<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 1994 on Form 10-K as set forth in the pages attached hereto:
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 (a)(3) Exhibits
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 25, 1995 By: DIANE M. IRVINE
------------------------------------------
Diane M. Irvine,
Vice President and Chief Financial Officer
See Exhibit Index on page 14 and 15.
<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, 1994
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 State of Delaware I.R.S. Employer 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 eight 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 eight were
elected by unanimous written consent of the stockholders of Corp. I to hold
office until the Annual Meeting of Stockholders in 1996 and until their
successors are duly elected and qualified. There are no family relationships
among them.
Ian B. Davidson (Age 63) -- 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. and DADCO. Mr. Davidson also serves as a
Director of Energy West and the DADCO Companies.
George M. Dennison (Age 59) -- Dr. Dennison was elected a Director of
Corp. I effective February 1994 and is a member of the Audit Committee, the
Compensation Committee and the Conflicts Committee of the Board of Directors.
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.
Charles P. Grenier (Age 45) -- Mr. Grenier was elected a Director of
Corp. I effective April 11, 1995. Mr. Grenier has been Executive Vice
President of the General Partner since January 1, 1994. Mr. Grenier was Vice
President, Rocky Mountain Region of the General Partner from December 1992 to
December 1993 and was Vice President, Rocky Mountain Region of the former
general partner of the Registrant, Plum Creek Management Company, from June
1989 to December 1992.
Rick R. Holley (Age 43) -- Mr. Holley was elected a Director of
Corp. I effective January 1, 1994. Mr. Holley has been President and Chief
Executive Officer of the General Partner since 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.
David D. Leland (Age 59) -- 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
2
<PAGE> 4
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.
William E. Oberndorf (Age 41) -- 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 and
Wometco Cable Corp.
William J. Patterson (Age 33) -- 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.
John H. Scully (Age 50) -- 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 and Wometco Cable Corp.
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) 43 President and Chief Executive Officer 1989
Charles P. Grenier (a) 45 Executive Vice President 1989
William R. Brown (b) 43 Vice President, Resource Management 1995
Diane M. Irvine (c) 36 Vice President and Chief Financial Officer 1994
James A. Kraft (a) 40 Vice President, Law 1989
</TABLE>
(a) Served during the past five years in a managerial or executive
capacity with the General Partner's predecessor, Plum Creek
Management Company, and the General Partner.
(b) Mr. Brown became Vice President, Resource Management of the General
Partner on
3
<PAGE> 5
February 22, 1995. Mr. Brown was the Director, Planning for the
General Partner's predecessor, Plum Creek Management Company, and
the General Partner from August 1990 to February 1995. From June
1987 to June 1990, Mr. Brown was the Director, Planning for Glacier
Park Company.
(c) Served since February 7, 1994 as 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.
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
David D. Leland, a Director of Corp. I, failed to report in a timely
manner on a Form 4 for 1994 the disposition by him on August 24 and August 25,
1994 of 2,000 and 8,000 Limited Partnership Units of the Registrant ("Units"),
respectively. The Units were reported on a Form 4 by Mr. Leland on October 18,
1994.
Ian B. Davidson, a Director of Corp. I, failed to report in a timely
manner on a Form 4 for 1994 the acquisition by his wife on June 17, 1994 of 200
Units of the Registrant. The Units were reported on a Form 5 by Mr. Davidson
on February 14, 1995.
Other than the late reportings 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, 1994 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>
LONG TERM
COMPENSATION
------------
ANNUAL COMPENSATION AWARDS
-----------------------------------------------------------
(c) (d) (c)(e)(f)(g)
OTHER ANNUAL RESTRICTED ALL OTHER
NAME & PRINCIPAL (b) COMPENSATION STOCK AWARDS COMPENSATION
POSITION (a) YEAR SALARY ($) BONUS ($) ($) ($) ($)
- ---------------- ---- ---------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Rick R. Holley 1994 $375,000 $187,500 $187,500 $111,755
President and 1993 $149,733 $90,840 $ 10 $377,470
Chief Executive Officer 1992 $139,567 $84,840 $111 $331,784
Robert E. Manne 1994 $300,000 $150,000 $150,000 $64,871
Executive Vice 1993 $152,717 $92,430 $102 $366,531
President 1992 $145,000 $87,630 $192 $316,112
Charles P. Grenier 1994 $300,000 $150,000 $150,000 $64,871
Executive Vice 1993 $148,433 $90,060 $20 $366,131
President 1992 $139,083 $84,060 $249 $315,335
James A. Kraft 1994 $200,000 $100,000 $100,000 $49,711
Vice President, Law 1993 $123,633 $62,650 $37 $279,232
1992 $114,467 $57,650 $15 $283,332
Diane M. Irvine 1994 $135,288 $75,000 $10,728 $75,000 $37,500
Vice President and
Chief Financial Officer
</TABLE>
5
<PAGE> 7
(a) Principal position as of December 31, 1994.
(b) Bonuses include cash amounts awarded under the Management Incentive
Plan ("MIP"). Under the terms of the MIP, one half of any bonus
awarded is paid in cash and the remaining half of any bonus awarded is
converted into restricted Shadow Units (defined below). The Shadow
Unit portion of the awards are reflected under the Restricted Stock
Awards column of the Summary Compensation Table. Payments made under
the MIP are not reimbursable by the Registrant.
(c) All Other Compensation and Other Annual Compensation includes $30,000
and $10,728, respectively, for reimbursement to Ms. Irvine of the
purchase price of 1,000 Units and the related tax liability.
(d) The amounts under the Restricted Stock Awards column of the Summary
Compensation Table represent Shadow Units awarded under the MIP.
Messrs. Holley, Manne, Grenier, Kraft and Ms. Irvine were awarded
8,287, 6,630, 6,630, 4,420 and 3,315 Shadow Units on January 30, 1995
for the 1994 Plan Year. The number of Shadow Units credited to each
participant's account was determined by the amount of the Unit portion
of bonuses awarded divided by the Average Price of a Unit for the date
the cash portion was paid to the Participant.
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
Average 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 (three years subsequent to the Plan Year for
which the bonus is awarded), a change in control or the participant's
termination of employment as a result of permanent disability or the
participant's death. If the participant's employment is terminated
involuntarily for cause prior to the occurrence of a realization
event, the participant forfeits any Shadow Units credited to his or
her account.
(e) All Other Compensation includes director fees of $34,000 paid to Mr.
Holley.
(f) 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 declared by the Registrant to the General
Partner for any year prior to 1994. Payments made under the IS Plan
are not reimbursable by the Registrant. Compensation related to
distributions declared for 1993, paid in 1994, from the IS Plan to
Messrs. Holley,
6
<PAGE> 8
Manne, Grenier, and Kraft totalled $44,218, $44,218, $44,218 and
$33,690, respectively. Participation in the IS Plan by the above
participants terminated in 1994.
(g) All Other Compensation includes matching thrift contributions in the
Plum Creek Thrift and Profit Sharing Plan for Messrs. Holley, Manne,
Grenier and Kraft totaling $6,750 each and includes matching thrift
contributions in the Plum Creek Supplemental Benefits Plan for Messrs.
Holley, Manne, Grenier, Kraft and Ms. Irvine totaling $26,787,
$13,903, $13,903, $9,271 and $7,500, respectively.
LONG-TERM INCENTIVE PLAN AWARDS IN 1994
<TABLE>
<CAPTION>
PERFORMANCE PERIOD
NAME NUMBER OF UARS UNTIL MATURATION
---- -------------- ----------------
<S> <C> <C>
Diane M. Irvine 125,000 December 31, 1998
</TABLE>
Effective October 1, 1993, the Board of Directors of Corp. I approved
a long-term incentive plan ("LTIP"). The LTIP is administered by a
committee of the Board of Directors ("Committee"). Pursuant to the
determination of the Committee, Unit Appreciation Rights ("UARs") were
granted to Ms. Irvine effective February 7, 1994.
The terms of the UARs granted to Ms. Irvine provide for five Unit
Value targets with the first Unit Value target set at 115% of a base
Unit value of $26.45 and each subsequent Unit Value target at 115% of
the previous target. Consequently, the five Unit Value targets are
$30.42, $34.98, $40.23, $46.26, and $53.20, 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.
7
<PAGE> 9
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 involuntarily for cause or voluntarily without good
reason 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.
8
<PAGE> 10
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 $22,470 $29,960 $37,450 $44,940
$300,000 $70,470 $93,960 $117,450 $140,940
$500,000 $118,470 $157,960 $197,450 $236,940
$700,000 $166,470 $221,960 $277,450 $332,940
$900,000 $214,470 $285,960 $357,450 $428,940
$1,100,000 $262,470 $349,960 $437,450 $524,940
$1,300,000 $310,470 $413,960 $517,450 $620,940
$1,500,000 $358,470 $477,960 $597,450 $716,940
</TABLE>
Benefit accruals under the Pension Plan are based on the gross amount
of earnings, including cash incentive bonuses and IS Plan payments, but
excluding bonuses awarded in Units under the MIP and all commissions and other
extra or added compensation or benefits of any kind or nature. Bonuses awarded
in Units under the MIP for 1994 were $187,500, $150,000, $150,000, $100,000 and
$75,000 for Messrs. Holley, Manne, Grenier, Kraft and Ms. Irvine, respectively.
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 Burlington
Resources Inc. 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. Holley, Manne,
Grenier, Kraft and Ms. Irvine would be 30, 24, 27, 30 and 30, respectively.
Years of service under the Pension Plan as of December 31, 1994 for Messrs.
Holley, Manne, Grenier, Kraft and Ms. Irvine were 12, 9, 8, 11 and 1,
respectively.
9
<PAGE> 11
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.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1994, Mr. Leland served on the Compensation Committee of the
Board of Directors. Mr. Leland is the former President and Chief Executive
Officer of the General Partner.
10
<PAGE> 12
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
BENEFICIAL OWNERSHIP
To the best knowledge of the Registrant, there were no beneficial
owners of more than five percent of the Registrant's Units outstanding on March
31, 1995.
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, 1995.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP OF PERCENT OF
NAME OF INDIVIDUAL OR IDENTITY OF GROUP DEPOSITARY UNITS CLASS
--------------------------------------- ---------------- -----
<S> <C> <C>
Directors
Ian B. Davidson 20,200 0.05%
George M. Dennison 392 0.00%
Rick R. Holley 151,340(d)(e) 0.37%
David D. Leland 125,625 0.31%
William E. Oberndorf 822,249(a) 2.02%
William J. Patterson 0(b) 0.00%
John H. Scully 851,493(c) 2.10%
Executive Officers
Charles P. Grenier (f) 88,695(d) 0.22%
Diane M. Irvine 4,578(d) 0.01%
James A. Kraft 38,927(d) 0.10%
Robert E. Manne 34,115(d) 0.08%
12 Executive Officers & Directors as a Group 1,104,324 2.72%
========= =====
</TABLE>
(a) Includes 224,983 Units owned by Main Street Partners, L.P., 84,817
Units owned by San Francisco Partners II, L.P. and 500,393 Units owned
by an Employee Benefits Trust of the General Partner as to which Mr.
Oberndorf has shared voting and dispositive power. Mr.
11
<PAGE> 13
Oberndorf shares control of and has an indirect pecuniary interest in
the General Partner's 2% interest in the Registrant. Mr. Oberndorf
disclaims that the General Partner's 2% interest in the Partnership
constitutes a security.
(b) 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.
(c) Includes 224,983 Units owned by Main Street Partners, L.P., 84,817
Units owned by San Francisco Partners II, L.P. and 500,393 Units owned
by an Employee Benefits Trust of 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 that
the General Partner's 2% interest in the Registrant constitutes a
security.
(d) Includes non-vested Shadow Units credited to participant's accounts
under the terms of the LTIP and Shadow Units credited to participant's
accounts under the terms of the MIP. Upon vesting, the participants
are entitled to receive one Unit for each Shadow Unit that vests.
Non-vested Shadow Units under the terms of the LTIP credited to the
participant's accounts for Messrs. Holley, Grenier and Kraft totaled
71,036, 50,740 and 30,444, respectively. Shadow Units under the terms
of the MIP credited to the participant's accounts for Messrs. Holley,
Manne, Grenier, Kraft and Ms. Irvine totaled 8,444, 6,755, 6,755,
4,503 and 3,378, respectively. Messrs. Holley, Manne, Grenier, Kraft
and Ms. Irvine disclaim beneficial ownership of both the non-vested
Shadow Units under the LTIP and the Shadow Units under the MIP.
(e) Includes 43,200 Units deferred under the Unit Awards Plan. Mr. Holley
disclaims beneficial ownership of the Units deferred.
(f) Elected a Director of Corp. I effective April 11, 1995.
12
<PAGE> 14
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Registrant is required under its Partnership agreement to
reimburse the General Partner for compensation costs related to the management
of the Registrant, including the purchase of Units associated with certain
benefit plans. During 1994, the Registrant paid the General Partner for its
purchase of 496,800 Units at a total cost of $12.8 million, of which $10.5
million was funded from current operations and $2.3 million from funds held by
an employee benefit trust of the Registrant.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as a part of the Form 10-K:
(1) Financial Statements and Supplementary Financial Information
The following combined financial statements of the Company were
included in Part II, Item 8 of the Form 10-K as filed on March 15, 1995:
Combined Statement of Income........................ 26
Combined Balance Sheet.............................. 27
Combined Statement of Cash Flows.................... 28
Notes to Combined Financial Statements.............. 29
Report of Independent Accountants................... 42
Supplementary Financial Information................. 43
(2) Financial Statement Schedules
Not applicable.
(3) List of Exhibits
Each exhibit set forth below 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.
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<PAGE> 15
Index to Exhibits
<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) (Form 10-K/A, Amendment
No. 1, filed April 1994).
3.B Certificate of Limited Partnership of Plum Creek Timber
Company, 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).
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 (Form 10-K/A, Amendment No. 1, filed April 1994).
Amendment No. 3, Senior Note Agreement Amendment dated May 20,
1994. 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 (Form 10-K/A, Amendment No. 1, filed April
1994). Amendment No. 3, Mortgage Note Agreement Amendment
dated May 20, 1994. See attached exhibit.
4.C.3* Senior Note Agreement, dated August 1, 1994, 8.73% Senior
Notes due August 1, 2009, Plum Creek Timber Company, L.P.
See attached exhibit.
10.A.1* $100 million Amended and Restated Credit Agreement by and
between Plum Creek Timber Company, L.P., Bank of America
National Trust and Savings Association as Agent, ABN AMRO
Bank N.V. as Co-agent and the Other Financial Institutions
Party Thereto, dated as of November 15, 1994.
See attached exhibit.
10.A.2* $35 million Credit Agreement by and between Plum Creek Timber
Company, L.P., Bank of America National Trust and Savings
Association as Agent, ABN AMRO Bank N.V. as Co-agent and the
Other Financial Institutions Party Thereto, dated as of
November 15, 1994. See attached exhibit.
10.B.1*+ Plum Creek Supplemental Benefits Plan. See attached exhibit.
10.B.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).
</TABLE>
14
<PAGE> 16
<TABLE>
<S> <C>
10.B.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.B.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.B.5+ Retirement Plan for Directors, Plum Creek Management Company.
(Form 8 Amendment No. 1, filed April 1991).
10.B.6+ Long-term Incentive Plan, Plum Creek Management Company, L.P.
(Form 10-K/A, Amendment No. 1, filed April 1994).
10.B.7+ Management Incentive Plan, Plum Creek Management Company, L.P.
(Form 10-K/A, Amendment No. 1, filed April 1994).
10.B.8*+ Executive and Key Employee Salary and Incentive Compensation
Deferral Plan, Plum Creek Management Company, L.P. See
attached exhibit.
10.B.9*+ Deferred Compensation Plan for Directors, PC Advisory Corp. I.
See attached exhibit.
21 Subsidiaries of the Registrant. (Form 8 Amendment No. 1,
filed April 1991).
27* Financial Data Schedule. See attached exhibit.
</TABLE>
(b) Reports on Form 8-K
None.
15
<PAGE> 1
EXHIBIT 4.C.1
SENIOR NOTE AGREEMENT AMENDMENT
PLUM CREEK TIMBER COMPANY, L.P.
999 THIRD AVENUE
SEATTLE, WASHINGTON 98104
As of May 20, 1994
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 by amendments thereto dated
as of January 1, 1991, April 22, 1993 and September 1, 1993 (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 by amendments thereto dated as of January 1, 1991, April 22, 1993 and
September 1, 1993, 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 purchased 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, entered into a Revolving Credit Agreement dated as of October 28,
1993 with Bank of America National Trust and Savings Association and the other
lenders parties to such facility ("Bank of America Revolving Credit
Agreement");
WHEREAS, the Company, in order to refinance a portion of the borrowing
under the Bank of America Revolving Credit Agreement, proposes to enter into
Senior Note Agreements with certain lenders (the "1994 Senior Note
Agreements").
<PAGE> 2
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
shall become effective as of the date on which (a) the 1994 Senior Note
Agreements are effective and (b) the conditions to effectiveness set forth in
Section 2 hereof are completely satisfied (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 following definitions shall be added to Paragraph
10B of the Senior Note Agreements:
"1994 Senior Note Agreements" shall mean the senior
note agreements to be entered into between the Company and
certain lenders pursuant to which the Company shall issue, and
the lenders shall purchase, senior notes of the Company in an
aggregate principal amount not to exceed $150,000,000.
(2) The following definition contained in Paragraph 10B
of the Senior Note Agreements shall be amended to read as follows:
"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,
the Bank of America Revolving Credit Agreement and the 1994
Senior Note Agreements.
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
-2-
<PAGE> 3
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; and
you shall receive a duly executed officer's certificate, dated as of the
Effective Time, to both such effects.
B. CERTAIN AGREEMENTS
Each of (i) this Agreement, (ii) the 1994 Senior Note Agreements, and
(iii) the Mortgage Note Amendment Agreement shall have been duly authorized,
executed and delivered by the parties thereto (other than you) and by the
Required Holders 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.
D. OTHER CONSENTS
The Company shall have sent all notices, and received all consents,
approvals, waivers and other authorizations, that are necessary in connection
with the modifications contained herein, and no default, event of default,
material adverse change or other similar event or condition shall exist under
any Debt or any agreement or instrument relating thereto as at the Effective
Time.
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.
-3-
<PAGE> 4
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.
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 March 31, 1994, the
date of the most recent combined 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, and (b) there has not been any material adverse change in
the business, properties or assets, condition (financial or otherwise) 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 (financial or otherwise) 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.
-4-
<PAGE> 5
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 (financial or otherwise) 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 performance of 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.
-5-
<PAGE> 6
Reg. 31805 and 55 Fed. Reg. 33091), Blocking Kuwaiti Government Property and
Prohibiting Transactions with Kuwait.
I. AUTHORIZATION; ENFORCEABILITY
This Agreement has been duly authorized by all requisite action and
duly executed and delivered by authorized officers of the Company and the
General Partner, and the Senior Note Agreements, as amended by this Agreement,
are valid obligations of the Company, legally binding upon and enforceable
against the Company in accordance with their terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency, reorganization or
other similar law affecting the enforcement of creditors' rights generally and
(ii) general principles of equity (regardless of whether such enforceability is
considered in proceeding in equity or at law).
J. 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 (financial or otherwise) 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.
-6-
<PAGE> 7
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.
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. LIMITED DURATION
This Agreement shall terminate and be of no further force or effect if
the Effective Time does not occur by November 30, 1994.
F. 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.
-7-
<PAGE> 8
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
DIANE M. IRVINE
By: ___________________________________
Name: Diane M. Irvine
Title: Vice President and Chief
Financial Officer
The foregoing is accepted and agreed to:
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
ANGELA BROCK-KYLE
By: _______________________________
Name: Angela Brock-Kyle
Title: Associate Director
Company: Teachers Insurance and Annuity
Association of America
-8-
<PAGE> 1
EXHIBIT 4.C.2
MORTGAGE NOTE AGREEMENT AMENDMENT
PLUM CREEK MANUFACTURING, L.P.
999 Third Avenue
Seattle, Washington 98104
As of May 20, 1994
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 by
amendments thereto dated as of January 1, 1991, April 22, 1993 and September l,
1993 (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 purchased 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, entered into a
Revolving Credit Agreement dated as of October 28, 1993 with Bank of America
National Trust and Savings Association and the other lenders under to such
facility ("Bank of America Revolving Credit Agreement");
WHEREAS, the Partnership, in order to refinance a portion of the
borrowings under the Bank of America Revolving Credit Agreement, proposes to
enter into Senior Note Agreements with certain lenders (the "1994 Senior Note
Agreements");
WHEREAS, consummation of the foregoing transactions requires certain
amendments to the Mortgage Note Agreements;
<PAGE> 2
NOW, THEREFORE, the Company and the Partnership hereby agree with you
that this Agreement shall become effective as of the date on which the 1994
Senior Note Agreements become 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.
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 May 20, 1994 between the
Partnership and the Senior Noteholders (collectively, the
"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 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; and you
shall receive a duly executed officer's certificate, dated as of the Effective
Time, to both such effects.
-2-
<PAGE> 3
B. CERTAIN AGREEMENTS
Each of (i) this Agreement, (ii) the 1994 Senior Note Agreements, 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 by the Required Holders 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
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. 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 Mortgage Note Agreements or the Mortgage Notes.
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
-3-
<PAGE> 4
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 March 31, 1994, 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, and (ii) there has not
been any material adverse change in the financial condition or operations of
the Company or the Partnership.
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 (financial or otherwise) or operations of the
Company, or in the inability of the Company to perform its obligations under
this Agreement, the Mortgage Note Agreements or the Mortgage Notes, following
the effectuation of the transactions described herein.
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 (financial or otherwise) or
operations or on the ability of the Company to perform its obligations under
this Agreement, or, after giving effect to the transactions contemplated
-4-
<PAGE> 5
hereby, the performance of the Mortgage Note Agreements or the Mortgage Notes,
and the execution, delivery and performance by the Company of this Agreement,
or, after giving effect to the transactions contemplated hereby, the Mortgage
Note Agreements or the Mortgage 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(l) of the Mortgage 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 Mortgage Note Agreements or the Mortgage
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 Mortgage Note Agreements or the
Mortgage 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.
I. AUTHORIZATION; ENFORCEABILITY
This Agreement has been duly authorized by all requisite action and
duly executed and delivered by authorized officers of the Company and the
General Partner, and the Mortgage Note Agreements, as amended by this
Agreement, are valid obligations of the Company, legally binding upon and
enforceable against the Company in accordance with their terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency, reorganization or
other similar law affecting the enforcement of creditors' rights generally, and
(ii) general principles of equity (regardless of whether such enforceability is
considered in proceeding in equity or at law).
-5-
<PAGE> 6
J. 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 (financial or otherwise) 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. 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.
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 of 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.
-6-
<PAGE> 7
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.
-7-
<PAGE> 8
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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective as of the date first above written.
PLUM CREEK MARKETING, INC.
/s/ Diane M. Irvine
By: ---------------------------------
Name: Diane M. Irvine
Title: Vice President and Chief
Financial Officer
PLUM CREEK MANUFACTURING, L.P.
By: Plum Creek Management Company,
L.P., General Partner
/s/ Diane M. Irvine
By: --------------------------------
Name: Diane M. Irvine
Title: Vice President and Chief
Financial Officer
<PAGE> 9
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company,
L.P., General Partner
/s/ Diane M. Irvine
By: ------------------------------
Name: Diane M. Irvine
Title: Vice President and Chief
Financial Officer
The foregoing is accepted and agreed to:
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
/s/ Angela Brock-Kyle
By: ---------------------------------------
Name: Angela Brock-Kyle
Title: Associate Director
Company: Teachers Insurance and Annuity
Association of America
<PAGE> 1
CONFORMED COPY
EXHIBIT 4.C.3
- -------------------------------------------------------------------------------
PLUM CREEK TIMBER COMPANY, L.P.
$150,000,000
8.73% SENIOR NOTES DUE AUGUST 1, 2009
- -------------------------------------------------------------------------------
SENIOR NOTE AGREEMENT
- -------------------------------------------------------------------------------
Dated as of August 1, 1994
- -------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
1. AUTHORIZATION OF ISSUE OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. PURCHASE AND SALE OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. CONDITIONS OF CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3A. Opinion of Purchaser's Special Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3B. Opinion of Company's Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3C. Representations and Warranties; No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3D. Sale of Notes to Other Purchasers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3E. Purchase Permitted by Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3F. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3G. Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4. PREPAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4A. Optional Prepayment With Yield-Maintenance Premium . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4B. Notice of Optional Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4C. Partial Payments Pro Rata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4D. Retirement of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4E. Payments on Business Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5A. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5B. Inspection of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5C. Covenant to Secure Notes Equally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5D. Partnership Existence, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5E. Payment of Taxes and Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5F. Compliance with Laws, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5G. Maintenance of Properties; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6A. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6B. Lien, Indebtedness and Other Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6B(1) Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6B(2) Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6B(3) Loans, Advances, Investments and Contingent Liabilities . . . . . . . . . . . . . . . . . . . 18
6B(4) Sale of Stock and Debt of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6B(5) Merger and Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6B(6) Harvesting Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6B(7) Sale and Lease-Back . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6B(8) Certain Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6B(9) Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6C. Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6D. Issuance of Stock by Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
</TABLE>
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7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7A. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7B. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8. REPRESENTATIONS, COVENANTS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8A. Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8B. General Partner Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8C. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8D. Partnership Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8E. Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8F. Business; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8G. Changes, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8H. Tax Returns and Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8I. Franchises, Licenses, Agreements, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8J. Actions Pending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8K. Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8L. Compliance with Other Instruments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8M. Governmental Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
8N. Foreign Assets Control Regulations, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
8O. Offering of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8P. Regulation G, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8Q. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8R. Status Under Certain Federal Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8S. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8T. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8U. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9. REPRESENTATIONS OF THE PURCHASER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
10. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10A. Yield-Maintenance Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10B. Other Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
11A. Note Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
11B. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
11C. Consent to Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
11D. Solicitation of Holders of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
11E. Form, Registration, Transfer and Exchange of Notes; Lost Notes . . . . . . . . . . . . . . . . . . . . 65
11F. Persons Deemed Owners; Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
11G. Non-Recourse Nature of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
11H. Survival of Representations and Warranties; Entire Agreement . . . . . . . . . . . . . . . . . . . . . 66
11I. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
11J. Disclosure to Other Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
11K. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
11L. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
11M. Substitution of Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
</TABLE>
ii
<PAGE> 4
<TABLE>
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11N. Satisfaction Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
11O. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
11P. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
PURCHASER SCHEDULE
Exhibit A - Form of Note
Exhibit B-1 - Form of Opinion of Purchaser's Counsel
Exhibit B-2 - Form of Opinion of Company's Counsel
Exhibit D - Liens
Exhibit E - Investments
Exhibit F - Environmental Notices
Exhibit 8G - Material Transactions
Exhibit 8K - Property Titles
Exhibit 8T - Environmental Permits and Licenses
Schedule 10B(1) - Investment Policy
</TABLE>
iii
<PAGE> 5
PLUM CREEK TIMBER COMPANY, L.P.
999 Third Avenue
Seattle, Washington 98104
As of August 1, 1994
To each of the Purchasers
listed in the attached
Purchaser Schedule
Dear Purchaser:
The undersigned, Plum Creek Timber Company, L.P. (herein called the "Company"),
a Delaware limited partnership, hereby agrees with you as follows:
1. AUTHORIZATION OF ISSUE OF NOTES
The Company will authorize the issue of its senior promissory
notes (herein called the "Notes") in the aggregate principal amount of
$150,000,000, to be dated the date of issue thereof, to mature August 1, 2009,
to bear interest on the unpaid balance thereof from the date thereof to but
excluding the date the principal thereof shall have become due and payable at
the rate of 8.73% per annum and on overdue principal, premium and interest at
the rate specified therein, and to be substantially in the form of Exhibit A
attached hereto. The term "Notes" as used herein shall include each Note
delivered pursuant to any provision of this Agreement or the other Note
Agreements referred to in paragraph 2 and each Note delivered in substitution
or exchange for any such Note pursuant to any such provision.
2. PURCHASE AND SALE OF NOTES
The Company hereby agrees to sell to you and, subject to the
terms and conditions herein set forth, you agree to purchase from the Company
the aggregate principal amount of Notes set forth opposite your name in the
Purchaser Schedule attached hereto at 100% of such aggregate principal amount.
The Company will deliver to you, at the offices of Debevoise & Plimpton at 875
Third Avenue, New York, New York 10022, one or more Notes registered in your
name or in the name of your nominee, evidencing the aggregate principal amount
of Notes to be purchased by you and in
<PAGE> 6
the denomination or denominations specified with respect to you in the
Purchaser Schedule, against payment of the purchase price thereof by transfer
of immediately available funds for credit to the Company's account #12336-14205
at Bank of America, Seattle, Washington, ABA #121-000- 358, Message: Attn:
Global Agency #5596-Ref: Plum Creek Timber Co., L.P. on the date of closing,
which shall be August 1, 1994, or any other date on or before August 1, 1994
upon which the Company, you and the other purchasers referred to in the
penultimate sentence of this paragraph 2 may mutually agree (herein called the
"closing" or the "date of closing"). If at the closing the Company shall fail
to tender such Notes to you as provided above in this paragraph 2, or any of
the conditions specified in paragraph 3 shall not have been fulfilled to your
satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement, without thereby waiving any other rights you
may have by reason of such failure or such nonfulfillment. Concurrently with
the execution and delivery of this Agreement, the Company is entering into
other Note Agreements (herein called the "Other Note Agreements") substantially
identical with this Agreement (except as to the identity of the purchaser and
the principal amount of Notes to be purchased) with the other purchasers
(herein called the "Other Purchasers") named in the Purchaser Schedule. The
sale to you and the sales to the Other Purchasers are to be separate and
several sales.
3. CONDITIONS OF CLOSING
Your obligation to purchase and pay for the Notes to be purchased by
you hereunder is subject to the satisfaction, on or before the date of closing,
of the following conditions:
3A. OPINION OF PURCHASER'S SPECIAL COUNSEL
You shall have received from Debevoise & Plimpton, who are
acting as special counsel for you in connection with this transaction, an
opinion satisfactory to you and substantially in the form of Exhibit B-1
attached hereto and including such other matters as you may reasonably request.
3B. OPINION OF COMPANY'S COUNSEL
You shall have received from James A. Kraft, Vice President,
Law for the Company, a favorable opinion satisfactory to you and substantially
in the form of Exhibit B-2
2
<PAGE> 7
attached hereto and including such other matters as you may reasonably request.
3C. REPRESENTATIONS AND WARRANTIES; NO DEFAULT
The representations and warranties contained in paragraph 8
shall be true in all material respects on and as of the date of closing, except
to the extent of changes caused by the transactions herein contemplated; there
shall exist on the date of closing no Event of Default or Default; and the
Company shall have delivered to you an Officers' Certificate, dated the date of
closing, to both such effects.
3D. SALE OF NOTES TO OTHER PURCHASERS
The Company shall have sold to the Other Purchasers the Notes
to be purchased by them at the closing and shall have received payment in full
therefor.
3E. PURCHASE PERMITTED BY APPLICABLE LAWS
The purchase of and payment for the Notes to be purchased by
you on the date of closing on the terms and conditions herein provided
(including the use of the proceeds of such Notes by the Company) shall not
violate any applicable law or governmental regulation (including, without
limitation, section 5 of the Securities Act or Regulation G, T or X of the
Board of Governors of the Federal Reserve System), shall not subject you to any
tax, penalty, liability or other onerous condition under or pursuant to any
applicable law or governmental regulation, and shall be permitted by the laws
and regulations of each jurisdiction to which you are subject, but without
recourse to provisions (such as section 1405(a)(8) of the New York Insurance
Law) permitting limited investments by life insurance companies without
restriction as to the character of the particular investment. If required by
you, you shall have received an Officers' Certificate of the Company certifying
as to such matters of fact as you may reasonably specify to enable you to
determine whether such purchase is permitted.
3F. INSURANCE
The Company shall have delivered to you an Officers'
Certificate, dated the date of closing, certifying that insurance with respect
to its properties and business complying with the provisions of paragraph 5G
(including, without limitation, the provisions of paragraph 5G permit-
3
<PAGE> 8
ting the Company to self-insure) is in full force and effect.
3G. PROCEEDINGS
All proceedings taken or to be taken in connection with the
transactions contemplated hereby and all documents incident thereto shall be
satisfactory in substance and form to you, and you shall have received all such
counterpart originals or certified or other copies of such documents as you may
reasonably request.
If the above conditions (other than the conditions stated in
paragraph 3D) are satisfied, the obligation of the Company to sell to you the
Notes to be purchased by you hereunder is subject to the tendering by the Other
Purchasers of the purchase price of the Notes to be purchased by them pursuant
to the Other Note Agreements on the date of closing.
4. PREPAYMENTS
The Notes shall be subject to prepayment under the
circumstances set forth in paragraph 4A.
4A. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE PREMIUM
The Notes shall be subject to prepayment, in whole at any time
or from time to time in part (other than in the case of any prepayment pursuant
to paragraph 6B(5)(viii) or 6B(6), in multiples of $5,000,000), at the option
of the Company, at 100% of the principal amount so prepaid plus interest
thereon to the prepayment date and the Yield-Maintenance Premium, if any, with
respect to each Note.
