shall be distributed, unless the provisions of Section 5.5(b)
hereof require otherwise, 98% to the Limited Partners, in accordance with their
respective Percentage Interests, and 2% to the General Partner until the Limited
Partners have received, since the Closing Date through such date, distributions
of Available Cash that are deemed to be Cash from Capital Transactions in an
aggregate amount equal to the product obtained by multiplying (i) the Initial
Unit Price by (ii) 12,500,000 (increased by the number of Units, if any, issued
pursuant to exercise of the Underwriters' over-allotment option). Thereafter,
any Cash from Capital Transactions shall be distributed in accordance with
Section 5.4.
(b) If one or more Capital Transactions shall occur in any taxable year,
then (except as otherwise provided below) the General Partner shall be required
to make a distribution of Cash from Capital Transactions on or before the April
1st next following the end of the taxable year in which such Capital
Transactions occur in accordance with the following procedures:
(i) The General Partner shall determine the net capital gain and net
ordinary income recognized by the Partnership (without taking account of
any Code Section 743 adjustments) for federal income tax purposes from all
Capital Transactions during such year, and shall then determine the portion
of such net capital gain and net ordinary income allocable to Units
purchased by the Underwriters pursuant to the Underwriting Agreement for
federal income tax purposes. Such portion of any net capital gain or net
ordinary income shall then be divided by the number of Units purchased by
the Underwriters pursuant to the Underwriting Agreement.
(ii) The General Partner shall then cause the Partnership to
distribute to the Partners, in accordance with their respective Percentage
Interests, cash until an amount has been distributed pursuant
hereto with respect to every Unit outstanding on the Record Date
established by the General Partner with respect to such distribution equal
to 125% of the federal income tax liability that would be due with respect
to the "net capital gain" and "net ordinary income" attributed to each
outstanding Unit on the Record Date for the distribution to be made
pursuant to the preceding sentence (assuming for such purpose that the
maximum effective federal income tax rates for individuals, relating to
either long-term capital gain or ordinary income, whichever the case may
be, applied to all holders of Units at the time of such recognition without
regard to any recapture of lower rates or alternative minimum tax rate).
(iii) No distribution of Cash from Capital Transactions shall be
required by this Section 5.5(b) with respect to any tax year if the amount
otherwise distributable for such taxable year under this Section 5.5(b)
does not exceed $0.10 per Unit, or if such distribution shall be prohibited
by requirements binding upon the Partnership or any Subsidiary at the time
such distribution would otherwise be required (including but not limited to
any such requirement imposed by any loan agreement then in effect).
5.6 Adjustment of Minimum Quarterly Amount, Unrecovered Capital,
Cumulative Base Deficiency and Target Amounts. (a) The Minimum Quarterly
Amount, Unrecovered Capital, Cumulative Base Deficiency, First Target Amount,
Second Target Amount, Third Target Amount and Fourth Target Amount shall be
proportionately adjusted in the event of any distribution, combination or
subdivision (whether effected by a distribution payable in Units or otherwise)
of Units or Partnership Securities in accordance with Section 4.11 hereof. In
the event of a distribution of Cash from Capital Transactions, the Minimum
Quarterly Amount, First Target Amount, Second Target Amount, Third Target
Amount and Fourth Target Amount shall be adjusted proportionately downward to
equal the product of the otherwise applicable Minimum Quarterly Amount, First
Target Amount, Second Target Amount, Third Target Amount and Fourth Target
Amount, as the case may be, by a fraction, of which the numerator is the
Unrecovered Capital immediately after giving effect to such distribution and of
which the denominator is the Unrecovered Capital immediately prior to giving
effect to such distribution.
(b) The Minimum Quarterly Amount, First Target Amount, Second Target
Amount, Third Target Amount and Fourth Target Amount shall also be subject to
adjustment pursuant to Section 9.6 hereof.
5.7 Special Provisions Relating to the Deferred Participation
Interests. (a) During the Support Period, the holder of a Deferred
Participation Interest shall not be entitled to any cash distributions and
shall only
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possess the rights and obligations specifically provided in this Agreement
with respect to a Deferred Participation Interest (and no other rights
otherwise available to a holder of a Partnership Interest).
(b) Immediately upon the expiration of the Support Period, the General
Partner shall take all reasonable steps necessary, based on advice of counsel,
including the application of Sections 4.6(c)(ii), 4.6(c)(iii) and 5.1(d)(x);
provided, however, that no such steps may be taken that would have a material
adverse effect on the Limited Partners or the Record Holders of any class or
classes of Units, to ensure that each Deferred Participation Interest has, as a
substantive matter, like intrinsic economic and federal income tax
characteristics, in all material respects, to the intrinsic economic and
federal income tax characteristics of a Unit then outstanding, and each
Deferred Participation Interest shall, upon the expiration of the Support
Period, automatically convert to a Unit and from that time forward shall
constitute a Unit for all purposes under this Agreement.
ARTICLE VI
MANAGEMENT AND OPERATION OF BUSINESS
6.1 Management. (a) The General Partner shall conduct, direct and
exercise full control over all activities of the Partnership. Except as
otherwise expressly provided in this Agreement, all management powers over the
business and affairs of the Partnership shall be exclusively vested in the
General Partner, and no Limited Partner shall have any right of control or
management power over the business and affairs of the Partnership. In addition
to the powers now or hereafter granted a general partner of a limited
partnership under applicable law or which are granted to the General Partner
under any other provision of this Agreement, the General Partner, subject to
Section 6.3 hereof, shall have full power and authority to do all things deemed
necessary or desirable by it to conduct the business of the Partnership, to
exercise all powers set forth in Section 3.2 hereof and to effectuate the
purposes set forth in Section 3.1 hereof including, without limitation, (i) the
making of any expenditures, the borrowing of money, the guaranteeing of
indebtedness and other liabilities, the issuance of evidences of indebtedness
and the incurring of any obligations it deems necessary for the conduct of the
activities of the Partnership; (ii) the making of tax, regulatory and other
filings, or rendering of periodic or other reports to governmental or other
agencies having jurisdiction over the business or assets of the Partnership;
(iii) the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation
or exchange of any assets of the Partnership or the merger or other combination
of the Partnership with or into another entity (all of the foregoing subject to
any prior approval which may be required by Section 6.3 hereof); (iv) the use of
the assets of the Partnership (including, without limitation, cash on hand) for
any purpose consistent with the terms of this Agreement and on any terms it sees
fit, including, without limitation, the financing of the conduct of the
operations of the Partnership or any Subsidiary, the lending of funds to other
persons (including any Subsidiary) and the repayment of obligations of the
Partnership and any Subsidiary and the making of capital contributions to any
Subsidiary; (v) the negotiation and execution on any terms deemed desirable in
its sole discretion and the performance of any contracts, conveyances or other
instruments that it considers useful or necessary to the conduct of the
Partnership operations or the implementation of its powers under this Agreement;
(vi) the distribution of Partnership cash; (vii) the selection and dismissal of
employees and agents (including, without limitation, employees having titles
such as "president", "vice president", "secretary" and "treasurer") and agents,
outside attorneys, accountants, consultants and contractors and the
determination of their compensation and other terms of employment or hiring;
(viii) the maintenance of such insurance for the benefit of the Partnership and
the Partners as it deems necessary or appropriate; (ix) the formation of, or
acquisition of an interest in, and the contribution of property to, any further
limited or general partnerships, joint ventures or other relationships that it
deems desirable (including, without limitation, the acquisition of interests in,
and the contributions of property to any Subsidiary from time to time); (x) the
control of any matters affecting the rights and obligations of the Partnership,
including the conduct of litigation and the incurring of legal expense and the
settlement of claims and litigation; (xi) the lending or borrowing of money, the
assumption or guarantee of, or other contracting for, indebtedness and other
liabilities, the issuance of evidences of indebtedness and the securing of same
by mortgage, deed of trust or other lien or encumbrance, the bringing and
defending of actions at law or in equity and the indemnification of any Person
against liabilities and contingencies to the extent permitted by law; (xii)
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the entering into listing agreements with the New York Stock Exchange and any
other securities exchange and delisting some or all of the Units from, or
requesting that trading be suspended on, any such exchange (subject to any
prior approval which may be required under Section 1.6 hereof); (xiii) the
undertaking of any action in connection with the Partnership's investment in
any Subsidiary (including, without limitation, the contribution or loan by
the Partnership to any Subsidiary of funds); and (xiv) the undertaking of any
action in connection with the Partnership's direct or indirect investment in
any Subsidiary.
(b) Each of the Partners and each other Person who may acquire an
interest in Units hereby approves, ratifies and confirms the execution,
delivery and performance by the parties thereto of the Deposit Agreement, the
Underwriting Agreement, and the other agreements described in the Registration
Statement, and agrees that the General Partner is authorized to execute,
deliver and perform the above-mentioned agreements and transactions and such
other agreements described in the Registration Statement on behalf of the
Partnership without any further act, approval or vote of the Partners or the
other Persons who may acquire an interest in Units, notwithstanding any other
provision of this Agreement, the Delaware Act or any applicable law, rule or
regulation. None of the execution, delivery or performance by the General
Partner, the Partnership or any Affiliate of any of them of any agreement
authorized or permitted under this Agreement shall constitute a breach by the
General Partner of any duty that the General Partner may owe the Partnership or
the Limited Partners or any other Persons under this Agreement or of any duty
stated or implied by law or equity.
6.2 Certificate of Limited Partnership. The General Partner has filed the
Certificate of Limited Partnership with the Secretary of State of the State of
Delaware as required by the Delaware Act and shall use all reasonable efforts to
cause to be filed such other certificates or documents as may be reasonable and
necessary or appropriate for the formation, continuation, qualification and
operation of a limited partnership (or a partnership in which the limited
partners have limited liability) in the State of Delaware or any other state in
which the Partnership may elect to do business or own property. To the extent
that such action is determined by the General Partner to be reasonable and
necessary or appropriate, the General Partner shall file amendments to and
restatements of the Certificate of Limited Partnership and do all the things to
maintain the Partnership as a limited partnership (or a partnership in which the
limited partners have limited liability) under the laws of the State of Delaware
or any other state in which the Partnership may elect to do business or own
property. Subject to the terms of Section 7.5(a) hereof, the General Partner
shall not be required, before or after filing, to deliver or mail a copy of the
Certificate of Limited Partnership or any amendment thereto to any Limited
Partner.
6.3 Restrictions on General Partner's Authority. (a) The General Partner
may not, without the written approval of the specific act by all of the Limited
Partners or by other written instrument executed and delivered by all of the
Limited Partners subsequent to the date of this Agreement, take any action in
contravention of this Agreement, including, without limitation, (i) take any act
that would make it impossible to carry on the ordinary business of the
Partnership, except as otherwise provided in this Agreement; (ii) possess
Partnership property, or assign any rights in specific Partnership property, for
other than a Partnership purpose; (iii) admit a person as a Partner, except as
otherwise provided in this Agreement; (iv) amend this Agreement in any manner,
except as otherwise provided in this Agreement; or (v) transfer its interest as
General Partner of the Partnership, except as otherwise provided in this
Agreement.
(b) Except as provided in Article XIV hereof, the General Partner may not
sell, exchange or otherwise dispose of all or substantially all of the
Partnership's assets in a single transaction or a series of related transactions
(including by way of merger, consolidation or other combination with any other
Person) or approve on behalf of the Partnership the sale, exchange or other
disposition of all or substantially all of the assets of the Facilities
Subsidiary, without the approval of at least 66 2/3% of the outstanding Units
(excluding any Units owned by the General Partner and its Affiliates) during the
Support Period and thereafter without the approval of at least a majority of the
outstanding Units (excluding any Units owned by the General Partner and its
Affiliates); provided, however, that this provision shall not preclude or limit
the mortgage, pledge, hypothecation or grant of a security interest in all or
substantially all of the Partnership's assets and shall not apply to any forced
sale of any or all of the Partnership's assets pursuant to the foreclosure of,
or other realization upon, any such encumbrance.
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(c) Unless approved by the affirmative vote of the holders of at least
66 2/3% of each class of outstanding Units and the affirmative vote of the
holders of at least a majority of outstanding Units excluding for purposes of
such determination any Units owned by the General Partner and its Affiliates,
the General Partner shall not take any action or refuse to take any reasonable
action the effect of which, if taken or not taken, as the case may be, would be
to cause the Partnership to be treated for federal income tax purposes as an
association taxable as a corporation.
(d) At all times while serving as the general partner of the Partnership,
the General Partner will not make any dividend or distribution on, or repurchase
any stock or take any other action if the effect of such dividend or
distribution, repurchase or other action would be to reduce its net worth below
an amount necessary to receive an Opinion of Counsel that the Partnership will
be treated as a partnership for federal income tax purposes.
6.4 Reimbursement of the General Partner. (a) Except as provided in this
Section 6.4 and elsewhere in this Agreement, the General Partner shall not be
compensated for its services as general partner of the Partnership.
(b) The General Partner shall be reimbursed on a monthly basis, or such
other basis as the General Partner may determine in its sole discretion, for (i)
all direct and indirect expenses it incurs or payments it makes on behalf of the
Partnership (including amounts paid to any Person to perform services to or for
the Partnership) and (ii) that portion of the General Partner's or its
Affiliates' legal, accounting, investor communications, utilities, telephone,
secretarial, travel, entertainment, bookkeeping, reporting, data processing,
office rent and other office expenses (including overhead charges), salaries,
fees and other compensation and benefit expenses of employees, officers and
directors, other administrative or overhead expenses and all other expenses, in
each such case, necessary or appropriate to the conduct of the Partnership's
business and allocable to the Partnership or otherwise incurred by the General
Partner in connection with operating the Partnership's business (including,
without limitation, expenses allocated to the General Partner by its
Affiliates). The General Partner shall determine the fees and expenses that are
allocable to the Partnership in any reasonable manner determined by the General
Partner in its sole discretion. Such reimbursements shall be in addition to any
reimbursement to the General Partner as a result of indemnification pursuant to
Section 6.7 hereof.
(c) Subject to Section 4.4(c) hereof, the General Partner in its sole
discretion and without the approval of the Limited Partners may propose and
adopt on behalf of the Partnership, employee benefit plans (including, without
limitation, plans involving the issuance of Units), for the benefit of employees
of the General Partner, the Partnership, any Subsidiary or any Affiliate of any
of them in respect of services performed, directly or indirectly, for the
benefit of the Partnership or any Subsidiary.
6.5 Outside Activities. (a) After the Closing Date, the General Partner
shall not, for so long as it is the general partner of the Partnership, enter
into or conduct any business nor incur any debts or liabilities except in
connection with or incidental to (i) its performance of the activities required
or authorized by this Agreement or described in or contemplated by the
Registration Statement and (ii) the acquisition, ownership or disposition of the
partnership interest in the Partnership or its equity interest in any
Subsidiary.
(b) Except as described in the Registration Statement or provided in
Section 6.5(a) hereof, no Indemnitee shall be expressly or implicitly restricted
or proscribed pursuant to this Agreement or the partnership relationship
established hereby from engaging in other activities for profit, whether in the
businesses engaged in by the Partnership or anticipated to be engaged in by the
Partnership or otherwise, including, without limitation, those businesses
described in or contemplated by the Registration Statement. Neither the
Partnership, any Limited Partner nor any other Person shall have any rights by
virtue of this Agreement or the partnership relationship established hereby or
thereby in any business ventures of any Indemnitee, and, except as set forth in
the Registration Statement, such Indemnitees shall have no obligation to offer
any interest in any such business ventures to the Partnership, any Limited
Partner or any such other Person. The General Partner and any other Persons
affiliated with the General Partner may acquire Units or Partnership Securities,
in addition to those acquired by any of such Persons on the Closing Date, and
shall be
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entitled to exercise all rights of an Assignee or Limited Partner, as
applicable, relating to such Units or Partnership Securities, as the case may
be.
6.6 Contracts with Affiliates. (a) The Partnership may lend or
contribute to any Subsidiary, and any other Subsidiary may borrow funds, on
terms and conditions established in the sole discretion of the General Partner.
The foregoing authority shall be exercised by the General Partner in its
reasonable discretion and shall not create any right or benefit in favor of any
Subsidiary or any other Person. The Partnership may not lend funds to the
General Partner or any of its Affiliates.
(b) The General Partner may itself, or may enter into an agreement with any
of its Affiliates to, render services to the Partnership. Any services rendered
to the Partnership by the General Partner or any of its Affiliates shall be on
terms that are fair and reasonable to the Partnership. The provisions of Section
6.4 hereof shall apply to the rendering of services described in this Section
6.6(b).
(c) The Partnership may transfer assets to joint ventures, other
partnerships, corporations or other business entities in which it is or thereby
becomes a participant upon such terms and subject to such conditions consistent
with this Agreement and applicable law.
(d) Neither the General Partner nor any of its Affiliates shall sell,
transfer or convey any property to, or purchase any property from, the
Partnership, directly or indirectly, except pursuant to transactions that are
fair and reasonable to the Partnership; provided, however, that the requirements
of this Section 6.6(d) shall be deemed to be satisfied as to any transactions
described in or contemplated by the Registration Statement.
6.7 Indemnification. (a) To the fullest extent permitted by law but
subject to the limitations expressly provided in this Agreement, each Indemnitee
shall be indemnified and held harmless by the Partnership from and against any
and all losses, claims, damages, liabilities, joint or several, expenses
(including legal fees and expenses), judgments, fines, settlements and other
amounts arising from any and all claims, demands, actions, suits or proceedings,
civil, criminal, administrative or investigative, in which any Indemnitee may be
involved, or is threatened to be involved, as a party or otherwise, by reason of
its status as (x) the General Partner, a Departing Partner or any of their
Affiliates, (y) an employee, partner, agent or trustee of the General Partner,
any Departing Partner or any of their Affiliates or (z) a Person serving at the
request of the Partnership in another entity in a similar capacity, provided
that in each case the Indemnitee acted in good faith and in the manner which
such Indemnitee believed to be in, or not opposed to, the best interests of the
Partnership and, with respect to any criminal proceeding, had no reasonable
cause to believe its conduct was unlawful. The termination of any action, suit
or proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere, or its equivalent, shall not, of itself, create a presumption that
the Indemnitee acted in a manner contrary to that specified above. Any
indemnification pursuant to this Section 6.7 shall be made only out of the
assets of the Partnership.
(b) To the fullest extent permitted by law, expenses (including legal fees
and expenses) incurred by an Indemnitee in defending any claim, demand, action,
suit or proceeding shall, from time to time, be advanced by the Partnership
prior to the final disposition of such claim, demand, action, suit or proceeding
upon receipt by the Partnership of an undertaking by or on behalf of the
Indemnitee to repay such amount if it shall be determined that the Indemnitee is
not entitled to be indemnified as authorized in this Section 6.7.
(c) The indemnification provided by this Section 6.7 shall be in addition
to any other rights to which an Indemnitee may be entitled under any agreement,
pursuant to any vote of the Partners, as a matter of law or otherwise, and shall
continue as to an Indemnitee who has ceased to serve in such capacity.
(d) The Partnership may purchase and maintain insurance, on behalf of the
General Partner and such other Persons as the General Partner shall determine,
against any liability that may be asserted against or expense that may be
incurred by such Person in connection with the Partnership's activities,
regardless of whether the Partnership would have the power to indemnify such
Person against such liability under the provisions of this Agreement.
(e) For purposes of this Section 6.7, the Partnership shall be deemed to
have requested an Indemnitee to serve as fiduciary of an employee benefit plan
whenever the performance by it of its duties to the Partnership
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also imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute "fines" within the meaning of Section 6.7(a); and action taken
or omitted by it with respect to an employee benefit plan in the performance of
its duties for a purpose reasonably believed by it to be in the interest of the
participants, and beneficiaries of the plan shall be deemed to be for a purpose
which is in, or not opposed to, the best interests of the Partnership.
(f) In no event may an Indemnitee subject the Limited Partners or the
Special Limited Partners to personal liability by reason of the indemnification
provisions set forth in this Agreement.
(g) An Indemnitee shall not be denied indemnification in whole or in part
under this Section 6.7 because the Indemnitee had an interest in the transaction
with respect to which the indemnification applies if the transaction was
otherwise permitted by the terms of this Agreement.
(h) The provisions of this Section 6.7 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons.
(i) No amendment, modification or repeal of this Section 6.7 or any
provision hereof shall in any manner terminate, reduce or impair the right of
any past, present or future Indemnitee to be indemnified by the Partnership, nor
the obligation of the Partnership to indemnify any such Indemnitee under and in
accordance with the provisions of this Section 6.7 as in effect immediately
prior to such amendment, modification or repeal with respect to claims arising
from or relating to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when such claims may arise or
be asserted.
6.8 Liability of Indemnitees. (a) Notwithstanding anything to the
contrary set forth in this Agreement, no Indemnitee shall be liable for
monetary damages to the Partnership, Limited Partners, Special Limited Partners
or to any Persons who have acquired interests in the Units for losses sustained
or liabilities incurred as a result of any act or omission if such Indemnitee
acted in good faith.
(b) Subject to its obligations and duties as General Partner set forth in
Section 6.1(a) hereof, the General Partner may exercise any of the powers
granted to it by this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its agents and the General Partner
shall not be responsible for any misconduct or negligence on the part of any
such agent appointed by it in good faith.
(c) Any amendment, modification or repeal of this Section 6.8 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations or the liability to the Partnership, the Limited Partners and the
Special Limited Partners of the General Partner, their directors, officers,
partners and employees under this Section 6.8 as in effect immediately prior to
such amendment, modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise or be asserted.
6.9 Resolution of Conflicts of Interest. (a) Unless otherwise expressly
provided in this Agreement, whenever a potential conflict of interest exists or
arises between the General Partner or any of its Affiliates, on the one hand,
and the Partnership or any Partner, on the other hand, any resolution or course
of action in respect of such conflict of interest shall be permitted and deemed
approved by all Partners, and shall not constitute a breach of this Agreement,
of any agreement contemplated herein, or of any duty stated or implied by law or
equity, if the resolution or course of action is or, by operation of this
Agreement, is deemed to be fair and reasonable to the Partnership. Any such
resolution or course of action in respect of any conflict of interest shall not
constitute a breach of this Agreement, of any other agreement contemplated
herein, or of any duty stated or implied by law or equity, if such resolution or
course of action is fair and reasonable to the Partnership. The General Partner
shall be authorized in connection with its resolution of any conflict of
interest to consider (i) the relative interests of any party to such conflict,
agreement, transaction or situation and the benefits and burdens relating to
such interest; (ii) any customary or accepted industry practices; (iii) any
applicable generally accepted accounting practices or principles; and (iv) such
additional factors as the General Partner determines in its sole discretion to
be relevant, reasonable or appropriate under the circumstances. Nothing
contained in this Agreement, however, is intended to nor shall it be construed
to require the General Partner to consider the interests of any Person other
than the Partnership. In the absence
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of bad faith by the General Partner, the resolution, action or terms so
made, taken or provided by the General Partner with respect to such matter
shall not constitute a breach of this Agreement or any other agreement
contemplated herein or a breach of any standard of care or duty imposed herein
or therein or under the Delaware Act or any other law, rule or regulation.
(b) Whenever this Agreement or any other agreement contemplated hereby
provides that the General Partner or any of its Affiliates is permitted or
required to make a decision (i) in its "discretion" or under a grant of similar
authority or latitude, the General Partner or such Affiliate shall be entitled
to consider only such interests and factors as it desires and shall have no duty
or obligation to give any consideration to any interest of, or factors
affecting, the Partnership or any Limited Partner, or (ii) in "good faith" or
under another express standard, the General Partner or such Affiliate shall act
under such express standard and shall not be subject to any other or different
standards imposed by this Agreement or any other agreement contemplated hereby.
(c) Whenever a particular transaction, arrangement or resolution of a
conflict of interest is required under this Agreement to be "fair and
reasonable" to any Person, the fair and reasonable nature of such transaction,
arrangement or resolution shall be considered in the context of all similar or
related transactions.
6.10 Other Matters Concerning the General Partner. (a) The General
Partner may rely and shall be protected in acting or refraining from acting
upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture, or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties.
(b) The General Partner may consult with legal counsel, accountants,
appraisers, management consultants, investment bankers and other consultants and
advisers selected by it, and any act taken or omitted to be taken in reliance
upon the opinion (including an Opinion of Counsel) of such Persons as to matters
which such General Partner reasonably believes to be within such Person's
professional or expert competence shall be conclusively presumed to have been
done or omitted in good faith and in accordance with such opinion.
(c) The General Partner shall have the right, in respect of any of its
powers or obligations hereunder, to act through any of its duly authorized
officers and a duly appointed attorney or attorneys-in-fact. Each such attorney
shall, to the extent provided by the General Partner in the power of attorney,
have full power and authority to do and perform all and every act and duty which
is permitted or required to be done by the General Partner hereunder.
6.11 Title to Partnership Assets. Title to Partnership assets, whether
real, personal or mixed and whether tangible or intangible, shall be deemed to
be owned by the Partnership as an entity, and no Partner, individually or
collectively, shall have any ownership interest in such Partnership assets or
any portion thereof. Title to any or all of the Partnership assets may be held
in the name of the Partnership, the General Partner or one or more nominees, as
the General Partner may determine, including Affiliates of the General Partner.
The General Partner hereby declares and warrants that any Partnership assets for
which legal title is held in the name of the General Partner or any nominee or
Affiliate of the General Partner shall be held by the General Partner for the
use and benefit of the Partnership in accordance with the provisions of this
Agreement; provided, however, that the General Partner shall use its best
efforts to cause beneficial and record title to such assets to be vested in the
Partnership as soon as reasonably practicable. All Partnership assets shall be
recorded as the property of the Partnership in its books and records,
irrespective of the name in which legal title to such Partnership assets is
held.
6.12 Reliance by Third Parties. Notwithstanding anything to the contrary
in this Agreement, any Person dealing with the Partnership shall be entitled to
assume that the General Partner has full power and authority to encumber, sell
or otherwise use in any manner any and all assets of the Partnership and to
enter into any contracts on behalf of the Partnership, and such Person shall be
entitled to deal with the General Partner as if it were the Partnership's sole
party in interest, both legally and beneficially. Each Limited Partner hereby
waives any and all defenses or other remedies which may be available against
such Person to contest, negate or disaffirm any action of the General Partner in
connection with any such dealing. In no event shall any Person dealing with the
General Partner or its representatives be obligated to ascertain that the terms
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of this Agreement have been complied with or to inquire into the necessity or
expedience of any act or action of the General Partner or its representatives.
Each and every certificate, document or other instrument executed on behalf of
the Partnership by the General Partner or its representatives shall be
conclusive evidence in favor of any and every Person relying thereon or claiming
thereunder that (a) at the time of the execution and delivery of such
certificate, document or instrument, this Agreement was in full force and
effect, (b) the Person executing and delivering such certificate, document or
instrument was duly authorized and empowered to do so for and on behalf of the
Partnership and (c) such certificate, document or instrument was duly executed
and delivered in accordance with the terms and provisions of this Agreement and
is binding upon the Partnership.
ARTICLE VII
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
7.1 Limitation of Liability. The Limited Partners and the Organizational
Limited Partner shall have no liability under this Agreement except as expressly
provided in this Agreement or the Delaware Act.
7.2 Management of Business. No Limited Partner or Assignee (other
than the General Partner, any of its Affiliates or any officer, director,
employee, partner, agent or trustee of the General Partner or any of its
Affiliates, in its capacity as such) shall take part in the operation,
management or control (within the meaning of the Delaware Act) of the
Partnership's business, transact any business in the Partnership's name or have
the power to sign documents for or otherwise bind the Partnership. The
transaction of any such business by the General Partner, any of its Affiliates
or any officer, director, employee, partner, agent or trustee of the General
Partner or any of its Affiliates, in its capacity as such, shall not affect,
impair or eliminate the limitations on the liability of the Limited Partners or
Assignees under this Agreement.
7.3 Outside Activities. Subject to the provisions of Section 6.5 hereof,
which shall continue to be applicable to the Persons referred to therein,
regardless of whether such Persons shall also be Limited Partners or Assignees,
any Limited Partner shall be entitled to and may have business interests and
engage in business activities in addition to those relating to the Partnership,
including business interests and activities in direct competition with the
Partnership. Neither the Partnership nor any Partners shall have any rights by
virtue of this Agreement in any business ventures of any Limited Partner or
Assignee.
7.4 Return of Capital. No Limited Partner shall be entitled to the
withdrawal or return of his Capital Contribution, except to the extent of
distributions made pursuant to this Agreement or upon termination of the
Partnership as provided herein. Except to the extent provided by Article V
hereof or as otherwise expressly provided in this Agreement, no Limited Partner
or Assignee shall have priority over any other Limited Partner or Assignee
either as to the return of Capital Contributions or as to profits, losses or
distributions.
7.5 Rights of Limited Partners Relating to the Partnership. (a) In
addition to other rights provided by this Agreement or by applicable law, and
except as limited by Section 7.5(b) hereof, each Limited Partner shall have the
right, for a purpose reasonably related to such Limited Partner's interest as a
limited partner in the Partnership, upon reasonable demand and at such Limited
Partner's own expense:
(i) to obtain true and full information regarding the status of the
business and financial condition of the Partnership;
(ii) promptly after becoming available, to obtain a copy of the
Partnership's federal, state and local income tax returns for each year;
(iii) to have furnished to him, upon notification to the General
Partner, a current list of the name and last known business, residence or
mailing address of each Partner;
(iv) to have furnished to him, upon notification to the General
Partner, a copy of this Agreement and the Certificate of Limited
Partnership and all amendments thereto, together with executed copies of
all powers of attorney pursuant to which this Agreement, the Certificate of
Limited Partnership and all amendments thereto have been executed;
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(v) to obtain true and full information regarding the amount of cash
and a description and statement of the Agreed Value of any other Capital
Contribution by each Partner and which each Partner has agreed to
contribute in the future, and the date on which each became a Partner; and
(vi) to obtain such other information regarding the affairs of the
Partnership as is just and reasonable.
(b) Notwithstanding any other provision of this Section 7.5, the General
Partner may keep confidential from the Limited Partners for such period of time
as the General Partner determines in its sole discretion to be reasonable, any
information that the General Partner reasonably believes to be in the nature of
trade secrets or other information the disclosure of which the General Partner
in good faith believes is not in the best interests of the Partnership or
which the Partnership is required by law or by agreements with unaffiliated
third parties to maintain confidentiality.
ARTICLE VIII
BOOKS, RECORDS, ACCOUNTING AND REPORTS
8.1 Records and Accounting. The General Partner shall keep or cause to be
kept at the principal office of the Partnership appropriate books and records
with respect to the Partnership's business including, without limitation, all
books and records necessary to provide to the Limited Partners any information,
lists and copies of documents required to be provided pursuant to Section 7.5(a)
hereof. Any records maintained by or on behalf of the Partnership in the regular
course of its business, including the record of the Record Holders and Assignees
of Units, Depositary Units or Partnership Securities, books of account and
records of Partnership proceedings, may be kept on, or be in the form of, punch
cards, magnetic tape, photographs, micrographics or any other information
storage device, provided that the records so maintained are convertible into
clearly legible written form within a reasonable period of time. The books of
the Partnership shall be maintained, for financial reporting purposes, on an
accrual basis in accordance with generally accepted accounting principles.
8.2 Fiscal Year. The fiscal year of the Partnership shall be the calendar
year.
8.3 Reports. (a) As soon as practicable, but in no event later than 120
days after the close of each Partnership Year, the General Partner shall cause
to be mailed to each Record Holder of a Unit as of a date selected by the
General Partner in its sole discretion, an annual report containing financial
statements of the Partnership for such Partnership Year, presented in accordance
with generally accepted accounting principles, including a balance sheet and
statements of operations, Partners' equity and changes in financial position,
such statements to be audited by a firm of independent public accountants
selected by the General Partner.
(b) As soon as practicable, but in no event later than 45 days after the
close of each calendar quarter except the last calendar quarter of each year,
the General Partner shall cause to be mailed to each Record Holder of a Unit, as
of a date selected by the General Partner in its sole discretion, a report
containing unaudited financial statements of the Partnership and such other
information as may be required by applicable law, regulation or rule of any
National Securities Exchange on which the Units are listed for trading, or as
the General Partner determines to be appropriate.
ARTICLE IX
TAX MATTERS
9.1 Preparation of Tax Returns. The General Partner shall arrange for the
preparation and timely filing of all returns of Partnership income, gains,
deductions, losses and other items required of the Partnership for federal and
state income tax purposes and shall use all reasonable efforts to furnish,
within 90 days of the close of each taxable year, the tax information reasonably
required by Unitholders for federal and state income tax reporting purposes. The
classification, realization and recognition of income, gain, losses and
deductions and other items shall be on the accrual method of accounting for
federal income tax purposes. The taxable year of the Partnership shall be the
calendar year.
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9.2 Tax Elections. Except as otherwise provided herein, the General
Partner shall, in its sole discretion, determine whether to make any available
election pursuant to the Code; provided, however, that the General Partner shall
make the election under Section 754 of the Code in accordance with applicable
regulations thereunder. The General Partner shall have the right to seek to
revoke any such election (including, without limitation, the election under
Section 754 of the Code) upon the General Partner's determination in its sole
discretion that such revocation is in the best interests of the Limited Partners
and Assignees. For purposes of computing the adjustments under Section 743(b) of
the Code, the General Partner shall be authorized (but not required) to adopt a
convention whereby the price paid by a transferee of Units will be deemed to be
the lowest quoted trading price of the Units on any National Securities Exchange
on which such Units are traded during the calendar month in which such transfer
is deemed to occur pursuant to Section 5.2(g) hereof without regard to the
actual price paid by such transferee.
9.3 Tax Controversies. Subject to the provisions hereof, the General
Partner is designated the Tax Matters Partner (as defined in Section 6231 of the
Code), and is authorized and required to represent the Partnership (at the
Partnership's expense) in connection with all examinations of the Partnership's
affairs by tax authorities, including resulting administrative and judicial
proceedings, and to expend Partnership funds for professional services and costs
associated therewith. Each Partner or Assignee agrees to cooperate with the
General Partner and to do or refrain from doing any or all things reasonably
required by the General Partner to conduct such proceedings.
9.4 Organizational Expenses. The Partnership shall elect to deduct
expenses, if any, incurred by it in organizing the Partnership ratably over a
60-month period as provided in Section 709 of the Code.
9.5 Withholding. Notwithstanding any other provision of this Agreement,
the General Partner is authorized to take any action that it determines in its
sole discretion to be necessary or appropriate to cause the Partnership to
comply with any withholding requirements established under the Code or any other
federal, state or local law including, without limitation, pursuant to Sections
1441, 1442, 1445 and 1446 of the Code. To the extent that the Partnership is
required to withhold and pay over to any taxing authority any amount resulting
from the allocation or distribution of income to any Partner or Assignee
(including by reason of Section 1446 of the Code), the amount withheld shall be
treated as a distribution of cash pursuant to Section 5.3 hereof in the amount
of such withholding from such Partner.
9.6 Entity-Level Taxation. If legislation is enacted which causes the
Partnership to become treated as an association taxable as a corporation for
federal income tax purposes, then with respect to any calendar quarter, the
Minimum Quarterly Amount, the First Target Amount, Second Target Amount, Third
Target Amount or Fourth Target Amount, as the case may be, shall be equal to the
product of (i) the amount of such distribution multiplied by (ii) 1 minus the
sum of (x) the highest marginal federal corporate income tax rate for the
Partnership Year in which such quarter occurs (expressed as a percentage) plus
(y) the effective overall state and local income tax rate (expressed as a
percentage) applicable to the Partnership for the calendar year next preceding
the calendar year in which such quarter occurs (after taking into account the
benefit of any deduction allowable for federal income tax purposes with respect
to the payment of state and local income taxes). Such effective overall state
and local income tax rate shall be determined for the calendar year next
preceding the first calendar year during which the Partnership is taxable for
federal income tax purposes as a corporation or as an association taxable as a
corporation by determining such rate as if the Partnership had been subject to
such state and local taxes during such preceding calendar year.
9.7 Entity-Level Deficiency Collections. If the Partnership is required
by applicable law to pay any federal, state or local income tax on behalf of any
Partner or Assignee or any former Partner or Assignee (i) the General Partner
shall pay such tax on behalf of such Partner or Assignee or former Partner or
Assignee from the funds of the Partnership; (ii) any amount so paid on behalf of
any Partner or Assignee shall constitute a distribution of Available Cash to
such Partner or Assignee pursuant to Section 5.3 hereof; and (iii) to the extent
any such Partner or Assignee (but not a former Partner or Assignee) is not then
entitled to such distribution under this Agreement, the General Partner shall be
authorized, without the approval of any Partner or Assignee, to amend this
Agreement insofar as is necessary to maintain the uniformity of intrinsic tax
characteristics as to all Units and to make subsequent adjustments to
distributions in a manner which, in
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the reasonable judgment of the General Partner, will make as little
alteration in the priority and amount of distributions otherwise applicable
under this Agreement, and will not otherwise alter the distributions to which
Partners and Assignees are entitled under this Agreement. If the Partnership is
permitted (but not required) by applicable law to pay any such tax on behalf of
any Partner or Assignee or former Partner or Assignee, the General Partner
shall be authorized (but not required) to pay such tax from the funds of the
Partnership and to take any action consistent with this Section 9.7. The
General Partner shall be authorized (but not required) to take all necessary or
appropriate actions to collect all or any portion of a deficiency in the
payment of any such tax which relates to prior periods which is attributable to
Persons who were Limited Partners or Assignees when such deficiencies arose,
from such Persons.
9.8 Opinions of Counsel. Notwithstanding any other provision of this
Agreement, if the Partnership is taxable for federal income tax purposes as a
corporation or an association taxable as a corporation at any time and, pursuant
to the provisions hereof, an Opinion of Counsel would otherwise be required at
that time to the effect that an action will not cause the Partnership to become
so taxable as a corporation or to be treated as an association taxable as a
corporation, such requirement for an Opinion of Counsel shall be deemed
automatically waived.
ARTICLE X
CERTIFICATES AND DEPOSITARY RECEIPTS
10.1 Certificates and Depositary Receipts. (a) Upon the issuance of Units
by the Partnership to the Initial Limited Partners or any other Person, the
Partnership shall issue one or more Certificates in the name of the Initial
Limited Partners or such Person evidencing the number of such Units being so
issued. Certificates shall be executed on behalf of the Partnership by the
General Partner.
(b) The General Partner (i) may cause the deposit of some or all of the
Certificates in the Deposit Account pursuant to the Deposit Agreement; (ii) with
respect to those Certificates deposited in the Deposit Account, shall receive
from the Depositary Receipts registered in the name of the Person(s) to whom
such Units have been issued, evidencing the same number of Depositary Units, as
the case may be, as the number of Units represented by the Certificates so
deposited; and (iii) shall cause the distribution of such Depositary Receipts to
such Person(s).
10.2 Registration of Transfer and Exchange. (a) The General Partner shall
cause to be kept on behalf of the Partnership a register (the "Unit Register")
in which, subject to such reasonable regulations as it may prescribe and subject
to the provisions of Section 10.2(b) hereof, the General Partner will provide
for the registration of Units and the transfer of such Units. The Depositary is
hereby appointed Transfer Agent and registrar for the purpose of registering
Units and transfers of such Units as herein provided. The Partnership shall not
recognize transfers of Certificates representing Units which have been deposited
pursuant to Section 10.1(a) hereof and not withdrawn or interests therein except
by transfers of Depositary Units in the manner described in this Section 10.2
and in the Deposit Agreement. Upon surrender for registration of transfer of any
Depositary Units evidenced by a Depositary Receipt and, subject to the
provisions of Section 10.2(b) hereof, the General Partner on behalf of the
Partnership will execute, and the Transfer Agent will countersign and deliver,
in the name of the holder or the designated transferee or transferees, as
required pursuant to the holder's instructions, one or more new Depositary
Receipts evidencing the same aggregate number of Depositary Units as was
evidenced by the Depositary Receipt so surrendered.
(b) The Partnership shall not recognize any transfer of Depositary Units
until the Depositary Receipts evidencing such Depositary Units are surrendered
for registration of transfer and such Depositary Receipts are accompanied by a
Transfer Application duly executed by the transferee (or the transferee's
attorney-in-fact duly authorized in writing). No charge shall be imposed by the
Partnership for such transfer, provided that, as a condition to the issuance of
any new Depositary Receipt under this Section 10.2, the General Partner may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed with respect thereto.
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10.3 Mutilted, Destroyed, Lost or Stolen Depositary Receipts. (a) If
any mutiliated Depositary is surrendered to the Transfer Agent, the Depositary
shall execute, and the Transfer Agent shall countersign and deliver in exchange
therefor, a new Depositary Receipt evidencing the same number of Depositary
Units, as the case may be, as the Depositary Receipt so surrendred.
(b) If there shall be deliverd to the General Partner and the Transfer
Agent (i) evidence (including, without limitation, proof by affidavit if
requested by the General Partner in form and substance satisfactory to the
General Partner) to their satisfaction of the destruction, loss or theft of any
Depositary Receipt and (ii) such security or indemnity as may be required by
them to indemnify and hold each of them and any of their agents harmless, then,
in the absence of notice to the General Partner or the Transfer Agent that such
Depositary Receipt has been acquired by a bona fide purchaser, the General
Partner on behalf of the Partnership shall execute and, upon its request, the
Transfer Agent shall countersign and deliver, in exchange for and in lieu of
any such destroyed, lost or stolen Depositary Receipt, a new Depositary Receipt
evidencing the same number of Depositary Units, as the Depositary Receipt so
destroyed, lost or stolen.
(c) As a condition to the issuance of any new Depositary Receipt under this
Section 10.3, the General Partner may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Transfer
Agent) connected therewith.
10.4 Registered Owner. In accordance with Section 10.2(b) hereof, the
Partnership shall be entitled to recognize the Record Holder as the Limited
Partner or Assignee with respect to any Units and, accordingly, shall not be
bound to recognize any equitable or other claim to or interest in such Units on
the part of any other Person, whether or not the Partnership shall have actual
or other notice thereof, except as otherwise provided by law or any applicable
rule, regulation, guideline or requirement of any National Securities Exchange
on which the Units are listed for trading. Without limiting the foregoing, when
a Person (such as a broker, dealer, bank, trust company or clearing corporation
or an agent of any of the foregoing) is acting as nominee, agent or in some
other representative capacity for another Person in acquiring and/or holding
Units, as between the Partnership on the one hand and such other Persons on the
other hand, such representative Person (a) shall be the Limited Partner or
Assignee (as the case may be) of record and beneficially, (b) must execute and
deliver a Transfer Application and (c) shall be bound by this Agreement and
shall have the rights and obligations of a Limited Partner or Assignee (as the
case may be) hereunder and as provided for herein.
10.5 Withdrawal of Units from and Redeposit of Units in Depositary
Account. Any Units may be withdrawn from the Depositary Account by surrender of
the Depositary Receipts evidencing the corresponding Depositary Units duly
executed by the Record Holder thereof (or his attorney-in-fact duly authorized
in writing), provided that such Record Holder is then reflected on the books and
records of the Partnership as the Limited Partner in respect of the Units for
which such withdrawal is requested. Upon any such withdrawal, the General
Partner shall cause the Partnership to issue a Certificate evidencing such
Units. Any such withdrawn Units, or Units which have not previously been so
deposited, may be redeposited or deposited (as the case may be) in the Deposit
Account by the surrender of the Certificate evidencing such withdrawn Units or
non-deposited Units to the Depositary and payment to the Depositary of such fee
and upon such terms as may be required therefor pursuant to the Deposit
Agreement. Upon any such redeposit or deposit, the Depositary shall issue a
Depositary Receipt evidencing the same number of Units as was evidenced by the
Certificate so redeposited or deposited.
10.6 Amendment of Deposit Agreement. Subject to its fiduciary
obligations, the General Partner may amend or modify any provision of the
Deposit Agreement in any respect it reasonably determines to be necessary or
appropriate, provided, however, that the General Partner shall not amend or
modify the Deposit Agreement if the effect of any such amendment or modification
would be to impair the right of Limited Partners to withdraw their Units from
deposit thereunder.
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ARTICLE XI
TRANSFER OF INTERESTS
11.1 Transfer. (a) The term "transfer," when used in this Article XI with
respect to a Partnership Interest, shall be deemed to refer to an appropriate
transaction by which the General Partner assigns its Partnership Interest as
General Partner to another Person or by which the holder of a Unit assigns such
Unit to another Person who is or becomes an Assignee and includes a sale,
assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any
other disposition by law or otherwise.
(b) No Partnership Interest shall be transferred, in whole or in part,
except in accordance with the terms and conditions set forth in this Article XI.
Any transfer or purported transfer of a Partnership Interest not made in
accordance with this Article XI shall be null and void.
11.2 Transfer of General Partner's Partnership Interest. (a) The General
Partner may transfer all, but not less than all, of its Partnership Interest as
the General Partner to a single transferee if, but only if, (i) the holders of
at least 66 2/3% of the outstanding Units (excluding for purposes of such
determination any Units owned by the General Partner and its Affiliates)
approves of such transfer and of the admission of such transferee as General
Partner, (ii) the transferee agrees to assume and be bound by the provisions of
this Agreement and (iii) the Partnership receives an Opinion of Counsel that
such transfer would not result in the loss of limited liability of any Limited
Partner or the taxation of the Partnership as a corporation or as an association
taxable as a corporation for federal income tax purposes.
(b) Neither Section 11.2(a) hereof nor any other provision of this
Agreement shall be construed to prevent (and all Partners do hereby consent to)
the transfer by the General Partner of all of its Partnership Interest (i) to an
Affiliate of Burlington or (ii) upon its merger, consolidation or other
combination into any other entity or the transfer by it of all or
substantially all of its assets to another entity (provided that such
entity assumes all of the rights and duties of the General Partner), to the
transferee or successor entity; provided that, such entity furnishes
to the Partnership an Opinion of Counsel that such merger, consolidation,
combination, transfer or assumption will not result in a loss of limited
liability of any Limited Partner or result in the Partnership being treated as
an association taxable as a corporation for federal income tax purposes. In the
case of a transfer pursuant to this Section 11.2(b), the transferee or successor
(as the case may be) shall be admitted to the Partnership as the General Partner
immediately prior to the transfer of the Partnership Interest, and the business
of the Partnership shall continue without dissolution.
11.3 Transfer of Units. (a) Any Units which have been deposited in the
Deposit Account may be transferred, but only in the manner described in Section
10.2 hereof. Units with respect to which no such deposit has been made or which
have been withdrawn from the Deposit Account and not redeposited are not
transferable except upon death or by operation of law, by transfer to the
General Partner for the account of the Partnership or otherwise in accordance
with this Agreement. The transfer of any Units and the admission of any new
Partner shall not constitute an amendment to this Agreement.
(b) Until admitted as a Substituted Limited Partner pursuant to Article
XII, the Record Holder of a Depositary Unit shall constitute an Assignee in
respect of such Unit.
(c) Each distribution in respect of Units shall be paid by the Partnership,
directly or through the Transfer Agent or through any other Person or agent,
only to the Record Holders thereof as of the Record Date set for the
distribution. Such payment shall constitute full payment and satisfaction of the
Partnership's liability in respect of such payment, regardless of any claim of
any Person who may have an interest in such payment by reason of an assignment
or otherwise.
11.4 Restrictions on Transfers. Notwithstanding the other provisions of
this Article XI, no transfer of any Unit or interest therein of any Limited
Partner in the Partnership shall be made if such transfer (i) would violate the
then applicable federal or state securities laws or rules and regulations of the
Securities and Exchange Commission, any state securities commission or any other
governmental authorities with jurisdiction over such transfer, (ii) would result
in the taxation of the Partnership as a corporation or as an association
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taxable as a corporation for federal income tax purposes or (iii) would affect
the Partnership's existence or qualification as a limited partnership under the
Delaware Act.
11.5 Citizenship Certification; Non-citizen Assignees. (a) In the event
that, because of the nationality (or any other status) of a Limited Partner or
Assignee, the Partnership is or becomes subject to federal, state or local laws
or regulations the effect of which would, in the reasonable determination of the
General Partner, cause cancellation or forfeiture of any property in which the
Partnership has an interest, the General Partner may request any such Limited
Partner or Assignee to furnish to the General Partner or, with respect to
Depositary Units, to the Depositary within 30 days after receipt of such request
an executed Citizenship Certification or such other information concerning his
nationality, citizenship or other status (or, if the Limited Partner or Assignee
is a nominee holding for the account of another Person, the nationality,
citizenship or other status of such Person) as the General Partner may request.
If a Limited Partner or Assignee fails to furnish such Citizenship Certification
or other information as may be requested, or if upon receipt of such
Citizenship Certification or other information the General Partner determines,
with the advice of counsel, that a Limited Partner or an Assignee is not an
Eligible Citizen, the Units owned by such Limited Partner or Assignee shall be
subject to redemption in accordance with the provisions of Section 11.6 hereof.
In addition to becoming subject to redemption, the General Partner may require
that the status of any such Limited Partner or Assignee be changed to that of
a Non-citizen Assignee, and, thereupon, the General Partner shall be
substituted for such Non-citizen Assignee as the Limited Partner in respect of
his Units.
(b) The General Partner shall, in exercising voting rights in respect of
Units held by it on behalf of Non-citizen Assignees, distribute the votes in the
same ratios as the votes of Limited Partners in respect of Units other than
those of Non-citizen Assignees are cast, either for, against or abstaining as to
the matter.
(c) Upon dissolution of the Partnership, a Non-citizen Assignee shall have
no right to receive a distribution in kind pursuant to Section 14.4 hereof but
shall be entitled to the cash equivalent thereof, and the General Partner shall
provide cash in exchange for an assignment of the Non-citizen Assignee's share
of the distribution in kind. Such payment and assignment shall be treated for
Partnership purposes as a purchase by the General Partner from the Non-citizen
Assignee of his Partnership Interest (representing his right to receive his
share of such distribution in kind).
(d) At any time after he can and does certify that he has become an
Eligible Citizen, a Non-citizen Assignee may, upon application to the General
Partner, request admission as a Substituted Limited Partner with respect to any
Partnership Interest of such Non-citizen Assignee not redeemed pursuant to
Section 11.6 hereof, and upon his admission pursuant to Section 12.2 hereof the
General Partner shall cease to be deemed to be the Limited Partner in respect of
the Non-citizen Assignee's Units.
11.6 Redemption of Interests. (a) If at any time a Limited Partner or
Assignee fails to furnish a Citizenship Certification or other information
requested within the 30-day period specified in Section 11.5(a) hereof, or if
upon receipt of such Citizenship Certification or other information the General
Partner determines, with the advice of counsel, that a Limited Partner or
Assignee is not an Eligible Citizen, the Partnership may, unless the Limited
Partner or Assignee establishes to the satisfaction of the General Partner that
such Limited Partner or Assignee is an Eligible Citizen or has transferred his
Units to a person who furnishes a Citizenship Certification to the General
Partner prior to the date fixed for redemption as provided below, redeem the
Partnership Interest of such Limited Partner or Assignee as follows:
(i) The General Partner shall, not later than the 30th day before the
date fixed for redemption, give notice of redemption to the Limited Partner
or Assignee, at his last address designated on the records of the
Partnership or the Depositary, by registered or certified mail, postage
prepaid. The notice shall be deemed to have been given when so mailed. The
notice shall specify the Redeemable Units, the date fixed for redemption,
the place of payment, that payment of the redemption price will be made
upon surrender of the Depositary Receipt or the Certificate evidencing the
Redeemable Units and that on and after the date fixed for redemption no
further allocations or distributions to which the Limited Partner or
Assignee would otherwise be entitled in respect of the Redeemable Units
will accrue or be made.
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(ii) The aggregate redemption price for Redeemable Units shall be an
amount equal to the Current Market Price (as defined in Section 17.1) (the
date of determination of which shall be the date fixed for redemption) of
Units of the class to be so redeemed multiplied by the number of Units of
each such class included among the Redeemable Units. The redemption price
shall be paid, in the sole discretion of the General Partner, in cash or by
delivery of a promissory note of the Partnership in the principal amount of
the redemption price, bearing interest at the rate of 10% annually and
payable in three equal annual installments of principal, together with
accrued interest, commencing one year after the redemption date.
(iii) Upon surrender by or on behalf of the Limited Partner or
Assignee, at the place specified in the notice of redemption, of the
Depositary Receipt or the Certificate evidencing the Redeemable Units, duly
endorsed in blank or accompanied by an assignment duly executed in blank,
the Limited Partner or Assignee or his duly authorized representative shall
be entitled to receive the payment therefor.
(iv) After the redemption date, Redeemable Units shall no longer
constitute issued and outstanding Units.
(b) The provisions of this Section 11.6 shall be applicable to Units held
by a Limited Partner or Assignee as nominee of a Person determined to be other
than an Eligible Citizen.
(c) Nothing in this Section 11.6 shall prevent the recipient of a notice of
redemption from transferring his Units before the redemption date if such
transfer is otherwise permitted under this Agreement. Upon receipt of notice of
such a transfer, the General Partner shall withdraw the notice of redemption;
provided, the transferee of such Units or Depositary Units certifies in the
Transfer Application that he is an Eligible Citizen. If the transferee fails to
make such certification, such redemption shall be effected from the transferee
on the original redemption date.
(d) If the Partnership or the General Partner determines that because of
the nationality (or other status) of the General Partner, whether or not in its
capacity as such, the Partnership is or becomes subject to federal, state or
local regulations the effect of which would, in the reasonable determination of
the General Partner, cause cancellation or forfeiture of any property in which
the Partnership has an interest, the Partnership may, unless the General Partner
has furnished a Citizenship Certification or transferred his Partnership
Interest or Units to a Person who furnishes a Citizenship Certification prior to
the date fixed for redemption, redeem the Partnership Interest or Interests of
the General Partner in the Partnership as provided in Section 11.6(a) hereof.
The redemption price shall be paid in cash.
11.7 Transfer of Deferred Participation Interests. (a) The holders of
Deferred Participation Interests may transfer their Deferred Participation
Interests to any Person or Persons and such Person or Persons shall have the
right to deposit with the Depositary such Deferred Participation Interests if,
but only if, either (i) such Deferred Participation Interests so transferred are
identified and registered as a trading class separate and distinguishable from
the Units then outstanding or (ii) such Deferred Participation Interests so
proposed to be transferred have been converted to Units pursuant to Section
5.7(b) of this Agreement; provided, however, the foregoing restriction shall not
apply to a transfer of all, but not less than all, of the Deferred Participation
Interests held by the transferor to an Affiliate of such transferor; provided
further, that no holder of a Deferred Participation Interest shall have the
right to transfer the Deferred Participation Interest during the Support Period
to other than an Affiliate of such holder; provided, further, that,
notwithstanding anything to the contrary set forth above, the holder of the
Deferred Participation Interests may transfer the Deferred Participation
Interests to DPI Intermediate Holdings, L.P., a Delaware limited partnership,
and PC Advisory II, L.P., a Delaware limited partnership.
(b) Notwithstanding Section 11.7(a) above, no such restrictions shall apply
with respect to the transfer of Deferred Participation Interests after the
Conversion Date with respect to such Interests.
(c) The holders of Deferred Participation Interests will receive
certificates evidencing such interests. Subject to Section 11.7(a), such
certificates may be exchanged by the holders for Certificates of limited partner
interests and then deposited and transferred in accordance with Articles X and
XI hereof.
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11.8 Transfer of Management Units. The holders of Management Units may
transfer their Management Units to any Person or Persons and such Person or
Persons shall have the right to deposit with the Depositary such Management
Units if, but only if, the General Partner determines, based on advice of
counsel, that such Management Units so proposed to be transferred have, as a
substantive matter, like intrinsic economic and federal income tax
characteristics, in all material respects, to the intrinsic economic and federal
income tax characteristics of the Units then outstanding.
ARTICLE XII
ADMISSION OF PARTNERS
12.1 Admission of Initial Limited Partners and Underwriters. Upon the
issuance of Units by the Partnership to the Initial Limited Partners (as
described in Section 4.3 hereof), the General Partner shall admit to the
Partnership the Initial Limited Partners as Limited Partners in respect of the
Units. Each such party shall execute a Transfer Application and thereby agree to
be bound by the terms hereof as a Limited Partner.
12.2 Admission of Substituted Limited Partners. By transfer of a
Depositary Unit in accordance with Article XI hereof, the transferor shall be
deemed to have given the transferee the right to seek admission as a Substituted
Limited Partner subject to the conditions of, and in the manner permitted under,
this Agreement.
A transferor of a Depositary Receipt shall, however, only have the authority to
convey to a purchaser or other transferee who does not execute and deliver a
Transfer Application (i) the right to negotiate such Depositary Receipt to a
purchaser or other transferee and (ii) the right to transfer the right to
request admission as a Substituted Limited Partner to such purchaser or other
transferee in respect of the transferred Depositary Units. Each transferee of a
Depositary Unit (including any nominee holder or an agent acquiring such
Depositary Unit for the account of another Person) who executes a Transfer
Application shall be an Assignee and shall be deemed to have applied to become a
Substituted Limited Partner with respect to the Depositary Units so transferred
to such Person by virtue of executing and delivering such Transfer Application.
Such Assignee shall become a Substituted Limited Partner at such time as the
General Partner consents thereto, which consent may be given or withheld in the
General Partner's sole discretion, and when any such admission is shown on the
books and records of the Partnership. If such consent is withheld, such
transferee shall be an Assignee. An Assignee shall have an interest in the
Partnership equivalent to that of a Limited Partner with respect to allocations
and distributions, including liquidating distributions, of the Partnership. With
respect to voting rights attributable to Units that are held by Assignees, the
General Partner shall be deemed to be the Limited Partner with respect thereto
and shall, in exercising the voting rights in respect of such Units on any
matter, vote such Units at the written direction of the Assignee who is the
Record Holder of such Units. If no such written direction is received, such
Units will not be voted. An Assignee shall have no other rights of a Limited
Partner.
12.3 Admission of Successor General Partner. A successor General Partner
approved pursuant to Section 13.1 hereof or the transferee of or successor to
all of the General Partner's Partnership Interest pursuant to Section 11.2
hereof who is proposed to be admitted as a successor General Partner shall be
admitted to the Partnership as the General Partner, effective immediately prior
to the withdrawal or removal of the General Partner pursuant to Section 13.1
hereof or the transfer pursuant to Section 11.2; provided, however, that no such
successor shall be admitted to the Partnership until the terms of Section 11.2
hereof have been complied with. Any such successor shall carry on the business
of the Partnership without dissolution. In each case, the admission shall be
subject to the successor General Partner executing and delivering to the
Partnership an acceptance of all of the terms and conditions of this Agreement
and such other documents or instruments as may be required to effect the
admission.
12.4 Admission of Additional Limited Partners. (a) A Person (other than an
Initial Limited Partner, an Underwriter or a Substituted Limited Partner) who
makes a Capital Contribution to the Partnership in accordance with this
Agreement (other than by the purchase of SPUs) shall be admitted to the
Partnership as an Additional Limited Partner only upon furnishing to the General
Partner (i) evidence of acceptance in form satisfactory to the General Partner
of all of the terms and conditions of this Agreement, including, without
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limitation, the power of attorney granted in Section 1.4 hereof and (ii) such
other documents or instruments as may be required in the discretion of the
General Partner in order to effect such Person's admission as an Additional
Limited Partner.
(b) Notwithstanding anything to the contrary in this Section 12.4, no
Person shall be admitted as an Additional Limited Partner without the consent of
the General Partner, which consent may be given or withheld in the General
Partner's sole discretion. The admission of any Person as an Additional Limited
Partner shall become effective on the date upon which the name of such Person is
recorded on the books and records of the Partnership, following the consent of
the General Partner to such admission.
12.5 Amendment of Agreement and Certificate of Limited Partnership. For
the admission to the Partnership of any Partner, the General Partner shall take
all steps necessary and appropriate under the Delaware Act to amend the records
of the Partnership and, if necessary, to prepare as soon as practical an
amendment of this Agreement and, if required by law, shall prepare and file an
amendment to the Certificate of Limited Partnership and may for this purpose
exercise the power of attorney granted pursuant to Section 1.4 hereof.
ARTICLE XIII
WITHDRAWAL OR REMOVAL OF PARTNERS
13.1 Withdrawal of the General Partner. (a) The General Partner shall be
deemed to have withdrawn from the Partnership upon the occurrence of any one of
the following events (each such event herein referred to as an "Event of
Withdrawal"):
(i) the General Partner voluntarily withdraws from the Partnership by
giving written notice to the other Partners;
(ii) the General Partner transfers all of its rights as General
Partner pursuant to Section 11.2 hereof;
(iii) the General Partner is removed pursuant to Section 13.2 hereof;
(iv) the General Partner
(A) makes a general assignment for the benefit of creditors;
(B) files a voluntary bankruptcy petition;
(C) files a petition or answer seeking for itself a reorganization,
arrangement, composition, readjustment, liquidation, dissolution or
similar relief under any law;
(D) files an answer or other pleading admitting or failing to
contest the material allegations of a petition filed against the General
Partner in a proceeding of the type described in paragraphs (A)-(C) of
this subsection; or
(E) seeks, consents to or acquiesces in the appointment of a
trustee, receiver or liquidator of the General Partner or of all or any
substantial part of its properties;
(v) a final and non-appealable judgment is entered by a court with
appropriate jurisdiction ruling that the General Partner is bankrupt or
insolvent, or a final and non-appealable order for relief is entered by a
court with appropriate jurisdiction against the General Partner, in each
case under any federal or state bankruptcy or insolvency laws as now or
hereafter in effect; or
(vi) a certificate of dissolution or its equivalent is filed for the
General Partner, or 90 days expire after the date of notice to the General
Partner of revocation of its charter without a reinstatement of its
charter, under the laws of its state of incorporation.
If an Event of Withdrawal specified in paragraphs (iv), (v) or (vi) occurs, the
withdrawing General Partner shall give written notice to the Limited Partners
within 30 days after such occurrence. The Partners hereby
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agree that only the Events of Withdrawal described in this Section 13.1 shall
result in withdrawal of the General Partner from the Partnership.
(b) Withdrawal of the General Partner from the Partnership upon the
occurrence of an Event of Withdrawal will not constitute a breach of this
Agreement under the following circumstances: (i) at any time during the period
ending on December 31, 1999, the General Partner voluntarily withdraws by giving
at least 90 days' advance written notice of its intention to withdraw to the
Limited Partners, provided that, prior to the effective date of such withdrawal,
the Limited Partners approve such withdrawal by the vote of at least 66 2/3% of
the outstanding Units (excluding for purposes of such determination any Units
owned by the General Partner and its Affiliates); (ii) at any time after
December 31, 1999, the General Partner voluntarily withdraws by giving at least
90 days' advance written notice to the Limited Partners, such withdrawal to take
effect on the date specified in such notice; (iii) at any time that the General
Partner ceases to be a General Partner pursuant to Section 13.1(a)(ii) hereof or
is removed pursuant to Section 13.1(a)(iii) hereof; or (iv) notwithstanding
clause (i) above, at any time that the General Partner voluntarily withdraws by
giving at least 90 days' advance written notice of its intention to withdraw to
the Limited Partners, such withdrawal to take effect on the date specified in
the notice, if at the time such notice is given more than 50% of the
outstanding Units held by Persons other than by the General Partner and its
Affiliates are owned beneficially or of record or controlled at any time by one
Person or its Affiliates. If the General Partner gives a notice of withdrawal
pursuant to Section 13.1(a)(i) hereof or if the General Partner is removed
pursuant to Section 13.2 hereof, holders of at least a majority of the
outstanding Units (excluding for purposes of such determination Units owned by
the General Partner and its Affiliates) may, prior to the effective date of such
withdrawal, elect a successor General Partner. If, prior to the effective date
of the General Partner's withdrawal, a successor is not selected by the Limited
Partners as provided herein or the Partnership does not receive an Opinion of
Counsel that such withdrawal (following the selection of the successor General
Partner) would not result in the loss of the limited liability of the holders of
Units or cause the Partnership to be taxable as a corporation or to be treated
as an association taxable as a corporation for federal income tax purposes, the
Partnership shall be dissolved in accordance with Section 14.1 hereof. If a
successor General Partner is elected and the Opinion of Counsel rendered as
provided herein, such successor shall be admitted (subject to Section 12.3
hereof) immediately prior to the effective time of the withdrawal of the
Departing Partner and shall continue the business of the Partnership without
dissolution.