4B. NOTICE OF OPTIONAL PREPAYMENT
The Company shall give the holder of each Note irrevocable
written notice of any prepayment pursuant to paragraph 4A not less than 20
Business Days prior to the prepayment date, specifying such prepayment date and
the principal amount of the Notes, and of the Notes held by such holder, to be
prepaid on such date and stating that such prepayment is to be made pursuant to
paragraph 4A. Notice of prepayment having been given as aforesaid, the
principal amount of the Notes specified in such notice, together with interest
thereon to the prepayment date and together with the premium, if any, herein
provided, shall become due and payable on such prepayment date. The Company
shall deliver (i) two
4
<PAGE> 9
(2) Business Days prior to each prepayment pursuant to paragraph 4A an
Officers' Certificate stating whether a Yield-Maintenance Premium is payable in
connection with such prepayment and setting forth the calculations made in
making such determination based on an estimate of such Yield-Maintenance
Premium and (ii) on the date of such prepayment, an Officers' Certificate
stating whether such Yield-Maintenance Premium is payable and setting forth the
actual calculation.
4C. PARTIAL PAYMENTS PRO RATA
Upon any partial prepayment of the Notes, the principal amount
so prepaid shall be allocated to all Notes at the time outstanding (including,
for the purpose of this paragraph 4C only, all Notes prepaid or otherwise
retired or purchased or otherwise acquired by the Company or any of its
Subsidiaries or Affiliates other than by prepayment pursuant to paragraph 4A)
in proportion to the respective outstanding principal amounts thereof.
4D. RETIREMENT OF NOTES
The Company shall not, and shall not permit any of its
Subsidiaries or Affiliates to, prepay or otherwise retire in whole or in part
prior to their stated final maturity (other than a prepayment pursuant to
paragraph 4A or upon acceleration of such final maturity pursuant to paragraph
7A), or purchase or otherwise acquire, directly or indirectly, Notes held by
any holder unless the Company or such Subsidiary or Affiliate shall have
offered to prepay or otherwise retire or purchase or otherwise acquire, as the
case may be, the same proportion of the aggregate principal amount of Notes
held by each other holder of Notes at the time outstanding upon the same terms
and conditions. Any Notes so prepaid or otherwise retired or purchased or
otherwise acquired by the Company or any of its Subsidiaries or Affiliates
shall not be deemed to be outstanding for any purpose under this Agreement,
except as provided in paragraph 4C.
4E. PAYMENTS ON BUSINESS DAYS
If the date specified for any required payment under this
Agreement falls on a day that is not a Business Day, the payment shall be made
on the next succeeding Business Day and interest shall be payable to the date
of such payment.
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5. AFFIRMATIVE COVENANTS
5A. FINANCIAL STATEMENTS
The Company covenants that it will deliver to each Significant
Holder in duplicate:
(i) as soon as available, but not later than 90 days
after the end of each fiscal year, a copy of the audited combined
balance sheet of the Company and its combined Subsidiaries as of the
end of such year and the related combined statement of income and
combined statement of cash flows for such fiscal year, setting forth
in each case in comparative form the figures for the previous fiscal
year, and accompanied by the opinion of Coopers & Lybrand, or another
nationally recognized independent public accounting firm, which report
shall state that such combined financial statements present fairly the
financial position for the dates specified and the results of
operations for the periods indicated in conformity with generally
accepted accounting principles applied on a basis consistent with
prior years;
(ii) as soon as available, but not later than 120 days
after the end of each fiscal year, a copy of a combining balance sheet
of the Company and each of its Subsidiaries as at the end of such
fiscal year and the related combining statement of income and
combining statement of cash flows for such fiscal year, all in
reasonable detail and satisfactory in scope to the Required Holder(s)
and unaudited but certified by an appropriate Responsible Officer as
having been used in connection with the preparation of the financial
statements referred to in clause (i) of this paragraph 5A;
(iii) as soon as available, but not later than 45 days
after the end of each fiscal quarter (other than the last fiscal
quarter) of each year, a copy of the unaudited combined balance sheet
of the Company and its combined Subsidiaries as of the end of such
quarter and the related combined statement of income and combined
statement of cash flows for the period commencing on the first day and
ending on the last day of such quarter, in each case setting forth in
comparative form figures for the corresponding period in the preceding
fiscal year, all in reasonable detail and satisfactory in scope to the
Required Holder(s) (information in detail and scope comparable to
information required to
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<PAGE> 11
be included in a Quarterly Report on Form 10-Q shall be deemed to be
satisfactory for such purposes), such combined balance sheets to be as
of the end of such quarter and such combined statements of income and
combined statements of cash flows to be for such quarterly period and
for the period from the beginning of the fiscal year to the end of
such quarter, and certified by an appropriate Responsible Officer as
being complete and correct and presenting fairly the financial
position for the dates specified and the results of operations of the
Company and the Subsidiaries for the periods indicated in conformity
with generally accepted accounting principles applied on a consistent
basis;
(iv) as soon as available, but not later than 45 days
after the end of each fiscal quarter (other than the last fiscal
quarter) of each year, a copy of the unaudited combining balance sheet
of the Company and each of its Subsidiaries, and the related combining
statement of income and combining statement of cash flows for such
quarter, in each case setting forth in comparative form figures for
the corresponding period in the preceding fiscal year, all in
reasonable detail and satisfactory in scope to the Required Holder(s),
(information in detail and scope that would normally be required on
interim financial statements, except as provided for in this
paragraph, shall be deemed to be satisfactory for such purposes), such
combining balance sheets to be as of the end of such quarter and such
combining statements of income and combining statements of cash flows
to be for such quarterly period and for the period from the beginning
of the fiscal year to the end of such quarter, and certified by an
appropriate Responsible Officer of the Company as having been used in
connection with the preparation of the financial statements referred
to in clause (iii) of this paragraph 5A;
(v) to the extent not delivered pursuant to clauses (i),
(ii), (iii) and (iv) above, promptly upon transmission thereof, copies
of all such financial statements as are delivered to the Mortgage
Noteholders pursuant to the Mortgage Note Agreements;
(vi) to the extent not delivered pursuant to clause (i),
(ii), (iii), (iv) or (v), promptly upon transmission thereof, copies
of all such financial statements, proxy statements, notices and
reports as it
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<PAGE> 12
sends to its public security holders and copies of all registration
statements (without exhibits) and all reports which it files with the
Securities and Exchange Commission and any governmental body or agency
succeeding to the functions of the Securities and Exchange Commission;
(vii) as soon as practicable, and in any event within 10
Business Days after the Company, any of its Subsidiaries or any
Related Person knows of the occurrence or existence or expected
occurrence or existence of any event or condition or series of events
or conditions with respect to any Plan or Plans which are reasonably
likely to result in (a) a material liability to the Company, any of
its Subsidiaries or any Related Person pursuant to ERISA or the Code
(other than liability for PBGC premiums or regular periodic
contributions to any such Plan or Plans) or (b) the imposition of a
Lien on any of the assets or other properties of the Company, any of
its Subsidiaries or any Related Person pursuant to ERISA or the Code,
the Company shall deliver to each Significant Holder a statement
signed by the Chief Financial Officer of the Company setting forth
details respecting such event or condition or series of events or
conditions and the action, if any, that the Company, any of its
Subsidiaries or any Related Person proposes to take with respect
thereto (and a copy of any notice, report or other written
communication, or a written description of any oral communication,
with or from the PBGC, the Internal Revenue Service or the Department
of Labor with respect to such event or condition or series of events
or conditions); and
(viii) with reasonable promptness, such other information
and financial data as such Significant Holder may reasonably request.
Together with each delivery of financial statements required by clauses (i) and
(iii) above, the Company will deliver to each Significant Holder an Officers'
Certificate demonstrating (with computations in reasonable detail) compliance
by the Company and its Subsidiaries with the provisions of paragraph 6
(including, without limitation, paragraph 6A) and stating that there exists no
continuing Event of Default or Default, or, if any continuing Event of Default
or Default exists, specifying the nature and period of existence thereof and
what action the Company proposes to take or is taking with respect thereto.
Together with each delivery of
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<PAGE> 13
financial statements required by clause (i) above, the Company will deliver to
each Significant Holder a certificate of such accountants stating that, in
making the audit necessary to the certification of such financial statements,
they have obtained no knowledge of any Event of Default or Default continuing,
or, if they have obtained knowledge of any Event of Default or Default
continuing, specifying the nature and period of existence thereof. Such
accountants, however, shall not be required to engage in any auditing
procedures other than those procedures required by generally accepted auditing
standards, and shall not be liable to anyone by reason of their failure to
obtain knowledge of any Event of Default or Default which would not be
disclosed in the course of an audit conducted in accordance with generally
accepted auditing standards. Notwithstanding the foregoing provisions of this
paragraph 5A, the Company shall not be required to deliver any financial
statements or other documents (other than documents or information which have
become public information) to any Person engaged in any Permitted Business in
competition with the Company or any Subsidiary. The Company also covenants
that forthwith upon the chief executive officer, principal financial officer or
principal accounting officer of the Company or the General Partner becoming
aware of an Event of Default and within 5 Business Days after the chief
executive officer, principal financial officer or principal accounting officer
of the Company or the General Partner becomes aware of a Default, it will
deliver to each Significant Holder an Officers' Certificate specifying the
nature and period of existence thereof and what action the Company proposes to
take with respect thereto, provided, however, no such officer shall be
obligated to provide a certificate with respect to any such Event of Default or
Default that has been cured on or before the date upon which such officer
becomes aware thereof.
5B. INSPECTION OF PROPERTY
The Company covenants that it will permit any Person
designated in writing by (a) you or (b) any Significant Holder or Significant
Holders of not less than 5% in aggregate principal amount of the Notes at the
time outstanding (other than any Person acting on behalf of any holder which is
engaged in any Permitted Business in competition with the Company or any
Subsidiary), at such holder's or holders' expense, to visit and inspect any of
the properties of the Company and its Subsidiaries, to examine the books and
financial records of the Company and its Subsidiaries and make copies thereof
or extracts therefrom and to discuss the affairs, finances and accounts of the
Company or
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<PAGE> 14
any of such corporations with the principal officers of the Company and its
independent public accountants, all upon reasonable notice and at such
reasonable times and as often as such holder or holders may reasonably request.
5C. COVENANT TO SECURE NOTES EQUALLY
The Company covenants that, if it shall create or assume any
Lien upon any of its property or assets, whether now owned or hereafter
acquired, other than Liens permitted by the provisions of paragraph 6B(1)
(unless prior written consent to the creation or assumption thereof shall have
been obtained pursuant to paragraph 11C), it will make or cause to be made
effective provision whereby the Notes will be secured by such Lien equally and
ratably with any and all other Debt thereby secured so long as any such other
Debt shall be so secured.
5D. PARTNERSHIP EXISTENCE, ETC.
Except as permitted by paragraph 6B(5) the Company covenants
that it will, and will cause each of its Restricted Subsidiaries to, at all
times preserve and keep in full force and effect its partnership or corporate
existence, as the case may be, and rights and franchises material to its
business, and those of each of its Restricted Subsidiaries, and will qualify,
and cause each of its Restricted Subsidiaries to qualify, to do business in any
jurisdiction where the failure to do so would have a material adverse effect on
the business, condition (financial or other), assets, properties or operations
of the Company or the Company and its Restricted Subsidiaries taken as a whole,
provided that the corporate existence of any Restricted Subsidiary or any
rights and franchises of the Company or any Restricted Subsidiary may be
terminated if, in the good faith judgment of the Company, such termination is
in the best interests of the Company and would not have a material adverse
effect on the business, condition (financial or other), assets, properties or
operations of the Company or the Company and its Restricted Subsidiaries taken
as a whole.
5E. PAYMENT OF TAXES AND CLAIMS
The Company covenants that it will, and will cause each of its
Restricted Subsidiaries to, pay all material taxes, assessments and other
governmental charges imposed upon it or any of its properties or assets or in
respect of any of its franchises, business, income or profits before any
penalty accrues thereon, and all material claims (in-
10
<PAGE> 15
cluding, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law have or
may become a Lien upon any of its properties or assets, provided that no such
tax, assessment, charge or claim need be paid if it is being contested in good
faith by appropriate proceedings promptly instituted and diligently conducted
and if such accrual or other appropriate provision, if any, as shall be
required by generally accepted accounting principles shall have been made
therefor.
5F. COMPLIANCE WITH LAWS, ETC.
The Company covenants that it will, and will cause each of its
Subsidiaries to, comply with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority, the noncompliance with
which would materially adversely affect the business, condition (financial or
other), assets, properties or operations of the Company or the Company and its
Restricted Subsidiaries taken as a whole.
5G. MAINTENANCE OF PROPERTIES; INSURANCE
The Company covenants that it will maintain or cause to be
maintained in good repair, working order and condition (normal wear and tear
excepted) all properties used or useful in the business of the Company and its
Restricted Subsidiaries and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements thereof except where the failure
to make such repair, renewal or replacement would not have a material adverse
effect on the business, condition (financial or other), assets, properties or
results of operations of the Company or the Company and its Restricted
Subsidiaries taken as a whole. The Company will maintain or cause to be
maintained, with financially sound and reputable insurers, insurance with
respect to its properties and business and the properties and business of its
Restricted Subsidiaries against loss or damage of the kinds customarily insured
against by corporations of established reputation of similar size engaged in
the same or similar business and similarly situated, of such types and in such
amounts as are customarily carried under similar circumstances by such other
corporations, provided that the Company may self-insure with respect to its
properties and business and the properties and business of its Restricted
Subsidiaries to the extent consistent with the practice of corporations of
established
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<PAGE> 16
reputation of similar size engaged in the same or similar business and
similarly situated.
6. NEGATIVE COVENANTS
6A. RESTRICTED PAYMENTS
The Company covenants that it will not and will not permit any
Subsidiary to directly or indirectly pay, declare, order, make or set apart any
sum for any Restricted Payment, except that the Company may make, pay or set
apart during each calendar quarter one or more Restricted Payments if
(i) such Restricted Payments are in an aggregate amount not
exceeding the amount by which Available Cash with respect to the
immediately preceding calendar quarter exceeds any amount contributed
to Available Cash with respect to such immediately preceding calendar
quarter by any Subsidiary if and to the extent that the payment of
such amount as a dividend or distribution to the Company has not been
made and is not at the time permitted by the terms of such
Subsidiary's charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to such
Subsidiary, provided that in determining Available Cash with respect
to such immediately preceding calendar quarter, the Company will
include in the amount of the reserves established during such quarter
pursuant to clause (b)(iv) of the definition of Available Cash an
amount not less than 50% of the aggregate amount of all interest in
respect of the Notes to be paid on the interest payment date
immediately following such immediately preceding calendar quarter, and
the Company will not reduce the amount of the reserves so included, in
determining Available Cash for any calendar quarter subsequent to such
immediately preceding calendar quarter pursuant to clause (a)(iii) of
the definition of Available Cash, unless and until the amount of
interest in respect of which such amount has been reserved has in fact
been paid, and
(ii) immediately after giving effect to any such proposed
action no condition or event shall exist which constitutes an Event of
Default or Material Default.
The Company will not, in any event, directly or indirectly declare, order, pay
or make any Restricted Payment except in cash.
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6B. LIEN, INDEBTEDNESS AND OTHER RESTRICTIONS
The Company covenants that it will not, and will not permit
any Restricted Subsidiary to:
6B(1) LIENS
Create, assume or suffer to exist any Lien upon any of its
property or assets, whether now owned or hereafter acquired, securing Debt,
except
(i) Liens for taxes, assessments or other governmental
charges the payment of which is not at the time required by paragraph
5E,
(ii) Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers and materialmen and similar liens
incurred in the ordinary course of business for sums not yet due or
the payment of which is not at the time required by paragraph 5E,
(iii) Liens incurred or deposits made incidental to the
conduct of its business or the ownership of its property including,
without limitation, a) pledges or deposits in connection with worker's
compensation, unemployment insurance and other social security
legislation, (b) deposits to secure insurance, the performance of
bids, tenders, contracts, leases, licenses, franchises and statutory
obligations, each in the ordinary course of business, and c) other
obligations which were not incurred or made in connection with the
borrowing of money, the obtaining of advances or credit or the payment
of the deferred purchase price of property and which do not in the
aggregate materially detract from the value of its property or assets
or materially impair the use of such property or assets in the
operation of its business,
(iv) any attachment or judgment Lien, unless the judgment
it secures shall not, within 45 days after the entry thereof, have
been discharged or execution thereof stayed pending appeal, or shall
not have been discharged within 45 days after expiration of any such
stay,
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(v) leases or subleases granted to others, easements,
rights-of-way, restrictions and other similar charges or encumbrances,
which, in each case, and in the aggregate, do not materially interfere
with the ordinary conduct of the business of the Company or any
Restricted Subsidiary,
(vi) Liens on property or assets of any Restricted
Subsidiary securing obligations of such Restricted Subsidiary owing to
the Company or another Restricted Subsidiary,
(vii) any Lien existing prior to the time of acquisition
upon any property acquired by the Company or any Restricted Subsidiary
after the date of closing through purchase, merger or consolidation or
otherwise, whether or not assumed by the Company or such Subsidiary,
or placed upon property at (or within 30 days after) the later of the
time of acquisition or the completion of construction by the Company
or any Restricted Subsidiary to secure all or a portion of (or to
secure Debt incurred to pay all or a portion of) the purchase price
thereof, provided that (w) any such Lien does not encumber any other
property of the Company or such Restricted Subsidiary, (x) the Debt
secured by such Lien is not prohibited by the provisions of paragraph
6B(2), (y) the aggregate principal amount of the Debt secured by any
such Lien at no time exceeds 80% of the cost to the Company and its
Restricted Subsidiaries of the property subject to such Lien, and (z)
the aggregate outstanding principal amount (without duplication) of
the Debt secured by all such Liens and the Debt of all Restricted
Subsidiaries at no time (a) during the period commencing on the date
of closing and ending on June 8, 1999 exceeds $25,000,000, (b) during
the period commencing on June 9, 1999 and ending June 8, 2004 exceeds
$50,000,000, and (c) thereafter exceeds $100,000,000,
(viii) Liens on the accounts, rights to payment for goods
sold or services rendered that are evidenced by chattel paper or
instruments, and rights against persons who guarantee payment or
collection of the foregoing, and on the Company's inventory and on the
proceeds (as defined in the Uniform Commercial Code in any applicable
jurisdiction) thereof securing the obligations of the Company under
the Revolving Credit Facility (and any extension, renewal, refunding
or refinancing thereof) permitted by paragraph 6B(2)(iv),
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(ix) from and after the time that the Facilities
Subsidiary becomes a Restricted Subsidiary, Liens on the accounts,
rights to payment for goods sold or services rendered that are
evidenced by chattel paper or instruments, and rights against persons
who guarantee payment or collection of the foregoing, and on the
Facilities Subsidiary's inventory and on the proceeds (as defined in
the Uniform Commercial Code in any applicable jurisdiction) thereof
securing the obligations of the Facilities Subsidiary under the
Facilities Subsidiary's Revolving Credit Facility (and any extension,
renewal, refunding or refinancing thereof) permitted by paragraph
6B(2)(x),
(x) Liens existing on the property or assets of the
Company or any Subsidiary on the date of closing and set forth on
Exhibit D hereto, and
(xi) any Lien renewing, extending, refunding or
refinancing any Lien permitted by clause (vii) of this paragraph
6B(1), provided that the principal amount secured is not increased and
the Lien is not extended to other property and further provided, that
the maturity of the Lien is not extended beyond the maturity date of
the Debt which, at the time the Lien was initially placed upon the
property secured thereby, Responsible Representatives declare would
have been the maturity date of Debt customary for the type of asset
being financed;
6B(2) DEBT
Create, incur, assume or suffer to exist any Funded or Current
Debt, except
(i) Funded Debt represented by the Notes and the 11 1/8%
Senior Notes,
(ii) Funded Debt which is unsecured and is incurred by the
Company to finance the making of capital improvements, expansions and
additions to the Company's property (including Timberlands), plant and
equipment, provided that the aggregate outstanding principal amount of
such Funded Debt shall at no time exceed $20,000,000,
(iii) Funded or Current Debt of any Restricted Subsidiary
owing to the Company or to a Restricted Subsidiary,
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(iv) Debt, not in excess of an aggregate principal amount
of $15,000,000 at any time outstanding, incurred by the Company
pursuant to the Revolving Credit Facility (and any extension, renewal,
refunding or refinancing thereof, including any refunding or
refinancing in an amount in excess of the principal amount then
outstanding under the Revolving Credit Facility), or any other Debt
pursuant to a bank credit facility which is unsecured or is secured by
Liens permitted by paragraph 6B(1)(viii), provided that the Company
shall not suffer to exist any Debt permitted by this clause (iv) on
any day unless there shall have been a period of at least 45
consecutive days within the 12 months immediately preceding such day
during which the Company shall have been free from all Debt permitted
by this clause (iv),
(v) Debt represented by the Guarantee in an amount not
greater than $145,100,000 at any time,
(vi) the Company's guarantee of obligations incurred by
the Facilities Subsidiary pursuant to the Facilities Subsidiary's
Revolving Credit Facility (and any extension, renewal, refunding or
refinancing thereof permitted by clause (iv) of paragraph 6B(2) of the
Mortgage Note Agreements), provided that the aggregate outstanding
principal amount of such Debt shall at no time exceed $20,000,000, and
provided, further, that such guarantee shall be subordinated to the
Notes upon the earlier of (x) January 31, 1995, and (y) the date of
any extension, renewal, refunding or refinancing thereof by
subordination provisions substantially the same as those contained in
paragraph 7I of the Mortgage Note Agreements,
(vii) the Company's guarantee of Funded Debt (and related
obligations not constituting Debt) incurred by the Facilities
Subsidiary to finance the making of capital improvements, expansions
and additions to the Facilities Subsidiary's properties pursuant to
the Facilities Subsidiary's Facility, provided that such guarantee
shall be subordinated to the Notes by subordination provisions
substantially the same as those contained in paragraph 7I of the
Mortgage Note Agreements, and provided, further, that the aggregate
outstanding principal amount of such Funded Debt shall at no time
exceed $20,000,000,
(viii) Funded Debt of the Company or any Restricted
Subsidiary secured by a Lien permitted by clause (vii)
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of paragraph 6B(1), provided that immediately after the acquisition of
the property subject to such Lien or upon which such Lien is placed
(or, if later, the incurrence of the Debt secured by such Lien), the
Company could incur at least $1 of additional Funded Debt pursuant to
clause (ix) below,
(ix) Funded Debt of the Company (other than Funded Debt
owing to a Restricted Subsidiary) in addition to that otherwise
permitted by the foregoing clauses of this paragraph 6B(2), including
guarantees of Debt to the extent permitted by paragraph 6B(3) and not
otherwise permitted by the foregoing clauses of this paragraph 6B(2),
provided that, on the date the Company becomes liable with respect to
any such additional Funded Debt and immediately after giving effect
thereto and to the concurrent retirement of any other Funded Debt, the
ratio of Pro Forma Free Cash Flow to Maximum Pro Forma Annual Interest
Charges is not less than 2.25 to 1.0,
(x) from and after the time that the Facilities
Subsidiary becomes a Restricted Subsidiary, Debt incurred by the
Facilities Subsidiary pursuant to the Facilities Subsidiary's
Revolving Credit Facility (and any extension, renewal, refunding or
refinancing thereof, including any refunding or refinancing in an
amount in excess of the principal amount then outstanding under the
Facilities Subsidiary's Revolving Credit Facility), or any other Debt
incurred by the Facilities Subsidiary pursuant to a bank credit
facility which is unsecured or is secured by Liens permitted by
paragraph 6B(1)(ix), not in excess of an aggregate principal amount of
$20,000,000 at any time outstanding, provided that to the extent that
the Facilities Subsidiary is a Restricted Subsidiary, the Facilities
Subsidiary shall not suffer to exist any Debt permitted by this clause
(x) on any day unless there shall have been a period of at least 45
consecutive days within the 12 months immediately preceding such day
during which the Facilities Subsidiary shall have been free from all
Debt permitted by this clause (x), and
(xi) from and after the time that the Facilities
Subsidiary or any Designated Immaterial Subsidiary becomes a
Restricted Subsidiary, Debt of the Facilities Subsidiary or any such
Designated Immaterial Subsidiary outstanding at the time the
Facilities Subsidiary or such Designated Immaterial Subsidiary
becomes a Re-
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stricted Subsidiary, provided that (a) immediately after the
Facilities Subsidiary or any such Designated Immaterial Subsidiary
becomes a Restricted Subsidiary, the Company could incur at least $1
of additional Funded Debt pursuant to clause (ix) above (the
Facilities Subsidiary or any such Designated Immaterial Subsidiary
shall be deemed to be a Restricted Subsidiary for the four consecutive
fiscal quarters immediately prior to its becoming a Restricted
Subsidiary for purposes of determining Pro Forma Free Cash Flow), and
(b) the aggregate amount (without duplication) of such Debt and all
other Debt, in each case, secured by Liens permitted by clause (vii)
of paragraph 6B(1) does not violate subclause (z) of the proviso to
such clause (vii);
provided that notwithstanding any other provision in this paragraph 6B(2),
other than as provided in paragraph 6B(2)(vi), any guarantee issued by the
Company of any Funded Debt or Current Debt of any Subsidiary shall be
subordinated to the Notes by subordination provisions substantially the same as
those contained in paragraph 7I of the Mortgage Note Agreements;
6B(3) LOANS, ADVANCES, INVESTMENTS AND CONTINGENT LIABILITIES
Make or permit to remain outstanding any loan or advance to,
or guarantee, endorse or otherwise be or become contingently liable, directly
or indirectly, in connection with the obligations, stock or dividends of, or
own, purchase or acquire any stock, obligations or securities of, or any other
interest in, or make any capital contribution to, any Person (all of the
foregoing, other than Designated Repurchases permitted by paragraph 6A hereof,
being referred to herein as "Investments"), except that the Company or any
Restricted Subsidiary may
(i) make Investments in the Facilities Subsidiary,
provided that the Company will not make or permit any Restricted
Subsidiary to make any such Investment (including any guaranty of
obligations of the Facilities Subsidiary not otherwise permitted by
this paragraph 6B(3)) unless (a) immediately after giving effect to
such Investment, no Event of Default or Default, or "Default" or
"Event of Default" as defined in the Mortgage Note Agreements, shall
exist, (b) immediately prior to giving effect to such Investment, no
Default or Event of Default (other than under clause (xvi) of
paragraph 7A) shall exist, and (c) immediately after
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<PAGE> 23
giving effect to such Investment, the ratio of Pro Forma Free Cash
Flow to Maximum Pro Forma Annual Interest Charges is not less than 2.5
to 1.0,
(ii) own, purchase or acquire real or personal property to
be used in the ordinary course of its business,
(iii) own, purchase or acquire investments of the type
specified in, and in accordance with the requirements and limitations
of, the Investment Policy,
(iv) continue to own Investments owned on the date of
closing as set forth on Exhibit E,
(v) endorse negotiable instruments for collection in the
ordinary course of business,
(vi) become and be obligated under the Guarantee and under
the guarantees permitted by clauses (vi) and (vii) of paragraph 6B(2),
and acquire and own subordinated subrogation rights upon performance
of such guarantees,
(vii) make advances in the ordinary course of conducting
the business of the Company or any Restricted Subsidiary, including
deposits permitted under paragraph 6B(1)(iii), advances to employees
for travel, relocation and other employment related expenses, advances
to contractors performing services for the Company or such Restricted
Subsidiary, advances to owners of timber or timber properties to
acquire rights to harvest timber and other similar advances,
(viii) make Investments in Restricted Subsidiaries, or any
entity which immediately after such Investment will be a Restricted
Subsidiary, and
(ix) make Investments not otherwise permitted by this
paragraph 6B(3) in entities engaged solely in a Permitted Business,
provided that the cumulative aggregate amount of such Investments at
original cost (including the principal amount of any obligations
guaranteed to the extent such guarantees are not otherwise permitted
by this paragraph 6B(3)) made pursuant to this clause (ix) between the
date of closing and any date thereafter shall not exceed the greater
of $30,000,000 or 60% of the average annual Pro Forma Free Cash Flow
for the two fiscal years preceding such date;
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6B(4) SALE OF STOCK AND DEBT OF SUBSIDIARIES
Sell or otherwise dispose of, or part with control of, any
shares of stock or Debt of any Subsidiary, except to the Company or a
Restricted Subsidiary, and except that all shares of stock and Debt of any
Subsidiary (other than the Facilities Subsidiary) at the time owned by or owed
to the Company and its Restricted Subsidiaries may be sold as an entirety for a
cash consideration which represents the fair value (as determined in good faith
by the Responsible Representatives of the General Partner) at the time of sale
of the shares of stock and Debt so sold; provided that the assets of such
Subsidiary do not include any assets which could not be disposed of pursuant to
the provisions of paragraph 6B(5) unless the conditions to the sale of such
assets set forth in paragraph 6B(5) are complied with, and further provided
that, at the time of such sale, such Subsidiary shall not own, directly or
indirectly, any shares of stock or Debt of any other Subsidiary (unless all of
the shares of stock and Debt of such other Subsidiary owned, directly or
indirectly, by the Company and its Subsidiaries are simultaneously being sold
as permitted by this paragraph 6B(4));
6B(5) MERGER AND SALE OF ASSETS
Merge or consolidate with any other Person or sell, lease or
transfer or otherwise dispose of any assets (other than inventory sold in the
ordinary course of business) except that
(i) any Restricted Subsidiary may merge with the Company
(provided that the Company shall be the continuing or surviving
corporation) or with any one or more other Restricted Subsidiaries,
(ii) any Restricted Subsidiary may sell, lease, transfer
or otherwise dispose of any of its assets to the Company or a
Restricted Subsidiary,
(iii) any Restricted Subsidiary may merge or consolidate
with any other entity, provided that, immediately after giving effect
to such merger or consolidation, (a) the continuing or surviving
entity of such merger or consolidation shall be a solvent corporation
or partnership organized under the laws of any State of the United
States of America and shall constitute a Restricted Subsidiary, (b) no
Event of Default or Material Default shall exist, and (c) following
the
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<PAGE> 25
merger, the entity surviving the merger is not engaged in any business
other than a Permitted Business,
(iv) the Company may merge or consolidate with, or sell or
dispose of all or substantially all of its assets to, any other
entity, provided that (a) either (x) the Company shall be the
continuing or surviving entity (in the case of any such merger), or
(y) the successor or acquiring entity shall be a solvent corporation
or partnership organized under the laws of any State of the United
States of America and shall expressly assume in writing all of the
obligations of the Company under this Agreement and on the Notes,
including all covenants herein and therein contained, and such
successor or acquiring corporation or partnership shall succeed to and
be substituted for the Company with the same effect as if it had been
named herein as a party hereto, provided, however, that no such sale
shall release the Company from any of its obligations and liabilities
under this Agreement or the Notes unless such sale is followed by the
complete liquidation of the Company and substantially all the assets
of the Company immediately following such sale are distributed in such
liquidation, and (b) immediately after such merger or consolidation or
such sale or other disposition, (x) no Event of Default or Material
Default shall exist, (y) the Company could incur at least $1 of
additional Funded Debt pursuant to paragraph 6B(2)(ix), and (z) the
entity surviving the merger or consolidation or to which such assets
have been transferred is not engaged in any business other than a
Permitted Business,
(v) the Company or any Restricted Subsidiary may sell
Designated Acres for the fair value thereof as reasonably determined
in good faith by the Responsible Representatives,
(vi) the Company and its Restricted Subsidiaries may
exchange Timberlands with other Persons in the ordinary course of
business, provided that (a) the fair value of the Timberlands plus any
net cash proceeds received in such exchange is, in the good faith
judgment of the Responsible Representatives, not less than the fair
value of Timberlands exchanged plus any other consideration paid, (b)
such exchange would not materially and adversely affect the business,
property or assets, condition or results of operations of the Company
and its Restricted Subsidiaries on a combined basis or of the
Facilities Subsidiary or impair the ability of the
21
<PAGE> 26
Company to perform its obligations hereunder or under the Notes, and
(c) any properties shall be deemed sold to the extent of cash proceeds
received and such sales shall be allowed only to the extent otherwise
permitted by this paragraph 6B(5),
(vii) the Company and its Restricted Subsidiaries may sell
properties for not less than the fair value thereof as determined in
good faith by the Responsible Representatives, provided that the
aggregate net proceeds of such sales in any calendar year do not
exceed an amount (the "Permitted Amount") equal to (a) in the calendar
year 1994, $3,210,000 and (b) in each calendar year thereafter, the
sum of (1) the Permitted Amount for the preceding calendar year plus
(2) an increase equal to the percentage increase, if any, in the
consumer price index for goods and services for the United States, as
published by the U.S. Bureau of Labor Statistics, or successor
publication, for such preceding calendar year, times such Permitted
Amount, and
(viii) the Company and its Restricted Subsidiaries may
otherwise sell for cash properties in an amount not less than the fair
value thereof as determined in good faith by the Responsible
Representatives if and only if (a) immediately after giving effect to
such proposed sale, no condition or event shall exist which
constitutes an Event of Default or Material Default, (b) the net
proceeds of any such sale (x) are distributed to all holders of
Qualified Debt pro rata based upon outstanding principal balances at
the time of such distribution for application (either immediately or
within 180 days after such sale) to the repayment of such Qualified
Debt, which, in the case of the Notes, shall be a prepayment pursuant
to paragraph 4A, or (y) are applied, within 180 days after such sale,
to the purchase of productive assets in the same line of business, (c)
the net proceeds of any such sale are either (x) distributed
immediately upon receipt thereof to holders of Qualified Debt in
accordance with subclause (b)(x) above for application (either
immediately or within 180 days, and if in the case of the Notes such
application is not made immediately, such application shall be made
pursuant to an escrow agreement satisfactory in form and substance to
the Required Holder(s)) to repayment of such Qualified Debt, or (y) if
in excess of $25,000,000, placed immediately upon receipt thereof in
an escrow or cash collateral account or accounts, pursuant to an
agreement or agreements in
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<PAGE> 27
form and substance reasonably satisfactory to holders of 66 2/3% of
the outstanding principal balance of the Qualified Debt, for the
purpose of application in accordance with subclause (b)(y) above,
provided that to the extent that the aggregate amount of net proceeds
from all such asset sales received by the Company in a period of
twelve consecutive months is equal to an amount greater than
$50,000,000, the amount of such proceeds that exceeds $50,000,000 plus
all net proceeds from any subsequent sales of more than $5,000,000
during such period of twelve consecutive months shall be placed
immediately upon receipt thereof in such escrow or cash collateral
account, and (d) immediately after giving effect to such sale (giving
effect on a pro forma basis to any proposed retirement of Qualified
Debt out of the proceeds thereof), the Company could incur $1 of
additional Funded Debt pursuant to paragraph 6B(2)(ix);
6B(6) HARVESTING RESTRICTIONS
In any calendar year, harvest Timber on the Timberlands then
owned by the Company in excess of the amount set forth for such calendar year
in the following table:
<TABLE>
<CAPTION>
Maximum MMBF to
Calendar Year Be Harvested
------------- -------------
<S> <C>
1994 through 1996 700 MMBF
1997 through 2000 675 MMBF
2001 through 2009 625 MMBF
</TABLE>
plus, in each year, the amount, if any, by which (a) the sum of (x) the
cumulative amount set forth in the table above for the years preceding such
year of determination and (y) 735 MMBF, exceeds (b) the cumulative amount
actually harvested in such years preceding such year of determination;
unless (a) the net cash proceeds from such excess harvest are either (i)
distributed to all holders of Qualified Debt pro rata based upon outstanding
principal balances at the time of such distribution for application (either
immediately or within 180 days after such excess harvest) to the repayment of
such Qualified Debt, which, in the case of the Notes, shall be a prepayment
pursuant to paragraph 4A, or (ii) applied, within 180 days after any such
excess harvest, to purchase Timber (including Timber on Timberlands pur-
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chased) having a fair value (in the good faith judgment of the Responsible
Representatives) not less than the fair value of the Timber subject to such
excess harvest and (b) the net proceeds of any such excess harvest are either
(i) distributed immediately upon receipt thereof to holders of Qualified Debt
in accordance with subclause (a)(i) above for application (either immediately
or within 180 days, and if in the case of the Notes such application is not
made immediately, such application shall be made pursuant to an escrow
agreement satisfactory in form and substance to the Required Holder(s)) to
repayment of such Qualified Debt, or (ii) if in excess of $25,000,000, placed
immediately upon receipt thereof in an escrow or cash collateral account or
accounts, pursuant to an agreement or agreements in form and substance
reasonably satisfactory to holders of 66 2/3% of the outstanding principal
balance of the Qualified Debt, for the purpose of application in accordance
with subclause (a)(ii) above;
6B(7) SALE AND LEASE-BACK
Enter into any arrangement with any lender or investor or to
which such lender or investor is a party providing for the leasing by the
Company or any Restricted Subsidiary of real or personal property which has
been or is to be sold or transferred by the Company or any Restricted
Subsidiary to such lender or investor or to any Person to whom funds have been
or are to be advanced by such lender or investor on the security of such
property or rental obligations of the Company or any Restricted Subsidiary,
provided that this paragraph 6B(7) shall not apply to any property sold
pursuant to clause (vii) of paragraph 6B(5);
6B(8) CERTAIN CONTRACTS
Enter into or be a party to
(i) any contract providing for the making of loans,
advances or capital contributions to any Person, or for the purchase
of any property from any Person, in each case in order primarily to
enable such Person to maintain working capital, net worth or any other
balance sheet condition or to pay debts, dividends or expenses, or
(ii) any contract for the purchase of materials, supplies
or other property or services if such contract (or any related
document) requires that payment for such materials, supplies or other
property or services
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<PAGE> 29
shall be made regardless of whether or not delivery of such materials,
supplies or other property or services is ever made or tendered,
provided that nothing in this clause (ii) shall prevent the Company
from (a) entering into take-or-pay contracts in the ordinary course of
business with the United States Forest Service, the Bureau of Land
Management, the Washington Department of Natural Resources or similar
state or federal governmental agencies, or (b) making payments in
satisfaction of contracts with such Persons which contracts are deemed
by the Responsible Representatives to be disadvantageous to perform,
or
(iii) any contract to rent or lease (as lessee) any real or
personal property if such contract (or any related document) provides
that the obligation to make payments thereunder is absolute and
unconditional under conditions not customarily found in commercial
leases then in general use or requires that the lessee purchase or
otherwise acquire securities or obligations of the lessor, or
(iv) any contract for the sale or use of materials,
supplies or other property, or the rendering of services, if such
contract (or any related document) requires that payment for such
materials, supplies or other property, or the use thereof, or payment
for such services, shall be subordinated to any indebtedness (of the
purchaser or user of such materials, supplies or other property or the
Person entitled to the benefit of such services) owed or to be owed to
any Person, or
(v) any other contract which in economic effect, is
substantially equivalent to a guarantee
except as permitted by the provisions of clauses (i), (v), (vi), (vii), (viii)
or (ix) of paragraph 6B(3);
6B(9) TRANSACTIONS WITH AFFILIATES
Directly or indirectly engage in any transaction (including,
without limitation, the purchase, sale or exchange of assets or the rendering
of any service) with any Affiliate except in the ordinary course of and
pursuant to the reasonable requirements of the Company's or such Restricted
Subsidiary's business and upon fair and reasonable terms that are no less
favorable to the Company or such Restricted Subsidiary, as the case may be,
than those which might be obtained in an arm's length transaction at the time
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<PAGE> 30
from Persons which are not such an Affiliate. The foregoing shall not prohibit
Designated Repurchases otherwise permitted by this Agreement.