13.2 Removal of the General Partner. The General Partner may be removed
during the Support Period only if such removal is approved by the written
consent or affirmative vote of Limited Partners holding at least 90% of the
outstanding Units (excluding for purposes of such determination any Units owned
by the General Partner and its Affiliates) and, thereafter, only if such removal
is approved by the written consent or affirmative vote of Limited Partners
owning at least 66 2/3% of the outstanding Units (excluding for purposes of such
determination any Units owned by the General Partner and its Affiliates). Any
such action by the Limited Partners for removal of the General Partner must also
provide for the election and succession of a new General Partner. Such removal
shall be effective immediately following the admission of the successor General
Partner pursuant to Article XII. The right of the Limited Partners to remove the
General Partner shall not exist or be exercised unless the Partnership has
received an Opinion of Counsel that the removal of the General Partner and the
selection of a successor General Partner will not result in (i) the loss of
limited liability of the Partnership or any Limited Partner in the Partnership
or (ii) the taxation of the Partnership as a corporation or the treatment of the
Partnership as an association taxable as a corporation for federal income tax
purposes.
13.3 Interest of Departing Partner and Successor General Partner. (a) In
the event of (i) withdrawal of the General Partner under circumstances
where such withdrawal does not violate this Agreement or (ii) removal of the
General Partner by the Limited Partners under circumstances where "cause" does
not exist, the Departing Partner shall, at its option exercisable prior to the
effective date of the departure of such Departing Partner, promptly receive
from its successor in exchange for its Partnership Interest as General Partner
an amount in cash equal to the fair market value of the Departing Partner's
Partnership Interest as General Partner, such amount to be determined and
payable as of the effective date of its departure. If the General Partner is
removed by the Limited Partners under circumstances where "cause"
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exists or if the General Partner withdraws under circumstances where
such withdrawal violates this Agreement, its successor shall have the option
described in the immediately preceding sentence, and the Departing Partner
shall not have such option. In either event, the Departing Partner shall be
entitled to receive all reimbursements due such Departing Partner pursuant to
Section 6.4, including any employee-related liabilities, including severance
liabilities, incurred in connection with the termination of any employees
employed by the Departing Partner for the benefit of the Partnership. Subject
to Section 13.3(b) hereof, the Departing Partner shall, as of the effective
date of its departure, cease to share in any allocations or distributions with
respect to its Partnership Interest as the General Partner and Partnership
income, gain, loss, deduction and credit will be prorated and allocated as set
forth in Section 5.1(d) hereof. For purposes of this Section 13.3, "cause"
means that a court of competent jurisdiction has entered a final non-appealable
judgment finding the General Partner liable for actual fraud, gross negligence
or wilful or wanton misconduct in its capacity as General Partner of the
Partnership.
For purposes of this Section 13.3(a), the fair market value of the
Departing Partner's Partnership Interest as the General Partner herein
shall be determined by agreement between the Departing Partner and its
successor or, failing agreement within 30 days after the effective date of such
Departing Partner's departure, by an independent investment banking firm or
other independent expert selected by the Departing Partner and its successor,
which, in turn, may rely on other experts and the determination of which shall
be conclusive as to such matter. If such parties cannot agree upon one
independent investment banking firm or other independent expert within 45 days
after the effective date of such departure, then such firm shall be designated
by the independent investment banking firm or other independent expert selected
by each of the Departing Partner and its successor. In making its
determination, such independent investment banking firm or other independent
expert shall consider the then current trading price of Units on any National
Securities Exchange on which Units are then listed, the value of the
Partnership's assets, the rights and obligations of the General Partner and
other factors it may deem relevant.
(b) If the Partnership Interest is not acquired in the manner set forth in
Section 13.3(a) hereof, the Departing Partner shall become a Limited Partner and
its Partnership Interest shall be converted into Units pursuant to a valuation
made by an investment banking firm or other independent expert selected pursuant
to Section 13.3(a) hereof, without reduction in such Partnership Interest (but
subject to proportionate dilution by reason of the admission of its successor).
Any successor General Partner shall indemnify the Departing Partner as to all
debts and liabilities of the Partnership arising on or after the date on which
the Departing Partner becomes a Limited Partner. For purposes of this Agreement,
the General Partner's conversion of its Partnership Interest to Units will be
characterized as if the General Partner contributed its Partnership Interest to
the Partnership in exchange for the newly-issued Units.
(c) If the option described in Section 13.3(a) hereof is not exercised by
the party entitled to do so, the successor General Partner shall, at the
effective date of its admission to the Partnership, contribute to the capital of
the Partnership cash in an amount such that its Capital Account, after giving
effect to such contribution and any adjustments made to the Capital Accounts of
all Partners pursuant to Section 4.6(d)(i), shall be equal to that percentage of
the Capital Accounts of all Partners that is equal to its Percentage Interest as
the General Partner. In such event, each successor General Partner shall,
subject to the following sentence, be entitled to such Percentage Interest of
all Partnership allocations and distributions and any other allocations and
distributions to which the Departing Partner was entitled. In addition, such
successor General Partner shall cause this Agreement to be amended to reflect
that, from and after the date of such successor General Partner's admission, the
successor General Partner's interest in all Partnership distributions and
allocations shall be 2%, and that of the Unitholders shall be 98%.
13.4 Redemption of SPUs and Deferred Participation Interests. In the event
that Plum Creek Management Company (or any Affiliate of Burlington which is a
successor to Plum Creek Management Company as General Partner of the
Partnership) withdraws as General Partner under circumstances where such
withdrawal does not violate this Agreement or is removed by the Limited Partners
under circumstances where "cause" does not exist, (i) in the case of SPUs,
Burlington or its Affiliate shall have the right to require the Partnership
within 30 days of the effective date of such withdrawal or removal to redeem any
SPUs which are then outstanding at a price equal to the Unrecovered Capital
attributable thereto or (ii) in the case of
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Deferred Participation Interests, Plum Creek Timber Company, Inc. (or its
successor) or its Affiliate, shall have the right to require the Partnership
within 30 days of the effective date of such withdrawal or removal to redeem
any Deferred Participation Interests which are then outstanding, and not yet
converted into Units pursuant to Section 5.7(b), at a price equal to the
Unrecovered Capital attributable thereto.
13.5 Withdrawal of Limited Partners. Except as provided in Section 13.4,
no Limited Partner shall have any right to withdraw from the Partnership;
provided, however, that when a transferee of a Limited Partner's Units becomes a
Record Holder, such transferring Limited Partner shall cease to be a Limited
Partner with respect to the Units so transferred.
ARTICLE XIV
DISSOLUTION AND LIQUIDATION
14.1 Dissolution. The Partnership shall not be dissolved by the admission
of Substituted Limited Partners or Additional Limited Partners or by the
admission of a successor General Partner in accordance with the terms of this
Agreement. Upon the removal or withdrawal of the General Partner any successor
General Partner shall continue the business of the Partnership. The Partnership
shall dissolve, and its affairs shall be wound up, upon:
(a) the expiration of its term as provided in Section 1.5 hereof;
(b) an Event of Withdrawal of the General Partner as provided in
Section 13.1(a) hereof, unless a successor is named as provided in Section
13.1(b) hereof;
(c) an election to dissolve the Partnership by the General Partner
that is approved by the affirmative vote of the holders of at least 66 2/3%
of outstanding Units, excluding for purposes of such determination Units
owned by the General Partner and its Affiliates, (and all Limited Partners
hereby expressly consent that such approval may be effected upon written
consent of the holders of at least 66 2/3% of outstanding Units);
(d) entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Delaware Act; or
(e) the sale of all or substantially all of the assets and properties
of the Partnership.
14.2 Continuation of the Business of the Partnership after
Dissolution. Upon (i) dissolution of the Partnership caused by the withdrawal or
removal of the General Partner and following a failure of all Partners, within
90 days after the withdrawal or removal of the General Partner, to agree to
continue the business of the Partnership and appoint a successor General
Partner, then within an additional 90 days or (ii) dissolution of the
Partnership upon an event constituting an Event of Withdrawal as defined in
Section 13.1(a)(iv) hereof, then within 180 days thereafter, at least 66 2/3% of
the outstanding Units may elect to reconstitute the Partnership and continue its
business on the same terms and conditions set forth in this Agreement by forming
a new limited partnership on terms identical to those set forth in this
Agreement and having as a general partner a Person approved by the holders of at
least 66 2/3% of the outstanding Units. Upon any such election by the holders of
at least 66 2/3% of the outstanding Units, all Partners shall be bound thereby
and shall be deemed to have approved thereof. Unless such an election is made
within the applicable time period as set forth above, the Partnership shall
conduct only activities necessary to wind up its affairs. If such an election is
so made, then:
(a) the reconstituted Partnership shall continue until the end of the
term set forth in Section 1.5 hereof unless earlier dissolved in accordance
with this Article XIV;
(b) if the successor General Partner is not the former General
Partner, then the interest of the former General Partner shall be treated
thenceforth as the interests of a Limited Partner and converted into Units
in the manner provided in Section 13.3(b) hereof; and
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(c) all necessary steps shall be taken to cancel this Agreement and
the Certificate of Limited Partnership and to enter into and, as necessary,
to file a new partnership agreement and certificate of limited partnership,
and the successor general partner may for this purpose exercise the powers
of attorney granted the General Partner pursuant to Section 1.4 hereof;
provided, that the right of the holders of at least 66 2/3% of outstanding
Units to approve a successor general partner and to reconstitute and to
continue the business of the Partnership shall not exist and may not be
exercised unless the Partnership has received an Opinion of Counsel that
(x) the exercise of the right would not result in the loss of limited
liability of any Limited Partner and (y) neither the Partnership nor the
reconstituted limited partnership would become taxable as a corporation or
treated as an association taxable as a corporation for federal income tax
purposes upon the exercise of such right to continue.
14.3 Liquidation. Upon dissolution of the Partnership, unless the
Partnership is continued under an election to reconstitute and continue the
Partnership pursuant to Section 14.2 hereof, the General Partner, or in the
event the General Partner has been dissolved or removed, become bankrupt as set
forth in Section 13.1 or withdrawn from the Partnership, a liquidator or
liquidating committee approved by the holders of at least 66 2/3% of the
outstanding Units, shall be the Liquidator. The Liquidator (if other than the
General Partner) shall be entitled to receive such compensation for its services
as may be approved by the holders of at least 66 2/3% of the outstanding Units.
The Liquidator shall agree not to resign at any time without 15 days' prior
written notice and (if other than the General Partner) may be removed at any
time, with or without cause by notice of removal approved by at least 66 2/3% of
the outstanding Units. Upon dissolution, removal or resignation of the
Liquidator, a successor and substitute Liquidator (who shall have and succeed to
all rights, powers and duties of the original Liquidator) shall within 30 days
thereafter be approved by the holders of at least 66 2/3% of the outstanding
Units. The right to approve a successor or substitute Liquidator in the manner
provided herein shall be deemed to refer also to any such successor or
substitute Liquidator approved in the manner herein provided. Except as
expressly provided in this Article XIV, the Liquidator approved in the manner
provided herein shall have and may exercise, without further authorization or
consent of any of the parties hereto, all of the powers conferred upon the
General Partner under the terms of this Agreement (but subject to all of the
applicable limitations, contractual and otherwise, upon the exercise of such
powers, other than the limitation on sale set forth in Section 6.3(b) hereof) to
the extent necessary or desirable in the good faith judgment of the Liquidator
to carry out the duties and functions of the Liquidator hereunder for and during
such period of time as shall be reasonably required in the good faith judgment
of the Liquidator to complete the winding-up and liquidation of the Partnership
as provided for herein. The Liquidator shall liquidate the assets of the
Partnership, and apply and distribute the proceeds of such liquidation in the
following order of priority, unless otherwise required by mandatory provisions
of applicable law:
(a) the payment to creditors of the Partnership, including Partners
who are creditors, in order of priority provided by law; and the creation
of a reserve of cash or other assets of the Partnership for contingent
liabilities in an amount, if any, determined by the Liquidator to be
appropriate for such purposes; and
(b) to all Partners and Special Limited Partners in accordance with
the positive balances in their respective Capital Accounts after taking
into account adjustments to such Capital Accounts pursuant to Section
5.1(c) hereof.
14.4 Distributions in Kind. Notwithstanding the provisions of Section 14.3
hereof, which require the liquidation of the assets of the Partnership, but
subject to the order of priorities set forth therein, if prior to or upon
dissolution of the Partnership the Liquidator determines that an immediate sale
of part or all of the Partnership's assets would be impractical or would cause
undue loss to the Partners, the Liquidator may, in its absolute discretion,
defer for a reasonable time the liquidation of any assets except those necessary
to satisfy liabilities of the Partnership (including those to Partners as
creditors) and/or distribute to the Partners or to specific classes of Partners,
in lieu of cash, as tenants in common and in accordance with the provisions of
Section 14.3 hereof, undivided interests in such Partnership assets as the
Liquidator deems not suitable for liquidation. Any such distributions in kind
shall be made only if, in the good faith judgment of the Liquidator, such
distributions in kind are in the best interest of the Limited Partners, and
shall be subject to such conditions relating to the disposition and management
of such properties as the Liquidator deems reasonable
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and equitable and to any agreements governing the operation of such properties
at such time. The Liquidator shall determine the fair market value of any
property distributed in kind using such reasonable method of valuation as it
may adopt.
14.5 Cancellation of Certificate of Limited Partnership. Upon the
completion of the distribution of Partnership cash and property as provided in
Sections 14.3 and 14.4 hereof, the Partnership shall be terminated and the
Certificate of Limited Partnership and all qualifications of the Partnership as
a foreign limited partnership in jurisdictions other than the State of Delaware
shall be cancelled and such other actions as may be necessary to terminate the
Partnership shall be taken.
14.6 Reasonable Time for Winding-Up. A reasonable time shall be allowed
for the orderly winding-up of the business and affairs of the Partnership and
the liquidation of its assets pursuant to Section 14.3 hereof, in order to
minimize any losses otherwise attendant upon such winding-up and the provisions
of this Agreement shall remain in effect between the Partners during the period
of liquidation.
14.7 Return of Capital. The General Partner shall not be personally liable
for the return of the Capital Contributions of the Limited Partners, or any
portion thereof, it being expressly understood that any such return shall be
made solely from Partnership assets.
14.8 No Capital Account Restoration. No Partner shall have any obligation
to restore any negative balance in its Capital Account upon liquidation of the
Partnership.
14.9 Waiver of Partition. Each Partner hereby waives any right to
partition of the Partnership property.
ARTICLE XV
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
15.1 Amendment to be Adopted Solely by General Partner. Each Limited
Partner agrees that the General Partner (pursuant to its powers of attorney from
the Limited Partners and Assignees), without the approval of any Limited Partner
or Assignee, may amend any provision of this Agreement, and execute, swear to,
acknowledge, deliver, file and record whatever documents may be required in
connection therewith, to reflect:
(a) a change in the name of the Partnership, the location of the
principal place of business of the Partnership, the registered agent or the
registered office of the Partnership;
(b) admission, substitution, withdrawal or removal of Partners in
accordance with this Agreement;
(c) a change that, in the sole discretion of the General Partner, is
reasonable and necessary or appropriate to qualify or continue the
qualification of the Partnership as a limited partnership or a partnership
in which the limited partners have limited liability under the laws of any
state or that is necessary or advisable in the opinion of the General
Partner to ensure that the Partnership will not be taxable as a corporation
or treated as an association taxable as a corporation for federal income
tax purposes;
(d) a change (i) that, in the sole discretion of the General Partner,
does not adversely affect the Limited Partners in any material respect,
(ii) that is necessary or desirable to satisfy any requirements, conditions
or guidelines contained in any opinion, directive, order, ruling or
regulation of any federal or state agency or judicial authority or
contained in any federal or state statute (including, without limitation,
the Delaware Act) or that is necessary or desirable to facilitate the
trading of the Depositary Units (including, without limitation, the
division of outstanding Units into different classes in order to facilitate
uniformity of tax consequences within such classes of Units) or comply with
any rule, regulation, guideline or requirement of any National Securities
Exchange on which the Depositary Units are or will be listed for trading,
compliance with any of which the General Partner determines in its sole
discretion to be in the best interests of the Partnership and the Limited
Partners or (iii) that is required to effect the intent of the provisions
of this Agreement or is otherwise contemplated by this Agreement;
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(e) an amendment that is necessary, in the Opinion of Counsel, to
prevent the Partnership or the General Partner or its directors or officers
from in any manner being subjected to the provisions of the Investment
Company Act of 1940, as amended, the Investment Advisers Act of 1940, as
amended, or "plan asset" regulations adopted under the Employee Retirement
Income Security Act of 1974, as amended, whether or not substantially
similar to plan asset regulations currently applied or proposed by the
United States Department of Labor;
(f) subject to the terms of Section 4.4 hereof, an amendment that the
General Partner determines in its sole discretion to be necessary or
desirable in connection with the authorization for issuance of any class or
series of Units pursuant to Section 4.4 hereof;
(g) any amendment expressly permitted in this Agreement to be made by
the General Partner acting alone;
(h) any amendment made after the Support Period, the effect of which
is to separate into a security separate and apart from the Units, the
rights of holders of the Units to receive any Cumulative Base Deficiency in
respect of the Support Period;
(i) an amendment effected, necessitated or contemplated by a Merger
Agreement approved in accordance with Section 16.3 hereof; or
(j) any other amendments similar to the foregoing.
15.2 Amendment Procedures. Except as provided in Sections 15.1 and 15.3
hereof, all amendments to this Agreement shall be made in accordance with the
following requirements: If an amendment is proposed, the General Partner shall
seek the written approval of the requisite Percentage Interests or call a
meeting of the Limited Partners to consider and vote on such proposed amendment.
Each such proposal to the Limited Partners shall contain the text of the
proposed amendment. A proposed amendment shall be effective upon its approval by
at least 66 2/3% of the outstanding Units unless a greater or different
percentage is required under this Agreement. The General Partner shall notify
all Record Holders upon final adoption of any proposed amendment.
15.3 Amendment Requirements. (a) Amendments to this Agreement may be
proposed solely by the General Partner. Notwithstanding the provisions of
Sections 15.1 and 15.2 hereof, no provision of this Agreement which establishes
a Percentage Interest required to take any action shall be amended, altered,
changed, repealed or rescinded in any respect which would have the effect of
reducing such voting requirement unless such amendment is approved by the
written consent or the affirmative vote of Partners whose aggregate Percentage
Interests constitute not less than the voting requirement sought to be reduced.
(b) Notwithstanding the provisions of Sections 15.1 and 15.2 hereof, no
amendment to this Agreement may (i) enlarge the obligations of any Limited
Partner, (ii) modify the compensation payable to the General Partner or any of
its Affiliates by the Partnership, (iii) change Section 14.1(a) or (c) hereof,
(iv) restrict in any way any action by or rights of the General Partner as set
forth in this Agreement or (v) except as set forth in Section 14.1(c) hereof,
give any person the right to dissolve the Partnership.
(c) Except as otherwise provided, the General Partner may amend the
Partnership Agreement without the approval of the Limited Partners, except that
any amendment that would have a material adverse effect on the holders of any
class of outstanding Units must be approved by the holders of not less than
66 2/3% of the outstanding Units of such class.
(d) Notwithstanding any other provision of this Agreement, except for
amendments pursuant to Sections 6.3 or 15.1 hereof, no amendment shall become
effective without the approval of the Record Holders of all Units unless the
Partnership obtains an Opinion of Counsel to the effect that (i) such amendment
will not cause the Partnership to become taxable as a corporation or treated as
an association taxable as a corporation for federal income tax purposes and (ii)
such amendment will not affect the limited liability of any Limited Partner in
the Partnership under applicable law.
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(e) This Section 15.3 shall only be amended with the approval by written
consent or affirmative vote of the holders of not less than 95% of the
outstanding Units.
15.4 Meetings. All acts of Limited Partners to be taken hereunder shall be
taken in the manner provided in this Article XV. Meetings of the Limited
Partners may be called by the General Partner or by Limited Partners owning 20%
or more of the outstanding Units of the class for which a meeting is proposed.
Limited Partners shall call a meeting by delivering to the General Partner one
or more requests in writing stating that the signing Limited Partners wish to
call a meeting and indicating the general or specific purposes for which the
meeting is to be called. Within 60 days after receipt of such a call from
Limited Partners or within such greater time as may be reasonably necessary for
the Partnership to comply with any statutes, rules, regulations, listing
agreements or similar requirements governing the holding of a meeting or the
solicitation of proxies for use at such a meeting, the General Partner
shall send a notice of the meeting to the Limited Partners either directly or
indirectly through the Transfer Agent. A meeting shall be held at a time and
place determined by the General Partner on a date not more than 60 days after
the mailing of notice of the meeting. Limited Partners shall not vote on
matters that would cause the Limited Partners to be deemed to be taking part in
the management and control of the business and affairs of the Partnership so as
to jeopardize the Limited Partners' limited liability under the Delaware Act or
the law of any other state in which the Partnership is qualified to do
business.
15.5 Notice of a Meeting. Notice of a meeting called pursuant to Section
15.4 hereof shall be given to the Record Holders in writing by mail or other
means of written communication in accordance with Section 17.1 hereof. The
notice shall be deemed to have been given at the time when deposited in the mail
or sent by other means of written communication.
15.6 Record Date. For purposes of determining the Limited Partners
entitled to notice of or to vote at a meeting of the Limited Partners or to give
approvals without a meeting as provided in Section 15.11 hereof, the General
Partner may set a Record Date, which shall not be less than 10 nor more than 60
days before (a) the date of the meeting (unless such requirement conflicts with
any rule, regulation, guideline or requirement of any National Securities
Exchange on which the Units are listed for trading, in which case the rule,
regulation, guideline or requirement of such exchange shall govern) or (b) in
the event that approvals are sought without a meeting, the date on which Limited
Partners are requested in writing by the General Partner to give such approvals.
15.7 Adjournment. When a meeting is adjourned to another time or place,
notice need not be given of the adjourned meeting and a new Record Date need not
be fixed, if the time and place thereof are announced at the meeting at which
the adjournment is taken, unless such adjournment shall be for more than 45
days. At the adjourned meeting, the Partnership may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than 45 days or if a new Record Date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given in accordance with this Article
XV.
15.8 Waiver of Notice; Approval of Meeting; Approval of Minutes. The
transactions of any meeting of Limited Partners, however called and noticed, and
whenever held, shall be as valid as if had at a meeting duly held after regular
call and notice, if a quorum is present either in person or by proxy, and if,
either before or after the meeting, each of the Limited Partners entitled to
vote, present in person or by proxy, signs a written waiver of notice or an
approval of the holding of the meeting or an approval of the minutes thereof.
All waivers and approvals shall be filed with the Partnership records or made a
part of the minutes of the meeting. Attendance of a Limited Partner at a meeting
shall constitute a waiver of notice of the meeting, except when the Limited
Partner does not approve, at the beginning of the meeting, of the transaction of
any business because the meeting is not lawfully called or convened; and except
that attendance at a meeting is not a waiver of any right to disapprove the
consideration of matters required to be included in the notice of the meeting,
but not so included, if the disapproval is expressly made at the meeting.
15.9 Quorum. 66 2/3% of the outstanding Units of the class for which a
meeting has been called represented in person or by proxy shall constitute a
quorum at a meeting of Limited Partners of such class unless any such action by
the Limited Partners requires approval by holders of a majority in interest of
the Units, in which case, the quorum shall be a majority. At any meeting of the
Limited Partners duly called and
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held in accordance with this Agreement at which a quorum is present, the act of
Limited Partners whose Percentage Interests represent at least 66 2/3% of the
Percentage Interests entitled to vote and be present in person or by proxy at
such meeting shall be deemed to constitute the act of all Limited Partners,
unless a different percentage is required with respect to such action under the
provisions of this Agreement, in which case the act of the Limited Partners
owning such different percentage shall be required. The Limited Partners
present at a duly called or held meeting at which a quorum is present may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough Limited Partners to leave less than a quorum, if any action taken
(other than adjournment) is approved by the required Percentage Interests of
the Limited Partners specified in this Agreement. In the absence of a quorum,
any meeting of Limited Partners may be adjourned from time to time by the
affirmative vote of a majority of the Percentage Interests represented either
in person or by proxy, but no other business may be transacted, except as
provided in Section 15.7 hereof.
15.10 Conduct of Meeting. The General Partner shall have full power and
authority concerning the manner of conducting any meeting of the Limited
Partners or solicitation of approvals in writing, including, without limitation,
the determination of Persons entitled to vote, the existence of a quorum, the
satisfaction of the requirements of Section 15.4 hereof, the conduct of voting,
the validity and effect of any proxies and the determination of any
controversies, votes or challenges arising in connection with or during the
meeting or voting. The General Partner shall designate a Person to serve as
chairman of any meeting and shall further designate a Person to take the minutes
of any meeting, in either case including, without limitation, a Partner or a
director or officer of the General Partner. All minutes shall be kept with the
records of the Partnership maintained by the General Partner. The General
Partner may make such other regulations consistent with applicable law and this
Agreement as it may deem advisable concerning the conduct of any meeting of the
Limited Partners or solicitation of approvals in writing, including regulations
in regard to the appointment of proxies, the appointment and duties of
inspectors of votes and approvals, the submission and examination of proxies and
other evidence of the right to vote, and the revocation of approvals in writing.
15.11 Action Without a Meeting. Any action that may be taken at a meeting
of the Limited Partners may be taken without a meeting if an approval in writing
setting forth the action so taken is signed by Limited Partners owning not less
than the minimum Percentage Interests that would be necessary to authorize or
take such action at a meeting at which all the Limited Partners were present and
voted. Prompt notice of the taking of action without a meeting shall be given to
the Limited Partners who have not approved in writing. The General Partner may
specify that any written ballot submitted to Limited Partners for the purpose of
taking any action without a meeting shall be returned to the Partnership within
the time period, which shall be not less than 20 days, specified by the General
Partner. If a ballot returned to the Partnership does not vote all of the Units
held by the Limited Partner, the Partnership shall be deemed to have failed to
receive a ballot for the Units which were not voted. If approval of the taking
of any action by the Limited Partners is solicited by any Person other than by
or on behalf of the General Partner, the written approvals shall have no force
and effect unless and until (a) they are deposited with the Partnership in care
of the General Partner, (b) approvals sufficient to take the action proposed are
dated as of a date not more than 90 days prior to the date sufficient approvals
are deposited with the Partnership and (c) an Opinion of Counsel is delivered to
the General Partner to the effect that the exercise of such right and the action
proposed to be taken with respect to any particular matter (i) will not cause
the Limited Partners to be deemed to be taking part in the management and
control of the business and affairs of the Partnership so as to jeopardize the
Limited Partners' limited liability, (ii) will not jeopardize the status of the
Partnership as a partnership under applicable tax laws and regulations and (iii)
is otherwise permissible under the state statutes then governing the rights,
duties and liabilities of the Partnership and the Partners.
15.12 Voting and Other Rights. (a) Only those Record Holders of Units on
the Record Date set pursuant to Section 15.6 hereof shall be entitled to notice
of, and to vote at, a meeting of Limited Partners or to act with respect to
matters as to which approvals are solicited.
(b) With respect to Units that are held for a Person's account by another
Person (such as a broker, dealer, bank, trust company or clearing corporation,
or an agent of any of the foregoing), in whose name such Units are registered,
such broker, dealer or other agent shall, in exercising the voting rights in
respect of such
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Units on any matter, and unless the arrangement between such Persons
provides otherwise, vote such Units in favor of, and at the direction of, the
Person who is the beneficial owner, and the Partnership shall be entitled to
assume it is so acting without further inquiry. The provisions of this Section
15.12(b) (as well as all other provisions of this Agreement) are subject to the
provisions of Section 10.4 hereof.
ARTICLE XVI
MERGER
16.1 Authority. The Partnership may merge or consolidate with one or more
corporations, business trusts or associations, real estate investment trusts,
common law trusts or unincorporated businesses, including, without limitation,
a general partnership or limited partnership, formed under the laws of the
State of Delaware or any other state of the United States of America pursuant
to a written agreement of merger or consolidation ("Merger Agreement") in
accordance with this Article.
16.2 Procedure for Merger or Consolidation. Merger or consolidation of
the Partnership pursuant to this Article requires the prior approval of the
General Partner. If the General Partner shall determine, in the exercise of its
sole discretion, to consent to the merger or consolidation, the General Partner
shall approve the Merger Agreement, which shall set forth:
(a) The names and jurisdictions of formation or organization of each
of the business entities proposing to merge or consolidate;
(b) The name and jurisdictions of formation or organization of the
business entity that is to survive the proposed merger or consolidation
(hereafter designated as the "Surviving Business Entity");
(c) The terms and conditions of the proposed merger or consolidation;
(d) The manner and basis of exchanging or converting the equity
securities of each constituent business entity for, or into, cash, property
or general or limited partnership interests, rights, securities or
obligations of the Surviving Business Entity; and (i) if any general or
limited partnership interests, securities or rights of any constituent
business entity are not to be exchanged or converted solely for, or into,
cash, property or general or limited partnership interests, rights,
securities or obligations of the Surviving Business Entity, the cash,
property or general or limited partnership interests, rights, securities or
obligations of any limited partnership, corporation, trust or other entity
(other than the Surviving Business Entity) which the holders of such
general or limited partnership interests are to receive in exchange for, or
upon conversion of, their securities or rights, and (ii) in the case of
securities represented by certificates, upon the surrender of such
certificates, which cash, property or general or limited partnership
interests, rights, securities or obligations of the Surviving Business
Entity or any limited partnership, corporation, trust or other entity
(other than the Surviving Business Entity), or evidences thereof are to be
delivered;
(e) A statement of any changes in the constituent documents (the
articles or certificate of incorporation, articles of trust, declaration of
trust, certificate or agreement of limited partnership or other similar
charter or governing document) of the Surviving Business Entity to be
effected by such merger or consolidation;
(f) The effective time of the merger, which may be the date of the
filing of the certificate of merger pursuant to Section 16.4 hereof or a
later date specified in or determinable in accordance with the Merger
Agreement (provided that if the effective time of the merger is to be later
than the date of the filing of the certificate of merger, it shall be fixed
no later than the time of the filing of the certificate of merger and
stated therein); and
(g) Such other provisions with respect to the proposed merger or
consolidation as are deemed necessary or desirable.
16.3 Approval by Limited Partners of Merger or Consolidation. (a) The
General Partner of the Partnership, upon its approval of the Merger Agreement,
shall direct that the Merger Agreement be submitted to a vote of Limited
Partners whether at a meeting or by written consent, in either case in
accordance with the
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requirements of Article XV hereof. A copy or a summary of the Merger Agreement
shall be included in or enclosed with the notice of a meeting or the written
consent.
(b) The Merger Agreement shall be approved upon receiving the affirmative
vote or consent of the holders of at least 66 2/3% of the outstanding Units of
each class unless the Merger Agreement contains any provision which, if
contained in an amendment to the Agreement, the provisions of this Agreement or
the Delaware Act would require the vote or consent of a greater percentage of
the Percentage Interests of the Limited Partners or of any class of Limited
Partners, in which case such greater percentage vote or consent shall be
required for approval of the Merger Agreement.
(c) After such approval by vote or consent of the Limited Partners, and at
any time prior to the filing of the certificate of merger pursuant to Section
16.4 hereof, the merger or consolidation may be abandoned pursuant to provisions
therefor, if any, set forth in the Merger Agreement.
16.4 Certificate of Merger. Upon the required approval by the General
Partner and Limited Partners of a Merger Agreement, a certificate of merger
shall be executed and filed with the Secretary of State of the State of Delaware
in conformity with the requirements of the Delaware Act.
16.5 Effect of Merger. (a) Upon the effective date of the certificate of
merger:
(i) all of the rights, privileges and powers of each of the business
entities that has merged or consolidated, and all property, real, personal
and mixed, and all debts due to any of those business entities and all
other things and causes of action belonging to each of those business
entities shall be vested in the Surviving Business Entity and after the
merger or consolidation shall be the property of the Surviving Business
Entity to the extent they were of each constituent business entity;
(ii) the title to any real property vested by deed or otherwise in any
of those constituent business entities shall not revert and is not in any
way impaired because of the merger or consolidation;
(iii) all rights of creditors and all liens on or security interests
in property of any of those constituent business entities shall be
preserved unimpaired; and
(iv) all debts, liabilities and duties of those constituent business
entities shall attach to the Surviving Business Entity, and may be enforced
against it to the same extent as if the debts, liabilities and duties had
been incurred or contracted by it.
(b) A merger or consolidation effected pursuant to this Article shall not
be deemed to result in a transfer or assignment of assets or liabilities from
one entity to another having occurred.
ARTICLE XVII
RIGHT TO ACQUIRE UNITS
17.1 Right to Acquire Units. (a) Notwithstanding the provisions of
Section 13.1(a) hereof or any other provision of this Agreement (i) in the event
that at any time after the Support Period less than 10% of the total Units
outstanding are held by Persons other than the General Partner and its
Affiliates, the General Partner shall then have the right, which right it may
assign and transfer to the Partnership or any Affiliate of the General Partner,
exercisable in its sole discretion, to purchase all, but not less than all, of
the Units outstanding held by Persons other than the General Partner and its
Affiliates, at the greater of (x) the Current Market Price as of the date the
notice described in Section 17.1(b) hereof is mailed, (y) the Initial Unit Price
or (z) the highest cash price paid by the General Partner for any Unit purchased
during the 90-day period preceding the date that the notice described in Section
17.1(b) hereof is mailed. As used herein, (i) "Current Market Price" of any
class of Units listed or admitted to trading on any National Securities Exchange
means the average of the daily Closing Prices (as hereinafter defined) per Unit
of such class for the 20 consecutive Trading Days (as hereinafter defined)
immediately prior to such date and (ii) "Trading Day" means a day on which the
principal National Securities Exchange on which the Units of any class are
listed or admitted to trading is open for the transaction of business or, if
Units of a class are not listed or admitted to trading on any National
Securities Exchange, a day on which banking institutions in New York City
generally are open.
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(b) If the General Partner, any Affiliate of the General Partner or the
Partnership elects to exercise either right to purchase Units granted pursuant
to Section 17.1(a) hereof, the General Partner shall deliver to the Transfer
Agent written notice of such election to purchase (hereinafter in this Section
17.1 called the "Notice of Election to Purchase") and shall cause the Transfer
Agent to mail a copy of such Notice of Election to Purchase to the Record
Holders of Units (as of a Record Date selected by the General Partner) at least
10, but not more than 60, days prior to the Purchase Date. Such Notice of
Election to Purchase shall also be published in daily newspapers of general
circulation printed in the English language and published in the Borough of
Manhattan, New York. The Notice of Election to Purchase shall specify the
Purchase Date and the price (determined in accordance with Section 17.1(a)
hereof) at which Units will be purchased and state that the General
Partner, its Affiliate or the Partnership, as the case may be, elects to
purchase such Units, upon surrender of Depositary Receipts with respect to such
Units in exchange for payment, at such office or offices of the Transfer Agent
as the Transfer Agent may specify, or as may be required by any National
Securities Exchange on which the Units are listed or admitted to trading. Any
such Notice of Election to Purchase mailed to a Record Holder of Units at his
address as reflected in the records of the Transfer Agent shall be conclusively
presumed to have been given whether or not the owner receives such notice. On or
prior to the Purchase Date, the General Partner, its Affiliate or the
Partnership, as the case may be, shall deposit with the Transfer Agent cash in
an amount sufficient to pay the aggregate purchase price of all of the Units to
be purchased in accordance with this Section 17.1. If the Notice of Election to
Purchase shall have been duly given as aforesaid at least 10 days prior to the
Purchase Date, and if on or prior to the Purchase Date the deposit described in
the preceding sentence has been made for the benefit of the holders of Units
subject to purchase as provided herein, then from and after the Purchase Date,
notwithstanding that any Depositary Receipt shall not have been surrendered for
purchase, all rights of the holders of such Units (including, without
limitation, any rights pursuant to Articles IV, V and XIV hereof) shall
thereupon cease, except the right to receive the purchase price (determined in
accordance with Section 17.1(a) hereof) for Units therefor, without interest,
upon surrender to the Transfer Agent of the Depositary Receipts representing
such Units, and such Units shall thereupon be deemed to be transferred to the
General Partner, its Affiliate or the Partnership, as the case may be, on the
record books of the Transfer Agent and the Partnership, and the General Partner
or any Affiliate of the General Partner, or the Partnership, as the case may be,
shall be deemed to be the owner of all such Units from and after the Purchase
Date and shall have all rights as the owner of such Units (including, without
limitation, all rights as owner of such Units pursuant to Articles IV, V and XIV
hereof).
(c) At any time from and after the Purchase Date, a holder of an
outstanding Unit subject to purchase as provided in this Section 17.1 may
surrender his Depositary Receipt or Certificate, as the case may be, evidencing
such Unit to the Transfer Agent in exchange for payment of the amount described
in Section 17.1(a) therefor without interest thereon.
ARTICLE XVIII
GENERAL PROVISIONS
18.1 Addresses and Notices. Any notice, demand, request or report
required or permitted to be given or made to a Partner or Assignee under this
Agreement shall be in writing and shall be deemed given or made when delivered
in person or when sent by first-class United States mail or by other means of
written communication to the Partner or Assignee at the address described below.
Any notice, payment or report to be given or made to a Partner or Assignee
hereunder shall be deemed conclusively to have been given or made, and the
obligation to give such notice or report or to make such payment shall be deemed
conclusively to have been fully satisfied, upon sending of such notice, payment
or report to the Record Holder of such Unit at his address as shown on the
records of the Transfer Agent or as otherwise shown on the records of the
Partnership, regardless of any claim of any Person who may have an interest in
such Unit or the Partnership Interest of a General Partner by reason of an
assignment or otherwise. An affidavit or certificate of making of any notice,
payment or report in accordance with the provisions of this Section 18.1
executed by the General Partner, the Transfer Agent or the mailing organization
shall be prima facie evidence of the giving or making of such notice, payment or
report. If any notice, payment or report addressed to a Record Holder at the
address of
B-56
<PAGE> 57
such Record Holder appearing on the books and records of the Transfer
Agent or the Partnership is returned by the United States Post Office marked to
indicate that the United States Postal Service is unable to deliver it, such
notice, payment or report and any subsequent notices, payments and reports
shall be deemed to have been duly given or made without further mailing (until
such time as such Record Holder or another Person notifies the Transfer Agent
or the Partnership of a change in his address) if they are available for the
Partner or Assignee at the principal office of the Partnership for a period of
one year from the date of the giving or making of such notice, payment or
report to the other Partners and Assignees. Any notice to the Partnership shall
be deemed given if received by the General Partner at the principal office of
the Partnership designated pursuant to Section 1.3 hereof. The Partnership and
the General Partner may rely and shall be protected in relying on any notice or
other document from a Partner or other Person if believed by them to be
genuine.
18.2 Titles and Captions. All article or section titles or captions in
this Agreement are for convenience only. They shall not be deemed part of this
Agreement and in no way define, limit, extend or describe the scope or intent of
any provisions hereof. Except as specifically provided otherwise, references to
"Articles" and "Sections" are to Articles and Sections of this Agreement.
18.3 Pronouns and Plurals. Whenever the context may require, any pronoun
used in this Agreement shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns, pronouns and verbs shall include
the plural and vice versa.
18.4 Further Action. The parties shall execute and deliver all documents,
provide all information and take or refrain from taking action as may be
necessary or appropriate to achieve the purposes of this Agreement.
18.5 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their heirs, executors, administrators,
successors, legal representatives and permitted assigns.
18.6 Integration. This Agreement constitutes the entire agreement among
the parties hereto pertaining to the subject matter hereof and supersedes all
prior agreements and understandings pertaining thereto.
18.7 Creditors. None of the provisions of this Agreement shall be for the
benefit of, or shall be enforceable by, any creditor of the Partnership.
18.8 Waiver. No failure by any party to insist upon the strict performance
of any covenant, duty, agreement or condition of this Agreement or to exercise
any right or remedy consequent upon a breach thereof shall constitute waiver of
any such breach or any other covenant, duty, agreement or condition.
18.9 Counterparts. This Agreement may be executed in counterparts, all of
which together shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart. Each party shall become bound by this Agreement immediately
upon affixing its signature hereto or, in the case of a Person acquiring a Unit,
upon executing and delivering a Transfer Application as herein described,
independently of the signature of any other party.
18.10 Applicable Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Delaware, without regard to the
principles of conflicts of law.
18.11 Invalidity of Provisions. If any provision of this Agreement is or
becomes invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not be
affected thereby.
B-57
<PAGE> 58
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
GENERAL PARTNER:
Plum Creek Management Company, L.P.
By: DAVID D. LELAND
--------------------------------------
David D. Leland, President
ORGANIZATIONAL LIMITED PARTNER:
DAVID D. LELAND
--------------------------------------
David D. Leland
LIMITED PARTNERS:
All Limited Partners now and hereafter
admitted as limited partners of the
Partnership, pursuant to Powers of
Attorney now and hereafter executed in
favor of, and granted and delivered
to, the General Partner.
By: Plum Creek Management Company, L.P.
General Partner, as attorney-in-fact
for all Limited Partners pursuant
to the Powers of Attorney granted
pursuant to Section 1.4 hereof.
By: DAVID D. LELAND
--------------------------------------
David D. Leland, President
B-58
<PAGE> 1
Exhibit 4.C.1
SENIOR NOTE AGREEMENT AMENDMENT
PLUM CREEK TIMBER COMPANY, L.P.
999 THIRD AVENUE
SEATTLE, WASHINGTON 98104
As of September 1, 1993
To each of the Purchasers
listed on the attached
Purchaser Schedule
Dear Purchaser:
RECITALS
WHEREAS, you and Plum Creek Timber Company, L.P., a Delaware limited
partnership (the "Company"), have entered into Senior Note Agreements dated as
of May 31, 1989 and as amended to the date hereof (the "Senior Note
Agreements") pursuant to which the Company issued its 11-1/8% Senior Notes due
June 8, 2007 (the "Senior Notes");
WHEREAS, Plum Creek Manufacturing, L.P., a Delaware limited
partnership ("Manufacturing"), is the obligor with respect to certain 11-1/8%
First Mortgage Notes due June 8, 2007 (the "Mortgage Notes"), pursuant to
certain Mortgage Note Agreements, dated May 31, 1989 and as amended to the date
hereof, among Manufacturing, the Company and the several holders of the
Mortgage Notes identified on the Purchaser Schedule attached thereto ("Mortgage
Note Agreements");
WHEREAS, the Company desires to purchase certain timberlands in the
State of Montana ("Champion Timberlands") from Champion International
Corporation;
WHEREAS, the Company, in order to finance the purchase of the Champion
Timberlands, proposes to enter into a Revolving Credit Agreement with Bank of
America National Trust and Savings Association and the other lenders parties to
such facility ("Bank of America Revolving Credit Agreement");
WHEREAS, concurrently with the execution and delivery of this
Agreement, Manufacturing is executing and delivering a Mortgage Note Agreement
Amendment ("Mortgage Note Amendment Agreement") with the Required Holders (as
defined in the Mortgage Note Agreement) of the Mortgage Notes;
WHEREAS, consummation of certain of the foregoing transactions
requires certain amendments to the Senior Note Agreements;
NOW, THEREFORE, the Company hereby agrees with you that this Agreement
<PAGE> 2
shall become effective as of the date on which the Bank of America Revolving
Credit Agreement become effective (the "Effective Time") and that thereafter,
all references to, and actions taken in connection with, the Senior Note
Agreements shall incorporate this Agreement in its entirety. All capitalized
terms used in this Agreement and not otherwise defined have the meanings
ascribed to them in the Senior Note Agreements.
1. CERTAIN AMENDMENTS
A. DEFINITIONS
(1) The definition of "Designated Acres" in Paragraph 10B
of the Senior Note Agreements shall be amended by replacing the numeral
"150,000" in the second line thereof with "200,000."
(2) The following definitions shall be added to Paragraph
10B of the Senior Note Agreements:
"Bank of America Revolving Credit Agreement" shall
mean the credit agreement to be entered into between the
Company, Bank of America National Trust and Savings
Association, as Administrative Agent, and certain other
lenders pursuant to which the lenders thereunder shall provide
credit facilities to the Company in an aggregate principal
amount not to exceed $260,000,000.
"Qualified Debt" shall mean, as to the Company, as of
any date of determination, without duplication, all
outstanding indebtedness of the Company for borrowed money,
including, without limitation, Debt represented by the Notes
and the Bank of America Revolving Credit Agreement.
"Actual Percentage" shall mean, at any date of
determination, the percentage determined by dividing the
aggregate outstanding principal balance of the Notes by the
aggregate outstanding principal balance of all Qualified Debt,
including the Notes.
"Desired Percentage" shall mean thirty-eight percent
(38%), the percentage determined by dividing the aggregate
outstanding principal balance of the Notes on September 1,
1993 by the aggregate outstanding principal balance of all
Qualified Debt outstanding upon the drawdown of the Bank of
America Revolving Credit Agreement.
-2-
<PAGE> 3
B. PARAGRAPH 6B(5)(VIII)--MERGER AND SALE OF ASSETS
(1) The existing Paragraph 6B(5)(viii) of the Senior Note
Agreements shall be replaced by the following new subparagraphs (viii)
and (ix):
(viii) the Company and its Restricted Subsidiaries
may otherwise sell for cash properties that constitute the
Company's Columbia River Unit in an amount not less than the
fair value thereof as determined in good faith by the
Responsible Representatives, if and only if (a) immediately
after giving effect to such proposed sale, no condition or
event shall exist which constitutes an Event of Default or
Material Default, (b) the net proceeds of any such sale are
either (x) subject to subclause (e) of this Paragraph
6B(5)(viii), distributed immediately upon receipt thereof to
holders of Qualified Debt other than the Notes for application
(either immediately or within 180 days) to prepayment of such
Qualified Debt, or (y) applied, within 180 days after such
sale, to the purchase of productive assets in the same line of
business, (c) in the event net proceeds of any such sale are
in excess of $25,000,000 and if not applied immediately as
provided in subclause (b) above, placed immediately upon
receipt thereof in an escrow or cash collateral account or
accounts, pursuant to an agreement or agreements in form and
substance satisfactory to holders of 66-2/3% of the
outstanding principal amount balance of the Qualified Debt
other than the Notes, for the purpose of application in
accordance with subclause (b) above, (d) immediately after
giving effect to such sale (giving effect on a pro forma basis
to any proposed retirement of Qualified Debt out of the
proceeds thereof), the Company could incur $1 of additional
Funded Debt pursuant to paragraph 6B(2)(ix), and (e) the
aggregate net proceeds of all sales pursuant to this paragraph
(viii) during the year from the funding of the first loan
under the Bank of America Revolving Credit Agreement to the
first anniversary thereof that are applied in repayment of
Qualified Debt other than the Notes do not exceed
$150,000,000, and
(ix) the Company and its Restricted Subsidiaries may
otherwise sell for cash properties (other than properties
described in Paragraph 6B(5)(viii) above) in an amount not
less than the fair value thereof as determined in good faith
by the Responsible Representatives if and only if (a)
immediately after giving effect to such proposed sale, no
condition or event shall exist which constitutes an Event of
Default or Material Default, (b) the net proceeds of any such
sale (x) are applied first, if any net proceeds
-3-
<PAGE> 4
have been used to repay Qualified Debt other than the Notes in
accordance with paragraph 6B(5)(viii), to the prepayment of
the Notes pursuant to Paragraphs 4A or 4B, as the case may be,
to the extent necessary to cause their Actual Percentage to
equal the Desired Percentage, and second, pro rata (based on
the current outstanding principal of all Qualified Debt) to
the holders of all Qualified Debt, or (y) are applied, within
180 days after such sale, to the purchase of productive assets
in the same line of business, (c) the net proceeds of any such
sale are either (x) distributed immediately upon receipt
thereof to holders of Qualified Debt in accordance with
subclause (b)(x) above for application (either immediately or
within 180 days, which, in the case of the Notes, shall be
pursuant to an escrow agreement satisfactory in form and
substance to the Required Holder(s)) to repayment of such
Qualified Debt, or (y) if in excess of $25,000,000, placed
immediately upon receipt thereof in an escrow or cash
collateral account or accounts, pursuant to an agreement or
agreements in form and substance reasonably satisfactory to
holders of 66-2/3% of the outstanding principal balance of the
Qualified Debt, for the purpose of application in accordance
with subclause (b) above, and (d) immediately after giving
effect to such sale (giving effect on a pro forma basis to any
proposed retirement of Qualified Debt out of the proceeds
thereof), the Company could incur $1 of additional Funded Debt
pursuant to paragraph 6B(2)(ix).
C. PARAGRAPH 6B(6)--HARVESTING RESTRICTIONS
Paragraph 6B(6) of the Senior Note Agreements shall be amended
in its entirety to read as follows:
6B(6) HARVESTING RESTRICTIONS -- In any calendar
year, harvest Timber on the Timberlands then owned by the
Company in excess of the amount set forth for such calendar
year in the following table:
-4-
<PAGE> 5
<TABLE>
<CAPTION>
Maximum MMBF
Calendar Year to be Harvested
------------- ---------------
<S> <C>
1989 (including harvest by
predecessor prior to the
closing) through 1991
675 MMBF
1992 and 1993 650 MMBF
1994 through 1996 700 MMBF
1997 through 2000 675 MMBF
2001 through 2007 625 MMBF
</TABLE>
plus, in each year, the amount, if any, by which the
cumulative amount set forth in the table above for the
preceding years exceeds the cumulative amount actually
harvested in such years; unless the net cash proceeds from
such excess harvest are either (i) distributed to all holders
of Qualified Debt pro rata based upon outstanding principal
balances at the time of such distribution for application
(either immediately or within 180 days after such excess
harvest) to the repayment of such Qualified Debt, which, in
the case of the Notes, shall be a prepayment pursuant to
Paragraph 4A or 4B, as the case may be, and shall be pursuant
to an escrow agreement satisfactory in form and substance to
the Required Holder(s), or (ii) applied, within 180 days after
any such excess harvest, to purchase Timber (including Timber
on Timberlands purchased) having a fair value (in the good
faith judgment of the Responsible Representatives) not less
than the fair value of the Timber subject to such excess
harvest.
2. CONDITIONS TO EFFECTIVENESS
The amendments to the Senior Note Agreements and the other agreements
set forth herein shall become effective, subject to the fulfillment of the
following conditions to your satisfaction or waiver by you thereof (as
evidenced by your execution and delivery of this Agreement) on or prior to the
Effective Time.
A. REPRESENTATIONS AND WARRANTIES; NO DEFAULT
The representations and warranties contained in Paragraph 3 hereof
shall be true in all material respects on and as of the date of closing, except
to the extent of changes caused by the transactions herein contemplated; and
there shall exist on the date of closing no Event of Default or Default.
-5-
<PAGE> 6
B. CERTAIN AGREEMENTS
Each of (i) this Agreement, (ii) Bank of America Revolving Credit
Agreement, and (iii) the Mortgage Note Amendment Agreement shall have been duly
authorized, executed and delivered by the parties thereto (other than you) and
shall be in full force and effect.
C. PROCEEDINGS
All proceedings taken or to be taken in connection with the
transactions contemplated hereby and all documents incident thereto shall be
satisfactory in substance and form to you, and you shall have received all such
counterpart originals or certified or other copies of such documents as you may
reasonably request.
3. REPRESENTATIONS AND WARRANTIES
The Company represents and warrants as follows:
A. ORGANIZATION
The Company is a limited partnership duly organized, validly existing
and in good standing under the Delaware Revised Uniform Limited Partnership Act
and has all requisite partnership power and authority to own and operate its
properties, to conduct its business as now conducted and as proposed to be
conducted and to enter into this Agreement.
B. QUALIFICATION
The Company is duly qualified or registered for transaction of
business and in good standing as a foreign limited partnership in each
jurisdiction in which the failure so to qualify or be registered would have a
material adverse effect on the business, property or assets, condition or
operations of the Company, or on the ability of the Company to perform its
obligations under this Agreement, or, after giving effect to the transactions
contemplated hereby, the Senior Note Agreements or the Senior Notes.
-6-
<PAGE> 7
C. SUBSIDIARIES
As of the Effective Time the General Partner owns a 2% general
partner's interest and the Company owns a 98% limited partner's interest in
Manufacturing, which interests have been duly authorized and validly issued,
fully paid and non-assessable and are owned free and clear of any Liens.
Manufacturing has issued no warrants or options to acquire, or instruments
convertible into or exchangeable for any equity interest in Manufacturing. As
of the Effective Time the General Partner owns 4% of the capital stock and the
Company owns 96% of the capital stock of Marketing, which capital stock has
been duly authorized and validly issued, fully paid and non-assessable and are
owned free and clear of any liens. Marketing has issued no warrants or options
to acquire or interests convertible into or exchangeable for any equity
interest in Marketing. As of the Effective Time the Company has no
Subsidiaries other than Manufacturing and Marketing. As of the Effective Time
Manufacturing has no Subsidiaries.
D. CHANGES, ETC.
Except as contemplated by this Agreement, since June 30, 1993, the
date of the most recent consolidated financial statements of the Company, (a)
the Company has not incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions not in the ordinary
course of business (except for the commitment to purchase the Champion
Timberlands), and (b) there has not been any material adverse change in the
financial condition or operations of the Company.
E. ACTIONS PENDING
There is no action, suit, investigation or proceeding pending or, to
the knowledge of the Company, threatened against the Company, or any properties
or rights of the Company, by or before any court, arbitrator or administrative
or governmental body which questions the validity of this Agreement, or any
action taken or to be taken pursuant to this Agreement, which would be
reasonably likely to result in any material adverse change in the business,
properties or assets, condition or operations of the Company, or in the
inability of the Company to perform its obligations under this Agreement, the
Senior Note Agreements or the Senior Notes, following the effectuation of the
transactions described herein.
-7-
<PAGE> 8
F. COMPLIANCE WITH OTHER INSTRUMENTS, ETC.
The Company is not in violation of any provision of the Partnership
Agreement or of any term of any agreement or instrument to which it is a party
or by which it or any of its properties is bound or any term of any applicable
law, ordinance, rule or regulation of any governmental authority or any term of
any applicable order, judgment or decree of any court, arbitrator or
governmental authority (collectively, "term"), the consequences of which
violation would be reasonably likely to have a material adverse effect on its
business, properties or assets, condition or operations or on the ability of
the Company to perform its obligations under this Agreement, or, after giving
effect to the transactions contemplated hereby, the Senior Note Agreements or
the Senior Notes, and the execution, delivery and performance by the Company of
this Agreement, or, after giving effect to the transactions contemplated
hereby, the Senior Note Agreements or the Senior Notes will not result in any
violation of or be in conflict with or constitute a default under any such term
or result in the creation of (or impose any obligation on the Company to
create) any Lien upon any of the properties or assets of the Company, pursuant
to any such term except for Liens permitted by paragraph 6B(1) of the Senior
Note Agreements; and there is no such term which materially adversely affects
or in the future would be likely to materially adversely affect the business,
properties or assets, condition or operations of the Company or the ability of
the Company to perform its obligations under this Agreement, or, after giving
effect to the transactions contemplated hereby, the Senior Note Agreements or
the Senior Notes.
G. GOVERNMENTAL CONSENT
No consent, approval or authorization of, or declaration or filing
with, any governmental authority is required for the valid execution, delivery
and performance by the Company of this Agreement, or, after giving effect to
the transactions contemplated hereby, the Senior Note Agreements or the Senior
Notes other than those which have been obtained on or prior to the Effective
Time.
H. FOREIGN ASSETS CONTROL REGULATIONS, ETC.
The execution and delivery of this Agreement by the Company and the
consummation of the transactions contemplated hereby will not violate the
Foreign Assets Control Regulations, the Transaction Control Regulations, the
Cuban Assets Control Regulations, the Foreign Funds Control Regulations, the
Iranian Assets Control Regulations, the Nicaraguan Trade Control Regulations,
the South African Transactions Regulations, the Libyan Sanctions Regulations,
the Soviet Gold Coin Regulations or the Panamanian Transactions Regulations of
the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as
amended) or (i) Executive Orders 12722 and 12724 (55 Fed. Reg. 31803 and 55 Fed
Reg. 33089), Blocking Iraqi Government Property and Prohibiting Transactions
with Iraq, and (ii) Executive Orders 12723 and 12725 (55 Fed. Reg. 31805 and
55 Fed. Reg. 33091), Blocking Kuwaiti Government Property and Prohibiting
Transactions with Kuwait.
-8-
<PAGE> 9
I. DISCLOSURE
Neither this Agreement nor any other document, certificate or
statement furnished to you by or on behalf of the Company in connection
herewith contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein and
therein not misleading. There is no fact peculiar to the Company which
materially adversely affects or in the future may (so far as the Company can
now reasonably foresee) materially adversely affect the businesses, property or
assets, condition or results of operations of the Company and which has not
been set forth in this Agreement, or in the other documents, certificates and
statements furnished to you by or on behalf of the Company, prior to the date
hereof in connection with the transactions contemplated hereby.
4. EXPENSES; INDEMNIFICATION
The Company shall, whether or not the transactions contemplated hereby
are consummated, save each holder of Senior Notes harmless for all
out-of-pocket expenses arising in connection with the execution and delivery or
performance of this Agreement, including the reasonable fees and expenses of
special counsel for the holders of Senior Notes. The Company shall also
indemnify and save each holder of Senior Notes harmless from and against all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever (including,
without limitation, any taxes, and any additional taxes imposed on any amounts
payable pursuant to this Paragraph 4) which may at any time be imposed on,
incurred by or asserted against any holder of Senior Notes in any way arising
out of, relating to or resulting from this Agreement or the transactions
contemplated hereby. The obligations of the Company under this Paragraph 4
shall survive the transfer of any Senior Note or portion thereof or interest
therein by a holder of Senior Notes or any transferee and the payment of any
Senior Note.
5. MISCELLANEOUS.
A. CONTINUITY AND INTEGRATION OF AGREEMENTS.
The Senior Note Agreements, as affected by this Agreement, shall
remain in full force and effect and are hereby ratified and confirmed, and the
Senior Note Agreements and this Agreement shall be deemed to be and are
construed as a single agreement.
B. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement, and the transfer of any Senior Note
by a holder thereof. Such representations and warranties may be relied upon by
any transferee of a Senior Note from a holder thereof.
-9-
<PAGE> 10
C. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Agreement contained by or on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not.
D. DESCRIPTIVE HEADINGS.
The descriptive headings of the several paragraphs of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
E. COUNTERPARTS.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same instrument.
THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND
THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW
YORK. THIS AGREEMENT SHALL BE BINDING UPON THE COMPANY AND THE HOLDERS OF
SENIOR NOTES AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS.
-10-
<PAGE> 11
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective as of the date first above written.
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company,
L.P., General Partner
By: . . . . . . . . . . . . . . .
Name: Rick R. Holley
Title: Vice President and
Chief Financial Officer
The foregoing is accepted and agreed to:
By: . . . . . . . . . . . . . . . . .
Name:
Title:
Company:
-11-
<PAGE> 1
Exhibit 4.C.2
MORTGAGE NOTE AGREEMENT AMENDMENT
PLUM CREEK MANUFACTURING, L.P.
999 THIRD AVENUE
SEATTLE, WASHINGTON 98104
As of September 1, 1993
To each of the Purchasers
listed on the attached
Purchaser Schedule
Dear Purchaser:
RECITALS
WHEREAS, you, Plum Creek Manufacturing, L.P., a Delaware limited
partnership (the "Company"), and Plum Creek Timber Company, L.P., a Delaware
limited partnership (the "Partnership"), are parties to Mortgage Note
Agreements dated as of May 31, 1989 and as amended to the date hereof (the
"Mortgage Note Agreements") pursuant to which the Company is the obligor with
respect to certain 11-1/8% First Mortgage Notes due June 8, 2007 (the "Mortgage
Notes");
WHEREAS, the payment of the Mortgage Notes is guaranteed by the
Partnership pursuant to Paragraph 7 of the Mortgage Note Agreements;
WHEREAS, the Partnership desires to purchase certain timberlands in
the State of Montana ("Champion Timberlands") from Champion International
Corporation;
WHEREAS, the Partnership, in order to finance the purchase of the
Champion Timberlands pursuant to the Purchase Agreement, proposes to enter into
a Revolving Credit Agreement with Bank of America National Trust and Savings
Association and the other lenders under to such facility ("Bank of America
Revolving Credit Agreement");
WHEREAS, consummation of the foregoing transactions requires certain
amendments to the Mortgage Note Agreements;
NOW, THEREFORE, the Company and the Partnership hereby agree with you
that this Agreement shall become effective as of the date on which the Bank of
America Revolving Credit Agreement becomes effective (the "Effective Time") and
that thereafter, all references to, and actions taken in connection with, the
Mortgage Note Agreements shall incorporate this Agreement in its entirety. All
capitalized terms used in this Agreement and not otherwise defined have the
meanings ascribed to them in the Mortgage Note Agreements.
<PAGE> 2
1. AMENDMENT
The first part of Paragraph 7J of the Mortgage Note Agreements shall
be amended to read as follows:
7J INCORPORATED COVENANTS. The provisions of paragraphs 5
and 6 of the Senior Note Agreements as originally in effect
(except as amended to and as of September 1, 1993 between the
Partnership and the Senior Noteholders ("Amendments")) and the
definitions set forth or specified by reference in the Senior
Note Agreement as originally in effect (except as amended by
the Amendments) of terms used in such paragraphs 5 and 6 or in
such definitions (herein, collectively, the Incorporated
Provisions") . . .
The last sentence of Paragraph 7J shall be amended to read as follows:
The Incorporated Provisions shall not be affected by any
amendments, modification, waiver or termination of the Senior
Note Agreements, except as amended by the Amendments, and may
be amended, modified, waived or terminated only pursuant to
Paragraph 12C of this Agreement.
2. CONDITIONS TO EFFECTIVENESS
The amendments to the Mortgage Note Agreements and the other
agreements set forth herein shall become effective, subject to the fulfillment
of the following conditions to your satisfaction or waiver by you thereof (as
evidenced by your execution and delivery of this Agreement) on or prior to the
Effective Time:
A. REPRESENTATIONS AND WARRANTIES; NO DEFAULT
The representations and warranties contained in Paragraph 3 hereof
shall be true in all material respects on and as of the Effective Time, except
to the extent of changes caused by the transactions herein contemplated; and
there shall exist on the date of closing no Event of Default or Default.
B. CERTAIN AGREEMENTS
Each of (i) this Agreement, (ii) the Bank of America Revolving Credit
Agreement, and (iii) the amendment to the Senior Note Agreement of even date
herewith among the Partnership and the several holders of the Senior Notes (the
"Senior Note Agreement Amendment") shall have been duly authorized, executed
and delivered by the parties thereto (other than you) and shall be in full
force and effect.
-2-
<PAGE> 3
C. PROCEEDINGS
All proceedings taken or to be taken in connection with the
transactions contemplated hereby and all documents incident thereto shall be
satisfactory in substance and form to you, and you shall have received all such
counterpart originals or certified or other copies of such documents as you may
reasonably request.
3. REPRESENTATIONS AND WARRANTIES
Each of the Company and the Partnership represents and warrants:
A. ORGANIZATION
The Company is a limited partnership duly organized, validly existing
and in good standing under the Delaware Revised Uniform Limited Partnership Act
and has all requisite partnership power and authority to own and operate its
properties, to conduct its business as now conducted and as proposed to be
conducted, and to enter into and carry out the terms of this Agreement. The
Partnership is a limited partnership duly organized, validly existing and in
good standing under the Delaware Revised Uniform Limited Partnership Act and
has all requisite partnership power and authority to own and operate its
properties, to conduct its business as now conducted and as proposed to be
conducted, and to enter into and carry out the terms of this Agreement.
B. CHANGES, ETC.
Except as contemplated by this Agreement, since June 30, 1993, the
date of the most recent consolidated financial statements of the Partnership,
(i) neither the Company nor the Partnership has incurred any material
liabilities or obligations, direct or contingent, or entered into any material
transactions not in the ordinary course of business (except for the commitment
to purchase the Champion Timberlands), and (ii) there has not been any material
adverse change in the financial condition or operations of the Company or the
Partnership.
4. AFFIRMATION OF GUARANTEE
The Partnership hereby agrees that its Guarantee in respect of the
Mortgage Notes, as set forth in Paragraph 7 of the Mortgage Note Agreements,
shall continue in full force and effect from and after the Effective Time.
-3-
<PAGE> 4
5. EXPENSES; INDEMNIFICATION
The Company shall, whether or not the transactions contemplated hereby
are consummated, save each holder of Mortgage Notes harmless for all
out-of-pocket expenses arising in connection with the execution and delivery or
performance of this Agreement and the consummation of the transactions
contemplated hereby, including the reasonable fees and expenses of special
counsel for the holders of Mortgage Notes. The Company shall also indemnify
and save each holder of Mortgage Notes harmless from and against all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements or any kind whatsoever (including,
without limitation, any taxes, and any additional taxes imposed on any amounts
payable pursuant to this Paragraph 5) which may at any time be imposed on,
incurred by or asserted against any holder of Mortgage Notes in any way arising
out of, relating to or resulting from this Agreement or the transactions
contemplated hereby. The obligations of the Operations Partnership under this
Paragraph 5 shall survive the transfer of any Mortgage Note or portion thereof
or interest therein by a holder of Mortgage Notes or any transferee and the
payment of any Mortgage Note.
6. MISCELLANEOUS
A. CONTINUITY AND INTEGRATION OF AGREEMENTS
The Mortgage Note Agreements, as affected by this Agreement, shall
remain in full force and effect and are hereby ratified and confirmed, and the
Mortgage Note Agreements and this Agreement shall be deemed to be and construed
as a single agreement.
B. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby and the transfer of any Mortgage Note by a holder of
Mortgage Notes. Such representations and warranties may be relied upon by any
transferee of a Mortgage Note from a holder of Mortgage Notes.
C. SUCCESSORS AND ASSIGNS
All covenants and agreements in this Agreement contained by or on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not.
D. DESCRIPTIVE HEADINGS
The descriptive headings of the several paragraphs of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
-4-
<PAGE> 5
E. COUNTERPARTS
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same instrument.
THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND
THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW
YORK. THIS AGREEMENT SHALL BE BINDING UPON THE COMPANY, THE PARTNERSHIP, THE
OPERATIONS PARTNERSHIP, THE MERGER COMPANY AND THE HOLDERS OF MORTGAGE NOTES
AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS.
-5-
<PAGE> 6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective as of the date first above written.
PLUM CREEK MARKETING, INC.
By: . . . . . . . . . . . . . . . .
Name: Rick R. Holley
Title: Vice President and
Chief Financial Officer
PLUM CREEK MANUFACTURING, L.P..
By: Plum Creek Management Company,
L.P., General Partner
By: . . . . . . . . . . . . . . . .
Name: Rick R. Holley
Title: Vice President and
Chief Financial Officer
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company,
L.P., General Partner
By: . . . . . . . . . . . . . . . .
Name: Rick R. Holley
Title: Vice President and
Chief Financial Officer
The foregoing is accepted and agreed to:
By: . . . . . . . . . . . . . . . .
Name:
Title:
Company:
-6-
<PAGE> 1
Exhibit 4.C.3
================================================================================
CREDIT AGREEMENT
Dated as of October 28, 1993
among
PLUM CREEK TIMBER COMPANY, L.P.,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
================================================================================
<PAGE> 2
PLUM CREEK TIMBER COMPANY CREDIT AGREEMENT
DESK SET INDEX
Document
Number:
- -------
1. Credit Agreement dated as of October 28, 1993 (the "Credit
Agreement"), among Plum Creek Timber Company, L.P., the financial
institutions party thereto (the "Banks") and Bank of America National
Trust and Savings Association, as agent for the Banks
2. Schedules to the Credit Agreement:
o Schedule 1.01: Investment Policy
o Schedule 2.01: Commitments
o Schedule 5.05: Litigation
o Schedule 5.07: ERISA
o Schedule 5.12: Environmental Matters
o Schedule 5.18: Subsidiaries of PCTC
o Schedule 7.01: Permitted Liens
o Schedule 7.04: Permitted Investments
3. Exhibits to the Credit Agreement:
o Exhibit A: Notice of Borrowing
o Exhibit B: Notice of Conversion/Continuation
o Exhibit C-1: Form of Legal Opinion of Company Counsel
o Exhibit C-2: Form of Legal Opinion of Perkins Coie
o Exhibit D: Compliance Certificate
o Exhibit E: Form of Cash Collateral Agreement
o Exhibit F: Form of Assignment and Acceptance
4. Closing Documents List
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
<S> <C> <C>
ARTICLE I
DEFINITIONS ................. 1
1.01 Defined Terms ............................... 1
1.02 Other Interpretive Provisions ............... 30
(a) Defined Terms .......................... 30
(b) The Agreement .......................... 30
(c) Certain Common Terms ................... 30
(d) Performance; Time ...................... 30
(e) Contracts .............................. 31
(f) Laws ................................... 31
(g) Captions ............................... 31
(h) Independence of Provisions ............. 31
(i) Interpretation ......................... 31
1.03 Accounting Principles ....................... 31
ARTICLE II
THE CREDITS ................. 32
2.01 Amounts and Terms of Commitments ............ 32
2.02 Loan Accounts ............................... 32
2.03 Procedure for Borrowing ..................... 32
2.04 Conversion and Continuation Elections ....... 33
2.05 Voluntary Termination or Reduction of
Commitments ................................. 35
2.06 Optional Prepayments ........................ 36
2.07 Mandatory Prepayments of Loans; Mandatory
Commitment Reductions ....................... 36
(a) Asset Dispositions ..................... 36
(b) Mandatory Commitment Reductions ........ 36
(c) General ................................ 37
(d) Reduction of Commitment ................ 37
2.08 Repayment ................................... 38
2.09 Interest .................................... 38
2.10 Fees ........................................ 40
(a) Agency and Participation Fees .......... 40
(b) Commitment Fees. ....................... 40
2.11 Computation of Fees and Interest ............ 40
2.12 Payments by the Company ..................... 41
2.13 Payments by the Banks to the Agent .......... 42
2.14 Sharing of Payments, Etc .................... 43
</TABLE>
i
<PAGE> 4
<TABLE>
<CAPTION>
Section Page
<S> <C> <C>
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY ... 43
3.01 Taxes ....................................... 43
3.02 Illegality .................................. 47
3.03 Increased Costs and Reduction of Return ..... 47
3.04 Funding Losses .............................. 48
3.05 Inability to Determine Rates ................ 49
3.06 Certificate of Bank ......................... 49
3.07 Survival .................................... 49
ARTICLE IV
CONDITIONS PRECEDENT ............ 50
4.01 Conditions of Initial Loans ................. 50
(a) Credit Agreement ....................... 50
(b) Resolutions; Incumbency ................ 50
(c) Articles of Incorporation; By-laws;
Partnership Documents and Good Standing 50
(d) Legal Opinion .......................... 51
(e) Payment of Fees ........................ 51
(f) Certificate ............................ 51
(g) Financial Statements ................... 52
(h) Credit Agreements ...................... 52
(i) Other Documents ........................ 52
4.02 Conditions to All Borrowings. ............... 52
(a) Notice of Borrowing or
Continuation/Conversion ................ 52
(b) Continuation of Representations and
Warranties ............................. 52
(c) No Existing Default .................... 53
ARTICLE V
REPRESENTATIONS AND WARRANTIES ....... 53
5.01 Corporate Existence and Power ............... 53
5.02 Authorization; No Contravention ............. 54
5.03 Governmental Authorization .................. 54
5.04 Binding Effect .............................. 54
5.05 Litigation .................................. 54
5.06 No Default .................................. 55
5.07 ERISA Compliance ............................ 55
5.08 Use of Proceeds; Margin Regulations ......... 57
5.09 Title to Properties ......................... 57
5.10 Taxes ....................................... 57
5.11 Financial Condition ......................... 58
5.12 Environmental Matters ....................... 58
5.13 Regulated Entities .......................... 59
5.14 No Burdensome Restrictions .................. 59
5.15 Solvency .................................... 59
5.16 Labor Relations ............................. 60
</TABLE>
ii
<PAGE> 5
<TABLE>
<CAPTION>
Section Page
<S> <C> <C>
5.17 Copyrights, Patents, Trademarks and Licenses,
etc. ........................................ 60
5.18 Subsidiaries ................................ 60
5.19 Partnership Interests ....................... 60
5.20 Broker's; Transaction Fees .................. 61
5.21 Insurance ................................... 61
5.22 Timber Harvest .............................. 61
5.23 Full Disclosure ............................. 61
ARTICLE VI
AFFIRMATIVE COVENANTS ............ 61
6.01 Financial Statements ........................ 61
6.02 Certificates; Other Information ............. 63
6.03 Notices ..................................... 63
6.04 Preservation of Corporate Existence, Etc. ... 66
6.05 Maintenance of Property ..................... 66
6.06 Insurance ................................... 66
6.07 Payment of Obligations ...................... 66
6.08 Compliance with Laws ........................ 67
6.09 Inspection of Property and Books and Records 67
6.10 Environmental Laws .......................... 67
6.11 Use of Proceeds ............................. 68
6.12 Solvency .................................... 68
ARTICLE VII
NEGATIVE COVENANTS ............. 68
7.01 Limitation on Liens ......................... 68
7.02 Merger; Disposition of Assets ............... 70
7.03 Harvesting Restrictions ..................... 74
7.04 Loans and Investments ....................... 74
7.05 Limitation on Indebtedness .................. 76
7.06 Transactions with Affiliates ................ 79
7.07 Use of Proceeds ............................. 79
7.08 Sale of Stock and Debt of Subsidiaries ...... 79
7.09 Certain Contracts ........................... 80
7.10 Joint Ventures .............................. 81
7.11 Compliance with ERISA ....................... 81
7.12 Sale and Leaseback .......................... 81
7.13 Restricted Payments ......................... 82
7.14 Change in Business .......................... 83
7.15 Issuance of Stock by Subsidiaries ........... 83
7.16 Amendments .................................. 83
7.17 Available Cash............................... 83
ARTICLE VIII
EVENTS OF DEFAULT .............. 84
8.01 Event of Default ............................ 84
(a) Non-Payment ............................ 84
(b) Representation or Warranty ............. 84
</TABLE>
iii
<PAGE> 6
<TABLE>
<CAPTION>
Section Page
<S> <C> <C>
(c) Specific Defaults ...................... 85
(d) Other Defaults ......................... 85
(e) Cross-Default .......................... 85
(f) Insolvency; Voluntary Proceedings ...... 85
(g) Involuntary Proceedings ................ 85
(h) ERISA .................................. 86
(i) Monetary Judgments ..................... 87
(j) Non-Monetary Judgments ................. 87
(k) Montana Timberlands .................... 87
(1) Adverse Change ......................... 87
8.02 Remedies .................................... 88
8.03 Rights Not Exclusive ........................ 88
ARTICLE IX
THE AGENT .................. 88
9.01 Appointment and Authorization ............... 88
9.02 Delegation of Duties ........................ 89
9.03 Liability of Agent .......................... 89
9.04 Reliance by Agent ........................... 89
9.05 Notice of Default ........................... 90
9.06 Credit Decision ............................. 91
9.07 Indemnification ............................. 91
9.08 Agent in Individual Capacity ................ 92
9.09 Successor Agent ............................. 93
ARTICLE X
MISCELLANEOUS ................ 94
10.01 Amendments and Waivers ...................... 94
10.02 Notices ..................................... 95
10.03 No Waiver; Cumulative Remedies .............. 96
10.04 Costs and Expenses .......................... 96
10.05 Indemnity ................................... 97
10.06 Marshalling; Payments Set Aside ............. 97
10.07 Successors and Assigns ...................... 97
10.08 Assignments, Participations, etc ............ 98
10.09 Set-off ..................................... 101
10.10 Automatic Debits of Fees .................... 101
10.11 Notification of Addresses, Lending Offices,
Etc. ........................................ 101
10.12 Counterparts ................................ 101
10.13 Severability ................................ 102
10.14 No Third Parties Benefited .................. 102
10.15 Time ........................................ 102
10.16 Governing Law and Jurisdiction .............. 102
10.17 Arbitration; Reference ...................... 102
10.18 Entire Agreement ............................ 103
</TABLE>
iv
<PAGE> 7
SCHEDULES
<TABLE>
<S> <C>
Schedule 1.01 Corporate Investment Policy
Schedule 2.01 Commitments
Schedule 5.05 Litigation
Schedule 5.07 ERISA
Schedule 5.12 Environmental Matters
Schedule 5.18 Subsidiaries and Equity Investments
Schedule 7.01 Permitted Liens
Schedule 7.04 Permitted Investments
</TABLE>
EXHIBITS
<TABLE>
<S> <C>
Exhibit A Notice of Borrowing
Exhibit B Notice of Conversion/Continuation
Exhibit C-1 Legal Opinion of Counsel for the Company
Exhibit C-2 Legal Opinion of Perkins Coie
Exhibit D Compliance Certificate
Exhibit E Form of Cash Collateral Account Agreement
Exhibit F Form of Assignment and Acceptance
</TABLE>
v
<PAGE> 8
CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of October 28,
1993, among Plum Creek Timber Company, L.P., a Delaware
limited partnership (the "Company"), the several financial
institutions from time to time party to this Agreement
(collectively, the "Banks"; individually, a "Bank"), and
Bank of America National Trust and Savings Association as
agent for the Banks.
WHEREAS, the Banks have agreed to make available to the
Company a revolving credit facility upon the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual
agreements, provisions and covenants contained herein, the
parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 Defined Terms. In addition to the terms defined
elsewhere in this Agreement, the following terms have the
following meanings:
"Actual Percentage" means, at any date of
determination, the percentage determined by dividing the
aggregate outstanding principal balance of the Notes by
the aggregate outstanding principal balance of all
Qualified Debt, including the Notes.
"Affiliate" means, as to any Person, any other
Person which, directly or indirectly, is in control of,
is controlled by, or is under common control with, such
Person. A Person shall be deemed to control another
Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction
of the management and policies of the other Person,
whether through the ownership of voting securities, by
contract or otherwise. Without limitation, any
director, executive officer or beneficial owner of 5% or
more of the equity of a Person shall for the purposes of
this Agreement, be deemed to control the other Person.
Notwithstanding the foregoing, no Bank shall be deemed
an "Affiliate" of the Company or of any Subsidiary of
the Company.
1
<PAGE> 9
Agent" means BofA in its capacity as agent for the
Banks hereunder, and any successor agent.
"Agent's Payment Office" means the address for
payments set forth on the signature page hereto in
relation to the Agent or such other address as the Agent
may from time to time specify in accordance with
Section 10.02.
"Agent-Related Persons" means BofA and any
successor agent arising under Section 9.09, together
with their respective Affiliates, and the officers,
directors, employees, agents and attorneys-in-fact of
such Persons and Affiliates.
"Aggregate Commitment" means the combined
Commitments of the Banks, in the initial amount of two
hundred seventy-five million dollars ($275,000,000), as
such amount may be reduced from time to time pursuant to
this Agreement.
"Agreement" means this Credit Agreement, as amended
from time to time in accordance with the terms hereof.
"Applicable Margin" means
(i) with respect to Base Rate Loans, 0.000%;
(ii) with respect to CD Rate Loans, 1.250%;
and
(iii) with respect to Offshore Rate Loans,
1.125%.
"Assignee" has the meaning specified in
subsection 10.08(a).
"Assignment and Acceptance" has the meaning
specified in subsection 10.08(a).
"Attorney Costs" means and includes all fees and
disbursements of any law firm or other external counsel,
the allocated cost of internal legal services and all
disbursements of internal counsel.
"Available Cash" means, with respect to any
calendar quarter, (i) the sum of:
(a) the Company's net income (or net loss)
(excluding gain on the sale of any Capital Asset) for
such quarter,
2
<PAGE> 10
(b) the amount of depletion, depreciation,
amortization and other noncash charges utilized in
determining net income of the Company for such quarter,
(c) the amount of any reduction in reserves of the
Company of the types referred to in clause (ii)(d)
below,
(d) proceeds received by the Company from the sale
of Designated Acres, and
(e) any Cash from Capital Transactions received by
the Company during such quarter in specific
contemplation that such Cash from Capital Transactions
will be used to refund or refinance any payment of
Indebtedness of the type specified in clause (ii)(a)
below which was made in either of the two immediately
preceding quarters,
less (ii) the sum of:
(a) all payments of principal on Indebtedness made
by the Company in such quarter (excluding any payments
of principal on Indebtedness made with Cash from Capital
Transactions received by the Company during such quarter
or, to the extent such Cash from Capital Transactions
remains available, received by the Company during the
four immediately preceding quarters),
(b) capital expenditures made by the Company
during such quarter (excluding any capital expenditures
for such quarter made with Cash from Capital
Transactions received by the Company during such quarter
or, to the extent such Cash from Capital Transactions
remains available, received by the Company during the
four immediately preceding quarters, and capital
expenditures which the General Partner reasonably
anticipates will be financed with Cash from Capital
Transactions within 90 days from the end of such
quarter),
(c) the amount of any capital expenditures made by
the Company in a prior quarter which was anticipated
would be financed from Cash from Capital Transactions
but which have not been financed from such source within
90 days from the end of such quarter,
(d) the amount of any reserves of the Company
established during such quarter which are necessary or
appropriate (1) to provide funds for the future payment
3
<PAGE> 11
of items of the types specified in clauses (ii)(a) and
(ii)(b) above, (2) to provide additional working
capital, (3) to provide funds for cash distributions
with respect to any one or more of the next four
quarters, or (4) to provide funds for the future payment
of interest in an amount equal to the interest to be
accrued in the next quarter,
(e) the amount of any noncash items of income
utilized in determining net income of the Company for
such quarter,
(f) the amount of any Investments (other than
guarantees, contingent liabilities or endorsements,
except to the extent payments are actually made under
such guarantees, contingent liabilities or endorsements)
made by the Company during such quarter pursuant to
subsections 7.04(a), (h) or (i) (or in the case of any
Subsidiary, Investments (other than guarantees,
contingent liabilities or endorsements, except to the
extent payments are actually made under such guarantees,
contingent liabilities or endorsements) of similar type)
to the extent not included in capital expenditures or
payments on principal on Indebtedness made by the
Company during such quarter (excluding any such
Investments for such quarter made with Cash from Capital
Transactions received by the Company during such quarter
or, to the extent such Cash from Capital Transactions
remains available, received by the Company during the
four immediately preceding quarters, and Investments
which the General Partner reasonably anticipates will be
financed with Cash from Capital Transactions within 90
days from the end of such quarter), and
(g) the amount of any Investments (other than
guarantees, contingent liabilities or endorsements,
except to the extent payments are actually made under
such guarantees, contingent liabilities or endorsements)
made by the Company in a prior quarter pursuant to
subsections 7.04(a), (h) or (i) (or in the case of any
Subsidiary, Investments (other than guarantees,
contingent liabilities or endorsements, except to the
extent payments are actually made under such guarantees,
contingent liabilities or endorsements) of similar type)
to the extent not included in capital expenditures made
by the Company during such quarter which was anticipated
would be financed from Cash from Capital Transactions
but which have not been financed from such source within
90 days from the end of such quarter,
4
<PAGE> 12
provided, however, (1) net proceeds to the Company from
the issuance of SPUs (as such term is defined in the
Partnership Agreement) shall be deemed to be Available
Cash, and shall be deemed to be received, for purposes
of determining Available Cash, during the quarter in
respect of which such SPUs are issued, even if such cash
is received by the Company after the last day of such
quarter, and (2) any disbursements made of the types
described in clauses (ii)(a), (b), (c), (f) and (g) or
reserves established, in accordance with clause (ii)(d),
within 45 days after the end of any quarter as to which
SPUs were purchased in respect of such quarter in
accordance with the Distribution Support Agreement shall
be deemed to be made or established, for purposes of
determining Available Cash, within such quarter if the
General Partner so determines, provided that the
aggregate amount of such disbursements made or reserves
established which are so determined as being made within
such quarter shall not exceed the aggregate dollar
amount of SPUs purchased in respect of such quarter.
Notwithstanding the foregoing, "Available Cash"
shall not take into account any reductions in reserves
or disbursements made or reserves established after
commencement of the dissolution and liquidation of the
Company. In determining "Available Cash", (i) all items
under clauses (i)(a), (b), (c), (d) and (e) above and
all items under clauses (ii)(a), (b), (c), (d), (e), (f)
and (g) above shall be calculated on a combined basis
with any Subsidiary of the Company whose income is
accounted for on a consolidated or combined basis with
the Company and, in accordance therewith, "Available
Cash" shall include a percentage of each such item of
each such Subsidiary equal to the Company's percentage
ownership interest in such Subsidiary, provided,
however, that the items under clauses (i)(a), (b), (c),
(d) and (e) above shall only be included in Available
Cash to the extent that the General Partner determines
such amount to be legally available for dividends or
distributions to the Company by such Subsidiary;
(ii) the amount of net income and the amount of
depletion, depreciation, amortization and other noncash
charges utilized in determining net income shall be
determined, with respect to the Company, by the General
Partner in accordance with generally accepted accounting
principals and, with respect to any Subsidiary, by its
Board of Directors (or by such other body or person
which has the ultimate management authority of such
Subsidiary) in accordance with generally accepted
accounting principles; (iii) the net income of any
Subsidiary shall be determined on an after-tax basis;
5
<PAGE> 13
(iv) the amount of any reductions in, or additions to,
reserves for purposes of clauses (i)(c) and (ii)(d)
above shall be determined, with respect to the Company,
by the General Partner in its reasonable good faith
judgment and, with respect to any Subsidiary, by its
Board of Directors (or by such other body or person
which has the ultimate management authority of such
Subsidiary) in its reasonable good faith judgment; and
(v) any determination of whether any capital
expenditures or Investments are financed, or anticipated
to be financed, with Cash from Capital Transactions for
purposes of clause (ii)(b) or (ii)(f) above shall be
made, with respect to the Company, by the General
Partner in its reasonable good faith judgment and, with
respect to any Subsidiary, by its Board of Directors (or
by such other body or person which has the ultimate
management authority of such Subsidiary) in its
reasonable good faith judgment.
"Bank" has the meaning specified in the
introductory clause hereto.
"Bankruptcy Code" means the Federal Bankruptcy
Reform Act of 1978 (11 U.S.C. Section 101, et seq.).
"Base Rate" means, for any day, the higher of:
(a) the rate of interest in effect for such
day as publicly announced from time to time by BofA
in San Francisco, California, as its "reference
rate." It is a rate set by BofA based upon various
factors including BofA's costs and desired return,
general economic conditions and other factors, and
is used as a reference point for pricing some
loans, which may be priced at, above, or below such
announced rate; and
(b) 0.50% per annum above the latest Federal
Funds Rate.
Any change in the reference rate announced by BofA
shall take effect at the opening of business on the day
specified in the public announcement of such change.
"Base Rate Loan" means a Loan that bears interest
based on the Base Rate.
"BofA" means Bank of America National Trust and
Savings Association, a national banking association.
6
<PAGE> 14
"Board Foot" means a unit of measurement one foot
square and one inch thick.
"Borrowing" means a borrowing hereunder consisting
of Loans made to the Company on the same day by the
Banks pursuant to Article II.
"Business Day" means any day other than a Saturday,
Sunday or other day on which commercial banks in New
York City or San Francisco are authorized or required by
law to close and, if the applicable Business Day relates
to any Offshore Rate Loan, means such a day on which
dealings are carried on in the applicable offshore
dollar interbank market.
"Capital Adequacy Regulation" means any guideline,
request or directive of any central bank or other
Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in
each case, regarding capital adequacy of any bank or of
any corporation controlling a bank.
"Capital Asset" means any asset on the Company's or
any Subsidiary's balance sheet, as the case may be,
other than inventory, accounts receivable or any other
current asset and assets disposed of in connection with
normal retirements or replacements.
"Capital Lease" has the meaning specified in the
definition of "Capital Lease Obligations."
"Capital Lease Obligations" means all monetary
obligations of the Company or any of its Subsidiaries
under any leasing or similar arrangement which, in
accordance with GAAP, is classified as a capital lease
("Capital Lease").
"Capital Transaction" means (i) borrowings and
sales of debt securities (other than for working capital
purposes and other than for items purchased on open
account in the ordinary course of business) by the
Company, (ii) sales of equity interests by the Company
(other than sales of SPUs) and (iii) sales or other
voluntary or involuntary dispositions of any assets of
the Company (other than (x) sales or other dispositions
of inventory in the ordinary course of business, (y)
sales or other dispositions of other current assets
including receivables and accounts and (z) sales or
other dispositions of assets as a part of normal
retirements or replacements), in each case prior to the
commencement of the dissolution and liquidation of the
7
<PAGE> 15
Company provided, that in determining Cash from Capital
Transactions, items (i), (ii) and (iii) above shall
include, with respect to each Subsidiary of the Company
whose income is accounted for on a consolidated or
combined basis with the Company, a percentage of each
such item of such Subsidiary equal to the Company's
percentage ownership interest in such Subsidiary.
"Cash Collateral Account Agreement" means an
agreement or agreements entered into between the Company
and the Agent pursuant to subsection 7.02(i)
substantially in the form of Exhibit E.
"Cash from Capital Transactions" means at any date,
such amounts of cash as are determined by the General
Partner to be cash made available to the Company from or
by reason of a Capital Transaction.
"CD Rate" means, for each Interest Period in
respect of CD Rate Loans comprising a part of the same
Borrowing, the rate of interest (rounded upward to the
nearest 1/100th of 1%) determined pursuant to the
following formula:
CD Rate = Certificate of Deposit Rate + Assessment
--------------------------- Rate
1.00 - Reserve Percentage
Where:
"Assessment Rate" means for any day of any
Interest Period for CD Rate Loans, the rate
determined by the Agent as equal to the annual
assessment rate in effect on such day that is
payable to the FDIC by a member of the Bank
Insurance Fund that is classified as adequately
capitalized and within supervisory subgroup "A" (or
a comparable successor assessment risk
classification within the meaning of 12 C.F.R.
Section 327.3(d)) for insuring time deposits at offices
of such member in the United States, or, in the
event that the FDIC shall at any time hereafter
cease to assess time deposits based upon such
classifications or successor classifications, equal
to the maximum annual assessment rate in effect on
such day that is payable to the FDIC by commercial
banks for insuring time deposits at offices of such
banks in the United States.
"Certificate of Deposit Rate" means for any
Interest Period for CD Rate Loans the rate of
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<PAGE> 16
interest per annum determined by the Agent to be
the arithmetic mean (rounded upward to the nearest
1/100th of 1%) of the rates notified to the Agent
as the rates of interest bid by two or more
certificate of deposit dealers of recognized
standing selected by the Agent for the purchase at
face value of dollar certificates of deposit issued
by major United States banks, for a maturity
comparable to such Interest Period and in the
approximate amount of the CD Rate Loans to be made,
at the time selected by the Agent on the first day
of such Interest Period.
"Reserve Percentage" means for any day for any
Interest Period for CD Rate Loans the reserve
percentage (expressed as a decimal, rounded upward
to the nearest 1/100th of 1%), as determined by the
Agent, in effect on such day (including any
ordinary, marginal, emergency, supplemental,
special and other reserve percentages) prescribed
by the Federal Reserve Board for determining the
reserves to be maintained by member banks of the
Federal Reserve System with deposits exceeding
$1,000,000,000 for new non-personal time deposits
for a period comparable to such Interest Period and
in an amount of $100,000 or more. The CD Rate
shall be adjusted automatically as of the effective
date of any change in the Reserve Percentage.
"CD Rate Loan" means a Loan that bears interest
based on the CD Rate.
"CERCLA" has the meaning specified in the
definition of "Environmental Laws."
"Closing Date" means the date on which all
conditions precedent set forth in Section 4.01 are
satisfied or waived by all Banks.
"Code" means the Internal Revenue Code of 1986, and
regulations promulgated thereunder.
"Columbia River Unit" means those certain
approximately 63,000 acres located in southwest
Washington and generally referred to on the date hereof
as the Company's "Columbia River Unit."
"Commitment", with respect to each Bank, has the
meaning specified in Section 2.01.
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<PAGE> 17
"Commitment Percentage" means, as to any Bank, the
percentage equivalent of such Bank's Commitment divided
by the Aggregate Commitment.
"Contractual Obligations" means, as to any Person,
any provision of any security issued by such Person or
of any agreement, undertaking, contract, indenture,
mortgage, deed of trust or other instrument, document or
agreement to which such Person is a party or by which it
or any of its property is bound.
"Controlled Group" means the Company and all
Persons (whether or not incorporated) under common
control or treated as a single employer with the Company
pursuant to Section 414(b), (c), (m) or (o) of the Code.
"Conversion Date" means any date on which the
Company converts a Base Rate Loan to an Offshore Rate
Loan or a CD Rate Loan; a CD Rate Loan to an Offshore
Rate Loan or a Base Rate Loan; or an Offshore Rate Loan
to a CD Rate Loan or a Base Rate Loan.
"Default" means any event or circumstance which,
with the giving of notice, the lapse of time, or both,
would (if not cured or otherwise remedied during such
time) constitute an Event of Default.
"Designated Acres" means up to an aggregate of
200,000 acres owned by the Company which (based on the
good faith determination of the Responsible
Representatives that such acres have at the time such
determination is made a higher value as recreational,
residential, grazing or agricultural property than for
timber production) may be reasonably designated by the
General Partner at the time of the sale thereof as
constituting Designated Acres (such aggregate number of
acres to be determined over the term of existence of the
Note Agreements).
"Designated Immaterial Subsidiary" means any entity
which would otherwise be a Restricted Subsidiary and
which at any time is designated by the Company as a
Designated Immaterial Subsidiary, provided that no such
designation of any entity as a Designated Immaterial
Subsidiary shall be effective unless (i) at the time of
such designation, such entity does not own any shares of
stock or Indebtedness of any Restricted Subsidiary which
is not simultaneously being designated as a Designated
Immaterial Subsidiary, (ii) immediately after giving
effect to such designation, (a) the Company could incur
at least $1 of additional Funded Debt pursuant to
10
<PAGE> 18
subsection 7.05(j), and (b) no condition or event shall
exist which constitutes an Event of Default or Material
Default, (iii) the Company is permitted to make the
Investment in such entity resulting from such
designation pursuant to, and within the limitations
specified in, subsection 7.04(i), treating the aggregate
book value (including equity in retained earnings) of
the Investments of the Company and its Subsidiaries in
such entity immediately prior to such designation as the
cost of such Investment, and provided, further, that if
at any time all Designated Immaterial Subsidiaries on a
combined basis would be a "significant subsidiary"
(assuming the Company is the registrant) within the
meaning of Regulation S-X (17 CFR Part 210) the Company
shall designate one or more Designated Immaterial
Subsidiaries which are directly owned by the Company and
its Restricted Subsidiaries as Restricted Subsidiaries
such that the condition in this proviso is no longer
applicable and the entities so designated shall no
longer be Designated Immaterial Subsidiaries. Any
entity which has been designated a Designated Immaterial
Subsidiary shall not thereafter become a Restricted
Subsidiary except pursuant to a designation required by
the last proviso in the preceding sentence, and any
Designated Immaterial Subsidiary which has been
designated a Restricted Subsidiary pursuant to the last
proviso of the preceding sentence shall not thereafter
be redesignated as a Designated Immaterial Subsidiary.
"Designated Repurchases" means and includes
purchases, redemptions or other acquisitions, in each
case at a price not to exceed fair market value, of the
publicly traded limited partnership interests in the
Company, which are retired by the Company within six
months of such purchase, redemption or other
acquisition.
"Desired Percentage" means thirty-eight percent
(38%), the percentage determined by dividing the
aggregate outstanding principal balance of the Notes on
September 1, 1993 by the aggregate outstanding principal
balance of all Qualified Debt outstanding upon the
drawdown of the Loans.
"Distribution Support Agreement" means the
Distribution Support Agreement, dated as of June 8, 1989
between the Company and Burlington Resources Inc.
"Dollars", "dollars" and "$" each mean lawful money
of the United States.
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<PAGE> 19
"Domestic Lending Office" means, with respect to
each Bank, the office of that Bank designated as such in
the signature pages hereto or such other office of the
Bank as it may from time to time specify to the Company
and the Agent.
"DPI Borrower" has the meaning specified in
Section 9.08.
"EBITDA" means, for any period, for the Company and
its Subsidiaries on a combined basis, determined in
accordance with GAAP, the sum of (a) the net income (or
net loss) for such period, plus (b) all amounts treated
as expenses for depreciation, depletion and interest and
the amortization of intangibles of any kind to the
extent included in the determination of such net income
(or loss), plus (c) all adjustments arising by virtue of
the conversion from average cost accounting to a LIFO
basis with respect to inventory to the extent included
in the determination of such net income, plus (d) all
accrued taxes on or measured by income to the extent
included in the determination of such net income (or
loss); provided, however, that net income (or loss)
shall be computed for these purposes without giving
effect to extraordinary losses or extraordinary gains.
"Effective Date" means the later to occur of the
Closing Date or November 1, 1993.
"Eligible Assignee" means (i) a commercial bank
organized under the laws of the United States, or any
state thereof, and having a combined capital and surplus
of at least $250,000,000; (ii) a commercial bank
organized under the laws of any other country which is a
member of the Organization for Economic Cooperation and
Development (the "OECD"), or a political subdivision of
any such country, and having a combined capital and
surplus of at least $250,000,000, provided that such
bank is acting through a branch or agency located in the
United States; and (iii) a Person that is primarily
engaged in the business of commercial banking and that
is (A) a Subsidiary of a Bank, (B) a Subsidiary of a
Person of which a Bank is a Subsidiary, or (C) a Person
of which a Bank is a Subsidiary.
"Environmental Claims" means all claims, however
asserted, by any Governmental Authority or other Person
alleging potential liability or responsibility for
violation of any Environmental Law, or for release or
injury to the environment or threat to public health,
personal injury (including sickness, disease or death),
12
<PAGE> 20
property damage, natural resources damage, or otherwise
alleging liability or responsibility for damages
(punitive or otherwise), cleanup, removal, remedial or
response costs, restitution, civil or criminal
penalties, injunctive relief, or other type of relief,
resulting from or based upon (a) the presence,
placement, discharge, emission or release (including
intentional and unintentional, negligent and non-
negligent, sudden or non-sudden, accidental or non-
accidental placement, spills, leaks, discharges,
emissions or releases) of any Hazardous Material at, in,
or from Property, whether or not owned by such person,
or (b) any other circumstances forming the basis of any
violation, or alleged violation, of any Environmental
Law.
"Environmental Laws" means all federal, state or
local laws, statutes, common law duties, rules,
regulations, ordinances and codes, together with all
administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements
with, any Governmental Authorities, in each case
relating to environmental, health, safety, land use,
conservation, and timber harvesting matters; including,
but not limited to, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980
("CERCLA"), the Clean Air Act, the Federal Water
Pollution Control Act of 1972, the Solid Waste Disposal
Act, the Federal Resource Conservation and Recovery Act,
the Toxic Substances Control Act, the Emergency Planning
and Community Right-to-Know Act.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time, and
regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business
(whether or not incorporated) under common control with
the Company within the meaning of Section 414(b) or
414(c) of the Code.
"ERISA Event" means (a) a Reportable Event with
respect to a Qualified Plan or a Multiemployer Plan;
(b) a withdrawal by the Company or any ERISA Affiliate
from a Qualified Plan subject to Section 4063 of ERISA
during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA);
(c) a complete or partial withdrawal by the Company or
any ERISA Affiliate from a Multiemployer Plan; (d) the
filing of a notice of intent to terminate, the treatment
of a plan amendment as a termination under Section 4041
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<PAGE> 21
or 4041A of ERISA or the commencement of proceedings by
the PBGC to terminate a Qualified Plan or Multiemployer
Plan subject to Title IV of ERISA; (e) a failure by the
Company or any ERISA Affiliate to make required
contributions to a Qualified Plan or Multiemployer Plan;
(f) an event or condition which might reasonably be
expected to constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a
trustee to administer, any Qualified Plan or
Multiemployer Plan; (g) the imposition of any liability
under Title IV of ERISA, other than PBGC premiums due
but not delinquent under Section 4007 of ERISA, upon the
Company or any ERISA Affiliate; (h) an application for a
funding waiver or an extension of any amortization
period pursuant to Section 412 of the Code with respect
to any Plan; (i) a non-exempt prohibited transaction
occurs with respect to any Plan for which the Company
may be directly or indirectly liable; or (j) a violation
of the applicable requirements of Section 404 or 405 of
ERISA or the exclusive benefit rule under Section 401(a)
of the Code by any fiduciary or disqualified person with
respect to any Plan for which the Company may be
directly or indirectly liable.
"Eurodollar Reserve Percentage" has the meaning
specified in the definition of "Offshore Rate".
"Event of Default" means any of the events or
circumstances specified in Section 8.01.
"Event of Loss" means, with respect to any
Property, any of the following: (a) any loss,
destruction or damage of such Property; (b) any pending
or threatened institution of any proceedings for the
condemnation or seizure of such Property or for the
exercise of any right of eminent domain; or (c) any
actual condemnation, seizure or taking, by exercise of
the power of eminent domain or otherwise, of such
Property, or confiscation of such Property or the
requisition of the use of such Property.
"Exchange Act" means the Securities and Exchange
Act of 1934, as amended, and regulations promulgated
thereunder.
"Facilities Subsidiary" means, collectively, Plum
Creek Manufacturing, L.P., a Delaware limited
partnership, and Plum Creek Marketing, Inc., a Delaware
corporation,
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<PAGE> 22
"Facilities Subsidiary's Facility" means any
facility pursuant to which the Facilities Subsidiary may
incur Indebtedness for purposes of making capital
improvements, additions to, or expansions of, property,
plant and equipment of the Facilities Subsidiary or its
Subsidiaries.
"Facilities Subsidiary's Revolving Credit Facility"
means any facility pursuant to which the Facilities
Subsidiary may obtain revolving credit, take-down
credit, the issuance of standby and payment letters of
credit and backup for the issuance of commercial paper.
"FDIC" means the Federal Deposit Insurance
Corporation, or any entity succeeding to any of its
principal functions.
"Federal Funds Rate" means, for any period, the
rate set forth in the weekly statistical release
designated as H.15(519), or any successor publication,
published by the Federal Reserve Board (including any
such successor, "H.15(519)") for such day opposite the
caption "Federal Funds (Effective)". If on any relevant
day such rate is not yet published in H.15(519), the
rate for such day will be the rate set forth in the
daily statistical release designated as the Composite
3:30 p.m. Quotations for U.S. Government Securities, or
any successor publication, published by the Federal
Reserve Bank of New York (including any such successor,
the "Composite 3:30 p.m. Quotation") for such day under
the caption "Federal Funds Effective Rate". If on any
relevant day the appropriate rate for such previous day
is not yet published in either H.15(519) or the
Composite 3:30 p.m. Quotations, the rate for such day
will be the arithmetic mean as determined by the Agent
of the rates for the last transaction in overnight
Federal funds arranged prior to 9:00 a.m. (New York
time) on that day by each of three leading brokers of
Federal funds transactions in New York City selected by
the Agent.
"Federal Reserve Board" means the Board of
Governors of the Federal Reserve System, or any entity
succeeding to any of its principal functions.
"Form 1001" has the meaning specified in
subsection 3.01(f).
"Form 4224" has the meaning specified in
subsection 3.01(f).
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<PAGE> 23
"Funded Debt" means, without duplication, any
Indebtedness payable more than one year from the date of
the creation thereof.
"Funds Flow" means, for any period, (a) EBITDA for
the period less (b) the sum of (i) taxes paid in cash
during the period by the Company and its combined
Subsidiaries that are not already excluded in the
calculation of EBITDA, plus (ii) capital expenditures of
the Company and its combined Subsidiaries for the
period.
"Funds Flow Ratio" means, as of the date of
determination, the ratio of (a) Funds Flow to
(b) combined Indebtedness of the Company and its
Subsidiaries.
"GAAP" means generally accepted accounting
principles set forth from time to time in the opinions
and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public
Accountants and statements and pronouncements of the
Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority
within the accounting profession), or in such other
statements by such other entity as may be in general use
by significant segments of the U.S. accounting
profession, which are applicable to the circumstances as
of the date of determination.
"General Partner" means Plum Creek Management
Company, L.P., a Delaware limited partnership, the
managing general partner of the Company, and any
successor managing general partner of the Company.
"Governmental Authority" means any nation or
government, any state or other political subdivision
thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising
executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled,
through stock or capital ownership or otherwise, by any
of the foregoing.
"GP Borrower" has the meaning specified in
Section 9.08.
"Guarantee" means the guarantee in paragraph 7 of
the Mortgage Note Agreements.
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<PAGE> 24
"Hazardous Materials" means all those substances
which are regulated by, or which may form the basis of
liability under, any Environmental Law, including all
substances identified under any Environmental Law as a
pollutant, contaminant, hazardous waste, hazardous
constituent, special waste, hazardous substance,
hazardous material, or toxic substance, or petroleum or
petroleum derived substance or waste.
"Indebtedness" of any Person means, as of any date
of determination, without duplication, (a) all
indebtedness of such Person for borrowed money or for
the deferred purchase price of property or services,
(b) all amounts owed by such Person to banks or other
Persons in respect of reimbursement obligations under
letters of credit, surety bonds, banker's acceptances
and other similar instruments guaranteeing payment or
other performance of obligations by such Person, (c) all
indebtedness for borrowed money or for the deferred
purchase price of property or services secured by any
Lien on any property owned by such Person, to the extent
attributable to such Person's interest in such property,
even though such Person has not assumed or become liable
for the payment thereof, (d) lease obligations of such
Person which, in accordance with GAAP, should be
capitalized, (e) lease obligations of such Person under
leases which have a term (including any option to renew
exercisable at the discretion of the lessee thereunder)
longer than 10 years or under leases under which the
lessor, pursuant to an agreement with such Person, has
acquired the property specifically for the purpose of
leasing it to such Person, (f) obligations payable out
of the proceeds of production from property of such
Person, even though such Person has not assumed or
become liable for the payment thereof, (g) all net
obligations with respect to Rate Contracts, and (h) any
obligations of any other Person of the type described in
the above clauses (a) through (g), inclusive, which are
guaranteed or in effect guaranteed by such Person
through any agreement (contingent or otherwise) to
purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds
for the payment or discharge of such obligation (whether
in the form of loans, advances, stock purchases, capital
contributions or otherwise), or to maintain the solvency
or any balance sheet or other financial condition of the
obligor of such obligation, or to make payment for any
property, securities, products, materials or supplies or
for any transportation or services regardless of the
non-delivery or nonfurnishing thereof, in any such case
if the purpose or intent of such agreement is to provide
17
<PAGE> 25
assurance that such obligation will be paid or
discharged, or that any agreements relating thereto will
be complied with, or that the holders of such obligation
will be protected against loss in respect thereof or to
otherwise assure or hold harmless the holder of any
primary obligation against loss in respect thereof. The
amount of any obligations of the type described in
clause (h) of this definition shall be deemed equal to
the stated or determinable amount of the primary
obligation in respect of which such obligation is made
or, if not stated or if not determinable, the maximum
reasonably anticipated liability in respect thereof.
The amount of any obligations of the type described in
clause (g) of this definition shall be marked to market
on a current basis in accordance with GAAP.
"Indemnified Person" has the meaning specified in
subsection 10.05.
"Indemnified Liabilities" has the meaning specified
in subsection 10.05.
"Insolvency Proceeding" means (a) any case, action
or proceeding before any court or other Governmental
Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general
assignment for the benefit of creditors, composition,
marshalling of assets for creditors, or other, similar
arrangement in respect of its creditors generally or any
substantial portion of its creditors; in each case
(a) and (b) undertaken under U.S. Federal, State or
foreign law, including the Bankruptcy Code.
"Interest Payment Date" means, with respect to any
CD Rate Loan or Offshore Rate Loan, the last day of each
Interest Period applicable to such Loan and, with
respect to Base Rate Loans, the last Business Day of
each calendar quarter and each date a Base Rate Loan is
converted into an Offshore Rate Loan or a CD Rate Loan,
provided, however, that if any Interest Period for a CD
Rate Loan or Offshore Rate Loan exceeds 90 days or three
months, respectively, the date which falls 90 days or
three months (as the case may be) after the beginning of
such Interest Period and after each Interest Payment
Date thereafter shall also be an Interest Payment Date.
"Interest Period" means, (a) with respect to any
Offshore Rate Loan, the period commencing on the
Business Day the Loan is disbursed or continued or on
the Conversion Date on which the Loan is converted to
18
<PAGE> 26
the Offshore Rate Loan and ending on the date one, two,
three or six months thereafter, as selected by the
Company in its Notice of Borrowing or Notice of
Conversion/Continuation; and (b) with respect to any CD
Rate Loan, the period commencing on the Business Day the
CD Rate Loan is disbursed or continued or on the
Conversion Date on which a Loan is converted to the CD
Rate Loan and ending 30, 60, 90 or 180 days thereafter,
as selected by the Company in its Notice of Borrowing or
Notice of Conversion/Continuation;
provided that:
(i) if any Interest Period pertaining to an
Offshore Rate Loan or CD Rate Loan would otherwise
end on a day which is not a Business Day, that
Interest Period shall be extended to the next
succeeding Business Day unless, in the case of an
Offshore Rate Loan, the result of such extension
would be to carry such Interest Period into another
calendar month, in which event such Interest Period
shall end on the immediately preceding Business
Day;
(ii) any Interest Period pertaining to an
Offshore Rate Loan that begins on the last Business
Day of a calendar month (or on a day for which
there is no numerically corresponding day in the
calendar month at the end of such Interest Period)
shall end on the last Business Day of the calendar
month at the end of such Interest Period; and
(iii) no Interest Period for any Loan shall
extend beyond the Maturity Date.
"Investment Policy" means the Corporate Investment
Policy of the Company, as it existed on April 5, 1993
and as attached hereto as Schedule 1.01 (without giving
effect to any later amendments thereto).
"Investments" has the meaning specified in
Section 7.04.
"Joint Venture" means a partnership, joint venture
or other similar legal arrangement (whether created
pursuant to contract or conducted through a separate
legal entity) now or hereafter formed by the Company or
any of its Restricted Subsidiaries with another Person
in order to conduct a common venture or enterprise with
such Person.
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<PAGE> 27
"Lending Office" means, with respect to any Bank,
the office or offices of the Bank specified as its
"Lending Office" or "Domestic Lending Office" or
"Offshore Lending Office", as the case may be, opposite
its name on the applicable signature page hereto, or
such other office or offices of the Bank as it may from
time to time notify the Company and the Agent.
"Lien" means any mortgage, pledge, security
interest, encumbrance, lien, preference or priority or
charge of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof,
and the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any
jurisdiction).
"Loan" means an extension of credit by a Bank to
the Company pursuant to Article II, and may be a Base
Rate Loan, CD Rate Loan or an Offshore Rate Loan.
"Loan Documents" means this Agreement and all
documents delivered to the Agent pursuant to this
Agreement.
"Majority Banks" means at any time Banks then
holding at least 66-2/3% of the then aggregate unpaid
principal amount of the Loans, or, if no such principal
amount is then outstanding, Banks then having at least
66-2/3% of the Commitments.
"Mandatory Commitment Reduction" has the meaning
specified in Section 2.07.
"Mandatory Commitment Reduction Date" has the
meaning specified in Section 2.07.
"Margin Reduction Discount" has the meaning
specified in Section 2.09.
"Margin Stock" means "margin stock" as such term is
defined in Regulation G, T, U or X of the Federal
Reserve Board.
"Material Adverse Effect" means (a) a material
adverse change in, or a material adverse effect upon,
any of the operations, business, properties, condition
(financial or otherwise) or prospects of the Company or
the Company and its Subsidiaries taken as a whole or as
to any Restricted Subsidiary; (b) a material impairment
of the ability of the Company to perform under any Loan
20
<PAGE> 28
Document and avoid any Event of Default; or (c) a
material adverse effect upon the legality, validity,
binding effect or enforceability of any Loan Document.
"Material Default" means any continuing Default as
to which a written notice of such Default (which notice
has not been rescinded) shall have been received by the
Company or the General Partner from the Agent or any
Bank, or any continuing Event of Default.
"Maturity Date" means November 1, 2001.
"Maximum Pro Forma Annual Interest Charges" means,
as of any date, the highest total amount payable during
any period of four consecutive fiscal quarters,
commencing with the fiscal quarter in which such date
occurs and ending with the fiscal quarter in which the
Maturity Date occurs, by the Company and its Restricted
Subsidiaries on a combined basis, after eliminating all
intercompany transactions, in respect of interest
charges ((a) including amortization of debt discount and
expense and imputed interest on Capital Lease
Obligations and on other obligations included in
Indebtedness which do not have stated interest,
(b) assuming, in the case of fluctuating interest rates
which cannot be determined in advance, that the rate in
effect on such date will remain in effect throughout
such period, and (c) treating the principal amount of
all Indebtedness outstanding as of such date under a
revolving credit or similar agreement as maturing and
becoming due and payable on the scheduled maturity date
thereof, without regard to any provision permitting such
maturity date to be extended) on all Indebtedness of the
Company and its Restricted Subsidiaries outstanding on
such date (excluding the Guarantee and the guarantees of
the Facilities Subsidiary's Facility and the Facilities
Subsidiary's Revolving Credit Facility but including, to
the extent not already included, all other Indebtedness
outstanding on such date which is guaranteed or in
effect guaranteed by the Company or any Restricted
Subsidiaries), after giving effect to any Indebtedness
proposed to be created on such date and to the
concurrent retirement of any other Indebtedness.
"MMBF" means one million Board Feet.
"Montana Timberlands" means those certain
approximately 870,000 acres of timberlands located in
Montana together with certain personal properties, owned
by Champion International Corporation, and to be
acquired by the Company.
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<PAGE> 29
"Mortgage Note Agreements" means the Note
Agreements, dated as of May 31, 1989, providing for the
issuance and sale by the Facilities Subsidiary of its
11 1/8% First Mortgage Notes to the purchasers listed in
the schedule of purchasers attached thereto, as amended
by (a) those certain Mortgage Note Agreement Amendment,
Consent and Waivers dated as of January 1, 1991,
(b) that certain letter agreement dated April 22, 1993,
and (c) that certain Mortgage Note Agreement Amendment
dated as of September 1, 1993.
"Mortgage Notes" means the 11 1/8% First Mortgage
Notes of the Facilities Subsidiary issued and sold
pursuant to the Mortgage Note Agreements.
"Multiemployer Plan" means a "multiemployer plan"
(within the meaning of Section 4001(a)(3) of ERISA) and
to which any ERISA Affiliate makes, is making, or is
obligated to make contributions or, during the preceding
three calendar years, has made, or been obligated to
make, contributions.
"Net Proceeds" means proceeds in cash as and when
received by the Person making a sale of Property, net
of: (a) the direct costs relating to such sale excluding
amounts payable to the Company or any Affiliate of the
Company, (b) sale, use or other transaction taxes paid
or payable as a result thereof, and (c) amounts required
to be applied to repay principal, interest and
prepayment premiums and penalties on Indebtedness
secured by a Lien on the asset which is the subject of
such disposition.
"Notes" means those certain senior promissory notes
in the aggregate principal amount of $165,000,000 issued
and pursuant to the Note Agreements.
"Note Agreements" means those certain Note
Agreements dated as of May 31, 1989, providing for the
issuance and sale by the Company of the Notes to the
purchasers listed in the schedule of purchasers attached
thereto, as amended by (a) those certain Senior Note
Agreement Amendment, Consent and Waivers dated as of
January 1, 1991, (b) that certain letter agreement dated
April 22, 1993, and (c) that certain Senior Note
Agreement Amendment dated as of September 1, 1993.
"Notice of Borrowing" means a notice given by the
Company to the Agent pursuant to Section 2.03, in
substantially the form of Exhibit A.
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"Notice of Conversion/Continuation" means a notice
given by the Company to the Agent pursuant to
Section 2.04, in substantially the form of Exhibit B.
"Notice of Lien" means any "notice of lien" or
similar document intended to be filed or recorded with
any court, registry, recorder's office, central filing
office or other Governmental Authority for the purpose
of evidencing, creating, perfecting or preserving the
priority of a Lien securing obligations owing to a
Governmental Authority.
"Obligations" means all Loans, and other
Indebtedness, advances, debts, liabilities, obligations,
covenants and duties owing by the Company to any Bank,
the Agent, or any other Person required to be
indemnified, that arises under any Loan Document,
whether or not for the payment of money, whether arising
by reason of an extension of credit, loan, guaranty,
indemnification or in any other manner, whether direct
or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired.
"Offshore Lending Office" means with respect to
each Bank, the office of such Bank designated as such in
the signature pages hereto or such other office of such
Bank as such Bank may from time to time specify to the
Company and the Agent.
"Offshore Rate" means, for each Interest Period in
respect of Offshore Rate Loans comprising part of the
same Borrowing, an interest rate per annum (rounded
upward to the nearest 1/16th of 1%) determined pursuant
to the following formula:
Offshore Rate = IBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any
day for any Interest Period the reserve percentage
(expressed as a decimal, rounded upward to the
nearest 1/100th of 1%) in effect for such day under
regulations issued from time to time by the Federal
Reserve Board for determining the reserve
requirement (including any emergency, supplemental
or other marginal reserve requirement) with respect
to Eurocurrency funding (currently referred to as
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<PAGE> 31
"Eurocurrency liabilities") having a term
comparable to such Interest Period; and
"IBOR" means the rate of interest per annum
determined by the Agent as the rate at which dollar
deposits in the approximate amount of BofA's
Offshore Rate Loan and having a maturity comparable
to such Interest Period would be offered by BofA's
Grand Cayman Branch, Grand Cayman B.W.I. (or such
other office as may be designated for such purpose
by BofA), to major banks in the offshore dollar
interbank market upon request of such banks at
approximately 11:00 a.m. (New York City time) two
Business Days prior to the commencement of such
Interest Period.
The Offshore Rate shall be adjusted
automatically as of the effective date of any
change in the Eurodollar Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears
interest based on the Offshore Rate.
"Operating Lease" means, as applied to any Person,
any lease of Property which is not a Capital Lease.
"Ordinary Course of Business" means, in respect of
any transaction involving the Company or any Subsidiary
of the Company, the ordinary course of such Person's
business, as conducted by any such Person in accordance
with past practice and undertaken by such Person in good
faith and not for purposes of evading any covenant or
restriction in any Loan Document.
"Organization Documents" means, for any
corporation, the certificate or articles of
incorporation, the bylaws, any certificate of
determination or instrument relating to the rights of
preferred shareholders of such corporation, any
shareholder rights agreement, and all applicable
resolutions of the board of directors (or any committee
thereof) of such corporation; and, for any limited
partnership, the certificate of limited partnership, the
limited partnership agreement, and all applicable
partnership resolutions.
"Other Taxes" has the meaning specified in
subsection 3.01(b).
"Participant" has the meaning specified in
subsection 10.08(d).
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"Partnership Agreement" means the Amended and
Restated Agreement of Limited Partnership of the
Company, as in effect on the Closing Date, and as the
same may, from time to time, be amended, modified or
supplemented in accordance with the terms thereof.
"Partner Entities" means the General Partner, the
PCMC General Partner and the PC Advisory General
Partner.
"PBGC" means the Pension Benefit Guaranty
Corporation or any entity succeeding to any of its
principal functions under ERISA.
"PC Advisory General Partner" means PC Advisory
Corp. I, a Delaware corporation, the managing general
partner of the PCMC General Partner, and any successor
managing general partner of the PCMC General Partner.
"PCMC General Partner" means PC Advisory Partners
I, L.P., a Delaware limited partnership, the managing
general partner of the General Partner, and any
successor managing general partner of the General
Partner.
"Permitted Business" means any business engaged in
by the Company or the Facilities Subsidiary on the
Closing Date, and any business substantially similar or
related to any such business, which shall not include
pulp or paper manufacturing.
"Permitted Liens" has the meaning specified in
Section 7.01.
"Person" means an individual, partnership,
corporation, business trust, joint stock company, trust,
unincorporated association, joint venture or
Governmental Authority.
"Plan" means an employee benefit plan (as defined
in Section 3(3) of ERISA) which the Company or any ERISA
Affiliate sponsors or maintains or to which the Company
or any ERISA Affiliate makes, is making or is obligated
to make contributions, and includes any Multiemployer
Plan or Qualified Plan.
"Pro Forma Free Cash Flow" as of any date means
(i) net income of the Company and its Restricted
Subsidiaries on a pro forma combined basis (excluding
(a) gain on the sale of any Capital Asset, (b) non-cash
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<PAGE> 33
items of income, and (c) any distributions or other
income received from, or equity of the Company or any
Restricted Subsidiary in the earnings of, any entity
which is not a Restricted Subsidiary) for the period of
four consecutive fiscal quarters immediately prior to
such date determined in accordance with GAAP plus
depreciation, depletion, amortization and other noncash
charges, interest expense on Indebtedness and provision
for income taxes, minus (ii) capital expenditures made
by the Company and its Restricted Subsidiaries during
such period of four consecutive fiscal quarters to
maintain their respective operations.
"Property" means any estate or interest in any kind
of property or asset, whether real, personal or mixed,
and whether tangible or intangible.
"Qualified Debt" means, as to the Company, as of
any date of determination, without duplication, all
outstanding indebtedness of the Company for borrowed
money, including, without limitation, Indebtedness
represented by the Notes and this Agreement.
"Qualified Plan" means a pension plan (as defined
in Section 3(2) of ERISA) intended to be tax-qualified
under Section 401(a) of the Code and which any ERISA
Affiliate sponsors, maintains, or to which it makes, is
making or is obligated to make contributions, or in the
case of a multiple employer plan (as described in
Section 4064(a) of ERISA) has made contributions at any
time during the immediately preceding period covering at
least five (5) plan years, but excluding any
Multiemployer Plan.
"Rate Contracts" means swap agreements (as such
term is defined in Section 101 of the Bankruptcy Code)
and any other agreements or arrangements designed to
provide protection against fluctuations in interest or
currency exchange rates.
"Reportable Event" means, as to any Plan, (a) any
of the events set forth in Section 4043(b) of ERISA or
the regulations thereunder, other than any such event
for which the 30-day notice requirement under ERISA has
been waived in regulations issued by the PBGC, (b) a
withdrawal from a Plan described in Section 4063 of
ERISA, or (c) a cessation of operations described in
Section 4062(e) of ERISA.
"Requirement of Law" means, as to any Person, any
law (statutory or common), treaty, rule or regulation or
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<PAGE> 34
determination of an arbitrator or of a Governmental
Authority, in each case applicable to or binding upon
the Person or any of its property or to which the Person
or any of its property is subject.
"Responsible Officer" means the chief executive
officer, the president or any vice president of the
General Partner, or any other officer having
substantially the same authority and responsibility; or,
with respect to compliance with financial covenants, the
chief financial officer or the treasurer of the General
Partner, or any other officer having substantially the
same authority and responsibility.
"Responsible Representatives" means (a) in the case
of any transaction in which the value of any assets
disposed of or received have a value of less than
$5,000,000 or in which payments made are less than
$5,000,000, the chief executive officer, chief financial
officer or chief operating officer of the Company, and
(b) in the case of any other transaction, the Board of
Directors of the PC Advisory General Partner.
"Restricted Payment" means (a) any payment or other
distribution, direct or indirect, in respect of any
partnership interest in the Company, except a
distribution payable solely in additional partnership
interests in the Company, and (b) any payment, direct or
indirect, on account of the redemption, retirement,
purchase or other acquisition of any partnership
interest in the Company including, without limitation,
any Designated Repurchases; or, if the Company is at any
time reorganized as or changed (by merger, sale of
assets or otherwise) into a corporation, (i) any
dividend or other distribution, direct or indirect, on
account of any shares of any class of stock of the
Company now or hereafter outstanding, except a dividend
payable solely in shares of stock of the Company, and
(ii) any redemption, retirement, purchase or other
acquisition, direct or indirect, of any shares of any
class of stock of the Company, now or hereafter
outstanding, or of any warrants, rights or options to
acquire any such shares, except to the extent that the
consideration therefor consists of shares of stock of
the Company.
"Restricted Subsidiary" means any Wholly-Owned
Subsidiary other than (a) any Designated Immaterial
Subsidiary and (b) the Facilities Subsidiary or any
Subsidiary directly or indirectly owned by the
Facilities Subsidiary, provided that after the Mortgage
Notes shall have been paid in full and retired, the
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<PAGE> 35
Facilities Subsidiary and its Subsidiaries shall become
and be Restricted Subsidiaries.
"Revolving Credit Facility" means any facility
pursuant to which the Company may obtain revolving
credit, take-down credit, the issuance of standby and
payment letters of credit and back-up for the issuance
of commercial paper, other than that established
pursuant to this Agreement.
"Revolving Termination Date" means the earlier to
occur of:
(a) the Maturity Date; and
(b) the date on which the Aggregate
Commitment shall terminate in accordance with the
provisions of this Agreement.
"SEC" means the Securities and Exchange Commission,
or any entity succeeding to any of its principal
functions.
"Solvent" means, as to any Person at any time, that
(a) the fair value of the Property of such Person is
greater than the amount of such Person's liabilities
(including disputed, contingent and unliquidated
liabilities) as such value is established and
liabilities evaluated for purposes of Section 101(31) of
the Bankruptcy Code and, in the alternative, for
purposes of the Uniform Fraudulent Transfer Act; (b) the
present fair saleable value of the Property of such
Person is not less than the amount that will be required
to pay the probable liability of such Person on its
debts as they become absolute and matured; (c) such
Person is able to realize upon its Property and pay its
debts and other liabilities (including disputed,
contingent and unliquidated liabilities) as they mature
in the normal course of business; (d) such Person does
not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay
as such debts and liabilities mature; and (e) such
Person is not engaged in business or a transaction, and
is not about to engage in business or a transaction, for
which such Person's property would constitute
unreasonably small capital.
"SPUs" has the meaning specified in the Partnership
Agreement.
"Subsidiary" of a Person means any corporation,
partnership or other entity a majority of (i) the total
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<PAGE> 36
combined voting power of all classes of Voting Stock of
which or (ii) the outstanding equity interests of which
shall, at the time of which any determination is being
made, be owned by the Company either directly or through
Subsidiaries.
"Taxes" has the meaning specified in
subsection 3.01(a).
"Timber" means standing trees not yet harvested.
"Timberlands" means the timberlands owned by the
Company as of the Closing Date and any timberlands
acquired by the Company or any Subsidiary after the
Closing Date.
"Transferee" has the meaning specified in
subsection 10.08(e).
"UCC" means the Uniform Commercial Code as in
effect in the State of California.
"Unfunded Pension Liabilities" means the excess of
a Plan's benefit liabilities under Section 4001(a)(16)
of ERISA, over the current value of that Plan's assets,
determined in accordance with the assumptions used by
the Plan's actuaries for funding the Plan pursuant to
section 412 for the applicable plan year.
"United States" and "U.S." each means the United
States of America.
"Voting Stock" means, with respect to any
corporation or other entity, any shares of stock or
other ownership interests of such corporation or entity
whose holders are entitled under ordinary circumstances
to vote for the election of directors of such
corporation or to manage any such other entity
(irrespective of whether at the time stock or ownership
interests of any other class or classes shall have or
might have voting power by reason of the happening of
any contingency).
"Western Europe" means Austria, Belgium, Denmark,
Finland, France, Great Britain, Greece, Iceland,
Ireland, Italy, the Netherlands, Norway, Portugal,
Spain, Sweden, Switzerland and Germany.
"Wholly-Owned Subsidiary" means any Subsidiary
organized under the laws of any state of the United
States which conducts the major portion of its business
in the United States, and all of the stock or other
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ownership interests of every class of which, except
director's qualifying shares, and except in the case of
the Facilities Subsidiary not more than 5% of the
outstanding Voting Stock shall, at the time as of which
any determination is being made, be owned by the Company
either directly or through Wholly-Owned Subsidiaries.
"Withdrawal Liabilities" means, as of any
determination date, the aggregate amount of the
liabilities, if any, pursuant to Section 4201 of ERISA
if the Controlled Group made a complete withdrawal from
all Multiemployer Plans and any increase in
contributions pursuant to Section 4243 of ERISA.
1.02 Other Interpretive Provisions.
(a) Defined Terms. Unless otherwise specified
herein or therein, all terms defined in this Agreement shall
have the defined meanings when used in any certificate or
other document made or delivered pursuant hereto. The
meaning of defined terms shall be equally applicable to the
singular and plural forms of the defined terms. Terms
(including uncapitalized terms) not otherwise defined herein
and that are defined in the UCC shall have the meanings
therein described.
(b) The Agreement. The words "hereof", "herein",
"hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not
to any particular provision of this Agreement; and
subsection, section, schedule and exhibit references are to
this Agreement unless otherwise specified.
(c) Certain Common Terms.
(i) The term "documents" includes any and
all instruments, documents, agreements, certificates,
indentures, notices and other writings, however
evidenced.
(ii) The term "including" is not limiting and
means "including without limitation."
(d) Performance; Time. Whenever any performance
obligation hereunder (other than a payment obligation) shall
be stated to be due or required to be satisfied on a day
other than a Business Day, such performance shall be made or
satisfied on the next succeeding Business Day. In the
computation of periods of time from a specified date to a
later specified date, the word "from" means "from and
including"; the words "to" and "until" each mean "to but
excluding", and the word "through" means "to and including".
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If any provision of this Agreement refers to any action
taken or to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be interpreted
to encompass any and all means, direct or indirect, of
taking, or not taking, such action.