6C. CONDUCT OF BUSINESS
The Company covenants that it will not, and will not permit
any Subsidiary to, engage in any business other than Permitted Businesses.
6D. ISSUANCE OF STOCK BY SUBSIDIARIES
The Company covenants that it will not permit any Subsidiary
(either directly, or indirectly by the issuance of rights or options for, or
securities convertible into, such shares) to issue, sell or otherwise dispose
of any shares of any class of its stock or partnership or other ownership
interests (other than directors' qualifying shares) except to the Company or a
Restricted Subsidiary and except to the extent that holders of minority
interests may be entitled to purchase stock by reason of preemptive rights.
7. EVENTS OF DEFAULT
7A. ACCELERATION
If any of the following events shall occur and be continuing
for any reason whatsoever (and whether such occurrence shall be voluntary or
involuntary or come about or be effected by operation of law or otherwise):
(i) the Company defaults in the payment of any principal
or of premium on any Note when the same shall become due, either by
the terms thereof or otherwise as herein provided; or
(ii) the Company defaults in the payment of any interest
on any Note for more than 10 days after the date due; or
(iii) the Company or any Restricted Subsidiary (a) defaults
in any payment of principal of or interest on any other obligation for
money borrowed (or any payment obligation under the Guarantee, any
Capital Lease Obligation, any obligation under a conditional sale or
other title retention agreement, any obligation issued or assumed as
full or partial payment for property whether or not secured by a
purchase money mortgage or
26
<PAGE> 31
any obligation under notes payable or drafts accepted representing
extensions of credit) beyond any period of grace provided with respect
thereto, or (b) fails to perform or observe any other agreement, term
or condition contained in any agreement under which any such
obligation is created within any applicable grace period provided
therein (or if any other event thereunder or under any such agreement
shall occur and be continuing) and the effect of such failure or other
event is (x) to then cause such obligation to become due prior to any
stated maturity or (y) to then permit the holder or holders of such
obligation (or a trustee on behalf of such holder or holders) to cause
such obligation to become due prior to any stated maturity, provided
that the aggregate outstanding principal amount of all obligations as
to which such payment defaults shall occur and be continuing or such
failures or other events causing or permitting acceleration shall
occur and be continuing exceeds $5,000,000; or
(iv) any representation or warranty made by the Company
herein or in any writing furnished in connection with or pursuant to
this Agreement shall be false in any material respect on the date as
of which made; or
(v) the Company fails to perform or observe any agreement
contained in the last sentence of paragraph 5A or in paragraph 6; or
(vi) the Company fails to perform or observe any other
agreement, term or condition contained herein and such failure shall
not be remedied within 30 consecutive days after written notice
thereof shall have been received by the Company from any holder of any
Note; or
(vii) the Company or the General Partner or any Restricted
Subsidiary makes a general assignment for the benefit of creditors or
is generally not paying its debts as such debts become due; or
(viii) any decree or order for relief in respect of the
Company or the General Partner or any Restricted Subsidiary is entered
under any bankruptcy, reorganization, compromise, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or
similar law, whether now or hereafter in effect (herein called the
"Bankruptcy Law"), of any jurisdiction; or
27
<PAGE> 32
(ix) the Company or the General Partner or any Restricted
Subsidiary petitions or applies to any tribunal for, or consents to,
the appointment of, or taking possession by, a trustee, receiver,
custodian, liquidator or similar official of the Company or the
General Partner or any Restricted Subsidiary, or of any substantial
part of the assets of the Company or the General Partner or any
Restricted Subsidiary, or commences a voluntary case under the
Bankruptcy Law of the United States or any proceedings (other than
proceedings for the voluntary liquidation and dissolution of a
Restricted Subsidiary) relating to the Company or the General Partner
or any Restricted Subsidiary under the Bankruptcy Law of any other
jurisdiction; or
(x) any such petition or application is filed, or any
such proceedings as described in clause (ix) above are commenced,
against the Company or the General Partner or any Restricted
Subsidiary and the Company or the General Partner or such Restricted
Subsidiary by any act indicates its approval thereof, consent thereto
or acquiescence therein, or an order, judgment or decree is entered
appointing any such trustee, receiver, custodian, liquidator or
similar official, or approving the petition in any such proceedings,
and such order, judgment or decree remains unstayed and in effect for
more than 60 consecutive days; or
(xi) any order, judgment or decree is entered in any
proceedings against the Company or the General Partner or any
Restricted Subsidiary decreeing the dissolution, winding-up or
liquidation of the Company or the General Partner or any Restricted
Subsidiary and such order, judgment or decree remains unstayed and in
effect for more than 60 consecutive days; or
(xii) any order, judgment or decree is entered in any
proceedings against the Company or any Restricted Subsidiary decreeing
a split-up of the Company or such Restricted Subsidiary which requires
the divestiture of assets representing a substantial part, or the
divestiture of the stock of or partnership or other ownership interest
in a Subsidiary whose assets represent a substantial part, of the
combined assets of the Company and its Restricted Subsidiaries
(determined in accordance with generally accepted accounting
principles) or which requires the divestiture of assets, or stock of
or partnership or other ownership interest in a Subsidiary, which
shall have contributed a substantial
28
<PAGE> 33
part of the combined net income of the Company and its Restricted
Subsidiaries (determined in accordance with generally accepted
accounting principles) for any of the three fiscal years then most
recently ended, and such order, judgment or decree remains unstayed
and in effect for more than 60 consecutive days; or
(xiii) a final judgment (which is non-appealable or has not
been stayed pending appeal or as to which all rights to appeal have
been expired or been exhausted) in an amount in excess of $5,000,000
is rendered against the Company or any Restricted Subsidiary and,
within 60 consecutive days after entry thereof, such judgment is not
discharged or execution thereof stayed pending appeal, or within 60
consecutive days after the expiration of any such stay, such judgment
is not discharged; or
(xiv) this Agreement shall at any time, for any reason,
cease to be in full force and effect or shall be declared to be null
and void in whole or in any material part by the final judgment (which
is nonappealable or has not been stayed pending appeal or as to which
all rights to appeal have expired or been exhausted) of any court or
other governmental or regulatory authority having jurisdiction in
respect thereof, or the validity or the enforceability of this
Agreement shall be contested by or on behalf of the Company, or the
Company shall renounce this Agreement, or deny that it is bound by the
terms hereof or has any further liability hereunder; or
(xv) any "Event of Default" as defined in the Mortgage
Note Agreements shall exist; or
(xvi) the Facilities Subsidiary, any Subsidiary of the
Facilities Subsidiary or any Designated Immaterial Subsidiary,
immediately after they become Restricted Subsidiaries under the
definition of "Restricted Subsidiary" contained in paragraph 10B,
shall have any Debt outstanding which is not permitted by clause (x)
or (xi) of paragraph 6B(2) insofar as it relates to such Facilities
Subsidiary, Subsidiary of the Facilities Subsidiary or Designated
Immaterial Subsidiary; or
(xvii) if any of the events or conditions or series of events or
conditions described in subparagraph (vii) of paragraph 5A occurs
which events or conditions or series of events or conditions have, or
could reason-
29
<PAGE> 34
ably be expected to have, a material adverse effect on the
business, condition (financial or other), assets, properties or
operations of the Company or the Company and its Restricted
Subsidiaries taken as a whole;
then (a) if such event is an Event of Default specified in clause (viii), (ix)
or (x) of this paragraph 7A with respect to the Company, all of the Notes at
the time outstanding shall automatically become immediately due and payable at
par together with interest accrued thereon, without presentment, demand,
protest or notice of any kind, all of which are hereby waived by the Company,
and (b) if such event is any other continuing Event of Default, the holder or
holders of a majority of the aggregate principal amount of the Notes at the
time outstanding may at its or their option, by notice in writing to the
Company, declare all of the Notes to be, and all of the Notes shall thereupon
be and become, immediately due and payable together with interest accrued
thereon and together with the Yield-Maintenance Premium, if any, with respect
to each Note, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Company and the Company shall give notice
in writing of such declaration to the other holders, provided that (x) if such
event is a continuing Event of Default specified in clause (i) or (ii) of this
paragraph 7A in respect of any Note, any Significant Holder may, at its option,
by notice in writing to the Company, declare the Notes held by such Significant
Holder to be, and all of such Notes shall thereupon be and become, immediately
due and payable together with interest accrued thereon and together with the
Yield-Maintenance Premium, if any, with respect to each such Note, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Company, (y) if any Significant Holder shall have declared
all of the Notes held by such Significant Holder to be due and payable pursuant
to clause (x) of this proviso, then the Company shall give notice in writing of
such declaration to the other holders and any other holder may at any time
thereafter and until the later of (A) the expiration of 60 days after such
other holder shall have received notice from the Company of such declaration
and (B) the date on which all Events of Default and Defaults have been cured or
waived pursuant to paragraph 11C, by notice in writing to the Company, declare
all of the Notes held by such other holder to be immediately due and payable,
together with interest accrued thereon and together with the Yield- Maintenance
Premium, if any, with respect to each such Note without presentment, demand,
protest or any other notice of any kind, all
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<PAGE> 35
of which are hereby waived by the Company, and (z) the Yield-Maintenance
Premium, if any, with respect to each Note shall be due and payable upon any
such declaration only if (1) such event is a continuing Event of Default
specified in any of clauses (i) through (vi), inclusive, (xiii), (xiv), (xv),
(xvi) and (xvii) of this paragraph 7A, (2) the holder or holders effecting such
declaration shall have given to the Company, at least 10 Business Days before
such declaration, written notice stating its or their intention so to declare
the Notes to be immediately due and payable and identifying one or more such
Events of Default whose occurrence on or before the date of such notice permits
such declaration and (3) one or more of the Events of Default so identified
shall be continuing at the time of such declaration.
At any time after the principal of, and interest accrued on,
any or all of the Notes are declared due and payable, the holders of not less
than 66 2/3% aggregate principal amount of the Notes then outstanding, by
written notice to the Company, may rescind and annul any such declaration and
its consequences if (x) the Company has paid all overdue interest on the Notes,
the principal of and premium, if any, on any Notes which have become due
otherwise than by reason of such declaration, and interest on such overdue
principal and premium and (to the extent permitted by applicable law) any
overdue interest in respect of such Notes at a rate per annum from time to time
equal to the greater of (i) 9.73% or (ii) the rate of interest publicly
announced by Morgan Guaranty Trust Company of New York from time to time in New
York as its Prime Rate plus 2.0%, (y) all Events of Default and Defaults, other
than non-payment of amounts which have become due solely by reason of such
declaration, have been cured or waived pursuant to paragraph 11C, and (z) no
judgment or decree has been entered for the payment of any monies due pursuant
to the Notes or this Agreement; but no such rescission and annulment shall
extend to or affect any subsequent Event of Default or Default or impair any
right consequent thereon.
7B. OTHER REMEDIES
If any Event of Default shall occur and be continuing, the
holder of any Note may proceed to protect and enforce its rights under this
Agreement and such Note by exercising such remedies as are available to such
holder in respect thereof under applicable law, either by suit in equity or by
action at law, or both, whether for specific performance of any covenant or
other agreement contained
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<PAGE> 36
in this Agreement or in aid of the exercise of any power granted in this
Agreement. No remedy conferred in this Agreement upon the holder of any Note
is intended to be exclusive of any other remedy, and each and every such remedy
shall be cumulative and shall be in addition to every other remedy conferred
herein or now or hereafter existing at law or in equity or by statute or
otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES
The Company represents, covenants and warrants:
8A. ORGANIZATION
The Company is a limited partnership duly organized, validly
existing and in good standing under the Delaware Revised Uniform Limited
Partnership Act and has all requisite partnership power and authority to own
and operate its properties, to conduct its business as currently conducted, to
enter into this Agreement, to issue and sell the Notes and to carry out the
terms of this Agreement and the Notes.
8B. GENERAL PARTNER NET WORTH
On the date of closing the General Partner will have a net
worth (excluding its interest in the Company and any notes receivable from or
payable to the Company) at least equal to the amount sufficient to meet the tax
requirements for a general partner of a Delaware limited partnership (based on
the fair market value of its assets).
8C. SUBSIDIARIES
The General Partner owns 2% and the Company owns 98% of the
limited partnership interest in Manufacturing. The General Partner owns 4% and
the Company owns 96% of the issued and outstanding stock of Marketing. The
Facilities Subsidiary Stock has been duly authorized and validly issued, is
fully paid and non-assessable and is owned free and clear of any Liens. The
Facilities Subsidiary has issued no rights, warrants or options to acquire or
instruments convertible into or exchangeable for any equity interest in the
Facilities Subsidiary. On the date of closing the Company will have no
Subsidiaries other than the Facilities Subsidiary.
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<PAGE> 37
8D. PARTNERSHIP INTERESTS
The only general partner of the Company is the General
Partner, which on the date of closing will own a 2% interest in the Company.
8E. QUALIFICATION
The Company is duly qualified or registered for the
transaction of business and in good standing as a foreign limited partnership
in each of the State of Idaho, the State of Montana and the State of
Washington, which are the only jurisdictions in which the failure so to qualify
or be registered would have a material adverse effect on the business, property
or assets, condition, or results of operations of the Company, or on the
ability of the Company to perform its obligations under this Agreement and the
Notes.
8F. BUSINESS; FINANCIAL STATEMENTS
(a) The Company and its Subsidiaries have not engaged in
any business or activities prior to the date of this Agreement other than (i)
owning, acquiring and disposing of Timber and Timberlands, and (ii) owning and
operating lumber mills, plywood and fiberboard manufacturing plants, and wood
chip plants. The Company and its Subsidiaries do not have any significant
assets other than Timber, Timberlands and the facilities described in clause
(ii) above, and, after giving effect to the application of the proceeds of the
Notes in accordance with paragraph 8S, on the date of closing will not have any
significant liabilities other than the Notes, the 11 1/8% Senior Notes, the
Guarantee and the Mortgage Notes or indebtedness under the Bank of America
Revolving Credit Agreement or the ABN Revolving Credit Agreements.
(b) The Company has delivered or caused to be delivered
to you complete and correct copies of (i) the Company's Form 10-K as filed with
the Securities and Exchange Commission on March 14, 1994 and the Company's Form
10-Q as filed with the Securities and Exchange Commission on May 2, 1994
(together, the "1934 Act Reports") and (ii) the memorandum dated May 1994
prepared by the Company for use in connection with the Company's private
placement of the Notes, as supplemented by supplementary information including
but not limited to that supplementary information included in the Slide
Presentation of June 16, 1994 (such memorandum, as so supplemented, being
herein collectively called the "Memorandum"). The annual financial statements
33
<PAGE> 38
and schedules included in the 1934 Act Reports have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
throughout the period specified and present fairly the financial position for
the dates specified, and the results of their operations and cash flows of the
Company for the respective periods specified. The quarterly financial
statements and schedules included in the 1934 Act Reports present fairly the
financial position for the dates specified and the results of operations for
the quarterly periods presented. The pro forma financial information set forth
in the Memorandum is based upon assumptions stated in the Memorandum that are
reasonable in all material respects and the financial projections contained
therein are reasonable based upon such reasonable assumptions and the best
information available to the officers of the Company.
8G. CHANGES, ETC.
Except as contemplated by this Agreement or disclosed in
Exhibit 8G, subsequent to December 31, 1993, (a) neither the Company nor the
Facilities Subsidiary has incurred any material liabilities or obligations,
direct or contingent, or entered into any material transactions not in the
ordinary course of business, and (b) there has not been (i) any material
adverse change in the financial condition or operations of the Company or the
Facilities Subsidiary or (ii) any Restricted Payment of any kind declared, paid
or made by the Company.
8H. TAX RETURNS AND PAYMENTS
The Company has filed all tax returns required by law to be
filed by it (or obtained extensions with respect thereto) and has paid all
material taxes, assessments and other material governmental charges levied upon
it, or any of its properties, assets, income or franchises which are due and
payable by it, other than those which are not past due or delinquent or the
non-payment of which is permitted by paragraph 5E.
8I. FRANCHISES, LICENSES, AGREEMENTS, ETC.
Except as disclosed in Exhibit 8T, the Company is in
possession of and operating in substantial compliance with all franchises,
grants, authorizations, approvals, licenses, permits, easements, consents,
certificates and orders required to own or lease its properties and to permit
the conduct of its business, except for those franchises,
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<PAGE> 39
grants, authorizations, approvals, licenses, permits, easements, consents,
certificates and orders the failure of which to be obtained, given or complied
with would not individually or in the aggregate materially and adversely affect
the business, property or assets, condition or operations of the Company or
impair the ability of the Company to perform its obligations hereunder or under
the Notes or impair the validity or enforceability of this Agreement or the
Notes.
8J. ACTIONS PENDING
There is no action, suit, investigation or proceeding pending
or, to the knowledge of the Company, threatened against the Company, or any
properties or rights of the Company, by or before any court, arbitrator or
administrative or governmental body which questions the validity of this
Agreement or the Notes or any action taken or to be taken pursuant to this
Agreement or the Notes or which would be reasonably likely to result in any
material adverse change in the business, property or assets, condition or
operations of the Company, or in the inability of the Company to perform its
obligations hereunder or under the Notes.
8K. TITLE TO PROPERTIES
Except as disclosed in Exhibit 8K, the Company has good title
to its real properties (other than properties which it leases) and good title
to all of its other properties and assets, subject to no Lien of any kind
except Liens permitted by paragraph 6B(1), and except such Liens as do not
materially interfere with the full ownership and enjoyment of such properties
and assets. All leases necessary in any material respect for the conduct of
the respective businesses of the Company and its Subsidiaries are valid and
subsisting and are in full force and effect.
8L. COMPLIANCE WITH OTHER INSTRUMENTS, ETC.
The Company is not in violation of any term of the Partnership
Agreement or of any term of any other agreement or instrument to which it is a
party or by which it or any of its properties is bound or any term of any
applicable law, ordinance, rule or regulation of any governmental authority or
any term of any applicable order, judgment or decree of any court, arbitrator
or governmental authority, the consequences of which violation would be
reasonably likely to have a material adverse effect on its business, property
or assets, condition or operations or on the abil-
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ity of the Company to perform its obligations under this Agreement or the
Notes, and the execution, delivery and performance by the Company of this
Agreement and the Notes will not result in any violation of or be in conflict
with or constitute a default under any such term or result in the creation of
(or impose any obligation on the Company to create) any Lien (other than the
Liens contemplated by this Agreement) upon any of the properties or assets of
the Company, pursuant to any such term except for Liens permitted by paragraph
6B(1); and there is no such term which materially adversely affects or in the
future would be likely to materially adversely affect the business, property or
assets, condition or operations of the Company, or the ability of the Company
to perform its obligations under this Agreement or the Notes.
8M. GOVERNMENTAL CONSENT
No consent, approval or authorization of, or declaration or
filing with, any governmental authority is required for the valid execution,
delivery and performance by the Company of this Agreement or the valid offer,
issue, sale and delivery of the Notes pursuant to this Agreement.
8N. FOREIGN ASSETS CONTROL REGULATIONS, ETC.
Neither the issue and sale of the Notes by the Company nor its
use of the proceeds thereof as contemplated by this Agreement will violate any
of the regulations administered by the Office of Foreign Assets Control, United
States Department of the Treasury, including, without limitation, the Foreign
Assets Control Regulations, the Transaction Control Regulations, the Cuban
Assets Control Regulations, the Foreign Funds Control Regulations, the Iranian
Assets Control Regulations, the Iranian Transactions Regulations, the Iraqi
Sanctions Regulations, the Haitian Transactions Regulations, the Libyan
Sanctions Regulations, and the Soviet Gold Coin Regulations (31 C.F.R.,
Subtitle B, Chapter V, as amended) or the restrictions set forth in Executive
Orders No. 12543 (Libya), 12544 (Libya), 12801 (Libya), 12722 (Iraq) or 12724
(Iraq), 12775 (Haiti), 12779 (Haiti), 12808 (Yugoslavia), 12810 (Yugoslavia) or
12831 (Yugoslavia), as amended, of the President of the United States of
America or of any rules or regulations issued thereunder.
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8O. OFFERING OF NOTES
Neither the Company nor any agent acting on behalf of the
Company has, directly or indirectly, offered the Notes or any similar security
of the Company for sale to, or solicited any offers to buy the Notes or any
similar security of the Company from, or otherwise approached or negotiated
with respect thereto with any Person other than 73 institutional investors, and
neither the Company nor any agent acting on behalf of the Company has taken or
will take any action which would subject the issuance or sale of the Notes to
the provisions of section 5 of the Securities Act or to the provisions of any
securities or Blue Sky law of any applicable jurisdiction.
8P. REGULATION G, ETC.
The Company does not own or have any present intention of
acquiring any "margin stock" as defined in Regulation G (12 CFR Part 207) of
the Board of Governors of the Federal Reserve System (herein called "margin
stock"). None of the proceeds of the sale of the Notes will be used, directly
or indirectly, for the purpose, whether immediate, incidental or ultimate, of
purchasing or carrying any margin stock or for the purpose of maintaining,
reducing or retiring any indebtedness which was originally incurred to purchase
or carry any stock that is currently a margin stock or for any other purpose
which might constitute this transaction a "purpose credit" within the meaning
of such Regulation G. Neither the Company nor any agent acting on its behalf
has taken or will take any action which might cause this Agreement or the Notes
to violate Regulation G, Regulation T or any other regulation of the Board of
Governors of the Federal Reserve System or to violate the Securities Exchange
Act of 1934, as amended, in each case as in effect now or as the same may
hereafter be in effect.
8Q. ERISA
(a) Neither the Company nor any of its Subsidiaries has
breached the fiduciary rules of ERISA or engaged in any prohibited transaction
which, in any such case, could reasonably be expected to result in any direct
or indirect material liability (including, without limitation, as a result of
an indemnification obligation) to the Company or any of its Subsidiaries in
connection with a suit for damages or pursuant to section 409, 502(i) or 502(l)
of ERISA or section 4975 of the Code, which liability, either individually or
in the aggregate, has had or could reasonably be
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<PAGE> 42
expected to have a material adverse effect on the business, condition
(financial or other), assets, properties or operations of the Company or the
Company and its Restricted Subsidiaries taken as a whole.
(b) None of the Company, any of its Subsidiaries or any
Related Person has incurred any direct or indirect material liability
(including, without limitation, as a result of an indemnification obligation)
under or pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, which liability has
had or could reasonably be expected to have a material adverse effect on the
business, condition (financial or other), assets, properties or operations of
the Company or the Company and its Restricted Subsidiaries taken as a whole.
No event, transaction or condition has occurred or exists or, to the Company's
best knowledge, is expected to occur or exist with respect to any Plan that
could reasonably be expected to result in any direct or indirect material
liability to the Company, any of its Subsidiaries or any Related Person
(including, without limitation, as a result of an indemnification obligation)
under or pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, which liability has
had or could reasonably be expected to have a material adverse effect on the
business, condition (financial or other), assets, properties or operations of
the Company or the Company and its Restricted Subsidiaries taken as a whole.
There has been no reportable event (within the meaning of section 4043(b) of
ERISA) or any other event or condition with respect to any Plan which presents
a risk of the termination of, or the appointment of a trustee to administer,
any such Plan by the PBGC.
(c) Full payment (made in a timely manner such that any
incidental delay in making a payment, if any, has not resulted in any Lien or
any material liability to the Company, any of its Subsidiaries or any Related
Person) has been made of all amounts which the Company, any of its Subsidiaries
or any Related Person is required under applicable law, the terms of each Plan
or any collective bargaining agreement to have paid as contributions to each
such Plan, and no accumulated funding deficiency (as defined in section 302 of
ERISA or section 412 of the Code), whether or not waived, exists or is expected
to exist with respect to any Plan (other than a Multiemployer Plan).
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<PAGE> 43
(d) The present value of the accumulated benefit
obligations (whether or not vested) under each Plan (other than a Multiemployer
Plan), determined as of the end of each such Plan's most recently ended Plan
year on the basis of the actuarial assumptions specified for funding purposes
in each such Plan's actuarial valuation report for such Plan year, each of
which assumptions is reasonable and in compliance with section 412 of the Code,
did not exceed the current value of the assets of each such Plan allocable to
such accumulated benefit obligations by an amount which could have a material
adverse effect on the business, condition (financial or other), assets,
properties or operations of the Company or the Company and its Restricted
Subsidiaries taken as a whole, and no event has occurred since such date that
could reasonably be expected to cause the present value of such accumulated
benefit obligations to increase by a material amount. The terms "present
value" and "current value" shall have the meanings assigned to such terms in
section 3 of ERISA, and the term "accumulated benefit obligations" shall have
the meaning assigned to such term in Statement of Financial Accounting
Standards No. 87.
(e) None of the Company, any of its Subsidiaries or any
Related Person has incurred or expects to incur any withdrawal liability under
Title IV of ERISA with respect to any Multiemployer Plan or any Plan that is a
"multiple employer plan" within the meaning of section 4063 or 4064 of ERISA,
which liability has had or could reasonably be expected to have a material
adverse effect on the business, condition (financial or other), assets,
properties or operations of the Company or the Company and its Restricted
Subsidiaries taken as a whole. The aggregate withdrawal liability of the
Company, its Subsidiaries and the Related Persons with respect to all
Multiemployer Plans and Plans that are "multiple employer plans" within the
meaning of section 4063 or 4064 of ERISA, determined as if a complete
withdrawal had occurred on the date hereof, does not exceed $25,000,000. No
Multiemployer Plan is insolvent or in reorganization within the meaning of
section 4241 or 4245 of ERISA.
(f) The "expected postretirement benefit obligation"
(determined as of the last day of the Company's most recently ended fiscal year
in accordance with Financial Accounting Standards Board Statement No. 106,
without regard to liabilities attributable to continuation coverage mandated by
section 4980B of the Code) of the Company and its Subsidiaries under Plans
which are "employee welfare benefit
39
<PAGE> 44
plans" (as defined in section 3(1) of ERISA) did not exceed $1,000,000.
(g) The execution and delivery of this Agreement and the
Other Note Agreements and the issuance and sale of the Notes hereunder and
thereunder will not involve any transaction which is subject to the
prohibitions of section 406 of ERISA or in connection with which a tax could be
imposed pursuant to section 4975 of the Code. With respect to each employee
benefit plan identified in writing to the Company in accordance with paragraph
9(c), neither the Company nor any "affiliate" thereof (as defined in section
V(c) of Prohibited Transaction Class Exemption 84-14 (the "QPAM Exemption"))
has at this time, and has not exercised at any time within the preceding year,
the authority to appoint or terminate the "QPAM" (as defined in the QPAM
Exemption) identified in accordance with paragraph 9(c) as manager of any of
the assets of any plan identified in accordance with paragraph 9(c), or to
negotiate the terms of any management agreement with such QPAM on behalf of any
such plan, the Company is not an "affiliate" (as defined in section V(c) of the
QPAM Exemption) of such QPAM, and the Company is not a party in interest with
respect to any plan identified in accordance with paragraph 9(c). The
representations by the Company in this subparagraph (g) of paragraph 8Q are
made in reliance upon and subject to the accuracy of your representation in
paragraph 9 of this Agreement and the respective representations of the Other
Purchasers in paragraph 9 of the Other Note Agreements as to the source of the
funds to be used to pay the purchase price of the Notes to be purchased by you
and the Other Purchasers and assumes the continued applicability and validity
of paragraph (b) of Department of Labor Interpretive Bulletin 75-2, 29 C.F.R.
Section 2509.75-2.
As used in this paragraph 8Q, the terms "employee benefit plan" and "party in
interest" have the respective meanings assigned to such terms in section 3 of
ERISA.