(e) Contracts. Unless otherwise expressly
provided herein, references to agreements and other
contractual instruments shall be deemed to include all
subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications
are not prohibited by the terms of any Loan Document.
(f) Laws. References to any statute or regulation
are to be construed as including all statutory and
regulatory provisions consolidating, amending, replacing,
supplementing or interpreting the statute or regulation.
(g) Captions. The captions and headings of this
Agreement are for convenience of reference only and shall
not affect the interpretation of this Agreement.
(h) Independence of Provisions. The parties
acknowledge that this Agreement and other Loan Documents may
use several different limitations, tests or measurements to
regulate the same or similar matters, and that such
limitations, tests and measurements are cumulative and must
each be performed, except as expressly stated to the
contrary in this Agreement.
(i) Interpretation. This Agreement is the result
of negotiations among and has been reviewed by counsel to
the Agent, the Company and other parties, and is the product
of all parties hereto. Accordingly, this Agreement and the
other Loan Documents shall not be construed against the
Banks or the Agent merely because of the Agent's or Banks'
involvement in the preparation of such documents and
agreements.
1.03 Accounting Principles.
(a) Unless the context otherwise clearly requires,
all accounting terms not expressly defined herein shall be
construed, and all financial computations required under
this Agreement shall be made, in accordance with GAAP,
consistently applied.
(b) References herein to "fiscal year" and "fiscal
quarter" refer to such fiscal periods of the Company.
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ARTICLE II
THE CREDITS
2.01 Amounts and Terms of Commitments. Each Bank
severally agrees, on the terms and conditions hereinafter
set forth, to make loans to the Company from time to time on
any Business Day during the period from the Effective Date
to the Revolving Termination Date, in an aggregate amount
not to exceed at any time outstanding the amount set forth
opposite the Bank's name in Schedule 2.01 under the heading
"Commitment" (such amount as the same may be reduced
pursuant to Section 2.05 or Section 2.07), or as a result of
one or more assignments pursuant to Section 10.08, the
Bank's "Commitment"); provided, however, that, after giving
effect to any Borrowing of Loans, the aggregate principal
amount of all outstanding Loans shall not exceed the
Aggregate Commitment. Within the limits of each Bank's
Commitment, and subject to the other terms and conditions
hereof, the Company may borrow under this Section 2.01,
prepay pursuant to Section 2.06 and reborrow pursuant to
this Section 2.01.
2.02 Loan Accounts. The Loans made by each Bank shall
be evidenced by one or more loan accounts maintained by such
Bank in the ordinary course of business. The loan accounts
or records maintained by the Agent and each Bank shall be
conclusive absent manifest error of the amount of the Loans
made by the Banks to the Company and the interest and
payments thereon. Any failure so to record or any error in
doing so shall not, however, limit or otherwise affect the
obligation of the Company hereunder to pay any amount owing
with respect to the Loans.
2.03 Procedure for Borrowing.
(a) Each Borrowing shall be made upon the
Company's irrevocable written notice delivered to the Agent
in accordance with Section 10.02 in the form of a Notice of
Borrowing (which notice must be received by the Agent prior
to 9:00 a.m. (San Francisco time) (i) three Business Days
prior to the requested Borrowing date, in the case of
Offshore Rate Loans; (ii) three Business Days prior to the
requested Borrowing date, in the case of CD Rate Loans, and
(iii) on the requested Borrowing date, in the case of Base
Rate Loans, specifying:
(A) the amount of the Borrowing, which
shall be in an aggregate minimum principal amount
of five million dollars ($5,000,000) or any
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<PAGE> 40
multiple of one million dollars ($1,000,000) in
excess thereof;
(B) the requested Borrowing date, which
shall be a Business Day;
(C) whether the Borrowing is to be
comprised of Offshore Rate Loans, CD Rate Loans or
Base Rate Loans;
(D) the duration of the Interest Period
applicable to such Loans included in such notice.
If the Notice of Borrowing shall fail to specify
the duration of the Interest Period for any
Borrowing comprised of CD Rate Loans or Offshore
Rate Loans, such Interest Period shall be 90 days
or three months, respectively.
(b) Upon receipt of the Notice of Borrowing, the
Agent will promptly notify each Bank thereof and of the
amount of such Bank's Commitment Percentage of the
Borrowing.
(c) Each Bank will make the amount of its
Commitment Percentage of the Borrowing available to the
Agent for the account of the Company at the Agent's Payment
Office by 12:00 noon (San Francisco time) on the Borrowing
date requested by the Company in funds immediately available
to the Agent. The proceeds of all such Loans will then be
made available to the Company by the Agent at such office by
crediting the account of the Company on the books of BofA
with the aggregate of the amounts made available to the
Agent by the Banks and in like funds as received by the
Agent.
(d) Unless the Majority Banks shall otherwise
agree, during the existence of a Default or Event of
Default, the Company may not elect to have a Loan be made
as, or converted into or continued as, an Offshore Rate Loan
or a CD Rate Loan.
(e) After giving effect to any Borrowing, there
shall not be more than five different Interest Periods in
effect.
2.04 Conversion and Continuation Elections.
(a) The Company may upon irrevocable written
notice to the Agent in accordance with subsection 2.04(b):
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<PAGE> 41
(i) elect to convert on any Business Day,
any Base Rate Loans (or any part thereof in an amount
not less than $5,000,000, or that is in an integral
multiple of $1,000,000 in excess thereof) into Offshore
Rate Loans or CD Rate Loans or;
(ii) elect to convert on the last day of the
applicable Interest Period any Offshore Rate Loans
having Interest Periods maturing on such day (or any
part thereof in an amount not less than $5,000,000, or
that is in an integral multiple of $1,000,000 in excess
thereof) into CD Rate Loans or Base Rate Loans;
(iii) elect to convert on the last day of the
applicable Interest Period any CD Rate Loans having
Interest Periods maturing on such day (or any part
thereof in an amount not less than $5,000,000, or that
is in an integral multiple of $1,000,000 in excess
thereof) into Offshore Rate Loans or Base Rate Loans; or
(iv) elect to renew on the last day of the
applicable Interest Period any Offshore Rate Loans or CD
Rate Loans having Interest Periods maturing on such day
(or any part thereof in an amount not less than
$5,000,000, or that is in an integral multiple of
$1,000,000 in excess thereof);
provided, that if the aggregate amount of CD Rate Loans or
Offshore Rate Loans in respect of any Borrowing shall have been
reduced, by payment, prepayment, or conversion of part thereof
to be less than $1,000,000, such CD Rate Loans or Offshore Rate
Loans shall automatically convert into Base Rate Loans, and on
and after such date the right of the Company to continue such
Loans as, and convert such Loans into, Offshore Rate Loans or CD
Rate Loans, as the case may be, shall terminate.
(b) The Company shall deliver a Notice of Conversion/
Continuation in accordance with Section 10.02 to be received by
the Agent not later than 9:00 a.m. (San Francisco time) (i) at
least three Business Days in advance of the Conversion Date or
continuation date, if the Loans are to be converted into or
continued as Offshore Rate Loans; (ii) at least three Business
Days in advance of the Conversion Date or continuation date, if
the Loans are to be converted into or continued as CD Rate
Loans; and (iii) on the Conversion Date, if the Loans are to be
converted into Base Rate Loans, specifying:
(A) the proposed Conversion Date or
continuation date;
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<PAGE> 42
(B) the aggregate amount of Loans to be
converted or renewed;
(C) the nature of the proposed
conversion or continuation; and
(D) the duration of the requested
Interest Period.
(c) If upon the expiration of any Interest Period
applicable to CD Rate Loans or Offshore Rate Loans, the
Company has failed to select timely a new Interest Period to
be applicable to such CD Rate Loans or Offshore Rate Loans,
as the case may be, or if any Default or Event of Default
shall then exist, the Company shall be deemed to have
elected to convert such CD Rate Loans or Offshore Rate Loans
into Base Rate Loans effective as of the expiration date of
such current Interest Period.
(d) Upon receipt of a Notice of Conversion/
Continuation, the Agent will promptly notify each Bank
thereof, or, if no timely notice is provided by the Company,
the Agent will promptly notify each Bank of the details of
any automatic conversion. All conversions and continuations
shall be made pro rata according to the respective
outstanding principal amounts of the Loans with respect to
which the notice was given held by each Bank.
(e) Unless the Majority Banks shall otherwise
agree, during the existence of a Default or Event of
Default, the Company may not elect to have a Loan converted
into or continued as an Offshore Rate Loan or a CD Rate
Loan.
(f) Notwithstanding any other provision contained
in this Agreement, after giving effect to any conversion or
continuation of any Loans, there shall not be more than five
different Interest Periods in effect.
2.05 Voluntary Termination or Reduction of Commitments.
The Company may, upon not less than five Business Days'
prior notice to the Agent, terminate the Aggregate
Commitments or permanently reduce the Aggregate Commitment
by an aggregate minimum amount of $5,000,000 or any multiple
of $5,000,000 in excess thereof; provided that no such
reduction or termination shall be permitted if, after giving
effect thereto and to any prepayments of the Loans made on
the effective date thereof, the then outstanding principal
amount of the Loans would exceed the amount of the Aggregate
Commitment then in effect and, provided, further, that once
reduced in accordance with this Section 2.05, the Aggregate
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<PAGE> 43
Commitment may not be increased. Any reduction of the
Aggregate Commitment shall be applied to each Bank's
Commitment in accordance with such Bank's Commitment
Percentage. All accrued commitment fees to, but not
including the effective date of any reduction or termination
of Commitments, shall be paid on the effective date of such
reduction or termination.
2.06 Optional Prepayments. Subject to Section 3.04,
the Company may, at any time or from time to time, upon at
least three Business Days' notice to the Agent, ratably
prepay Loans in whole or in part, in amounts of $5,000,000
or any multiple of $1,000,000 in excess thereof. Such notice
of prepayment shall specify the date and amount of such
prepayment and whether such prepayment is of Base Rate
Loans, CD Rate Loans or Offshore Rate Loans, or any
combination thereof. Such notice shall not thereafter be
revocable by the Company and the Agent will promptly notify
each Bank thereof and of such Bank's Commitment Percentage
of such prepayment. If such notice is given by the Company,
the Company shall make such prepayment and the payment
amount specified in such notice shall be due and payable on
the date specified therein, together with accrued interest
to each such date on the amount prepaid and any amounts
required pursuant to Section 3.04.
2.07 Mandatory Prepayments of Loans; Mandatory
Commitment Reductions.
(a) Asset Dispositions. If the Company or any of
its Restricted Subsidiaries shall at any time or from time
to time make or agree to make a sale of Properties permitted
by subsection 7.02(i) or 7.02(j), or harvest excess Timber
permitted by Section 7.03, then (i) the Net Proceeds of such
sale shall either be paid by the Company as a prepayment of
Loans or reinvested in accordance with the provisions of
subsection 7.02(i), (ii) the Net Proceeds of such sale shall
either be paid pro-rata by the Company as a prepayment of
Loans or reinvested in accordance with the provisions of
subsection 7.02(j), or (iii) the Net Proceeds from such
excess harvest shall either be paid pro-rata by the Company
as a prepayment of Loans or reinvested in accordance with
the provisions of subsection 7.03, each as applicable.
(b) Mandatory Commitment Reductions.
(i) The Aggregate Commitment shall be
reduced by equal decrements of $13,750,000 each (such
amount, as the same may be reduced pursuant to
clause (ii) of this subsection, the "Mandatory
Commitment Reduction"), commencing on the last day of
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<PAGE> 44
the six month period commencing on the Effective Date
and on the last day of each successive six month period
thereafter until the Revolving Termination Date. On
each such day (each, a "Mandatory Commitment Reduction
Date"), the Company shall prepay Loans in an amount
equal to the excess of (x) the aggregate principal
amount of all outstanding Loans, over (y) the Aggregate
Commitment after giving effect to the Mandatory
Commitment Reduction on such Mandatory Commitment
Reduction Date.
(ii) Upon any reduction in the Aggregate
Commitment pursuant to Section 2.05 or clause (i) of
subsection 2.07(d), there shall be no decrease in the
Mandatory Commitment Reduction, unless and until the
Aggregate Commitment is or has been reduced by a
cumulative amount (pursuant to Section 2.05, clause (i)
of subsection 2.07(d), or this subsection 2.07(b)) such
that the remaining Mandatory Commitment Reductions would
decrease the Aggregate Commitment to zero as of or prior
to the Maturity Date. Once the Aggregate Commitment has
been so decreased to zero, on any reduction in the
Aggregate Commitment pursuant to Section 2.05 or
clause (i) of subsection 2.07(d), each remaining
Mandatory Commitment Reduction shall be adjusted pro-
rata to equal an amount which would reduce the Aggregate
Commitment to zero as of the Maturity Date based on the
remaining semi-annual reduction periods.
(c) General. Any prepayments pursuant to this
Section 2.07 shall be applied first to any Base Rate Loans
then outstanding and then to CD Rate Loans and Offshore Rate
Loans with the shortest Interest Periods remaining. The
Company shall pay, together with each prepayment under this
Section 2.07, accrued interest on the amount prepaid and any
amounts required pursuant to Section 3.04.
(d) Reduction of Commitment. Upon (i) the making
of any mandatory prepayment under subsection 2.07(a), and
(ii) each Mandatory Commitment Reduction Date, the
Commitment of each Bank shall automatically be reduced by an
amount equal to such Bank's ratable share of the aggregate
of principal repaid, effective as of the earlier of the date
that such prepayment is made or the date by which such
prepayment is due and payable hereunder, or of the Mandatory
Commitment Reduction, as the case may be. All accrued
commitment fees to, but not including the effective date of
any reduction or termination of Commitments, shall be paid
on the effective date of such reduction or termination.
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2.08 Repayment. The Company shall repay to the Banks
in full on the Revolving Termination Date the aggregate
principal amount of the Loans outstanding on the Revolving
Termination Date.
2.09 Interest.
(a) Subject to subsection 2.09(d), each Loan shall
bear interest on the outstanding principal amount thereof
from the date when made until it becomes due at a rate per
annum equal to the CD Rate, the Offshore Rate or the Base
Rate, as the case may be, plus the Applicable Margin, as the
same may be adjusted pursuant to the provisions of
subsection 2.09(b).
(b) The Applicable Margin for Offshore Rate Loans
and CD Rate Loans shall be adjusted by deducting therefrom
the applicable Margin Reduction Discount, if any. The
applicable "Margin Reduction Discount" shall be determined
as of the end of each fiscal quarter and shall be effective
on the third Business Day after the Agent shall have
received from the Company the financial reports required to
be delivered pursuant to the provisions of
subsection 6.01(c) and the certificate required to be
delivered pursuant to the provisions of subsection 6.02(b)
for such fiscal quarter (each such date, a "margin
determination date"). If any such financial reports and
certificate are delivered to the Agent after the date
required in subsections 6.01(c) and 6.02(b) and such
financial reports and certificate shall give rise to a
reduction in the applicable Margin Reduction Discount, then
the Company shall pay on the date of delivery of such
financial reports and certificate, an amount sufficient to
compensate the Banks for the Company's failure to deliver
the financial report and certificate on a timely basis. The
Margin Reduction Discount shall mean the percentage, if any,
specified below opposite the Funds Flow Ratio (which shall
be calculated as of the end of the fiscal quarter
immediately preceding the margin determination date for the
12 months ended on such fiscal quarter) in effect on the
last margin determination date; provided, however, that as
long as any Default or Event of Default exists no Margin
Reduction Discount shall be effective or remain in effect
(and the Offshore Rate Loans and CD Rate Loans shall bear
interest without any reduction of the Applicable Margin from
the date of the Default or Event of Default until the same
has been cured):
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<PAGE> 46
<TABLE>
<CAPTION>
Funds Flow Ratio Margin Reduction
at End of Fiscal Quarter Discount
------------------------ ------------------------
Offshore Rate CD Rate
Loans Loans
----- -----
<S> <C> <C>
Less than 40.00% 0.00% 0.00%
Greater than or equal to 0.25% 0.25%
40.00% and less than 50.00%
Greater than or equal to 0.375% 0.375%
50.00%
</TABLE>
Subject to the proviso of the preceding paragraph, the
applicable Margin Reduction Discount shall remain in effect
so long as such Funds Flow Ratio is applicable; provided,
however, that if, as of the day of delivery of any report
delivered pursuant to subsection 6.01(c) and certificate
delivered pursuant to subsection 6.02(b), such Margin
Reduction Discount shall cease to be effective, the
applicable Margin Reduction Discount, if any, shall be
readjusted on the third day after delivery of such report
and certificate.
(c) Interest on each Loan shall be paid in arrears
on each Interest Payment Date. Interest shall also be paid
on the date of any prepayment of Loans pursuant to
Section 2.06 and 2.07 for the portion of the Loans so
prepaid and upon payment (including prepayment) in full
thereof and, during the existence of any Event of Default,
interest shall be paid on demand.
(d) While any Event of Default exists or after
acceleration, the Company shall pay interest (after as well
as before entry of judgment thereon to the extent permitted
by law) on the principal amount of all Loans due and unpaid,
at a rate per annum equal to the Base Rate plus 2%.
(e) Anything herein to the contrary
notwithstanding, the obligations of the Company hereunder
shall be subject to the limitation that payments of interest
shall not be required, for any period for which interest is
computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by the
respective Bank would be contrary to the provisions of any
law applicable to such Bank limiting the highest rate of
interest which may be lawfully contracted for, charged or
received by such Bank, and in such event the Company shall
pay such Bank interest at the highest rate permitted by
applicable law.
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<PAGE> 47
2.10 Fees.
(a) Agency and Participation Fees. The Company
shall pay to BofA for BofA's own account fees in the amounts
and at the times set forth in a letter agreement between the
Company and BofA dated June 21, 1993 and the term sheet
attached thereto. The Company shall pay to the Agent on the
Closing Date for the account of each Bank a participation
fee in an amount equal to the product of (i) 0.25% times
(ii) such Bank's Commitment as set forth in Schedule 2.01
hereof. The foregoing fees shall be non-refundable.
(b) Commitment Fees. The Company shall pay to the
Agent for the account of each Bank a commitment fee on the
average daily unused portion of such Bank's Commitment,
computed on a quarterly basis in arrears on the last
Business Day of each calendar quarter based upon the daily
utilization for that quarter as calculated by the Agent,
equal to 0.25 % per annum. Such commitment fee shall accrue
from the Effective Date to the Revolving Termination Date
and shall be due and payable quarterly in arrears on the
last Business Day of each calendar quarter, commencing on
the first such day after this Agreement is executed by the
Company through the Revolving Termination Date, with the
final payment to be made on the Revolving Termination Date;
provided that, in connection with any reduction or
termination of Commitments pursuant to Section 2.05 or
Section 2.07, the accrued commitment fee calculated for the
period ending on such date shall also be paid on the date of
such reduction or termination, with the next succeeding
quarterly payment being calculated on the basis of the
period from the reduction or termination date to such
quarterly payment date. The commitment fees provided in
this subsection shall accrue at all times after the above-
mentioned commencement date, including at any time during
which one or more conditions in Article IV are not met.
2.11 Computation of Fees and Interest.
(a) All computations of interest payable in
respect of Base Rate Loans at all times as the Base Rate is
determined by BofA's "reference rate" shall be made on the
basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All other computations of fees and
interest under this Agreement shall be made on the basis of
a 360-day year and actual days elapsed, which results in
more interest being paid than if computed on the basis of a
365-day year. Interest and fees shall accrue during each
period during which interest or such fees are computed from
the first day thereof to the last day thereof.
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<PAGE> 48
(b) The Agent will, with reasonable promptness,
notify the Company and the Banks of each determination of an
Offshore Rate or of a CD Rate; provided that any failure to
do so shall not relieve the Company of any liability
hereunder or provide the basis for any claim against the
Agent. Any change in the interest rate on a Loan resulting
from a change in the Applicable Margin, Reserve Percentage,
Eurocurrency Reserve Percentage, or the Assessment Rate
shall become effective as of the opening of business on the
day on which such change in the Applicable Margin, Reserve
Percentage, Eurocurrency Reserve Percentage, or the
Assessment Rate becomes effective. The Agent will with
reasonable promptness notify the Company and the Banks of
the effective date and the amount of each such change,
provided that any failure to do so shall not relieve the
Company of any liability hereunder or provide the basis for
any claim against the Agent.
(c) Each determination of an interest rate by the
Agent pursuant hereto shall be conclusive and binding on the
Company and the Banks in the absence of manifest error.
2.12 Payments by the Company.
(a) All payments (including prepayments) to be
made by the Company on account of principal, interest, fees
and other amounts required hereunder shall be made without
set-off, recoupment or counterclaim; shall, except as
otherwise expressly provided herein, be made to the Agent
for the ratable account of the Banks at the Agent's Payment
Office, and shall be made in dollars and in immediately
available funds, no later than 10:00 a.m. (San Francisco
time) on the date specified herein. The Agent will promptly
distribute to each Bank its Commitment Percentage (or other
applicable share as expressly provided herein) of such
principal, interest, fees or other amounts, in like funds as
received. Any payment which is received by the Agent later
than 10:00 a.m. (San Francisco time) shall be deemed to have
been received on the immediately succeeding Business Day and
any applicable interest or fee shall continue to accrue.
(b) Whenever any payment hereunder shall be stated
to be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the
computation of interest or fees, as the case may be; subject
to the provisions set forth in the definition of "Interest
Period" herein.
(c) Unless the Agent shall have received notice
from the Company prior to the date on which any payment is
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<PAGE> 49
due to the Banks hereunder that the Company will not make
such payment in full as and when required hereunder, the
Agent may assume that the Company has made such payment in
full to the Agent on such date in immediately available
funds and the Agent may (but shall not be so required), in
reliance upon such assumption, cause to be distributed to
each Bank on such due date an amount equal to the amount
then due such Bank. If and to the extent the Company shall
not have made such payment in full to the Agent, each Bank
shall repay to the Agent on demand such amount distributed
to such Bank, together with interest thereon for each day
from the date such amount is distributed to such Bank until
the date such Bank repays such amount to the Agent, at the
Federal Funds Rate as in effect for each such day.
2.13 Payments by the Banks to the Agent.
(a) Unless the Agent shall have received notice
from a Bank on the Closing Date or, with respect to each
Borrowing after the Closing Date, at least one Business Day
prior to the date of any proposed Borrowing, that such Bank
will not make available to the Agent as and when required
hereunder for the account of the Company the amount of that
Bank's Commitment Percentage of the Borrowing, the Agent may
assume that each Bank has made such amount available to the
Agent in immediately available funds on the Borrowing date
and the Agent may (but shall not be so required), in
reliance upon such assumption, make available to the Company
on such date a corresponding amount. If and to the extent
any Bank shall not have made its full amount available to
the Agent in immediately available funds and the Agent in
such circumstances has made available to the Company such
amount, that Bank shall on the next Business Day following
the date of such Borrowing make such amount available to the
Agent, together with interest at the Federal Funds Rate for
and determined as of each day during such period. A notice
of the Agent submitted to any Bank with respect to amounts
owing under this subsection 2.13(a) shall be conclusive,
absent manifest error. If such amount is so made available,
such payment to the Agent shall constitute such Bank's Loan
on the date of Borrowing for all purposes of this Agreement.
If such amount is not made available to the Agent on the
next Business Day following the date of such Borrowing, the
Agent shall notify the Company of such failure to fund and,
upon demand by the Agent, the Company shall pay such amount
to the Agent for the Agent's account, together with interest
thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the interest rate
applicable at the time to the Loans comprising such
Borrowing.
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<PAGE> 50
(b) The failure of any Bank to make any Loan on
any date of borrowing shall not relieve any other Bank of
any obligation hereunder to make a Loan on the date of such
borrowing, but no Bank shall be responsible for the failure
of any other Bank to make the Loan to be made by such other
Bank on the date of any borrowing.
2.14 Sharing of Payments, Etc. If, other than as
expressly provided elsewhere herein, any Bank shall obtain
on account of the Loans made by it any payment (whether
voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its Commitment
Percentage of payments on account of the Loans obtained by
all the Banks, such Bank shall forthwith (a) notify the
Agent of such fact, and (b) purchase from the other Banks
such participations in the Loans made by them as shall be
necessary to cause such purchasing Bank to share the excess
payment ratably with each of them; provided, however, that
if all or any portion of such excess payment is thereafter
recovered from the purchasing Bank, such purchase shall to
that extent be rescinded and each other Bank shall repay to
the purchasing Bank the purchase price paid therefor,
together with an amount equal to such paying Bank's
Commitment Percentage (according to the proportion of
(i) the amount of such paying Bank's required repayment to
(ii) the total amount so recovered from the purchasing Bank)
of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered.
The Company agrees that any Bank so purchasing a
participation from another Bank pursuant to this
Section 2.14 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of
set-off, but subject to Section 10.09) with respect to such
participation as fully as if such Bank were the direct
creditor of the Company in the amount of such participation.
The Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations
purchased pursuant to this Section 2.14 and will in each
case notify the Banks following any such purchases or
repayments.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes.
(a) Subject to subsection 3.01(g), any and all
payments by the Company to each Bank or the Agent under this
Agreement shall be made free and clear of, and without
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<PAGE> 51
deduction or withholding for, any and all present or future
taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding, in the
case of each Bank and the Agent, such taxes (including
income taxes or franchise taxes) as are imposed on or
measured by each Bank's net income by the jurisdiction under
the laws of which such Bank or the Agent, as the case may
be, is organized or maintains a Lending Office or any
political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes").
(b) In addition, the Company shall pay any present
or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies which arise from
any payment made hereunder or from the execution, delivery
or registration of, or otherwise with respect to, this
Agreement or any other Loan Documents (hereinafter referred
to as "Other Taxes").
(c) Subject to subsection 3.01(g), the Company
shall indemnify and hold harmless each Bank and the Agent
for the full amount of Taxes or Other Taxes (including any
Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 3.01) paid by the Bank or the
Agent and any liability (including penalties, interest,
additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted. Payment under this
indemnification shall be made within 30 days from the date
the Bank or the Agent makes written demand therefor.
(d) If the Company shall be required by law to
deduct or withhold any Taxes or Other Taxes from or in
respect of any sum payable hereunder to any Bank or the
Agent, then, subject to subsection 3.01(g):
(i) the sum payable shall be increased as
necessary so that after making all required deductions
(including deductions applicable to additional sums
payable under this Section 3.01) such Bank or the Agent,
as the case may be, receives an amount equal to the sum
it would have received had no such deductions been made;
(ii) the Company shall make such deductions;
and
(iii) the Company shall pay the full amount
deducted to the relevant taxation authority or other
authority in accordance with applicable law.
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<PAGE> 52
(e) Within 30 days after the date of any payment
by the Company of Taxes or Other Taxes, the Company shall
furnish to the Agent the original or a certified copy of a
receipt evidencing payment thereof, or other evidence of
payment satisfactory to the Agent.
(f) Each Bank which is a foreign person (i.e., a
person other than a United States person for United States
Federal income tax purposes) agrees that:
(i) it shall, no later than the Closing Date
(or, in the case of a Bank which becomes a party hereto
pursuant to Section 10.08 after the Closing Date, the
date upon which the Bank becomes a party hereto) deliver
to the Company through the Agent two accurate and
complete signed originals of Internal Revenue Service
Form 4224 or any successor thereto ("Form 4224"), or two
accurate and complete signed originals of Internal
Revenue Service Form 1001 or any successor thereto
("Form 1001"), as appropriate, in each case indicating
that the Bank is on the date of delivery thereof
entitled to receive payments of principal, interest and
fees under this Agreement free from withholding of
United States Federal income tax;
(ii) if at any time the Bank makes any
changes necessitating a new Form 4224 or Form 1001, it
shall with reasonable promptness deliver to the Company
through the Agent in replacement for, or in addition to,
the forms previously delivered by it hereunder, two
accurate and complete signed originals of Form 4224; or
two accurate and complete signed originals of Form 1001,
as appropriate, in each case indicating that the Bank is
on the date of delivery thereof entitled to receive
payments of principal, interest and fees under this
Agreement free from withholding of United States Federal
income tax;
(iii) it shall, before or promptly after the
occurrence of any event (including the passing of time
but excluding any event mentioned in (ii) above)
requiring a change in or renewal of the most recent
Form 4224 or Form 1001 previously delivered by such
Bank, deliver to the Company through the Agent two
accurate and complete original signed copies of
Form 4224 or Form 1001 in replacement for the forms
previously delivered by the Bank; and
(iv) it shall, promptly upon the Company's or
the Agent's reasonable request to that effect, deliver
to the Company or the Agent (as the case may be) such
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<PAGE> 53
other forms or similar documentation as may be required
from time to time by any applicable law, treaty, rule or
regulation in order to establish such Bank's tax status
for withholding purposes.
(g) The Company will not be required to pay any
additional amounts in respect of United States Federal
income tax pursuant to subsection 3.01(d) to any Bank for
the account of any Lending Office of such Bank:
(i) if the obligation to pay such additional
amounts would not have arisen but for a failure by such
Bank to comply with its obligations under
subsection 3.01(f) in respect of such Lending Office;
(ii) if such Bank shall have delivered to the
Company a Form 4224 in respect of such Lending Office
pursuant to subsection 3.01(f), and such Bank shall not
at any time be entitled to exemption from deduction or
withholding of United States Federal income tax in
respect of payments by the Company hereunder for the
account of such Lending Office for any reason other than
a change in United States law or regulations or in the
official interpretation of such law or regulations by
any governmental authority charged with the
interpretation or administration thereof (whether or not
having the force of law) after the date of delivery of
such Form 4224; or
(iii) if the Bank shall have delivered to the
Company a Form 1001 in respect of such Lending Office
pursuant to subsection 3.01(f), and such Bank shall not
at any time be entitled to exemption from deduction or
withholding of United States Federal income tax in
respect of payments by the Company hereunder for the
account of such Lending Office for any reason other than
a change in United States law or regulations or any
applicable tax treaty or regulations or in the official
interpretation of any such law, treaty or regulations by
any governmental authority charged with the
interpretation or administration thereof (whether or not
having the force of law) after the date of delivery of
such Form 1001.
(h) If, at any time, the Company requests any Bank
to deliver any forms or other documentation pursuant to
subsection 3.01(f)(iv), then the Company shall, on demand of
such Bank through the Agent, reimburse such Bank for any
costs and expenses (including Attorney Costs) reasonably
incurred by such Bank in the preparation or delivery of such
forms or other documentation.
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<PAGE> 54
(i) If the Company is required to pay additional
amounts to any Bank or the Agent pursuant to
subsection 3.01(d), then such Bank shall use its reasonable
best efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Lending
Office so as to eliminate any such additional payment by the
Company which may thereafter accrue if such change in the
judgment of such Bank is not otherwise disadvantageous to
such Bank.
3.02 Illegality.
(a) If any Bank shall determine that the
introduction of any Requirement of Law, or any change in any
Requirement of Law or in the interpretation or
administration thereof, has made it unlawful, or that any
central bank or other Governmental Authority has asserted
that it is unlawful, for any Bank or its Lending Office to
make Offshore Rate Loans, then, on notice thereof by the
Bank to the Company through the Agent, the obligation of
that Bank to make Offshore Rate Loans shall be suspended
until the Bank shall have notified the Agent and the Company
that the circumstances giving rise to such determination no
longer exists.
(b) If a Bank shall determine that it is unlawful
to maintain any Offshore Rate Loan, the Company shall prepay
in full all Offshore Rate Loans of that Bank then
outstanding, together with interest accrued thereon, either
on the last day of the Interest Period thereof if the Bank
may lawfully continue to maintain such Offshore Rate Loans
to such day, or immediately, if the Bank may not lawfully
continue to maintain such Offshore Rate Loans, together with
any amounts required to be paid in connection therewith
pursuant to Section 3.04.
3.03 Increased Costs and Reduction of Return.
(a) If any Bank shall determine that, due to
either (i) the introduction of or any change after the date
hereof (other than any change by way of imposition of or
increase in reserve requirements included in the calculation
of the CD Rate or the Offshore Rate or in respect of the
assessment rate payable by any Bank to the FDIC for insuring
U.S. deposits) in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or
request from any central bank or other Governmental
Authority (whether or not having the force of law), there
shall be any increase in the cost to such Bank of agreeing
to make or making, funding or maintaining any Offshore Rate
Loans or CD Rate Loans, then the Company shall be liable
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<PAGE> 55
for, and shall from time to time, upon demand therefor by
such Bank (with a copy of such demand to the Agent), pay to
the Agent for the account of such Bank, additional amounts
as are sufficient to compensate such Bank for such increased
costs.
(b) If any Bank shall have determined that (i) the
introduction of any Capital Adequacy Regulation after the
date hereof, (ii) any change in any Capital Adequacy
Regulation after the date hereof, (iii) any change in the
interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration
thereof after the date hereof, or (iv) compliance by the
Bank (or its Lending Office) or any corporation controlling
the Bank, with any Capital Adequacy Regulation; affects or
would affect the amount of capital required or expected to
be maintained by the Bank or any corporation controlling the
Bank and (taking into consideration such Bank's or such
corporation's policies with respect to capital adequacy and
such Bank's desired return on capital) determines that the
amount of such capital is increased as a consequence of its
Commitment, loans, credits or obligations under this
Agreement, then, upon demand of such Bank (with a copy to
the Agent), the Company shall upon demand pay to the Bank,
from time to time as specified by the Bank, additional
amounts sufficient to compensate the Bank for such increase.
3.04 Funding Losses. The Company agrees to reimburse
each Bank and to hold each Bank harmless from any loss or
expense which the Bank may sustain or incur as a consequence
of:
(a) the failure of the Company to make any payment
or mandatory prepayment of principal of any Offshore Rate
Loan or CD Rate Loan (including payments made after any
acceleration thereof);
(b) the failure of the Company to borrow, continue
or convert a Loan after the Company has given (or is deemed
to have given) a Notice of Borrowing or a Notice of
Conversion/Continuation;
(c) the failure of the Company to make any
prepayment after the Company has given a notice in
accordance with Section 2.06;
(d) the prepayment (including pursuant to
Section 2.07) of an Offshore Rate Loan or a CD Rate Loan on
a day which is not the last day of the Interest Period with
respect thereto; or
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<PAGE> 56
(e) the conversion pursuant to Section 2.04 of
(i) any Offshore Rate Loan to a CD Rate Loan or a Base Rate
Loan, or (ii) any CD Rate Loan to an Offshore Rate Loan or
Base Rate Loan, on a day that is not the last day of the
respective Interest Period;
including any such loss or expense arising from the
liquidation or reemployment of funds obtained by it to
maintain its Offshore Rate Loans or CD Rate Loans hereunder
or from fees payable to terminate the deposits from which
such funds were obtained.
3.05 Inability to Determine Rates. If the Majority
Banks shall have determined that for any reason adequate and
reasonable means do not exist for ascertaining the Offshore
Rate or the CD Rate for any requested Interest Period with
respect to a proposed Offshore Rate Loan or CD Rate Loan or
that the Offshore Rate or the CD Rate applicable pursuant to
subsection 2.09(a) for any requested Interest Period with
respect to a proposed Offshore Rate Loan or CD Rate Loan
does not adequately and fairly reflect the cost to such
Banks of funding such Loan, the Agent will forthwith give
notice of such determination to the Company and each Bank.
Thereafter, the obligation of the Banks to make or maintain
CD Rate Loans or Offshore Rate Loans, as the case may be,
hereunder shall be suspended until the Agent upon the
instruction of the Majority Banks revokes such notice in
writing. Upon receipt of such notice, the Company may
revoke any Notice of Borrowing or Notice of
Conversion/Continuation then submitted by it. If the
Company does not revoke such notice, the Banks shall make,
convert or continue the Loans, as proposed by the Company,
in the amount specified in the applicable notice submitted
by the Company, but such Loans shall be made, converted or
continued as Base Rate Loans instead of CD Rate Loans or
Offshore Rate Loans, as the case may be.
3.06 Certificate of Bank. Each Bank, if claiming
reimbursement or compensation pursuant to this Article III,
shall deliver to the Company, a certificate setting forth in
reasonable detail the amount payable to such Bank hereunder
and such certificate shall be conclusive and binding on the
Company in the absence of manifest error.
3.07 Survival. The covenants, agreements and
obligations of the Company in this Article III shall survive
the payment of all other Obligations.
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ARTICLE IV
CONDITIONS PRECEDENT
4.01 Conditions of Initial Loans. The obligation of
each Bank to make its initial Loan hereunder is subject to
the condition that the Agent shall have received on or
before the Closing Date all of the following, in form and
substance satisfactory to the Agent and, as to the items
referenced in subsection 4.01(h) and (i), the Majority
Banks, and in sufficient copies for each Bank:
(a) Credit Agreement. This Agreement executed by
the Company, the Agent and each of the Banks;
(b) Resolutions; Incumbency.
(i) Copies of the resolutions of the board
of directors of the PC Advisory General Partner, as
general partner of the PCMC General Partner, as general
partner of the General Partner, as general partner of
the Company, approving and authorizing the execution,
delivery and performance by such entities on behalf of
the Company of this Agreement and the other Loan
Documents to be delivered hereunder, and authorizing the
borrowing of the Loans, certified as of the Closing Date
by the Secretary or an Assistant Secretary of the PC
Advisory General Partner; and
(ii) A certificate of the Secretary or
Assistant Secretary of the PC Advisory General Partner
certifying the names and true signatures of the duly
authorized officers of the General Partner, as general
partner of the Company, authorized to execute, deliver
and perform, as applicable, this Agreement on behalf of
the Company, and all other Loan Documents to be
delivered hereunder;
(c) Articles of Incorporation; By-laws;
Partnership Documents and Good Standing. Each of the
following documents:
(i) the partnership certificate of each of
the Company, the General Partner, and the PCMC General
Partner as in effect on the Closing Date, certified by
the Secretary of State (or similar, applicable
Governmental Authority) of the state of formation of
such entities as of a recent date and by the Secretary
or Assistant Secretary of the PC Advisory General
Partner as of the Closing Date, and the partnership
agreement of each of the Company, the General Partner,
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and the PCMC General Partner as in effect on the Closing
Date, certified by the Secretary or Assistant Secretary
of the PC Advisory General Partner as of the Closing
Date;
(ii) the articles or certificate of
incorporation of the PC Advisory General Partner as in
effect on the Closing Date, certified by the Secretary
of State (or similar, applicable Governmental Authority)
of the state of incorporation of the PC Advisory General
Partner as of a recent date and by the Secretary or
Assistant Secretary of the PC Advisory General Partner
as of the Closing Date, and the bylaws of the PC
Advisory General Partner as in effect on the Closing
Date, certified by the Secretary or Assistant Secretary
of the PC Advisory General Partner as of the Closing
Date; and
(iii) a good standing certificate for each of
the Company, the General Partner, the PCMC General
Partner, and the PC Advisory General Partner from the
Secretary of State (or similar, applicable Governmental
Authority) of its state of incorporation or formation,
as applicable and each state where the Company is
qualified to do business as a foreign corporation or
limited partnership, as applicable, as of a recent date,
together with a bring down certificate by facsimile,
dated the Closing Date;
(d) Legal Opinions. An opinion of (i) James A.
Kraft, Vice President, Law and Corporate Affairs of the
Company and (ii) Perkins Coie, counsel to the Company, each
addressed to the Agent and the Banks and substantially in
the form of Exhibits C-1 and C-2, respectively;
(e) Payment of Fees. The Company shall have paid
all accrued and unpaid fees, costs and expenses to the
extent then due and payable on the Closing Date, together
with Attorney Costs of BofA to the extent invoiced prior to
or on the Closing Date, together with such additional
amounts of Attorney Costs as shall constitute BofA's
reasonable estimate of Attorney Costs incurred or to be
incurred through the closing proceedings, provided that such
estimate shall not thereafter preclude final settling of
accounts between the Company and BofA; including any such
costs, fees and expenses arising under or referenced in
Sections 2.10, 3.01 and 10.04;
(f) Certificate. A certificate signed by a
Responsible Officer, dated as of the Closing Date, stating
that:
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(i) the representations and warranties
contained in Article V are true and correct on and as of
such date, as though made on and as of such date;
(ii) no Default or Event of Default exists or
would result from the initial Borrowing; and
(iii) there has occurred since December 31,
1992, no event or circumstance that has resulted or
could reasonably be expected to result in a Material
Adverse Effect;
(g) Financial Statements. A copy certified by the
chief financial officer of the Company of the financial
statements of the Company and its Subsidiaries referred to
in Section 5.11;
(h) Credit Agreements. Copies certified by a
Responsible Officer of (i) the Note Agreements, as amended
(ii) the Mortgage Note Agreements, as amended, and
(iii) that certain $15,000,000 Revolving Credit Agreement
dated as of May 1, 1993 between the Company, ABN AMRO Bank
N.V., as agent, and the banks parties thereto, as amended;
(i) Other Documents. Such other approvals,
opinions, documents or materials as the Agent or the
Majority Bank may request.
4.02 Conditions to All Borrowings. The obligation of
each Bank to make any Loan to be made by it hereunder
(including its initial Loan) or to continue or convert any
Loan pursuant to Section 2.04 is subject to the satisfaction
of the following conditions precedent on the relevant
borrowing, continuation or conversion date:
(a) Notice of Borrowing or Continuation/
Conversion. The Agent shall have received (with, in the
case of the initial Loan only, a copy for each Bank) a
Notice of Borrowing or a Notice of Continuation/Conversion,
as applicable;
(b) Continuation of Representations and
Warranties. The representations and warranties made by the
Company contained in Article V shall be true and correct on
and as of such borrowing, continuation or conversion date
with the same effect as if made on and as of such borrowing,
continuation or conversion date (except to the extent such
representations and warranties specifically relate to an
earlier date, in which case they shall be true and correct
as of such earlier date); and
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(c) No Existing Default. No Default or Event of
Default shall exist or shall result from such Borrowing or
continuation or conversion.
Each Notice of Borrowing and Notice of Continuation/
Conversion submitted by the Company hereunder shall
constitute a representation and warranty by the Company
hereunder, as of the date of each such notice or application
and as of the date of each Borrowing, continuation or
conversion, as applicable, that the conditions in
Section 4.02 are satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and
each Bank that:
5.01 Corporate Existence and Power.
(a) The Company, each of its Subsidiaries, and
each of the Partner Entities:
(i) is a limited partnership or corporation,
duly organized, validly existing and in good standing
under the laws of the jurisdiction of its formation;
(ii) is duly qualified as a foreign
partnership or corporation, as applicable, and licensed
and in good standing, under the laws of each
jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such
qualification or license; and
(iii) is in compliance with all Requirements
of Law except where failure to so comply would not
reasonably be expected to have a Material Adverse
Effect.
(b) The Company and each of its Subsidiaries has
the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets and
carry on its business; and the Company and each of the
Partner Entities has the power and authority and all
governmental licenses, authorizations, consents and
approvals to execute, deliver, and perform its obligations
under, the Loan Documents.
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5.02 Authorization; No Contravention. The execution,
delivery and performance by the Company of this Agreement,
and any other Loan Document to which the Company is party,
have been duly authorized by all necessary corporate and
partnership action on behalf of the PC Advisory General
Partner, as general partner of the PCMC General Partner, as
general partner of the General Partner, as general partner
of the Company, and by all necessary partnership action on
behalf of the Company, and do not and will not:
(a) contravene the terms of the Organization
Documents of any of the Company or the Partner Entities;
(b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, any
document evidencing any Contractual Obligation to which such
Person is a party or any order, injunction, writ or decree
of any Governmental Authority to which such Person or its
Property is subject; or
(c) violate any Requirement of Law.
5.03 Governmental Authorization. No approval, consent,
exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority is necessary or
required in connection with the execution, delivery or
performance by, or enforcement against, the Company, the
Partner Entities or any of their Subsidiaries of the
Agreement or any other Loan Document.
5.04 Binding Effect. This Agreement and each other
Loan Document to which the Company is a party constitute the
legal, valid and binding obligations of the Company and the
Partner Entities, enforceable against the Company and the
Partner Entities in accordance with their respective terms
except as enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting the
enforcement of creditor's rights generally or by equitable
principles relating to enforceability.
5.05 Litigation. There are no actions, suits,
proceedings, claims or disputes pending, or to the best
knowledge of the Company and the Partner Entities,
threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against
the Company, the Partner Entities or their Subsidiaries or
any of their respective Properties which:
(a) purport to affect or pertain to this Agreement
or any other Loan Document, or any of the transactions
contemplated hereby or thereby; or
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(b) have a reasonable probability of success on
the merits and which, if determined adversely to the
Company, the Partner Entities or their Subsidiaries, would
reasonably be expected to have a Material Adverse Effect. No
injunction, writ, temporary restraining order or any order
of any nature has been issued by any court or other
Governmental Authority purporting to enjoin or restrain the
execution, delivery or performance of this Agreement or any
other Loan Document, or directing that the transactions
provided for herein or therein not be consummated as herein
or therein provided.
5.06 No Default. No Default or Event of Default exists
or would result from the incurring of any Obligations by the
Company. Neither the Company, the Partner Entities, nor any
of their Subsidiaries is in default under or with respect to
any Contractual Obligation in any respect which,
individually or together with all such defaults, would
reasonably be expected to have a Material Adverse Effect or
that would, if such default had occurred after the Closing
date, create an Event of Default under subsection 8.01(e).
5.07 ERISA Compliance.
(a) Schedule 5.07 lists all Plans and separately
identifies Plans intended to be Qualified Plans and
Multiemployer Plans. All written descriptions thereof
provided to the Agent are true and complete in all material
respects.
(b) Each Plan is in compliance in all material
respects with the applicable provisions of ERISA, the Code
and other Federal or state law, including all requirements
under the Code or ERISA for filing reports (which are true
and correct in all material respects as of the date filed),
and benefits have been paid in accordance with the
provisions of the Plan.
(c) Except as specifically disclosed in
Schedule 5.07, each Qualified Plan has been determined by
the IRS to qualify under Section 401 of the Code, and the
trusts created thereunder have been determined to be exempt
from tax under the provisions of Section 501 of the Code,
and to the best knowledge of the Company nothing has
occurred which would cause the loss of such qualification or
tax-exempt status.
(d) Except as specifically disclosed in
Schedule 5.07, there is no outstanding liability under Title
IV of ERISA with respect to any Plan maintained or sponsored
by the Company or any ERISA Affiliate, nor with respect to
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any Plan to which the Company or any ERISA Affiliate
contributes or is obligated to contribute.
(e) Except as specifically disclosed in
Schedule 5.07, no Plan subject to Title IV of ERISA has any
Unfunded Pension Liability.
(f) Except as specifically disclosed in
Schedule 5.07, no member of the Controlled Group has ever
represented, promised or contracted (whether in oral or
written form) to any current or former employee (either
individually or to employees as a group) that such current
or former employee(s) would be provided, at any cost to any
member of the Controlled Group, with life insurance or
employee welfare plan benefits (within the meaning of
section 3(1) of ERISA) following retirement or termination
of employment. To the extent that any member of the
Controlled Group has made any such representation, promise
or contract, such member has expressly reserved the right to
amend or terminate such life insurance or employee welfare
plan benefits with respect to claims not yet incurred.
(g) Members of the Controlled Group have complied
in all material respects with the notice and continuation
coverage requirements of Section 4980B of the Code.
(h) Except as specifically disclosed in
Schedule 5.07, no ERISA Event has occurred or, to the best
knowledge of the Company is reasonably expected to occur
with respect to any Plan.
(i) There are no pending or, to the best knowledge
of the Company, threatened claims, actions or lawsuits,
other than routine claims for benefits in the usual and
ordinary course, asserted or instituted against (i) any Plan
maintained or sponsored by the Company or its assets,
(ii) any member of the Controlled Group with respect to any
Qualified Plan, or (iii) any fiduciary with respect to any
Plan for which the Company may be directly or indirectly
liable, through indemnification obligations or otherwise.
This representation is not made with respect to any
Multiemployer Plan.
(j) Except as specifically disclosed in
Schedule 5.07, neither the Company nor any ERISA Affiliate
has incurred nor, to the best knowledge of the Company,
reasonably expects to incur (i) any liability (and no event
has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under
Section 4201 or 4243 of ERISA with respect to a
Multiemployer Plan or (ii) any liability under Title IV of
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ERISA (other than premiums due and not delinquent under
Section 4007 of ERISA) with respect to a Plan.
(k) Except as specifically disclosed in
Schedule 5.07, neither the Company nor any ERISA Affiliate
has transferred any Unfunded Pension Liability to a Person
other than the Company or an ERISA Affiliate or otherwise
engaged in a transaction that could be subject to
Section 4069 or 4212(c) of ERISA.
(l) The Company has not engaged, directly or
indirectly, in a non-exempt prohibited transaction (as
defined in Section 4975 of the Code or Section 406 of ERISA)
in connection with any Plan which would reasonably be
expected to have a Material Adverse Effect.
5.08 Use of Proceeds; Margin Regulations. The proceeds
of the Loans are intended to be and shall be used solely for
the purposes set forth in and permitted by Section 6.11, and
are intended to be and shall be used in compliance with
Section 7.07. Neither the Company, the Partner Entities,
nor any of their Subsidiaries is generally engaged in the
business of purchasing or selling Margin Stock or extending
credit for the purpose of purchasing or carrying Margin
Stock.
5.09 Title to Properties. The Company and each of its
Subsidiaries have good record and marketable title in fee
simple to, or valid leasehold interests in, all real
Property necessary or used in the ordinary conduct of their
respective businesses, except for such defects in title as
would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect. As of the
Closing Date, the Property of the Company and its
Subsidiaries is subject to no Liens, other than Permitted
Liens.
5.10 Taxes. The Company, the Partner Entities and
their Subsidiaries have filed all Federal and other material
tax returns and reports required to be filed, and have paid
all Federal and other material taxes, assessments, fees and
other governmental charges levied or imposed upon them or
their Properties, income or assets otherwise due and
payable, except those which are being contested in good
faith by appropriate proceedings and for which adequate
reserves have been provided in accordance with GAAP and no
Notice of Lien has been filed or recorded. There is no
proposed tax assessment against the Company, the Partner
Entities or any of their Subsidiaries which would, if the
assessment were made, have a Material Adverse Effect.
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5.11 Financial Condition.
(a) The audited combined financial statements of
financial condition of the Company and its Subsidiaries
dated December 31, 1992, and the related combined statements
of income and combined statement of cash flows for the
fiscal year ended on that date:
(i) were prepared in accordance with GAAP
consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein;
(ii) fairly present the financial condition
of the Company and its Subsidiaries as of the date
thereof and results of operations for the period covered
thereby; and
(iii) show all material Indebtedness and other
liabilities, direct or contingent of the Company and its
combined Subsidiaries as of the date thereof, including
liabilities for taxes and material commitments.
(b) Since December 31, 1992, there has been no
Material Adverse Effect.
5.12 Environmental Matters.
(a) Except as specifically disclosed in
Schedule 5.12, the on-going operations of the Company, the
Partner Entities and each of their Subsidiaries comply in
all respects with all Environmental Laws, except such non-
compliance which would not (if enforced in accordance with
applicable law) result in liability in excess of $25,000,000
in the aggregate.
(b) Except as specifically disclosed in
Schedule 5.12, the Company, the Partner Entities and each of
their Subsidiaries have obtained all licenses, permits,
authorizations and registrations required under any
Environmental Law ("Environmental Permits") and necessary
for their respective ordinary course operations, all such
Environmental Permits are in good standing, and the Company,
the Partner Entities and each of their Subsidiaries are in
compliance with all terms and conditions of such
Environmental Permits except where the failure to obtain,
maintain in good standing or comply with such Environmental
Permits would not reasonably be expected to have a Material
Adverse Effect.
(c) Except as specifically disclosed in
Schedule 5.12, none of the Company, the Partner Entities,
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any of their Subsidiaries or any of their respective present
Property or operations, is subject to any outstanding
written order from or agreement with any Governmental
Authority, nor subject to any judicial or docketed
administrative proceeding, respecting any Environmental Law,
Environmental Claim or Hazardous Material arising out of a
violation or alleged violation of any Environmental Law.
(d) Except as specifically disclosed in
Schedule 5.12, there are no Hazardous Materials or other
conditions or circumstances existing with respect to any
Property, or arising from operations prior to the Closing
Date, of the Company, the Partner Entities, or any of their
Subsidiaries that would reasonably be expected to give rise
to Environmental Claims with a potential liability of the
Company and its Subsidiaries in excess of $25,000,000 in the
aggregate for any such condition, circumstance or Property.
In addition, (i) neither the Company, the Partner Entities
nor any of their Subsidiaries has any underground storage
tanks (x) that are not properly registered or permitted
under applicable Environmental Laws, or (y) that are leaking
or disposing of Hazardous Materials off-site, and (ii) the
Company, the Partner Entities and their Subsidiaries have
notified all of their employees of the existence, if any, of
any health hazard arising from the conditions of their
employment and have met all notification requirements under
Title III of CERCLA and all other Environmental Laws.
5.13 Regulated Entities. None of the Company, the
Partner Entities, any Person controlling the Company or the
Partner Entities, or any Subsidiary of the Company or the
Partner Entities, is (a) an "Investment Company" within the
meaning of the Investment Company Act of 1940; or
(b) subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act, any state public utilities code, or any other
Federal or state statute or regulation limiting its ability
to incur Indebtedness.
5.14 No Burdensome Restrictions. Neither the Company
nor any of its Subsidiaries is a party to or bound by any
Contractual Obligation, or subject to any charter or
corporate restriction, or any Requirement of Law, which
would reasonably be expected to have a Material Adverse
Effect.
5.15 Solvency. The Company, the General Partner, the
Facilities Subsidiary, and the Restricted Subsidiaries are
each Solvent.
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5.16 Labor Relations. There are no material strikes,
lockouts or other labor disputes against the Company or any
of its Subsidiaries, or, to the best of the Company's
knowledge, threatened against or affecting the Company or
any of its Subsidiaries, and no significant unfair labor
practice complaint is pending against the Company or any of
its Subsidiaries or, to the best knowledge of the Company,
threatened against any of them before any Governmental
Authority.
5.17 Copyrights, Patents, Trademarks and Licenses, etc.
The Company or its Subsidiaries own or are licensed or
otherwise have the right to use all of the patents,
trademarks, service marks, trade names, copyrights,
contractual franchises, authorizations and other rights that
are reasonably necessary for the operation of their
respective businesses, without conflict with the rights of
any other Person. To the best knowledge of the Company, no
slogan or other advertising device, product, process,
method, substance, part or other material now employed, or
now contemplated to be employed, by the Company or any of
its Subsidiaries infringes upon any rights held by any other
Person; except as specifically disclosed in Schedule 5.05,
no claim or litigation regarding any of the foregoing is
pending or, to the knowledge of the Company, threatened, and
no patent, invention, device, application, principle or any
statute, law, rule, regulation, standard or code is pending
or, to the knowledge of the Company, proposed, which, in
either case, would reasonably be expected to have a Material
Adverse Effect.
5.18 Subsidiaries. The Company has no Subsidiaries
other than those specifically disclosed in part (a) of
Schedule 5.18 hereto and has no equity investments in any
other corporation or entity other than those specifically
disclosed in part (b) of Schedule 5.18. Except as disclosed
in part (a) of Schedule 5.18, the Company owns 100% of the
ownership interests of its Subsidiaries. The Facilities
Subsidiary has issued no rights, warrants or options to
acquire or instruments convertible into or exchangeable for
any equity interest in the Facilities Subsidiary.
5.19 Partnership Interests. The only general partner
of the Company is the General Partner, which on the Closing
Date will own a 2% interest in the Company. The only
general partners of the General Partner are (i) the PCMC
General Partner, which is the managing general partner of
the General Partner, and (ii) Sub Advisory Corp. I, a
Delaware corporation. The only general partner of the PCMC
General Partner is the PC Advisory General Partner.
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5.20 Broker's; Transaction Fees. Neither the Company
nor any of its Subsidiaries has any obligation to any Person
in respect of any finder's, broker's or investment banker's
fee in connection with the transactions contemplated hereby.
5.21 Insurance. The Properties of the Company and its
Subsidiaries are insured with financially sound and
reputable insurance companies not Affiliates of the Company,
in such amounts, with such deductibles and covering such
risks as are customarily carried by companies engaged in
similar businesses and owning similar Properties in
localities where the Company or such Subsidiary operates.
5.22 Timber Harvest. The Company and its Restricted
Subsidiaries harvested 1,663 MMBF of its fee Timber during
the calendar years 1989 (including harvest by the Company's
predecessor prior to closing under the Note Agreements)
through 1991, and 469 MMBF of its fee Timber during calendar
year 1992.
5.23 Full Disclosure. None of the representations or
warranties made by the Company, the General Partners, or any
of their Subsidiaries in the Loan Documents as of the date
such representations and warranties are made or deemed made,
and none of the statements contained in each exhibit,
report, written statement or certificate furnished by or on
behalf of the Company or any of its Subsidiaries in
connection with the Loan Documents, contains any untrue
statement of a material fact or omits any material fact
required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under
which they are made, not misleading as of the time when made
or delivered.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Company covenants and agrees that, so long as any
Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, unless
the Majority Banks waive compliance in writing:
6.01 Financial Statements. The Company shall deliver
to the Agent in form and detail satisfactory to the Agent
and the Majority Banks, with sufficient copies for each
Bank:
(a) as soon as available, but not later than 90
days after the end of each fiscal year, a copy of the
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audited combined balance sheet of the Company as at the end
of such year and the related combined statements of income
and statements of cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the
previous fiscal year, and accompanied by the opinion of
Coopers & Lybrand, or another nationally-recognized
independent public accounting firm which report shall state
that such combined financial statements present fairly the
financial position for the periods indicated in conformity
with GAAP applied on a basis consistent with prior years.
Such opinion shall not be qualified or limited because of a
restricted or limited examination by such accountant of any
material portion of the Company's or any Subsidiary's
records and shall be delivered to the Agent pursuant to a
reliance agreement in favor of the Agent and Banks by such
accounting firm in form and substance satisfactory to the
Agent and the Majority Banks;
(b) as soon as available, but not later than 120
days after the end of each fiscal year, a copy of an audited
combining balance sheet of the Company and each of its
Subsidiaries as at the end of such fiscal year and the
related combining statements of income and statement of cash
flows for such fiscal year, all in reasonable detail
certified by an appropriate Responsible Officer as having
been used in connection with the preparation of the
financial statements referred to in subsection (a) of this
Section 6.01;
(c) as soon as available, but not later than 45
days after the end of each fiscal quarter of each year, a
copy of the unaudited combined balance sheet of the Company
and its combined Subsidiaries as of the end of such quarter
and the related combined statements of income and statement
of cash flows for the period commencing on the first day and
ending on the last day of such quarter, and certified by an
appropriate Responsible Officer as being complete and
correct and fairly presenting, in accordance with GAAP, the
financial position and the results of operations of the
Company and the Subsidiaries;
(d) as soon as available, but not later than 45
days after the end of each fiscal quarter of each year, a
copy of the unaudited combining balance sheets of the
Company and each of its Subsidiaries, and the related
combining statements of income and statement of cash flows
for such quarter, all certified by an appropriate
Responsible Officer of the Company as having been used in
connection with the preparation of the financial statements
referred to in subsection (c) of this Section 6.01;
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(e) as soon as available, but not later than
September 30 of each year, a business plan which shall
include five years' pro-forma projections of the Company
accompanied by appropriate assumptions on which such
projections are based.
6.02 Certificates; Other Information. The Company
shall furnish to the Agent, with sufficient copies for each
Bank:
(a) concurrently with the delivery of the
financial statements referred to in subsection 6.01(a)
above, a certificate of the independent certified public
accountants reporting on such financial statements stating
that in making the examination necessary therefor no
knowledge was obtained of any Default or Event of Default,
except as specified in such certificate;
(b) concurrently with the delivery of the
financial statements referred to in subsections 6.01(a)
through (d) above, a certificate of a Responsible Officer
substantially in the form of Exhibit D (i) stating that, to
the best of such officer's knowledge, the Company, during
such period, has observed and performed all of its covenants
and other agreements, and satisfied every condition
contained in this Agreement to be observed, performed or
satisfied by it, and that such officer has obtained no
knowledge of any Default or Event of Default except as
specified (by applicable subsection reference) in such
certificate, (ii) stating if an applicable Margin Reduction
Discount should be implemented or changed, and (iii) showing
in detail the calculations supporting such statement in
respect of Section 7.03, subsection 7.04(i), Section 7.05
and Section 7.13, and supporting the computation of the
Funds Flow Ratio;
(c) promptly after the same are sent, copies of
all financial statements and reports which the Company sends
to its limited partners (excluding the Form K-1s); and
promptly after the same are filed, copies of all financial
statements and regular, periodical or special reports which
the Company may make to, or file with, the SEC or any
successor or similar Governmental Authority; and
(d) promptly, such additional business, financial,
corporate affairs and other information as the Agent, at the
request of any Bank, may from time to time reasonably
request.
6.03 Notices. The Company shall promptly upon becoming
aware thereof notify the Agent and each Bank:
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(a) (i) of the occurrence of any Default or Event
of Default, (ii) of the occurrence or existence of any event
or circumstance that foreseeably will become a Default or
Event of Default, and (iii) of the occurrence or existence
of any event or circumstance that would cause the condition
to Borrowing set forth in subsection 4.02(b) not to be
satisfied if a Borrowing were requested on or after the date
of such event or circumstance;
(b) of (i) any breach or non-performance of, or
any default under, any Contractual Obligation of the
Company, the Partner Entities, or any of their Subsidiaries
which could result in a Material Adverse Effect; and
(ii) any dispute, litigation, investigation, proceeding or
suspension which may exist at any time between the Company,
the Partner Entities, or any of their Subsidiaries and any
Governmental Authority which, if adversely determined, could
reasonably be expected to result in a Material Adverse
Effect;
(c) of the commencement of, or any material
development in, any litigation or proceeding affecting the
Company or any Subsidiary (i) which, if adversely
determined, would reasonably be expected to have a Material
Adverse Effect, or (ii) in which the relief sought is an
injunction or other stay of the performance of this
Agreement or any Loan Document;
(d) upon, but in no event later than 10 days
after, becoming aware of (i) any and all enforcement,
cleanup, removal or other governmental or regulatory actions
instituted, completed or threatened against the Company or
any of its Subsidiaries or any of their respective
Properties pursuant to any applicable Environmental Laws
where, if adversely determined, the potential liability or
expense relating thereto could exceed $25,000,000 or the
potential remedy with respect thereto would otherwise
reasonably be expected to have a Material Adverse Effect,
(ii) all other Environmental Claims which allege liability
in excess of $25,000,000 or have the possibility of remedies
that would, if adversely determined, otherwise reasonably be
expected to constitute a Material Adverse Effect, and
(iii) any environmental or similar condition on any real
property adjoining or in the vicinity of the property of the
Company or any Subsidiary that would reasonably be
anticipated to cause such property or any part thereof to be
subject to any restrictions on the ownership, occupancy,
transferability or use of such property under any
Environmental Laws where the net book value of such property
exceeds $25,000,000;
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(e) of any other litigation or proceeding
affecting the Company or any of its Subsidiaries which the
Company would be required to report to the SEC pursuant to
the Exchange Act, within four days after reporting the same
to the SEC;
(f) of any of the following ERISA events affecting
the Company or any member of its Controlled Group (but in no
event more than 10 days after such event), together with a
copy of any notice with respect to such event that may be
required to be filed with a Governmental Authority and any
notice delivered by a Governmental Authority to the Company
or any member or its Controlled Group with respect to such
event:
(i) an ERISA Event;
(ii) the adoption of any new Plan that is
subject to Title IV of ERISA or section 412 of the Code
by any member of the Controlled Group;
(iii) the adoption of any amendment to a Plan
that is subject to Title IV of ERISA or section 412 of
the Code, if such amendment results in a material
increase in benefits or unfunded liabilities; or
(iv) the commencement of contributions by any
member of the Controlled Group to any Plan that is
subject to Title IV of ERISA or section 412 of the Code;
(g) any Material Adverse Effect subsequent to the
date of the most recent audited financial statements of the
Company delivered to the Banks pursuant to subsection 6.01(a)
or 4.01(g);
(h) of any material labor controversy resulting in
or threatening to result in any strike, work stoppage,
boycott, shutdown or other labor disruption against or
involving the Company or any of its Subsidiaries.
Each notice pursuant to this Section shall be
accompanied by a written statement by a Responsible Officer
of the Company setting forth details of the occurrence
referred to therein, and stating what action the Company
proposes to take with respect thereto and at what time. Each
notice under subsection 6.03(a) shall describe with
particularity any and all clauses or provisions of this
Agreement or other Loan Document that have been breached or
violated.
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6.04 Preservation of Corporate Existence, Etc. The
Company shall, except as permitted by Section 7.02, and
shall cause each of its Subsidiaries to:
(a) preserve and maintain in full force and effect
its partnership or corporate existence and good standing
under the laws of its state or jurisdiction of formation or
incorporation;
(b) preserve and maintain in full force and effect
all rights, privileges, qualifications, permits, licenses
and franchises necessary in the normal conduct of its
business;
(c) use its reasonable efforts, in the Ordinary
Course of Business, to preserve its business organization
and preserve the goodwill and business of the customers,
suppliers and others having material business relations with
it; and
(d) preserve or renew all of its registered
trademarks, trade names and service marks, the non-
preservation of which would reasonably be expected to have a
Material Adverse Effect.
6.05 Maintenance of Property. The Company shall
maintain, and shall cause each of its Subsidiaries to
maintain, and preserve all its Property which is used or
useful in its business in good working order and condition,
ordinary wear and tear excepted.
6.06 Insurance. The Company shall maintain, and shall
cause each of its Subsidiaries to maintain, with financially
sound and reputable independent insurers, insurance with
respect to its Properties and business against loss or
damage of the kinds customarily insured against by Persons
engaged in the same or similar business, of such types and
in such amounts as are customarily carried under similar
circumstances by such other Persons.
6.07 Payment of Obligations. The Company shall, and
shall cause its Subsidiaries to, pay and discharge as the
same shall become due and payable, all their respective
obligations and liabilities, including:
(a) all tax liabilities, assessments and
governmental charges or levies upon it or its properties or
assets, unless the same are being contested in good faith by
appropriate proceedings and adequate reserves in accordance
with GAAP are being maintained by the Company or such
Subsidiary;
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(b) all Indebtedness, as and when due and payable,
but subject to any subordination provisions contained in any
instrument or agreement evidencing such Indebtedness.
6.08 Compliance with Laws. The Company shall comply,
and shall cause each of its Subsidiaries to comply with all
Requirements of Law of any Governmental Authority having
jurisdiction over it or its business (including the Federal
Fair Labor Standards Act) the non-compliance with which
would reasonably be expected to have a Material Adverse
Effect, except such as may be contested in good faith or as
to which a bona fide dispute may exist.
6.09 Inspection of Property and Books and Records. The
Company shall maintain and shall cause each of its
Subsidiaries to maintain proper books of record and account,
in which full, true and correct entries in conformity with
GAAP consistently applied shall be made of all financial
transactions and matters involving the assets and business
of the Company and such Subsidiaries. The Company shall
permit, and shall cause each of its Subsidiaries to permit,
representatives and independent contractors of the Agent or
any Bank to visit and inspect any of their respective
Properties, to examine their respective corporate, financial
and operating records, and make copies thereof or abstracts
therefrom, and to discuss their respective affairs, finances
and accounts with their respective directors, officers, and
independent public accountants, all at the expense of the
Company and at such reasonable times during normal business
hours and as often as may be reasonably desired, upon
reasonable advance notice to the Company; provided, however,
when an Event of Default exists the Agent or any Bank may do
any of the foregoing at the expense of the Company such
Properties at any time during normal business hours and
without advance notice.
6.10 Environmental Laws.
(a) The Company shall, and shall cause each of its
Subsidiaries to, conduct its operations and keep and
maintain its Property in compliance with all Environmental
Laws, the non-compliance with which would reasonably be
expected to have a Material Adverse Effect.
(b) Upon the written request of the Agent or any
Bank, the Company shall submit and cause each of its
Subsidiaries to submit, to the Agent and with sufficient
copies for each Bank, at the Company's sole cost and
expense, at reasonable intervals, a report providing an
update of the status of any environmental, health or safety
compliance, hazard or liability issue identified in any
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notice or report required pursuant to subsection 6.03(d),
that could, individually or in the aggregate, result in
liability in excess of $25,000,000.
6.11 Use of Proceeds. The Company shall use the
proceeds of the Loans solely as follows: (a) in connection
with the acquisition of the Montana Timberlands, (b) other
capital expenditures, (c) repayment of Indebtedness, and
(d) for working capital purposes not in contravention of any
Requirement of Law.
6.12 Solvency. The Company shall at all times be, and
shall cause each of its Restricted Subsidiaries to be,
Solvent.
ARTICLE VII
NEGATIVE COVENANTS
The Company hereby covenants and agrees that, so long as
any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, unless
the Majority Banks waive compliance in writing:
7.01 Limitation on Liens. The Company shall not, and
shall not suffer or permit any of its Restricted
Subsidiaries to, directly or indirectly, make, create,
incur, assume or suffer to exist any Lien upon or with
respect to any part of its Property, whether now owned or
hereafter acquired, other than the following ("Permitted
Liens"):
(a) Liens for taxes, fees, assessments or other
governmental charges which are not delinquent or remain
payable without penalty, or to the extent that non-payment
thereof is permitted by Section 6.07, provided that no
Notice of Lien has been filed or recorded under the Code;
(b) carriers', warehousemen's, mechanics',
landlords', materialmen's, repairmen's or other similar
Liens arising in the Ordinary Course of Business which are
not delinquent or remain payable without penalty or unless
such lien is being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and
if such accrual or other appropriate provision, if any, as
shall be required by GAAP shall have been made therefor;
(c) Liens (other than any Lien imposed by ERISA)
incurred or deposits made incidental to the conduct of its
business or the ownership of its Property including
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<PAGE> 76
(i) pledges or deposits in connection with worker's
compensation, unemployment insurance and other social
security legislation, (ii) deposits to secure insurance, the
performance of bids, tenders, contracts, leases, licenses,
franchises and statutory obligations, each in the Ordinary
Course of Business, and (iii) other obligations which were
not incurred or made in connection with the borrowing of
money, the obtaining of advances or credit or the payment of
the deferred purchase price of property and which do not in
the aggregate materially detract from the value of its
Property or materially impair the use of such Property in
the operation of its business;
(d) any attachment or judgment Lien, unless the
judgment it secures shall not, within 45 days after the
entry thereof, have been discharged or execution thereof
stayed pending appeal, or shall not have been discharged
within 45 days after expiration of any such stay;
(e) easements, rights-of-way, restrictions and
other similar charges or encumbrances incurred in the
Ordinary Course of Business which, in each case, and in the
aggregate, do not materially interfere with the ordinary
conduct of the business of the Company or any Restricted
Subsidiary;
(f) Liens on Property of any Restricted Subsidiary
securing obligations of such Restricted Subsidiary owing to
the Company or another Restricted Subsidiary;
(g) any Lien existing prior to the time of
acquisition upon any Property acquired by the Company or any
Restricted Subsidiary after the Closing Date through
purchase, merger or consolidation or otherwise, whether or
not assumed by the Company or such Subsidiary, or placed
upon Property at (or within 30 days after) the later of the
time of acquisition or the completion of construction by the
Company or any Restricted Subsidiary to secure all or a
portion of (or to secure Indebtedness incurred to pay all or
a portion of) the purchase price thereof, provided that
(i) any such Lien does not encumber any other property of
the Company or such Restricted Subsidiary, (ii) the
Indebtedness secured by such Lien is not prohibited by the
provisions of Section 7.05, (iii) the aggregate principal
amount of the Indebtedness secured by such Lien at no time
exceeds 80% of the cost to the Company and its Restricted
Subsidiaries of the Property subject to such Lien, and
(iv) the aggregate outstanding principal amount (without
duplication) of the Indebtedness secured by all such Liens
and the Indebtedness of all Restricted Subsidiaries at no
time (a) during the period commencing on May 31, 1989 (the
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<PAGE> 77
"Senior Note Closing") and ending on the fifth anniversary
of the Senior Note Closing exceeds $12,000,000, (b) during
the period commencing on the fifth anniversary of the Senior
Note Closing and ending on the tenth anniversary of the
Senior Note Closing exceeds $25,000,000, and (c) during the
period commencing on the tenth anniversary of the Senior
Note Closing and ending on the Revolving Termination Date
exceeds $50,000,000;
(h) Liens on the accounts, rights to payment for
goods sold or services rendered that are evidenced by
chattel paper or instruments, and rights against persons who
guarantee payment or collection of the foregoing, and on the
Company's inventory and on the proceeds (as defined in the
UCC in any applicable jurisdiction) thereof securing the
obligations of the Company under the Revolving Credit
Facility (and any extension, renewal, refunding or
refinancing thereof) permitted by subsection 7.05(e);
(i) any Lien existing on the Property of the
Company or its Subsidiaries on the Closing Date and set
forth in Schedule 7.01 securing Indebtedness outstanding on
such date; and
(j) any Lien renewing, extending, refunding or
refinancing any Lien permitted by subsection (i) of this
Section, provided that the principal amount secured is not
increased and the Lien is not extended to other Property and
further provided, that the maturity of the Lien is not
extended beyond the maturity date of the Indebtedness which,
at the time the Lien was initially placed upon the Property
secured thereby, Responsible Representatives declare would
have been the maturity date of Indebtedness customary for
the type of Property being financed.
7.02 Merger; Disposition of Assets. The Company shall
not, and shall not suffer or permit any of its Restricted
Subsidiaries to, merge or consolidate with any Person or,
directly or indirectly, sell, lease or transfer or otherwise
dispose of (whether in one or a series of transactions) any
Property (including accounts and notes receivable, with or
without recourse) or enter into any agreement to do any of
the foregoing, except that:
(a) any Restricted Subsidiary of the Company may
merge with the Company (provided that the Company shall be
the continuing or surviving corporation) or with any one or
more other Restricted Subsidiaries;
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(b) any Restricted Subsidiary of the Company may
sell, lease, transfer or otherwise dispose of any of its
assets to the Company or a Restricted Subsidiary;
(c) any Restricted Subsidiary may merge or
consolidate with any other entity, provided that,
immediately after giving effect to such merger or
consolidation (i) the continuing or surviving entity of such
merger or consolidation shall constitute a Restricted
Subsidiary, (ii) no Event of Default or Material Default
shall exist, and (iii) following the merger, the entity
surviving the merger is not engaged in any business other
than a Permitted Business;
(d) the Company may merge or consolidate with, or
sell or dispose of all or substantially all of its assets
to, any other entity, provided that (i) either (x) the
Company shall be the continuing or surviving entity (in the
case of such merger) or (y) the successor or acquiring
entity shall be a solvent corporation or partnership
organized under the laws of the United States and shall
expressly assume in writing all of the obligations of the
Company under this Agreement, the Note Agreements and the
Mortgage Note Agreements, including all covenants herein and
therein contained, and such successor or acquiring
corporation or partnership shall succeed to and be
substituted for the Company with the same effect as if it
had been named herein as a party hereto, provided, however,
that no such sale shall release the Company from any of its
obligations and liabilities under this Agreement, the Note
Agreements and the Mortgage Note Agreements unless such sale
is followed by the complete liquidation of the Company and
substantially all the assets of the Company immediately
following such sale are distributed in such liquidation, and
(ii) immediately after such merger or consolidation or such
sale or other disposition, (x) no Event of Default or
Material Default shall exist, (y) the Company could incur at
least $1 of additional Funded Debt pursuant to
subsection 7.05(j), and (z) the entity surviving the merger
or consolidation or to which such assets have been
transferred is not engaged in any business other than a
Permitted Business;
(e) the Company or any Restricted Subsidiary may
make dispositions of inventory in the Ordinary Course of
Business;
(f) the Company or any Restricted Subsidiary may
sell Designated Acres (or notes receivable arising from the
sale of Designated Acres) for the fair value thereof as
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reasonably determined in good faith by Responsible
Representatives;
(g) the Company and its Restricted Subsidiaries
may exchange Timberlands with other Persons in the Ordinary
Course of Business, provided that (i) the fair value of the
Timberlands plus any Net Proceeds received in such exchange
is, in the good faith judgment of the Responsible
Representatives, not less than the fair value of Timberlands
exchanged plus any other consideration paid, (ii) such
exchange would not materially and adversely affect the
business, Property, condition or results of operations of
the Company and its Restricted Subsidiaries on a combined
basis or of the Facilities Subsidiary or impair the ability
of the Company to perform its obligations hereunder and the
Note Agreements and the Mortgage Note Agreements, and
(iii) any Properties shall be deemed sold to the extent of
Net Proceeds received and such sales shall be allowed only
to the extent otherwise permitted by this Section 7.02;
(h) the Company and its Restricted Subsidiaries
may sell Properties for cash for not less than the fair
value thereof as determined in good faith by the Responsible
Representatives, provided that the aggregate Net Proceeds of
such sales in any calendar year do not exceed an amount (the
"Permitted Amount") equal to (i) in calendar year 1989 and
1990, $3,000,000 and (ii) in each calendar year thereafter,
the sum of (x) the Permitted Amount for the preceding
calendar year plus (y) an increase equal to the percentage
increase, if any, in the consumer price index for goods and
services in the United States, as published by the U.S.
Bureau of Labor Statistics, or successor publication, for
such preceding calendar year, times such permitted amount;
(i) the Company and its Restricted Subsidiaries
may otherwise sell for cash properties that constitute the
Company's Columbia River Unit in an amount not less than the
fair value thereof as determined in good faith by the
Responsible Representatives, if and only if (i) immediately
after giving effect to such proposed sale, no condition or
event shall exist which constitutes an Event of Default or
Material Default, (ii) the Net Proceeds of any such sale are
either (x) subject to clause (v) of this subsection 7.02(i),
paid immediately to the Agent on behalf of the Banks for
prepayment of the Loans in accordance with the provisions of
Section 2.07, or (y) are applied, within 180 days after such
sale, to the purchase of productive assets in the same line
of business, provided, that the Company shall have notified
the Agent promptly after its determination to so apply the
Net Proceeds, (iii) if the Net Proceeds are in excess of
$25,000,000 and if not paid immediately as provided in
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clause (ii) above, placed immediately upon receipt thereof
in a cash collateral account or accounts at BofA, pursuant
to a Cash Collateral Account Agreement, for the purpose of
application in accordance with subclause (ii)(y) above,
(iv) immediately after giving effect to such sale (giving
effect on a pro forma basis to any proposed retirement of
Indebtedness out of proceeds thereof), the Company could
incur $1 of additional Funded Debt pursuant to
subsection 7.05(j), and (v) the aggregate Net Proceeds of
all sales pursuant to this subsection 7.02(i) during the
year from the funding of the first Loan hereunder to the
first anniversary thereof that are applied in repayment of
the Loans is less than or equal to $150,000,000; and
(j) the Company and its Restricted Subsidiaries
may otherwise sell Properties for cash (other than
properties described in subsection 7.02(i) above) in an
amount not less than the fair value thereof as determined in
good faith by the Responsible Representatives, if and only
if (i) immediately after giving effect to such proposed
sale, no condition or event shall exist which constitutes an
Event of Default or Material Default, (ii) the Net Proceeds
of any such sale (x) are applied first, if any Net Proceeds
have been used to repay the Loans in accordance with
subsection 7.02(i), to the holders of the Notes to the
extent necessary to cause their Actual Percentage to equal
the Desired Percentage, and second, pro rata (based on the
then outstanding principal of all Qualified Debt) to the
holders of all Qualified Debt, or (y) are applied, within
180 days after such sale, to the purchase of productive
assets in the same line of business, provided, that the
Company shall have notified the Agent promptly after its
determination to so apply the Net Proceeds, (iii) the net
proceeds of any such sale are either (x) distributed
immediately upon receipt thereof to holders of Qualified
Debt in accordance with subclause (ii)(x) above for
application (either immediately or within 180 days) to
repayment of such Qualified Debt, provided that, such
proceeds to be paid to the Agent on behalf of the Banks
shall be paid and applied immediately in accordance with the
provisions of Section 2.07, or (y) if in excess of
$25,000,000, placed immediately upon receipt thereof in an
escrow or cash collateral account or accounts, pursuant to
an agreement or agreements in form and substance reasonably
satisfactory to holders of 66-2/3% of the outstanding
principal balance of the Qualified Debt, for the purpose of
application in accordance with clause (ii) above, and
(iv) immediately after giving effect to such sale (giving
effect on a pro forma basis to any proposed retirement of
Qualified Debt out of proceeds thereof), the Company could
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incur $1 of additional Funded Debt pursuant to
subsection 7.05(j).
7.03 Harvesting Restrictions. The Company shall not,
and shall not suffer or permit any of its Restricted
Subsidiaries to, in any calendar year, harvest Timber on the
Timberlands then owned by the Company in excess of the
amount set forth for such calendar year in the following
table:
<TABLE>
<CAPTION>
Maximum MMBF
to be
Calendar Year Harvested
------------------------- ------------
<S> <C>
1989 (including harvest
by predecessor prior
to closing under the
Note Agreements)
through 1991 675 MMBF
1992 and 1993 650 MMBF
1994 through 1996 700 MMBF
1997 through 2000 675 MMBF
2001 625 MMBF
</TABLE>
plus, in each year, the amount, if any, by which the
cumulative amount set forth in the table above for the
preceding years exceeds the cumulative amount actually
harvested in such years;
unless the Net Proceeds from such excess harvest are either
(i) distributed to all holders of Qualified Debt pro rata
based upon the outstanding principal balance at the time of
such distribution for application (either immediately or
within 180 days after such excess harvest) to the repayment
of such Qualified Debt, provided that, such proceeds to be
paid to the Agent on behalf of the Banks shall be paid and
applied immediately in accordance with the provisions of
Section 2.07, or (ii) applied, within 180 days after any
such excess harvest, to purchase Timber (including Timber on
Timberlands purchased) having a fair value (in the good
faith judgment of the Responsible Representatives) not less
than the fair value of the Timber subject to such excess
harvest, provided, that the Company shall have notified the
Agent promptly after its determination to so apply the Net
Proceeds.
7.04 Loans and Investments. The Company shall not
suffer or permit any of its Restricted Subsidiaries to make
or commit to make or permit to remain outstanding any loan
or advance to, or guarantee, endorse or otherwise be or
become contingently liable, directly or indirectly, in
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connection with the obligations, stock or dividends of, or
own, purchase or acquire (or commit to own, purchase or
acquire) any stock, obligations or securities of, or any
other interest in (including, without limitation, the
acquisition of all or substantially all of the assets of a
Person, or of any business or division of a Person), or make
or commit to make any capital contribution to, any Person
(all of the foregoing (but excluding any Designated
Repurchases permitted by Section 7.13 hereof) being referred
to herein as "Investments"), except that the Company or any
Restricted Subsidiary may:
(a) make Investments in the Facilities Subsidiary,
provided that the Company will not make or permit any
Restricted Subsidiary to make any such Investment (including
any guaranty of obligations of the Facilities Subsidiary
otherwise permitted by this Section 7.04) unless
(i) immediately after giving effect to such Investment, no
Event of Default or Default, or "Default" or "Event of
Default" as defined in the Mortgage Note Agreements, shall
exist, (ii) immediately prior to giving effect to such
Investment, no Default or Event of Default (other than an
"Event of Default" as defined in the Mortgage Note
Agreements) shall exist, and (iii) immediately after giving
effect to such Investment, the ratio of Pro Forma Free Cash
Flow to Maximum Pro Forma Annual Interest Charges is not
less than 2.5 to 1.0.
(b) own, purchase or acquire real or personal
property to be used in the Ordinary Course of Business;
(c) own, purchase or acquire investments of the
type specified in, and in accordance with the requirements
and limitations of, the Investment Policy;
(d) continue to own Investments owned on the
Closing Date as set forth on Schedule 7.04;
(e) endorse negotiable instruments for collection
in the Ordinary Course of Business;
(f) become and be obligated under the Guarantee
and under the guarantees permitted by subsections 7.05(g)
and (h), and acquire and own subordinated subrogation rights
upon performance of such guarantees;
(g) make advances in the Ordinary Course of
Business of the Company or any Restricted Subsidiary,
including deposits permitted under subsection 7.01(c),
advances to employees for travel, relocation and other
employment related expenses, advances to contractors
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performing services for the Company or such Restricted
Subsidiary, advances to owners of timber or timber
properties to acquire rights to harvest timber and other
similar advances;
(h) make Investments in Restricted Subsidiaries,
or any entity which immediately after such Investment will
be a Restricted Subsidiary; and
(i) make Investments not otherwise permitted by
this Section 7.04 in entities engaged solely in a Permitted
Business, provided that the cumulative aggregate amount of
such Investments at original cost (including the principal
amount of any obligations guaranteed to the extent such
guarantees are not otherwise permitted by this Section 7.04)
made pursuant to this subsection (i) between the closing
date of the Note Agreements and any date thereafter shall
not exceed the greater of $30,000,000 or 60% of the average
annual Pro Forma Free Cash Flow for the two fiscal years
preceding such date.
7.05 Limitation on Indebtedness. The Company shall
not, and shall not suffer or permit any of its Restricted
Subsidiaries to, create, incur, assume, suffer to exist, or
otherwise become or remain directly or indirectly liable
with respect to, any Indebtedness, except:
(a) Indebtedness incurred pursuant to this
Agreement;
(b) Funded Debt represented by the Notes and any
refinancing thereof so long as such refinancing does not
increase the principal amount thereof and is on terms no
less favorable to the Company, and to the rights of the
Agent and the Banks hereunder, than those contained on the
Closing Date in the Notes and the documentation relating
thereto;
(c) Funded Debt which is unsecured and is incurred
by the Company to finance the making of capital
improvements, expansions and additions to the Company's
property (including Timberlands), plant and equipment,
provided that the aggregate outstanding principal amount of
such Funded Debt shall at no time exceed $20,000,000;
(d) Indebtedness of any Restricted Subsidiary
owing to the Company or to a Restricted Subsidiary;
(e) Indebtedness incurred by the Company pursuant
to the Revolving Credit Facility (and any extension,
renewal, refunding or refinancing thereof, including any
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refunding or refinancing in an amount in excess of the
principal amount then outstanding under the Revolving Credit
Facility), or any other Indebtedness pursuant to a bank
credit facility which is unsecured or is secured by Liens
permitted by subsection 7.01(h), not in excess of an
aggregate principal amount of $15,000,000 at any time
outstanding, provided that the Company shall not suffer to
exist any Indebtedness permitted by this subsection (e) on
any day unless there shall have been a period of at least 45
consecutive days within the 12 months immediately preceding
such day during which the Company shall have been free from
all Indebtedness permitted by this subsection (e);
(f) Indebtedness represented by the Guarantee and
any refinancing thereof so long as such refinancing does not
increase the principal amount thereof and is on terms no
less favorable to the Company, and to the rights of the
Agent and the Banks hereunder, than those contained on the
Closing Date in the Guarantee and the documentation relating
thereto;
(g) the Company's guarantee of obligations
incurred by the Facilities Subsidiary pursuant to the
Facilities Subsidiary's Revolving Credit Facility (and any
extension, renewal, refunding or refinancing thereof
permitted by clause (iv) of paragraph 6B(2) of the Mortgage
Note Agreements), provided that the aggregate outstanding
principal amount of such Indebtedness shall at no time
exceed $20,000,000, and provided further that such guarantee
shall be subordinated to the Notes by subordination
provisions substantially the same as those contained in
paragraph 7I of the Mortgage Note Agreements;
(h) the Company's guarantee of Funded Debt (and
related obligations not constituting Indebtedness) incurred
by the Facilities Subsidiary to finance the making of
capital improvements, expansions and additions to the
Facilities Subsidiaries' Properties pursuant to the
Facilities Subsidiary's Facility, provided that such
guarantee shall be subordinated to the Notes by
subordination provisions substantially the same as those
contained in paragraph 7I of the Mortgage Note Agreements,
and provided, further, that the aggregate outstanding
principal amount of such Funded Debt shall at no time exceed
$20,000,000;
(i) Funded Debt of the Company or any Restricted
Subsidiary secured by a Lien permitted by
subsection 7.01(g), provided that immediately after the
acquisition of the Property subject to such Lien or upon
which such Lien is placed (or, if later, the incurrence of
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the Indebtedness secured by such Lien), the Company could
incur at least $1 of additional Funded Debt pursuant to
clause (j) below;
(j) Funded Debt of the Company (other than Funded
Debt owing to a Restricted Subsidiary) in addition to that
otherwise permitted by the foregoing subsections of this
Section 7.05, including guarantees of Indebtedness to the
extent permitted by Section 7.04 and not otherwise permitted
by the foregoing subsections of this Section 7.05, provided
that, on the date the Company becomes liable with respect to
any such additional Funded Debt and immediately after giving
effect thereto and to the concurrent retirement of any other
Funded Debt, the ratio of Pro Forma Free Cash Flow to
Maximum Pro Forma Annual Interest Charges is not less than
2.25 to 1.00; and provided, further, that the aggregate
outstanding principal amount of such additional Funded Debt
shall not exceed $400,000,000;
(k) from and after the time that the Facilities
Subsidiary becomes a Restricted Subsidiary, Indebtedness
incurred by the Facilities Subsidiary pursuant to the
Facilities Subsidiary's Revolving Credit Facility (and any
extension, renewal, refunding or refinancing thereof,
including any refunding or refinancing in an amount in
excess of the principal amount then outstanding under the
Facilities Subsidiary's Revolving Credit Facility) or any
other Indebtedness incurred by the Facilities Subsidiary
pursuant to a bank credit facility which is unsecured or is
secured by Liens permitted by subsection 7.01(h), not in
excess of an aggregate principal amount of $20,000,000 at
any time outstanding, provided that to the extent that the
Facilities Subsidiary is a Restricted Subsidiary, the
Facilities Subsidiary shall not suffer to exist any
Indebtedness permitted by this subsection (k) on any day
unless there shall have been a period of at least 45
consecutive days within the 12 months immediately preceding
such day during which the Facilities Subsidiary shall have
been free from all Indebtedness permitted by this
subsection (k); and
(l) from and after the time that the Facilities
Subsidiary or any Designated Immaterial Subsidiary becomes a
Restricted Subsidiary, Indebtedness of the Facilities
Subsidiary or any such Designated Immaterial Subsidiary
outstanding at the time the Facilities Subsidiary or such
Designated Immaterial Subsidiary becomes a Restricted
Subsidiary, provided that (i) immediately after the
Facilities Subsidiary or any such Designated Immaterial
Subsidiary becomes a Restricted Subsidiary, the Company
could incur at least $1 of additional Funded Debt pursuant
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to subsection (j) above (the Facilities Subsidiary or any
such Designated Immaterial Subsidiary shall be deemed to be
a Restricted Subsidiary for the four consecutive fiscal
quarters immediately prior to its becoming a Restricted
Subsidiary for purposes of determining Pro Forma Free Cash
Flow), and (ii) the aggregate amount (without duplication)
of such Indebtedness and all other Indebtedness, in each
case, secured by Liens permitted by subsection 7.01(g) does
not violate subclause (iv) to the proviso to such
subsection (g).
7.06 Transactions with Affiliates. The Company shall
not, and shall not suffer or permit any of its Restricted
Subsidiaries to directly or indirectly engage in any
transaction (including, without limitation, the purchase,
sale or exchange of assets or the rendering of any service),
with any Affiliate of the Company or of any such Restricted
Subsidiary, except in the Ordinary Course of Business and
pursuant to the reasonable requirements of the business of
the Company or such Restricted Subsidiary and upon fair and
reasonable terms that are no less favorable to the Company
or such Restricted Subsidiary, as the case may be, than
those which might be obtained in an arm's-length transaction
at the time from Persons not an Affiliate of the Company or
such Restricted Subsidiary.
7.07 Use of Proceeds. The Company shall not and shall
not suffer or permit any of its Subsidiaries to use any
portion of the Loan proceeds, directly or indirectly, (i) to
purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of the Company or others incurred to
purchase or carry Margin Stock, (iii) to extend credit for
the purpose of purchasing or carrying any Margin Stock, or
(iv) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act.
7.08 Sale of Stock and Indebtedness of Subsidiaries.
The Company shall not, and shall not suffer or permit any of
its Restricted Subsidiaries to, sell or otherwise dispose
of, or part with control of, any shares of stock or
Indebtedness of any Subsidiary, except to the Company or a
Restricted Subsidiary, and except that all shares of stock
and Indebtedness of any Subsidiary (other than the
Facilities Subsidiary) at the time owned by or owed to the
Company and its Restricted Subsidiaries may be sold as an
entirety for a cash consideration which represents the fair
value (as determined in good faith by the Responsible
Representatives of the PC Advisory General Partner) at the
time of sale of the shares of stock and Indebtedness so
sold, provide that the assets of such Subsidiary do not
include any assets which could not be disposed of pursuant
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to the provisions of Section 7.02 unless the conditions to
the sale of such assets set forth in Section 7.02 are
complied with, and further provided that, at the time of
such sale, such Subsidiary shall not own, directly or
indirectly, any shares of stock or Indebtedness of any other
Subsidiary (unless all of the shares of stock and
Indebtedness of such other Subsidiary owned, directly or
indirectly, by the Company and its Subsidiaries are
simultaneously being sold as permitted by this
Section 7.08).
7.09 Certain Contracts. The Company shall not, and
shall not suffer or permit any of its Restricted
Subsidiaries to enter into or be a party to:
(a) any contract providing for the making of
loans, advances or capital contributions to any Person, or
for the purchase of any Property from any Person, in each
case in order primarily to enable such Person to maintain
working capital, net worth or any other balance sheet
condition or to pay debts, dividends or expenses; or
(b) any contract for the purchase of materials,
supplies or other property or services if such contract (or
any related document) requires that payment for such
materials, supplies or other property or services shall be
made regardless of whether or not delivery of such
materials, supplies or other property or services is ever
made or tendered, provided that nothing in this
subsection (b) shall prevent the Company from (i) entering
into take-or-pay contracts in the Ordinary Course of
Business with the United States Forest Service, the Bureau
of Land Management, the Bureau of Indian Affairs, the
Washington Department of Natural Resources or similar state
or federal governmental agencies, or (ii) making payments in
satisfaction of contracts with such Persons which contracts
are deemed by the Responsible Representatives to be
disadvantageous to perform; or
(c) any contract to rent or lease (as lessee) any
real or personal property if such contract (or any related
document) provides that the obligation to make payments
thereunder is absolute and unconditional under conditions
not customarily found in commercial leases then in general
use or requires that the lessee purchase or otherwise
acquire securities or obligations of the lessor; or
(d) any contract for the sale or use of materials,
supplies or other property, or the rendering of services, if
such contract (or any related document) requires that
payment for such materials, supplies or other property, or
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the use thereof, or payment for such services, shall be
subordinated to any indebtedness (of the purchaser or user
of such materials, supplies or other property or the Person
entitled to the benefit of such services) owed or to be owed
to any Person; or
(e) any other contract which in economic effect,
is substantially equivalent to a guarantee,
except as permitted by the provisions of subsection 7.04(a),
(e), (f), (g), (h) or (i).
7.10 Joint Ventures. The Company shall not, and shall
not suffer or permit any of its Restricted Subsidiaries to
enter into any Joint Venture, other than in Permitted
Businesses and so long as any such Joint Venture is not
entered into for the purposes of evading any covenant or
restriction in any Loan Documents.
7.11 Compliance with ERISA. The Company shall not, and
shall not suffer or permit any of its Subsidiaries to,
without the consent of the Majority Banks, (i) terminate any
Plan subject to Title IV of ERISA so as to result in any
material (in the opinion of the Majority Banks) liability to
the Company or any ERISA Affiliate, (ii) permit to exist any
ERISA Event or any other event or condition with respect to
any Plan other than a Multiemployer Plan, which presents the
risk of a material (in the opinion of the Majority Banks)
liability to the Company, (iii) make a complete or partial
withdrawal (within the meaning of ERISA Section 4201) from
any Multiemployer Plan so as to result in any material (in
the opinion of the Majority Banks) liability to the Company
or any ERISA Affiliate, (iv) enter into any new Plan or
modify any existing Plan so as to increase its obligations
thereunder which could result in any material (in the
opinion of the Majority Banks) liability to any member of
the Controlled Group, or (v) permit the present value of all
nonforfeitable accrued benefits under any Plan (using the
actuarial assumptions utilized by the PBGC upon termination
of a Plan) materially (in the opinion of the Majority Banks)
to exceed the fair market value of Plan assets allocable to
such benefits, all determined as of the most recent
valuation date for each such Plan.
7.12 Sale and Leaseback. The Company shall not, and
shall not suffer or permit any of its Restricted
Subsidiaries to, enter into any arrangement with any lender
or investor or to which such lender or investor is a party
providing for the leasing by the Company or any Restricted
Subsidiary of real or personal property which has been or is
to be sold or transferred by the Company or any Restricted
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Subsidiary to such lender or investor or to any Person to
whom funds have been or are to be advanced by such lender or
investor on the security of such property or rental
obligations of the Company or any Restricted Subsidiary,
provided that this Section 7.12 shall not apply to any
property sold pursuant to subsection 7.02(h).
7.13 Restricted Payments. The Company shall not and
shall not permit or suffer any Subsidiary to directly or
indirectly pay, declare, order, make or set apart any sum
for any Restricted Payment, except that the Company may
make, pay or set apart during each calendar quarter one or
more Restricted Payments if:
(a) such Restricted Payments are in an aggregate
amount not exceeding the amount by which Available Cash with
respect to the immediately preceding calendar quarter
exceeds any amount contributed to Available Cash with
respect to such immediately preceding calendar quarter by
any Subsidiary if and to the extent that the payment of such
amount as a dividend or distribution to the Company has not
been made and is not at the time permitted by the terms of
such Subsidiary's charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental
regulation applicable to such Subsidiary, provided that in
determining Available Cash with respect to such immediately
preceding calendar quarter, the Company will include in the
amount of reserves established during such quarter pursuant
to clause (ii)(d) of the definition of Available Cash an
amount not less than (i) 50% of the aggregate amount of all
interest in respect of the Notes to be paid on the interest
date immediately following such immediately preceding
calendar quarter, (ii) 100% of the aggregate amount of all
interest in respect of the Loans to be paid on the
respective Interest Payment Dates for such Loans immediately
following such immediately preceding calendar quarter,
(iii) 25% of the aggregate amount of all principal in
respect of the Notes scheduled to be paid during the 12
calendar months immediately following such immediately
preceding calendar quarter, and (iv) 25% of the aggregate
amount of payments required to be made on account of
Mandatory Commitment Reductions scheduled during the
12 calendar months immediately following such immediately
preceding calendar quarter, and the Company will not reduce
the amount of the reserves so included, in determining
Available Cash for any calendar quarter subsequent to such
immediately preceding calendar quarter pursuant to
clause (i)(c) of the definition of Available Cash, unless
and until (A) the amount of interest or principal in respect
of which such amount has been reserved has in fact been paid
and (B) in the case of clause (iv) of this
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subsection 7.13(a), the amount of the reserves so included
exceeds fifty percent (50%) of the aggregate amount of
payments required to be made on account of the Mandatory
Commitment Reductions scheduled during the 12 calendar
months immediately following such immediately preceding
calendar quarter; and
(b) immediately after giving effect to any such
proposed action no condition or event shall exist which
constitutes an Event of Default or Material Default.
The Company will not, in any event, directly or indirectly
declare, order, pay or make any Restricted Payment except in
cash.
7.14 Change in Business. The Company shall not, and
shall not permit any of its Subsidiaries to, engage in any
business other than a Permitted Business.
7.15 Issuance of Stock by Subsidiaries. The Company
covenants that it will not permit any Subsidiary to (either
directly, or indirectly by the issuance of rights or options
for, or securities convertible into, such shares) issue,
sell or otherwise dispose of any shares of any class of its
stock or partnership or other ownership interests (other
than directors' qualifying shares) except to the Company or
a Restricted Subsidiary, and except to the extent that
holders of minority interests may be entitled to purchase
stock by reason of preemptive rights.
7.16 Amendments. The Company shall not, and shall not
suffer or permit any of its Subsidiaries to amend, modify,
supplement, waive or otherwise modify any provision of any
agreement evidencing funded Debt in excess of $35,000,000
which amendment, modification, supplement or waiver would
reasonably be expected to affect the Agent's or the Banks'
rights hereunder (including the right to be repaid pursuant
to subsection 7.02(i)) or the ability of the Company to
perform its obligations under any Loan Document.
7.17 Available Cash. The Company shall not at any time
permit Available Cash to be less than zero. For purposes of
this Section 7.17, in determining Available Cash with
respect to the immediately preceding calendar quarter, the
Company will include in the amount of reserves established
during such quarter pursuant to clause (ii)(d)(1) (with
respect to principal on Indebtedness) and clause (ii)(d)(4)
of the definition of "Available Cash" an amount not less
than (a) 50% of the aggregate amount of all interest in
respect of the Notes to be paid on the interest date
immediately following such immediately preceding calendar
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quarter, (b) 100% of the aggregate amount of all interest in
respect of the Loans to be paid on the respective Interest
Payment Dates for such Loans immediately following such
immediately preceding calendar quarter, (c) 25% of the
aggregate amount of all principal in respect of the Notes
scheduled to be paid during the 12 calendar months
immediately following such immediately preceding calendar
quarter, and (d) 25% of the aggregate amount of payments
required to be made on account of Mandatory Commitment
Reductions scheduled during the 12 calendar months
immediately following such immediately preceding calendar
quarter, and the Company will not reduce the amount of the
reserves so included in determining Available Cash for any
calendar quarter subsequent to such immediately preceding
calendar quarter pursuant to clause (i)(c) of the definition
of Available Cash, unless and until (i) the amount of
interest or principal in respect of which such amount has
been reserved has in fact been paid and (ii) in the case of
clause (d) of this Section 7.17, the amount of the reserves
so included exceeds fifty percent (50%) of the aggregate
amount of payments required to be made on account of the
Mandatory Commitment Reductions scheduled during the
12 calendar months immediately following such immediately
preceding calendar quarter.
ARTICLE VIII
EVENTS OF DEFAULT
8.01 Event of Default. Any of the following shall
constitute an "Event of Default":
(a) Non-Payment. The Company fails to pay,
(i) when and as required to be paid herein, any amount of
principal of any Loan, or (ii) within 5 days after the same
shall become due, any interest, fee or any other amount
payable hereunder or pursuant to any other Loan Document; or
(b) Representation or Warranty. Any
representation or warranty by the Company or any of its
Subsidiaries made or deemed made herein, in any Loan
Document, or which is contained in any certificate, document
or financial or other statement by the Company, its
Responsible Representatives, any of its Subsidiaries, or
their respective Responsible Officers, furnished at any time
under this Agreement, or in or under any Loan Document,
shall prove to have been incorrect in any material respect
on or as of the date made or deemed made; or
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(c) Specific Defaults. The Company fails to
perform or observe any term, covenant or agreement contained
in Sections 6.01, 6.02, 6.03 and 6.09 or Article VII; or
(d) Other Defaults. The Company fails to perform
or observe any other term or covenant contained in this
Agreement or any Loan Document, and such default shall
continue unremedied for a period of 20 days after the
earlier of (i) the date upon which a Responsible Officer or
Responsible Representative of the Company knew or should
have known of such failure or (ii) the date upon which
written notice thereof is given to the Company by the Agent
or any Bank; or
(e) Cross-Default. The Company or any of its
Subsidiaries (i) fails to make any payment in respect of any
Indebtedness having an aggregate principal amount (including
undrawn committed or available amounts and including amounts
owing to all creditors under any combined or syndicated
credit arrangement) of more than $5,000,000 when due
(whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise); or (ii) fails to
perform or observe any other condition or covenant, or any
other event shall occur or condition exist, under any
agreement or instrument relating to any such Indebtedness,
if the effect of such failure, event or condition is to
cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on behalf of such holder
or holders or beneficiary or beneficiaries) to cause such
Indebtedness to be declared to be due and payable prior to
its stated maturity, or with respect to any contingent
obligations, to become payable or cash collateral in respect
thereof to be demanded; or
(f) Insolvency; Voluntary Proceedings. The
Company, any of its Subsidiaries, or any Partner Entity
(i) ceases or fails to be Solvent, or generally fails to
pay, or admits in writing its inability to pay, its debts as
they become due, subject to applicable grace periods, if
any, whether at stated maturity or otherwise;
(ii) voluntarily ceases to conduct its business in the
ordinary course; (iii) commences any Insolvency Proceeding
with respect to itself; or (iv) takes any action to
effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary
Insolvency Proceeding is commenced or filed against the
Company, the Facilities Subsidiary, any Restricted
Subsidiary of the Company, or any Partner Entity, or any
writ, judgment, warrant of attachment, execution or similar
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process, is issued or levied against a substantial part of
the Company's, any of its Restricted Subsidiaries', any
Partner Entities' or the Facilities Subsidiaries'
Properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment,
execution or similar process shall not be released, vacated
or fully bonded within 60 days after commencement, filing or
levy; (ii) the Company, any Partner Entity, the Facilities
Subsidiary, or any of the Company's Restricted Subsidiaries
admits the material allegations of a petition against it in
any Insolvency Proceeding, or an order for relief (or
similar order under non-U.S. law) is ordered in any
Insolvency Proceeding; or (iii) the Company, any Partner
Entity, any of the Company's Restricted Subsidiaries, or the
Facilities Subsidiary acquiesces in the appointment of a
receiver, trustee, custodian, conservator, liquidator,
mortgagee in possession (or agent therefor), or other
similar Person for itself or a substantial portion of its
Property or business; or
(h) ERISA. (i) A member of the Controlled Group
shall fail to pay when due, after the expiration of any
applicable grace period, any installment payment with
respect to its withdrawal liability under a Multiemployer
Plan; (ii) the Company or an ERISA Affiliate shall fail to
satisfy its contribution requirements under
Section 412(c)(11) of the Code, whether or not it has sought
a waiver under Section 412(d) of the Code; (iii) in the case
of an ERISA Event involving the withdrawal from a Plan of a
"substantial employer" (as defined in Section 4001(a)(2) or
Section 4062(e) of ERISA), the withdrawing employer's
proportionate share of that Plan's Unfunded Pension
Liabilities is more than $10,000,000; (iv) in the case of an
ERISA Event involving the complete or partial withdrawal
from a Multiemployer Plan, the withdrawing employer has
incurred a withdrawal liability in an aggregate amount
exceeding $10,000,000; (v) in the case of an ERISA Event not
described in clause (iii) or (iv), the Unfunded Pension
Liabilities of the relevant Plan or Plans exceed
$10,000,000; (vi) a Plan that is intended to be qualified
under Section 401(a) of the Code shall lose its
qualification, and the loss can reasonably be expected to
impose on members of the Controlled Group liability (for
additional taxes, to Plan participants, or otherwise) in the
aggregate amount of $10,000,000 or more; (vii) the
commencement or increase of contributions to, or the
adoption of or the amendment of a Plan by, a member of the
Controlled Group shall result in a net increase in unfunded
liabilities to the Controlled Group in excess of
$10,000,000; (viii) any member of the Controlled Group
engages in or otherwise becomes liable for a non-exempt
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prohibited transaction and the initial tax or additional tax
under section 4975 of the Code relating thereto might
reasonably be expected to exceed $10,000,000; (ix) a
violation of section 404 or 405 of ERISA or the exclusive
benefit rule under section 401(a) of the Code if such
violation might reasonably be expected to expose a member or
members of the Controlled Group to monetary liability in
excess of $10,000,000; (x) any member of the Controlled
Group is assessed a tax under section 4980B of the Code in
excess of $10,000,000; or (xi) the occurrence of any
combination of events listed in clauses (iii) through (x)
that involves a potential liability, net increase in
aggregate Unfunded Pension Liabilities, unfunded
liabilities, or any combination thereof, in excess of
$10,000,000; or
(i) Monetary Judgments. One or more non-
interlocutory judgments, orders or decrees shall be entered
against the Company or any of its Subsidiaries involving in
the aggregate a liability (not fully covered by independent
third-party insurance) as to any single or related series of
transactions, incidents or conditions, of $25,000,000 or
more, and the same shall remain unsatisfied, unvacated and
unstayed pending appeal for a period of 30 days after the
entry thereof; or
(j) Non-Monetary Judgments. Any non-monetary
judgment, order or decree shall be rendered against the
Company or any of its Subsidiaries which does or would
reasonably be expected to have a Material Adverse Effect,
and there shall be any period of 10 consecutive days during
which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in
effect; or
(k) Montana Timberlands. The Company shall not
have acquired the Montana Timberlands on or before the date
that is 30 days after the Closing Date; or
(l) Adverse Change. There shall occur (i) a
material adverse change in, or a material adverse effect
upon, any of the operations, business, properties, or
condition (financial or otherwise) of the Company or the
Company and its Subsidiaries taken as a whole or as to any
Restricted Subsidiary which materially impairs the ability
of the Company to perform under any Loan Document and avoid
any Event of Default, or (ii) a material adverse effect upon
the legality, validity, binding effect or enforceability of
any Loan Document.
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8.02 Remedies. If any Event of Default occurs, the
Agent shall, at the request of, or may, with the consent of,
the Majority Banks,
(a) declare the Commitment of each Bank to make
Loans to be terminated, whereupon such Commitments shall
forthwith be terminated;
(b) declare the unpaid principal amount of all
outstanding Loans, all interest accrued and unpaid thereon,
and all other amounts owing or payable hereunder or under
any other Loan Document to be immediately due and payable;
without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by the
Company; and
(c) exercise on behalf of itself and the Banks all
rights and remedies available to it and the Banks under the
Loan Documents or applicable law;
provided, however, that upon the occurrence of any event
specified in paragraph (f) or (g) of Section 8.01 above (in
the case of clause (i) of paragraph (g) upon the expiration
of the 60-day period mentioned therein), the obligation of
each Bank to make Loans shall automatically terminate and
the unpaid principal amount of all outstanding Loans and all
interest and other amounts as aforesaid shall automatically
become due and payable without further act of the Agent or
any Bank.
8.03 Rights Not Exclusive. The rights provided for in
this Agreement and the other Loan Documents are cumulative
and are not exclusive of any other rights, powers,
privileges or remedies provided by law or in equity, or
under any other instrument, document or agreement now
existing or hereafter arising.
ARTICLE IX
THE AGENT
9.01 Appointment and Authorization. Each Bank hereby
irrevocably appoints, designates and authorizes the Agent to
take such action on its behalf under the provisions of this
Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to
it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably
incidental thereto, including, without limitation, to enter
into Cash Collateral Account Agreements from time to time in
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accordance with subsection 7.02(i) of this Agreement, and to
release funds to the Company in accordance with Section 1(b)
of the Cash Collateral Agreement pursuant to an Officer's
Certificate substantially in the form attached thereto as
Exhibit A. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan
Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein,
nor shall the Agent have or be deemed to have any fiduciary
relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other
Loan Document or otherwise exist against the Agent.
9.02 Delegation of Duties. The Agent may execute any
of its duties under this Agreement or any other Loan
Document by or through agents, employees or attorneys-in-
fact and shall be entitled to advice of counsel concerning
all matters pertaining to such duties. The Agent shall not
be responsible for the negligence or misconduct of any agent
or attorney-in-fact that it selects with reasonable care.
9.03 Liability of Agent. None of the Agent-Related
Persons shall (i) be liable for any action taken or omitted
to be taken by any of them under or in connection with this
Agreement or any other Loan Document (except for its own
gross negligence or willful misconduct), or (ii) be
responsible in any manner to any of the Banks for any
recital, statement, representation or warranty made by the
Company or any Subsidiary or Affiliate of the Company, or
any officer thereof, contained in this Agreement or in any
other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this
Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Loan Document, or for any
failure of the Company or any other party to any Loan
Document to perform its obligations hereunder or thereunder.
No Agent-Related Person shall be under any obligation to any
Bank to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or
to inspect the Properties, books or records of the Company
or any of the Company's Subsidiaries or Affiliates.
9.04 Reliance by Agent.
(a) The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution,
notice, consent, certificate, affidavit, letter, telegram,
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facsimile, telex or telephone message, statement or other
document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal
counsel (including counsel to the Company), independent
accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to
take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or
concurrence of the Majority Banks as it deems appropriate
and, if it so requests, it shall first be indemnified to its
satisfaction by the Banks against any and all liability and
expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all
cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Majority Banks
and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with
the conditions specified in Section 4.01, each Bank that has
executed this Agreement shall be deemed to have consented
to, approved or accepted or to be satisfied with each
document or other matter either sent or made available by
the Agent to such Bank for consent, approval, acceptance or
satisfaction, or required thereunder to be consented to or
approved by or acceptable or satisfactory to the Bank,
unless an officer of the Agent responsible for the
transactions contemplated by the Loan Documents shall have
received notice from the Bank prior to the initial Borrowing
specifying its objection thereto and either such objection
shall not have been withdrawn by notice to the Agent to that
effect or the Bank shall not have made available to the
Agent the Bank's ratable portion of such Borrowing.
9.05 Notice of Default. The Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default
or Event of Default, except with respect to defaults in the
payment of principal, interest and fees required to be paid
to the Agent for the account of the Banks, unless the Agent
shall have received written notice from a Bank or the
Company referring to this Agreement, describing such Default
or Event of Default and stating that such notice is a
"notice of default". In the event that the Agent receives
such a notice, the Agent shall give prompt notice thereof to
the Banks. The Agent shall take such action with respect to
such Default or Event of Default as shall be requested by
the Majority Banks in accordance with Article VIII;
provided, however, that unless and until the Agent shall
have received any such request, the Agent may (but shall not
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be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest
of the Banks.
9.06 Credit Decision. Each Bank expressly acknowledges
that none of the Agent-Related Persons has made any
representation or warranty to it and that no act by the
Agent hereinafter taken, including any review of the affairs
of the Company and its Subsidiaries shall be deemed to
constitute any representation or warranty by the Agent to
any Bank. Each Bank represents to the Agent that it has,
independently and without reliance upon the Agent and based
on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation
into the business, prospects, operations, property,
financial and other condition and creditworthiness of the
Company and its Subsidiaries, and all applicable bank
regulatory laws relating to the transactions contemplated
thereby, and made its own decision to enter into this
Agreement and extend credit to the Company hereunder. Each
Bank also represents that it will, independently and without
reliance upon the Agent and based on such documents and
information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and
decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to
the business, prospects, operations, property, financial and
other condition and creditworthiness of the Company. Except
for notices, reports and other documents expressly herein
required to be furnished to the Banks by the Agent, the
Agent shall not have any duty or responsibility to provide
any Bank with any credit or other information concerning the
business, prospects, operations, property, financial and
other condition or creditworthiness of the Company which may
come into the possession of any of the Agent-Related
Persons.
9.07 Indemnification. Whether or not the transactions
contemplated hereby shall be consummated, the Banks shall
indemnify upon demand the Agent-Related Persons (to the
extent not reimbursed by or on behalf of the Company and
without limiting the obligation of the Company to do so),
ratably from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses and disbursements of any kind
whatsoever which may at any time (including at any time
following the repayment of the Loans and the termination or
resignation of the related Agent) be imposed on, incurred by
or asserted against any such Person in any way relating to
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or arising out of this Agreement or any document
contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action
taken or omitted by any such Person under or in connection
with any of the foregoing; provided, however, that no Bank
shall be liable for the payment to the Agent-Related Persons
of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from such
Person's gross negligence or willful misconduct. Without
limitation of the foregoing, each Bank shall reimburse the
Agent upon demand for its ratable share of any costs or out-
of-pocket expenses (including reasonable Attorney Costs)
incurred by the Agent in connection with the preparation,
execution, delivery, administration, modification, amendment
or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other
Loan Document, or any document contemplated by or referred
to herein to the extent that the Agent is not reimbursed for
such expenses by or on behalf of the Company. Without
limiting the generality of the foregoing, if the Internal
Revenue Service or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that the
Agent did not properly withhold tax from amounts paid to or
for the account of any Bank (because the appropriate form
was not delivered, was not properly executed, or because
such Bank failed to notify the Agent of a change in
circumstances which rendered the exemption from, or
reduction of, withholding tax ineffective, or for any other
reason) such Bank shall indemnify the Agent fully for all
amounts paid, directly or indirectly, by the Agent as tax or
otherwise, including penalties and interest, and including
any taxes imposed by any jurisdiction on the amounts payable
to the Agent under this Section, together with all costs and
expenses and attorneys' fees (including reasonable Attorney
Costs). The obligation of the Banks in this Section shall
survive the payment of all Obligations hereunder.
9.08 Agent in Individual Capacity. BofA and its
Affiliates may make loans to, issue letters of credit for
the account of, accept deposits from, acquire equity
interests in and generally engage in any kind of banking,
trust, financial advisory or other business with the Company
and its Subsidiaries and Affiliates as though BofA was not
the Agent hereunder and without notice to or consent of the
Banks. With respect to its Loans, BofA shall have the same
rights and powers under this Agreement as any other Bank and
may exercise the same as though it were not the Agent, and
the terms "Bank" and "Banks" shall include BofA in its
individual capacity. BofA has provided and may in the
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future provide credit facilities (which presently consist of
the issuance of a letter of credit in the amount of
$32,486,640 for the benefit of Burlington Resources Inc.)
for the account of or to PCMC Intermediate Holdings, a
Delaware limited partnership (the "GP Borrower"), and DPI
Intermediate Holdings, L.P., a Delaware limited partnership
(the "DPI Borrower"), in connection with or related to the
acquisition by the GP Borrower and the PCMC General Partner
of the limited and general partnership interests in the
General Partner, and the acquisition by the DPI Borrower and
PC Advisory Partners II, L.P. of the limited and general
partnership interests in DPI Sub L.P., a Delaware limited
partnership that owned the Deferred Participation Interests
(as defined in the Partnership Agreement). Those credit
facilities are secured by, among other things, security
interests in the general and limited partnership interests
in the General Partner and in DPI Sub L.P.; accordingly,
upon the exercise of remedies following a default under
those credit facilities, BofA could become the owner of (or
could transfer to a third person) those limited and general
partnership interests. Each Bank acknowledges that (i) it
has, independently and without reliance upon BofA and based
on such documents and information as it has deemed
appropriate, made its own investigation into those credit
facilities; (ii) BofA has responded satisfactorily to any
request by such Bank for information regarding such credit
facilities; (iii) BofA may manage its relationship with the
GP Borrower and the DPI Borrower, and deal with its
collateral for such credit facilities, as it sees fit as
though it were not the Agent hereunder; (iv) BofA's
liability under the letter of credit will be directly
related to, and the ability of the GP Borrower and the DPI
Borrower to pay sums due under such credit facilities may be
dependant in whole or part on, distributions received from
the Company; and (v) BofA shall have no obligation to
disclose to any Bank any information received by BofA in
connection with such credit facilities.
9.09 Successor Agent. The Agent may, and at the
request of the Majority Banks shall, resign as Agent upon 30
days' notice to the Banks. If an Agent shall resign as
Agent under this Agreement, the Majority Banks shall appoint
from among the Banks a successor agent for the Banks. If no
successor agent is appointed prior to the effective date of
the resignation of the Agent, the Agent may appoint, after
consulting with the Banks and the Company, a successor agent
from among the Banks. Upon the acceptance of its
appointment as successor agent hereunder, such successor
agent shall succeed to all the rights, powers and duties of
the retiring Agent and the term "Agent" shall mean such
successor agent and the retiring Agent's appointment, powers
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and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of
this Article IX and Sections 10.04 and 10.05 shall inure to
its benefit as to any actions taken or omitted to be taken
by it while it was Agent under this Agreement. If no
successor agent has accepted appointment as Agent by the
date which is 30 days following a retiring Agent's notice of
resignation, the retiring Agent's resignation shall
nevertheless thereupon become effective and the Banks shall
perform all of the duties of the Agent hereunder until such
time, if any, as the Majority Banks appoint a successor
agent as provided for above.
ARTICLE X
MISCELLANEOUS
10.01 Amendments and Waivers. No amendment or waiver
of any provision of this Agreement or any other Loan
Document, and no consent with respect to any departure by
the Company therefrom, shall be effective unless the same
shall be in writing and signed by the Majority Banks, the
Company and acknowledged by the Agent, and then such waiver
shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no
such waiver, amendment, or consent shall, unless in writing
and signed by all the Banks, the Company and acknowledged by
the Agent, do any of the following:
(a) increase or extend the Commitment of any Bank
(or reinstate any Commitment terminated pursuant to
subsection 8.02(a)) or subject any Bank to any additional
obligations;
(b) postpone or delay any date fixed for any
payment of principal, interest, fees or other amounts due to
the Banks (or any of them) hereunder or under any Loan
Document;
(c) reduce the principal of, or the rate of
interest specified herein on any Loan, or of any fees or
other amounts payable hereunder or under any Loan Document;
(d) change the percentage of the Commitments or of
the aggregate unpaid principal amount of the Loans which
shall be required for the Banks or any of them to take any
action hereunder; or
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(e) amend this Section 10.01 or Section 2.14 or
any provision providing for consent or other action by all
Banks;
and, provided further, that no amendment, waiver or consent
shall, unless in writing and signed by the Agent in addition
to the Majority Banks or all the Banks, as the case may be,
affect the rights or duties of the Agent under this
Agreement or any other Loan Document.
10.02 Notices.
(a) All notices, requests and other communications
provided for hereunder shall be in writing (including,
unless the context expressly otherwise provides, by
facsimile transmission, provided that any matter transmitted
by the Company by facsimile (i) shall be immediately
confirmed by a telephone call to the recipient at the number
specified on the applicable signature page hereof, and
(ii) shall be followed promptly by a hard copy original
thereof) and mailed, faxed or delivered, to the address or
facsimile number specified for notices on the applicable
signature page hereof; or, as directed to the Company or the
Agent, to such other address as shall be designated by such
party in a written notice to the other parties, and as
directed to each other party, at such other address as shall
be designated by such party in a written notice to the
Company and the Agent.
(b) All such notices, requests and communications
shall, when transmitted by overnight delivery, or faxed, be
effective when delivered for overnight (next-day) delivery,
or transmitted by facsimile machine, respectively, or if
mailed, upon the third Business Day after the date deposited
into the U.S. mail, or if delivered, upon delivery; except
that notices pursuant to Article II or IX shall not be
effective until actually received by the Agent.
(c) The Company acknowledges and agrees that any
agreement of the Agent and the Banks at Article II herein to
receive certain notices by telephone and facsimile is solely
for the convenience and at the request of the Company. The
Agent and the Banks shall be entitled to rely on the
authority of any Person purporting to be a Person authorized
by the Company to give such notice and the Agent and the
Banks shall not have any liability to the Company or other
Person on account of any action taken or not taken by the
Agent or the Banks in reliance upon such telephonic or
facsimile notice. The obligation of the Company to repay
the Loans shall not be affected in any way or to any extent
by any failure by the Agent and the Banks to receive written
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confirmation of any telephonic or facsimile notice or the
receipt by the Agent and the Banks of a confirmation which
is at variance with the terms understood by the Agent and
the Banks to be contained in the telephonic or facsimile
notice.
10.03 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the
Agent or any Bank, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or
privilege.
10.04 Costs and Expenses. The Company shall, whether
or not the transactions contemplated hereby shall be
consummated:
(a) pay or reimburse BofA (including in its
capacity as Agent) within five Business Days after demand
(subject to subsection 4.01(e)) for all reasonable costs and
expenses incurred by BofA (including in its capacity as
Agent) in connection with the development, preparation,
delivery, administration and execution of, and any
amendment, supplement, waiver or modification to (in each
case, whether or not consummated), this Agreement, any Loan
Document and any other documents prepared in connection
herewith or therewith, and the consummation of the
transactions contemplated hereby and thereby, including the
reasonable Attorney Costs incurred by BofA (including in its
capacity as Agent) with respect thereto; provided, however,
that this subsection (a) shall not apply to any such costs
and expenses incurred by BofA after any date that BofA is no
longer the Agent hereunder and after any such date any
references in this subsection (a) to BofA shall be deemed a
reference to the successor Agent; and
(b) pay or reimburse each Bank and the Agent
within five Business Days after demand (subject to
subsection 4.01(e)) for all costs and expenses incurred by
them in connection with the enforcement, attempted
enforcement, or preservation of any rights or remedies
(including in connection with any "workout" or restructuring
regarding the Loans, and including in any Insolvency
Proceeding or appellate proceeding) under this Agreement,
any other Loan Document, and any such other documents,
including Attorney Costs and appraisal (including the
allocated cost of internal appraisal services), audit,
environmental inspection and review (including the allocated
cost of such internal services), and search and filing
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costs, fees and expenses, incurred by the Agent and any
Bank.
10.05 Indemnity. Whether or not the transactions
contemplated hereby shall be consummated: The Company shall
pay, indemnify, and hold each Bank, the Agent and each of
their respective officers, directors, employees, counsel,
agents and attorneys-in-fact (each, an "Indemnified Person")
harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, charges, expenses or disbursements (including
Attorney Costs) of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance
and administration of this Agreement and any other Loan
Documents, or the transactions contemplated hereby and
thereby, and with respect to any investigation, litigation
or proceeding (including any Insolvency Proceeding or
appellate proceeding) related to this Agreement or the Loans
or the use of the proceeds thereof, whether or not any
Indemnified Person is a party thereto (all the foregoing,
collectively, the "Indemnified Liabilities"); provided, that
the Company shall have no obligation hereunder to any
Indemnified Person with respect to Indemnified Liabilities
arising from the gross negligence or willful misconduct of
such Indemnified Person. The agreements in this
Section shall survive payment of all other Obligations.
10.06 Marshalling; Payments Set Aside. Neither the
Agent nor the Banks shall be under any obligation to
marshall any assets in favor of the Company or any other
Person or against or in payment of any or all of the
Obligations. To the extent that the Company makes a payment
or payments to the Agent or the Banks, or the Agent or the
Banks enforce their Liens or exercise their rights of set-
off, and such payment or payments or the proceeds of such
enforcement or set-off or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement
entered into by the Agent in its discretion) to be repaid to
a trustee, receiver or any other party in connection with
any Insolvency Proceeding, or otherwise, then (a) to the
extent of such recovery the obligation or part thereof
originally intended to be satisfied shall be revived and
continued in full force and effect as if such payment had
not been made or such enforcement or set-off had not
occurred, and (b) each Bank severally agrees to pay to the
Agent upon demand its ratable share of the total amount so
recovered from or repaid by the Agent.
10.07 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of
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the parties hereto and their respective successors and
assigns, except that the Company may not assign or transfer
any of its rights or obligations under this Agreement
without the prior written consent of the Agent and each
Bank.
10.08 Assignments, Participations, etc.
(a) Prior to the date that is one year after the
Closing Date, the Banks shall be prohibited from assigning
all or any part of the Loans, the Commitments, or any other
right or obligation hereunder. Thereafter, any Bank may,
with the written consent of the Company at all times other
than during the existence of an Event of Default and the
Agent, which consents of the Company and the Agent may be
given or withheld in each of their sole discretion, at any
time assign and delegate to one or more Eligible Assignees
(provided that no written consent of the Company or the
Agent shall be required in connection with any assignment
and delegation by a Bank to an Eligible Assignee that is an
Affiliate of such Bank) (each an "Assignee") all, or any
ratable part of all, of the Loans, the Commitments and the
other rights and obligations of such Bank hereunder;
provided that no assignment shall in any event be less than
$20,000,000 unless as a result of such assignment the
assigning Bank's rights and obligations hereunder shall be
reduced to zero; and provided further that if a Bank assigns
less than all of its rights and obligations hereunder, such
Bank's remaining Commitment, after giving effect to such
assignment, shall not be less than $20,000,000; provided,
however, that (i) the Company and the Agent may continue to
deal solely and directly with such Bank in connection with
the interest so assigned to an Assignee until (A) written
notice of such assignment, together with payment
instructions, addresses and related information with respect
to the Assignee, shall have been given to the Company and
the Agent by such Bank and the Assignee; (B) such Bank and
its Assignee shall have delivered to the Company and the
Agent an Assignment and Acceptance in the form of Exhibit F
("Assignment and Acceptance") and (C) the assignor Bank or
Assignee has paid to the Agent a processing fee in the
amount of $3,500.
(b) From and after the date that the Agent
notifies the assignor Bank that it has received (and
provided its consent with respect to) an executed Assignment
and Acceptance and payment of the above-referenced
processing fee, (i) the Assignee thereunder shall be a party
hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and
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obligations of a Bank under the Loan Documents, and (ii) the
assignor Bank shall, to the extent that rights and
obligations hereunder and under the other Loan Documents
have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its
obligations under the Loan Documents.
(c) Immediately upon each Assignee's making its
processing fee payment under the Assignment and Acceptance,
this Agreement, shall be deemed to be amended to the extent,
but only to the extent, necessary to reflect the addition of
the Assignee and the resulting adjustment of the Commitments
arising therefrom. The Commitment allocated to each Assignee
shall reduce such Commitments of the assigning Bank pro
tanto.