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8R. STATUS UNDER CERTAIN FEDERAL STATUTES
The Company is not (i) an "investment company" or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended, (ii) a "holding company" or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company or of
a "subsidiary company" of a "holding company", as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended, (iii) a "public
utility" as such term is defined in the Federal Power Act, as amended, nor (iv)
a "rail carrier or a person controlled by or affiliated with a "rail carrier",
within the meaning of Title 49, U.S.C., and neither the Company, the General
Partner nor the Facilities Subsidiary is a "carrier" to which 49 U.S.C. Section
11301(b)(1) is applicable.
8S. USE OF PROCEEDS
The Company will apply the proceeds of the sale of the Notes
to you and the Other Purchasers to repay amounts owing under the Bank of
America Revolving Credit Agreement.
8T. ENVIRONMENTAL MATTERS
(a) Except as disclosed in Exhibit 8T, to the Company's
knowledge, the Company and its Subsidiaries are in compliance in all material
respects with all Environmental Laws applicable to them or to real property
owned or leased by them, or to the ownership, use, operation or occupancy
thereof except where the failure to be in compliance with such Environmental
Laws would not result in liability of the Company or any of its Subsidiaries in
an aggregate amount in excess of $25,000,000. To the Company's knowledge,
neither the Company, its Subsidiaries nor any other Person acting at the
direction of or on behalf of the Company has engaged in any activity in
violation of any provision of any applicable Environmental Laws, which
violation could reasonably be expected to have a material adverse effect on the
business, condition (financial or other), assets, properties or operations of
the Company or the Company and its Restricted Subsidiaries taken as a whole.
(b) Except as permitted by paragraph 8I or as disclosed
in Exhibit 8T, the Company has or will have on the date of closing all
environmental permits or licenses necessary for the conduct of its business as
conducted on the date of closing and, as to any such permit or license that has
expired or is about to expire or is needed for the pro-
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<PAGE> 46
posed conduct of its business, the Company has or will have timely and
properly applied for renewal or receipt of the same. Exhibit F lists all
material notices from Federal, state or local environmental agencies to the
Company citing environmental violations that have not been finally resolved and
disposed of; no such violation, individually or in the aggregate is reasonably
expected to have a material adverse effect on the business, property or assets,
condition or operations of the Company, and the Company is acting in compliance
with all such notices. Notwithstanding any such notice, the Company is
currently operating in compliance with the limits set forth in such
environmental permits or licenses except for such noncompliance as could not
reasonably be expected to have a material adverse effect on the business,
condition (financial or other), assets, properties or operations of the Company
or the Company and its Restricted Subsidiaries taken as a whole and the Company
has no knowledge of any threatened or pending proceeding for the revocation,
loss or termination of any such environmental permits or licenses.
Neither the Company nor any of its Subsidiaries is subject to
any order or decree of any governmental authority under any Environmental Laws,
which order or decree would reasonably be likely to result in a material
adverse effect on the business, condition (financial or other), assets,
properties or operations of the Company or the Company and its Restricted
Subsidiaries taken as a whole, nor is there any basis for such order or decree.
(c) All facilities located on the real property owned by
the Company or the Facilities Subsidiary on the date of closing which are
subject to regulation by the Federal Resource Conservation and Recovery Act, as
in effect on the date hereof, are and to the knowledge of the Company (or the
Facilities Subsidiary, as the case may be) have been operated in material
compliance with such Act and the Company (or the Facilities Subsidiary, as the
case may be) has not received or, to the knowledge of the Company (or the
Facilities Subsidiary, as the case may be) upon reasonable inquiry, has not
been threatened with, a notice of violation under such Act regarding such
facilities which can reasonably be expected to have a material adverse effect
on the business, property or assets, conditions or operations of the Company
(or the Facilities Subsidiary, as the case may be), or the ability of the
Company to perform its obligations under this Agreement or the Notes.
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<PAGE> 47
(d) Except as disclosed in Exhibit 8T, with respect to
the real property owned by the Company (or the Facilities Subsidiary, as the
case may be) on the date of closing, there has not occurred to the best
knowledge of the Company (or the Facilities Subsidiary, as the case may be) (i)
any Release of any Hazardous Substance in a Reportable Quantity, (ii) any
discharge of any substance into ground, surface, or navigable waters for which
a notice of violation has been received or threatened under any Federal, state
or local laws, rules or regulations concerning water pollution, or (iii) any
assertion of any Lien pursuant to Federal, state or local environmental law
resulting from any use, spill, discharge or clean-up of any hazardous or toxic
substance or waste, which occurrence can reasonably be expected to have a
material adverse effect on the business, property or assets, condition or
operations of the Company (or the Facilities Subsidiary, as the case may be).
As used in this paragraph, the terms "Release," "Hazardous Substance," and
"Reportable Quantity" shall have the meanings assigned such terms under the
Comprehensive Environmental Response Compensation and Liability Act (CERCLA).
8U. DISCLOSURE
Neither this Agreement, the Memorandum, the 1934 Act Reports
nor any other document, certificate or statement furnished to you by or on
behalf of the Company in writing, in connection herewith contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein and therein not misleading.
There is no fact peculiar to the Company which materially adversely affects or
in the future may (so far as the Company can now reasonably foresee) materially
adversely affect the business, property or assets, condition or results of
operations of the Company and which has not been set forth in this Agreement,
the Memorandum or the 1934 Act Reports or in the other documents, certificates
and statements in writing furnished to you by or on behalf of the Company prior
to the date hereof in connection with the transactions contemplated hereby.
9. REPRESENTATIONS OF THE PURCHASER
You represent, and in making this sale to you it is
specifically understood and agreed, that you are not acquiring the Notes to be
purchased by you hereunder with a view to or for sale in connection with any
distribution thereof within the meaning of the Securities Act, provided that
the disposition of your property shall at all times be
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<PAGE> 48
and remain within your control. You understand that the Notes have not been
registered under the Securities Act and may be resold only if registered
pursuant to the provisions of the Securities Act or if an exemption from
registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to register the Notes. You also represent that at least one of
the following statements is an accurate representation as to the source of
funds to be used by you to pay the purchase price of the Notes purchased by you
hereunder:
(a) you are an insurance company subject to state
regulation and no part of the funds being used by you to pay the
purchase price of the Notes being purchased by you hereunder
constitutes assets allocated to any separate account maintained by you
in which any employee benefit plan or its related trust has any
interest and, assuming the continued applicability and validity of
paragraph (b) of Department of Labor Interpretive Bulletin 75-2, 29
C.F.R. Section 2509.75-2, no part of such funds constitutes assets of
any employee benefit plan solely for purposes of determining whether
such purchase is a prohibited transaction under ERISA or the Code; or
(b) you are an insurance company subject to state
regulation and to the extent that any part of the funds being used by
you to pay the purchase price of the Notes being purchased by you
hereunder constitutes assets allocated to any separate account
maintained by you, (i) such separate account is an "insurance company
pooled separate account" within the meaning of Prohibited Transaction
Class Exemption 90-1, in which case you have disclosed to the Company
the name of each employee benefit plan whose assets in such separate
account exceed 10% of the total assets or are expected to exceed 10%
of the total assets of such account as of the date of such purchase
(and for the purposes of this subparagraph (b), all employee benefit
plans maintained by the same employer or employee organization are
deemed to be a single plan), or (ii) such separate account contains
only the assets of a specific employee benefit plan, complete and
accurate information as to the identity of which you have delivered to
the Company; or
(c) all of the funds being used by you to pay the
purchase price of the Notes being purchased by you
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hereunder constitute assets of an "investment fund" (within the
meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of
the QPAM Exemption), no employee benefit plan's assets which are
included in such investment fund, when combined with the assets of all
other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM, the conditions of Part I(g) of the QPAM
Exemption are satisfied and the identity of such QPAM and the names of
each employee benefit plan whose assets are included in such
investment fund have been disclosed to the Company; or
(d) you are not an insurance company and all or a portion of
the funds to be used by you to pay the purchase price of the Notes
being purchased by you hereunder does not constitute assets of any
employee benefit plan (other than a governmental plan exempt from the
coverage of ERISA) and the remaining portion, if any, of such funds
consists of funds which may be deemed to constitute assets of one or
more specific employee benefit plans, complete and accurate
information as to the identity of each of which you have delivered to
the Company.
As used in this paragraph 9, the terms "employee benefit plan", "party in
interest" and "separate account" shall have the respective meanings assigned to
such terms in section 3 of ERISA.
10. DEFINITIONS
For the purpose of this Agreement, the terms defined in
paragraphs 1 and 2 shall have the respective meanings specified therein, and
the following terms shall have the meanings specified with respect thereto
below:
10A. YIELD-MAINTENANCE TERMS
"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which commercial banks in New York City are required or
authorized to be closed.
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"Called Principal" shall mean, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to paragraph 4A
(including partial prepayments made pursuant to paragraphs 6B(5)(viii) and
6B(6)) or is declared to be immediately due and payable pursuant to paragraph
7A, as the context requires.
"Discounted Value" shall mean, with respect to the Called
Principal of any Note, the amount obtained by discounting all Remaining
Scheduled Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a discount
factor (applied on a semiannual basis) equal to 50 basis points above the
Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" shall mean, with respect to the Called
Principal of any Note, the yield to maturity implied by (i) the yields
reported, as of 10:00 A.M. (New York City time) on the Business Day next
preceding the Settlement Date with respect to such Called Principal, on the
display designated as the USD page in the Bloomberg Financial Markets Service
(or such other display as may replace the USD page in the Bloomberg Financial
Markets Service) for actively traded U.S. Treasury securities having a maturity
equal to the Remaining Life of such Called Principal as of such Settlement
Date, or if such yields shall not be reported as of such time or the yields
reported as of such time shall not be ascertainable, (ii) the Treasury Constant
Maturity Series yields reported, for the latest day for which such yields shall
have been so reported as of the Business Day next preceding the Settlement Date
with respect to such Called Principal, in Federal Reserve Statistical Release
H.15 (519) (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the Remaining Life of
such Called Principal as of such Settlement Date. Such implied yield shall be
determined, if necessary, by (a) converting U.S. Treasury bill quotations to
bond-equivalent yields in accordance with accepted financial practice and (b)
interpolating linearly between reported yields.
"Remaining Life" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) which will elapse between the Settlement Date with respect to
such Called Principal and August 1, 2009.
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<PAGE> 51
"Remaining Scheduled Payments" shall mean, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due on or after the Settlement Date with respect
to such Called Principal if no payment of such Called Principal were made prior
to its scheduled due date.
"Settlement Date" shall mean, with respect to the Called
Principal of any Note, the date on which such Called Principal is to be prepaid
pursuant to paragraph 4A (including partial prepayments made pursuant to
paragraphs 6B(5)(viii) and 6B(6)) or is declared to be immediately due and
payable pursuant to paragraph 7A, as the context requires.
"Yield-Maintenance Premium" shall mean, with respect to any
Note, a premium equal to the excess, if any, of the Discounted Value of the
Called Principal of such Note over the sum of (i) such Called Principal plus
(ii) interest accrued thereon as of (including interest due on) the Settlement
Date with respect to such Called Principal. The Yield-Maintenance Premium
shall in no event be less than zero.
10B. OTHER TERMS
"ABN Revolving Credit Agreements" shall mean the credit
agreements (i) between the Company, ABN AMRO Bank N.V. ("ABN") as agent, and
certain other lenders pursuant to which the lenders thereunder provide credit
facilities to the Company in an aggregate principal amount not to exceed
$15,000,000 and (ii) between Marketing, Manufacturing, ABN, as agent, and
certain other lenders pursuant to which the lenders thereunder provide credit
facilities to Marketing and Manufacturing in an aggregate principal amount not
to exceed $20,000,000.
"Affiliate" shall mean any Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with,
the Company, except a Restricted Subsidiary. A Person shall be deemed to
control a corporation or other entity if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such corporation or other entity, whether through the ownership of
voting securities, by contract or otherwise.
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"Available Cash" shall mean, with respect to any calendar
quarter, (a) the sum of:
(i) the Company's net income (or net loss) (excluding
gain on the sale of any Capital Asset) for such quarter,
(ii) the amount of depletion, depreciation, amortization
and other noncash charges utilized in determining net income of the
Company for such quarter,
(iii) the amount of any reduction in reserves of the
Company of the types referred to in clause (b)(iv) below,
(iv) proceeds received by the Company from the sale of
Designated Acres, and
(v) any Cash from Capital Transactions received by the
Company during such quarter in specific contemplation that such Cash
from Capital Transactions will be used to refund or refinance any
payment of Debt of the type specified in clause (b)(i) below which
made in either of the two immediately preceding quarters,
less (b) the sum of:
(i) all payments of principal on Debt made by the Company
in such quarter (excluding any payments of principal on Debt made with
Cash from Capital Transactions received by the Company during such
quarter or, to the extent such Cash from Capital Transactions remains
available, received by the Company during the four immediately
preceding quarters),
(ii) capital expenditures made by the Company during such
quarter (excluding any capital expenditures for such quarter made with
Cash from Capital Transactions received by the Company during such
quarter or, to the extent such Cash from Capital Transactions remains
available, received by the Company during the four immediately
preceding quarters, and capital expenditures which the General Partner
reasonably anticipates will be financed with Cash from Capital
Transactions within 90 days from the end of such quarter),
(iii) the amount of any capital expenditures made by the
Company in a prior quarter which was anticipated would be financed
from Cash from Capital Transactions
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but which have not been financed from such source within 90 days from
the end of such quarter,
(iv) the amount of any reserves of the Company established
during such quarter which are necessary or appropriate (A) to provide
funds for the future payment of items of the types specified in
clauses (b)(i) and (b)(ii) above, (B) to provide additional working
capital, (C) to provide funds for cash distributions with respect to
any one or more of the next four quarters, or (D) to provide funds for
the future payment of interest in an amount equal to the interest to
be accrued in the next quarter,
(v) the amount of any noncash items of income utilized in
determining net income of the Company for such quarter,
(vi) the amount of any Investments (other than guarantees,
contingent liabilities or endorsements, except to the extent payments
are actually made under such guarantees, contingent liabilities or
endorsements) made by the Company during such quarter pursuant to
clause (i), (viii) or (ix) of paragraph 6B(3) (or in the case of any
Subsidiary, Investments (other than guarantees, contingent liabilities
or endorsements, except to the extent payments are actually made under
such guarantees, contingent liabilities or endorsements) of similar
type) to the extent not included in capital expenditures or payments
on principal on Debt made by the Company during such quarter
(excluding any such Investments for such quarter made with Cash from
Capital Transactions received by the Company during such quarter or,
to the extent such Cash from Capital Transactions remains available,
received by the Company during the four immediately preceding
quarters, and Investments which the General Partner reasonably
anticipates will be financed with Cash from Capital Transactions
within 90 days from the end of such quarter), and
(vii) the amount of any Investments (other than guarantees,
contingent liabilities or endorsements, except to the extent payments
are actually made under such guarantees, contingent liabilities or
endorsements) made by the Company in a prior quarter pursuant to
clause (i), (viii) or (ix) of paragraph 6B(3) (or in the case of any
Subsidiary, Investments (other than guarantees, contingent liabilities
or endorsements,
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except to the extent payments are actually made under such guarantees,
contingent liabilities or endorsements) of similar type) to the extent
not included in capital expenditures made by the Company during such
quarter which was anticipated would be financed from Cash from Capital
Transactions but which have not been financed from such source within
90 days from the end of such quarter,
provided, however, (i) net proceeds to the Company from the issuance of SPUs
(as such term is defined in the Partnership Agreement) shall be deemed to be
Available Cash, and shall be deemed to be received, for purposes of determining
Available Cash, during the quarter in respect of which such SPUs are issued,
even if such cash is received by the Company after the last day of such
quarter, and (ii) any disbursements made of the types described in clauses
(b)(i), (ii), (iii), (vi) and (vii) or reserves established, in accordance with
clause (b)(iv), within 45 days after the end of any quarter as to which SPUs
were purchased in respect of such quarter in accordance with the Distribution
Support Agreement shall be deemed to be made or established, for purposes of
determining Available Cash, within such quarter if the General Partner so
determines, provided that the aggregate amount of such disbursements made or
reserves established which are so determined as being made within such quarter
shall not exceed the aggregate dollar amount of SPUs purchased in respect of
such quarter.
Notwithstanding the foregoing, "Available Cash" shall not take
into account any reductions in reserves or disbursements made or reserves
established after commencement of the dissolution and liquidation of the
Company. In determining "Available Cash", (i) all items under clauses (a)(i),
(ii), (iii), (iv) and (v) above and all items under clauses (b)(i), (ii),
(iii), (iv), (v), (vi) and (vii) above shall be calculated on a combined basis
with any Subsidiary of the Company whose income is accounted for on a
consolidated or combined basis with the Company and, in accordance therewith,
"Available Cash" shall include a percentage of each such item of each such
Subsidiary equal to the Company's percentage ownership interest in such
Subsidiary, provided, however, that the items under clauses (a)(i), (ii),
(iii), (iv) and (v) above shall only be included in Available Cash to the
extent that the General Partner determines such amount to be legally available
for dividends or distributions to the Company by such Subsidiary; (ii) the
amount of net income and the amount of depletion, depreciation, amortization
and other noncash charges, utilized in
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determining net income shall be determined, with respect to the Company, by the
General Partner in accordance with generally accepted accounting principles
and, with respect to any Subsidiary, by its Board of Directors (or by such
other body or Person which has the ultimate management authority of such
Subsidiary) in accordance with generally accepted accounting principles; (iii)
the net income of any Subsidiary shall be determined on an after-tax basis;
(iv) the amount of any reductions in, or additions to, reserves for purposes of
clauses (a)(iii) and (b)(iv) above shall be determined, with respect to the
Company, by the General Partner in its reasonable good faith judgment and, with
respect to any Subsidiary, by its Board of Directors (or by such other body or
Person which has the ultimate management authority of such Subsidiary) in its
reasonable good faith judgment; and (v) any determination of whether any
capital expenditures or Investments are financed, or anticipated to be
financed, with Cash from Capital Transactions for purposes of clause (b)(ii) or
(b)(vi) above shall be made, with respect to the Company, by the General
Partner in its reasonable good faith judgment and, with respect to any
Subsidiary, by its Board of Directors (or by such other body or Person which
has the ultimate management authority of such Subsidiary) in its reasonable
good faith judgment.
"Bank of America Revolving Credit Agreement" shall mean the
credit agreement between the Company, Bank of America National Trust and
Savings Association, as Administrative Agent, and certain other lenders
pursuant to which the lenders thereunder provide credit facilities to the
Company in an aggregate principal amount not to exceed $260,000,000 and any
extension, renewal, refunding or refinancing thereof provided that such
renewal, refunding or refinancing shall not contain terms which are any less
favorable to the Purchasers.
"Bankruptcy Law" shall have the meaning specified in clause
(viii) of paragraph 7A.
"Board Foot" shall mean a unit of measurement one foot square
and one inch thick.
"Business Day" shall mean any day other than a Saturday,
Sunday or other day on which commercial banking institutions in New York, New
York or Seattle, Washington are authorized or required by law, regulation or
executive order to be closed.
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"Capital Asset" shall mean any asset on the Company's or any
Subsidiary's balance sheet, as the case may be, other than inventory, accounts
receivable or any other current asset and assets disposed of in connection with
normal retirements or replacements.
"Capital Lease Obligation" shall mean, with respect to any
Person, any rental obligation which, under generally accepted accounting
principles, is or will be required to be capitalized on the books of such
Person, taken at the amount thereof accounted for as indebtedness (net of
interest expenses) in accordance with such principles.
"Capital Transaction" shall mean (i) borrowings and sales of
debt securities (other than for working capital purposes and other than for
items purchased on open account in the ordinary course of business) by the
Company, (ii) sales of equity interests by the Company (other than the issuance
of SPUs) and (iii) sales or other voluntary or involuntary dispositions of any
assets of the Company (other than (x) sales or other dispositions of inventory
in the ordinary course of business, (y) sales or other dispositions of other
current assets including receivables and accounts and (z) sales or other
dispositions of assets as a part of normal retirements or replacements), in
each case prior to the commencement of the dissolution and liquidation of the
Company provided, that in determining Cash from Capital Transactions, items
(i), (ii) and (iii) above shall include, with respect to each Subsidiary of the
Company whose income is accounted for on a consolidated or combined basis with
the Company, a percentage of each such item of such Subsidiary equal to the
Company's percentage ownership interest in such Subsidiary.
"Cash from Capital Transactions" shall mean at any date, such
amounts of cash as are determined by the General Partner to be cash made
available to the Company from or by reason of a Capital Transaction.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Company's knowledge" or "knowledge of the Company" shall mean
the actual knowledge of Rick R. Holley, President and Chief Executive Officer,
Charles P. Grenier, Executive Vice President, Robert E. Manne, Executive Vice
President, Diane M. Irvine, Vice President and Chief Financial Officer, James
A. Kraft, Vice President Law,
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Susanna N. Duke, Director, Law and Secretary and Mitchell Leu, Environmental
Engineer and any successor to the offices and officers, such persons being the
principal persons employed by the Company ultimately responsible for
environmental operations and compliance, ERISA and legal matters relating to
the Company.
"Debt" shall mean, as to any Person, as of any date of
determination, without duplication, (i) all indebtedness of such Person for
borrowed money or for the deferred purchase price of property or services, (ii)
all amounts owed by such Person to banks or other Persons in respect of
reimbursement obligations under letters of credit, surety bonds and other
similar instruments guaranteeing payment or other performance of obligations by
such Person, (iii) all indebtedness for borrowed money or for the deferred
purchase price of property or services secured by any Lien on any property
owned by such Person, to the extent attributable to such Person's interest in
such property, even though such Person has not assumed or become liable for the
payment thereof, (iv) lease obligations of such Person which, in accordance
with generally accepted accounting principles, should be capitalized, (v) lease
obligations of such Person under leases which have a term (including any option
to renew exercisable at the discretion of the lessee thereunder) longer than 10
years or under leases under which the lessor, pursuant to an agreement with
such Person, has acquired the property specifically for the purpose of leasing
it to such Person, (vi) obligations payable out of the proceeds of production
from property of such Person, even though such Person has not assumed or become
liable for the payment thereof, and (vii) any obligations of any other Person
of the type described in the above clauses (i) through and including (vi),
inclusive, which are guaranteed or in effect guaranteed by such Person through
any agreement (contingent or otherwise) to purchase, repurchase or otherwise
acquire such obligation or any security therefor, or to provide funds for the
payment or discharge of such obligation (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or to maintain
the solvency or any balance sheet or other financial condition of the obligor
of such obligation, or to make payment for any products, materials or supplies
or for any transportation or services regardless of the non-delivery or
nonfurnishing thereof, in any such case if the purpose or intent of such
agreement is to provide assurance that such obligation will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the
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holders of such obligation will be protected against loss in respect thereof.
"Designated Acres" shall mean up to an aggregate of 114,000
acres owned by the Company which (based on the good faith determination of the
Responsible Representatives that such acres have at the time such determination
is made a higher value as recreational, residential, grazing or agricultural
property than for timber production) may be reasonably designated by the
General Partner at the time of the sale thereof as constituting Designated
Acres (such aggregate number of acres to be determined over the term of
existence of this Agreement).
"Designated Immaterial Subsidiary" shall mean any entity which
would otherwise be a Restricted Subsidiary and which at any time is designated
by the Company as a Designated Immaterial Subsidiary, provided that no such
designation of any entity as a Designated Immaterial Subsidiary shall be
effective unless (i) at the time of such designation, such entity does not own
any shares of stock or Debt of any Restricted Subsidiary which is not
simultaneously being designated as a Designated Immaterial Subsidiary, (ii)
immediately after giving effect to such designation, (a) the Company could
incur at least $1 of additional Funded Debt pursuant to clause (ix) of
paragraph 6B(2), and (b) no condition or event shall exist which constitutes an
Event of Default or Material Default, (iii) the Company is permitted to make
the Investment in such entity resulting from such designation pursuant to, and
within the limitations specified in, clause (ix) of paragraph 6B(3), treating
the aggregate book value (including equity in retained earnings) of the
Investments of the Company and its Subsidiaries in such entity immediately
prior to such designation as the cost of such Investment, and provided,
further, that if at any time all Designated Immaterial Subsidiaries on a
combined basis would be a "significant subsidiary" (assuming the Company is the
registrant) within the meaning of Regulation S-X (17 CFR Part 210) the Company
shall designate one or more Designated Immaterial Subsidiaries which are
directly owned by the Company and its Restricted Subsidiaries as Restricted
Subsidiaries such that the condition in this proviso is no longer applicable
and the entities so designated shall no longer be Designated Immaterial
Subsidiaries. Any entity which has been designated a Designated Immaterial
Subsidiary shall not thereafter become a Restricted Subsidiary except pursuant
to a designation required by the last proviso in the preceding sentence, and
any Designated Immaterial Subsidiary which has been designated a Restricted
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Subsidiary pursuant to the last proviso of the preceding sentence shall not
thereafter be redesignated as a Designated Immaterial Subsidiary.
"Designated Repurchases" shall mean and include purchases,
redemptions or other acquisitions, in each case at a price not to exceed fair
market value, of the publicly traded limited partnership interests in the
Company, which are retired by the Company within six months of such purchase,
redemption or other acquisition.
"Distribution Support Agreement" shall mean the Distribution
Support Agreement, dated as of June 8, 1989, between the Company and Burlington
Resources Inc., a Delaware corporation.
"11 1/8% Senior Note Agreements" shall mean the Note
Agreements, dated as of May 31, 1989 and amended as of January 1, 1991, April
22, 1993, September 1, 1993 and May 20, 1994, providing for the issuance and
sale by the Company of its 11 1/8% Senior Notes to the purchasers listed in the
schedule of purchasers attached thereto.
"11 1/8% Senior Notes" shall mean the 11 1/8% Senior Notes Due
June 8, 2007 of the Company issued and sold pursuant to the 11 1/8% Senior Note
Agreements.
"Environmental Laws" shall mean Federal, state, local and
foreign laws, rules or regulations relating to emissions, discharges, releases
or threatened releases of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or wastes into the environment (including,
without limitation, air, surface water, ground water or land), or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, chemicals or
industrial, toxic or hazardous substances or wastes.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"Event of Default" shall mean any of the events specified in
paragraph 7A, provided that there has been satisfied any requirement in
connection with such event for the giving of notice, or the lapse of time, or
the happening of any further condition, event or act, and "Default" shall mean
any of such events, whether or not any such requirement has been satisfied.
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"Facilities Subsidiary" shall mean, collectively,
Manufacturing and Marketing.
"Facilities Subsidiary's Facility" shall mean any facility
pursuant to which the Facilities Subsidiary may incur Debt for purposes of
making capital improvements, additions to, or expansions of, property, plant
and equipment of the Facilities Subsidiary or its Subsidiaries.
"Facilities Subsidiary's Revolving Credit Facility" shall mean
any facility pursuant to which the Facilities Subsidiary may obtain revolving
credit, takedown credit, the issuance of standby and payment letters of credit
and backup for the issuance of commercial paper.
"Facilities Subsidiary Stock" shall mean, collectively, the
limited partner interest of the Company in Manufacturing and the capital stock
of Marketing that is owned by the Company.
"Funded Debt" shall mean, without duplication, any Debt
payable more than one year from the date of the creation thereof. "Current
Debt" shall mean, without duplication, any Debt payable on demand or within a
period of one year from the date of the creation thereof; provided that any
Debt shall be treated as Funded Debt, regardless of its term, if such Debt is
renewable pursuant to the terms thereof or of a revolving credit or similar
agreement effective for more than one year after the date of the creation of
such Debt, or may be payable out of the proceeds of similar Debt pursuant to
the terms of such Debt or of any such agreement.
"General Partner" shall mean Plum Creek Management Company,
L.P., a limited partnership organized and existing under the laws of the State
of Delaware, and its successors and assigns.
"Guarantee" shall mean the guarantee in paragraph 7 of the
Mortgage Note Agreements.
"Investment Policy" shall mean the Corporate Investment Policy
of the Company, as it exists on April 5, 1993 and as attached hereto as
Schedule 10B(1).
"Investments" shall have the meaning specified in paragraph
6B(3).
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"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement, any
lease in the nature thereof, and the filing of or agreement to give any
financing statement under the Uniform Commercial Code of any jurisdiction).
"Manufacturing" shall mean Plum Creek Manufacturing, L.P., a
Delaware limited partnership.
"Marketing" shall mean Plum Creek Marketing, Inc., a Delaware
corporation.
"Material Default" shall mean any continuing Default as to
which a written notice of such Default (which notice has not been rescinded)
shall have been received by the Company or the General Partner from any holder
of any Note, or any continuing Event of Default.
"Maximum Pro Forma Annual Interest Charges" shall mean, as of
any date, the highest total amount payable during any period of four
consecutive fiscal quarters, commencing with the fiscal quarter in which such
date occurs and ending with the fiscal quarter in which August 1, 2009 occurs,
by the Company and its Restricted Subsidiaries on a combined basis, after
eliminating all intercompany transactions, in respect of interest charges ((a)
including amortization of debt discount and expense and imputed interest on
Capital Lease Obligations and on other obligations included in Debt which do
not have stated interest, (b) assuming, in the case of fluctuating interest
rates which cannot be determined in advance, that the rate in effect on such
date will remain in effect throughout such period, and (c) treating the
principal amount of all Debt outstanding as of such date under a revolving
credit or similar agreement as maturing and becoming due and payable on the
scheduled maturity date thereof, without regard to any provision permitting
such maturity date to be extended) on all Debt of the Company and its
Restricted Subsidiaries outstanding on such date (excluding the Guarantee and
the guarantees of the Facilities Subsidiary's Facility and the Facilities
Subsidiary's Revolving Credit Facility but including, to the extent not already
included, all other Debt outstanding on such date which is guaranteed or in
effect guaranteed by the Company or any Restricted Subsidiaries), after giving
effect to any Debt proposed to be created on such date and to the concurrent
retirement of any other Debt.
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"MMBF" shall mean one million Board Feet.
"Mortgage Note Agreements" shall mean the Note Agreements,
dated as of May 31, 1989 and amended as of January 1, 1991, April 22, 1993,
September 1, 1993, and May 20, 1994, providing for the issuance and sale by the
Facilities Subsidiary of its 11 1/8% First Mortgage Notes to the purchasers
listed in the schedule of purchasers attached thereto.
"Mortgage Noteholder" shall mean and include each holder from
time to time of a Mortgage Note issued under the Mortgage Note Agreements.
"Mortgage Notes" shall mean the 11 1/8% First Mortgage Notes
of the Facilities Subsidiary issued and sold pursuant to the Mortgage Note
Agreements.
"Multiemployer Plan" shall mean any Plan which is a
"multiemployer plan" (as such term is defined in section 4001(a)(3) of ERISA).
"Officers' Certificate" shall mean, as to any corporation, a
certificate executed on its behalf by the Chairman of the Board of Directors
(if an officer) or its President or one of its Vice Presidents and its
Treasurer, or Controller or one of its Assistant Treasurers or Assistant
Controllers, and, as to any partnership, a certificate executed on behalf of
such partnership by its general partner in a manner which would qualify such
certificate as an Officers' Certificate of such general partner hereunder.
"Partnership Agreement" shall mean the Amended and Restated
Agreement of Limited Partnership of the Company, as in effect on the date of
closing, and as the same may, from time to time be amended, modified or
supplemented in accordance with the terms thereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any governmental authority succeeding to any of its functions.
"Permitted Business" shall mean any business engaged in by the
Company or the Facilities Subsidiary on the date of closing, and any business
substantially similar or related to any such business, which shall not include
pulp or paper manufacturing.
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"Person" shall mean and include an individual, a partnership,
a joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
"Plan" shall mean an "employee benefit plan" (as defined in
section 3(3) of ERISA) which is or has been established or maintained, or to
which contributions are or have been made, by the Company, any of its
Subsidiaries or any Related Person or with respect to which the Company, any of
its Subsidiaries or any Related Person may have any liability.
"Pro Forma Free Cash Flow" as of any date shall mean (i) net
income of the Company and its Restricted Subsidiaries on a combined basis
(excluding (a) gain on the sale of any Capital Asset, (b) non-cash items of
income, and (c) any distributions or other income received from, or equity of
the Company or any Restricted Subsidiary in the earnings of, any entity which
is not a Restricted Subsidiary) for the period of four consecutive fiscal
quarters immediately prior to such date determined in accordance with generally
accepted accounting principles plus depreciation, depletion, amortization and
other noncash charges, interest expense on Debt and provision for income taxes,
minus (ii) capital expenditures made by the Company and its Restricted
Subsidiaries during such period of four consecutive fiscal quarters to maintain
their respective operations.
"Qualified Debt" shall mean, as to the Company, as of any date
of determination, without duplication, all outstanding indebtedness of the
Company for borrowed money, including, without limitation, Debt represented by
the Notes and the 11-1/8% Senior Notes.
"Related Person" shall mean, as of any date of determination,
any trade or business, whether or not incorporated, which, together with the
Company or any of its Subsidiaries, is treated as a single employer under
section 414(b) or (c) of the Code or the regulations promulgated thereunder.
"Required Holder(s)" shall mean for the purpose of paragraph
11C the holder or holders of at least 55% of the aggregate principal amount of
the Notes from time to time outstanding, and for all other purposes the holder
or holders of at least 66 2/3% of the aggregate principal amount of the Notes
from time to time outstanding.