(d) Any Bank may at any time sell to one or more
commercial banks or other Persons not Affiliates of the
Company (a "Participant") participating interests in any
Loans, the Commitment of that Bank and the other interests
of that Bank (the "originating Bank") hereunder and under
the other Loan Documents; provided, however, that (i) the
originating Bank's obligations under this Agreement shall
remain unchanged, (ii) the originating Bank shall remain
solely responsible for the performance of such obligations,
(iii) the Company and the Agent shall continue to deal
solely and directly with the originating Bank in connection
with the originating Bank's rights and obligations under
this Agreement and the other Loan Documents, and (iv) no
Bank shall transfer or grant any participating interest
under which the Participant shall have rights to approve any
amendment to, or any consent or waiver with respect to, this
Agreement or any other Loan Document, except to the extent
such amendment, consent or waiver would require unanimous
consent of the Banks as described in the first proviso to
Section 10.01. In the case of any such participation, the
Participant shall be entitled to the benefit of Sections
3.01, 3.03 and 10.05 as though it were also a Bank
hereunder, and if amounts outstanding under this Agreement
are due and unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event
of Default, each Participant shall be deemed to have the
right of set-off in respect of its participating interest in
amounts owing under this Agreement to the same extent as if
the amount of its participating interest were owing directly
to it as a Bank under this Agreement.
(e) Each Bank agrees to take normal and reasonable
precautions and exercise due care to maintain the
confidentiality of all information identified as
"confidential" by the Company and provided to it by the
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Company or any Subsidiary of the Company, or by the Agent on
such Company's or Subsidiary's behalf, in connection with
this Agreement or any other Loan Document, and neither it
nor any of its Affiliates shall use any such information for
any purpose or in any manner other than pursuant to the
terms contemplated by this Agreement; provided, however,
that any Bank may disclose such information (A) to the
extent that such information was or becomes generally
available to the public other than as a result of a
disclosure by the Bank; (B) to the extent such information
was or becomes available to such Bank to whom it was
furnished on a non-confidential basis; (C) at the request or
pursuant to any requirement of any Governmental Authority to
which the Bank is subject or in connection with an
examination of such Bank by any such authority; (D) pursuant
to subpoena or other court process; (E) when required to do
so in accordance with the provisions of any applicable
Requirement of Law; (F) to the extent reasonably required in
connection with any litigation or proceeding to which the
Agent, any Bank or their respective Affiliates may be party;
(G) to the extent reasonably required in connection with the
exercise of any remedy hereunder or under any other Loan
Document; (H) to such Bank's independent auditors and other
professional advisors. Notwithstanding the foregoing, the
Company authorizes each Bank to disclose to any Participant
or Assignee (each, a "Transferee") and to any prospective
Transferee, such financial and other information in such
Bank's possession concerning the Company or its Subsidiaries
which has been delivered to the Agent or the Banks pursuant
to this Agreement or which has been delivered to the Agent
or the Banks by the Company in connection with the Banks'
credit evaluation of the Company prior to entering into this
Agreement; provided that, unless otherwise agreed by the
Company, such Transferee agrees in writing to such Bank to
keep such information confidential to the same extent
required of the Banks hereunder.
(f) Notwithstanding any other provision contained
in this Agreement or any other Loan Document to the
contrary, any Bank may assign all or any portion of the
Loans held by it to any Federal Reserve Bank or the United
States Treasury as collateral security pursuant to
Regulation A of the Federal Reserve Board and any Operating
Circular issued by such Federal Reserve Bank, provided that
any payment in respect of such assigned Loans made by the
Company to or for the account of the assigning or pledging
Bank in accordance with the terms of this Agreement shall
satisfy the Company's obligations hereunder in respect to
such assigned Loans to the extent of such payment. No such
assignment shall release the assigning Bank from its
obligations hereunder.
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10.09 Set-off. In addition to any rights and remedies
of the Banks provided by law, if an Event of Default exists,
each Bank is authorized at any time and from time to time,
without prior notice to the Company, any such notice being
waived by the Company to the fullest extent permitted by
law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time
held by, and other indebtedness at any time owing to, such
Bank to or for the credit or the account of the Company
against any and all Obligations owing to such Bank, now or
hereafter existing, irrespective of whether or not the Agent
or such Bank shall have made demand under this Agreement or
any Loan Document and although such Obligations may be
contingent or unmatured. Each Bank agrees promptly to
notify the Company and the Agent after any such set-off and
application made by such Bank; provided, however, that the
failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Bank under
this Section 10.09 are in addition to the other rights and
remedies (including other rights of set-off) which the Bank
may have.
10.10 Automatic Debits of Fees. With respect to any
commitment fee, facility fee, or other fee, or any other
cost or expense (including Attorney Costs) due and payable
to the Agent or BofA under the Loan Documents, the Company
hereby irrevocably authorizes BofA to debit any deposit
account of the Company with BofA in an amount such that the
aggregate amount debited from all such deposit accounts does
not exceed such fee or other cost or expense. If there are
insufficient funds in such deposit accounts to cover the
amount of the fee or other cost or expense then due, such
debits will be reversed (in whole or in part, in BofA's sole
discretion) and such amount not debited shall be deemed to
be unpaid. No such debit under this Section 10.10 shall be
deemed a setoff.
10.11 Notification of Addresses, Lending Offices, Etc.
Each Bank shall notify the Agent in writing of any changes
in the address to which notices to the Bank should be
directed, of addresses of its Offshore Lending Office, of
payment instructions in respect of all payments to be made
to it hereunder and of such other administrative information
as the Agent shall reasonably request.
10.12 Counterparts. This Agreement may be executed by
one or more of the parties to this Agreement in any number
of separate counterparts, each of which, when so executed,
shall be deemed an original, and all of said counterparts
taken together shall be deemed to constitute but one and the
same instrument. A set of the copies of this Agreement
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signed by all the parties shall be lodged with the Company
and the Agent.
10.13 Severability. The illegality or unenforceability
of any provision of this Agreement or any instrument or
agreement required hereunder shall not in any way affect or
impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement
required hereunder.
10.14 No Third Parties Benefited. This Agreement is
made and entered into for the sole protection and legal
benefit of the Company, the Banks and the Agent, and their
permitted successors and assigns, and no other Person shall
be a direct or indirect legal beneficiary of, or have any
direct or indirect cause of action or claim in connection
with, this Agreement or any of the other Loan Documents.
Neither the Agent nor any Bank shall have any obligation to
any Person not a party to this Agreement or other Loan
Documents.
10.15 Time. Time is of the essence as to each term or
provision of this Agreement and each of the other Loan
Documents.
10.16 Governing Law and Jurisdiction. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF CALIFORNIA; PROVIDED THAT THE AGENT AND
THE BANKS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
10.17 Arbitration; Reference.
(a) Mandatory Arbitration. Any controversy or claim
between or among the parties, including but not limited to
those arising out of or relating to this Agreement or any
agreements or instruments relating hereto or delivered in
connection herewith and any claim based on or arising from
an alleged tort, shall at the request of any party be
determined by arbitration. The arbitration shall be
conducted in accordance with the United States Arbitration
Act (Title 9, U.S. Code), notwithstanding any choice of law
provision in this Agreement, and under the Commercial Rules
of the American Arbitration Association ("AAA"). The
arbitrator(s) shall give effect to applicable statutes of
limitation in determining any claim. Any controversy
concerning whether an issue is arbitrable shall be
determined by the arbitrator(s). Judgment upon the
arbitration award may be entered in any court having
jurisdiction. The institution and maintenance of an action
for judicial relief or pursuit of a provisional or ancillary
remedy shall not constitute a waiver of the right of any
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party, including the plaintiff, to submit the controversy or
claim to arbitration if any other party contests such action
for judicial relief.
(b) Judicial Reference. At the request of any party
a controversy or claim which is not submitted to arbitration
as provided and limited in subparagraph (a) shall be
determined by a reference in accordance with California Code
of Civil Procedure Section 638 et seq. If such an election
is made, the parties shall designate to the court a referee
or referees selected under the auspices of the AAA in the
same manner as arbitrators are selected in AAA-sponsored
proceedings. The presiding referee of the panel, or the
referee if there is a single referee, shall be an active
attorney or retired judge. Judgment upon the award rendered
by such referee or referees shall be entered in the court in
which such proceeding was commenced in accordance with
California Code of Civil Procedure Sections 644 and 645.
(c) Provisional Remedies, Self-Help and
Foreclosure. No provision of this paragraph shall limit the
right of any party to this Agreement to exercise self-help
remedies such as setoff, foreclosure against or sale of any
real or personal property collateral or security, or
obtaining provisional or ancillary remedies from a court of
competent jurisdiction before, after, or during the pendency
of any arbitration or other proceeding. The exercise of a
remedy does not waive the right of either party to resort to
arbitration or reference.
10.18 Entire Agreement. This Agreement, together with
the other Loan Documents, embodies the entire agreement and
understanding among the Company, the Banks and the Agent,
and supersedes all prior or contemporaneous Agreements and
understandings of such Persons, verbal or written, relating
to the subject matter hereof and thereof, except for the fee
letter referenced in subsection 2.10(a), and any prior
arrangements made with respect to the payment by the Company
of (or any indemnification for) any fees, costs or expenses
103
<PAGE> 111
payable to or incurred (or to be incurred) by or on behalf
of the Agent or the Banks.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered in San
Francisco, California by their proper and duly authorized
officers as of the day and year first above written.
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company, L.P.,
its general partner
By: ______________________________
Title: ___________________________
Address for notices:
999 Third Avenue, Suite 2300
Seattle, WA 98104
Attn: Chief Financial Officer
Facsimile: (206) 467-3797
Tel: (206) 467-3600
104 [signatures continue]
<PAGE> 112
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By: ___________________________________
Title: ________________________________
Address for notices:
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attn: Global Agency #5596
Facsimile: (415) 622-4894
Tel: (415) 953-0849
Attention: Daniel G. Farthing
Address for payments:
Bank of America NT&SA
ABA 121-000-358
Attention: Global Agency #5596
1850 Gateway Blvd.
Concord, CA 94520
for credit to Account
No. 1233-6-14205
105 [signatures continue]
<PAGE> 113
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as a Bank
By: ___________________________________
Title: ________________________________
Address for notices:
San Francisco Credit Products
(#3838)
555 California Street,
41st Floor
San Francisco, CA 94104
Attention: Michael J. Balok
Facsimile: (415) 622-4585
Tel: (415) 622-2018
Address for payments:
Bank of America National Trust
and Savings Association
Global Payment Operations
Customer Service Americas
(#5693)
1850 Gateway Boulevard
Concord, CA 94520
Attention: Daryl L. Hurst
ABA 121-000-358 SF
Domestic and Offshore Lending Office:
Same as address for payments
106 [signatures continue]
<PAGE> 114
NATIONSBANK OF NORTH CAROLINA, N.A.
By: ___________________________________
Title: ________________________________
Address for notices:
1 NationsBank Plaza
NC1-002-06-19
Charlotte, NC 28255
Attention: William White
Facsimile: (704) 386-8694
Tel: (704) 386-7891
Address for payments:
NationsBank of North Carolina, N.A.
ABA 053-000-196
Specialized Loan Support
Account No. 13662122506
Domestic and Offshore Lending Office:
Forest Products
NationsBank Corporate Center,
8th Fl.
Charlotte, NC 28255
107 [signatures continue]
<PAGE> 115
UNITED STATES NATIONAL BANK OF OREGON
By: ___________________________________
Title: ________________________________
Address for Notices:
c/o U.S. Bank of Washington
1414 Fourth Avenue WWH276
Seattle, WA 98101
Attention: Peter G. Bentley,
Vice President
Facsimile: (206) 587-5259
Tel: (206) 587-5237
Address for payments:
United States National Bank of Oregon
Commercial Loan Department
Attention: Fran
Reference: Plum Creek
Domestic and Offshore Lending Office:
Same as notice address
108 [signatures continue]
<PAGE> 116
WELLS FARGO BANK, N.A.
By: ___________________________________
Title: ________________________________
Address for notices:
420 Montgomery St., 9th Floor
San Francisco, CA 94163
(for notices of Borrowings)
Attention: Joan Nitis
Facsimile: (415) 989-4319
Tel: (415) 396-4916
(for all other notices)
Attention: Ralph Turner
Facsimile: (415) 421-1352
Tel: (415) 396-4932
Address for payments:
Wells Fargo Bank, N.A.
ABA 121000248
Corporate Note Dept., SR 703
Account No. 2712-507201
Reference: Plum Creek Timber
Company, L.P.
Attention: Joan Nitis
Domestic and Offshore Lending Office:
109 [signatures continue]
<PAGE> 117
SEATTLE FIRST NATIONAL BANK
By: ___________________________________
Title: ________________________________
Address for notices:
701 Fifth Avenue, 12th Floor
Box 94010
Seattle, WA 98120-9410
Attention: John Wilson, Vice
President, Northwest National
Division
Facsimile: (206) 358-3113
Tel: (206) 358-8945
Address for payments:
Seattle First National Bank
ABA 125000024
CLSC Loans RC #94680
Reference: Plum Creek Timber
Company, L.P.,
AFS #7007143921
Domestic and Offshore Lending Office:
same as notice address
110 [signatures continue]
<PAGE> 118
ABN AMRO BANK N.V.
By: ___________________________________
Title: ________________________________
By: ___________________________________
Title: ________________________________
Address for notices:
One Union Square, Suite 2323
Seattle, WA 98101
Attention: David McGinnis,
Vice President
Facsimile: (206) 682-5641
Tel: (206) 587-0342
Address for payments:
ABN AMRO Bank N.V., New York
ABA 026009580
for credit to ABN AMRO Seattle,
Account No. 651001085541
Reference: Plum Creek
Domestic and Offshore Lending Offices:
Same as notice address
111 [signatures continue]
<PAGE> 119
CHEMICAL BANK
By: ___________________________________
Title: ________________________________
Address for notices:
270 Park Avenue, 9th Fl.
New York, NY 10017
Attention: Abigail L. Garcia
Facsimile: (212) 818-1456
Tel: (212) ________
Address for payments:
Chemical Bank
Commercial Loan Operations
52 Broadway, 3rd Fl.
Attention: John Gallagher
ABA 021000128
Reference: Plum Creek Timber Co.
Domestic and Offshore Lending Offices:
Chemical Bank
270 Park Avenue
New York, NY 10017
112 [signatures continue]
<PAGE> 120
THE BANK OF TOKYO, LTD.
By: ___________________________________
Title: ________________________________
Address for notices:
1201 Third Avenue, Suite 1100
Seattle, WA 98101
Attention: Corey W.
Kalbfleisch, Corporate
Banking Officer
Facsimile: (206) 382-6067
Tel: (206) 382-6021
Address for payments:
The Bank of Tokyo, Ltd.,
Seattle Branch
ABA 1250-0162-9
Reference: Plum Creek Timber Co. (CBD)
Domestic and Lending Offices:
Seattle Branch
1201 Third Avenue, Suite 1100
Seattle, CA 98101
113 [signatures continue]
<PAGE> 121
THE BANK OF CALIFORNIA, N.A.
By: ___________________________________
Title: ________________________________
Address for notices:
400 California Street, 17th Fl.
San Francisco, CA 94104
Attention: Katharyn Simien
Banking Assistant
Facsimile: (415) 765-3146
Tel: (415) 765-2722
Address for payments:
The Bank of California, N.A.
ABA 1210-000-15
for credit to Corporate Banking
Note Dept., Bancontrol
Acct. #001060235
Attention: E. DeLeon
Reference: Plum creek
Domestic and Offshore Lending Offices:
Same as notice address
114 [signatures continue]
<PAGE> 122
SCHEDULE 1.01
APRIL 5, 1993
Page 1 of 2
CORPORATE INVESTMENT POLICY
I. OBJECTIVE
This policy provides guidelines for the management of the Company's
cash. It is essential that these assets be invested in a high quality
portfolio which:
. Preserves principal
. Meets liquidity needs
. Allows for appropriate diversification of investments
. Delivers good yield in relationship to the guidelines and market
conditions.
The Company is adverse to incurring market risk or credit risk, and will
generally sacrifice yield in the interest of safety. Care must always
be taken to insure that the Company's reported financial statements are
never materially affected by decreases in the market value of
securities held.
II. MATURITY OR PUT
Within the constraints provided throughout this document, or by addendum
to this document, the maximum maturity or put of any investment
instrument will be within two years from the purchase settlement date;
however, the total portfolio must have an average maturity of less than
12 months.
III. PERMISSIBLE INVESTMENTS
A. Investments will be made in U.S. dollars only.
B. The Company may own, purchase or acquire marketable direct
obligations in the following:
1. Obligations (fixed and floating rate) issued by, or
unconditionally guaranteed by the U.S. Treasury, or any
agency thereof, or issued by any political subdivision of
any state or public agency,
2. Commercial paper rated as A-1 or better by Standard &
Poor's, and P-1 or better by Moody's (or equivalent).
3. Floating rate and fixed rate obligations of corporations,
banks and agencies including: medium term notes and
bonds, deposit notes, and euro dollar/yankee notes and
bonds.
<PAGE> 123
April 5, 1993
Page 2 of 2
4. Certificates of deposit, bankers acceptances and time deposits of
commercial banks, domestic or foreign, whose short term credit
ratings are A-1/P-1 (or equivalent).
5. Repurchase agreements collateralized by U.S. Treasury and agency
securities.
6. Insurance company Funding Agreements, Investment Contracts, or
similar obligations.
7. Asset backed and mortgage backed securities.
8. Master Notes.
9. Taxable money market preferreds.
10. Tax exempt securities including municipal bonds/notes, money
market preferreds, and variable rate demand notes.
C. Issuing institutions shall be Corporations, Trusts, Partnerships,
and Banks domiciled in the U.S., Canada, Japan and Western Europe,
or Insurance Companies domiciled in the U.S.
IV. CREDIT REQUIREMENTS
Safety shall always be a primary consideration in structuring the
Company's investment portfolio. Credit ratings should be tied to
duration as prescribed below in order to combine safety, liquidity
and acceptable market performance:
Minimum Credit Rating
---------------------
Duration S&P Moody's
-------- --- -------
6 months or less A- A3
6 - 18 months AA Aa2
18 months or more AAA Aaa
Original issue securities allowable under this policy with less than
twelve months to maturity may substitute the issuers short term credit
rating if that rating is A-1/P-1 or better.
V. DIVERSIFICATION
To diversify risk, no more than $2 million or 10% of the portfolio can be
invested with any one issuer. Exceptions are issues of the U.S. Treasury
or agency securities, insured or government collateralized issues and
daily money market funds.
<PAGE> 124
SCHEDULE 2.01
COMMITMENTS
<TABLE>
<CAPTION>
Bank Commitment
<S> <C>
Bank of America National Trust
and Savings Association $50,000,000
NationsBank of North Carolina, N.A. $40,000,000
United States National Bank of Oregon $40,000,000
Wells Fargo Bank, N.A. $40,000,000
Seattle First National Bank $25,000,000
ABN AMRO Bank N.V. $20,000,000
Chemical Bank $20,000,000
The Bank of Tokyo, Ltd. $20,000,000
The Bank of California, N.A. $20,000,000
</TABLE>
125036 (753/711)
<PAGE> 125
PLUM CREEK TIMBER COMPANY, L.P.
SCHEDULE 5.05
Litigation
None.
<PAGE> 126
PLUM CREEK TIMBER COMPANY, L.P.
SCHEDULE 5.07
5.07 (a)
QUALIFIED PLANS:
Plum Creek Pension Plan
Plum Creek Thrift and Profit Sharing Plan
Plum Creek Welfare Plan - Plan Number 505
- Component Documents listed in Appendix II, thereto
NON-QUALIFIED PLANS:
Plum Creek Management Company, L.P. Executive Incentive Sharing Plan
Plum Creek Management Company, L.P. Executive Incentive Compensation Plan
Plum Creek Management Company, L.P. Key Employee Unit Award Plan
Plum Creek Management Company, L.P. Executive and Key Employee Salary and
Incentive
Compensation Deferral Plan
Plum Creek Management Company, L.P. Executive Unit Award Plan
Plum Creek Supplemental Benefits Plan
PC Advisory Corp. I Deferred Compensation Plan for Directors
MULTI-EMPLOYER PLANS: None.
5.07 (c)
A favorable determination letter from the IRS has been received for the Plum
Creek Thrift and Profit Sharing Plan.
The Plum Creekk Pension Plan, adopted in March 1990, is intended to be a
qualified plan pursuant to Internal Revenue Service Code section 401(a) and the
Trust is intended to be tax exempt pursuant to Code section 501(a). The
current plan has not yet been submitted for a determination letter which will
confirm it is qualified. The Plum Creek Pension Plan will be submitted for a
favorable determination letter request no later than the last day of its plan
year commencing on or after January 1, 1994 and the Company will adopt any
appropriate amendments and take any action requested by the Internal Revenue
Service as a condition of issuing a favorable determination letter on the Plum
Creek Pension Plan.
5.07 (d) and (e) None.
<PAGE> 127
5.07 (f)
Retiree Life Insurance:
- Insured plan
- $10,000 coverage per salaried retiree
- Approximately 47 retirees covered
- Plan continues to be available to salaried retirees
Retiree Medical:
- Liability to cover four retirees for life and five retirees to age 65
- Plan continues to be available to salaried retirees at a retiree pay
all basis
Both the Life and Retiree Medical Communications contain disclaimers regarding
the rights of the Company to modify, amend or terminate the Plans.
The Accumulated Post-retirement Benefit Obligation at December 31, 1992 was
$334,003.
5.07 (h), (j), and (k) None.
<PAGE> 128
PLUM CREEK TIMBER COMPANY, L.P.
SCHEDULE 5.12
5.12 (a) None.
5.12 (b) Plum Creek Manufacturing, L.P. is in the process of applying
for groundwatear discharge permits at the Columbia Falls and
Evergreen complexes. It has not been determined yet whether a
Groundwater Discharge Permit will be required at the Pablo
facility.
5.12 (c) Resolved Consent Decrees:
Columbia Falls Veneer Dryers - May 21, 1990
Evergreen Veneer Dryers - May 26, 1991
Evergreen Boiler - May, 19, 1992
Environmental Claims related to:
EPA/North American Environmental Inc. (Clearfield, UT)
EPA/Evergreen Plywood glue pit
EPA/Somers site (Somers, MT)
DOE/Old Landsburg Mine Site (Ravensdale, WA)
Yakima Health District/Dump Site (Yakima, WA)
5.12 (d) None.
<PAGE> 129
PLUM CREEK TIMBER COMPANY, L.P.
SCHEDULE 5.18
Subsidiaries
5.18 (a)
Plum Creek Timber Company, L.P. a Delaware limited partnership, (the "Company")
has direct ownership in two subsidiaries, and indirect ownership of two
additional subsidiaries.
The Company owns 98% of Plum Creek Manufacturing, L.P., a Delaware limited
partnership. The remaining 2% of Plum Creek Manufacturing, L.P., is owned by
Plum Creek Management Company, L.P., a Delaware limited partnership, general
partner of the Company.
The Company owns 96% of the issued and outstanding stock of Plum Creek
Marketing, Inc., a Delaware corporation. The remaining 4% of the issued and
outstanding stock of Plum Creek Marketing, Inc. is owned by Plum Creek
Management Company, L.P., general partner of the Company.
Plum Creek Marketing, Inc. owns 100% of the issued and outstanding stock of
Plum Creek Remanufacturing, Inc., a Washington corporation, and Plum Creek
Foreign Sales Corp., a Guam corporation. Plum Creek Foreign Sales Corp. is an
active corporation.
5.18 (b) None.
<PAGE> 130
PLUM CREEK TIMBER COMPANY, L.P.
SCHEDULE 7.01
Permitted Liens
NONE.
<PAGE> 131
PLUM CREEK TIMBER COMPANY, L.P.
SCHEDULE 7.04
Permitted Investments
1. 98% interest in Plum Creek Manufacturing, L.P.
2. 96% interest in Plum Creek Marketing, Inc.
<PAGE> 132
EXHIBIT A
NOTICE OF BORROWING
Date: __________________
To: Bank of America National Trust and Savings Association,
as Agent for the Banks parties to the Credit Agreement
dated as of October 28, 1993 (as extended, renewed,
amended or restated from time to time, the "Credit
Agreement") among Plum Creek Timber Company, L.P.,
certain Banks which are signatories thereto and Bank of
America National Trust and Savings Association, as
Agent
Ladies and Gentlemen:
The undersigned, Plum Creek Timber Company, L.P,
(the "Company"), refers to the Credit Agreement, the terms
defined therein being used herein as therein defined, and
hereby gives you notice irrevocably, pursuant to
Section 2.03 of the Credit Agreement, of the Borrowing
specified herein:
1. The aggregate amount of the proposed Borrowing
is $_____________________.
2. The Business Day of the proposed Borrowing is
_____________________________, 19___.
3. The Borrowing is to be comprised of
$___________ of [CD Rate] [Offshore Rate] [Base Rate]
Loans.
4. The duration of the Interest Period for the [CD
Rate Loans] [Offshore Rate Loans] included in the
Borrowing shall be [____________ days] [_________
months].
The undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on
the date of the proposed Borrowing, before and after giving
effect thereto and to the application of the proceeds
therefrom:
1
<PAGE> 133
(a) the representations and warranties of the
Company contained in Article V of the Credit Agreement
are true and correct as though made on and as of such
date (except to the extent such representations and
warranties specifically relate to an earlier date, in
which case they are true and correct as of such earlier
date);
(b) no Default or Event of Default has occurred
and is continuing, or would result from such proposed
Borrowing; and
(c) the proposed Borrowing will not cause the
aggregate principal amount of all outstanding Loans to
exceed the Aggregate Commitment.
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company, L.P.,
its general partner
By:_________________________________
Title:______________________________
2
123587 (753)(711)
<PAGE> 134
EXHIBIT B
NOTICE OF CONVERSION/CONTINUATION
Date: __________________
To: Bank of America National Trust and Savings Association,
as Agent for the Banks parties to the Credit Agreement
dated as of October 28, 1993 (as extended, renewed,
amended or restated from time to time, the "Credit
Agreement") among Plum Creek Timber Company, L.P.,
certain Banks which are signatories thereto and Bank of
America National Trust and Savings Association, as
Agent
Ladies and Gentlemen:
The undersigned, Plum Creek Timber Company, L.P.
(the "Company"), refers to the Credit Agreement, the terms
defined therein being used herein as therein defined, and
hereby gives you notice irrevocably, pursuant to
Section 2.04 of the Credit Agreement, of the [conversion]
[continuation] of the Loans specified herein, that:
1. The date of the [conversion] [continuation] is
______________________, 19__.
2. The aggregate amount of the Loans [converted]
[continued] is $______________.
3. The Loans are to be [converted into]
[continued as] [CD Rate] [Offshore Rate] [Base Rate]
Loans.
4. [If applicable:] The duration of the Interest
Period for the Loans included in the [conversion]
[continuation] shall be [____ days] [____ months].
The undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on
the date of the proposed [conversion][continuation], before
and after giving effect thereto and to the application of
the proceeds therefrom:
1
<PAGE> 135
(a) the representations and warranties of the
Company contained in Article V of the Credit Agreement
are true and correct as though made on and as of such
date (except to the extent such representations and
warranties specifically relate to an earlier date, in
which case they are true and correct as of such earlier
date);
(b) no Default or Event of Default has occurred
and is continuing, or would result from such proposed
[conversion] [continuation]; and
(c) the proposed [conversion] [continuation] will
not cause the aggregate principal amount of all
outstanding Loans to exceed the Aggregate Commitment.
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company, L.P.,
its general partner
By:_________________________________
Title:______________________________
2
123588 (753)(711)
<PAGE> 136
EXHIBIT C-1
FORM OF OPINION OF PERKINS COIE
October ____, 1993
The Persons Named on
Attached Annex A
RE: THAT CERTAIN CREDIT AGREEMENT DATED AS OF OCTOBER ___, 1993 THE
("CREDIT AGREEMENT") AMONG PLUM CREEK TIMBER COMPANY, L.P. (THE
"COMPANY"), THE FINANCIAL INSTITUTIONS PARTY THERETO (THE
"BANKS") AND BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION AS AGENT (THE "AGENT") FOR THE BANKS
Ladies and Gentlemen:
We have acted as special counsel for the Company in connection
with the transactions contemplated by the Credit Agreement. This opinion is
furnished pursuant to Section 4.01(d) of the Credit Agreement.
For the purpose of rendering this opinion, we have examined
executed originals of the Credit Agreement and of the documents delivered to
the Agent on the date hereof pursuant to the Credit Agreement. We have also
examined the original or copies of such other partnership and corporate
records, documents, instruments or agreements as we deemed necessary to render
the opinion contained herein, subject to the limitations contained herein.
In rendering this opinion, we have relied on the following
assumptions, the accuracy of which we have not independently verified:
(i) Each party to the Credit Agreement (other than the
Company) is a corporation or other legally cognizable entity duly
organized and validly existing in good standing under the laws of its
jurisdiction of organization and has the full power, authority and
legal right to execute and deliver the Credit Agreement to which it is
a party and to perform its obligations thereunder; and each such party
has duly authorized the
<PAGE> 137
Persons Named on the Attached Annex A
October , 1993
Page 2
execution, delivery and performance of the Credit Agreement and the
transactions contemplated thereunder.
(ii) The Credit Agreement constitutes the legal, valid and
binding obligation of each party thereto (other than the Company),
enforceable against such party in accordance with its terms.
(iii) All signatures on the Credit Agreement and the other
documents and materials examined by us are genuine, and, where any
such signature purports to have been made in a corporate, partnership,
governmental, fiduciary or other capacity, the person whose signature
so appears had the requisite legal capacity and authority to do so;
the factual matters contained in the documents examined by us are
accurate, true and correct; all documents and other materials
submitted to us as originals are authentic; and all documents and
other materials submitted to us as copies of the originals conform to
the originals.
(iv) The Agent and each Bank is exempt from the
application of the restrictions set forth in Article XV, Section 1, of
the California Constitution.
We have not conducted any independent investigation or
otherwise attempted to verify any factual matters which would have a bearing
upon this opinion.
Based upon the foregoing, and subject to the further
qualifications stated below, it is our opinion that the Credit Agreement
constitutes the legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms.
The opinion set forth above is subject to the following
additional limitations:
(a) We express no opinion as to any laws other than the
laws of the State of California (including its choice of law principles) and
the federal laws of the United States.
(b) We express no opinion as to the validity, binding
effect or enforceability of any right or obligation to the extent that such
right or obligation (1) may be limited by (A) applicable bankruptcy,
insolvency, reorganization,
<PAGE> 138
Persons Named on the Attached Annex A
October ____, 1993
Page 3
moratorium, fraudulent transfer or other laws relating to or affecting
creditors' rights generally or (B) general principles of equity (regardless of
whether considered in a proceeding in equity or at law), including those
relating to the availability of the remedy of specific performance, injunctive
relief or setoff or (2) purports to authorize or permit any person to act in a
manner which is not in good faith, diligent or commercially reasonable
(including, without limitation, exercising any rights without the giving of
reasonable notice) or purports to waive any rights of any person with respect
to such actions or (3) purports to require that provisions of the Credit
Agreement may only be modified in writing to the extent that an oral agreement
has been made modifying such provision.
(c) We express no opinion with respect to the need for
any consent or approval of, the giving of notice to, the registration with, or
the taking of any action with respect to, any governmental authority or agency
which may be required by reason of the business or activities of the Agent and
the Banks generally.
(d) We express no opinion as to the validity, priority or
perfection of any security interest or other lien which may be created by the
Credit Agreement or as to any provision purporting to (1) set evidentiary
standards or (2) require the payment of any amount to the extent that such
amount is deemed to constitute a penalty, forfeiture, late payment charge or an
increase in the applicable rate of interest upon delinquency.
(e) Notwithstanding any provision in the Credit Agreement
to the effect that such agreement, either in itself or together with any other
agreements, reflects the entire understanding of the parties with respect to
the matters described therein, the courts of the state of California may
consider extrinsic evidence of the circumstances surrounding the making of such
agreement or agreements to ascertain the intent of the parties in using the
language employed in such agreement or agreements, regardless of whether the
meaning of the language used in such agreement or agreements is plain and
unambiguous on its face, and may determine that additional or supplementary
terms can be incorporated into such agreement or agreements.
<PAGE> 139
Persons Named on the Attached Annex A
October ____, 1993
Page 4
(f) We express no opinion as to the conclusive nature of
any certificate or determination which may be furnished or made by or on behalf
of any party pursuant to the Credit Agreement.
(g) Indemnity obligations imposed or undertaken pursuant
to the Credit Agreement may be unenforceable to the extent such obligations do
not satisfy the requirements of Sections 2773 through 2774 of the California
Civil Code, or which require the indemnifying party to indemnify another party
against an act which constitutes gross negligence on the part of the
indemnified party or its agent.
(h) The effect of California law which provides that
where a contract permits one party to the contract to recover attorneys' fees,
the prevailing party in any action to enforce any provision of the contract
shall be entitled to recover its reasonable attorneys' fees notwithstanding the
absence of a written agreement to such effect.
(i) Statutes and case law reflecting public policy may
render unenforceable a waiver or release of the benefits of statutory, common
law, or broadly or vaguely stated rights or unknown future rights.
(j) We express no opinion as to the enforceability of the
provisions in the Credit Agreement to the effect that failure to exercise, or
delay in exercising, rights or remedies will not operate as a waiver of any
such rights or remedies.
(k) We express no opinion as to the enforceability of any
provision relating to cumulation of remedies or the availability of remedies in
the event of a non-material default.
The opinion set forth above is given as of the date hereof,
and we disavow any undertaking or obligation to advise you of any changes in
law or any facts or circumstances that may hereafter occur or come to our
attention that could affect this opinion. This opinion is delivered to the
parties identified on Annex A hereto solely for use in connection with the
transactions referenced herein and may not be used by any such party for any
other purpose and may not be relied on by any person other than the parties
identified on Annex A hereto
<PAGE> 140
Persons Named on the Attached Annex A
October ____, 1993
Page 5
and their permitted successors and assigns under the Credit Agreement, or
duplicated or disclosed, without our prior written consent.
Very truly yours,
<PAGE> 141
ANNEX A
TO OPINION OF
PERKINS COIE DATED OCTOBER ____, 1993
<TABLE>
<S> <C>
Bank of America National Chemical Bank
Trust and Savings 9th Floor
Association, as Agent 270 Park Avenue
12th Floor New York, NY 10017
1455 Market Street
San Francisco, CA 94103 The Bank of Tokyo, Ltd.
Suite 1100
Bank of America National 1201 Third Avenue
Trust and Savings Seattle, WA 98101
Association, as a Bank
41st Floor The Bank of California, N.A,
555 California Street 17th Floor.
San Francisco, CA 94104 400 California Street
San Francisco, CA 94104
NationsBank of North
Carolina, N.A.
1 NationsBank Plaza
NC1-002-06-19
Charlotte, NC 28255
United States National Bank
of Oregon
c/o U.S. Bank of Washington
1414 Fourth Avenue WWH276
Seattle, WA 98101
Wells Fargo Bank, N.A.
9th Floor
420 Montgomery Street
San Francisco, CA 94163
Seattle First National Bank
12th Floor
701 Fifth Avenue
Box 94010
Seattle, WA 98120-9410
ABN Amro Bank N.V.
Suite 2323
One Union Square
Seattle, WA 98101
</TABLE>
<PAGE> 142
EXHIBIT C - 2
October 28, 1993
To the Banks and the Agent
Referred to Below
c/o Bank of America National Trust
and Savings Association
1455 Market Street, 12th Floor
San Francisco, CA 94103
Ladies and Gentlemen:
As Vice President Law and Corporate Affairs of Plum Creek Management
Company, L.P. (the "General Partner"), I have acted as counsel to Plum Creek
Timber Company, L.P., a Delaware limited partnership (the "Company") and its
subsidiaries in connection with that certain Credit Agreement, dated as of
October 28, 1993 (the "Credit Agreement"), among the Company, the banks listed
on the signature pages thereof (the "Banks"), and Bank of America National
Trust and Savings Association as agent for the Banks (the "Agent"). This
opinion is delivered to you pursuant to Section 4.01(d)(i) of the Credit
Agreement. All capitalized terms used herein that are defined in, or by
reference in, the Credit Agreement have the meanings assigned to such terms
therein, or by reference therein, unless otherwise defined herein.
In connection with this opinion, I have (i) investigated such
questions of law, (ii) examined originals or certified, conformed or
reproduction copies of such agreements, instruments, documents and records of
the Company, such certificates of public officials and such other documents,
and (iii) received such information from officers and representatives of the
Company, as I have deemed necessary or appropriate for the purposes of this
opinion. I have examined, among other documents, a copy of the Credit
Agreement.
In all such examinations, I have assumed the genuineness of all
signatures on original or certified, conformed or reproduction copies of
documents of all parties other than the Company, and the conformity to original
or certified copies of all copies submitted to me as conformed or reproduction
copies. As to various questions of fact relevant to the opinions expressed
herein, I have relied upon, and assume the accuracy of, certificates and oral
or written statements and other information of or from public officials,
representatives of the Company and others and assume compliance on the part of
all parties to the Credit Agreement with the covenants and agreements contained
therein.
To the extent it may be relevant to the opinions expressed herein, I
have assumed that the Agent and the Banks have the power to enter into and
perform such agreement and that such agreement has been duly authorized,
executed and delivered by, and constitutes the legal, valid and binding
obligation of, such parties.
<PAGE> 143
Bank of America
October 28, 1993
Page 2
Based upon the foregoing, and subject to the limitations,
qualifications and assumptions set forth herein, I am of the opinion that:
(a) Each of the Company, the General Partner, PCMC General Partner
and Plum Creek Manufacturing, L.P. is a limited partnership duly formed under
the laws of the State of Delaware, with a stated term beyond the term of the
Loan Documents (in those cases where the Loan Documents have a fixed term) and
is duly qualified and in good standing in each state in which the failure to so
qualify would have a Material Adverse Effect.
(b) Each of PC Advisory General Partner and Plum Creek Marketing,
Inc., is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and is duly qualified and in good
standing in each state in which the failure to so qualify would have a Material
Adverse Effect.
(c) The Company and each of the Partner Entities have the
partnership or corporate, as applicable, power and authority to execute and
deliver, and to perform and observe the provisions of, the Loan Documents.
(d) The execution, delivery and performance by the Company of the
Loan Documents have been duly authorized by all necessary corporate and
partnership action on behalf of PC Advisory General Partner, as general partner
of PCMC General Partner, as general partner of the General Partner, as general
partner of the Company.
(e) The Loan Documents have been duly executed and delivered by
the Company.
(f) The Company and each of its Subsidiaries has the power and
authority and all governmental licenses, authorizations, consents and approvals
to own its assets and carry on its business, except for such governmental
licenses, authorizations, consents and approvals, the lack thereof would not
have a Material Adverse Effect.
(g) No registration with, consent or approval of, notice to, or
other action by, any Governmental Authority is required on the part of the
Company or the Partner Entities or any of their Subsidiaries for the execution,
delivery or performance by the Company of the Loan Documents, or if required,
such registration has been made, such consent or approval has been obtained,
such notice has been given or such other appropriate action has been taken.
(h) The execution, delivery and performance of the Loan Documents
by the Company are not in violation of the partnership documents of the
Company, the General Partner or the PCMC General Partner or the Articles of
Incorporation and Bylaws of the PC Advisory General Partner.
(i) The execution, delivery and performance of the Loan Documents
by the Company
<PAGE> 144
Bank of America
October 28, 1993
Page 3
(including, without limitation, the sale of the Columbia River Unit and the
application of the Net Proceeds thereof in accordance with Section 7.02 (i) of
the Credit Agreement) will not violate or result in a breach of any of the
terms of or constitute a default under or result in a creation of any Lien on
any property or assets of the Company or any of the Partner Entities, pursuant
to the terms of any indenture, mortgage, deed of trust or other agreement to
which such Person is a party or any order, injunction, writ or decree of any
Governmental Authority to which such Person or its property is subject.
(j) The execution, delivery and performance of the Loan Documents
will not conflict with or contravene any of Regulations G, T, U and X
promulgated by the Federal Reserve Board.
(k) Neither the Company, the Partner Entities, any Person
controlling the Company or the Partner Entities, or any Subsidiary of the
Company or the Partner Entities, is an "Investment Company" within the meaning
of the Investment Company Act of 1940, as amended, or subject to regulation
under the Public Utility Holding Company Act of 1935, as amended.
(l) There are no actions, suits, proceedings, claims or disputes
pending or, to the best of my knowledge, threatened against the Company, the
Partner Entities or any of their Subsidiaries or any of their respective
properties before any court, regulatory body, administrative agency, at law, in
equity, in arbitration or before any Governmental Authority which (a) purport
to affect or pertain to the Loan Documents, or any of the transactions
contemplated thereby, (b) have a reasonable probability of success on the
merits and which, if determined adversely to the Company, the Partner Entities
or their Subsidiaries, would reasonably be expected to have a Material Adverse
Effect.
The opinions expressed herein are limited to the federal laws of the
United States of America and the laws of the State of Washington and, to the
extent relevant hereto, the General Corporation Law of the State of Delaware
and the Delaware Uniform Revised Limited Partnership Act.
The opinions expressed herein are solely for the benefit of the Agent
and the Banks and may not be relied on in any manner or for any purpose by any
person or entity other than the Agent and the Banks and their permitted
successors and assigns under the Credit Agreement.
Very truly yours,
James A. Kraft
Vice President, Law and
Corporate Affairs
/sw
<PAGE> 145
EXHIBIT D
PLUM CREEK TIMBER COMPANY, L.P.
COMPLIANCE CERTIFICATE
DATE: _______________
Reference is made to that certain Credit Agreement
dated as of October 28, 1993 among Plum Creek Timber
Company, L.P., a Delaware limited partnership (the
"Company"), certain financial institutions from time to time
parties to the Credit Agreement (the "Banks") and Bank of
America National Trust and Savings Association, a national
banking association, as agent for the Banks (in such
capacity, the "Agent"). Unless otherwise defined herein,
capitalized terms used herein have the respective meanings
assigned to them in the Credit Agreement.
The undersigned Responsible Officer of the Company,
hereby certifies as of the date hereof that he/she is the
________________________ of the Company, and that, as such,
he/she is authorized to execute and deliver this Certificate
to the Banks and the Agent on the behalf of the Company and
its Subsidiaries and not as an individual, and that:
[Use the following paragraph if this Certificate is
delivered in connection with the financial statements
required by subsection 6.01(a) of the Credit Agreement.]
1. Attached as Schedule 1 hereto are (a) a true
and correct copy of the audited combined balance sheet of
the Company as at the end of the fiscal year ended
December 31, ____ and (b) the related combined statements of
income and statement of cash flows for such fiscal year,
setting forth in each case in comparative form the figures
for the previous fiscal year, and accompanied by the opinion
of Coopers & Lybrand or another nationally-recognized
certified independent public accounting firm. Such opinion
is not qualified or limited because of a restricted or
limited examination by such accountant of any material
portion of the Company's or any Subsidiary's records and is
delivered to the Agent pursuant to a reliance agreement
between the Agent and Banks and such accounting firm which
you have advised us is in form and substance satisfactory to
the Agent and the Majority Banks;
-1-
<PAGE> 146
or
[Use the following paragraph if this Certificate is
delivered in connection with the financial statements
required by subsection 6.01(b) of the Credit Agreement.]
1. Attached as Schedule 1 hereto are (a) a true
and correct copy of the audited combining balance sheets of
the Company and each of its Subsidiaries as at the end of
the fiscal year ended December 31, ____ and (b) the related
combining statements of income and statement of cash flows
for such fiscal year; which financial statements were used
in connection with the preparation of the audited combined
balance sheet of the Company as of the end of such fiscal
year and the related combined statements of income and
statement of cash flows for such fiscal year.
or
[Use the following paragraph if this Certificate is
delivered in connection with the financial statements
required by subsections 6.01(c) and (d) of the Credit
Agreement.]
1. (a) Attached as Schedule 1A hereto is (i) a
true and correct copy of the unaudited combined balance
sheet of the Company and its combined Subsidiaries as of the
end of the fiscal quarter ended __________ __, ____ and
(ii) the related combined statements of income and statement
of cash flows of the Company and its combined Subsidiaries
for the period commencing on the first day and ending on the
last day of such quarter, setting forth in each case in
comparative form the figures for the previous year (subject
to normal year-end audit adjustments).
(b) Attach as Schedule 1B hereto is (i) a
true and correct copy of the unaudited combining balance
sheets of the Company and each of its Subsidiaries as of the
end of the fiscal quarter ended __________ __, ____ and
(ii) the related combining statements of income and
statement of cash flows for such quarter, which financial
statements were used in connection with the preparation of
the financial statements referred to in paragraph 1(a) above
of this Certificate.
2. The undersigned has reviewed and is familiar
with the terms of the Credit Agreement and has made, or has
caused to be made under his/her supervision, a detailed
review of the transactions and conditions (financial or
-2-
<PAGE> 147
otherwise) of the Company during the accounting period
covered by the attached financial statements.
3. The attached financial statements are complete
and correct, and have been prepared in accordance with GAAP
on a basis consistent with prior periods (except as approved
by such accountants or officer, as the case may be, and
disclosed therein).
4. The attached financial statements are
certified by a Responsible Officer of the Company and fairly
state the financial position and results of operations of
the Company and its Combined Subsidiaries.
5. To the best of the undersigned's knowledge,
the Company, during such period, has observed, performed or
satisfied all of its covenants and other agreements, and
satisfied every condition in the Credit Agreement to be
observed, performed or satisfied by the Company, and the
undersigned has no knowledge of any Default or Event of
Default.
6. The following financial covenant analyses and
information set forth on Schedule 2 attached hereto are true
and accurate on and as of the date of this Certificate.
[7. A Margin Reduction Discount of ____% should be
implemented in accordance with Section 2.09 of the Credit
Agreement.]
or
[7. The existing Margin Reduction Discount should
be changed to ____% in accordance with Section 2.09 of the
Credit Agreement.]
or
[7. The Margin Reduction Discount pursuant to
Section 2.09 of the Credit Agreement does not apply.]
-3-
<PAGE> 148
IN WITNESS WHEREOF, the undersigned has executed
this Certificate as of _______________ __, ____.
PLUM CREEK TIMBER COMPANY L.P.
By: Plum Creek Management
Company, L.P.,
its general partner
By: ___________________________
Title: ________________________
-4-
W88149.AB9[753/711]
<PAGE> 149
Plum Creek Timber Company, L.P.
Schedule 2
to the Compliance Certificate
($ in 000's)
Section 7.03: Harvesting Restrictions (MMBF)
199_ Maximum Allowable Harvest
Add: Prior year Cumulataive Carryover Harvest
Maximum Allowable 199_ Harvest
Actual 199_ Harvest
199_ Carryover Harvest
Section 7.04(i): Investments Not Otherwise Permitted:
The greater of $30 million or 60% of the
average annual Pro Forma Free Cash
Flow for the two fiscal years preceding
such date. $
Cumulative Investments made through month-day-year $
Section 7.05(c): Funded Debt Incurred to Finance Capital Improvements:
Maximum Allowed $20,000
Outstanding at month-day-year $
Section 7.05(e): Indebtedness Incurred Pursuant to a Revolving Credit Facility:
Maximum Allowed $15,000
Outstanding at month-day-year $
Section 7.05(g): Guarantee of Facilities Subsidiary Revolving Credit Facility:
Maximum Allowed $20,000
Outstanding at month-day-year $
Section 7.05(h): Guarantee of Facility Subsidiary Capital Improvement Funded
Debt:
Maximum Allowed $20,000
Outstanding at month-day-year $
<PAGE> 150
Plum Creek Timber Company, L.P.
Schedule 2
to the Compliance Certificate
($ in 000's)
Section 7.05(i): Aggregate Principal Amount of Indebtedness Secured by Liens:
Maximum Allowed $
Outstanding at month-day-year $
Section 7.05(j): Additional Funded Debt:
Pro Forma Free Cash Flow $
Maximum Pro Forma Annual Interest Charges: 2:25 to 1 $
Current Interest Expense $
Additional Allowable Interest $
Allowable Fund Debt at ___% Interest Rate* $
* Aggregate outstanding principal amount of such additional Funded Debt shall
not exceed $400 million.
<PAGE> 151
Plum Creek Timber Company, L.P.
Schedule 2
to the Compliance Certificate
($ in 000's)
Section 7.13(a): Restricted Payments:
Available Cash means, with respect to any calendar quarter,
(i)(a) Net Income $
(a) Excluding gain on the sale of any Capital Assets $
Plus:
(b) DD&A $
(b) Other non-cash charges $
(c) Reduction in reserves of the types referred
to in clause (ii)(d) below $
(d) Proceeds received from the sale of
Designated Acres $
(e) Cash from Capital Transaction used to
refinance or refund Indebtedness $
Less (ii) the sum of:
(a) All payments of principal Indebtedness $
(b) Capital Expenditures $
(c) Capital Expenditures made in prior quarter
anticipated to be financed but have not been $
(d) Reserve for future principal payments:
Bank $
Senior Notes $
(d) Reserve for future capital expenditures $
(d) Reserve for additional working capital $
(d) Reserve for future interest payments:
Bank $
Senior Notes $
(e) Other noncash credits $
(f) The amount of any Investments $
(g) Any investmenets made in prior quarter
anticipated to be financed but have not been $
Available Cash - month-day-year $
General Partner 2% Interest $
General Partner Incentive Distribution $
Allocable to Unitholders - Net $
<PAGE> 152
Plum Creek Timber Company, L.P.
Schedule 2
to the Compliance Certificate
($ in 000's)
Summary of Available Cash Reserves:
<TABLE>
<CAPTION>
Cumulative
Balance
----------
<S> <C>
Reserve for future principal payments:
Bank $
Senior Notes $
Reserve for future Capital Expenditures $
Reserve for additional working capital $
Reserve for future distributions $
Reserve for future interest payments:
Bank $
Senior Notes $
Funds Flow Ratio Calculation with respect to any quarter.
EBITDA $
Less:
Taxes paid in cash not already excluded from EBITDA $
Capital Expenditures $
Total Funds Flow $
Indebtedness $
Funds Flow Ratio ___%
</TABLE>
<PAGE> 153
EXHIBIT E
FORM OF CASH COLLATERAL ACCOUNT AGREEMENT
This CASH COLLATERAL ACCOUNT AGREEMENT
("Agreement") dated as of ______________, 199_ is entered
into by and between PLUM CREEK TIMBER COMPANY, L.P., a
Delaware limited partnership (the "Company"), and BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as agent
(solely in such capacity, "Agent") for the financial
institutions from time to time parties to the Credit
Agreement referred to below (such entities, together with
their respective successors and assigns, being collectively
referred to as the "Banks").
RECITALS
A. The Company, Agent and the Banks have entered
into a Credit Agreement dated as of October 28, 1993 (as the
same may from time to time be amended, amended and restated,
modified, supplemented or renewed, the "Credit Agreement").
Capitalized terms used herein without definition shall have
the meanings given to them in the Credit Agreement.
B. The Company wishes to sell properties that
constitute all or a part of its Columbia River Unit and to
apply the Net Proceeds thereof to the purchase of productive
assets in the same line of business.
C. Pursuant to the Credit Agreement, any such Net
Proceeds in excess of $25,000,000 not paid immediately to
Agent on behalf of the Banks for prepayment of the Loans or
paid immediately to purchase such productive assets shall be
placed immediately upon receipt thereof into a cash
collateral account at Bank of America National Trust and
Savings Association ("BofA") for application in accordance
with Section 7.02(i) of the Credit Agreement.
D. The execution and delivery by the Company of
this Agreement is a condition to the application of the Net
Proceeds as set forth in Recital B above.
NOW, THEREFORE, in consideration of the foregoing
and the mutual agreements contained herein, the Company and
Agent hereby agree as follows:
1
<PAGE> 154
1. Cash Collateral Account.
(a) Cash Collateral Account. For purposes of
Section 7.02(i) of the Credit Agreement, the Company has
established with BofA, for the benefit of Agent on behalf of
itself and the Banks, a special purpose restricted deposit
account in the name of the Company, deposit account
#__________ (together with any successor account(s) that may
be established from time to time in replacement thereof, the
"Cash Collateral Account"). Agent shall have exclusive
control over the Cash Collateral Account and the sole right
of withdrawal therefrom, except as expressly provided in
Section 1(b) below. The Company agrees that the Cash
Collateral Account shall be a blocked account, and upon the
deposit of funds into the Cash Collateral Account by or at
the direction of the Company, such deposit shall become
(except as expressly provided in such Section 1(b) hereof)
irrevocable and the Company shall have no right to withdraw
amounts contained therein or interest accrued thereon except
as provided in Section 1(b) hereof or upon the indefeasible
payment in full of the Obligations; and until such
indefeasible payment in full of the Obligations the Company
waives (i) the right to make withdrawals from the Cash
Collateral Account and (ii) the right to instruct BofA to
honor drafts drawn against the Cash Collateral Account,
except in each case as expressly provided in Section 1(b)
hereof.
(b) Withdrawal. The Company may withdraw
funds from the Cash Collateral Account if and only if
(i) such funds are applied directly (1) to purchase
investments permitted hereunder or (2) to purchase
productive assets in the same line of business provided that
the Company shall have delivered to Agent no later than
three (3) Business Days prior to the proposed date of such
withdrawal a certificate of a Responsible Representative
substantially the form of Exhibit A hereto, and (ii) no
Default or Event of Default exists or will occur by virtue
of such withdrawal and purchase.
(c) Application to Loans. Upon the date that
is 180 days after the date of the sale of the properties
that constitute all or part of the Columbia River Unit,
Agent shall promptly apply any amounts remaining in the Cash
Collateral Account to the prepayment of the Loans in
accordance with the provisions of Section 2.07 of the Credit
Agreement and the Company irrevocably directs Agent to apply
such funds at such time to the prepayment of the Loans in
accordance with Section 2.07 of the Credit Agreement.
2
<PAGE> 155
2. Lien. The Cash Collateral Account, all funds
and investments contained therein, all interest accrued
thereon, and all proceeds thereof shall be held by BofA for
the benefit of Agent on behalf of itself and the Banks as
cash collateral to secure the Company's obligations to Agent
and the Banks. As security for the payment and performance
of all obligations of the Company hereunder and under the
Credit Agreement, the Company hereby grants to Agent on
behalf of itself and the Banks a first priority perfected
security interest in all of its rights, title and interest
now existing or hereafter arising in and to the Cash
Collateral Account and any proceeds or products thereof.
Agent and the Company hereby notify BofA of the foregoing
lien, and BofA, by its signature below, acknowledges receipt
of such notice.
The Company shall be deemed in default under this
Agreement upon the occurrence of an Event of Default, as
that term is defined in the Credit Agreement. Upon the
occurrence of any such Event of Default, Agent may, at its
option, and without notice to or demand on the Company and
in addition to all rights and remedies available to Agent
under the Credit Agreement, do any one or more of the
following: (a) foreclose or otherwise enforce Agent's
security interest in any manner permitted by law, or
provided for in this Agreement; (b) dispose of the Cash
Collateral Account on such terms and in such manner as Agent
may determine; and (c) recover from the Company all costs
and expenses, including, without limitation, Attorneys
Costs, incurred or paid by Agent in exercising any right,
power or remedy provided by this Agreement, the Loan
Documents, or by law.
3. Investments. Upon the Company's written
instructions as provided in Section 4 below, if no Default
or Event of Default exists, Agent shall invest the funds on
deposit in the Cash Collateral Account in any of the
permitted investments described in the Investment Policy
attached as Schedule 1.01 to the Credit Agreement; provided
that with respect to any instruction to invest funds in any
investment that does not constitute a "deposit account" (as
defined in Division 9 of the California Commercial Code)
maintained with BofA, Agent shall take no action to effect
such instructions to invest funds unless and until the
Company has duly executed and delivered such documents and
instruments and caused to be delivered such opinions of
counsel as the Majority Lenders may reasonably deem
necessary or appropriate to perfect or to confirm the
perfection and first priority status of Agent's security
interest in such investments.
3
<PAGE> 156
4. Investment Direction. With respect to the
investment of funds on deposit in the Cash Collateral
Account pursuant to Section 3 above, Agent shall be entitled
to rely upon the written instructions of those individuals
whose signatures appear in the spaces provided below, or
such other individuals as may hereafter be designated in
writing by the Company:
______________________________
______________________________
______________________________
5. Compensation. BofA shall be entitled to
compensation from the Company for the maintenance of and
investment of funds contained in the Cash Collateral Account
in accordance with its standard fees for such services in
effect from time to time. Such compensation shall be
payable upon demand.
6. Notices, Etc. Any notice or other
communication herein required or permitted to be given shall
be in writing and may be delivered in person, with receipt
acknowledged, or sent by telex, telecopy or by United States
mail, registered or certified, return receipt requested,
postage prepaid and addressed as set forth on the signature
pages to this Agreement or at such other address as may be
substituted by notice given as herein provided. The giving
of any notice required hereunder may be waived in writing by
the party entitled to receive such notice. All such notices
and communications shall, when transmitted by overnight
delivery, telegraphed, telecopied by facsimile, telexed or
cabled, be effective when delivered for overnight delivery
or to the telegraph company, transmitted by telecopier (with
successful transmission confirmation), confirmed by telex
answerback or delivered to the cable company, respectively,
or if delivered, upon delivery. Failure or delay in
delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to the persons
designated above to receive copies shall in no way adversely
affect the effectiveness of such notice, demand, request,
consent, approval, declaration or other communication.
4
<PAGE> 157
7. Termination. This Agreement shall terminate
when transfers of amounts in the Cash Collateral Account
pursuant to Section 1 hereof shall have reduced the balance
of the Cash Collateral Account to zero.
8. Successors and Assigns; Governing Law. This
Agreement shall be binding upon and inure to the benefit of
the Company, Agent and the Banks and their respective
successors and assigns, except that the Company shall not
have the right to assign its rights hereunder or any
interest herein without the prior written consent of Agent
and each Bank. Except as otherwise expressly provided
herein or in any of the other Loan Documents, in all
respects, including all matters of construction, validity
and performance, this Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the
State of California applicable to contracts made and
performed in such state, without regard to the principles
thereof regarding conflict of laws, and any applicable laws
of the United States of America.
9. Entire Agreement; Construction; Amendments and
Waivers.
(a) Entire Agreement. This Agreement, the
Credit Agreement and the other Loan Documents, taken
together, constitute and contain the entire agreement among
the parties and supersede any and all prior agreements,
negotiations, correspondence, understandings and
communications among the parties, whether written or oral,
respecting the subject matter hereof.
(b) Construction. This Agreement is the
result of negotiations between and has been reviewed by each
of the Company, Agent and the Banks and their respective
counsel; accordingly, this Agreement shall be deemed to be
the product of the parties hereto, and no ambiguity shall be
construed in favor of or against the Company, Agent or the
Banks. The Company, Agent and the Banks agree that they
intend the literal words of this Agreement and that no parol
evidence shall be necessary or appropriate to establish the
Company's, Agent's or any Bank's actual intentions.
(c) Interpretation. The terms of this
Agreement shall be interpreted in accordance with the
provisions of Article I of the Credit Agreement, provided,
however, that (a) any reference to a "Section" shall refer
to the relevant Section to this Agreement, unless
specifically indicated to the contrary and (b) the words
"herein," "hereof" and "hereunder" and other words of
similar import (including, without limitation, in Article I
5
<PAGE> 158
of the Credit Agreement) shall refer to this Agreement as a
whole, as the same may from time to time be amended, amended
and restated, modified or supplemented, and not to any
particular section, subsection or clause contained in this
Agreement.
(d) Amendments; Waivers. No amendment,
modification, discharge or waiver of, or consent to any
departure by the Company from, any provision of this
Agreement shall be effective unless the same shall be in
writing and signed by the Agent with the written consent of
the Majority Banks, and then such waiver shall be effective
only in the specific instance and for the specific purpose
for which given.
10. Severability. Whenever possible, each
provision of this Agreement shall be interpreted in such a
manner as to be valid, legal and enforceable under the
applicable law of any jurisdiction. Without limiting the
generality of the foregoing sentence, in case any provision
of this Agreement shall be invalid, illegal or unenforceable
under the applicable law of any jurisdiction, the validity,
legality and enforceability of the remaining provisions, or
of such provision in any other jurisdiction, shall not in
any way be affected or impaired thereby.
11. Headings. Section headings in this Agreement
are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other
purpose or be given any substantive effect.
12. No Third Parties Benefited. This Agreement is
made and entered into for the sole protection and legal
benefit of the Company, Agent, the Banks, and their
permitted successors and assigns, and no other Person shall
be a direct or indirect legal beneficiary of, or have any
direct or indirect cause of action or claim in connection
with this Agreement. Neither Agent nor any Bank shall have
any obligation to any Person not a party to this Agreement.
13. Counterparts. This Agreement and any
amendments, waivers, consents or supplements hereto may be
executed in any number of counterparts, and by different
parties hereto in separate counterparts, each of which when
so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and
the same instrument.
6
<PAGE> 159
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and delivered as of the
date first above written.
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company, L.P.,
its general partner
By:_________________________________
Title:______________________________
Notice to be sent to:
Plum Creek Timber Company, L.P.
999 Third Avenue, Suite 2300
Seattle, WA 98104
Attn: Chief Financial Officer
Tel: (206) 467-3600
Fax: (206) 467-3797
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By: _____________________________________
Printed Name:
Title:
Notice to be sent to:
Bank of America National Trust
and Savings Association
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attn: Daniel G. Farthing
Global Agency #5596
Tel: (415) 953-0849
Fax: (415) 622-4894
7
<PAGE> 160
Notice of security interest
acknowledged:
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION,
as depository
By: _________________________
Printed Name:
Title:
Notice to be sent to:
Bank of America National Trust
and Savings Association
555 California Street, 41st Floor
San Francisco, CA 94104
Attn: Michael J. Balok
Tel: (415) 622-2018
Fax: (415) 622-4585
8
123957 (753)(711)
<PAGE> 161
EXHIBIT A
OFFICER'S CERTIFICATE
Date: ___________________
Reference is made to that certain Cash Collateral
Account Agreement dated as of _____________, 199_ (the
"Cash Collateral Account Agreement") between Plum Creek
Timber Company, L.P., a Delaware limited partnership (the
"Company"), and Bank of America National Trust and Savings
Association, as agent ("Agent") (capitalized terms used
herein without definition shall have the meanings given to
them in the Cash Collateral Account Agreement).
The undersigned Responsible Representative of the
Company, hereby certifies as of the date hereof that he/she
is the ____________________________ of the Company, and
that, as such, he/she is authorized to execute and deliver
this Certificate to the Agent on behalf of the Company and
not as an individual, and that:
(1) Pursuant to Section 1(b) of the Cash
Collateral Account Agreement, the Company may withdraw funds
from the Cash Collateral Account to purchase productive
assets in the same line of business;
(2) The Company has acquired [or will acquire on
__________, 199_] the assets listed on Schedule 1 attached
hereto (the "Eligible Assets"), which Eligible Assets
constitute productive assets in the same line of the
Company's business;
(3) The aggregate purchase price for the Eligible
Assets is $____________________ (the "Purchase Price");
(4) No Default or Event of Default exists or would
result from such proposed purchase of the Eligible Assets or
a withdrawal from the Cash Collateral Account to fund such
purchase; and
(5) The representations and warranties made by the
Company contained in Article V of the Credit Agreement are
true and correct as though made on and as of the date hereof
(except to the extent such representations and warranties
specifically relate to an earlier date, in which case they
are true and correct as of such earlier date).
1
<PAGE> 162
The Company hereby requests that the Agent release
from the Cash Collateral Account and transfer to the Company
at _______________________________________ on
______________, 199_ an amount equal to the lesser of
(i) the Purchase Price and (ii) the amount remaining in the
Cash Collateral Account on such date of transfer. The
undersigned hereby certifies that such amount shall be used
solely to pay the Purchase Price, or part thereof, of the
Eligible Assets.
IN WITNESS WHEREOF, the Company has executed and
delivered this Certificate as of ________________.