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"Responsible Officer" means the chief executive officer, the
president or any vice president of the General Partner, or any other officer
having substantially the same authority and responsibility; or, with respect to
compliance with financial covenants, the chief financial officer or the
treasurer of the General Partner, or any other officer having substantially the
same authority and responsibility.
"Responsible Representatives" shall mean (a) in the case of
any transaction in which the value of any assets disposed of or received have a
value of less than $5,000,000 or in which payments made are less than
$5,000,000, the chief executive officer, chief financial officer or chief
operating officer of the Company, and (b) in the case of any other transaction,
the Board of Directors of the General Partner.
"Restricted Payment" shall mean (a) any payment or other
distribution, direct or indirect, in respect of any partnership interest in the
Company, except a distribution payable solely in additional partnership
interests in the Company, and (b) any payment, direct or indirect, on account
of the redemption, retirement, purchase or other acquisition of any partnership
interest in the Company including, without limitation, any Designated
Repurchase; or, if the Company is at any time reorganized as or changed (by
merger, sale of assets or otherwise) into a corporation, (i) any dividend or
other distribution, direct or indirect, on account of any shares of any class
of stock of the Company now or hereafter outstanding, except a dividend payable
solely in shares of stock of the Company, and (ii) any redemption, retirement,
purchase or other acquisition, direct or indirect, of any shares of any class
of stock of the Company, now or hereafter outstanding, or of any warrants,
rights or options to acquire any such shares, except to the extent that the
consideration therefor consists of shares of stock of the Company.
"Restricted Subsidiary" shall mean any Wholly-Owned Subsidiary
other than (a) any Designated Immaterial Subsidiary and (b) the Facilities
Subsidiary or any Subsidiary directly or indirectly owned by the Facilities
Subsidiary, provided that after the Mortgage Notes shall have been paid in full
and retired, the Facilities Subsidiary and its Subsidiaries shall become and be
Restricted Subsidiaries.
"Revolving Credit Facility" shall mean any facility pursuant
to which the Company may obtain revolving cred-
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it, take-down credit, the issuance of standby and payment letters of credit
and back-up for the issuance of commercial paper.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Significant Holder" shall mean (i) you, so long as you shall
hold (or be committed under this Agreement to purchase) any Note, or (ii) any
other insurance company, bank, financial institution, public or governmental
retirement or pension fund or other similar institutional holder of Notes,
whether acting for itself or in a trust, agency or other fiduciary capacity.
"Subsidiary" shall mean any corporation, partnership or other
entity a majority of (i) the total combined voting power of all classes of
Voting Stock of which or (ii) the outstanding equity interests of which shall,
at the time as of which any determination is being made, be owned by the
Company either directly or through Subsidiaries.
"Timber" shall mean standing trees not yet harvested.
"Timberlands" shall mean the timberlands owned as of the date
of closing and any timberlands acquired by the Company or any Subsidiary after
the date of closing.
"Transferee" shall mean any direct or indirect transferee of
all or any part of any Note purchased by you under this Agreement.
"Voting Stock" shall mean, with respect to any corporation or
other entity, any shares of stock or other ownership interests of such
corporation or entity whose holders are entitled under ordinary circumstances
to vote for the election of directors of such corporation or to manage any such
other entity (irrespective of whether at the time stock or ownership interests
of any other class or classes shall have or might have voting power by reason
of the happening of any contingency).
"Western Europe" shall mean Belgium, Denmark, France, Germany,
Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain and the United
Kingdom.
"Wholly-Owned Subsidiary" shall mean any Subsidiary organized
under the laws of any state of the United
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States of America which conducts the major portion of its business in the
United States of America and all of the stock or other ownership interests of
every class of which, except director's qualifying shares, and except in the
case of the Facilities Subsidiary not more than 5% of the outstanding Voting
Stock shall, at the time as of which any determination is being made, be owned
by the Company either directly or through Wholly-Owned Subsidiaries.
11. MISCELLANEOUS
11A. NOTE PAYMENTS
The Company agrees that, so long as you shall hold any Note,
it will make payments of principal thereof and premium, if any, and interest
thereon, which comply with the terms of this Agreement, by wire or electronic
funds transfer of immediately available funds for credit to your account or
accounts as specified in the Purchaser Schedule attached hereto, or such other
account or accounts in the United States as you may designate in writing,
notwithstanding any contrary provision herein or in any Note with respect to
the place of payment. You agree that, before disposing of any Note, you will
make a notation thereon (or on a schedule attached thereto) of all principal
payments previously made thereon and of the date to which interest thereon has
been paid. The Company agrees to afford the benefits of this paragraph 11A to
any Transferee which shall have made the same agreement as you have made in
this paragraph 11A.
11B. EXPENSES
Whether or not the transactions contemplated by this Agreement
shall be consummated, the Company will pay and will indemnify and hold you and
each holder of any Notes harmless in respect of all reasonable expenses in
connection with such transactions and in connection with any amendments or
waivers (whether or not the same become effective) under or in respect of this
Agreement or the Notes, including: (a) the cost and expenses of preparing and
reproducing this Agreement or the Notes, of furnishing all opinions by counsel
for the Company and all other opinions referred to herein (including any
opinions requested by Debevoise & Plimpton (or another firm selected by you and
the other holders as your special counsel) as to any legal matter arising
hereunder) and all certificates on behalf of the Company or any of its
Subsidiaries or Affiliates, and of the performance of and compliance with all
agreements and conditions contained
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herein on the part of the Company to be performed or complied with, (b) the
cost of delivering to your principal office, insured to your satisfaction, the
Notes sold to you hereunder and any Notes delivered to you upon any
substitution of Notes pursuant to paragraph 11E and of your delivering any
Notes, insured to your satisfaction, upon any such substitution, (c) the
reasonable fees, expenses and disbursements of your special counsel in
connection with such transactions and any such amendments or waivers (whether
or not such amendments or waivers become effective), (d) the reasonable
out-of-pocket expenses incurred by you in connection with such transactions
(including the costs and expenses incurred in connection with obtaining a
private placement number) and any such amendments or waivers and (e) the cost
and expenses, including attorneys' fees, incurred by you or any Transferee in
enforcing any rights under this Agreement or the Notes or in responding to any
subpoena or any other legal process issued in connection with this Agreement or
the transactions contemplated hereby or thereby or by reason of your or any
Transferee's having acquired any Note (as to any Person, other than under
circumstances in which such Person has contravened the understanding contained
in the second sentence of paragraph 9), including without limitation costs and
expenses incurred in any bankruptcy case. The Company shall have no obligation
to pay any legal fees incurred by you or any other holder other than the
reasonable fees of special counsel for you and the other holders. The Company
also will pay, and will indemnify and hold you and each holder of any Notes
harmless from, all claims in respect of the fees, if any, of brokers and
finders (unless engaged by you or any of the Other Purchasers) and any and all
liabilities with respect to any and all taxes including interest and penalties
which may be payable in respect of the execution, delivery, filing or recording
of this Agreement, the issue of the Notes and any amendment or waiver under or
in respect of this Agreement or the Notes. In furtherance of the foregoing, on
the date of closing the Company will pay the fees and disbursements of
Debevoise & Plimpton, your special counsel, which are reflected as unpaid in
the statement of your special counsel delivered to the Company on or prior to
the date of closing. The obligations of the Company under this paragraph 11B
shall survive the transfer of any Note or portion thereof or interest therein
by you or any Transferee and the payment of any Note.
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11C. CONSENT TO AMENDMENTS
This Agreement may be amended, and the Company may take any
action herein prohibited, or omit to perform any act herein required to be
performed by it, if the Company shall obtain the written consent to such
amendment, action or omission to act, of the Required Holder(s) except that,
without the written consent of the holder or holders of all Notes at the time
outstanding, no amendment to this Agreement shall change the maturity of any
Note, or change the principal of, or the rate or time of payment of interest or
any premium payable with respect to any Note, or affect the time, amount or
allocation of any required prepayments, or alter or amend the right of any
Significant Holder to declare all of the Notes held by such Significant Holder
to be due and payable in accordance with the provisions of paragraph 7A, or
reduce the proportion of the principal amount of the Notes required with
respect to any consent. Each holder of any Note at the time or thereafter
outstanding shall be bound by any consent authorized by this paragraph 11C,
whether or not such Note shall have been marked to indicate such consent, but
any Notes issued thereafter may bear a notation referring to any such consent.
No course of dealing between the Company and the holder of any Note nor any
delay in exercising any rights hereunder or under any Note shall operate as a
waiver of any rights of any holder of such Note. As used herein and in the
Notes, the term "this Agreement" and references thereto shall mean this
Agreement as it may from time to time be amended or supplemented.
11D. SOLICITATION OF HOLDERS OF NOTES
The Company will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of this
Agreement, the Other Note Agreements or the Notes unless each holder of any
Note shall concurrently be informed thereof in writing by the Company and shall
be afforded the opportunity to consider the same and shall be supplied by the
Company with sufficient information to enable it to make an informed decision
with respect thereto. Executed or true and correct copies of any waiver or
consent effected pursuant to the provisions of paragraph 11C shall be delivered
by the Company to each holder of outstanding Notes forthwith following the date
on which the same shall have been executed and delivered by the holder or
holders of the requisite percentage of outstanding Notes. The Company will
not, directly or indirectly, pay or cause to be paid any remuneration, whether
by way of supple-
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<PAGE> 69
mental or additional interest, fee or otherwise, to any holder of any
Note as consideration for or as an inducement to the entering into by any such
holder of any Note of any waiver or amendment of any of the terms and
provisions of this Agreement, the Other Note Agreements or the Notes unless
such remuneration is concurrently paid, on the same terms, ratably to each
holder of the then outstanding Notes.
11E. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES
The Notes are issuable as registered notes without coupons in
minimum denominations equal to the lesser of (a) $1,000,000 (except as may be
necessary to reflect any principal amount not evenly divisible by $1,000,000)
and (b) the aggregate principal amount of Notes purchased by you hereunder (the
"Minimum Note Amount"). The Company shall keep at its principal office a
register in which the Company shall provide for the registration of Notes and
of transfers of Notes. Upon surrender for registration of transfer of any Note
at the principal office of the Company, the Company shall, at its expense,
execute and deliver one or more new Notes of like tenor and of a like aggregate
principal amount, registered in the name of such transferee or transferees,
provided that no transfer shall be made to any Transferee which does not
acquire Notes in a principal amount equal to not less than the lesser of the
Minimum Note Amount or the entire principal amount of the Notes owned by the
transferor thereof, and no holder shall transfer any Notes if thereafter such
holder retains ownership of Notes and the aggregate principal amount retained
is less than the Minimum Note Amount. At the option of the holder of any Note,
such Note may be exchanged for other Notes of like tenor and of any authorized
denominations, of a like aggregate principal amount, upon surrender of the Note
to be exchanged at the principal office of the Company. Whenever any Notes are
so surrendered for exchange, the Company shall, at its expense, execute and
deliver the Notes which the holder making the exchange is entitled to receive.
Every Note surrendered for registration of transfer or exchange shall be duly
endorsed, or be accompanied by a written instrument of transfer duly executed,
by the holder of such Note or such holder's attorney duly authorized in
writing. Any Note or Notes issued in exchange for any Note or upon transfer
thereof shall carry the rights to unpaid interest and interest to accrue which
were carried by the Note so exchanged or transferred, so that neither gain nor
loss of interest shall result from any such transfer or exchange. Upon receipt
of written notice from the holder of any Note
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<PAGE> 70
of the loss, theft, destruction or mutilation of such Note and, in the case of
any such loss, theft or destruction, upon receipt of such holder's unsecured
indemnity agreement, or in the case of any such mutilation upon surrender and
cancellation of such Note, the Company will make and deliver a new Note, of
like tenor, in lieu of the lost, stolen, destroyed or mutilated Note.
11F. PERSONS DEEMED OWNERS; PARTICIPATIONS
Prior to due presentment for registration of transfer, the
Company may treat the Person in whose name any Note is registered as the owner
and holder of such Note for the purpose of receiving payment of principal of
and premium, if any, and interest on such Note and for all other purposes
whatsoever, whether or not such Note shall be overdue, and the Company shall
not be affected by notice to the contrary. You may without the consent of the
Company sell participations in principal amounts of not less than the Minimum
Note Amount or, in the case of any sale by a holder holding Notes in an
aggregate principal amount less than the Minimum Note Amount, such aggregate
principal amount of Notes so held, to one or more Persons who agree to be bound
by the provisions of paragraph 11J in all or a portion of your rights in the
Note or Notes held by you.
11G. NON-RECOURSE NATURE OF LIABILITY
Notwithstanding anything to the contrary contained in this
Agreement, you hereby acknowledge and agree that neither the General Partner,
stockholder nor any general partner or limited partner, officer, employee,
servant, controlling Person, executive, director or agent, as such, of the
General Partner, nor any past, present or future general partner or limited
partner, as such, of the General Partner, shall have any liability to you or
any Transferee (such liability, including such as may arise by operation of
law, being hereby expressly waived) for the payment of any sums now or
hereafter owing by the Company under this Agreement or under the Notes or for
the performance of any of the obligations of the Company contained herein.
11H. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT
All representations and warranties contained herein or made in
writing by or on behalf of the Company in connection herewith shall survive the
execution and delivery of this Agreement and the Notes, the transfer by you of
any
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<PAGE> 71
Note or portion thereof or interest therein and the payment of any Note, and
may be relied upon by any Transferee, regardless of any investigation made at
any time by or on behalf of you or any Transferee. All representations,
warranties and covenants contained herein made by you or any holder shall
survive the execution and delivery of this Agreement and the Notes, and may be
relied upon by the Company and its successors and assigns. No holder of any
Notes (including you) shall be responsible for the truth, correctness or
performance of the representations or warranties of any other holder (including
any Transferee). Subject to the preceding sentences, this Agreement and the
Notes embody the entire agreement and understanding between you and the Company
and supersede all prior agreements and understandings relating to the subject
matter hereof.
11I. SUCCESSORS AND ASSIGNS
All covenants and other agreements in this Agreement contained
by or on behalf of any of the parties hereto shall bind and inure to the
benefit of the respective successors and assigns of the parties hereto
(including, without limitation, any Transferee) whether so expressed or not.
11J. DISCLOSURE TO OTHER PERSONS
You agree to use your best efforts to keep any information
(other than information which has become public information) delivered or made
available by the Company or the General Partner to you (including any
information obtained pursuant to paragraph 5A or 5B) in connection with or
pursuant to this Agreement which is proprietary in nature and clearly indicated
to be confidential information, confidential from any one other than Persons
employed or retained by you who are or are expected to become engaged in
evaluating, approving, structuring or administering the Notes; provided that
nothing herein shall prevent any holder of any Notes from disclosing such
information to (i) such holder's trustees, directors, officers, employees,
agents and professional consultants, (ii) any other holder of any Notes, (iii)
any Person to whom such holder offers to sell such Note or any part thereof
which has agreed in writing to be bound by the provisions of this paragraph
11J, (iv) any Person to whom such holder sells or offers to sell a
participation in all or any part of such Notes who has agreed in writing to be
bound by the provisions of this paragraph 11J, (v) any federal or state
regulatory authority having jurisdiction over such holder, (vi) the National
Association of Insurance Commissioners or any similar organization or
67
<PAGE> 72
(vii) any other Person to whom such delivery or disclosure may be necessary or
appropriate (a) in compliance with any law, rule, regulation or order
applicable to such holder, (b) in response to any subpoena or other legal
process, (c) in connection with any litigation to which such holder is a party
or (d) in order to protect such holder's investment in such Note to the extent
reasonably required in connection with the exercise of any remedy hereunder.
11K. NOTICES
All written communications provided for hereunder shall be
sent by first class mail or nationwide overnight delivery service (with charges
prepaid) and (i) if to you, addressed to you at the address specified for such
communications in the Purchaser Schedule attached hereto, or at such other
address as you shall have specified to the Company in writing, (ii) if to any
other holder of any Note, addressed to such other holder at such address as
such other holder shall have specified to the Company in writing or, if any
such other holder shall not have so specified an address to the Company, then
addressed to such other holder in care of the last holder of such Note which
shall have so specified an address to the Company, and (iii) if to the Company,
addressed to it at 999 Third Avenue, Suite 2300, Seattle, Washington 98104, or
at such other address as the Company shall have specified to the holder of each
Note in writing; provided, however, that any such communication to the Company
may also, at the option of the holder of any Note, be delivered by any other
means either to the Company at its address specified above or to any officer of
the Company.
11L. DESCRIPTIVE HEADINGS
The descriptive headings of the several paragraphs of this
Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
11M. SUBSTITUTION OF PURCHASER
You shall have the right to substitute any one of your
affiliates as the purchaser of the Notes which you have agreed to purchase
hereunder, by written notice to the Company, which notice shall be signed by
both you and such affiliate, shall contain such affiliate's agreement to be
bound by this Agreement and shall contain a confirmation by such affiliate of
the accuracy with respect to it of the representations set forth in paragraph
9. Upon receipt of such notice, wherever the word "you" is used in this Agree-
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<PAGE> 73
ment (other than in this paragraph 11M), such word shall be deemed to
refer to such affiliate in lieu of you. In the event such affiliate is so
substituted as a purchaser hereunder and such affiliate thereafter transfers to
you all of the Notes then held by such affiliate, upon receipt by the Company
of notice of such transfer, wherever the word "you" is used in this Agreement
(other than in paragraph 11M), such word shall no longer be deemed to refer to
such affiliate, but shall refer to you, and you shall have all the rights of an
original holder of the Notes under this Agreement.
11N. SATISFACTION REQUIREMENT
If any agreement, certificate or other writing, or any action
taken or to be taken, is by the terms of this Agreement required to be
satisfactory to you or to the Required Holder(s), the determination of such
satisfaction shall be made by you or the Required Holder(s), as the case may
be, in the sole and exclusive judgment (exercised in good faith) of the Person
or Persons making such determination.
11O. GOVERNING LAW
THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE
OF NEW YORK.
11P. COUNTERPARTS
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, and it shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart.
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<PAGE> 74
If you are in agreement with the foregoing, please sign the
form of acceptance on the enclosed counterpart of this letter and return the
same to the Company, whereupon this letter shall become a binding agreement
between you and the other parties hereto.
Very truly yours,
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company,
L.P., as General Partner
By: /s/ Diane M. Irvine
-------------------------------------
Name: Diane M. Irvine
Title: Vice President and Chief
Financial Officer
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<PAGE> 75
The foregoing Agreement is hereby accepted as of the date first above written.
CENTRAL LIFE ASSURANCE COMPANY
By: /s/ Keith Gunzenhauser
-----------------------------------
Name: Keith Gunzenhauser
Title: Executive Vice
President-Finance
FARM BUREAU LIFE
INSURANCE COMPANY
By: /s/ Richard D. Warming
-----------------------------------
Name: Richard D. Warming
Title: VP-Chief Investment
Officer
FBL INSURANCE COMPANY
By: /s/ Richard D. Warming
------------------------------------
Name: Richard D. Warming
Title: VP-Chief Investment
Officer
FIRST COLONY LIFE
INSURANCE COMPANY
By: /s/ J. Alden Butler
------------------------------------
Name: J. Alden Butler
Title: Senior Vice President
GOLDMAN, SACHS & CO.
By: /s/ Richard Coppersmith
------------------------------------
Name: Richard Coppersmith
Title: VP
71
<PAGE> 76
GUARANTEE MUTUAL LIFE COMPANY
By: /s/ Beth A. True
------------------------------------
Name: Beth A. True
Title: Director-Investment
Administration
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: /s/ Bruce E. Gaudette
------------------------------------
Name: Bruce E. Gaudette
Title: Vice President
MUTUAL OF OMAHA
INSURANCE COMPANY
By: /s/ M.G. Echtenkamp
------------------------------------
Name: M.G. Echtenkamp
Title: Second Vice President
OHIO CASUALTY
INSURANCE COMPANY
By: /s/ Richard B. Kelly
------------------------------------
Name: Richard B. Kelly
Title: Senior Investment
Officer
PRINCIPAL MUTUAL LIFE
INSURANCE COMPANY
By: /s/ Warren Shank
------------------------------------
Name: Warren Shank
Title: Counsel
By: /s/ Nora M. Everett
------------------------------------
Name: Nora M. Everett
Title: Counsel
72
<PAGE> 77
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: /s/ Angela Brock-Kyle
------------------------------------
Name: Angela Brock-Kyle
Title: Associate Director
TRANSAMERICA LIFE INSURANCE
AND ANNUITY COMPANY
By: /s/ John M. Casparian
------------------------------------
Name: John M. Casparian
Title: Investment Officer
TRANSAMERICA OCCIDENTAL LIFE
INSURANCE COMPANY
By: /s/ John M. Casparian
------------------------------------
Name: John M. Casparian
Title: Investment Officer
UNITED MUTUAL LIFE
INSURANCE COMPANY
By: /s/ M.G. Echtenkamp
------------------------------------
Name: M.G. Echtenkamp
Title: Second Vice President
73
<PAGE> 78
PURCHASER SCHEDULE
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
CENTRAL LIFE ASSURANCE COMPANY $5,000,000
(1) All payments on account of the Notes shall be made by wire transfer of
immediately available funds to:
Central Life Assurance Company
Account No. 000-756
Norwest Bank Iowa, N.A.
7th and Walnut Street
Des Moines, Iowa 50304
ABA No. 073-000-228
(2) All notice of and written communication of payment information should
be directed to:
Central Life Assurance Company
611 Fifth Avenue
Des Moines, Iowa 50309
Attn: Vice President - Private Placements
(3) All other communications should be directed to:
Central Life Assurance Company
611 Fifth Avenue
Des Moines, Iowa 50309
Attn: Vice President - Private Placements
(4) Securities should be delivered to:
Central Life Assurance Company
611 Fifth Avenue
Des Moines, Iowa 50309
Attn: Diane Cortese
(5) Tax Identification No. 42-0175-020
<PAGE> 79
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
FARM BUREAU LIFE INSURANCE COMPANY $3,000,000
(registered in the name
of Auer & Company)
(1) All payments on account of the Notes shall be made by wire transfer of
immediately available funds to:
Bankers Trust Co.
ABA No. 021-001-033
Private Placement Processing No. 99-991-145
For credit to #098642
Farm Bureau Life Insurance Co.
Description of Payment
(2) All financial reports (in duplicate) should be sent to:
FARM BUREAU LIFE INSURANCE COMPANY
5400 University Avenue
West Des Moines, IA 50266
Attn: Investment Dept.
BANKERS TRUST COMPANY
16 Wall Street, 4th Floor
New York, NY 10005
Attn: Rich McCormick
(3) Securities should be delivered to:
BANKERS TRUST COMPANY
16 Wall Street, 4th Floor
New York, NY 10005
Attn: Rich McCormick
(4) Taxpayer Identification No. 42-0623913
2
<PAGE> 80
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
FBL INSURANCE COMPANY $2,000,000
(registered in the name
of Auer & Company)
(1) All payments on account of the Notes shall be made by wire transfer of
immediately available funds to:
Bankers Trust Co.
ABA No. 021-001-033
Private Placement Processing No. 99-991-145
For credit to #098644
FBL Insurance Company
Description of Payment
(2) All financial reports (in duplicate) should be sent to:
FBL INSURANCE COMPANY
5400 University Avenue
West Des Moines, IA 50266
Attn: Investment Dept.
BANKERS TRUST COMPANY
16 Wall Street, 4th Floor
New York, NY 10005
Attn: Rich McCormick
(3) Securities should be delivered to:
BANKERS TRUST COMPANY
16 Wall Street, 4th Floor
New York, NY 10005
Attn: Rich McCormick
(4) Taxpayer Identification No. 42-1131824
3
<PAGE> 81
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
FIRST COLONY LIFE INSURANCE COMPANY $10,000,000
(1) All payments on or in respect of the Notes to be by bank wire transfer
of Federal or other immediately available funds (identifying each
payment as "Plum Creek Timber Company, L.P., 8.73% Senior Notes, due
08/01/09") to:
Crestar Bank
Richmond, Virginia
ABA No. 0510-0002-0
Credit - 2111
Attn: Income Processing Unit Number 27955
for credit to First Colony Life Insurance
Company's
Account No. 10765400
(2) All notices and communications, including notices with respect to
payments and written confirmation of each such payment to:
FIRST COLONY LIFE INSURANCE COMPANY
700 Main Street
Lynchburg, Virginia 24504
Attn: Mr. George D. Vermilya, Jr.
(3) Securities should be delivered by registered mail to:
FIRST COLONY LIFE INSURANCE COMPANY
700 Main Street
Lynchburg, Virginia 24504
Attn: Mr. George D. Vermilya, Jr.
(4) Taxpayer Identification No. 540-596-414
4
<PAGE> 82
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
GOLDMAN, SACHS & CO. $14,000,000
(1) All payments on account of the Notes shall be made by wire transfer of
immediately available funds to:
Chase Manhattan Bank
85 Broad Street
New York, NY 10004
Account No. 930-1-011-483
Attn: John Ippolito
Ref: Plum Creek Timber Company, L.P.
(2) All notice of and written communication of payment information should
be directed to:
Chase Manhattan Bank
85 Broad Street
New York, NY 10004
Account No. 930-1-011-483
Attn: John Ippolito
Ref: Plum Creek Timber Company, L.P.
(3) All other communications should be directed to:
Chase Manhattan Bank
85 Broad Street
New York, NY 10004
Account No. 930-1-011-483
Attn: John Ippolito
Ref: Plum Creek Timber Company, L.P.
(4) Securities should be delivered to:
Chase Manhattan Bank
85 Broad Street
New York, NY 10004
Account No. 930-1-011-483
Attn: John Ippolito
Ref: Plum Creek Timber Company, L.P.
(5) Tax Identification No. 13-510-8880
5
<PAGE> 83
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
GUARANTEE MUTUAL LIFE COMPANY $3,000,000
(1) All payments on account of the Notes shall be made by wire transfer of
immediately available funds to:
Bankers Trust Company
16 Wall Street
New York, NY 10015
ABA No. 021-001-033
Credit: Guarantee Mutual Life Company
Account No. 50-035-201
(2) All notice of and written communication of payment information should
be directed to:
Guarantee Mutual Life Company
8801 Indian Hills Drive
Omaha, NE 68114
Attn: Investment Division
(3) All other communications should be directed to:
Guarantee Mutual Life Company
8801 Indian Hills Drive
Omaha, NE 68114
Attn: Investment Division
(4) Securities should be delivered to:
Guarantee Mutual Life Company
8801 Indian Hills Drive
Omaha, NE 68114
Attn: Investment Division
(5) Tax Identification No. 42-017-9235
6
<PAGE> 84
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY $6,500,000
[IFM Traditional Account]
(1) All payments on account for the Notes shall be made by wire transfer
of immediately available funds to:
Chemical Bank
ABA No. 021-00128
Institutional Client Services
4 New York Plaza -- 4th Floor
New York, NY 10004-2413
Account No. 321-029-852
(2) All notice of and written confirmation of payment information should
be directed to:
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111
Attn: Securities Custody and Collection Dept.,
E381
Tel: (413) 788-8411
Fax: (413) 744-6263
(3) All other communications should be directed to:
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111
Tel: (413) 788-8411
Fax: (413) 744-6127
(4) Tax Identification Number: 04-1590850
7
<PAGE> 85
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY $3,500,000
[Pension Management GIA Account]
(1) All payments on account for the Notes shall be made by wire transfer
of immediately available funds to:
Chemical Bank
ABA No. 021-00128
Institutional Client Services
4 New York Plaza -- 4th Floor
New York, NY 10004-2413
Account No. 321-029-828
(2) All notice of and written confirmation of payment information should
be directed to:
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111
Attn: Securities Custody and Collection Dept.,
E381
Tel: (413) 788-8411
Fax: (413) 744-6263
(3) All other communications should be directed to:
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111
Tel: (413) 788-8411
Fax: (413) 744-6127
(4) Tax Identification Number: 04-1590850
8
<PAGE> 86
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
MUTUAL OF OMAHA INSURANCE COMPANY $4,000,000
(1) All principal and interest payments on the Notes shall be made by wire
transfer of immediately available funds to:
First National Bank Omaha
ABA No. 1040-00016
16th & Dodge Street
Omaha, NE 68102
For Credit to:
Mutual of Omaha Insurance Company
Account No. 26-743587
For payment on:______________
_____________________________
Interest Amount:
Principal Amount:
(2) Address for all notices in respect of payment:
Mutual of Omaha Insurance Company
Attn: Investments/Investment Accounting
Mutual of Omaha Plaza
Omaha, NE 68175
(3) Address for all other communications:
Mutual of Omaha Insurance Company
Attn: Investment Division
Mutual of Omaha Plaza
Omaha, NE 68175
(4) Address for delivery of securities
Mutual of Omaha Insurance Company
Attn: Investments/Securities Accounting
Mutual of Omaha Plaza
Omaha, NE 68175
(5) Taxpayer Identification No. 47-0246511
9
<PAGE> 87
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
OHIO CASUALTY INSURANCE COMPANY $3,000,000
(registered in the name of Elite & Co.)
(1) All payments on account of the Notes shall be made by wire transfer of
immediately available funds to:
Bank of America
ABA No. 121000358
Credit: Custody Plus Insurance
Account No. 1257-9-03422
Attn: Ohio Casualty Insurance Company
Sender's Name________________________
Credit to: QD-7-15125-1
(2) All notices of and written confirmation of payment information should
be directed to:
The Ohio Casualty Group
Jane A. Schriever, Investment Records
136 N. Third Street
Hamilton, OH 45025
Tel: (513) 867-6316
Fax: (513) 867-3964
and also to:
Bank of America
Ruth Hankins, Senior Business Manager
P.O. Box 93487
Pasadena, CA 91109-3487
or
299 N. Euclid Avenue, 4th Floor
Pasadena, CA 91101
Tel: (818) 405-3460
Fax: (818) 449-9025
(3) All other communications should be directed to:
Eric P. Scruggs, Portfolio Mngr., Prvt. Plcmt. Invstmt.
136 N. Third Street
Hamilton, OH 45025
Tel: (513) 867-3696
Fax: (513) 867-3228
10
<PAGE> 88
(4) Securities should be delivered to:
BankAmerica National Trust Company
One World Trade Center 13th Floor
New York, NY 10048
For account of CPI
Customer Account No. QD-7-15125-1
Account No. 4-09046 CPI
(5) Taxpayer Identification No. 31-0396250
11
<PAGE> 89
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY $25,000,000
(1) All payments on account of the Note shall be made by wire transfer of
immediately available funds to its Account No. 014752 at Norwest Bank
Iowa, N.A., 7th & Walnut Streets, Des Moines, IA 50309, with
sufficient information to identify the source and application of such
funds, including identifying each payment as "Plum Creek Timber
Company, L.P. 8.73% Senior Notes due August 1, 2009, the Bond No.
(1-B-60129) and PPN (729237 A@ 6) of the issue.
(2) Address for all notices in respect of payment:
711 High Street
Des Moines, IA 50392-0960
Attn: Investment Accounting & Treasury - Securities
Fax: (515) 248-2643
(3) Address for all other communications:
711 High Street
Des Moines, IA 50392-0800
Attn: Investment Department Securities Division
Fax: (515) 248-2490
(4) Taxpayer Identification No. 42-0127290
12
<PAGE> 90
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
TEACHERS INSURANCE AND ANNUITY $50,000,000
ASSOCIATION OF AMERICA
(1) All payments on account of Teachers Insurance and Annuity Association
of America shall be made in immediately available funds at the opening
of business on the due date by electronic funds transfer, identifying
it as PLUM CREEK TIMBER COMPANY, L.P., PPN 729237 A@ 6, $50,000,000
8.73% Senior Note due August 1, 2009 (principal or interest), through
the Automated Clearing House System to:
Morgan Guaranty Trust Company of New York
ABA No. 021-000-238
23 Wall Street
New York, NY 10015
Account of: Teachers Insurance and Annuity
Association of America
Account No. 121-85-001
On Order of: Plum Creek Timber Company, L.P.