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management
Company, L.P.,
its general partner
By: __________________________
Title: ________________________
2
123957(753)(711)
<PAGE> 163
SCHEDULE 1
ELIGIBLE ASSETS
123957(753)(711)
<PAGE> 164
EXHIBIT F
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this
"Agreement") dated as of __________, ____ is made between
______________________________ (the "Assignor") and
__________________________ (the "Assignee").
RECITALS
WHEREAS, the Assignor is party to that certain
Credit Agreement dated as of October 28, 1993 among PLUM
CREEK TIMBER COMPANY, L.P., a Delaware limited partnership
(the "Company"), the several financial institutions from
time to time party thereto (including the Assignor, the
"Banks"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Agent (as from time to time amended, amended
and restated, modified, supplemented or renewed, the "Credit
Agreement"). Any terms defined in the Credit Agreement and
not defined in this Agreement are used herein as defined in
the Credit Agreement;
WHEREAS, as provided under the Credit Agreement,
the Assignor has committed to making Loans (the "Committed
Loans") to the Company in an aggregate amount not to exceed
$__________ (the "Commitment");
WHEREAS, [the Assignor has made Committed Loans in
the aggregate principal amount of $__________ to the
Company] [no Committed Loans are outstanding under the
Credit Agreement]; and
WHEREAS, the Assignor wishes to assign to the
Assignee [part of the] [all] rights and obligations of the
Assignor under the Credit Agreement in respect of its
Commitment, [together with a corresponding portion of each
of its outstanding Committed Loans,] in an amount equal to
$__________ (the "Assigned Amount") on the terms and subject
to the conditions set forth herein and the Assignee wishes
to accept assignment of such rights and to assume such
obligations from the Assignor on such terms and subject to
such conditions;
NOW, THEREFORE, in consideration of the foregoing
and the mutual agreements contained herein, the parties
hereto agree as follows:
-1-
<PAGE> 165
1. Assignment and Acceptance.
(a) Subject to the terms and conditions of
this Agreement, (i) the Assignor hereby sells, transfers
and assigns to the Assignee, and (ii) the Assignee
hereby purchases, assumes and undertakes from the
Assignor, without recourse and without representation or
warranty (except as provided in this Agreement) __% (the
"Assignee's Percentage Share") of (A) the Commitment
[and the Committed Loans] of the Assignor and (B) all
related rights, benefits, obligations, liabilities and
indemnities of the Assignor under and in connection with
the Credit Agreement and the Loan Documents.
[If appropriate, add paragraph specifying
payment to Assignor by Assignee of outstanding principal
of, accrued interest on, and fees with respect to,
Committed Loans assigned.]
(b) With effect on and after the Effective
Date (as defined herein), the Assignee shall be a party
to the Credit Agreement and succeed to all of the rights
and be obligated to perform all of the obligations of a
Bank under the Credit Agreement, including the
requirements concerning confidentiality, with a
Commitment in an amount equal to the Assigned Amount.
The Assignee agrees that it will perform in accordance
with their terms all of the obligations which by the
terms of the Credit Agreement are required to be
performed by it as a Bank. It is the intent of the
parties hereto that the Commitment of the Assignor
shall, as of the Effective Date, be reduced by an amount
equal to the Assigned Amount and the Assignor shall
relinquish its rights and be released from its
obligations under the Credit Agreement to the extent
such obligations have been assumed by the Assignee.
(c) After giving effect to the assignment and
assumption, on the Effective Date the Assignee's
Commitment will be $__________.
2. Payments.
(a) As consideration for the sale, assignment
and transfer contemplated in Section 1, the Assignee
shall pay to the Assignor on the Effective Date in
immediately available funds an amount equal to
$__________, representing the Assignee's Percentage
Share of the principal amount of all Committed Loans
previously made, and currently owed, by the Company to
-2-
<PAGE> 166
the Assignor under the Credit Agreement and outstanding
on the Effective Date.
(b) The [Assignor] [Assignee] further agrees
to pay to the Agent a processing fee in the amount
specified in Section 10.08(a) of the Credit Agreement.
3. Reallocation of Payments.
Any interest, fees and other payments accrued to
the Effective Date with respect to the Committed Loans and
the Commitment shall be for the account of the Assignor.
Any interest, fees and other payments accrued on and after
the Effective Date with respect to the Assigned Amount shall
be for the account of the Assignee. Each of the Assignor
and the Assignee agrees that it will hold in trust for the
other party any interest, fees and other amounts which it
may receive to which the other party is entitled pursuant to
the preceding sentence and pay to the other party any such
amounts which it may receive promptly upon receipt.
4. Independent Credit Decision.
The Assignee (a) acknowledges that it has received
a copy of the Credit Agreement and the Schedules and
Exhibits thereto, together with copies of the most recent
financial statements referred to in Section 6.01 of the
Credit Agreement, and such other documents and information
as it has deemed appropriate to make its own credit and
legal analysis and decision to enter into this Agreement;
and (b) agrees that it will, independently and without
reliance upon the Assignor, the Agent or any other Bank and
based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit and
legal decisions in taking or not taking action under the
Credit Agreement.
5. Effective Date; Notices.
(a) As between the Assignor and the Assignee,
the effective date for this Agreement shall be
__________, ____ (the "Effective Date"); provided that
the following conditions precedent have been satisfied
on or before the Effective Date:
(i) this Agreement shall be executed and
delivered by the Assignor and the Assignee;
(ii) the consent of the Company and the
Agent required for an effective assignment of the
Assigned Amount by the Assignor to the Assignee
-3-
<PAGE> 167
under Section 10.08(a) of the Credit Agreement
shall have been duly obtained and shall be in full
force and effect as of the Effective Date;
(iii) the Assignee shall pay to the
Assignor all amounts due to the Assignor under this
Agreement;
(iv) the Assignee shall have complied
with Section 3.01(f) of the Credit Agreement (if
applicable; and
(v) the processing fee referred to in
Section 2(b) hereof and in Section 10.08(a) of the
Credit Agreement shall have been paid to the Agent.
(b) Promptly following the execution of this
Agreement, the Assignor shall deliver to the Company and
the Agent for acknowledgement by the Agent, a Notice of
Assignment in the form attached hereto as Schedule 1.
[6. Agent. [INCLUDE ONLY IF ASSIGNOR IS AGENT]
(a) The Assignee hereby appoints and
authorizes the Assignor to take such action as agent on
its behalf and to exercise such powers under the Credit
Agreement as are delegated to the Agent by the Banks
pursuant to the terms of the Credit Agreement.
(b) The Assignee shall assume no duties or
obligations held by the Assignor in its capacity as
Agent under the Credit Agreement.]
7. Withholding Tax.
The Assignee agrees to comply with Section 3.01(f)
of the Credit Agreement (if applicable).
8. Representations and Warranties.
(a) The Assignor represents and warrants that
(i) it is the legal and beneficial owner of the interest
being assigned by it hereunder and that such interest is
free and clear of any lien, security interest or other
adverse claim; (ii) it is duly organized and existing
and it has the full power and authority to take, and has
taken, all action necessary to execute and deliver this
Agreement and any other documents required or permitted
to be executed or delivered by it in connection with
this Agreement and to fulfill its obligations hereunder;
(iii) no notices to, or consents, authorizations or
-4-
<PAGE> 168
approvals of, any person are required (other than any
already given or obtained) for its due execution,
delivery and performance of this Agreement, and apart
from any agreements or undertakings or filings required
by the Credit Agreement, no further action by, or notice
to, or filing with, any person is required of it for
such execution, delivery or performance; and (iv) this
Agreement has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of
the Assignor, enforceable against the Assignor in
accordance with the terms hereof, subject, as to
enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application
relating to or affecting creditors' rights and to
general equitable principles.
(b) The Assignor makes no representation or
warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or
in connection with the Credit Agreement or the
execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished
pursuant thereto. The Assignor makes no representation
or warranty in connection with, and assumes no
responsibility with respect to, the solvency, financial
condition or statements of the Company, or the
performance or observance by the Company, of any of its
respective obligations under the Credit Agreement or any
other instrument or document furnished in connection
therewith.
(c) The Assignee represents and warrants that
(i) it is duly organized and existing and it has full
power and authority to take, and has taken, all action
necessary to execute and deliver this Agreement and any
other documents required or permitted to be executed or
delivered by it in connection with this Agreement, and
to fulfill its obligations hereunder; (ii) no notices
to, or consents, authorizations or approvals of, any
person are required (other than any already given or
obtained) for its due execution, delivery and
performance of this Agreement; and apart from any
agreements or undertakings or filings required by the
Credit Agreement, no further action by, or notice to, or
filing with, any person is required of it for such
execution, delivery or performance; (iii) this Agreement
has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of
the Assignee, enforceable against the Assignee in
accordance with the terms hereof, subject, as to
-5-
<PAGE> 169
enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application
relating to or affecting creditors' rights and to
general equitable principles; and (iv) it is an Eligible
Assignee.
9. Further Assurances.
The Assignor and the Assignee each hereby agrees to
execute and deliver such other instruments, and take such
other action, as either party may reasonably request in
connection with the transactions contemplated by this
Agreement, including the delivery of any notices or other
documents or instruments to the Company or the Agent, which
may be required in connection with the assignment and
assumption contemplated hereby.
10. Miscellaneous.
(a) Any amendment or waiver of any provision
of this Agreement shall be in writing and signed by the
parties hereto. No failure or delay by either party
hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof and any
waiver of any breach of the provisions of this Agreement
shall be without prejudice to any rights with respect to
any other or further breach thereof.
(b) All payments made hereunder shall be made
without any set-off or counterclaim.
(c) The Assignor and the Assignee shall each
pay its own costs and expenses incurred in connection
with the negotiation, preparation, execution and
performance of this Agreement.
(d) This Agreement may be executed in any
number of counterparts and all of such counterparts
taken together shall be deemed to constitute one and the
same instrument.
(e) THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF
CALIFORNIA. The Assignor and the Assignee each
irrevocably submits to the non-exclusive jurisdiction of
any State or Federal court sitting in California over
any suit, action or proceeding arising out of or
relating to this Agreement and irrevocably agrees that
all claims in respect of such action or proceeding may
be heard and determined in such California State or
Federal court. Each party to this Agreement hereby
-6-
<PAGE> 170
irrevocably waives, to the fullest extent it may
effectively do so, the defense of an inconvenient forum
to the maintenance of such action or proceeding.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER,
OR IN CONNECTION WITH THIS AGREEMENT, THE CREDIT
AGREEMENT, ANY RELATED DOCUMENTS AND AGREEMENTS OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, OR STATEMENTS
(WHETHER ORAL OR WRITTEN).
[Other provisions to be added as may be
negotiated between the Assignor and the Assignee,
provided that such provisions are not inconsistent with
the Credit Agreement.]
IN WITNESS WHEREOF, the Assignor and the Assignee
have caused this Assignment and Acceptance Agreement to be
executed and delivered by their duly authorized officers as
of the date first above written.
__________________________________
Assignor
By: _________________________________
Title: ______________________________
Address:
__________________________________
Assignee
By: _________________________________
Title: ______________________________
Address:
-7-
<PAGE> 171
SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE
_______________, 19__
Bank of America National Trust
and Savings Association, as Agent
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attn: Global Agency #5596
Plum Creek Timber Company, L.P.
999 Third Avenue, Suite 2300
Seattle, WA 98104
Attn: Chief Financial Officer
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of October 28,
1993 (the "Credit Agreement") among Plum Creek Timber
Company, L.P. (the "Company"), the Banks referred to therein
and Bank of America National Trust and Savings Association,
as Agent. Terms defined in the Credit Agreement are used
herein as therein defined.
1. We hereby give you notice of, and request the
consent of the Company to, the assignment by
__________________ (the "Assignor") to _______________ (the
"Assignee") of _____% of the right, title and interest of
the Assignor in and to the Credit Agreement (including,
without limitation, the right, title and interest of the
Assignor in and to the Commitments of the Assignor and all
outstanding Loans made by the Assignor). Before giving
effect to such assignment the Assignor's Commitment is
$ ___________, and the aggregate amount of its
outstanding Loans is $_____________.
2. The Assignee agrees that, upon receiving the
consent of the Company and the Agent to such assignment, the
Assignee will be bound by the terms of the Credit Agreement
as fully and to the same extent as if the Assignee were the
Bank originally holding such interest in the Credit
Agreement.
-8-
<PAGE> 172
3. The following administrative details apply to the
Assignee:
(A) Notice Address:
Assignee name: __________________________
Address: _______________________________
_______________________________
_______________________________
Attention: _____________________________
Telephone: (___) _______________________
Telecopier: (___) ______________________
Telex (Answerback): ____________________
(B) Payment Instructions:
Account No.: ___________________________
At: ___________________________
___________________________
___________________________
Reference: ___________________________
Attention: ___________________________
IN WITNESS WHEREOF, the Assignor and the Assignee have
caused this Assignment Notice and Acceptance to be executed
by their respective duly authorized officials, officers or
agents as of the date first above mentioned.
Very truly yours,
[Name of Assignor]
By: ________________________
Title:
[Name of Assignee]
By: ________________________
Title:
-9-
<PAGE> 173
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company, L.P.
By: ______________________
Its: _____________________
By: __________________________
Title: _______________________
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By: __________________________
Vice President
-10-
123897.AB2 (753)(711)
<PAGE> 174
CLOSING DOCUMENTS
PLUM CREEK CREDIT AGREEMENT
PARTIES
Borrower & Affiliates:
- ---------------------
Plum Creek Timber Company, L.P. ("Company")
Plum Creek Management Company, L.P. ("General Partner")
PC Advisory Partners I, L.P. ("PMC General Partner")
PC Advisory Corp. I ("PC Advisory General Partner")
Agent:
- -----
Bank of America National Trust and
Savings Association, as agent for
the Banks ("Agent")
Collectively the Banks: ("Banks")
- ----------------------
Bank of America National Trust and
Savings Association
NationsBank of North Carolina, N.A.
United States National Bank of Oregon
Wells Fargo Bank, N.A.
Seattle First National Bank
ABN AMRO Bank N.V.
Chemical Bank
The Bank of Tokyo, Ltd.
The Bank of California, N.A.
Counsel:
- -------
Morrison & Foerster ("MoFo")
(for Agent)
Perkins Coie ("Perkins")
(for PCTC)
1
<PAGE> 175
Document
Number:
- --------
CREDIT DOCUMENTS
----------------
1. Credit Agreement dated as of October 28, 1993, among PCTC,
the Banks and the Agent
2. Schedules to the Credit Agreement:
. Schedule 1.01: Investment Policy
. Schedule 2.01: Commitments
. Schedule 5.05: Litigation
. Schedule 5.07: ERISA
. Schedule 5.12: Environmental Matters
. Schedule 5.18: Subsidiaries of PCTC
. Schedule 7.01: Permitted Liens
. Schedule 7.04: Permitted Investments
3. Exhibits to the Credit Agreement:
. Exhibit A: Notice of Borrowing
. Exhibit B: Notice of Conversion/Continuation
. Exhibit C-1: Form of Legal Opinion of Company Counsel
. Exhibit C-2: Form of Legal Opinion of Perkins
. Exhibit D: Compliance Certificate
. Exhibit E: Form of Cash Collateral Agreement
. Exhibit F: Form of Assignment and Acceptance
CORPORATE AND PARTNERSHIP DOCUMENTS
-----------------------------------
4. Resolutions of the Board of Directors of PC Advisory
General Partner certified by the Assistant Secretary
5. Incumbency Certificate of PC Advisory General Partner
2
<PAGE> 176
<TABLE>
<CAPTION>
Document
Number:
- --------
<S> <C> <C> <C>
6. Certificates of the Assistant Secretary of PC Advisory General
Partner certifying a copy of Company's:
(i) Partnership Certificate, certified by the Delaware
Secretary of State
(ii) Partnership Agreement
7. Certificates of the Assistant Secretary of PC Advisory General
Partner certifying a copy of General Partner's:
(i) Partnership Certificate, certified by the Delaware
Secretary of State
(ii) Partnership Agreement
8. Certificates of the Assistant Secretary of PC Advisory General
Partner certifying a copy of PCMC General Partner's:
(i) Partnership Certificate, certified by the Delaware
Secretary of State
(ii) Partnership Agreement
9. Certificates of the Assistant Secretary of PC Advisory General
Partner certifying:
(i) Articles of Incorporation of PC Advisory General
Partner, certified by the Delaware Secretary of
State.
(ii) Bylaws of PC Advisory General Partner
10. Good standing certificates of Company from the States of:
- Delaware
- Washington
- Montana
- Idaho
11. Good standing certificates of General Partner from the States of:
- Delaware
- Washington
- Montana
- Idaho
</TABLE>
3
<PAGE> 177
Document
Number:
- --------
12. Good standing certificates of PCMC General Partner from
the States of:
-Delaware
-Washington
-Montana
13. Good standing certificates of PC Advisory General Partner
from the States of:
-Delaware
-Washington
-Montana
LEGAL OPINIONS
--------------
14. Opinion of Company's Counsel
15. Opinion of Perkins
16. Officer's Certificate with respect to representations true
and correct, no Event of Default and no Material Adverse
Effect
17. Certificate of Chief Financial Officer of General Partner
with respect to Financial Statements of Company
18. Officer's Certificate of PC Advisory General Partner
certifying a copy of:
(a) Senior Note Agreement, as amended
(b) Mortgage Note Agreement, as amended
(c) ABN Credit Agreement, as amended
4
<PAGE> 1
EXHIBIT 10.C.2
RELEASE AND WAIVER OF RIGHTS
This release by the undersigned ("Executive"), who is a participant in the Plum
Creek Management Company Incentive Sharing Plan ("IS Plan") and the Plum Creek
Management Company Executive Incentive Compensation Plan ("EIC Plan") is made
this 28th day of January, 1994, in consideration for and contingent upon the
adoption by Plum Creek Management Company, L.P. ("Company") of the Plum Creek
Management Company, L.P. Long-Term Incentive Plan ("LTIP") and the Plum Creek
Management Company, L.P. Management Incentive Plan ("MIP").
RECITALS
A. The Executive has participated in the IS Plan and the EIC Plan.
B. The Executive is generally entitled to continue participation
in the IS Plan and the EIC Plan through May 31, 1994 pursuant
to a letter agreement with the Company dated June 9, 1989, as
amended and modified by a subsequent letter agreement dated
December 28, 1992 (collectively referred to as the "Letter
Agreements").
C. The Company intends to establish the LTIP and the MIP to
provide incentives for the Executive intended to replace the
incentives previously provided the Executive under the IS Plan
and the EIC Plan.
D. The Executive agrees that, as a condition to the Executive's
participation in the LTIP and the MIP, (i) the Executive's
participation in the IS Plan and the EIC Plan shall be
discontinued effective on and after January 1, 1994; (ii) the
Company and the Plum Creek Timber Company, L.P. ("PCL") or any
affiliate of the Company or PCL (collectively referred to as
the "Affiliates") shall be released from all obligations under
the IS Plan and the EIC Plan arising after December 31, 1993;
(iii) the discontinuance of the Executive's participation in
and the termination of the IS Plan and the EIC Plan with
respect to the Executive shall not constitute a breach of the
Letter Agreements or be considered Good Reason for the
Executive's voluntary termination of employment thereunder.
RELEASE AND WAIVER AGREEMENT
NOW, THEREFORE, in consideration for and contingent upon the Company's adoption
of the LTIP and the MIP and the mutual undertaking of the parties hereto, the
Executive and the Company, agree as follows:
1. Upon the Company's adoption of the LTIP and the MIP
substantially in the form proposed as of this date,
including an original grant of 375,000 Unit
Appreciation Rights to the Executive under the LTIP,
and the designation of the Executive as a Participant
in the MIP for the Plan Year beginning January 1,
1994 (i) the IS Plan and the EIC Plan shall be
terminated with respect to the Executive and the
Executive's participation therein shall be
discontinued effective on and after January 1, 1994;
(ii) the Executive, on behalf of himself, his heirs,
executors, administrators, successors and assigns,
hereby releases, acquits and forever discharges the
Company and the Affiliates from any and all
obligations and waives any and all claims and causes
of action of every kind whether known or unknown,
suspected or unsuspected, to which the Executive may
have otherwise been entitled under the terms and
provisions of the IS Plan and the EIC Plan and the
Letter Agreements; and (iii) the Executive hereby
agrees that the discontinuance of the Executive's
participation in and
<PAGE> 2
the termination of the IS Plan and the EIC Plan shall
not constitute a breach of the Letter Agreements or
be considered Good Reason for the Executive's
voluntary termination of employment under said
Letter Agreements.
2. Notwithstanding the foregoing, the parties hereto
acknowledge that the Original Grants of Unit
Appreciation Rights pursuant Section 5.1(a) to the
LTIP is expressly conditioned upon the Committee's
written determination prior to June 30, 1994 that
such Original Grants comply with Rule 16b-3
promulgated under Section 16(b) of the Exchange Act
or any other comparable or successor rule or
regulatory requirement. Accordingly, this Release
and Waiver Agreement shall become null and void ab
initio in the event that the Committee does make a
written determination as described in the preceding
sentence prior to June 30, 1994.
EXECUTIVE: COMPANY:
PLUM CREEK MANAGEMENT COMPANY, L.P.
_________________________________ ___________________________________
Charles P. Grenier Keith B. Sletten
Executive Vice President Vice President Human Resources
_________________________________ ___________________________________
Date Date
<PAGE> 1
EXHIBIT 10.C.3
RELEASE AND WAIVER OF RIGHTS
This release by the undersigned ("Executive"), who is a participant in the Plum
Creek Management Company Incentive Sharing Plan ("IS Plan") and the Plum Creek
Management Company Executive Incentive Compensation Plan ("EIC Plan") is made
this 28th day of January, 1994, in consideration for and contingent upon the
adoption by Plum Creek Management Company, L.P. ("Company") of the Plum Creek
Management Company, L.P. Long-Term Incentive Plan ("LTIP") and the Plum Creek
Management Company, L.P. Management Incentive Plan ("MIP").
RECITALS
A. The Executive has participated in the IS Plan and the EIC Plan.
B. The Executive is generally entitled to continue participation
in the IS Plan and the EIC Plan through May 31, 1994 pursuant
to a letter agreement with the Company dated June 9, 1989, as
amended and modified by a subsequent letter agreement dated
December 28, 1992 (collectively referred to as the "Letter
Agreements").
C. The Company intends to establish the LTIP and the MIP to
provide incentives for the Executive intended to replace the
incentives previously provided the Executive under the IS Plan
and the EIC Plan.
D. The Executive agrees that, as a condition to the Executive's
participation in the LTIP and the MIP, (i) the Executive's
participation in the IS Plan and the EIC Plan shall be
discontinued effective on and after January 1, 1994; (ii) the
Company and the Plum Creek Timber Company, L.P. ("PCL") or any
affiliate of the Company or PCL (collectively referred to as
the "Affiliates") shall be released from all obligations under
the IS Plan and the EIC Plan arising after December 31, 1993;
(iii) the discontinuance of the Executive's participation in
and the termination of the IS Plan and the EIC Plan with
respect to the Executive shall not constitute a breach of the
Letter Agreements or be considered Good Reason for the
Executive's voluntary termination of employment thereunder.
RELEASE AND WAIVER AGREEMENT
NOW, THEREFORE, in consideration for and contingent upon the Company's adoption
of the LTIP and the MIP and the mutual undertaking of the parties hereto, the
Executive and the Company, agree as follows:
1. Upon the Company's adoption of the LTIP and the MIP
substantially in the form proposed as of this date,
including an original grant of 525,000 Unit
Appreciation Rights to the Executive under the LTIP,
and the designation of the Executive as a Participant
in the MIP for the Plan Year beginning January 1,
1994 (i) the IS Plan and the EIC Plan shall be
terminated with respect to the Executive and the
Executive's participation therein shall be
discontinued effective on and after January 1, 1994;
(ii) the Executive, on behalf of himself, his heirs,
executors, administrators, successors and assigns,
hereby releases, acquits and forever discharges the
Company and the Affiliates from any and all
obligations and waives any and all claims and causes
of action of every kind whether known or unknown,
suspected or unsuspected, to which the Executive may
have otherwise been entitled under the terms and
provisions of the IS Plan and the EIC Plan and the
Letter Agreements; and (iii) the Executive hereby
agrees that the discontinuance of the Executive's
participation in and
<PAGE> 2
the termination of the IS Plan and the EIC Plan shall
not constitute a breach of the Letter Agreements or
be considered Good Reason for the Executive's
voluntary termination of employment under said
Letter Agreements.
2. Notwithstanding the foregoing, the parties hereto
acknowledge that the Original Grants of Unit
Appreciation Rights pursuant Section 5.1(a) to the
LTIP is expressly conditioned upon the Committee's
written determination prior to June 30, 1994 that
such Original Grants comply with Rule 16b-3
promulgated under Section 16(b) of the Exchange Act
or any other comparable or successor rule or
regulatory requirement. Accordingly, this Release
and Waiver Agreement shall become null and void ab
initio in the event that the Committee does make a
written determination as described in the preceding
sentence prior to June 30, 1994.
EXECUTIVE: COMPANY:
PLUM CREEK MANAGEMENT COMPANY, L.P.
_________________________________ ___________________________________
Rick R. Holley Keith B. Sletten
President & Chief Executive Officer Vice President Human Resources
_________________________________ ___________________________________
Date Date
<PAGE> 1
EXHIBIT 10.C.4
RELEASE AND WAIVER OF RIGHTS
This release by the undersigned ("Executive"), who is a participant in the Plum
Creek Management Company Incentive Sharing Plan ("IS Plan") and the Plum Creek
Management Company Executive Incentive Compensation Plan ("EIC Plan") is made
this 28th day of January, 1994, in consideration for and contingent upon the
adoption by Plum Creek Management Company, L.P. ("Company") of the Plum Creek
Management Company, L.P. Long-Term Incentive Plan ("LTIP") and the Plum Creek
Management Company, L.P. Management Incentive Plan ("MIP").
RECITALS
A. The Executive has participated in the IS Plan and the EIC Plan.
B. The Executive is generally entitled to continue participation
in the IS Plan and the EIC Plan through May 31, 1994 pursuant
to a letter agreement with the Company dated June 9, 1989, as
amended and modified by a subsequent letter agreement dated
December 28, 1992 (collectively referred to as the "Letter
Agreements").
C. The Company intends to establish the LTIP and the MIP to
provide incentives for the Executive intended to replace the
incentives previously provided the Executive under the IS Plan
and the EIC Plan.
D. The Executive agrees that, as a condition to the Executive's
participation in the LTIP and the MIP, (i) the Executive's
participation in the IS Plan and the EIC Plan shall be
discontinued effective on and after January 1, 1994; (ii) the
Company and the Plum Creek Timber Company, L.P. ("PCL") or any
affiliate of the Company or PCL (collectively referred to as
the "Affiliates") shall be released from all obligations under
the IS Plan and the EIC Plan arising after December 31, 1993;
(iii) the discontinuance of the Executive's participation in
and the termination of the IS Plan and the EIC Plan with
respect to the Executive shall not constitute a breach of the
Letter Agreements or be considered Good Reason for the
Executive's voluntary termination of employment thereunder.
RELEASE AND WAIVER AGREEMENT
NOW, THEREFORE, in consideration for and contingent upon the Company's adoption
of the LTIP and the MIP and the mutual undertaking of the parties hereto, the
Executive and the Company, agree as follows:
1. Upon the Company's adoption of the LTIP and the MIP
substantially in the form proposed as of this date,
including an original grant of 225,000 Unit
Appreciation Rights to the Executive under the LTIP,
and the designation of the Executive as a Participant
in the MIP for the Plan Year beginning January 1,
1994 (i) the IS Plan and the EIC Plan shall be
terminated with respect to the Executive and the
Executive's participation therein shall be
discontinued effective on and after January 1, 1994;
(ii) the Executive, on behalf of himself, his heirs,
executors, administrators, successors and assigns,
hereby releases, acquits and forever discharges the
Company and the Affiliates from any and all
obligations and waives any and all claims and causes
of action of every kind whether known or unknown,
suspected or unsuspected, to which the Executive may
have otherwise been entitled under the terms and
provisions of the IS Plan and the EIC Plan and the
Letter Agreements; and (iii) the Executive hereby
agrees that the discontinuance of the Executive's
participation in and
<PAGE> 2
the termination of the IS Plan and the EIC Plan shall
not constitute a breach of the Letter Agreements or
be considered Good Reason for the Executive's
voluntary termination of employment under said
Letter Agreements.
2. Notwithstanding the foregoing, the parties hereto
acknowledge that the Original Grants of Unit
Appreciation Rights pursuant Section 5.1(a) to the
LTIP is expressly conditioned upon the Committee's
written determination prior to June 30, 1994 that
such Original Grants comply with Rule 16b-3
promulgated under Section 16(b) of the Exchange Act
or any other comparable or successor rule or
regulatory requirement. Accordingly, this Release
and Waiver Agreement shall become null and void ab
initio in the event that the Committee does make a
written determination as described in the preceding
sentence prior to June 30, 1994.
EXECUTIVE: COMPANY:
PLUM CREEK MANAGEMENT COMPANY, L.P.
_________________________________ ___________________________________
James A. Kraft Keith B. Sletten
Vice President, Law Vice President Human Resources
_________________________________ ___________________________________
Date Date
<PAGE> 1
EXHIBIT 10.C.5
RELEASE AND WAIVER OF RIGHTS
This release by the undersigned ("Executive"), who is a participant in the Plum
Creek Management Company Incentive Sharing Plan ("IS Plan") and the Plum Creek
Management Company Executive Incentive Compensation Plan ("EIC Plan") is made
this 28th day of January, 1994, in consideration for and contingent upon the
adoption by Plum Creek Management Company, L.P. ("Company") of the Plum Creek
Management Company, L.P. Long-Term Incentive Plan ("LTIP") and the Plum Creek
Management Company, L.P. Management Incentive Plan ("MIP").
RECITALS
A. The Executive has participated in the IS Plan and the EIC Plan.
B. The Executive is generally entitled to continue participation
in the IS Plan and the EIC Plan through May 31, 1994 pursuant
to a letter agreement with the Company dated June 9, 1989, as
amended and modified by a subsequent letter agreement dated
December 28, 1992 (collectively referred to as the "Letter
Agreements").
C. The Company intends to establish the LTIP and the MIP to
provide incentives for the Executive intended to replace the
incentives previously provided the Executive under the IS Plan
and the EIC Plan.
D. The Executive agrees that, as a condition to the Executive's
participation in the LTIP and the MIP, (i) the Executive's
participation in the IS Plan and the EIC Plan shall be
discontinued effective on and after January 1, 1994; (ii) the
Company and the Plum Creek Timber Company, L.P. ("PCL") or any
affiliate of the Company or PCL (collectively referred to as
the "Affiliates") shall be released from all obligations under
the IS Plan and the EIC Plan arising after December 31, 1993;
(iii) the discontinuance of the Executive's participation in
and the termination of the IS Plan and the EIC Plan with
respect to the Executive shall not constitute a breach of the
Letter Agreements or be considered Good Reason for the
Executive's voluntary termination of employment thereunder.
RELEASE AND WAIVER AGREEMENT
NOW, THEREFORE, in consideration for and contingent upon the Company's adoption
of the LTIP and the MIP and the mutual undertaking of the parties hereto, the
Executive and the Company, agree as follows:
1. Upon the Company's adoption of the LTIP and the MIP
substantially in the form proposed as of this date,
including an original grant of 375,000 Unit
Appreciation Rights to the Executive under the LTIP,
and the designation of the Executive as a Participant
in the MIP for the Plan Year beginning January 1,
1994 (i) the IS Plan and the EIC Plan shall be
terminated with respect to the Executive and the
Executive's participation therein shall be
discontinued effective on and after January 1, 1994;
(ii) the Executive, on behalf of himself, his heirs,
executors, administrators, successors and assigns,
hereby releases, acquits and forever discharges the
Company and the Affiliates from any and all
obligations and waives any and all claims and causes
of action of every kind whether known or unknown,
suspected or unsuspected, to which the Executive may
have otherwise been entitled under the terms and
provisions of the IS Plan and the EIC Plan and the
Letter Agreements; and (iii) the Executive hereby
agrees that the discontinuance of the Executive's
participation in and
<PAGE> 2
the termination of the IS Plan and the EIC Plan shall
not constitute a breach of the Letter Agreements or
be considered Good Reason for the Executive's
voluntary termination of employment under said
Letter Agreements.
2. Notwithstanding the foregoing, the parties hereto
acknowledge that the Original Grants of Unit
Appreciation Rights pursuant Section 5.1(a) to the
LTIP is expressly conditioned upon the Committee's
written determination prior to June 30, 1994 that
such Original Grants comply with Rule 16b-3
promulgated under Section 16(b) of the Exchange Act
or any other comparable or successor rule or
regulatory requirement. Accordingly, this Release
and Waiver Agreement shall become null and void ab
initio in the event that the Committee does make a
written determination as described in the preceding
sentence prior to June 30, 1994.
EXECUTIVE: COMPANY:
PLUM CREEK MANAGEMENT COMPANY, L.P.
_________________________________ ___________________________________
Robert E. Manne Keith B. Sletten
Executive Vice President Vice President Human Resources
_________________________________ ___________________________________
Date Date
<PAGE> 1
Exhibit 10.D.1
REVOLVING CREDIT AGREEMENT AMENDMENT
DATED AS OF SEPTEMBER 1, 1993
THIS REVOLVING CREDIT AGREEMENT AMENDMENT (this "Amendment") is made
by and among PLUM CREEK TIMBER COMPANY, L.P., a Delaware limited partnership
(the "Borrower"), the banks (the "Banks") listed on the signature pages hereof,
and ABN AMRO BANK N.V., acting through its Seattle Branch, individually ("ABN
Bank or a "Bank") and as agent (the "Agent") for the Banks hereunder.
RECITALS
The Borrower, the Banks and ABN Bank entered into a Revolving Credit
Agreement dated as of May 1, 1993 ("Credit Agreement").
The Borrower desires to purchase certain timberlands in the State of
Montana ("Champion Timberlands") from Champion International Corporation;
The Borrower, in order to finance the purchase of the Champion
Timberlands, proposes to enter into a Revolving Credit Agreement with Bank of
America National Trust and Savings Association and the other lenders parties to
such facility ("Bank of America Revolving Credit Agreement");
NOW, THEREFORE, the parties hereto agree that this Amendment shall
become effective after the signing hereof by the majority banks and as of the
date on which the Bank of America Revolving Credit Agreement becomes effective
(the "Effective Time") and that thereafter, all references to, and actions
taken in connection with, the Credit Agreement shall incorporate this Amendment
in its entirety. All capitalized terms used in this Amendment and not
otherwise defined have the meanings ascribed to them in the Credit Agreement.
ARTICLE I
CERTAIN AMENDMENTS
SECTION 1.01 DEFINITIONS
(a) The definition of "Designated Acres" in Section 1.01
of the Credit Agreement shall be amended by replacing the numeral "150,000" in
the first line thereof with "200,000."
(b) The following definitions shall be added to Section
1.01 of the Credit Agreement:
<PAGE> 2
"Bank of America Revolving Credit Agreement" shall
mean the credit agreement to be entered into between the
Borrower, Bank of America National Trust and Savings
Association, as Administrative Agent, and certain other
lenders pursuant to which the lenders thereunder shall provide
credit facilities to the Borrower in an aggregate principal
amount not to exceed $260,000,000.
"Qualified Debt" shall mean, as to the Borrower, as
of any date of determination, without duplication, all
outstanding indebtedness of the Borrower for borrowed money,
including, without limitation, Debt represented by the
borrowings under the Credit Agreement, the Senior Notes and
the Bank of America Revolving Credit Agreement.
"Actual Percentage" shall mean, at any date of
determination, the percentage determined by dividing the
aggregate outstanding principal balance of the Senior Notes by
the aggregate outstanding principal balance of all Qualified
Debt, excluding any Notes but including the Senior Notes.
"Desired Percentage" shall mean thirty-eight percent
(38%), the percentage determined by dividing the aggregate
outstanding principal balance of the Senior Notes on September
1, 1993 by the aggregate outstanding principal balance of all
Qualified Debt, other than any Notes, outstanding upon the
drawdown of the Bank of America Revolving Credit Agreement.
"Columbia River Unit" means those certain
approximately 63,000 acres located in southwest Washington and
generally referred to on the date hereof as the Borrower's
"Columbia River Unit."
SECTION 1.02 SECTION 5.02.6--MERGER AND SALE OF ASSETS
(a) The existing clause (h) of Subsection 5.02.6 of the
Credit Agreement shall be replaced by the following new clauses (h)
and (i):
(h) the Borrower and its Restricted Subsidiaries may
otherwise sell for cash properties that constitute the
Borrower's Columbia River Unit in an amount not less than the
fair value thereof as determined in good faith by the
Responsible Representatives, if and only if (i) immediately
after giving effect to such proposed sale, no condition or
event shall exist which constitutes an Event of Default or
Material Default, (ii) the net proceeds of any such sale are
either (x) subject to clause (v) of this clause (h) of
Subsection 5.02.6,
- 2 -
<PAGE> 3
distributed immediately upon receipt thereof to holders of
Qualified Debt other than the Notes and the Senior Notes for
application (either immediately or within 180 days) to
prepayment of such Qualified Debt, or (y) applied, within 180
days after such sale, to the purchase of productive assets in
the same line of business, (iii) in the event net proceeds of
any such sale are in excess of $25,000,000 and if not applied
immediately as provided in clause (ii) above, placed
immediately upon receipt thereof in an escrow or cash
collateral account or accounts for the purpose of application
in accordance with clause (ii) above, (iv) immediately after
giving effect to such sale (giving effect on a pro forma basis
to any proposed retirement of Qualified Debt out of the
proceeds thereof), the Borrower could incur $1 of additional
Funded Debt pursuant to clause (i) of Subsection 5.02.3, and
(v) the aggregate net proceeds of all sales pursuant to this
clause (h) of Subsection 5.02.6 during the year from the
funding of the first loan under the Bank of America Revolving
Credit Agreement to the first anniversary thereof that are
applied in repayment of Qualified Debt other than the Senior
Notes do not exceed $150,000,000, and
(i) the Borrower and its Restricted Subsidiaries may
otherwise sell for cash properties (other than any Collateral
or any properties described in clause (h) of Subsection 5.02.6
above) in an amount not less than the fair value thereof as
determined in good faith by the Responsible Representatives if
and only if (i) immediately after giving effect to such
proposed sale, no condition or event shall exist which
constitutes an Event of Default or Material Default, (ii) the
net proceeds of any such sale (x) are applied first, if any
net proceeds have been used to repay Qualified Debt other than
the Notes and the Senior Notes in accordance with clause (h)
of Subsection 5.02.6, to the prepayment of the Senior Notes to
the extent necessary to cause their Actual Percentage to equal
the Desired Percentage, and second, pro rata (based on the
current outstanding principal of all Qualified Debt other than
the Notes) to the holders of all Qualified Debt other than the
Notes, or (y) are applied, within 180 days after such sale, to
the purchase of productive assets in the same line of
business, (iii) the net proceeds of any such sale are either
(x) distributed immediately upon receipt thereof to holders of
Qualified Debt in accordance with clause (ii)(x) above for
application within 180 days to repayment of such Qualified
Debt, or (y) if in excess of $25,000,000, placed immediately
upon receipt thereof in an escrow or cash collateral account
or accounts for the purpose of application in accordance with
subclause (b) above,
- 3 -
<PAGE> 4
and (d) immediately after giving effect to such sale (giving
effect on a pro forma basis to any proposed retirement of
Qualified Debt out of the proceeds thereof), the Borrower
could incur $1 of additional Funded Debt pursuant to clause
(i) of Subsection 5.02.3.
(b) The existing clause (i) of Subsection 5.02.6 shall be
relabeled as subsection (j).
SECTION 1.03 SECTION 5.02.7--HARVESTING RESTRICTIONS
Section 5.02.7 of the Credit Agreement shall be amended in its
entirety to read as follows:
5.02.7 HARVESTING RESTRICTIONS -- The Borrower will
not, and will not permit any Restricted Subsidiary to, in any
calendar year, harvest Timber on the Timberlands then owned by
the Borrower in excess of the amount set forth for such
calendar year in the following table:
<TABLE>
<CAPTION>
Maximum MMBF to be
Calendar Year Harvested
------------- ------------------
<S> <C>
1989 (including harvest by
predecessor prior to the
closing) through 1991
675 MMBF
1992 and 1993 650 MMBF
1994 through 1996 700 MMBF
1997 through 2000 675 MMBF
2001 through 2007 625 MMBF
</TABLE>
plus, in each year, the amount, if any, by which the
cumulative amount set forth in the table above for the
preceding years exceeds the cumulative amount actually
harvested in such years;
unless the net cash proceeds from such excess harvest are
either (i) distributed to all holders of Qualified Debt other
than the Notes pro rata based upon outstanding principal
balances at the time of such distribution for application
(either immediately or within 180 days after such excess
harvest) to the repayment of such Qualified Debt other than
the Notes, or (ii) applied, within 180 days after any such
excess harvest, to purchase Timber (including Timber on
Timberlands purchased) having a fair value (in the good faith
- 4 -
<PAGE> 5
judgment of the Responsible Representatives) not less than the
fair value of the Timber subject to such excess harvest.
ARTICLE II
MISCELLANEOUS
SECTION 2.01 CONTINUITY AND INTEGRATION OF AGREEMENT.
The Credit Agreement, as affected by this Amendment, shall remain in
full force and effect and are hereby ratified and confirmed, and the Credit
Agreement and this Amendment shall be deemed to be and are construed as a
single agreement.
SECTION 2.02 COUNTERPARTS.
This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement. Delivery to the
Agent of a counterpart executed by a Bank shall constitute delivery as such
counterpart to all of the Banks.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to
be executed by their respective officers thereunto duly authorized as of the
date first above written.
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company, L.P.,
General Partner
By:
-----------------------------------
Name: Rick R. Holley
Title: Vice President and Chief
Financial Officer
- 5 -
<PAGE> 6
ABN AMRO Bank N.V., acting through its
Seattle Branch as Agent
By
-----------------------------------
Its
--------------------------------
By
-----------------------------------
Its
--------------------------------
The Banks
ABN AMRO Bank N.V., acting through its
Seattle Branch
By
-----------------------------------
Its
--------------------------------
By
-----------------------------------
Its
--------------------------------
U.S. BANK OF WASHINGTON NATIONAL
ASSOCIATION
By
-----------------------------------
Its
--------------------------------
SEATTLE-FIRST NATIONAL BANK
By
-----------------------------------
Its
--------------------------------
- 6 -
<PAGE> 1
EXHIBIT 10.E.6
PLUM CREEK MANAGEMENT COMPANY, L.P.
LONG-TERM INCENTIVE PLAN
SECTION 1 - ESTABLISHMENT, PURPOSE, AND EFFECTIVE DATE
1.1 Establishment of Plan. Plum Creek Management Company, L.P., a
Delaware limited partnership (the "Company") hereby establishes this 28th day
of January, 1994 the "PLUM CREEK MANAGEMENT COMPANY, L.P. LONG-TERM INCENTIVE
PLAN" (the "Plan") for the benefit of certain executives of the Company.
Subject to the terms and conditions provided herein, the Plan provides for
rewarding participating executives with a transfer of Units (as defined herein)
representing an ownership interest in the Plum Creek Timber Company, L.P. (the
"Partnership").
1.2 Purpose. The purpose of the Plan is to help retain the
services of participating executives, to align their interests with the
interests of the partners of the Partnership, and to encourage participating
executives to increase operating profitability, allocate capital wisely, and
generate cash with the ultimate goal of attaining appreciation in the value of
the Units. Transfers of Units under this Plan will reward participating
executives with ownership interests in the Partnership for which the Company
serves as general partner and to which it provides management support through
the efforts of the participating executives of the Company. This Plan is
intended to be an unfunded "bonus program" within the meaning of the United
States Code of Federal Regulations Section 2510.3-2(c) and is maintained
primarily for the purpose of providing long-term incentives to a select group
of management or highly compensated employees.
1.3 Effective Date of Plan. The Plan shall be effective as of
October 1, 1993 upon the approval of the Board of Directors of PC Advisory
Corp. I (the "Board"), the general partner of PC Advisory Partners I, L.P.,
which serves as a general partner of the Company, which serves as the general
partner of the Partnership.
SECTION 2 - DEFINITIONS
2.1 Definitions. When used in the Plan, the following terms shall
have the meanings specified below:
(a) "Account" means a Participant's Reinvested
Distribution Account and Unit Appreciation Account.
(b) "Base Unit Value" means, with respect to Unit
Appreciation Rights granted as of the Effective Date, the amount of
$20 and, with respect to Unit Appreciation Rights granted after the
Effective Date, the amount established by the Committee pursuant to
Section 5.1(b).
(c) "Beneficiary" means the person or entity determined
to be a Participant's beneficiary pursuant to Section 16.
(d) "Board" means the Board of Directors of PC Advisory
Corp. I.
(e) "Cause" means, when used in the phrase "for Cause" or
"without Cause" in connection with a termination of employment, that
the termination is evidenced by a resolution
<PAGE> 2
adopted in good faith by at least two-third (2/3rds) of the members
of the Board who are not employees of the Company or the Partnership,
that the Participant
(i) willfully and continually failed
substantially to perform the Participant's duties with the
Company or a Related Company (other than a failure resulting
from the Participant's incapacity due to physical or mental
illness) which failure continued for a period of at least 30
days after a written notice of demand for substantial
performance has been delivered to the Participant specifying
the manner in which the Participant has failed substantially
to perform the Participant's duties, or
(ii) willfully engaged in conduct which is
demonstrably and materially injurious to the Company or a
Related Company, monetarily or otherwise;
provided no termination of the Participant's employment shall be for
Cause set forth in clause (ii) above until there shall have been
delivered to the Participant a copy of a written notice setting forth
that the Participant was guilty of the conduct set forth in clause
(ii) and specifying the particulars thereof in detail, and the
Participant shall have been provided an opportunity to be heard by the
Board (with the assistance of the Participant's counsel if the
Participant so desires). No act, nor failure to act, on the
Participant's part, shall be considered "willful" unless the
Participant acted, or failed to act, with an absence of good faith and
without a reasonable belief that such action or failure to act was in
the best interest of the Company or a Related Company.
Notwithstanding anything contained in this Plan to the contrary, no
failure to perform by the Participant after notice of termination is
given to the Participant shall constitute Cause.
(f) "Change in Control" shall be deemed to occur at such
time as Mr. John H. Scully and Mr. William E. Oberndorf no longer
control, either individually or in the aggregate, the Company.
(g) "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
(h) "Committee" means a committee of two or more Board
members appointed by the Board.
(i) "Distribution Date" means the date a Partnership
Distribution is paid to the unitholders.
(j) "Effective Date" means October 1, 1993.
(k) "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
(l) "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time.
(m) "Good Reason" means the occurrence of any of the
following events or conditions:
-2-
<PAGE> 3
(i) a change in the Participant's status or
responsibilities (including reporting responsibilities) which
represents a substantial reduction of the status or
responsibilities as in effect immediately prior thereto; the
assignment to the Participant of any duties or
responsibilities which are inconsistent with such status or
responsibilities; or any removal of the Participant from or
failure to reappoint or reelect the Participant to a position
of responsibility, except in connection with the termination
of the Participant's employment for Cause, Permanent
Disability, as a result of death, or by the Participant for
other than Good Reason;
(ii) a reduction in the Participant's annual base
salary;
(iii) the failure by the Company or a Related Company
to provide the Participant with benefits substantially equal
(in terms of aggregate benefit levels and reward
opportunities) to those provided under the employee benefit
plans, programs and practices as in effect on the Effective
Date;
(iv) any material breach by the Company of any
provision of this Plan; and
(v) any purported termination of the Participant's
employment for Cause by the Company or a Related Company, as
the case may be, which does not otherwise comply with the
terms of this Plan.
Good Reason should not be inferred from a mere change in title or
position or because the exigencies of competition, changes in business
climate and opportunities presented in the marketplace may require a
Participant to undertake new roles and tasks or to travel or move in
order to best further the interests of the Company or any Related
Company.
(n) "Incentive Plans" means the Plan, the Plum Creek
Management Company, L.P. Management Incentive Plan, the Plum Creek
Management Company, L.P. Key Employee Long-Term Incentive Plan and any
other incentive plan maintained by the Company and designated by the
Committee as an Incentive Plan.
(o) "Market Price" means with respect to a Unit, the
closing reported sales price, regular way, per Unit on the New York
Stock Exchange Composite Tape, or if Units are not then traded on such
stock exchange, the principal national securities exchange on which
Units are then traded, or if not so traded, the highest bid quotation
on the over-the-counter market as reported by the National Quotations
Bureau, or any similar organization, on any relevant date, or if not
so reported, as determined by the Committee in a manner consistently
applied.
(p) "Participant" means an executive employee of the
Company designated as a Participant pursuant to Section 4.1 or
Section 4.2 or a former executive employee of the Company or a
Related Company who has any rights under the Plan.
(q) "Partnership Distributions" means cash distributions
of the Partnership with respect to the Units, including all ordinary
and extraordinary cash distributions.
(r) "Performance Period" means the period beginning on
the Effective Date and ending on December 31, 1998.
-3-
<PAGE> 4
(s) "Permanent Disability" means a condition that results
in the Participant's being totally disabled, whether due to physical
or mental causes, to the extent that the Participant is prevented from
engaging in further employment with the Company or any Related Company
and the Participant's condition is likely to be permanent and
continuous during the remainder of the Participant's life, as
determined by the Committee, upon the basis of medical evidence.
(t) "Plan" means the Plum Creek Management Company, L.P.
Long-Term Incentive Plan, as set forth herein and as amended from time
to time.
(u) "Realization Event" means the first to occur of (i)
the expiration of the Performance Period, (ii) the occurrence of a
Change in Control, (iii) the Participant's termination of employment
with the Company and any Related Company as a result of the
Participant's Permanent Disability, (iv) the termination of the
Participant's employment with the Company and any Related Company
either voluntarily by the Participant for Good Reason or involuntarily
by the employer without Cause, or (v) the Participant's death.
(v) "Reinvested Distribution Account" means a book
account maintained by the Company with respect to each Participant
reflecting the number of Shadow Units credited to the Participant with
respect to Partnership Distributions.
(w) "Related Companies" means the Partnership, Plum Creek
Manufacturing, L.P., and Plum Creek Marketing, Inc., but not the
Company, and any other entity owned, directly or indirectly, now or in
the future, by the Partnership to the extent of 50% or more.
(x) "Revocation Event" means a determination by the Board
in its sole discretion that any of the following has occurred or is
likely to occur:
(i) a determination by the Department of Labor or
a court of competent jurisdiction that the assets of the Trust
are subject to Part 4 of Subtitle B of Title I of ERISA or
(ii) a determination by the Internal Revenue
Service or a court of competent jurisdiction that any amount
deposited in the Trust is taxable to any Participant or
Beneficiary prior to the distribution to the Participant or
Beneficiary of such amount.
(y) "Securities Act" means the Securities Act of 1933, as
amended from time to time.
(z) "Shadow Unit" means the right of a Participant to
receive Units to be transferred (if not forfeited) pursuant to the
terms of the Plan upon the occurrence of a Realization Event.
(aa) "Termination of Employment" means ceasing to be an
Employee of either the Company or a Related Company for any reason.
(ab) "Trust" means any trust established in connection
with the Plan.
(ac) "Trustee" means the trustee of the Trust.
-4-
<PAGE> 5
(ad) "Unit Appreciation Account" means a book account
maintained by the Company with respect to each Participant reflecting
the number of Shadow Units credited to the Participant with respect to
the attainment of one or more of the Unit Value targets established
pursuant to Section 5.2.
(ae) "Unit Appreciation Right" means the right of the
Participant to be credited pursuant to Section 5.3 with Shadow Units
upon the attainment of Unit Value targets.
(af) "Units" means the depositary units representing
limited partner interests in the Partnership, or such other
substituted units as may replace them pursuant to Section 13 hereof.
(ag) "Unit Value" on any date means, with respect to a
Unit Appreciation Right, the arithmetic sum of the Market Price of a
Unit on such date and the value of all Partnership Distributions paid
on or after the later of January 1, 1994 and the date of grant of the
Unit Appreciation Right and on or before the date on which the Unit
Value is determined. For the purpose of determining Unit Value, the
Market Price on any day that Units are not traded shall be the Market
Price on the first preceding day that Units were traded.
Any terms defined in the Partnership Agreement have the same meaning in this
Plan as in the Partnership Agreement.
SECTION 3 - ADMINISTRATION
3.1 Administration. The Committee shall be responsible for the
administration of the Plan. The Committee, by majority action thereof, is
authorized to interpret and construe any provision of the Plan, to determine
eligibility and benefits under the Plan, to prescribe, amend, and rescind rules
and regulations relating to the Plan, to adopt such forms as it may deem
appropriate for the administration of the Plan, to provide for conditions and
assurances deemed necessary or advisable to protect the interests of the
Company, and to make all other determinations necessary or advisable for the
administration of the Plan, but only to the extent not contrary to the express
provisions of the Plan. Determinations, interpretations, or other actions made
or taken by the Committee under the Plan shall be final and binding for all
purposes and upon all persons. Committee decisions shall be made by a majority
of its members present at a meeting (which meeting may be held by telephone) at
which a quorum is present. Any decision reduced to writing and signed by all
members of the Committee shall be fully effective as if it had been made at a
meeting duly held.
3.2 Indemnification of Committee. The Company and the Partnership
shall indemnify each member of the Committee (which, for purposes of this
Section 3.2, includes any employee of the Company or a Related Company to whom
the Committee has delegated any responsibility in the administration of the
Plan) against any and all claims, losses, damages, expenses, including counsel
fees incurred by the Committee, and any liability, including any amounts paid
in settlement with the Company's approval, arising from the member's or the
Committee's determination, action or failure to act, except when the same is
judicially determined to be attributable to the gross negligence or willful
misconduct of such member. The right of indemnity described in the preceding
sentence shall be conditioned upon (i) the timely receipt of notice by the
Company of any claim asserted against the Committee member, which notice, in
the event of a lawsuit, shall be given within ten (10) days after receipt by
the Committee member, and (ii) the timely receipt by the Company of an offer
from the Committee member of an opportunity to participate in the settlement or
defense of such claim.
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<PAGE> 6
3.3 Cost. Although the Plan is maintained by the Company for
administrative convenience, all expenses and costs associated with the Plan,
including the cost of administration and the cost of funding the benefits to be
provided by the Plan, shall be borne by the Partnership. All economic benefits
and burdens will accrue to and be incurred by the Partnership, and the Company
shall have no opportunity to profit from the operation of the Plan.
SECTION 4 - ELIGIBILITY AND PARTICIPATION
4.1 Participants on Effective Date. The Participants in the Plan
on the Effective Date shall be those executives designated in Section 5.1(a).
4.2 Participants Designated by the Committee. The Committee may,
in its sole discretion, designate one or more of the senior executives of the
Company to be a Participant in the Plan effective as of such date as the
Committee in its sole discretion shall specify.
SECTION 5 - ALLOCATION OF UNIT APPRECIATION RIGHTS AND CREDITING OF
SHADOW UNITS
5.1 Unit Appreciation Rights. A grant of a Unit Appreciation
Right entitles the Participant to receive a benefit in an amount determined by
reference to the appreciation in the value of a Unit over the Base Unit Value
assigned to the Unit Appreciation Right and in the form of Units to be
transferred to the Participant (if not forfeited pursuant to Section 6)
pursuant to the terms of the Plan. The right to receive Units with respect to
Unit Appreciation Rights granted under the Plan in accordance with the terms
and conditions of the Plan is reflected by Shadow Units credited to the
Participant's Account.
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<PAGE> 7
(a) Original Grants. Pursuant to the Committee's
determination, Unit Appreciation Rights shall be granted as of the
Effective Date to the Participants listed below in the amount
indicated below:
<TABLE>
<CAPTION>
Unit Appreciation
Participant Rights Granted
----------- --------------
<S> <C> <C>
Rick R. Holley 525,000
Charles P. Grenier 375,000
Robert E. Manne 375,000
James A. Kraft 225,000
</TABLE>
Pursuant to the Committee's determination, the Base Unit Value with
respect to Unit Appreciation Rights granted pursuant to this Section
5.1(a) shall be $20.00. The Unit Appreciation Rights granted pursuant
to this Section 5.1(a) shall be conditioned upon the Committee's
written determination prior to June 30, 1994 that such grants have
been made in compliance with Rule 16b-3 promulgated under Section
16(b) of the Exchange Act or any comparable or successor rule or
regulatory requirement.
(b) Subsequent Grants. Unit Appreciation Rights may be
granted to Participants by the Committee, in its sole discretion,
provided that the total of all Unit Appreciation Rights granted
pursuant to this Section 5.1 and not cancelled pursuant to Section 6
shall not exceed 2,000,000. Although the Committee may grant
additional Unit Appreciation Rights pursuant to this Section 5.1(b) to
a Participant who received a grant on the Effective Date pursuant to
Section 5.1(a), it is not presently expected or intended that the
Committee will make such a grant. The Base Unit Value with respect to
Unit Appreciation Rights granted pursuant to this Section 5.1(b) shall
be established by the Committee in its sole discretion at the time of
the grant.
5.2 Unit Appreciation Rights Triggered by Unit Value Targets. On
the later of January 1, 1994 or when the Unit Value equals or exceeds, in turn,
one of the value targets established with respect to Unit Appreciation Rights
pursuant to this Section 5.2 for 75 calendar days during any 90 consecutive
calendar day period beginning on the first trading day the Unit Value equals or
exceeds the applicable value target, a percentage of the Unit Appreciation
Rights granted shall be triggered.
-7-
<PAGE> 8
(a) Value Targets for Original Unit Appreciation Right
Grants. The following table sets forth five Unit Value targets for
all original grants of Unit Appreciation Rights pursuant to Section
5.1(a) and the percentage of such Unit Appreciation Rights triggered
with respect to that Unit Value target:
<TABLE>
<CAPTION>
Percentage of
Unit Unit Appreciation
Target Value Target Rights Triggered
------ ------------ ----------------
<S> <C> <C>
First $23.00 10%
Second $26.45 15%
Third $30.42 20%
Fourth $34.98 25%
Fifth $40.23 30%
</TABLE>
(b) Value Targets for Subsequent Unit Appreciation Right
Grants. The Committee in its sole discretion shall establish at the
time of the grant of Unit Appreciation Rights pursuant to Section
5.1(b) one or more Unit Value targets and the percentage of such Unit
Appreciation Rights triggered with respect to each Unit Value target.
5.3 Shadow Units Credited to Unit Appreciation Account. The
Company shall establish a Unit Appreciation Account for each Participant
granted Unit Appreciation Rights pursuant to Section 5.1. The Participant's
Unit Appreciation Account shall reflect the number of Shadow Units credited to
the Participant as a result of Unit Appreciation Rights triggered by the
attainment of Unit Value targets. The number of Shadow Units credited to the
Participant's Unit Appreciation Account upon the attainment of a Unit Value
target with respect to Unit Appreciation Rights granted to the Participant
shall be determined by
(a) multiplying (i) the excess of the dollar amount of
the fifth Unit Value target over the Base Unit Value for the Unit
Appreciation Rights granted to the Participant by (ii) the number of
Unit Appreciation Rights granted to the Participant which are
triggered by the Unit Value target attained, and
(b) dividing the product obtained in (a) above by the
dollar amount of the fifth Unit Value target for the Unit Appreciation
Rights granted to the Participant.
If a Participant has been granted Unit Appreciation Rights pursuant to more
than one grant, the number of Shadow Units determined pursuant to this Section
5.3 shall be determined and credited separately with respect to each grant of
Unit Appreciation Rights. In the case of Unit Appreciation Rights granted by
the Committee pursuant to Section 5.1(b), the dollar amount of the highest Unit
Value target established for the Unit Appreciation Rights by the Committee
pursuant to Section 5.2(b) shall be substituted for the fifth Unit Value target
in applying Section 5.3(a)(i) and (b) to determine the number of Shadow Units
in the Participant's Unit Appreciation Account.
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<PAGE> 9
5.4 Shadow Units Credited to Reinvested Distribution Account. The
Company shall establish a Reinvested Distribution Account for each Participant
who has Shadow Units credited to his Account under the Plan. The purpose of
the Reinvested Distribution Account is to provide the Participant with an
additional benefit under the Plan equal to the value of the benefit the
Participant would receive from Partnership Distributions if the Participant was
the unitholder of the Units which are reflected in the form of Shadow Units
credited to the Participant's Account. On the Distribution Date of any
Partnership Distribution, Shadow Units shall be credited to the Participant's
Reinvested Distribution Account in an amount equal to
(a) the product of the Shadow Units credited to the
Participant's Account as of the Distribution Date and the amount of
the Partnership Distribution determined on a per Unit basis, divided
by
(b) the Market Price of a Unit on the Distribution Date.
5.5 Examples. Examples of calculations with respect to
Participants' Accounts pursuant to the rules provided by this Section 5 are set
forth in Appendix A.
SECTION 6 - CANCELLATIONS AND FORFEITURES
6.1 Cancellation of Unit Appreciation Rights. The Unit
Appreciation Rights granted to a Participant shall be cancelled upon the
occurrence of a Realization Event or a forfeiture pursuant to Section 6.2 with
respect to the Participant. Upon the cancellation of a grant of Unit
Appreciation Rights, the right of a Participant to have Shadow Units credited
to his Account with respect to such Unit Appreciation Rights upon the
attainment of Unit Value targets not previously attained shall be forfeited;
provided the Committee, in its sole discretion, may provide (although it is not
presently expected or intended that the Committee will exercise such authority)
that all or a portion of the Unit Appreciation Rights granted to a Participant
shall not be cancelled upon the occurrence of a Realization Event described in
Section 2.1 (u) and that the Participant shall continue to be entitled to have
all or a portion of the Shadow Units credited to the Participant's Account
pursuant to Section 5.3 and 5.4 and shall continue to participate in the Plan
in accordance with the provisions of the Plan subject to such additional terms
and conditions as the Committee, in its sole discretion, may require. Any Unit
Appreciation Rights cancelled in accordance with this Section 6.1 shall,
subject to Section 8, be available again to be used in connection with a
subsequent grant pursuant to Section 5.1(b) at any time prior to the end of the
Performance Period.
6.2 Forfeiture of Shadow Units. A Participant shall forfeit any
Shadow Units credited to the Participant's Account and any related transfer of
Units to be made under this Plan if, prior to the occurrence of a Realization
Event, the Participant's employment with the Company and any Related Company is
terminated either by the employer for Cause or by the Participant without Good
Reason.
SECTION 7 - TRANSFER OF UNITS
Upon the occurrence of a Realization Event with respect to the
Participant, the Company shall transfer or cause to be transferred to the
Participant a number of Units equal to the number of whole Shadow Units then
credited to the Participant's Account, including any Shadow Units credited to
the Participant's Reinvested Distribution Account for subsequent Partnership
Distributions pursuant to Section 5.4, less any withholding pursuant to Section
14.
-9-
<PAGE> 10
SECTION 8 - DURATION OF PLAN
Subject to Section 15 and Section 17, the Plan shall remain in effect
until December 31, 1998.
SECTION 9 - UNITS SUBJECT TO PLAN
Unit Appreciation Rights shall be granted under the Plan with respect
to a maximum of 2,000,000 Units, subject to the subsequent grant of previously
granted Unit Appreciation Rights after cancellation pursuant to Section 6.1 and
subject to any adjustment that may be made in connection with an event
described in Section 13. The number of Units transferred under the Plan shall
be subject to increase by the number of Shadow Units credited to Participants'
Reinvested Distribution Accounts and shall also be subject to any adjustment
that may be made in connection with an event described in Section 13.
SECTION 10 - FUNDING OF THE PLAN
Although the Company may cause Units that are subject to be
transferred pursuant to the terms of the Plan or are otherwise reserved and
other funds reserved for use under the Plan and other Incentive Plans to be
held under a grantor trust agreement, the Plan is unfunded. Benefits under the
Plan shall be paid from the general assets of the Company. A Trust, which
shall be intended to be a "grantor trust" within the meaning of section 671 of
the Code, shall be established pursuant to a trust agreement, to assist the
Company in meeting its obligations under the Incentive Plans. Such trust
agreement shall provide that the Trust may invest in Units. Nothing contained
in this Plan and no action taken pursuant to the provisions of this Plan shall
create or be construed to create a trust of any kind, or a fiduciary
relationship between the Company, the Partnership, the Board (or any of its
members), or the Committee (or any of its members) and any Participant, any
Beneficiary, or any other person. Although the Company may establish an
accounting reserve with respect to future payments under the Plan, no reserve
or set aside amounts shall imply any rights of any Participant therein. Any
reserve or set aside shall be fully subject to the claims of the Company's
creditors to the same extent as the general assets of the Company. To the
extent that any person acquires a right to receive Units from the Company under
this Plan, such right shall be no greater than the right of any unsecured
general creditor of the Company. Nothing contained in this Plan shall be
construed to give any Participant an ownership interest in, or the right to
receive distributions from the Partnership with respect to any Shadow Units
credited to the Participant's Account or any Units subject to a transfer
related to such Shadow Units until such Units have been transferred to the
Participant pursuant to the terms of the Plan.
The trust agreement creating the Trust shall contain procedures
substantially to the following effect which may be revised to the extent deemed
desirable by the Company for the purpose of ensuring that Participants will not
be in constructive receipt of income or incur an economic benefit for federal
income tax purposes because of the adoption or maintenance of the Trust:
(a) The Trustee shall cease payment of benefits to
Participants and their Beneficiaries if the Company is Insolvent. The
Company shall be considered "Insolvent" for purposes of this trust
agreement if (i) the Company is unable to pay its debts as they become
due, or (ii) the Company is subject to a pending proceeding as a
debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust,
the principal and income of the Trust shall be subject to claims of
general creditors of the Company under federal and state law as set
forth below.