(2) Contemporaneous with the above electronic funds transfer, mail or send
by facsimile the following information setting forth: (i) the full
name, private placement number, interest rate and maturity date of the
Notes or other obligations; (ii) the allocation of payment between
principal, interest, premium and any special payment; and (iii) the
name and address of bank from which such electronic funds transfer was
sent, to:
Teachers Insurance and Annuity
Association of America
730 Third Avenue
New York, NY 10017
Attn: Securities Accounting Division
Tel: (212) 916-4188
Fax: (212) 916-6199
13
<PAGE> 91
(3) All of the communications shall be delivered or mailed to:
Teachers Insurance and Annuity
Association of America
730 Third Avenue
New York, NY 10017
Attn: Securities Division
Tel: (212) 916-5724 (Angela Brock-Kyle) or
(212) 490-9000 (general number)
Fax: (212) 916-6582
(4) Securities should be delivered to:
Teachers Insurance and Annuity
Association of America
730 Third Avenue
New York, NY 10017
Attn: Timothy F. Hodgdon
Corporate Finance Law
(5) Taxpayer Identification No. 13-1624203N
14
<PAGE> 92
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
TRANSAMERICA OCCIDENTAL LIFE $5,000,000
INSURANCE COMPANY
(1) All payments on account for the Notes shall be made by wire transfer
of immediately available funds to:
Bank of America NT & SA
Corporate Service Center #1233
1859 Gateway Blvd.
Concord, CA 94520
Attn: Terry Peach
ABA No. 121-000-358
Account No. 12353-04390
(2) All notice of and written confirmation of payment information should
be directed to:
TransAmerica Securities Accounting
P.O. Box 2101
Los Angeles, CA 90051-0101
Attn: Elaine S. Farrell, Manager
(3) All other communications should be directed to:
John Casparian
TransAmerica Investment Services
1150 South Olive Street
Suite 2700
Los Angeles, CA 90015
(4) Securities should be delivered to:
John Casparian
TransAmerica Investment Services
1150 South Olive Street
Suite 2700
Los Angeles, CA 90015
(5) Tax Identification Number: 95-1060502
15
<PAGE> 93
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
TRANSAMERICA LIFE AND $5,000,000
ANNUITY INSURANCE COMPANY
(1) All payments on account for the Notes shall be made by wire transfer
of immediately available funds to:
Bank of America NT & SA
Corporate Service Center #1233
1859 Gateway Blvd.
Concord, CA 94520
Attn: Terry Peach
ABA No. 121-000-358
Account No. 12353-04395
(2) All notice of and written confirmation of payment information should
be directed to:
TransAmerica Securities Accounting
P.O. Box 2101
Los Angeles, CA 90051-0101
Attn: Elaine S. Farrell, Manager
(3) All other communications should be directed to:
John Casparian
TransAmerica Investment Services
1150 South Olive Street
Suite 2700
Los Angeles, CA 90015
(4) Securities should be delivered to:
John Casparian
TransAmerica Investment Services
1150 South Olive Street
Suite 2700
Los Angeles, CA 90015
(5) Tax Identification Number: 95-6140222
16
<PAGE> 94
PRINCIPAL AMOUNT
NAME OF PURCHASER OF NOTE
UNITED OF OMAHA LIFE INSURANCE COMPANY $11,000,000
(1) All principal and interest payments on the Notes shall be made by wire
transfer of immediately available funds to:
FirsTier Bank - Omaha
ABA No. 1040-0002-9
17th & Farnam Street
Omaha, NE 68102
For Credit to:
United of Omaha Life Insurance Company
Account No. 144-7-076
For payment on:______________
_____________________________
Interest Amount:
Principal Amount:
(2) Address for all notices in respect of payment:
United of Omaha Life Insurance Company
Attn: Investments/Securities Accounting
Mutual of Omaha Plaza
Omaha, NE 68175
(3) Address for all other communications:
United of Omaha Life Insurance Company
Attn: Investment Division
Mutual of Omaha Plaza
Omaha, NE 68175
(4) Address for delivery of securities
United of Omaha Life Insurance Company
Attn: Investments/Securities Accounting
Mutual of Omaha Plaza
Omaha, NE 68175
(5) Taxpayer Identification No. 47-0322111
17
<PAGE> 95
EXHIBIT A
PLUM CREEK TIMBER COMPANY, L.P.
8.73% Senior Note due August 1, 2009
No. R-___ New York, New York
$________ , 1994
PPN: 729237 A@ 6
FOR VALUE RECEIVED, the undersigned, PLUM CREEK TIMBER
COMPANY, L.P. (the "Company"), a limited partnership duly organized under the
Delaware Revised Uniform Limited Partnership Act, hereby promises to pay to
_______________________________________, or registered assigns, the principal
sum of ______________ DOLLARS on August 1, 2009, with interest (computed on the
basis of a 360-day year consisting of twelve 30-day months) (a) on the unpaid
balance thereof at the rate of 8.73% per annum from the date hereof, payable on
the first day of February and August in each year, commencing with the February
1 or August 1 next succeeding the date hereof, until the principal hereof shall
have become due and payable, and (b) on any overdue payment (including any
overdue prepayment) of principal, any overdue payment of premium and, to the
extent permitted by applicable law, any overdue payment of interest, payable
semiannually as aforesaid (or, at the option of the registered holder hereof,
on demand), at a rate per annum from time to time equal to the greater of (i)
9.73% or (ii) the rate of interest publicly announced by Morgan Guaranty Trust
Company of New York from time to time in New York City as its Prime Rate plus
2.0%.
Payments of principal, premium, if any, and interest are to be
made at the main office of Morgan Guaranty Trust Company of New York in New
York City or at such other place as the holder hereof shall designate to the
Company in writing, in lawful money of the United States of America.
This Note is one of the Company's 8.73% Senior Notes due
August 1, 2009 (the "Notes") issued pursuant to separate identical Senior Note
Agreements, each dated as of August 1, 1994 (the "Agreements"), between the
Company and the respective original purchasers of the Notes named in the
Purchaser Schedule attached thereto and is entitled to the benefits thereof.
As provided in the Agreements, this Note is subject to prepayment, in whole or
from time to time in part, with such premium as is specified in the Agreements.
Form of Senior Note
<PAGE> 96
This Note is a registered Note and, as provided in the
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company shall not be affected by any notice to
the contrary.
In case an Event of Default, as defined in the Agreements,
shall occur and be continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner and with the effect provided in
the Agreements.
2
Form of Senior Note
<PAGE> 97
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF SUCH STATE.
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company,
L.P., as General Partner
By: _______________________________
Title
3
Form of Senior Note
<PAGE> 98
EXHIBIT B-1
August 1, 1994
To each of the Purchasers listed
in the attached Purchaser Schedule:
Plum Creek Timber Company, L.P.
8.73% Senior Notes due August 1, 2009
Dear Purchaser:
We have acted as special counsel to you and the other
purchasers listed in the attached Purchaser Schedule in connection with the
issue and sale to you and such other purchasers today by Plum Creek Timber
Company, L.P., a Delaware limited partnership (the "Company"), of $150,000,000
aggregate principal amount of its 8.73% Senior Notes due August 1, 2009 (the
"Senior Notes"), pursuant to separate Senior Note Agreements (the "Senior Note
Agreements"), each dated as of August 1, 1994, between the Company and you and
between the Company and each of such other purchasers, respectively.
Capitalized terms used in this opinion without definition have the respective
meanings specified in the Senior Note Agreements.
<PAGE> 99
To each of the Purchasers 2 August 1, 1994
In so acting, we have participated in the preparation of the
Senior Note Agreements and the Senior Notes. We have also examined and relied
upon the representations and warranties as to factual matters contained in or
made pursuant to the Senior Note Agreements and have examined and relied upon
the originals, or copies certified or otherwise identified to our satisfaction,
of such records, documents, certificates and other instruments, and have made
such other investigations, as in our judgment are necessary or appropriate to
enable us to render the opinion expressed below.
We are of the following opinion:
1. Organization, Standing, etc. of the Company. The Company
is a limited partnership duly organized, validly existing and in good standing
under the Delaware Revised Uniform Limited Partnership Act (the "Act") amid has
all requisite partnership power and authority to enter into and carry out the
terms of the Senior Note Agreements and to issue and sell the Senior Notes.
2. Compliance with Partnership Agreement. The execution,
delivery and performance by the Company of the Senior Note Agreements and the
Senior Notes will not result in any violation of or be in conflict with or
constitute a default under any term of the Partnership Agreement.
3. Governmental Consent. No consent, approval or
authorization of, or declaration or filing with, any governmental authority on
the part of the Company is required under Federal or New York law for the valid
execution and delivery by the Company of the Senior Note Agreements or the
valid offer, issue, sale and delivery of the Senior Notes pursuant to the
Senior Note Agreements.
4. Senior Note Agreements and Senior Notes. The Senior Note
Agreements and the Senior Notes have been duly authorized by all necessary
action on the part of the Company. The Senior Note Agreement between the
Company and you and the Senior Notes purchased by you today have been duly
executed and delivered by the Company and constitute legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
of general application relating to or affecting the rights and remedies of
creditors and by general principles of equity.
2
<PAGE> 100
To each of the Purchasers 3 August 1, 1994
5. Securities Act. The offer, issue, sale and delivery of
the Senior Notes under the circumstances contemplated by the Senior Note
Agreements constitute exempted transactions under the registration provisions
of the Securities Act of 1933, as amended, and neither the registration of the
Senior Notes thereunder nor the qualification of an indenture in respect of the
Senior Notes under the Trust Indenture Act of 1939, as amended, is required in
connection with such offer, issue, sale and delivery.
We have reviewed the opinion, dated today and addressed to
you, of James A. Kraft, Vice President, Law for the Company. Such opinion is
satisfactory to us in scope and form, and, on the basis of such review, it is
our opinion that you are justified in relying thereon. Our review of such
opinion included such investigations and procedures as in our judgment were
necessary or appropriate in order to enable us to reach the conclusion that
your reliance thereon is reasonable under the circumstances.
We are members of the Bar of the State of New York and our
opinion is limited to the laws of the State of New York, the Delaware Revised
Uniform Limited Partnership Act and the Federal Laws of the United States of
America.
Very truly yours,
/s/ DEBEVOISE & PLIMPTON
3
<PAGE> 101
PURCHASER SCHEDULE
Central Life Assurance Company
Farm Bureau Life Insurance Company
FBL Life Insurance Company
First Colony Life Insurance Company
Goldman, Sachs & Co.
Guarantee Mutual Life Company
Massachusetts Mutual Life Insurance Company
Mutual of Omaha Insurance Company
Ohio Casualty Insurance Company
Principal Mutual Life Insurance Company
Teachers Insurance and Annuity Association
of America
Transamerica Occidental Life Insurance Company
Transamerica Life and Annuity Insurance Company
United of Omaha Life Insurance Company
<PAGE> 102
EXHIBIT B-2
August 1, 1994
To each of the Purchasers listed
in the attached Purchaser Schedule:
Plum Creek Timber Company, L.P.
8.73% Senior Notes due August 1, 2009
Dear Purchaser:
I am the Vice President, Law of Plum Creek Management Company,
L.P., (the "General Partner") which serves as the general partner of Plum Creek
Timber Company, L.P., a Delaware limited partnership (the "Company"). In such
capacity I have acted as counsel to the Company and as such I am familiar with
transactions contemplated by those separate Senior Note Agreements, each dated
as of August 1, 1994, between the Company, you and each of the Other
Purchasers, respectively, (the "Note Agreements"). Capitalized terms used in
this opinion without definition have the respective meanings specified in the
Note Agreements.
<PAGE> 103
To each of the Purchasers 2 August 1, 1994
In so acting, I have examined the following documents:
(a) the Notes; and
(b) the Note Agreements.
The Notes and the Note Agreements described in items (a) and
(b) above are sometimes herein collectively referred to as the "Loan
Documents". This opinion is being delivered to you pursuant to paragraph 3B of
the Note Agreements.
In such capacity, I have participated in the preparation of
the Loan Documents. For purposes of this opinion, I have (a) investigated such
questions of law, (b) examined such certificates of public officials and of
officers of the Company and other documents, as in my judgment are necessary or
appropriate to enable me to render the opinions expressed below, and (c) relied
upon the representations and warranties as to factual matters contained in or
made pursuant to the Loan Documents and in the Memorandum. In addition, I have
with your approval, assumed (i) the genuineness of the signatures of Persons
signing all Loan Documents in connection with which this opinion is rendered on
behalf of parties thereto (other than Persons signing on behalf of the
Company), (ii) the authority of all Persons signing all documents on behalf of
the parties thereto (other than Persons signing on behalf of the Company),
(iii) the authenticity of all documents submitted to me as originals, (iv) the
conformity to authentic original documents of all documents submitted to me as
certified, conformed or photostatic copies, (v) that each of the parties to the
Loan Documents other than the Company has all requisite power and authority to
execute, deliver and perform the Loan Documents to which it is a party and (vi)
the due authorization, execution and delivery of the Loan documents by all the
parties thereto other than the Company.
Based upon the foregoing, and subject to the further
assumptions and qualifications hereinafter set forth, I am of the opinion,
that:
1. The Company is a limited partnership duly organized,
validly existing and in good standing under the Delaware Revised Uniform
Limited Partnership Act and has all requisite partnership power and authority
to own and operate
2
<PAGE> 104
To each of the Purchasers 3 August 1, 1994
its properties, to conduct its business as currently conducted, to execute and
deliver the Loan Documents, to issue and sell the Notes and to carry out the
terms of the Note Agreements and the Notes. The Company has been qualified or
registered and is in good standing as a foreign limited partnership for the
transaction of business under the laws of the States of Washington, Idaho and
Montana, which are the only jurisdictions in which the failure so to qualify or
register would be likely, in my reasonable judgment, to subject the Company to
any liability or disability which would be material to the financial condition
or operations of the Company or to have a material adverse effect upon the
ability of the Company to perform its obligations under the Loan Documents.
2. The Note Agreements and the Notes have been duly
authorized by all necessary partnership action on the part of the Company. The
Note Agreements between the Company and you and the Notes purchased by you
today have been duly executed and delivered on behalf of the Company, and
constitute the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, subject to the
qualifications that (a) such enforceability may be limited by bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditor's rights generally, (b) such enforceability may be
limited by public policy, and (c) the enforceability of equitable rights and
remedies is subject to equitable defenses and judicial discretion and such
enforceability may be limited by general equitable principles.
3. The Company is not in violation of any term of the
Partnership Agreement or, to my knowledge, of any term of any other agreement
or instrument to which it is a party or by which it or any of its properties is
bound or, to my knowledge, of any term of any applicable law, ordinance, rule
or regulation of any governmental authority or, to my knowledge, of any term of
any applicable order, judgment or decree of any court, arbitrator or
governmental authority, the consequences of which violations, individually or
in the aggregate, would be reasonably likely to have a material adverse effect
on its business, property or assets, condition or operations or on the ability
of the Company to perform its obligations under the Loan Documents. The
execution, delivery and performance by the Company of the Loan Documents will
not result in any violation of or be in conflict with or constitute a default
under any such term or
3
<PAGE> 105
To each of the Purchasers 4 August 1, 1994
result in the creation of (or impose any obligation on the Company to create)
any Lien (other than the Liens required by paragraph 5C of the Note Agreements)
upon any of the properties or assets of the Company.
4. No consent, approval or authorization of, or declaration
or filing with, or the taking of any other action in respect of, any
commission, authority, governmental agency or body of the United States of
America or the State of Washington, Idaho, Delaware or Montana is required for
the valid execution, delivery and performance by the Company of the Loan
Documents or the valid offer, issue, sale and delivery of the Notes pursuant to
the Note Agreements except such consents, approvals or authorizations as have
been obtained and such filings as may be required under state securities laws
or Blue Sky Laws in connection with the offer, issue, sale and delivery of the
Notes.
5. There are no legal or governmental proceedings to which
the Company is a party or to which any property or assets of the Company is
subject or which is pending or, to the best of my knowledge, threatened against
the Company which questions the validity of the Loan Documents or any actions
pursuant thereto or which would be reasonably likely to result in any material
adverse change in the business, property or assets, condition or operations of
the Company.
6. The company is not an "investment company" as defined
under the Investment Company Act of 1940, as amended, nor is the Company or the
issue and sale of the Notes by the Company subject to regulation thereunder.
7. Based upon the representations of the Purchasers contained
in the Note Agreements, the offer, issue, sale and delivery of the Notes under
the circumstances contemplated by the Note Agreements constitute exempt
transactions under the registration provisions of the Securities Act of 1933,
as amended, and neither the registration of the Notes thereunder nor the
qualification of an indenture in respect of the Notes under the Trust Indenture
Act of 1939, as amended, is required in connection with such offer, issue, sale
and delivery.
8. Based upon the representation of the Company as to the use
of the proceeds of the Notes contained in the Note Agreements, the issue and
sale of the Notes do not violate Regulation G, T or X of the Board of Governors
of the Federal Reserve System.
4
<PAGE> 106
To each of the Purchasers 5 August 1, 1994
The opinions expressed herein are based upon and limited
exclusively to the laws of the State of Washington, the Delaware Revised
Uniform Limited Partnership Act, and federal laws of the United States of
America insofar as any of such laws are applicable, and I render no opinion
with respect to any other laws, except that the opinions expressed in
paragraphs 1, 2, 3 and 4 cover the laws of the State of Idaho, Montana, New
York, Delaware or Washington, in each case, insofar as any such laws are
applicable.
This opinion is solely for your benefit in connection with the
transactions contemplated by the Note Agreements and may not be relied upon by
any Person other than you or any transferee of any Note. This opinion is not
to be quoted in whole or in part or otherwise referred to (except in a list of
closing documents in connection with the transactions described herein), nor
shall it be filed with any governmental agency or other Person without my prior
written consent. I express no opinion with respect to any matter not expressly
set forth in this opinion.
Very truly yours,
/s/ James A. Kraft
James A. Kraft
Vice President, Law
5
<PAGE> 107
PURCHASER SCHEDULE
Central Life Assurance Company
Farm Bureau Life Insurance Company
FBL Insurance Company
First Colony Life Insurance Company
Goldman, Sachs and Company
Guarantee Mutual Life Company
Massachusetts Mutual Life Insurance Company
Mutual of Omaha Insurance Company
Ohio Casualty Insurance Company
Principal Mutual Life Insurance Company
Teachers Insurance and Annuity Association of America
Transamerica Occidental Life Insurance Company
United of Omaha Life Insurance Company
<PAGE> 108
EXHIBIT D
LIENS
Mortgage, Security Agreement and Fixture Filings dated June 8,
1989 recorded in Flathead, Lake and Lincoln Counties, Montana as supplemented
and amended by Mortgage Recording Supplements and Security Agreement and
Fixture Filings dated January 1, 1991; and Deed of Trust, Security Agreement
and Fixture Filing dated June 8, 1989 recorded in Kittitas County, Washington;
all of which were executed by Plum Creek Manufacturing, Inc. in favor of First
Interstate Bank of Washington, N.A., as Trustee, to secure the indebtedness
evidenced by the Mortgage Note Agreement dated May 31, 1989 among Plum Creek
Manufacturing, Inc., Plum Creek Timber Company, L.P. as guarantor, and each of
the purchasers of the Mortgage Notes, as amended by the Mortgage Note Agreement
Amendment, Consent and Waiver dated as of January 1, 1991 among Plum Creek
Manufacturing, Inc., Plum Creek Timber Company, L.P., Plum Creek Merger
Company, Inc., Plum Creek Manufacturing, L.P., and the several holders of the
11-1/8% First Mortgage Notes.
<PAGE> 109
EXHIBIT E
Plum Creek Timber Company, L.P.
Permitted Investments
1. 98% interest in Plum Creek Manufacturing, L.P.
2. 96% interest in Plum Creek Marketing, Inc.
<PAGE> 110
EXHIBIT F
Environmental notices from Federal, State and Local
Environmental Agencies to the Company citing environmental violations that have
not been finally resolved and disposed of:
EPA/North American Environmental Inc. (Clearfield, UT)
The Environmental Protection Agency ("EPA") has designated a storage
facility for hazardous substances located in Clearfield, Utah,
formerly run by North American Environmental, Inc. ("NAE"), as a
superfund site. In August, 1992, the EPA notified approximately 225
potential responsible parties ("PRP") including Plum Creek, based on
storage by the Company of hazardous waste at the site from 1989-1992.
In 1989, Plum Creek contracted with a third party to remove and
transport transformers and components ("transformers") from its
Columbia Falls, Montana facility. These transformers, which contained
polychlorinated biphenyls ("PCB"), a federally listed hazardous
substance, were transported to the NAE facility for permanent storage.
In 1992, Plum Creek contracted with certified third parties to
identify, remove, transport and dispose of the transformers.
The Company's transformers were identified, removed and transported to
Coffeyville, Kansas. They have been destroyed and certificates of
destruction have been provided to Plum Creek. To the best of Plum
Creek's knowledge, no release, leak or discharge from the transformers
occurred at the NAE facility. The EPA is encouraging a cooperative
settlement among the potential generators through a PRP steering
committee. The EPA also has issued a consent order of agreement to
PRPs with waste remaining at Freeport. The Company was not included
as a party to the cleanup agreement.
Based on the fact that Plum Creek has already removed its stored
items, has no knowledge of any release from any of its stored items
and has no orphan items, the Company believes that it should not have
any liability.
<PAGE> 111
State of Montana / Evergreen Plywood glue pit (Kalispell, MT)
The cite of a cistern which had been used by a prior owner at Plum
Creek's Evergreen complex was placed on the "CERLIS" list of potential
Superfund sites in 1980. When the cistern was later exhumed, visibly
contaminated soil was removed and the area was refilled with clean
soil. In conjunction with the construction of a new building, the
site was excavated and samples were taken and analyzed in consultation
and cooperation with a state representative. No visible evidence of
contamination was found, and the state authorized Plum Creek to fill
the excavation and construct the new building over it. Correspondence
from the Montana Department of Health and Environmental Services
states that there is no off-site migration of contaminants and the
current status of the site is 'No Further Action.'
EPA / Somers site (Somers, MT)
Burlington Northern Railroad (the "Railroad") and predecessors had a
railroad tie processing plant located at Somers, Montana. This site
is a designated Superfund site and clean up is on-going. A
predecessor company of Plum Creek owned a portion of the land, which
now has been transferred to an affiliate of the Railroad.
Burlington Northern Railroad has taken full responsibility for the
Superfund clean up and Plum Creek does not anticipate any liability.
DOE / Old Landsburg Mine Site (Ravensdale, WA)
In March, 1990, the State of Washington Department of Ecology ("DOE")
alleged that a release or threatened release of a hazardous substance
had occurred in an area designated "The Old Landsburg Mine."
Landowners are Palmer Coking Coal Company (Palmer) and Plum Creek.
Plum Creek and other Potentially Liable Parties (PLP) are required to
respond to the DOE regarding a high priority clean up of the site
under the Model Toxics Control Act. From 1991 to the present, Plum
Creek has participated on a PLP task force which has cooperated
voluntarily with the DOE removed barrels and fenced the site and under
an Agreed Order is participating in a
2
<PAGE> 112
Remedial Investigation/Feasibility Study (RI/FS). Plum Creek does not
believe it will be ultimately liable for disposal of barrels or
hazardous waste at the site and is vigorously defending its position.
To the extent liability is assessed against Plum Creek as a landowner,
the Company believes that Palmer, by virtue of the terms of a lease
entered between 1978 and 1983, and/or Burlington Northern Inc., by
virtue of an indemnity contained in the deed that transferred the
property to Plum Creek, will be responsible.
Yakima Health District / Dump Site (Yakima County, WA)
The Yakima Health District notified Plum Creek of the existence of a
garbage dump site on lands owned by Plum Creek as well as adjacent
lands owned by Champion International Corporation ("Champion"). Plum
Creek and Champion have caused the garbage to be removed and
anticipate receiving clearance from the Yakima Health Department.
State of Montana / Columbia Falls Boiler (Columbia Falls, MT)
The State of Montana Air Quality Board (AQB) issued Plum Creek a
citation for construction of emission control equipment (an
electrostatic precipitator) on the boiler without a permit. Plum
Creek has met with the AQB and is awaiting further action.
EPA / NOV under the Clean Air Act - Evergreen Veneer Dryers (Kalispell, MT)
On May 1, 1992, the Company received a Notice of Violation ("NOV")
from the EPA under the Clean Air Act. The NOV alleges that Plum
Creek's Evergreen veneer dryers in Kalispell, Montana were not in
compliance with an air quality permit on January 15, 1992 when
allegedly visible emissions from the veneer dryers were observed by
the EPA. These dryers were also the subject of a suit filed by the
MAQB in March 1990. Prior to the January 15, 1992 alleged violation,
the Company entered into a Consent Decree with the MAQB. The Company
installed approximately $900,000 of emission control equipment on the
dryers on April 14, 1992, in order to comply with the permit and all
State and Federal visible emission limits. Plum Creek will work with
the EPA to provide information and resolve
3
<PAGE> 113
issues arising under the NOV. The EPA has not notified the Company
what sanctions, if any, the EPA would seek as a result of the NOV.
Plum Creek believes that there is no basis for the NOV and does not
expect any EPA action.
4
<PAGE> 114
EXHIBIT 8(G)
Subsequent to December 31, 1993, neither the Company nor the
Facilities Subsidiary has incurred any material liabilities or obligations or
entered into any material transactions not in the ordinary course of business.
Subsequent to December 31, 1993, there has not been any
material adverse change in the financial condition or operations of the Company
or the Facilities Subsidiary.
Subsequent to December 31, 1993, there have been the following
Restricted Payments declared, paid or made by the Company:
1. Fourth Quarter 1993 Distribution of Available Cash in the
amount of $18.8 million paid to Unitholders in the first
quarter of 1994;
2. First Quarter 1994 Distribution of Available Cash in the
amount of $18.8 million paid to Unitholders in the second
quarter of 1994;
3. Second Quarter 1994 Distribution of Available Cash in the
amount of $22.1 million declared but not payable to
Unitholders until August 26, 1994;
<PAGE> 115
EXHIBIT 8(K)
The Company's title to the timberlands it acquired during its
formation in 1989 includes the related hard rock mineral interests. However,
the Company did not obtain the hard rock mineral interest to most of the
865,000 acres of timberland purchased in 1993 from Champion International
Corporation. In addition, the Company does not own oil and gas mineral
interests to any of its timberlands. The title to the Company's timberlands is
subject to presently existing easements, rights of way, flowage and flooding
rights, servitudes, cemeteries, camping sites, hunting and other leases,
licenses and permits, none of which materially adversely affect the value of
the timberlands or materially restrict the harvesting of timber or other
operations of the Company.
<PAGE> 116
SCHEDULE 8 T
Plum Creek Manufacturing, L.P. is in the process of applying
for a groundwater discharge permit at the Columbia Falls complex. It has not
been determined yet whether a groundwater discharge permit will be required at
the Pablo facility.
On May 1, 1992, the Company received a Notice of Violation
("NOV") from the Environmental Protection Agency ("EPA") under the Clean Air
Act. The NOV alleges that Plum Creek's Evergreen veneer dryers in Kalispell,
Montana were not in compliance with an air quality permit on January 15, 1992
when visible emissions from the veneer dryers were observed by the EPA. These
dryers were also the subject of a suit filed by the Montana Air Quality Bureau
("MAQB") in March 1990. Prior to the January 15, 1992 alleged violation, the
Company entered into a Consent Decree with the MAQB. The Company installed
approximately $900,000 of emission control equipment on the dryers on April 14,
1992, in order to comply with the permit and all State and Federal visible
emission limits. The Company will work with the EPA to provide information and
resolve issues arising under the NOV. The EPA has not notified the Company
what sanctions, if any, the EPA would seek as a result of the NOV.
In July, 1990, the United States Fish and Wildlife Service
("USFWS") listed the Northern Spotted Owl ("Owl") as a threatened species
throughout its range in Washington, Oregon, and California under the federal
Endangered Species Act ("ESA").
At the time of the listing, the USFWS issued guidelines to be
followed by landowners in order to comply with the ESA's prohibition against
harming or harassing Owls. These guidelines were rescinded in response to an
industry lawsuit, but continue to serve as the basis for USFWS enforcement of
the ESA. The guidelines impose several requirements, including the restriction
and preclusion of harvest activities in areas within a 1.8 mile radius
(approximately 6,600 acres) of known nest sites or activity centers for pairs
of Owls or territorial single Owls ("Activity Areas"). Under the guidelines,
at least 40% in the aggregate of the area within Activity Areas has to be
maintained as suitable Owl habitat. In addition, 70 acres immediately around
nest sites has to be preserved. Under the guidelines, approximately 140,000
acres of the 330,000
<PAGE> 117
acres in the Partnership's Cascade region lie within Activity Areas. The
Company does not have an incidental take permit that would allow the Company to
harvest below these thresholds.
The USFWS announced on December 29, 1993, that it is proposing
to draft a special rule ("Special Rule") to redefine private landowner
obligations under the ESA. In its description of the proposed Special Rule,
the USFWS indicated that the guidelines would serve as the basis for regulation
in areas of special concern ("ASC") for the Owl. Outside of the ASCs, only 70
acres around nest sites would be restricted. A substantial majority of the
Partnership's Timberlands that contain occupied Owl habitat lie within ASCs.
Accordingly, the proposed Special Rule, if adopted in its current form, is not
likely to materially alter the current level of regulation on the Partnership's
activities due to the Owl.
In March 1994, the U.S. Circuit Court of Appeals for the
District of Columbia ruled in Sweet Home Chapter of Communities for a Great
Oregon v. Babbitt, that Congress never intended habitat modifications to be a
violation of the ESA. The court therefore found invalid the regulation that
defines "harm" to a species to include habitat modification. This regulation
provides the legal basis for the guideline. The government has announced that
it will appeal the ruling. The government has also taken the position that the
ruling does not apply to areas outside of the District of Columbia circuit.
Accordingly, it is unclear whether the decision will reduce the regulatory
impact of the ESA on the Partnership.
All forest practice applications ("FPA's") within Activity
Areas must also comply with the Washington State Environmental Policy Act
("SEPA") and Forest Practices Act. In June 1992, the Washington State Forest
Practices Board (the "Board") adopted regulations which provide that SEPA will
apply to FPA's for activities on the 500 acres of habitat surrounding nest
sites or activity centers. By its terms, the rule was to have sunseted in
March 1994. In February 1994, the Board, however, extended the rule for an
additional four months.
Compliance with the ESA and SEPA is causing delays and in some
cases modification of Partnership FPA's in Owl Activity Areas and may cause
denials of future Partnership FPA'S.
2
<PAGE> 118
The ESA also prohibits the federal government from causing
jeopardy to the Owl or destroying or adversely modifying its designated
critical habitat. Private landowners are potentially affected by this
restriction if a private activity requires federal action, such as the granting
of access or federal funding. Where there is such a federal connection, the
federal agency involved must consult the USFWS to determine that the proposed
activity would not cause jeopardy to the Owl or direct or indirect adverse
modification of its designated critical habitat; or if it would, then to
propose, where possible, alternatives or modifications to the proposed
activity. The Partnership's timberlands are often intermingled with federal
land in or near areas that include the habitats of a number of threatened or
endangered species such as the Owl and grizzly bear. Thus access across
federal lands to certain of the Partnership's Timberlands in such areas has
been and, is likely to continue to be, delayed by the administrative process
and legal challenges and may be subjected to restriction under the ESA.
On June 9, 1992, the USFWS published its draft recovery plan
(the "Draft Plan") for the Owl. A recovery plan, once final is not legally
binding, but it may form the basis for future regulation. The Draft Plan
recommends that 7.5 million acres of federal land be set aside in designated
conservation areas ("DCA's") where timber harvesting and road building would be
prohibited. On July 16, 1993, the Clinton Administration proposed a new forest
policy (the "Forest Plan") that would substantially reduce harvest from public
lands in Owl forests and provide for the conservation of the Owl and numerous
other species. In April 1994, the Clinton Administration formally adopted the
Forest Plan and submitted it for judicial approval. Before the Forest Plan can
be implemented the Clinton Administration intends to implement its policies
administratively. However, it is likely to be subject to additional legal
challenges and thus, its implementation remains uncertain.
The ultimate impact of the Owl listing on the Partnership will
depend on (i) the number of Activity Areas actually found on or near
Partnership Timberlands, (ii) the availability and amount of suitable habitat
within individual Activity Areas, (iii) the outcome of the Clinton
Administration's forest policy, including the proposed Special Rule, (iv)
future regulations and restrictions placed on private and public lands, (v)
promulgation, interpretation and application of Owl regulations by both
3
<PAGE> 119
the USFWS and the Washington State Department of Natural Resources, (vi) the
impact of reduced harvests upon stumpage prices, and (vii) the outcome of
pending litigation. Although continuing uncertainty surrounding efforts to
conserve the Owl make it difficult to assess the future impact of the Owl
listing on the Partnership, at this time the General Partner does not believe
that federal and state laws and regulations related to the Owl will have a
materially adverse effect on the financial position of the Company or the
results of its operations. There can be no assurances, however, that (i)
interpretation or administration of current laws and regulations, (ii) changes
in laws or regulations, (iii) increases in the number of Owls on or near
Partnership lands, or (iv) decreases in suitable habitat adjacent to
Partnership lands will not adversely affect the operations or financial
position of the Company.
4
<PAGE> 120
SCHEDULE 10(B)(1)
April 5, 1993
CORPORATE INVESTMENT POLICY
I. OBJECTIVE
This policy provides guidelines for the management of the Company's
cash. It is essential that these assets be invested in a high quality
portfolio which:
. Preserves principal
. Meets liquidity needs
. Allows for appropriate diversification of investments
. Delivers good yield in relationship to the guidelines and
market conditions
The Company is adverse to incurring market risk or credit risk, and
will generally sacrifice yield in the interest of safety. Care must
always be taken to insure that the Company's reported financial
statements are never materially affected by decreases in the market
value of securities held.
II. MATURITY OR PUT
Within the constraints provided throughout this document, or by
addendum to this document, the maximum maturity or put of any
investment instrument will be within two years from the purchase
settlement date; however, the total portfolio must have an average
maturity of less than 12 months.
III. PERMISSIBLE INVESTMENTS
A. Investments will be made in U.S. dollars only.
B. The Company may own, purchase or acquire marketable direct
obligations in the following:
1. Obligations (fixed and floating rate) issued by, or
unconditionally guaranteed by the U.S.
<PAGE> 121
April 5, 1993
Treasury, or any agency thereof, or issued by any
political subdivision of any state or public agency,
2. Commercial paper rated as A-1 or better by Standard &
Poor's, and P-1 or better by Moody's (or equivalent).
3. Floating rate and fixed rate obligations of
corporations, banks and agencies including: medium
term notes and bonds, deposit notes, and euro
dollar/yankee notes and bonds.
4. Certificates of deposit, bankers acceptances and time
deposits of commercial banks, domestic or foreign,
whose short term credit ratings are A-1/P-1 (or
equivalent).
5. Repurchase agreements collateralized by U.S. Treasury
and agency securities.
6. Insurance company Funding Agreements, Investment
Contracts, or similar obligations.
7. Asset backed and mortgage backed securities.
8. Master Notes.
9. Taxable money market preferreds.
10. Tax exempt securities including municipal
bonds/notes, money market preferreds, and variable
rate demand notes.
C. Issuing institutions shall be Corporations, Trusts,
Partnerships, and Banks domiciled in the U.S., Canada, Japan
and Western Europe, or Insurance Companies domiciled in the
U.S.
IV. CREDIT REQUIREMENTS
Safety shall always be a primary consideration in structuring the
Company's investment portfolio. Credit ratings should be tied to duration as
prescribed below in order to combine safety, liquidity and acceptable market
performance:
2
<PAGE> 122
April 5, 1993
<TABLE>
<CAPTION>
Minimum Credit Rating
---------------------
Duration S&P Moody's
-------- --- -------
<S> <C> <C>
6 months or less A- A3
6 - 18 months AA Aa2
18 months or more AAA Aaa
</TABLE>
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.
3
<PAGE> 1
EXHIBIT 10.A.1
==============================================================================
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of November 15, 1994
among
PLUM CREEK TIMBER COMPANY, L.P.
BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Agent
ABN AMRO BANK, N.V.,
as Co-Agent
and
THE OTHER FINANCIAL INSTITUTIONS PARTY THERETO
==============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Other Interpretive Provisions . . . . . . . . . . . . . . . . . . . . . . . 37
1.03 Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE II THE CREDITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.01 Amounts and Terms of Commitments . . . . . . . . . . . . . . . . . . . . . 38
2.02 Loan Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.03 Procedure for Committed Borrowing . . . . . . . . . . . . . . . . . . . . . 39
2.04 Conversion and Continuation Elections for Committed Borrowings . . . . . . 41
2.05 Bid Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
2.06 Procedure for Bid Borrowings . . . . . . . . . . . . . . . . . . . . . . . 43
2.07 Voluntary Termination or Reduction of Commitments . . . . . . . . . . . . . 48
2.08 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
2.09 Mandatory Prepayments of Loans; Mandatory Commitment Reductions . . . . . . 49
2.10 Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
2.11 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
2.12 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
2.13 Computation of Fees and Interest . . . . . . . . . . . . . . . . . . . . . 53
2.14 Payments by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . 53
2.15 Payments by the Banks to the Agent . . . . . . . . . . . . . . . . . . . . 54
2.16 Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . 55
2.17 Effect of Limitations in Facility B Credit Agreement . . . . . . . . . . . . 56
ARTICLE III THE LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
3.01 The Letter of Credit Facility . . . . . . . . . . . . . . . . . . . . . . . 56
3.02 Issuance, Amendment and Renewal of Letters of Credit . . . . . . . . . . . 58
3.03 Existing ABN Letters of Credit; Risk Participations, Drawings and
Reimbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
3.04 Repayment of Participations . . . . . . . . . . . . . . . . . . . . . . . . 64
3.05 Role of the Issuing Bank . . . . . . . . . . . . . . . . . . . . . . . . . 64
3.06 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
3.07 Cash Collateral Pledge . . . . . . . . . . . . . . . . . . . . . . . . . . 67
3.08 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
3.09 Uniform Customs and Practice . . . . . . . . . . . . . . . . . . . . . . . 68
</TABLE>
i
<PAGE> 3
<TABLE>
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<S> <C> <C>
ARTICLE IV TAXES, YIELD PROTECTION AND ILLEGALITY . . . . . . . . . . . . . . . . . . 68
4.01 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
4.02 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
4.03 Increased Costs and Reduction of Return . . . . . . . . . . . . . . . . . . 72
4.04 Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
4.05 Inability to Determine Rates . . . . . . . . . . . . . . . . . . . . . . . 74
4.06 Certificate of Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
4.07 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
ARTICLE V CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
5.01 Conditions of Initial Credit Extensions . . . . . . . . . . . . . . . . . . 75
5.02 Conditions to All Credit Extensions . . . . . . . . . . . . . . . . . . . . 78
ARTICLE VI REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . 79
6.01 Corporate Existence and Power . . . . . . . . . . . . . . . . . . . . . . . 79
6.02 Authorization; No Contravention . . . . . . . . . . . . . . . . . . . . . . 79
6.03 Governmental Authorization . . . . . . . . . . . . . . . . . . . . . . . . 80
6.04 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
6.05 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
6.06 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
6.07 ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
6.08 Use of Proceeds; Margin Regulations . . . . . . . . . . . . . . . . . . . . 83
6.09 Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
6.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
6.11 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
6.12 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
6.13 Regulated Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
6.14 No Burdensome Restrictions . . . . . . . . . . . . . . . . . . . . . . . . 85
6.15 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
6.16 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
6.17 Copyrights, Patents, Trademarks and Licenses, Etc. . . . . . . . . . . . . 85
6.18 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
6.19 Partnership Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
6.20 Broker's, Transaction Fees . . . . . . . . . . . . . . . . . . . . . . . . 86
6.21 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
6.22 Timber Harvest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
6.23 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
ARTICLE VII AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
7.01 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
7.02 Certificates; Other Information . . . . . . . . . . . . . . . . . . . . . . 88
7.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
7.04 Preservation of Corporate Existence, Etc. . . . . . . . . . . . . . . . . . 91
7.05 Maintenance of Property . . . . . . . . . . . . . . . . . . . . . . . . . . 92
</TABLE>
ii
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<TABLE>
<CAPTION>
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<S> <C> <C>
7.06 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
7.07 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 92
7.08 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
7.09 Inspection of Property and Books and Records . . . . . . . . . . . . . . . 93
7.10 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
7.11 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
7.12 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
ARTICLE VIII NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
8.01 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
8.02 Merger; Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . 96
8.03 Harvesting Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . 99
8.04 Loans and Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
8.05 Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 101
8.06 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . 104
8.07 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
8.08 Sale of Stock and Indebtedness of Subsidiaries . . . . . . . . . . . . . . 105
8.09 Certain Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
8.10 Joint Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
8.11 Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
8.12 Sale and Leaseback . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
8.13 Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
8.14 Change in Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
8.15 Issuance of Stock by Subsidiaries . . . . . . . . . . . . . . . . . . . . . 109
8.16 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
8.17 Available Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
ARTICLE IX EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
9.01 Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
9.02 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
9.03 Rights Not Exclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
ARTICLE X THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
10.01 Appointment and Authorization . . . . . . . . . . . . . . . . . . . . . . . 114
10.02 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
10.03 Liability of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
10.04 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
10.05 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
10.06 Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
10.07 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
10.08 Agent in Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . 119
10.09 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
10.10 Co-Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
</TABLE>
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<TABLE>
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ARTICLE XI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
11.01 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . 120
11.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
11.03 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . 122
11.04 Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
11.05 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
11.06 Marshalling; Payments Set Aside . . . . . . . . . . . . . . . . . . . . . . 124
11.07 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . 124
11.08 Assignments, Participations, Etc. . . . . . . . . . . . . . . . . . . . . . 124
11.09 Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
11.10 Automatic Debits of Fees . . . . . . . . . . . . . . . . . . . . . . . . . 128
11.11 Notification of Addresses, Lending Offices, Etc. . . . . . . . . . . . . . 128
11.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
11.13 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
11.14 No Third Parties Benefited . . . . . . . . . . . . . . . . . . . . . . . . 129
11.15 Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
11.16 Governing Law and Jurisdiction . . . . . . . . . . . . . . . . . . . . . . 129
11.17 Arbitration; Reference . . . . . . . . . . . . . . . . . . . . . . . . . . 129
11.18 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
SCHEDULES
Schedule 1.01 Corporate Investment Policy
Schedule 2.01 Commitments
Schedule 3.03 Existing ABN Letters of Credit
Schedule 6.05 Litigation
Schedule 6.07 ERISA
Schedule 6.12 Environmental Matters
Schedule 6.18 Subsidiaries and Equity Investments
Schedule 8.01 Permitted Liens
Schedule 8.04 Permitted Investments
EXHIBITS
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
Exhibit G Competitive Bid Request
Exhibit H Invitation for Competitive Bid
Exhibit I Competitive Bid
Exhibit J Consent to Amendment and Restatement
</TABLE>
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<PAGE> 6
AMENDED AND RESTATED
CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as
of November 15, 1994, 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"), ABN AMRO Bank N.V., as a letter of credit issuing bank and as co-agent
for the Banks, and Bank of America National Trust and Savings Association, as a
letter of credit issuing bank and as agent for the Banks.
WHEREAS, the Company, certain of the Banks and BofA as agent
for those Banks entered into a Credit Agreement dated as of October 28, 1993
(the "Original Credit Agreement");
WHEREAS, the Banks have agreed to make available to the
Company a revolving credit facility with a letter of credit subfacility upon
the terms and conditions set forth in this Agreement to refinance indebtedness
outstanding under the Original Credit Agreement and certain other existing
indebtedness and to use for general corporate purposes;
WHEREAS, to give effect to the foregoing, the Company, the
Banks, the Co-Agent and the Agent desire to enter into this Agreement to amend
and restate the Original Credit Agreement;
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained herein, the parties hereby amend and restate
the Original Credit Agreement in its entirety 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:
"ABN" means ABN AMRO Bank N.V., a bank organized under the laws of The
Netherlands.
"Absolute Rate" has the meaning specified in subsection 2.06(c).
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<PAGE> 7
"Absolute Rate Auction" means a solicitation of Competitive Bids
setting forth Absolute Rates pursuant to Section 2.06.
"Absolute Rate Bid Loan" means a Bid Loan that bears interest at a
rate determined with reference to the Absolute Rate.
"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.
"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 11.02.
"Agent-Related Persons" means BofA, the Arranger, BofA as agent under
the Original Credit Agreement, and any successor agent arising under Section
10.09 and any successor to BofA as a letter of credit issuing bank hereunder,
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 one hundred million dollars ($100,000,000), as such
amount may be reduced from time to time pursuant to this Agreement.
"Agreement" means this Amended and Restated Credit Agreement, as
amended from time to time in accordance with the terms hereof.
2
<PAGE> 8
"Applicable Margin" means, in respect of all Committed Loans
outstanding on any date (A) for the period from the Closing Date through
December 31, 1994, 0.5000% for Offshore Rate Committed Loans, 0.6250% for CD
Rate Committed Loans and 0.0000% for Base Rate Committed Loans, and (B) from
January 1, 1995, the percentage specified below opposite the Fixed Charge
Coverage Ratio (which ratio shall be calculated for the relevant four fiscal
quarter period) calculated for the periods described below.
<TABLE>
<CAPTION>
Fixed Charge Coverage Ratio
at End of Fiscal Quarter Applicable Margin
- --------------------------- -----------------
Offshore CD Base
Rate Rate Rate
---- ---- ----
<S> <C> <C> <C>
Greater than or equal to
3:25 to 1:00 0 .4375% 0 .5625% 0 .0000%
Less than 3:25 to 1:00 but
greater than or equal
to 2:75 to 1:00 0 .5000% 0 .6250% 0 .0000%
Less than 2:75 to 1:00 but
greater than or equal to
2:00 to 1:00 0 .6250% 0 .7500% 0 .0000%
Less than 2:00 to 1:00 0 .8750% 1 .0000% 0 .0000%
</TABLE>
The Applicable Margin for each fiscal quarter commencing on and after
January 1, 1995 shall be calculated in reliance on the financial
reports delivered pursuant to subsection 7.01(c) and the certificate
delivered pursuant to subsection 7.02(b) with respect to the fiscal
quarter ending one fiscal quarter before the fiscal quarter in
question (e.g., June 30 financials determine the Applicable Margin for
the fiscal quarter beginning October 1). If the Company fails to
deliver such financial reports and certificate to the Agent for any
fiscal quarter by the beginning of the next succeeding fiscal quarter
(e.g., by October 1 for the fiscal quarter ending June 30), then the
Applicable Margin for the following fiscal quarter (e.g., October 1
through December 31) shall equal the next higher Applicable Margin as
set forth in the chart above immediately below the previously
effective Applicable Margin; thus if the Applicable Margin had
previously been 0.5000% for Offshore Rate Committed Loans, 0.6250% for
CD Rate Committed Loans and 0.0000% for Base Rate Committed Loans, a
failure to deliver quarterly
3
<PAGE> 9
financials by the first day of the next fiscal quarter would cause the
Applicable Margin to be 0.6250%, 0.7500% and 0.0000%, respectively,
for the duration of that quarter. In addition, if such financial
reports and certificate when delivered indicate that the Applicable
Margin for such period should have been higher than the Applicable
Margin provided for in the previous sentence, then the Company shall
pay on the date of delivery of such financial reports and certificate
an amount equal to the positive difference, if any, between the
interest that the Company should have paid hereunder had the financial
reports and certificate been delivered on a timely basis over what the
Company actually paid. The Applicable Margin shall be adjusted
automatically as to all Committed Loans then outstanding (without
regard to the timing of Interest Periods) as of the effective date of
any change in the Applicable Margin.
"Arranger" means BA Securities, Inc., a Delaware corporation.
"Assignee" has the meaning specified in subsection 11.08(a).
"Assignment and Acceptance" has the meaning specified in subsection
11.08(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,
(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
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<PAGE> 10
(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 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,
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<PAGE> 11
(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 8.04(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 8.04(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.
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
6
<PAGE> 12
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; (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.
References to the "Banks" shall include BofA and ABN, including in their
capacity as an Issuing Bank; for purposes of clarification only, to the extent
that BofA or ABN may have any rights or obligations in addition to those of the
Banks due to its status as an Issuing Bank, its status as such will be
specifically referenced.
"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:
7
<PAGE> 13
(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 Committed Loan" means a Committed Loan or an L/C Advance
that bears interest based on the Base Rate.
"Bid Borrowing" means a Borrowing hereunder consisting of one or more
Bid Loans made to the Company on the same day by one or more Banks.
"Bid Loan" means a Loan by a Bank to the Company under Section 2.05,
which may be a LIBOR Bid Loan or an Absolute Rate Bid Loan.
"Bid Loan Lender" means, in respect of any Bid Loan, the Bank making
such Bid Loan to the Company.
"BofA" means Bank of America National Trust and Savings Association, a
national banking association.
"Board Foot" means a unit of measurement one foot square and one inch
thick.
"Borrowing" means a borrowing hereunder consisting of Loans of the
same Type made to the Company on the same day by the Banks pursuant to Article
II, and may be a Committed Borrowing or a Bid Borrowing and, other than in the
case of Base Rate Committed Loans, having the same Interest Period.
"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
8
<PAGE> 14
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 and (iii) sales or other
voluntary or involuntary dispositions of any assets of the Company (other than
(x) sales or other dispositions of inventory in the ordinary course of
business, (y) sales or other dispositions of other current assets including
receivables and accounts and (z) sales or other dispositions of assets as a
part of normal retirements or replacements), in each case prior to the
commencement of the dissolution and liquidation of the Company provided, that
in determining Cash from Capital Transactions, items (i), (ii) and (iii) above
shall include, with respect to each Subsidiary of the Company whose income is
accounted for on a consolidated or combined basis with the Company, a
percentage of each such item of such Subsidiary equal to the Company's
percentage ownership interest in such Subsidiary.
"Cash Collateral Account Agreement" means an agreement or agreements
entered into between the Company and the Agent, substantially in the form of
Exhibit E.
9
<PAGE> 15
"Cash Collateralize" means to pledge and deposit with or deliver to
the Agent, for the benefit of (i) in the case of L/C Obligations, the Agent,
the Issuing Banks and the Banks, (ii) in the case of CD Rate Committed Loans
and Offshore Rate Committed Loans, the Agent and the Banks, and (iii) in the
case of Bid Loans, the Agent and the Bid Loan Lenders, in each case as
collateral for the L/C Obligations, the Committed Loans or the Bid Loans, as
the case may be, cash or deposit account balances pursuant to a Cash Collateral
Account Agreement. Derivatives of such term shall have corresponding meaning.
"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
Committed 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 Committed 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) 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 Committed Loans the rate of interest per annum determined
by the Agent
10
<PAGE> 16
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 Committed 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 Committed 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 Committed Loan" means a Committed 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 5.01 are satisfied or waived by all Banks.
"Co-Agent" means ABN in its capacity as co-agent for the Banks
hereunder.
"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.
11
<PAGE> 17
"Commitment Fee Percentage" means (A) for the period from the Closing
Date through December 31, 1994, 0.1750%, and (B) from January 1, 1995, the
percentage specified below opposite the Fixed Charge Coverage Ratio (which
ratio shall be calculated for the relevant four fiscal quarter period)
calculated for the periods described below.
<TABLE>
<CAPTION>
Fixed Charge Coverage Ratio
at End of Fiscal Quarter Commitment Fee
- --------------------------- --------------
<S> <C>
Greater than or equal to 2:00 to 1:00 .1750%
Less than 2:00 to 1:00 .2250%
</TABLE>
The Commitment Fee Percentage for each fiscal quarter commencing on and after
January 1, 1995, shall be calculated in reliance on the financial reports
delivered pursuant to subsection 7.01(c) and the certificate delivered pursuant
to subsection 7.02(b) with respect to the fiscal quarter before the fiscal
quarter in question (e.g., June 30 financials determine the Commitment Fee
Percentage for the fiscal quarter beginning October 1). If the Company fails
to deliver such financial reports and certificate to the Agent for any fiscal
quarter by the beginning of the next succeeding fiscal quarter (e.g., by
October 1 for the fiscal quarter ending June 30), then the Commitment Fee
Percentage for the following fiscal quarter (e.g., October 1 through December
31) shall equal 0.2250% for the duration of that quarter.
"Commitment Percentage" means, as to any Bank, the percentage
equivalent of such Bank's Commitment divided by the Aggregate Commitment.
"Committed Borrowing" means a Borrowing hereunder consisting of
Committed Loans made on the same day by the Banks ratably according to their
respective Commitment Percentages and, in the case of CD Rate Committed Loans
and Offshore Rate Committed Loans, having the same Interest Periods.
"Committed Loan" has the meaning specified in Section 2.01, and may be
a CD Rate Committed Loan, an Offshore Rate Committed Loan or a Base Rate
Committed Loan (each, a "Type" of Committed Loan).
"Company's Knowledge" or "Knowledge of the Company" shall mean the
actual knowledge of (i) Rick R. Holley, President and Chief Executive Officer,
Charles P.
12
<PAGE> 18
Grenier, Executive Vice President, Robert E. Manne, Executive Vice President,
Diane M. Irvine, Vice President and Chief Financial Officer, James A. Kraft,
Vice President Law, Susanna N. Duke, Director, Law and Secretary, and Mitchell
Leu, Environmental Engineer, and any successor to the offices and officers,
such persons being the principal persons employed by the Company ultimately
responsible for environmental operations and compliance, ERISA and legal
matters relating to the Company and (ii) the Treasurer or any other person
having the primary responsibility for the day-to-day administration of, and
dealings with the Agent and the Banks in connection with, this Agreement.
"Competitive Bid" means an offer by a Bank to make a Bid Loan in
accordance with subsection 2.06(b).
"Competitive Bid Request" has the meaning specified in subsection
2.06(a).
"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/Continuation Date" means any date on which, under Section
2.04, the Company (a) converts Committed Loans of one Type to another Type, or
(b) continues as Committed Loans of the same Type, but with a new Interest
Period, Committed Loans having Interest Periods expiring on such date.
"Credit Extension" means and includes (a) the making of any Committed
Loans or Bid Loans hereunder, including any conversion or continuation thereof,
and (b) the Issuance of any Letter of Credit hereunder.
"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.
"Departing Bank" means Chemical Bank.
13
<PAGE> 19
"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 $1 of additional Funded Debt pursuant to subsection 8.05(i), and
(b) no condition or event shall exist which constitutes an Event of Default or
Material Default, (iii) the Company is permitted to make the Investment in such
entity resulting from such designation pursuant to, and within the limitations
specified in, subsection 8.04(i), treating the aggregate book value (including
equity in retained earnings) of the Investments of the Company and its
Subsidiaries in such entity immediately prior to such designation as the cost
of such Investment, and provided, further, that if at any time all Designated
Immaterial Subsidiaries on a combined basis would be a "significant subsidiary"
(assuming the Company is the registrant) within the meaning of Regulation S-X
(17 C.F.R. Part 210) the Company shall designate one or more Designated
Immaterial Subsidiaries which are directly owned by the Company and its
Restricted Subsidiaries as Restricted Subsidiaries such that the condition in
this proviso is no longer applicable and the entities so designated shall no
longer be Designated Immaterial Subsidiaries. Any entity which has been
designated a Designated Immaterial Subsidiary shall not thereafter become a
Restricted Subsidiary except pursuant to a designation required by the last
proviso in the preceding sentence, and any Designated Immaterial Subsidiary
which has been designated a Restricted Subsidiary pursuant to the last proviso
of the preceding sentence shall not thereafter be redesignated as a Designated
Immaterial Subsidiary.
14
<PAGE> 20
"Designated Repurchases" means and includes purchases, redemptions or
other acquisitions, in each case at a price not to exceed fair market value, of
the publicly traded limited partnership interests in the Company, which are
retired by the Company within six months of such purchase, redemption or other
acquisition.
"Dollars", "dollars" and "$" each mean lawful money of the United
States.
"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.
"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 Amount" means (i) with respect to any Committed Loans or
Bid Loans, as the case may be, on any date, the aggregate outstanding principal
amount thereof after giving effect to any Borrowings and prepayments or
repayments thereof occurring on such date; and (ii) with respect to any
outstanding L/C Obligations on any date, the amount of such L/C Obligations on
such date after giving effect to any Issuances of Letters of Credit occurring
on such date and any other changes in the aggregate amount of the L/C
Obligations as of such date, including as a result of any reimbursements of
outstanding unpaid drawings under any Letters of Credit or any reductions in
the maximum amount available for drawing under Letters of Credit taking effect
on such date.
15
<PAGE> 21
"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), 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,
16
<PAGE> 22
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 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 9.01.
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"Exchange Act" means the Securities and Exchange Act of 1934, as
amended, and regulations promulgated thereunder.
"Existing ABN Letters of Credit" means the letters of credit described
in Schedule 3.03.
"Facilities Subsidiary" means, collectively, Plum Creek Manufacturing,
L.P., a Delaware limited partnership, and Plum Creek Marketing, Inc., a
Delaware corporation.
"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.
"Facility B Credit Agreement" means the $35,000,000 Credit Agreement
dated as of the date hereof between the Company, the Banks, the Co-Agent and
the Agent.
"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
18
<PAGE> 24
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.
"Fixed Charge Coverage Ratio" means, as measured quarterly on the last
day of each fiscal quarter for, except as set forth below, the four fiscal
quarter period then ending, the ratio of
(i) EBITDA;
to
(ii) an amount equal to the sum of (A) the
combined interest expense (including capitalized interest) of the
Company and its Subsidiaries for the four fiscal quarter period then
ending calculated in accordance with GAAP, plus (B) the aggregate
amount of scheduled principal repayment on the Indebtedness of the
Company and its Subsidiaries for such period;provided that the
aggregate amount of scheduled principal repayment on the Indebtedness
(x) shall not include the amount of any prepayment of Indebtedness
except to the extent such prepayment includes any amounts that would
have been scheduled principal repayments during such period, (y) shall
not include the amount of any scheduled principal repayment to the
extent the Company refinanced such scheduled repayments and the
scheduled principal repayments under the refinancing have been or will
be included in the calculation of the aggregate amount of scheduled
principal repayments, and (z) with respect to the Facility B Credit
Agreement, shall only include (1) the scheduled installments to be
made by the Company pursuant to subsection 2.10(c) thereof during such
period, and (2) the amount of any repayment made by the Company
thereunder pursuant to subsection 2.10(b) thereof.
"Form 1001" has the meaning specified in subsection 4.01(f).
"Form 4224" has the meaning specified in subsection 4.01(f).
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"Funded Debt" means, without duplication, any Indebtedness payable
more than one year from the date of the creation thereof; provided that any
Indebtedness shall be treated as Funded Debt, regardless of its term, if such
Indebtedness is renewable at the option of the Company pursuant to the terms
thereof or of a revolving credit or similar agreement effective for more than
one year after the date of the creation of such Indebtedness, or may be payable
out of the proceeds of similar Indebtedness pursuant to the terms of such
Indebtedness or any such agreement.
"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.
"Guarantee" means the guarantee in paragraph 7 of the Mortgage Note
Agreements.
"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.
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"Honor Date" has the meaning specified in subsection 3.03(c).
"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 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
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<PAGE> 27
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 11.05.
"Indemnified Liabilities" has the meaning specified in subsection
11.05.
"Independent Auditor" has the meaning specified in subsection 7.01(a).
"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, as to any Loan other than a Base Rate
Committed Loan, the last day of each Interest Period applicable to such Loan
and, as to Base Rate Committed Loans, the last Business Day of each calendar
quarter and each date a Base Rate Committed Loan is converted into another Type
of Committed Loan, provided, however, that (a) if any Interest Period for a CD
Rate Committed Loan or Offshore Rate Committed 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, and (b) as to
any Bid Loan, such intervening dates prior to the maturity thereof as may be
specified by the Company and agreed to by the applicable Bid Loan Lender in the
applicable Competitive Bid shall also be Interest Payment Dates.
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<PAGE> 28
"Interest Period" means, (a) with respect to any Offshore Rate
Committed Loan, the period commencing on the Business Day the Loan is disbursed
or on the Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Committed Loan, and ending on the date that is
one week or one, two, three or six months thereafter, as selected by the
Company in its Notice of Borrowing or Notice of Conversion/Continuation, as the
case may be; (b) with respect to any CD Rate Committed Loan, the period
commencing on the Business Day the CD Rate Committed Loan is disbursed or on
the Conversion/Continuation Date on which the Loan is converted into or
continued as a CD Rate Committed 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; (c) with respect to any LIBOR Bid Loan, the period
commencing on the Business Day the Loan is disbursed and ending on the date
one, two, three, six, or twelve months thereafter, as selected by the Company
in the applicable Competitive Bid Request; and (d) with respect to any Absolute
Rate Bid Loan, a period not less than 7 days and not more than 365/366 days, as
applicable, as selected by the Company in the applicable Competitive Bid
Request;
provided that:
(i) if any Interest Period 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.
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"Invitation for Competitive Bids" means a solicitation for Competitive
Bids, substantially in the form of Exhibit H.
"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 8.04.
"Issuance Date" has the meaning specified in subsection 3.01(a)."
"Issue" means, with respect to any Letter of Credit, to incorporate
the Existing ABN Letters of Credit into this Agreement, or to issue or to
extend the expiry of, or to renew or increase the amount of, such Letter of
Credit; and the terms "Issued," "Issuing" and "Issuance" have corresponding
meanings.
"Issuing Bank" means each of BofA and ABN in its capacity as issuer of
one or more Letters of Credit hereunder, together with any replacement letter
of credit issuer arising under subsection 10.01(b) or Section 10.09.
"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.
"L/C Advance" means each Bank's participation in any L/C Borrowing in
accordance with its Commitment Percentage.
"L/C Amendment Application" means an application form for amendment of
outstanding standby letters of credit as shall at any time be in use at an
Issuing Bank, as such Issuing Bank shall request.
"L/C Application" means an application form for issuances of standby
letters of credit as shall at any time be in use at an Issuing Bank, as such
Issuing Bank shall request.
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<PAGE> 30
"L/C Borrowing" means an extension of credit resulting from a drawing
under any Letter of Credit which shall not have been reimbursed on the date
when made nor converted into a Borrowing of Committed Loans under subsection
3.03(d).
"L/C Commitment" means the commitment of the Issuing Banks to Issue,
and the commitment of the Banks severally to participate in, Letters of Credit
(including the Existing ABN Letters of Credit) from time to time Issued or
outstanding under Article III, in an aggregate amount not to exceed on any date
five million dollars $5,000,000, minus the L/C Obligations under and as defined
in the Facility B Credit Agreement, as the same shall be reduced as a result of
a reduction in the L/C Commitment pursuant to Section 2.07; provided that the
L/C Commitment is a part of the Aggregate Commitment, rather than a separate,
independent commitment.
"L/C Obligations" means at any time the sum of (a) the aggregate
undrawn amount of all Letters of Credit then outstanding, plus (b) the amount
of all unreimbursed drawings under all Letters of Credit, including all
outstanding L/C Borrowings.
"L/C-Related Documents" means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other document relating to
any Letter of Credit, including any Issuing Bank's standard form documents for
letter of credit issuances.
"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.
"Letters of Credit" means the Existing ABN Letters of Credit and any
standby letters of credit Issued by the Issuing Banks pursuant to Article III.
"Letter of Credit Rate" means, for any period, a rate per annum equal
to the Applicable Margin with respect to Offshore Rate Committed Loans in
effect for such period. The Letter of Credit Rate shall be adjusted
automatically as to all Letters of Credit then outstanding as of the effective
date of any change in the Letter of Credit Rate.
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<PAGE> 31
"LIBO Rate" means, for any Interest Period with respect to a LIBOR Bid
Loan, the rate of interest per annum determined by the Agent to be the
arithmetic mean (rounded upward to the nearest 1/16th of 1%) of the rates of
interest per annum notified to the Agent by BofA as the rate of interest at
which dollar deposits in the approximate amount of the LIBOR Bid Loans to be
borrowed in such Bid Loan Borrowing, and having a maturity comparable to such
Interest Period, would be offered to major banks in the London interbank market
at their request at approximately 11:00 a.m. (London Time) two Business Days
prior to the commencement of such Interest Period.
"LIBOR Auction" means a solicitation of Competitive Bids setting forth
a LIBOR Bid Margin pursuant to Section 2.06.
"LIBOR Bid Loan" means any Bid Loan that bears interest at a rate
based upon the LIBO Rate.
"LIBOR Bid Margin" has the meaning specified in subsection
2.06(c)(ii)(C).
"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 under
Article II or Article III, and may be a Committed Loan, a Bid Loan or an L/C
Advance.
"Loan Documents" means this Agreement, the L/C-Related Documents, and
all documents delivered to the Agent in connection herewith and therewith.
"Majority Banks" means (a) at any time prior to the Revolving
Termination Date, or after the Revolving Termination Date if no Loans are then
outstanding, Banks then holding at least 66-2/3% of the Commitments, and (b)
otherwise, Banks then holding at least 66-2/3% of the then aggregate unpaid
principal amount of the Loans.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, T, U or X of the Federal Reserve Board.
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<PAGE> 32
"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
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 October 31, 1999.
"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.
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<PAGE> 33
"MMBF" means one million Board Feet.
"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, (c) that certain Mortgage Note
Agreement Amendment dated as of September 1, 1993, and (d) that certain
Mortgage Note Agreement Amendment dated as of May 20, 1994.
"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.
"1994 Notes" means the 8.73% Senior Notes due August 1, 2009 in the
aggregate principal amount of $150,000,000 issued and sold pursuant to the 1994
Senior Note Agreements.
"1994 Senior Note Agreements" means those certain Senior Note
Agreements dated as of August 1, 1994 providing for the issuance and sale by
the Company of the 1994 Senior Notes to the purchasers listed in the schedule
of purchasers attached thereto.
"Notes" means those certain senior promissory notes in the aggregate
principal amount of $165,000,000 issued and sold pursuant to the Note
Agreements.
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<PAGE> 34
"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, (c) that certain Senior Note Agreement Amendment dated as of
September 1, 1993, and (d) that certain Senior Note Agreement Amendment dated
as of May 20, 1994.
"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.
"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, the Co-Agent, the Issuing Banks, 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 Committed Loans comprising part of the same Borrowing, an interest rate
per annum
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<PAGE> 35
(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
"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 Committed 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 to all Offshore
Rate Committed Loans then outstanding as of the effective date of any change in
the Eurodollar Reserve Percentage.
"Offshore Rate Committed Loan" means any Committed Loan that bears
interest based on the Offshore Rate.
"Offshore Rate Loan" means any LIBOR Bid Loan or any Offshore Rate
Committed Loan.
"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
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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.
"Original Credit Agreement" has the meaning specified in the Recitals
hereto.
"Other Taxes" has the meaning specified in subsection 4.01(b).
"Participant" has the meaning specified in subsection 11.08(d).
"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.
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"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 8.01.
"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 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 Indebtedness represented by the Notes, the 1994
Senior Notes and this Agreement (including L/C Borrowings and Loans used to
repay L/C Borrowings, but excluding L/C Obligations with respect to undrawn
Letters of Credit).
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"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 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.
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"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 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.
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"Solvent" means, as to any Person at any time, that (a) (i) in the
case of a Person that is not a partnership, 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), and (ii) in the case of a
Person that is a partnership, the sum of (A) the fair value of the Property of
such Person plus (B) the sum of the excess of the fair value of each general
partner's non-partnership Property over such partner's non-partnership debts
(together, the "Applicable Property") is greater than the amount of such
Person's liabilities (including disputed, contingent and unliquidated
liabilities), as such value for purposes of both clauses (i) and (ii) 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 (or, in the case of a partnership, the Applicable Property for 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.
"Subsidiary" of a Person means any corporation, partnership or other
entity a majority of (i) the total combined voting power of all classes of
Voting Stock of which or (ii) the outstanding equity interests of which shall,
at the time of which any determination is being made, be owned by the Company
either directly or through Subsidiaries.
"Taxes" has the meaning specified in subsection 4.01(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.
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"Transferee" has the meaning specified in subsection 11.08(e).
"Type" has the meaning specified in the definition of "Committed Loan."