-10-
<PAGE> 11
(c) The Board and the Chief Executive Officer of the
Company shall have the duty to inform the Trustee in writing of the
Company's Insolvency. If a person claiming to be a creditor of the
Company alleges in writing to the Trustee that the Company has become
Insolvent, the Trustee shall determine whether the Company is
Insolvent and, pending such determination, the Trustee shall
discontinue payment of benefits to Participants or their
Beneficiaries.
(d) Unless the Trustee has actual knowledge of the
Company's Insolvency, or has received notice from the Company or a
person claiming to be a creditor alleging that the Company is
Insolvent, the Trustee shall have no duty to inquire whether the
Company is Insolvent. The Trustee may in all events rely on such
evidence concerning the Company's solvency as may be furnished to the
Trustee and that provides the Trustee with a reasonable basis for
making a determination concerning the Company's solvency.
(e) If at any time the Trustee has determined that the
Company is Insolvent, the Trustee shall discontinue payments to
Participants or their Beneficiaries and shall hold the assets of the
Trust for the benefit of the Company's general creditors. Nothing in
the trust agreement shall in any way diminish any rights of
Participants or their Beneficiaries to pursue their rights as general
creditors of the Company with respect to benefits due under the
Incentive Plans or otherwise.
(f) The Trustee shall resume the payment of benefits to
Participants or their Beneficiaries in accordance with the provisions
of the trust agreement only after the Trustee has determined that the
Company is not Insolvent (or is no longer Insolvent).
(g) Provided that there are sufficient assets, if the
Trustee discontinues the payment of benefits from the Trust pursuant
to subsection (e) and subsequently resumes such payments, the first
payment following such discontinuance shall include the aggregate
amount of all payments due to Participants or their Beneficiaries
under the terms of the Incentive Plans for the period of such
discontinuance, less the aggregate amount of any payments made to
Incentive Plan participants or their beneficiaries by the Company in
lieu of the payments provided for hereunder during any such period of
discontinuance.
SECTION 11 - TRANSFERS OF UNITS AND PAYMENTS UNDER THE PLAN
(a) Within 30 business days after the occurrence of a
Realization Event, the Company shall deliver or cause to be delivered
to the Participant certificates for a number of Units equal to the
whole number of such Shadow Units credited to such Participant's
Account as of the Realization Event and cash with respect to any
fractional Shadow Unit credited to such Participant's Account in an
amount equal to the product of such fraction and the Market Price of a
Unit on the date the Realization Event occurs.
(b) The Plan's principal purpose is to provide
Participants with a continuing long-term investment in the
Partnership. In order to accomplish that principal purpose, it is
imperative that a Participant's rights under the Plan generally be
required to remain in the form of Shadow Units credited to the
Participant's Account until the occurrence of a Realization Event with
respect to the Participant. Accordingly, in the event that a court of
competent jurisdiction finally determines that the Company is
obligated to distribute to a Participant, Beneficiary or any other
person certificates for any Units reflecting Shadow Units credited to
a Participant's Account prior to the
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<PAGE> 12
occurrence of a Realization Event with respect to the Participant or
the Committee determines the distribution of such certificates is
appropriate, the certificates so distributed to such Participant,
Beneficiary or other person shall be restricted as to transferability
until the date that a Realization Event would have occurred with
respect to the Participant had they not been distributed to the
Participant, Beneficiary or other person and remained subject to the
Plan, and each such Unit certificate shall bear the following legend:
The transferability of this certificate and the Units
represented hereby are subject to the restrictions, terms and
conditions (including forfeiture and restrictions against
transfer) applicable to the Shadow Units to which the Units
represented by this certificate relate, all as contained in
the Plum Creek Management Company, L.P. Long-Term Incentive
Plan. A copy of the Plan is on file in the office of the Plum
Creek Management Company; 999 Third Avenue, Suite 2300;
Seattle, Washington 98104.
(c) To further promote and ensure the accomplishment of
the Plan's principal purpose of providing Participants with a
continuing long-term investment in the Partnership, each Participant
will generally be required to retain until Termination of Employment
at least fifty percent (50%) of the after-tax benefit provided under
the Plan as reflected by the Shadow Units credited to the
Participant's Account in a long-term investment in the Partnership in
the form of Units transferred to the Participant pursuant to this
Plan. Accordingly, a percentage of the Units transferred pursuant to
this Plan shall be restricted as to transferability until the
Participant's Termination of Employment equal to fifty percent (50%)
of the excess of one hundred percent (100%) over the highest marginal
combined federal and applicable state individual income tax rate, and
the certificates for such Units shall bear such legend as the
Committee shall in its sole discretion deem appropriate to reflect
such restriction on transferability. The Committee may in its sole
discretion modify or choose not to impose the requirement of this
Section 11(c) at any time with respect to one or more Participants or
with respect to one or more grants of Unit Appreciation Rights as it
may deem appropriate.
SECTION 12 - SECURITIES MATTERS
(a) Subject to Section 11, the Partnership shall use its
best efforts to assure that any securities distributed to Participants
hereunder are marketable at the time of distribution, including, to
the extent required under applicable law, effecting the registration
pursuant to the Securities Act of any Units to be distributed
hereunder or effecting similar compliance under any state laws.
Notwithstanding anything herein to the contrary, the Partnership shall
not be obligated to cause to be issued or delivered any certificates
evidencing Units awarded pursuant to the Plan unless and until the
Partnership is advised by its counsel that the issuance and delivery
of such certificates is in compliance with all applicable laws,
regulations of governmental authority and the requirements of the New
York Stock Exchange and any other securities exchange on which Units
are traded. The Committee may require, as a condition of the issuance
and delivery of certificates evidencing Units pursuant to the terms
hereof, that the recipient of such Units make such covenants,
agreements and representations, and that such certificates bear such
legends, as the Committee, in its sole discretion, deems necessary or
desirable.
(b) Without limitation on the Committee's powers pursuant
to this Section 12, to the extent required by Rule 16b-3 promulgated
under Section 16(b) of the Exchange Act or by any comparable or
successor exemption under which the Committee believes it is
appropriate for the Plan to qualify, the Committee may (i) restrict a
Participant's ability to sell Units distributed to such Participant
pursuant to this Plan until the expiration of 6 months (or such other
period as the Committee deems appropriate) after the date as of which
the Shadow Units relating thereto were credited to the Participant's
Account, (ii) in lieu of distributing Units with respect to Shadow
Units that were credited to a Participant's Account within 6 months
(or such other period as the
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<PAGE> 13
Committee deems appropriate) after the date as of which the Shadow
Units relating thereto were credited to the Participant's Account,
(ii) in lieu of distributing Units with respect to Shadow Units that
were credited to a Participant's Account within 6 months (or such
other period as the Committee deems appropriate) prior to the
respective Realization Event, distribute a cash amount equal to the
Market Price of such Units as of the Realization Event, or (iii)
impose such other conditions on the exercise of any election under
the Plan or in connection with any distribution under the Plan as
the Committee deems appropriate.
SECTION 13 - ADJUSTMENT OF ACCOUNTS IN CERTAIN EVENTS
(a) Unless the Committee otherwise determines, a
Participant's Account shall be adjusted to reflect any securities,
cash and other property received with respect to Units equal in number
to the Shadow Units credited to such Participant's Account as a result
of any Unit distribution or split, recapitalization, extraordinary
distribution, merger, consolidation, combination or exchange of Units
or similar change or any other event that the Committee, in its sole
discretion, deems appropriate. The purpose of this adjustment is to
treat Participants as if they were unitholders of Units with respect
to the number of Shadow Units credited to their Accounts. However,
the Committee may convert any securities, cash or other property that
would have been received in respect of Units into an equivalent number
of Shadow Units to be credited to the Participant's Account, or may
provide that any security received in respect of Units shall be
substituted for Units under the Plan.
(b) In the event of any change in the number of Units
outstanding by reason of any Unit distribution or split,
recapitalization, extraordinary dividend, merger, consolidation,
combination or exchange of Units or similar change or any other event
that the Committee, in its sole discretion, deems appropriate, the
maximum aggregate number of Units subject to the Incentive Plans, the
number of Unit Appreciation Rights allocated under this Plan, the
number of Shadow Units credited to the Accounts of Participants, and
the amount of any target established under Section 5.2 shall be
appropriately adjusted by the Committee. In the event of any change
in the number of Units outstanding by reason of any other event or
transaction, the Committee may, but need not, make such adjustments in
the number and class of Units subject to the Incentive Plans, the
terms of Unit Appreciation Rights created and allocated under this
Plan and the Shadow Units credited to Participants' Accounts as the
Committee may deem appropriate.
(c) A Participant shall have no rights as a result of any
Unit distribution or split, recapitalization, extraordinary
distribution, merger, consolidation, combination or exchange of Units
or similar change, except as may be determined by the Committee
pursuant to this Section 13.
(d) The grants of Unit Appreciation Rights under Section
5.1(a) pursuant to the Committee's determination are based upon the
total Units outstanding on January 1, 1994, and no adjustment shall be
determined by the Committee pursuant to this Section 13 on account of
any Unit split or other transaction with respect to Units occurring
prior to January 1, 1994.
SECTION 14 - PAYROLL AND WITHHOLDING TAXES
All federal, state, local and other withholding tax requirements, if
any, attributable to a distribution shall be met pursuant to the following
procedures:
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<PAGE> 14
(a) The Company and Related Companies shall have the
right to withhold from any cash amounts payable to a Participant
(including salary, bonus or any other amounts payable from the Company
or any Related Company to the Participant) an amount sufficient to
satisfy such federal, state, local and other withholding tax
requirements, prior to the delivery of any certificate or certificates
for such Units or other payments pursuant to the Plan.
(b) The Company or Related Company shall have the right
to require Participants to remit to the Company or Related Company in
cash an amount sufficient to satisfy such federal, state, local and
other withholding tax requirements, prior to the delivery of any
certificate or certificates for such Units or other payments pursuant
to the Plan.
(c) At the election of the Participant, to the extent
permitted by the Committee, the Participant shall deliver, or the
Company or Related Company (or, if a distribution is to be made from
the Trust, the Trustee) shall withhold, a number of such Units, the
Market Price of which on the date the Units are to be distributed to
the Participant is determined by the Committee to be sufficient to
satisfy the minimum federal, state, local and other withholding tax
requirements under applicable law.
(d) If a Participant is subject to Section 16(b) of the
Exchange Act, the Committee may prescribe such requirements or
limitations on the Participant's ability to elect the withholding
options contained in Section 14(c) as may be required by Rule 16b-3
promulgated under Section 16(b) of the Exchange Act or by any
comparable or successor exemption.
SECTION 15 - TERMINATION AND AMENDMENT
The Plan may be terminated with respect to any or all Participants at
any time by the Board. Subject to Section 11 hereof, in order to meet the
benefit obligations under the Plan upon such termination, the Company shall
deliver or cause to be delivered to each Participant with respect to whom the
Plan has been terminated a certificate for a number of Units equal to the whole
number of Shadow Units credited to such Participant's Account as of the date
the Plan was terminated and cash with respect to any fractional Shadow Units
credited to such Participant's Account, in an amount equal to the product of
such fraction and the Market Price of a Unit as of the date the Plan was
terminated. The Plan may be amended by the Board from time to time in any
respect; provided that if the Committee, in its sole discretion, deems it
appropriate or advisable to comply with Rule 16b-3 or any comparable or
successor rule or regulatory requirement, the approval of security holders
shall be necessary to adopt any amendment to the extent that the adoption of
such amendment without such approval would cause the Plan to no longer comply
with Rule 16b-3 or any comparable or successor rule or regulatory requirement;
and provided further that Section 5 of the Plan with respect to grants made as
of the Effective Date shall not be amended more than once every six months,
other than to comport with changes in the Code, ERISA, or other rules
thereunder. No amendment or termination shall be made that would impair the
rights of any Participant in any Unit Appreciation Right theretofore granted,
any Shadow Unit theretofore credited or any Unit theretofore transferred,
without such Participant's prior written consent; provided that the Company may
amend the Plan and the Trust from time to time in such a manner as may be
necessary to avoid having the trust agreement pursuant to which the Trust is
created, the Incentive Plans or the Trust being subject to ERISA and to avoid
the current taxation of the assets held in the trusts established in connection
with the Incentive Plans to Participants. Neither a Participant's incurring
any income tax liability nor the loss of an investment opportunity as a result
of the termination of the Plan shall be considered an impairment of the rights
of a Participant.
-14-
<PAGE> 15
SECTION 16 - BENEFICIARIES, PERMITTED TRANSFEREES, AND OTHER PAYEES
16.1 Designation of Beneficiary. Each Participant shall have the
right to designate in writing from time to time a Beneficiary by filing a
written notice of such designation with the Committee. A Participant's
designation of a Beneficiary may be revoked by filing with the Committee an
instrument of revocation or a later designation. Any designation or revocation
shall be effective when received by the Committee. In the event of the death
of a Participant, any payment required to be made hereunder to such Participant
shall be made to such Participant's Beneficiary. Unless the Participant's
Beneficiary designation provides otherwise, no person shall be entitled to
benefits upon the death of the Participant unless such person survives the
Participant. If the Beneficiary designated by a Participant does not survive
the Participant or if the Participant has not made a valid Beneficiary
designation, the Participant's Beneficiary shall be the Participant's estate.
No payment shall be made after the death of a Participant with respect to the
Participant's Account, unless the Committee shall have been furnished with such
evidence as the Committee may deem necessary to establish the validity of the
payment.
16.2 Nontransferability. Except as provided in Section 16.1, no
Unit Appreciation Rights allocated to Participants under the Plan, no Shadow
Units credited to the Participant's Accounts under the Plan, no Units subject
to transfer that have not yet been transferred to Participants pursuant to the
Plan, no interest in any trust that may hold Units for the purpose of meeting
the Company's obligations under the Incentive Plans, and no other interest or
right of a Participant under the Plan may be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated (except by will or by the laws
of descent and distribution), or in any manner be liable for or subject to the
debts, contracts, liabilities, engagements or torts of a Participant or
Beneficiary entitled thereto, or be subject to any lien, directly or
indirectly, by operation of law or otherwise, including execution, levy,
garnishment, attachment, and bankruptcy.
16.3 Incapacity of Participant or Beneficiary. If the Committee
finds that any Participant or Beneficiary to whom a payment is payable under
the Plan is unable to care for his or her affairs because of illness or
accident or is under a legal disability, any payment due (unless a prior claim
therefore shall have been made by a duly appointed legal representative), may
in the sole discretion of the Committee, be paid to the spouse, child, parent
or brother or sister of such Participant or Beneficiary. Any such payment
shall be a complete discharge of the obligations of the Company under the
provisions of the Plan.
SECTION 17 - EFFECT OF REVOCATION EVENT
Upon the occurrence of a Revocation Event, the Board may, in its sole
discretion, elect to terminate the Plan, the Trust, or any Participant's
Account. The Company shall, in its sole discretion, (a) pay to each
Participant whose Account is terminated, as soon as practicable after the date
of such termination, a lump sum in cash equal to the Market Price of a Unit
multiplied by the number of Shadow Units reflected in each Participant's
Account as of the date of such termination or (b) distribute to each
Participant whose Account is terminated, as soon as practicable after the date
of such termination, that number of Units that would have been distributable to
such Participant under the Plan upon the occurrence of a Realization Event with
respect to the Participant. If it is finally determined in a proceeding, which
the Company either controls or was offered the right to control and declines,
that the Participant has an interest in the Trust that is taxable to the
Participant notwithstanding any termination of such Participant's Account, the
Company shall pay or distribute the Participant's interest (whether or not the
Board has previously elected to terminate the Plan, the Trust or the
Participant's Account) in accordance with either (a) or (b) of the preceding
sentence.
-15-
<PAGE> 16
SECTION 18 - RIGHTS OF EMPLOYMENT
Nothing in this Plan shall interfere with or limit in any way the
right of the Company or any Related Company to terminate any Participant's
employment at any time, nor confer upon any Participant any right to continue
in the employ of the Company or any Related Company.
SECTION 19 - REQUIREMENTS OF LAW AND GOVERNING LAW
19.1 Requirements of Law. The transfer of Units under the Plan
shall be subject to all applicable laws, rules, and regulations, and to such
approvals by any governmental agencies or national securities exchanges as may
be required.
19.2 Governing Law. The Plan and all agreements under the Plan
shall be construed in accordance with and governed by the laws of the State of
Washington.
PLUM CREEK MANAGEMENT COMPANY, L.P.
___________________________________
___________________________________
Date
-16-
<PAGE> 17
APPENDIX A - EXAMPLES
1. If the Unit Value for 75 of the 90 calendar days during the period
beginning on January 31, 1994 and ending on May 1, 1994 is greater than or
equal to $23.00, then the first value target with respect to the Unit
Appreciation Rights granted to the initial Participants would be attained.
Assume that the 75th day that the Unit Value exceeds $23.00 is April 24, 1994,
then the number of Shadow Units in the Unit Appreciation Accounts of the
initial Participants determined as of April 24, 1994 would be calculated as
follows:
<TABLE>
<CAPTION>
Divided
Participant Maximum Unit _ Base Unit x by x =
Value Target Value Total Max. Percentage Shadow Units in
= UARs Value Units Unit Appreciation
Maximum Target Triggered Account
Spread in Unit Value
<S> <C> <C> <C> <C> <C>
Rick R. Holley $40.23 - $20 = $20.23 525,000 $40.23 10% 26,400.07
Charles P. Grenier $40.23 - $20 = $20.23 375,000 $40.23 10% 18,857.20
Robert E. Manne $40.23 - $20 = $20.23 375,000 $40.23 10% 18,857.20
James A. Kraft $40.23 - $20 = $20.23 225,000 $40.23 10% 11,314.32
</TABLE>
2. Assume quarterly distributions of $.35 are paid on the last day of the
second month following each calendar quarter. No Shadow Units were
credited to any Participant's Reinvested Distribution Account with respect to
the February 28, 1994 distribution, as no Shadow Units were yet credited to any
Participant's Account on that date. Assume that the Market Price of a Unit on
May 31 and August 31, 1994, is $24 and $27, respectively, when the first and
second quarter dividends are paid. Shadow Units are credited to the
Reinvested Distribution Accounts of the initial Participants with respect to
the distribution on May 31, 1994 calculated as follows:
<TABLE>
<CAPTION> Divided
PARTICIPANT SHADOW UNITS CREDITED x by =
TO PARTICIPANT'S UNIT DISTRIBUTION MARKET SHADOW UNITS CREDITED TO
APPRECIATION ACCOUNT AMOUNT PRICE PARTICIPANT'S REINVESTED
DISTRIBUTION ACCOUNT
<S> <C> <C> <C> <C>
Rick R. Holley 26,400.07 $.35 $24 385.00
Charles P. Grenier 18,857.20 $.35 $24 275.00
Robert E. Manne 18,857.20 $.35 $24 275.00
James A. Kraft 11,314.32 $.35 $24 165.00
</TABLE>
<PAGE> 18
3. Additional Shadow Units are credited to Participants' Reinvested
Distribution Accounts with respect to the distribution on August 31, 1994
calculated as follows:
<TABLE>
<CAPTION>
DIVIDED
PARTICIPANT SHADOW UNITS CREDITED TO UNIT X BY =
APPRECIATION ACCOUNT AND DISTRIBUTION MARKET ADDITIONAL SHADOW UNITS
REINVESTED DISTRIBUTION AMOUNT PRICE CREDITED TO REINVESTED
ACCOUNT DISTRIBUTION ACCOUNT
<S> <C> <C> <C> <C>
Rick R. Holley 26,400.07 + 385.00 = 26,785.07 $.35 $27 347.21
Charles P. Grenier 18,857.20 + 275.00 = 19,132.20 $.35 $27 248.01
Robert E. Manne 18,857.20 + 275.00 = 19,132.20 $.35 $27 248.01
James A. Kraft 11,314.32 + 165.00 = 11,479.32 $.35 $27 148.81
</TABLE>
4. If the Unit Value for 75 of the 90 calendar days during the period
beginning on August 18, 1994 and ending on November 16, 1994 is greater than or
equal to $26.45, then the second value target with respect to Unit Appreciation
Rights granted to the initial Participants in the Plan would be attained.
Assume that the 75th day that the Unit Value exceeds $26.45 is November 9,
1994, then the number of additional Shadow Units credited to the Unit
Appreciation Accounts of each initial Participant and the aggregate Shadow
Units in the Unit Appreciation Accounts of each initial Participant as of
November 9, 1994 are calculated as follows:
<TABLE>
<CAPTION>
DIVIDED
PARTICIPANT MAX. SPREAD X BY X = AGGREGATE SHADOW UNITS
IN UNIT TOTAL MAX. PERCENTAGE ADDITIONAL IN UNIT APPRECIATION
VALUE1 UARs VALUE UNITS SHADOW UNITS ACCOUNT
TARGET TRIGGERED IN UNIT
APPRECIATION
ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
Rick R. Holley $20.23 525,000 $40.23 15% 39,600.11 26,400.07 + 39,600.11 = 66,000.18
Charles P. Grenier $20.23 375,00 $40.23 15% 28,285.79 18,857.20 + 28,285.79 = 47,142.99
Robert E. Manne $20.23 375,00 $40.23 15% 28,285.79 18,857.20 + 28,285.79 = 47,142.99
James A. Kraft $20.23 225,00 $40.23 15% 16,971.48 11,314.32 + 16,971.48 = 28,285.80
</TABLE>
________________________
1 See Paragraph 1 for complete calculation.
2
<PAGE> 19
5. After the foregoing events, the Accounts of the initial Participants in the
Plan as of November 9, 1994 would be as follows:
<TABLE>
<CAPTION>
PARTICIPANT AGGREGATE SHADOW UNITS CREDITED + =
TO REINVESTED DISTRIBUTIONS AGGREGATE AGGREGATE
ACCOUNT SHADOW UNITS IN UNIT SHADOW UNITS
(MAY 31 AND AUGUST 31 CREDITS) APPRECIATION ACCOUNT
<S> <C> <C> <C>
Rick R. Holley 385.00 + 347.21 = 732.21 66,000.18 66,732.39
Charles P. Grenier 275.00 + 248.01 = 523.01 47,142.99 47,666.00
Robert E. Manne 275.00 + 248.01 = 523.01 47,142.99 47,666.00
James A. Kraft 165.00 + 148.81 = 313.81 28,285.80 28,599.61
</TABLE>
6. If the Unit Value for 75 of the 90 calendar days during a 90 consecutive
calendar day period is greater than or equal to $30.42, then the third value
target with respect to Unit Appreciation Rights granted to the initial
Participants in the Plan would be attained. The number of additional Shadow
Units credited to the Unit Appreciation Accounts of each initial Participant
and the aggregate Shadow Units in the Unit Appreciation Accounts of each
initial Participant, determined as of the 75th day that the Unit Value exceeds
$30.42, are calculated as follows:
<TABLE>
<CAPTION>
DIVIDED
PARTICIPANT MAX. X BY X = AGGREGATE SHADOW
SPREAD TOTAL MAX. PERCENTAGE ADDITIONAL UNITS IN UNIT
IN UNIT UARs VALUE UNITS SHADOW APPRECIATION ACCOUNT
VALUE(2) TARGET TRIGGERED UNITS IN
UNIT
APPRECIATION
ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
Rick R. Holley $20.23 525,00 $40.23 20% 52,800.15 66,000.18 + 52,800.15 = 118,800.33
Charles P. Grenier $20.23 375,00 $40.23 20% 37,714.39 47,142.99 + 37,714.39 = 84,857.38
Robert E. Manne $20.23 375,00 $40.23 20% 37,714.39 47,142.99 + 37,714.39 = 84,857.38
James A. Kraft $20.23 225,00 $40.23 20% 22,628.64 28,285.80 + 22,628.64 = 50,914.44
</TABLE>
________________________
2 See Paragraph 1 for complete calculation.
3
<PAGE> 20
7. If the Unit Value for 75 of the 90 calendar days during a 90 consecutive
calendar day period is greater than or equal to $34.98, then the fourth value
target with respect to Unit Appreciation Rights granted to the initial
Participants in the Plan would be attained. The number of additional Shadow
Units credited to the Unit Appreciation Accounts of each initial Participant
and the aggregate Shadow Units in the Unit Appreciation Accounts of each
initial Participant, determined as of the 75th day that the Unit Value exceeds
$34.98, are calculated as follows:
<TABLE>
<CAPTION>
DIVIDED
PARTICIPANT MAX. X BY X = ()AGGREGATE SHADOW
SPREAD TOTAL MAX. PERCENTAGE ADDITIONAL UNITS IN UNIT
IN UNIT UARs VALUE UNITS SHADOW APPRECIATION ACCOUNT
VALUE(3) TARGET TRIGGERED UNITS IN
UNIT
APPRECIATION
ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
Rick R. Holley $20.23 525,000 $40.23 25% 66,000.19 118,800.33 + 66,000.19 = 184,800.52
Charles P. Grenier $20.23 375,000 $40.23 25% 47,142.99 84,857.38 + 47,142.99 = 132,000.37
Robert E. Manne $20.23 375,000 $40.23 25% 47,142.99 84,857.38 + 47,142.99 = 132,000.37
James A. Kraft $20.23 225,000 $40.23 25% 28,285.79 50,914.44 + 28,285.79 = 79,200.23
</TABLE>
8. If the Unit Value for 75 of the 90 calendar days during a 90 consecutive
calendar day period is greater than or equal to $40.23, then the fifth and
final value target with respect to Unit Appreciation Rights granted to the
initial Participants in the Plan would be attained. The number of additional
Shadow Units credited to the Unit Appreciation Accounts of each initial
Participant and the aggregate Shadow Units in the Unit Appreciation Accounts of
each initial Participant, determined as of the 75th day that the Unit Value
exceeds $40.23, are calculated as follows:
<TABLE>
<CAPTION>
DIVIDED
PARTICIPANT MAX. X BY X = AGGREGATE SHADOW
SPREAD TOTAL MAX. PERCENTAGE ADDITIONAL UNITS IN UNIT
IN UNIT UARs VALUE UNITS SHADOW APPRECIATION ACCOUNT
VALUE(3) TARGET TRIGGERED UNITS IN
UNIT
APPRECIATION
ACCOUNT
<S> <C> <C> <C> <C> <C> <C>
Rick R. Holley $20.23 525,000 $40.23 30% 79,200.22 184,800.52 + 79,200.22 = 264,000.74
Charles P. Grenier $20.23 375,000 $40.23 30% 56,571.59 132,000.37 + 56,571.59 = 188,571.96
Robert E. Manne $20.23 375,000 $40.23 30% 56,571.59 132,000.37 + 56,571.59 = 188,571.96
James A. Kraft $20.23 225,000 $40.23 30% 33,942.95 79,200.23 + 33,942.95 = 113,143.18
</TABLE>
________________________
3 See Paragraph 1 for complete calculation.
4
<PAGE> 1
EXHIBIT 10.E.7
PLUM CREEK MANAGEMENT COMPANY, L.P.
MANAGEMENT INCENTIVE PLAN
SECTION 1 - ESTABLISHMENT, PURPOSE, AND EFFECTIVE DATE
1.1 Establishment of Plan. Plum Creek Management Company, L.P., a
Delaware limited partnership (the "Company") hereby establishes the "PLUM CREEK
MANAGEMENT COMPANY, L.P. MANAGEMENT INCENTIVE PLAN" (the "Plan") for the
benefit of certain executives of the Company. Subject to the terms and
conditions provided herein, the Plan provides for rewarding participating
executives with a bonus in the form of cash and Units (as defined herein)
representing an ownership interest in the Plum Creek Timber Company, L.P. (the
"Partnership").
1.2 Purpose. The purpose of the Plan is to help retain the
services of participating executives, to align their interests with the
interests of the partners of the Partnership, and to encourage participating
executives to increase operating profitability, allocate capital wisely, and
generate cash with the ultimate goals of improving current operating
profitability and attaining appreciation in the value of the Units. Cash bonus
payments and the transfer of Units under this Plan will reward participating
executives with incentive compensation and ownership interests in the
Partnership for which the Company serves as general partner and to which it
provides management support through the efforts of the participating executives
of the Company. This Plan is intended to be an unfunded "bonus program" within
the meaning of the United States Code of Federal Regulations Section
2510.3-2(c) and is maintained primarily for the purpose of providing current
and long-term incentives to a select group of management or highly compensated
employees.
1.3 Effective Date of Plan. The Plan shall be effective as of
January 1, 1994 upon the approval of the Board of Directors of PC Advisory
Corp. I (the "Board"), the general partner of PC Advisory Partners I, L.P.,
which serves as a general partner of the Company, which serves as the general
partner of the Partnership.
SECTION 2 - DEFINITIONS
2.1 Definitions. When used in the Plan, the following terms shall
have the meanings specified below:
(a) "Account" means a Participant's Unit Portion Account.
(b) "Average Price" of a Unit for any date means the
average price, excluding commissions, paid by the Trustee per Unit
purchased during the 90-day period beginning on such date relating to
the Shadow Units credited to the Participant's Account pursuant to
Section 6.2 or Section 6.3, whichever is applicable. In the event
that the Trustee does not purchase any Units during such 90-day
period, then the "Average Price" of a Unit means the average Market
Price of a Unit during such 90-day period. Subject to Section 10, it
is intended that the Trustee will purchase the Units relating to the
Shadow Units credited to the Participant's Account pursuant to Section
6.2 or Section 6.3, whichever is applicable, as soon as reasonably
practicable following the commencement of such 90-day period.
<PAGE> 2
(c) "Base Salary" means the regular salary accrued during
the Plan Year, including any salary reduction contributions made to
any plan maintained by the Company or any Related Company pursuant to
Section 125 or Section 401(k) of the Code.
(d) "Beneficiary" means the person or entity determined
to be a Participant's beneficiary pursuant to Section 16.
(e) "Board" means the Board of Directors of PC Advisory
Corp. I.
(f) "Bonus" means the amount of the incentive award
earned under the Plan for a Plan Year as determined by the Committee
pursuant to Section 5.5.
(g) "Bonus Percentage" means the percentage of the
Participant's Base Salary for the Plan Year that may be earned as a
Bonus with respect to the achievement of a goal established as part of
the Participant's Performance Objectives.
(h) "Cash Portion" means that portion of the
Participant's Bonus which shall be paid in cash following the end of
the Plan Year in which it has been earned by the Participant.
(i) "Cause" means, when used in the phrase "for Cause" or
"without Cause" in connection with a termination of employment, that
the termination is evidenced by a resolution adopted in good faith by
at least two-third (2/3rds) of the members of the Board who are not
employees of the Company or the Partnership, that the Participant
willfully engaged in conduct which is demonstrably and materially
injurious to the Company or a Related Company, monetarily or
otherwise; provided no termination of the Participant's employment
shall be for Cause until there shall have been delivered to the
Participant a copy of a written notice setting forth that the
Participant was guilty of the conduct described above and specifying
the particulars thereof in detail, and the Participant shall have been
provided an opportunity to be heard by the Board (with the assistance
of the Participant's counsel if the Participant so desires). No act,
nor failure to act, on the Participant's part, shall be considered
"willful" unless the Participant acted, or failed to act, with an
absence of good faith and without a reasonable belief that such action
or failure to act was in the best interest of the Company or a Related
Company. Notwithstanding anything contained in this Plan to the
contrary, no failure to perform by the Participant after notice of
termination is given to the Participant shall constitute Cause.
(j) "Change in Control" shall be deemed to occur at such
time as Mr. John H. Scully and Mr. William E. Oberndorf no longer
control, either individually or in the aggregate, the Company.
(k) "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
(l) "Committee" means a committee of two or more Board
members appointed by the Board.
(m) "Distribution Date" means the date a Partnership
Distribution is paid to the unitholders.
(n) "Effective Date" means January 1, 1994.
-2-
<PAGE> 3
(o) "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
(p) "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time.
(q) "Incentive Plans" means the Plan, the Plum Creek
Management Company, L.P. Long-Term Incentive Plan, the Plum Creek
Management Company, L.P. Key Employee Long-Term Incentive Plan and any
other incentive plan maintained by the Company and designated by the
Committee as an Incentive Plan.
(r) "Market Price" means with respect to a Unit, the
closing reported sales price, regular way, per Unit on the New York
Stock Exchange Composite Tape, or if Units are not then traded on such
stock exchange, the principal national securities exchange on which
Units are then traded, or if not so traded, the highest bid quotation
on the over-the-counter market as reported by the National Quotations
Bureau, or any similar organization, on any relevant date, or if not
so reported, as determined by the Committee in a manner consistently
applied.
(s) "Participant" means an executive employee of the
Company selected for participation in the Plan for the Plan Year by
the Committee pursuant to Section 4 or a current or former executive
employee of the Company or a Related Company who was selected for
participation in the Plan in a preceding Plan Year and who has any
rights under the Plan.
(t) "Partnership Distributions" means cash distributions
of the Partnership with respect to the Units, including all ordinary
and extraordinary cash distributions.
(u) "Performance Objectives" means the performance
criterion comprised of quantitative and qualitative goals established
by the Committee with respect to each Participant and utilized by the
Committee in determining the Participant's Bonus, if any, for the Plan
Year.
(v) "Performance Period" means, with respect to the Unit
Portion of a Bonus converted into Shadow Units, the period ending on
the third anniversary of the end of the Plan Year with respect to
which the Bonus was earned.
(w) "Permanent Disability" means a condition that results
in the Participant's being totally disabled, whether due to physical
or mental causes, to the extent that the Participant is prevented from
engaging in further employment with the Company or any Related Company
and the Participant's condition is likely to be permanent and
continuous during the remainder of the Participant's life, as
determined by the Committee, upon the basis of medical evidence.
(x) "Permissive Retirement" means a Participant's
termination of employment with the Company and any Related Company,
other than by reason of death or Disability, in accordance with any
retirement policy established by the Committee and then in effect or
designated by the Committee in writing as a Permissive Retirement.
(y) "Plan" means the Plum Creek Management Company, L.P.
Management Incentive Plan, as set forth herein and as amended from
time to time.
-3-
<PAGE> 4
(z) "Plan Year" means the Partnership's fiscal year.
(aa) "Related Companies" means the Partnership, Plum Creek
Manufacturing, L.P., and Plum Creek Marketing, Inc., but not the
Company, and any other entity owned, directly or indirectly, now or in
the future, by the Partnership to the extent of 50% or more.
(ab) "Revocation Event" means a determination by the Board
in its sole discretion that any of the following has occurred or is
likely to occur:
(i) a determination by the Department of Labor or
a court of competent jurisdiction that the assets of the Trust
are subject to Part 4 of Subtitle B of Title I of ERISA or
(ii) a determination by the Internal Revenue
Service or a court of competent jurisdiction that any amount
deposited in the Trust is taxable to any Participant or
Beneficiary prior to the distribution to the Participant or
Beneficiary of such amount.
(ac) "Securities Act" means the Securities Act of 1933, as
amended from time to time.
(ad) "Shadow Unit" means the right of a Participant to
receive a Unit to be transferred (if not forfeited) pursuant to the
terms of the Plan upon the expiration of the Performance Period.
(ae) "Trust" means any trust established in connection
with the Plan.
(af) "Trustee" means the trustee of the Trust.
(ag) "Unit Portion" means that portion of the
Participant's Bonus which shall be converted to Shadow Units and
credited to the Participant's Account.
(ah) "Unit Portion Account" means a book account
maintained by the Company with respect to each Bonus earned by a
Participant under the Plan reflecting the aggregate of the number of
Shadow Units to which the Unit Portion of the Bonus was converted
pursuant to Section 6.2 and the number of additional Shadow Units
credited to the Participant for subsequent Partnership Distributions
pursuant to Section 6.3.
(ai) "Units" means the depositary units representing
limited partner interests in the Partnership, or such other
substituted units as may replace them pursuant to Section 13 hereof.
Any terms defined in the Partnership Agreement have the same meaning in this
Plan as in the Partnership Agreement.
SECTION 3 - ADMINISTRATION
3.1 Administration. The Committee shall be responsible for the
administration of the Plan. The Committee, by majority action thereof, is
authorized to interpret and construe any provision of the Plan, to determine
eligibility and benefits under the Plan, to prescribe, amend, and rescind rules
and regulations relating to the Plan, to adopt such forms as it may deem
appropriate for the administration of the Plan, to provide for conditions and
assurances deemed necessary or advisable to protect the interests
-4-
<PAGE> 5
of the Company, and to make all other determinations necessary or advisable for
the administration of the Plan, but only to the extent not contrary to the
express provisions of the Plan. Determinations, interpretations, or other
actions made or taken by the Committee under the Plan shall be final and
binding for all purposes and upon all persons. Committee decisions shall be
made by a majority of its members present at a meeting (which meeting may be
held by telephone) at which a quorum is present. Any decision reduced to
writing and signed by all members of the Committee shall be fully effective as
if it had been made at a meeting duly held.
3.2 Indemnification of Committee. The Company and the Partnership
shall indemnify each member of the Committee (which, for purposes of this
Section 3.2, includes any employee of the Company or a Related Company to whom
the Committee has delegated any responsibility in the administration of the
Plan) against any and all claims, losses, damages, expenses, including counsel
fees incurred by the Committee, and any liability, including any amounts paid
in settlement with the Company's approval, arising from the member's or the
Committee's determination, action or failure to act, except when the same is
judicially determined to be attributable to the gross negligence or willful
misconduct of such member. The right of indemnity described in the preceding
sentence shall be conditioned upon (i) the timely receipt of notice by the
Company of any claim asserted against the Committee member, which notice, in
the event of a lawsuit, shall be given within ten (10) days after receipt by
the Committee member, and (ii) the timely receipt by the Company of an offer
from the Committee member of an opportunity to participate in the settlement or
defense of such claim.
3.3 Cost. The Plan is maintained by the Company for
administrative convenience. The expense and cost of funding the benefits shall
be borne by the Company. All other costs associated with the Plan, including
the cost of administration, shall be borne by the Partnership.
SECTION 4 - ELIGIBILITY AND PARTICIPATION
4.1 Eligibility. Eligibility for participation in the Plan for
the purpose of earning a Bonus for the Plan Year will be limited to those
senior executive employees who, by the nature and scope of their position, are
materially responsible for the management, growth, and success of the
Partnership. Participation in the Plan for the purpose of earning a Bonus for
each Plan Year shall be determined by the Committee in its sole discretion.
Eligible senior executives selected for participation by the Committee shall be
notified of their selection as soon as practicable.
4.2 Partial Plan Year Participation. The Committee may select an
eligible senior executive to participate for the remaining portion of the Plan
Year following the date the Committee establishes as the effective date for
such Participant's participation in the Plan. In such a case, the
Participant's Bonus for the Plan Year shall be determined by the Committee
based upon the portion of Participant's Base Salary for the Plan Year accrued
on and after the effective date of the Participant's participation in the Plan.
4.3 No Right to Participate. No provision contained in this Plan
may be interpreted or construed to grant, and no action taken by the Committee
will grant, any Participant who was eligible for a Bonus in a previous Plan
Year or who continues to participate because of a Bonus earned with respect to
a previous Plan Year, or any other eligible senior executive at any time, a
right to be selected for participation for a Bonus in a current or future Plan
Year. Nothing contained in this Section 4.3 shall affect any rights any
executive may have pursuant to any separate written agreement.
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SECTION 5 - DETERMINATION OF BONUS
5.1 Performance Objectives. At the beginning of each Plan Year
or, in the case of a senior executive selected for participation during the
Plan Year pursuant to Section 4.2, as soon as practicable after the executive's
selection for participation, the Committee shall establish Performance
Objectives for each Participant participating for the purpose of earning a
Bonus under the Plan for the Plan Year, including quantitative goals and
qualitative goals. Quantitative goals shall be based in whole or in part upon
measurements of the Company's, the Partnership's or a Related Company's
financial or operational performance and may vary in relation to a
Participant's duties or responsibilities. It is expected that quantitative
goals will emphasize operating income, cash flow and free cash flow, or other
quantitative measurements which have considerable bearing upon such financial
measurements and may be significantly influenced by the Participant's
managerial performance. Qualitative goals shall be based upon the achievement
of immediate goals or the accomplishment of tasks assigned to the Participant
which may or may not affect the Company's, the Partnership's or a Related
Company's current financial performance, but are considered to have tactical
significance in the Company's strategic plan to maximize the Partnership's
overall financial performance. The Committee shall communicate to each
Participant the Performance Objectives established for the Participant for the
Plan Year and the Bonus Percentages assigned to each established goal as soon
as practicable.
5.2 Assignment of Bonus Percentages. With respect to each
quantitative goal and each qualitative goal established as part of the
Performance Objectives for a Participant for the Plan Year, the Committee shall
assign a Bonus Percentage that shall be earned by the Participant if the
respective goal is attained. The Committee may provide that a portion of the
Bonus Percentage assigned to a goal may be earned by the Participant if the
respective goal is not completely attained based upon either a schedule
prescribed by the Committee or a determination made by the Committee in its
sole discretion based on the Participant's performance with respect to the
goal. The sum of Bonus Percentages assigned to all goals established as part
of the Participant's Performance Objectives established for the Plan Year shall
not exceed 100%.
5.3 Adjustment of Performance Objectives and Bonus Percentages.
During the Plan Year, the Committee shall have the right to adjust the
Performance Objectives established for a Participant and the Bonus Percentage
assigned to any goal if the Committee determines in its sole discretion that
external changes or other unanticipated business conditions have either
materially affected the desirability or significance of the established goals
or unduly influenced the attainability of the established goals. Quantitative
goals may be adjusted up or down, qualitative goals may be enhanced or
diminished, goals may be eliminated, additional or substitute goals may be
established, and the Bonus Percentage assigned to any goal may be increased or
reduced; provided that after any adjustment made by the Committee pursuant to
this Section 5.3, the sum of the Bonus Percentages assigned to all the goals
comprising a Participant's Performance Objectives for the Plan Year shall not
exceed 100%.
5.4 Determination of Bonus Percentage Earned. As soon as
reasonably practicable after the end of each Plan Year, the Committee shall
determine the aggregate Bonus Percentage earned by each Participant who is
actively employed by the Company or a Related Company on the last day of the
Plan Year or who terminated employment with the Company or a Related Company
during the Plan Year by reason of death, Permanent Disability or Permissive
Retirement. The Committee shall determine the amount of the Bonus Percentage
earned with respect to each quantitative goal and each qualitative goal
established as part of the Participant's Performance Objectives. If the
Committee determines that a goal was not attained because of unanticipated
conditions not within the Participant's control, the Committee
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<PAGE> 7
may in its sole discretion consider the Participant to have earned all or a
portion of the Bonus Percentage assigned such goal based upon the Committee's
assessment of the Participant's performance with respect to such goal.
5.5 Final Bonus Determination. The Bonus of each Participant who
is employed by the Company or Related Company on the last day of the Plan Year
or who terminated employment with the Company or Related Company during the
Plan Year either by reason of death, Permanent Disability or Permissive
Retirement shall be equal to the Participant's Base Salary for the Plan Year
multiplied by the aggregate Bonus Percentage, determined by the Committee
pursuant to Section 5.4. A Participant who is not actively employed with the
Company or a Related Company on the last day of the Plan Year and who did not
terminate employment with the Company or a Related Company during the Plan Year
by reason of death, Permanent Disability, or Permissive Retirement shall not be
entitled to a Bonus for the Plan Year. The Committee, in its sole discretion,
may accelerate the determination pursuant to Section 5.4 and this Section 5.5
of the Bonuses of all Participants in the event a Change in Control occurs
during the Plan Year or the Bonus of any Participant who has terminated
employment during the Plan Year by reason of death, Permanent Disability, or
Permissive Retirement and may then accelerate payment of the Cash Portion or
the Unit Portion of the Bonus or Bonuses so determined pursuant to Section 6.1
or Section 7, respectively.
SECTION 6 - CASH AND UNIT PORTIONS OF BONUS
6.1 Cash and Unit Portions. One-half (50%) of the Bonus
determined with respect to each Participant, referred to as the Cash Portion,
shall be paid in cash following the end of the Plan Year at such time or times
as the Committee shall determine. The Committee, in its sole discretion, may
accelerate any payment to be made either with respect to a Participant who has
terminated employment by reason of death, Permanent Disability, or Permissive
Retirement or in the event a Change in Control occurs. The remaining one-half
(50%) of each Participant's Bonus, referred to as the Unit Portion, shall be
converted into Shadow Units to be credited to the Participant's Unit Portion
Account established with respect to the Bonus earned for the Plan Year. Units
as reflected by such Shadow Units credited to the Participant's Unit Portion
Account shall be transferred to the Participant (if not forfeited pursuant to
Section 6.4) at the time and in the manner provided by Section 7 and Section
11.
6.2 Conversion of Unit Portion into Shadow Units. The Company
shall maintain a Unit Portion Account for each Bonus earned by a Participant to
reflect the Units to which the Participant is entitled with respect to such
Bonus. The Unit Portion of each Participant's Bonus for the Plan Year shall be
converted into Shadow Units to be credited to the Participant's Unit Portion
Account as of the last day of the Plan Year in an amount of Shadow Units equal
to
(a) the amount of the Unit Portion of the Participant's
Bonus, divided by
(b) the Average Price of a Unit for the date the Cash
Portion of the Bonus is paid to the Participant.
6.3 Shadow Units Credited for Subsequent Partnership
Distributions. The purpose of crediting Shadow Units for subsequent
Partnership Distributions is to provide the Participant with an additional
benefit with respect to each Bonus earned under the Plan equal to the value of
the benefit the Participant would have received from Partnership Distributions
if the Participant was the unitholder of the Units reflected by the Shadow
Units credited to the Participant's Unit Portion Account and reinvested the
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<PAGE> 8
Partnership Distributions received in additional Units. On the Distribution
Date of any Partnership Distribution, Shadow Units shall be credited to each
Unit Portion Account maintained with respect to the Participant in an amount
equal to
(a) the product of the Shadow Units credited to the
Participant's Unit Portion Account as of the Distribution Date and the
amount of the Partnership Distribution determined on a per Unit basis,
divided by
(b) the Average Price of a Unit for the Distribution Date.
6.4 Forfeiture of Shadow Units. A Participant shall forfeit any
Shadow Units credited to a Participant's Unit Portion Account and any related
transfer of Units to be made under this Plan if, prior to the expiration of the
Performance Period, the Participant's employment with the Company and any
Related Company is terminated by the employer for Cause. Any Shadow Unit
cancelled in accordance with this Section 6.4 shall, subject to Section 8, be
available again to be credited to a Participant's Unit Portion Account pursuant
to Section 6.2.
SECTION 7 - TRANSFER OF UNITS
Upon the expiration of the Performance Period with respect to the
Shadow Units credited to the Participant's Unit Portion Account attributable to
the Bonus earned by the Participant for a Plan Year, the Company shall transfer
or cause to be transferred to the Participant a number of Units equal to the
number of whole Shadow Units then credited to the Participant's Unit Portion
Account attributable to the Bonus earned by the Participant for such Plan Year,
including any Shadow Units credited to the Participant's Unit Portion Account
for subsequent Partnership Distributions pursuant to Section 6.3, less any
withholding pursuant to Section 14. The Committee, in its sole discretion, may
accelerate any payment to be made either with respect to a Participant who has
terminated employment by reason of death, Permanent Disability or Permissive
Retirement or in the event a Change in Control occurs.
SECTION 8 - DURATION OF PLAN
The Plan shall remain in effect until terminated by the Board.
SECTION 9 - UNITS SUBJECT TO PLAN
The aggregate number of Units available to Participants because of
Bonuses earned under the Plan may not exceed 800,000, subject to the subsequent
grant of previously granted Shadow Units after forfeiture pursuant to Section
6.4 and subject to any adjustment that may be made in connection with an event
described in Section 13. The number of Units transferred under the Plan shall
be subject to increase by the number of Shadow Units credited to Participants'
Accounts with respect to Partnership Distributions pursuant to Sections 6.3 and
shall also be subject to any adjustment that may be made in connection with an
event described in Section 13.
SECTION 10 - FUNDING OF THE PLAN
Although the Company may cause Units that are subject to be
transferred pursuant to the terms of the Plan or are otherwise reserved and
other funds reserved for use under the Plan and other Incentive Plans to be
held under a grantor trust agreement, the Plan is unfunded. Benefits under the
Plan shall be
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<PAGE> 9
paid from the general assets of the Company. A Trust, which shall be intended
to be a "grantor trust" within the meaning of section 671 of the Code, shall be
established pursuant to a trust agreement, to assist the Company in meeting its
obligations under the Incentive Plans. Such trust agreement shall provide that
the Trust may invest in Units. Nothing contained in this Plan and no action
taken pursuant to the provisions of this Plan shall create or be construed to
create a trust of any kind, or a fiduciary relationship between the Company,
the Partnership, the Board (or any of its members), or the Committee (or any of
its members) and any Participant, any Beneficiary, or any other person.
Although the Company may establish an accounting reserve with respect to future
payments under the Plan, no reserve or set aside amounts shall imply any rights
of any Participant therein. Any reserve or set aside shall be fully subject to
the claims of the Company's creditors to the same extent as the general assets
of the Company. To the extent that any person acquires a right to receive
Units from the Company under this Plan, such right shall be no greater than the
right of any unsecured general creditor of the Company. Nothing contained in
this Plan shall be construed to give any Participant an ownership interest in,
or the right to receive distributions from the Partnership with respect to any
Shadow Units credited to the Participant's Account or any Units subject to a
transfer related to such Shadow Units until such Units have been transferred to
the Participant pursuant to the terms of the Plan.
The trust agreement creating the Trust shall contain procedures
substantially to the following effect which may be revised to the extent deemed
desirable by the Company for the purpose of ensuring that Participants will not
be in constructive receipt of income or incur an economic benefit for federal
income tax purposes because of the adoption or maintenance of the Trust:
(a) The Trustee shall cease payment of benefits to
Participants and their Beneficiaries if the Company is Insolvent. The
Company shall be considered "Insolvent" for purposes of this trust
agreement if (i) the Company is unable to pay its debts as they become
due, or (ii) the Company is subject to a pending proceeding as a
debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust,
the principal and income of the Trust shall be subject to claims of
general creditors of the Company under federal and state law as set
forth below.
(c) The Board and the Chief Executive Officer of the
Company shall have the duty to inform the Trustee in writing of the
Company's Insolvency. If a person claiming to be a creditor of the
Company alleges in writing to the Trustee that the Company has become
Insolvent, the Trustee shall determine whether the Company is
Insolvent and, pending such determination, the Trustee shall
discontinue payment of benefits to Participants or their
Beneficiaries.
(d) Unless the Trustee has actual knowledge of the
Company's Insolvency, or has received notice from the Company or a
person claiming to be a creditor alleging that the Company is
Insolvent, the Trustee shall have no duty to inquire whether the
Company is Insolvent. The Trustee may in all events rely on such
evidence concerning the Company's solvency as may be furnished to the
Trustee and that provides the Trustee with a reasonable basis for
making a determination concerning the Company's solvency.
(e) If at any time the Trustee has determined that the
Company is Insolvent, the Trustee shall discontinue payments to
Participants or their Beneficiaries and shall hold the assets of the
Trust for the benefit of the Company's general creditors. Nothing in
the trust agreement shall in any way diminish any rights of
Participants or their Beneficiaries to pursue their rights
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<PAGE> 10
as general creditors of the Company with respect to benefits due under
the Incentive Plans or otherwise.
(f) The Trustee shall resume the payment of benefits to
Participants or their Beneficiaries in accordance with the provisions
of the trust agreement only after the Trustee has determined that the
Company is not Insolvent (or is no longer Insolvent).
(g) Provided that there are sufficient assets, if the
Trustee discontinues the payment of benefits from the Trust pursuant
to subsection (e) and subsequently resumes such payments, the first
payment following such discontinuance shall include the aggregate
amount of all payments due to Participants or their Beneficiaries
under the terms of the Incentive Plans for the period of such
discontinuance, less the aggregate amount of any payments made to
Incentive Plan participants or their beneficiaries by the Company in
lieu of the payments provided for hereunder during any such period of
discontinuance.
SECTION 11 - TRANSFERS OF UNITS AND PAYMENTS UNDER THE PLAN
(a) Within 30 business days after the expiration of the
Performance Period with respect to Shadow Units attributable to the
Bonus earned by a Participant for any Plan Year, the Company shall
deliver or cause to be delivered to the Participant certificates for a
number of Units equal to the whole number of such Shadow Units as of
the expiration of the Performance Period and cash with respect to any
fractional Shadow Unit credited to such Participant's Account in an
amount equal to the product of such fraction and the Market Price of a
Unit on the date the Performance Period expires.
(b) The principal purpose of the Unit Portion of a
Participant's Bonus under the Plan is to provide the Participant with
a continuing long-term investment in the Partnership. In order to
accomplish that principal purpose, it is imperative that a
Participant's rights under the Plan with respect to the Unit Portion
of any Bonus earned generally be required to remain in the form of
Shadow Units until the expiration of the Performance Period with
respect to the Shadow Units attributable to any Bonus. Accordingly,
in the event that a court of competent jurisdiction finally determines
that the Company is obligated to distribute to a Participant,
Beneficiary or any other person certificates for any Units reflecting
Shadow Units credited to a Participant's Unit Portion Account prior to
the expiration of the Performance Period with respect to the
Participant or the Committee determines the distribution of such
certificates is appropriate, the certificates so distributed to such
Participant, Beneficiary or other person shall be restricted as to
transferability until the date that the Performance Period would have
expired with respect to such Shadow Units had the certificates not
been distributed to the Participant, Beneficiary or other person and
remained subject to the Plan, and each such Unit certificate shall
bear the following legend:
The transferability of this certificate and the Units
represented hereby are subject to the restrictions, terms and
conditions (including forfeiture and restrictions against
transfer) applicable to the Shadow Units to which the Units
represented by this certificate relate, all as contained in
the Plum Creek Management Company, L.P. Management Incentive
Plan. A copy of the Plan is on file in the office of the Plum
Creek Management Company; 999 Third Avenue, Suite 2300;
Seattle, Washington 98104.
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SECTION 12 - SECURITIES MATTERS
(a) Subject to Section 11, the Partnership shall use its
best efforts to assure that any securities distributed to Participants
hereunder are marketable at the time of distribution, including, to
the extent required under applicable law, effecting the registration
pursuant to the Securities Act of any Units to be distributed
hereunder or effecting similar compliance under any state laws.
Notwithstanding anything herein to the contrary, the Partnership shall
not be obligated to cause to be issued or delivered any certificates
evidencing Units awarded pursuant to the Plan unless and until the
Partnership is advised by its counsel that the issuance and delivery
of such certificates is in compliance with all applicable laws,
regulations of governmental authority and the requirements of the New
York Stock Exchange and any other securities exchange on which Units
are traded. The Committee may require, as a condition of the issuance
and delivery of certificates evidencing Units pursuant to the terms
hereof, that the recipient of such Units make such covenants,
agreements and representations, and that such certificates bear such
legends, as the Committee, in its sole discretion, deems necessary or
desirable.
(b) Without limitation on the Committee's powers pursuant
to this Section 12, to the extent required by Rule 16b-3 promulgated
under Section 16(b) of the Exchange Act or by any comparable or
successor exemption under which the Committee believes it is
appropriate for the Plan to qualify, the Committee may (i) restrict a
Participant's ability to sell Units distributed to such Participant
pursuant to this Plan until the expiration of 6 months (or such other
period as the Committee deems appropriate) after the date as of which
the Shadow Units relating thereto were credited to the Participant's
Account, (ii) in lieu of distributing Units with respect to Shadow
Units that were credited to a Participant's Account within 6 months
(or such other period as the Committee deems appropriate) prior to the
expiration of the respective Performance Period, distribute a cash
amount equal to the Market Price of such Units as of the expiration of
the Performance Period, or (iii) impose such other conditions on the
exercise of any election under the Plan or in connection with any
distribution under the Plan as the Committee deems appropriate.
SECTION 13 - ADJUSTMENT OF ACCOUNTS IN CERTAIN EVENTS
(a) Unless the Committee otherwise determines, a
Participant's Account shall be adjusted to reflect any securities,
cash and other property received with respect to Units equal in number
to the Shadow Units credited to such Participant's Account as a result
of any Unit distribution or split, recapitalization, extraordinary
distribution, merger, consolidation, combination or exchange of Units
or similar change or any other event that the Committee, in its sole
discretion, deems appropriate. The purpose of this adjustment is to
treat Participants as if they were unitholders of Units with respect
to the number of Shadow Units credited to their Accounts. However,
the Committee may convert any securities, cash or other property that
would have been received in respect of Units into an equivalent number
of Shadow Units to be credited to the Participant's Account, or may
provide that any security received in respect of Units shall be
substituted for Units under the Plan.
(b) In the event of any change in the number of Units
outstanding by reason of any Unit distribution or split,
recapitalization, extraordinary dividend, merger, consolidation,
combination or exchange of Units or similar change or any other event
that the Committee, in its sole discretion, deems appropriate, the
maximum aggregate number of Units subject to the
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<PAGE> 12
Incentive Plans and the number of Shadow Units credited to the
Accounts of Participants shall be appropriately adjusted by the
Committee. In the event of any change in the number of Units
outstanding by reason of any other event or transaction, the Committee
may, but need not, make such adjustments in the number and class of
Units subject to the Incentive Plans and the Shadow Units credited to
the Participant's Account under this Plan as the Committee may deem
appropriate.
(c) A Participant shall have no rights as a result of any
Unit distribution or split, recapitalization, extraordinary
distribution, merger, consolidation, combination or exchange of Units
or similar change, except as may be determined by the Committee
pursuant to this Section 13.
SECTION 14 - PAYROLL AND WITHHOLDING TAXES
All federal, state, local and other withholding tax requirements, if
any, attributable to a distribution shall be met pursuant to the following
procedures:
(a) The Company and Related Companies shall have the
right to withhold from any cash amounts payable to a Participant
(including salary, bonus or any other amounts payable from the Company
or any Related Company to the Participant) an amount sufficient to
satisfy such federal, state, local and other withholding tax
requirements, prior to the delivery of any certificate or certificates
for such Units or other payments pursuant to the Plan.
(b) The Company or Related Company shall have the right
to require Participants to remit to the Company or Related Company in
cash an amount sufficient to satisfy such federal, state, local and
other withholding tax requirements, prior to the delivery of any
certificate or certificates for such Units or other payments pursuant
to the Plan.
(c) At the election of the Participant, to the extent
permitted by the Committee, the Participant shall deliver, or the
Company or Related Company (or, if a distribution is to be made from
the Trust, the Trustee) shall withhold, a number of such Units, the
Market Price of which on the date the Units are to be distributed to
the Participant is determined by the Committee to be sufficient to
satisfy the minimum federal, state, local and other withholding tax
requirements under applicable law.
(d) If a Participant is subject to Section 16(b) of the
Exchange Act, the Committee may prescribe such requirements or
limitations on the Participant's ability to elect the withholding
options contained in Section 14(c) as may be required by Rule 16b-3
promulgated under Section 16(b) of the Exchange Act or by any
comparable or successor exemption.
SECTION 15 - TERMINATION AND AMENDMENT
The Plan may be terminated with respect to any or all Participants at
any time by the Board. Subject to Section 11 hereof, in order to meet the
benefit obligations under the Plan upon such termination, the Company shall
deliver or cause to be delivered to each Participant with respect to whom the
Plan has been terminated a certificate for a number of Units equal to the whole
number of Shadow Units credited to such Participant's Account as of the date
the Plan was terminated and cash with respect to any fractional Shadow Units
credited to such Participant's Account, in an amount equal to the product
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of such fraction and the Market Price of a Unit as of the date the Plan was
terminated. The Plan may be amended by the Board from time to time in any
respect; provided that if the Committee, in its sole discretion, deems it
appropriate or advisable to comply with Rule 16b-3 or any comparable or
successor rule or regulatory requirement, the approval of security holders
shall be necessary to adopt any amendment to the extent that the adoption of
such amendment without such approval would cause the Plan to no longer comply
with Rule 16b-3 or any comparable or successor rule or regulatory requirement.
No amendment or termination shall be made that would impair the rights of any
Participant in any Shadow Unit theretofore credited or any Unit theretofore
transferred, without such Participant's prior written consent; provided that
the Company may amend the Plan and the Trust from time to time in such a manner
as may be necessary to avoid having the trust agreement pursuant to which the
Trust is created, the Incentive Plans or the Trust being subject to ERISA and
to avoid the current taxation of the assets held in the trusts established in
connection with the Incentive Plans to Participants. Neither a Participant's
incurring any income tax liability nor the loss of an investment opportunity as
a result of the termination of the Plan shall be considered an impairment of
the rights of a Participant.
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SECTION 16 - BENEFICIARIES, PERMITTED TRANSFEREES, AND OTHER PAYEES
16.1 Designation of Beneficiary. Each Participant shall have the
right to designate in writing from time to time a Beneficiary by filing a
written notice of such designation with the Committee. A Participant's
designation of a Beneficiary may be revoked by filing with the Committee an
instrument of revocation or a later designation. Any designation or revocation
shall be effective when received by the Committee. In the event of the death
of a Participant, any payment required to be made hereunder to such Participant
shall be made to such Participant's Beneficiary. Unless the Participant's
Beneficiary designation provides otherwise, no person shall be entitled to
benefits upon the death of the Participant unless such person survives the
Participant. If the Beneficiary designated by a Participant does not survive
the Participant or if the Participant has not made a valid Beneficiary
designation, the Participant's Beneficiary shall be the Participant's estate.
No payment shall be made after the death of a Participant with respect to the
Participant's Account, unless the Committee shall have been furnished with such
evidence as the Committee may deem necessary to establish the validity of the
payment.
16.2 Nontransferability. Except as provided in Section 16.1, no
Shadow Units credited to the Participant's Account under the Plan, no Units
subject to transfer that have not yet been transferred to Participants pursuant
to the Plan, no interest in any trust that may hold Units for the purpose of
meeting the Company's obligations under the Incentive Plans, and no other
interest or right of a Participant under the Plan may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated (except by will or by
the laws of descent and distribution), or in any manner be liable for or
subject to the debts, contracts, liabilities, engagements or torts of a
Participant or Beneficiary entitled thereto, or be subject to any lien,
directly or indirectly, by operation of law or otherwise, including execution,
levy, garnishment, attachment, and bankruptcy.
16.3 Incapacity of Participant or Beneficiary. If the Committee
finds that any Participant or Beneficiary to whom a payment is payable under
the Plan is unable to care for his or her affairs because of illness or
accident or is under a legal disability, any payment due (unless a prior claim
therefore shall have been made by a duly appointed legal representative), may
in the sole discretion of the Committee, be paid to the spouse, child, parent
or brother or sister of such Participant or Beneficiary. Any such payment
shall be a complete discharge of the obligations of the Company under the
provisions of the Plan.
SECTION 17 - EFFECT OF REVOCATION EVENT
Upon the occurrence of a Revocation Event, the Board may, in its sole
discretion, elect to terminate the Plan, the Trust, or any Participant's
Account. The Company shall, in its sole discretion, (a) pay to each
Participant whose Account is terminated, as soon as practicable after the date
of such termination, a lump sum in cash equal to the Market Price of a Unit
multiplied by the aggregate number of Shadow Units reflected in each
Participant's Account as of the date of such termination or (b) distribute to
each Participant whose Account is terminated, as soon as practicable after the
date of such termination, a number of Units equal to the number of Shadow Units
reflected in the Participant's Account. If it is finally determined in a
proceeding, which the Company either controls or was offered the right to
control and declines, that the Participant has an interest in the Trust that is
taxable to the Participant notwithstanding any termination of such
Participant's Account, the Company shall pay or distribute the Participant's
interest (whether or not the Board has previously elected to terminate the
Plan, the Trust or the Participant's Account) in accordance with either (a) or
(b) of the preceding sentence.
SECTION 18 - RIGHTS OF EMPLOYMENT
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<PAGE> 15
Nothing in this Plan shall interfere with or limit in any way the
right of the Company or any Related Company to terminate any Participant's
employment at any time, nor confer upon any Participant any right to continue
in the employ of the Company or any Related Company.
SECTION 19 - REQUIREMENTS OF LAW AND GOVERNING LAW
19.1 Requirements of Law. The transfer of Units under the Plan
shall be subject to all applicable laws, rules, and regulations, and to such
approvals by any governmental agencies or national securities exchanges as may
be required.
19.2 Governing Law. The Plan and all agreements under the Plan
shall be construed in accordance with and governed by the laws of the State of
Washington.
PLUM CREEK MANAGEMENT COMPANY, L.P.
____________________________________
____________________________________
Date
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