"UCC" means the Uniform Commercial Code as in effect in the State of
California.
"UCP" has the meaning specified in Section 3.09.
"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).
"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 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.
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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".
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.
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(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, the Co-Agent or the Agent merely because of the Agent's, the Co-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.
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
(each such loan, a "Committed Loan") from time to time on any Business Day
during the period from the Closing 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
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Section 2.07 or Section 2.09, or as a result of one or more assignments
pursuant to Section 11.08, the Bank's "Commitment"); provided, however, that,
after giving effect to any Committed Borrowings, the Effective Amount of all
Committed Loans and Bid Loans and the Effective Amount of all L/C Obligations
shall not at any time exceed the Aggregate Commitment and provided, further,
that the Effective Amount of the Committed Loans of any Bank plus such Bank's
Commitment Percentage of the Effective Amount of all L/C Obligations shall not
at any time exceed such Bank's 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 2.08 and
reborrow pursuant to this Section 2.01. The amendment and restatement of the
Original Credit Agreement shall not be deemed a repayment, satisfaction,
cancellation, or novation of the loans outstanding thereunder or any other
obligations of the Company under the Original Credit Agreement or any of the
Loan Documents (as defined therein), which shall instead continue and
constitute Obligations hereunder and under the other Loan Documents, provided,
however, that upon the Closing Date, all outstanding Loans under the Original
Credit Agreement, subject to Section 4.04 thereof, shall be prepaid in full
with the proceeds of Loans hereunder.
2.02 Loan Accounts. The Loans made by each Bank and the Letters of
Credit Issued by an Issuing Bank shall be evidenced by one or more loan
accounts maintained by such Bank or Issuing Bank, as the case may be, in the
ordinary course of business. The loan accounts or records maintained by the
Agent, the Co-Agent, each Issuing Bank and each Bank shall be conclusive absent
manifest error of the amount of the Loans made by the Banks to the Company and
the Letters of Credit issued for the account of 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 or any Letter of Credit.
2.03 Procedure for Committed Borrowing.
(a) Each Committed Borrowing shall be made upon the
Company's irrevocable written notice delivered to the Agent in accordance with
Section 11.02 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 Committed Loans; (ii) three Business Days prior to the requested Borrowing
date, in the case of
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CD Rate Committed Loans, and (iii) on the requested Borrowing date, in the case
of Base Rate Committed Loans, specifying:
(A) the amount of the Committed Borrowing, which
shall be in an aggregate minimum principal amount of three million
dollars ($3,000,000) except in the case of Offshore Rate Committed
Loans with a proposed Interest Period of one week in which case the
aggregate minimum principal amount shall be twelve million dollars
($12,000,000), or, in either case, any multiple of five hundred
thousand dollars ($500,000) in excess thereof;
(B) the requested Committed Borrowing date, which
shall be a Business Day;
(C) whether the Committed Borrowing is to be
comprised of Offshore Rate Committed Loans, CD Rate Committed Loans or
Base Rate Committed Loans;
(D) the duration of the Interest Period
applicable to such Committed Loans included in such notice. If the
Notice of Borrowing shall fail to specify the duration of the Interest
Period for any Committed Borrowing comprised of CD Rate Committed
Loans or Offshore Rate Committed 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 Committed Borrowing.
(c) Each Bank will make the amount of its Commitment
Percentage of the Committed 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 Committed Borrowing date requested by the Company in funds immediately
available to the Agent. The proceeds of all such Committed 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, unless on the date of the Borrowing all or any portion of the proceeds
thereof shall then be required to be applied to the reimbursement of any
outstanding drawings under Letters of Credit pursuant to
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Section 3.03, in which case such proceeds or portion thereof shall be applied
to the reimbursement of such Letter of Credit drawings.
(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 Committed Loan be made as, or converted into or continued as,
an Offshore Rate Committed Loan or a CD Rate Committed Loan.
(e) After giving effect to any Committed Borrowing, there
shall not be more than six different Interest Periods in effect in respect of
all Committed Loans and Bid Loans together then outstanding.
2.04 Conversion and Continuation Elections for Committed Borrowings.
(a) The Company may upon irrevocable written notice to
the Agent in accordance with subsection 2.04(b):
(i) elect to convert on any Business Day, any
Base Rate Committed Loans (or any part thereof in an amount not less
than $3,000,000 except in the case of a conversion into an Offshore
Rate Committed Loan for an Interest Period of one week which shall be
in an amount not less than $12,000,000, or that is in an integral
multiple of $500,000 in excess thereof) into Offshore Rate Committed
Loans or CD Rate Committed Loans;
(ii) elect to convert on the last day of the
applicable Interest Period any Offshore Rate Committed Loans having
Interest Periods maturing on such day (or any part thereof in an
amount not less than $3,000,000, or that is in an integral multiple of
$500,000 in excess thereof) into CD Rate Committed Loans or Base Rate
Committed Loans;
(iii) elect to convert on the last day of the
applicable Interest Period any CD Rate Committed Loans having Interest
Periods maturing on such day (or any part thereof in an amount not
less than $3,000,000 except in the case of a conversion into an
Offshore Rate Committed Loan for an Interest Period of one week which
shall be in an amount not less than $12,000,000, or that is in an
integral multiple of $500,000 in excess thereof) into Offshore Rate
Committed Loans or Base Rate Committed Loans; or
(iv) elect to continue on the last day of the
applicable Interest Period any Offshore Rate Committed
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Loans or CD Rate Committed Loans having Interest Periods maturing on
such day (or any part thereof in an amount not less than $3,000,000
except in the case of a continuation of an Offshore Rate Committed
Loan for an Interest Period of one week which shall be in an amount
not less than $12,000,000, or that is in an integral multiple of
$500,000 in excess thereof);
provided, that if the aggregate amount of CD Rate Committed Loans or Offshore
Rate Committed Loans in respect of any Committed Borrowing shall have been
reduced, by payment, prepayment, or conversion of part thereof to be less than
$500,000, such CD Rate Committed Loans or Offshore Rate Committed Loans shall
automatically convert into Base Rate Committed Loans, and on and after such
date the right of the Company to continue such Committed Loans as, and convert
such Committed Loans into, Offshore Rate Committed Loans or CD Rate Committed
Loans, as the case may be, shall terminate.
(b) The Company shall deliver a Notice of
Conversion/Continuation in accordance with Section 11.02 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/Continuation Date, if the Committed Loans are
to be converted into or continued as Offshore Rate Committed Loans; (ii) at
least three Business Days in advance of the Conversion/Continuation Date, if
the Committed Loans are to be converted into or continued as CD Rate Committed
Loans; and (iii) on the Conversion/Continuation Date, if the Committed Loans
are to be converted into Base Rate Committed Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Committed Loans to be
converted or continued;
(C) the nature of the proposed conversion or
continuation; and
(D) other than in the case of Base Rate Committed
Loans, the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period
applicable to CD Rate Committed Loans or Offshore Rate Committed Loans, the
Company has failed to select timely a new Interest Period to be applicable to
such CD Rate Committed Loans or Offshore Rate Committed Loans, as the case may
be, or if any Default or Event of Default shall
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then exist, the Company shall be deemed to have elected to convert such CD Rate
Committed Loans or Offshore Rate Committed Loans into Base Rate Committed 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 Committed 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 Committed Loan converted into or continued as an Offshore Rate
Committed Loan or a CD Rate Committed Loan.
(f) Notwithstanding any other provision contained in this
Agreement, after giving effect to any conversion or continuation of any
Committed Loans, there shall not be more than six different Interest Periods in
effect in respect of all Committed Loans and Bid Loans, together then
outstanding.
2.05 Bid Borrowings. In addition to Committed Borrowings pursuant to
Section 2.03, each Bank severally agrees that the Company may, as set forth in
Section 2.06, from time to time request the Banks prior to the Revolving
Termination Date to submit offers to make Bid Loans to the Company; provided,
however, that the Banks may, but shall have no obligation to, submit such
offers and the Company may, but shall have no obligation to, accept any such
offers; and provided, further, that at no time shall (a) the Effective Amount
of all Committed Loans, Bid Loans and L/C Obligations exceed the Aggregate
Commitment; or (b) the number of Interest Periods for Bid Loans then
outstanding plus the number of Interest Periods for Committed Loans then
outstanding exceed six different Interest Periods.
2.06 Procedure for Bid Borrowings.
(a) When the Company wishes to request the Banks to
submit offers to make Bid Loans hereunder, it shall transmit to the Agent by
telephone call followed promptly by facsimile transmission, delivered in
accordance with Section 11.02, a notice in substantially the form of Exhibit G
(a "Competitive Bid Request") so as to be received no later than 7:00 a.m. (San
Francisco time) (x) four
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Business Days prior to the date of a proposed Bid Borrowing in the case of a
LIBOR Auction, or (y) two Business Days prior to the date of a proposed Bid
Borrowing in the case of an Absolute Rate Auction, specifying:
(i) the date of such proposed Bid Borrowing,
which shall be a Business Day;
(ii) the aggregate amount of such proposed Bid
Borrowing, which shall be in an aggregate minimum principal amount of
$5,000,000 or any multiple of $1,000,000 in excess thereof;
(iii) whether the Competitive Bids requested are to
be for LIBOR Bid Loans or Absolute Rate Bid Loans or both; and
(iv) the duration of the Interest Period
applicable thereto, subject to the provisions of the definition of "Interest
Period" herein.
Subject to subsection 2.06(c), the Company may not request
Competitive Bids for more than three Interest Periods in a single Competitive
Bid Request and may not request Competitive Bids more than once in any period
of five consecutive Business Days.
(b) Upon receipt of a Competitive Bid Request, the Agent
will promptly send to the Banks by facsimile transmission an Invitation for
Competitive Bids, which shall constitute an invitation by the Company to each
Bank to submit Competitive Bids offering to make the Bid Loans to which such
Competitive Bid Request relates in accordance with this Section 2.06.
(c) (i) Each Bank may at its discretion submit a
Competitive Bid maintaining an offer or offers to make Bid Loans in response to
any Invitation for Competitive Bids. Each Competitive Bid must comply with the
requirements of this subsection 2.06(c) and must be submitted to the Agent by
facsimile transmission at the Agent's office for notices set forth on the
signature pages hereto not later than (A) 6:30 a.m. (San Francisco time) three
Business Days prior to the proposed date of Borrowing, in the case of a LIBOR
Auction, or (B) 6:30 a.m. (San Francisco time) on the proposed date of
Borrowing, in the case of an Absolute Rate Auction; provided that Competitive
Bids submitted by the Agent (or any Affiliate of the Agent) in the capacity of
a Bank may be submitted, and may only be submitted, if the Agent or such
Affiliate notifies the Company of the terms of the offer or offers contained
therein not later than
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(A) 6:15 a.m. (San Francisco time) three Business Days prior to the proposed
date of Borrowing, in the case of a LIBOR Auction or (B) 6:15 a.m. (San
Francisco time) on the proposed date of Borrowing, in the case of an Absolute
Rate Auction.
(ii) Each Competitive Bid shall be in
substantially the form of Exhibit I, specifying therein:
(A) the proposed date of Borrowing;
(B) the principal amount of each Bid
Loan for which such Competitive Bid is being made, which principal
amount (x) may be equal to, greater than or less than the Commitment
of the quoting Bank, (y) shall be in an aggregate minimum principal
amount of $5,000,000 or any multiple of $1,000,000 in excess thereof,
and (z) may not exceed the principal amount of Bid Loans for which
Competitive Bids were requested;
(C) in case the Company elects a LIBOR
Auction, the margin above or below LIBOR (the "LIBOR Bid Margin")
offered for each such Bid Loan, expressed as a percentage (rounded to
the nearest 1/16th of 1%) to be added to or subtracted from the
applicable LIBOR and the Interest Period applicable thereto;
(D) in case the Company elects an
Absolute Rate Auction, the rate of interest per annum (rounded upward
to the nearest 1/100th of 1%) (the "Absolute Rate") offered for each
such Bid Loan; and
(E) the identity of the quoting Bank.
A Competitive Bid may contain up to three separate offers by the quoting Bank
with respect to each Interest Period specified in the related Invitation for
Competitive Bids.
(iii) Any Competitive Bid shall be disregarded if
it:
(A) is not substantially in conformity
with Exhibit I or does not specify all of the information required by
subsection (c)(ii) of this Section;
(B) contains qualifying, conditional or
similar language;
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(C) proposes terms other than or in
addition to those set forth in the applicable Invitation for
Competitive Bids; or
(D) arrives after the time set forth in
subsection (c)(i).
(d) Promptly on receipt and not later than 7:00 a.m. (San
Francisco time) three Business Days prior to the proposed date of Borrowing in
the case of a LIBOR Auction, or 7:00 a.m. (San Francisco time) on the proposed
date of Borrowing, in the case of an Absolute Rate Auction, the Agent will
notify the Company of the terms (i) of any Competitive Bid submitted by a Bank
that is in accordance with subsection 2.06(c), and (ii) of any Competitive Bid
that amends, modifies or is otherwise inconsistent with a previous Competitive
Bid submitted by such Bank with respect to the same Competitive Bid Request.
Any such subsequent Competitive Bid shall be disregarded by the Agent unless
such subsequent Competitive Bid is submitted solely to correct a manifest error
in such former Competitive Bid and only if received within the times set forth
in subsection 2.06(c). The Agent's notice to the Company shall specify (1) the
aggregate principal amount of Bid Loans for which offers have been received for
each Interest Period specified in the related Competitive Bid Request; and (2)
the respective principal amounts and LIBOR Bid Margins or Absolute Rates, as
the case may be, so offered. Subject only to the provisions of Sections 4.02,
4.05 and 5.02 hereof and the provisions of this subsection (d), any Competitive
Bid shall be irrevocable except with the written consent of the Agent given on
the written instructions of the Company.
(e) Not later than 7:30 a.m. (San Francisco time) three
Business Days prior to the proposed date of Borrowing, in the case of a LIBOR
Auction, or 7:30 a.m. (San Francisco time) on the proposed date of Borrowing,
in the case of an Absolute Rate Auction, the Company shall notify the Agent of
its acceptance or non-acceptance of the offers so notified to it pursuant to
subsection 2.06(d). The Company shall be under no obligation to accept any
offer and may choose to reject all offers. In the case of acceptance, such
notice shall specify the aggregate principal amount of offers for each Interest
Period that is accepted. The Company may accept any Competitive Bid in whole
or in part; provided that:
(i) the aggregate principal amount of each Bid
Borrowing may not exceed the applicable amount set forth in the related
Competitive Bid Request;
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(ii) the principal amount of each Bid Borrowing
must be an amount not less than $5,000,000 or any multiple of $1,000,000 in
excess thereof and the principal amount of each Bid Loan shall be an integral
multiple of $1,000,000;
(iii) acceptance of offers may only be made on the
basis of ascending LIBOR Bid Margins or Absolute Rates within each Interest
Period, as the case may be; and
(iv) the Company may not accept any offer that is
described in subsection 2.06(c)(iii) or that otherwise fails to comply with the
requirements of this Agreement.
(f) If offers are made by two or more Banks with the same
LIBOR Bid Margins or Absolute Rates, as the case may be, for a greater
aggregate principal amount than the amount in respect of which such offers are
accepted for the related Interest Period, the principal amount of Bid Loans in
respect of which such offers are accepted shall be allocated by the Agent among
such Banks as nearly as possible (in such integral multiples of $1,000,000 as
the Agent may deem appropriate) in proportion to the aggregate principal
amounts of such offers. Determination by the Agent of the amounts of Bid Loans
shall be conclusive in the absence of manifest error.
(g) (i) The Agent will promptly notify each Bank
having submitted a Competitive Bid if its offer has been accepted and, if its
offer has been accepted, of the amount of the Bid Loan or Bid Loans to be made
by it on the date of the Bid Borrowing.
(ii) If, on or before the proposed date of Bid
Borrowing, the Commitments have not been terminated and if, on such proposed
date of Borrowing all applicable conditions to funding referenced in Sections
4.02, 4.05 and 5.02 hereof are satisfied, each Bank that has received notice
pursuant to subsection 2.06(g)(i) that its Competitive Bid has been accepted
shall make the amounts of such Bid Loans available to the Agent for the account
of the Company at the Agent's Payment Office in immediately available funds by
11:00 a.m. (San Francisco time) on such date of Bid Borrowing.
(iii) Promptly following each Bid Borrowing, the
Agent shall notify each Bank of the ranges of bids submitted and the highest
and lowest Bids accepted for each Interest Period requested by the Company and
the aggregate amount borrowed pursuant to such Bid Borrowing.
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(iv) From time to time, the Company and the Banks
shall furnish such information to the Agent as the Agent may request relating
to the making of Bid Loans, including the amounts, interest rates, dates of
borrowings and maturities thereof, for purposes of the allocation of amounts
received from the Company for payment of all amounts owing hereunder.
2.07 Voluntary Termination or Reduction of Commitments. The Company
may, upon not less than five Business Days prior notice to the Agent, terminate
the Aggregate Commitment 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 Committed Loans made
on the effective date thereof, the Effective Amount of Committed Loans, Bid
Loans and L/C Obligations would exceed the amount of the Aggregate Commitment
then in effect. Once reduced in accordance with this Section 2.07, the
Aggregate 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 the effective
date of any reduction or termination of Commitments shall be paid on the
effective date of such reduction or termination.
2.08 Optional Prepayments.
(a) Subject to Section 4.04, the Company may, at any time
or from time to time, by written notice delivered to the Agent (i) at least
three Business Days prior to the proposed prepayment date in the case of
Offshore Rate Committed Loans and CD Rate Committed Loans, and (ii) on the
proposed prepayment date (which notice must be received by the Agent not later
than 9:00 a.m. (San Francisco time)) in the case of Base Rate Committed Loans,
ratably prepay Committed Loans in whole or in part, in minimum principal
amounts of $3,000,000 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 Committed Loans, CD Rate Committed
Loans or Offshore Rate Committed 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
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to each such date on the amount prepaid and any amounts required pursuant to
Section 4.04.
(b) Bid Loans may not be voluntarily prepaid.
2.09 Mandatory Prepayments of Loans; Mandatory Commitment
Reductions.
(a) Mandatory Prepayments.
(i) 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 8.02(i), or harvest
excess Timber permitted by Section 8.03, then (A) 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 8.02(i), or (B) 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 Section 8.03, each as applicable.
(ii) L/C Obligations. If on any date the
Effective Amount of L/C Obligations exceeds the L/C Commitment, the Company
shall Cash Collateralize on such date the outstanding Letters of Credit in an
amount equal to the excess of the maximum amount then available to be drawn
under the Letters of Credit over the aggregate L/C Commitment. The Company
hereby grants to the Agent, for the benefit of the Agent, the Issuing Banks and
the Banks, a security interest in all such cash and deposit account balances
used to Cash Collateralize such L/C Obligations. Subject to Section 4.04, if
on any date after giving effect to any Cash Collateralization made on such date
pursuant to the preceding sentence, the Effective Amount of all Loans then
outstanding plus the Effective Amount of all L/C Obligations exceeds the
Aggregate Commitments, the Company shall immediately, and without notice or
demand, prepay the outstanding principal amount of the Loans and L/C Advances
by an amount equal to the applicable excess.
(iii) Bid Loans. If any mandatory prepayments
pursuant to subsections 2.09(a)(i) or (ii) would otherwise require prepayment
of Bid Loans in accordance with subsection 2.09(c), the Company shall Cash
Collateralize the outstanding Bid Loans in an amount equal to the prepayment
amount applicable to Bid Loans, which amount shall be applied by the Agent to
Bid Loans when such Loans mature. The Company hereby grants to the Agent, for
the benefit of the Agent and the Bid Loan Lenders, a security interest in
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all such cash and deposit account balances used to Cash Collateralize such
prepayment of Bid Loans.
(b) Mandatory Commitment Reductions.
(i) The Aggregate Commitment shall be reduced
from time to time by the amount of any mandatory prepayment required by
subsection 2.09(a)(i).
(ii) No reduction in the Aggregate Commitment
pursuant to Section 2.07 or subsection 2.09(b)(i) shall reduce the L/C
Commitment unless and until the combined Commitment has been reduced to
$5,000,000; thereafter, any reduction in the combined Commitment pursuant to
Section 2.07 shall equally reduce the L/C Commitment.
(c) General. Any prepayments pursuant to subsections
2.09(i) or (ii) shall be applied first to any Base Rate Committed Loans then
outstanding, second, at the Company's option, to Cash Collateralize or to
prepay in the inverse order of their stated maturity CD Rate Committed Loans
and Offshore Rate Committed Loans, and third to Bid Loans as provided in
Section 2.09(a)(iii). The Company hereby grants to the Agent for the benefit
of the Agent and the Banks, a security interest in all such cash and deposit
account balances used to Cash Collateralize Loans to be prepaid pursuant to
this subsection 2.09(c). The Company shall pay, together with each prepayment
under this Section 2.09, accrued interest on the amount prepaid and any amounts
required pursuant to Section 4.04.
(d) Reduction of Commitment. Upon the making of any
mandatory prepayment under subsection 2.09(a)(i), 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. 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.
2.10 Repayment.
(a) 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.
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(b) The Company shall repay each Bid Loan on the last day
of the relevant Interest Period.
2.11 Interest.
(a) Subject to subsection 2.11(c), each Committed 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.
Each Bid 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
LIBO Rate plus (or minus) the LIBOR Bid Margin, or at the Absolute Rate, as the
case may be.
(b) 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 Committed Loans pursuant to Section 2.08 and 2.09 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 of the Agent at the request or with the consent of the Majority Banks.
(c) 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
Obligations due and unpaid, at a rate per annum that is determined, in the case
of Loans other than Base Rate Committed Loans, by adding 2% per annum to the
Applicable Margin then in effect for such Loans and, in the case of other
Obligations, at a rate equal to the Base Rate plus 2%.
(d) 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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2.12 Fees. In addition to certain fees described in Section 3.08:
(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, BofA and the Arranger dated August
29, 1994 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) 0.075% times (ii) such Bank's Commitment
as set forth in Schedule 2.01 hereof. The foregoing fees shall be
non-refundable.
(b) Commitment Fees. On or before the Closing Date, the
Company shall pay to BofA as agent under the Original Credit Agreement for the
account of each Bank and the Departing Bank in accordance with their respective
Commitment Percentage (as defined in the Original Credit Agreement) all
commitment fees accrued until the Closing Date under Section 2.10(b) of the
Original Credit Agreement. 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 the Commitment Fee Percentage.
For purposes of calculating utilization under this subsection, (i) the
Aggregate Commitment shall be deemed used to the extent of the Effective Amount
of Committed Loans then outstanding, plus the Effective Amount of L/C
Obligations then outstanding and (ii) with respect to the Commitment of each
Bid Loan Lender, the making of any Bid Loan shall not be considered a use of a
portion of such Bid Loan Lender's Commitment. Such commitment fee shall accrue
from the Closing 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 2.07 or Section
2.09, 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 V are not met.
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(c) Bid Loan Fee. The Company shall pay to the Agent for
its own account a Bid Loan fee for each Competitive Bid Request submitted by
the Company in the amounts set forth in the letter agreement between the
Company, BofA and the Arranger dated August 29, 1994 and the term sheet
attached thereto. Such Bid Loan fee shall be due and payable on each date the
Company submits a Competitive Bid Request.
2.13 Computation of Fees and Interest.
(a) All computations of interest payable in respect of
Base Rate Committed 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.
(b) The Agent will, with reasonable promptness, notify
the Company and the Banks of each determination of an Offshore Rate, LIBO 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 Committed 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.
2.14 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
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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 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.
2.15 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 Committed
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 Committed Borrowing, the Agent may assume that
each Bank has made such amount available to the Agent in immediately available
funds on the Committed Borrowing date and the Agent may (but shall not be so
required), in reliance upon such assumption, make
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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 Committed 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 2.15(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 such
Committed 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
Committed 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 Committed Borrowing, at a rate per annum equal to the
interest rate applicable at the time to the Committed Loans comprising such
Committed Borrowing.
(b) The failure of any Bank to make any Committed Loan on
any date of borrowing shall not relieve any other Bank of any obligation
hereunder to make a Committed Loan on the date of such borrowing, but no Bank
shall be responsible for the failure of any other Bank to make the Committed
Loan to be made by such other Bank on the date of any borrowing.
2.16 Sharing of Payments, Etc. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Committed 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 Committed 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 Committed 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 proportionate share (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
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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 2.16 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off, but subject
to Section 11.09) 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
2.16 and will in each case notify the Banks following any such purchases or
repayments. Any Bank having outstanding both Committed Loans and Bid Loans at
any time a right of set-off is exercised by such Bank shall apply the proceeds
of such set-off first to such Bank's Committed Loans, until its Committed Loans
are reduced to zero, and thereafter to its Bid Loans.
2.17 Effect of Limitations in Facility B Credit Agreement. Unless
otherwise stated herein to the contrary, the limitations imposed in Article II
and III hereof on the minimum principal amount of each Credit Extension, the
number of Interest Periods in effect and the frequency of Borrowings shall
operate independently of any such limitations imposed on Credit Extensions as
defined in and pursuant to the Facility B Credit Agreement and shall not be
affected by or combined with any such limitations therein.
ARTICLE III
THE LETTERS OF CREDIT
3.01 The Letter of Credit Facility.
(a) On the terms and conditions set forth herein, (i)
each Issuing Bank agrees, (A) from time to time on any Business Day during the
period from the Closing Date until 30 days before the Revolving Termination
Date to issue Letters of Credit for the account of the Company or the
Facilities Subsidiary, and to amend or renew Letters of Credit previously
issued by it, in accordance with subsections 3.02(c) and 3.02(d), and (B) to
honor drafts under the Letters of Credit; and (ii) the Banks severally agree to
participate in Letters of Credit Issued for the account of the Company or the
Facilities Subsidiary; provided, that the Issuing Banks shall not be obligated
to Issue, and no Bank shall be obligated to participate in, any Letter of
Credit if as of the date of Issuance of such Letter of Credit (the "Issuance
Date") (1) the Effective
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Amount of all L/C Obligations plus the Effective Amount of all Committed Loans
and Bid Loans exceeds the Aggregate Commitment, (2) the participation of any
Bank in the Effective Amount of all L/C Obligations plus the Effective Amount
of the Committed Loans of such Bank exceeds such Bank's Commitment, or (3) the
Effective Amount of L/C Obligations exceeds the L/C Commitment. Within the
foregoing limits, and subject to the other terms and conditions hereof, the
Company's ability to obtain Letters of Credit shall be fully revolving, and,
accordingly, the Company may, during the foregoing period, obtain Letters of
Credit to replace Letters of Credit which have expired or which have been drawn
upon and reimbursed. The Company shall be primarily liable for all obligations
hereunder and under the L/C-Related Documents with respect to any Letter of
Credit Issued for the account of the Facilities Subsidiary.
(b) Each of the Issuing Banks is under no obligation to
Issue any Letter of Credit if:
(i) any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms purport to enjoin or
restrain such Issuing Bank from Issuing such Letter of Credit, or any
Requirement of Law applicable to such Issuing Bank or any request or directive
(whether or not having the force of law) from any Governmental Authority with
jurisdiction over such Issuing Bank shall prohibit, or request that such
Issuing Bank refrain from, the Issuance of letters of credit generally or such
Letter of Credit in particular or shall impose upon such Issuing Bank with
respect to such Letter of Credit any restriction, reserve or capital
requirement (for which such Issuing Bank is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon such Issuing
Bank any unreimbursed loss, cost or expense which was not applicable on the
Closing Date and which such Issuing Bank in good faith deems material to it;
(ii) such Issuing Bank has received written notice
from any Bank, the Agent or the Company, on or prior to the Business Day prior
to the requested date of Issuance of such Letter of Credit, that one or more of
the applicable conditions contained in Article V is not then satisfied;
(iii) the expiry date of any requested Letter of
Credit is (A) more than one year after the date of Issuance, unless the
Majority Banks have approved such expiry date in writing, or (B) less than 30
days prior to the Revolving Termination Date, unless all of the Banks have
approved such expiry date in writing;
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(iv) the expiry date of any requested Letter of
Credit is prior to the maturity date of any financial obligation to be
supported by the requested Letter of Credit, unless such Letter of Credit is
issued in connection with worker's compensation or to secure self-insurance
deductibles or certain payments required in connection with export log yards,
or all of the Banks have approved such expiry date in writing;
(v) any requested Letter of Credit does not
provide for drafts, or is not otherwise in form and substance reasonably
acceptable to such Issuing Bank, or the Issuance of a Letter of Credit may
violate any policies of such Issuing Bank applicable to customers and credits
of a type similar to the Company and the transactions contemplated by this
Agreement;
(vi) any standby Letter of Credit is for the
purpose of supporting the issuance of any letter of credit by any other Person;
(vii) such Letter of Credit is in a face amount
less than $100,000 or to be denominated in a currency other than Dollars; or
(viii) the requested Letter of Credit provides for
payment thereunder sooner than the Business Day following the presentation to
such Issuing Bank of the documentation required thereunder.
3.02 Issuance, Amendment and Renewal of Letters of Credit.
(a) Each Letter of Credit shall be issued upon the
irrevocable written request of the Company (or, if such Letter of Credit is to
be for the account of the Facilities Subsidiary, the joint and several
irrevocable written request of the Company and the applicable Facilities
Subsidiary) received by an Issuing Bank (with a copy sent by the Company to the
Agent) at least five days (or such shorter time as such Issuing Bank may agree
in a particular instance in its sole discretion) prior to the proposed date of
issuance. Each such request for issuance of a Letter of Credit shall be made
by an original writing or by facsimile, confirmed immediately in an original
writing, in the form of an L/C Application, and shall specify in form and
detail satisfactory to such Issuing Bank:
(i) the proposed date of issuance of the Letter
of Credit (which shall be a Business Day);
(ii) the face amount of the Letter of Credit;
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(iii) the expiry date of the Letter of Credit;
(iv) the name and address of the beneficiary
thereof;
(v) the documents to be presented by the
beneficiary of the Letter of Credit in case of any drawing thereunder;
(vi) the full text of any certificate to be
presented by the beneficiary in case of any drawing thereunder; and
(vii) such other usual and customary matters as the
Issuing Bank may require.
(b) At least three Business Days prior to the Issuance of
any Letter of Credit or any amendment or renewal of a Letter of Credit, the
Issuing Bank issuing such Letter of Credit will confirm with the Agent (by
telephone or in writing) that the Agent has received a copy of the L/C
Application or L/C Amendment Application from the Company and, if not, such
Issuing Bank will provide the Agent with a copy thereof. Unless such Issuing
Bank has received notice on or before the Business Day immediately preceding
the date such Issuing Bank is to issue, amend or renew a requested Letter of
Credit from the Agent (A) directing such Issuing Bank not to issue, amend or
renew such Letter of Credit because such issuance amendment or renewal is not
then permitted under subsection 3.01(a) as a result of the limitations set
forth in clauses (1) through (3) thereof or subsection 3.01(b)(ii); or (B) that
one or more conditions specified in Article V are not then satisfied; then,
subject to the terms and conditions hereof, such Issuing Bank shall, on the
requested date, issue a Letter of Credit for the account of the Company or
amend or renew a Letter of Credit, as the case may be, in accordance with such
Issuing Bank's usual and customary business practices.
(c) From time to time while a Letter of Credit is
outstanding and prior to the Revolving Termination Date, an Issuing Bank will,
upon the written request of the Company received by such Issuing Bank (with a
copy sent by the Company to the Agent) at least five days (or such shorter time
as such Issuing Bank may agree in a particular instance in its sole discretion)
prior to the proposed date of amendment, amend any Letter of Credit issued by
it. Each such request for amendment of a Letter of Credit shall be made by an
original writing or by facsimile, confirmed immediately in an original writing,
made in the form of an
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L/C Amendment Application and shall specify in form and detail satisfactory to
such Issuing Bank:
(i) the Letter of Credit to be amended;
(ii) the proposed date of amendment of the Letter
of Credit (which shall be a Business Day);
(iii) the nature of the proposed amendment; and
(iv) such other usual and customary matters as
such Issuing Bank may require.
Such Issuing Bank shall be under no obligation to amend any Letter of Credit
if: (A) such Issuing Bank would have no obligation at such time to issue such
Letter of Credit in its amended form under the terms of this Agreement; or (B)
the beneficiary of any such letter of Credit does not accept the proposed
amendment to the Letter of Credit. The Agent will promptly notify the Banks of
the receipt by it of any L/C Application or L/C Amendment Application.
(d) Each Issuing Bank and the Banks agree that, while a
Letter of Credit is outstanding and prior to the Revolving Termination Date, at
the option of the Company and upon the written request of the Company received
by an Issuing Bank (with a copy sent by the Company to the Agent) at least five
days (or such shorter time as such Issuing Bank may agree in a particular
instance in its sole discretion) prior to the proposed date of notification of
renewal, such Issuing Bank shall be entitled to authorize the automatic renewal
of any Letter of Credit issued by it. Each such request for renewal of a
Letter of Credit shall be made by an original writing or by facsimile,
confirmed immediately in an original writing, in the form of an L/C Amendment
Application, and shall specify in form and detail satisfactory to such Issuing
Bank:
(i) the Letter of Credit to be renewed;
(ii) the proposed date of notification of renewal
of the Letter of Credit (which shall be a Business Day);
(iii) the revised expiry date of the Letter of
Credit; and
(iv) such other usual and customary matters as the
Issuing Bank may require.
Such Issuing Bank shall be under no obligation so to renew any Letter of Credit
if: (A) such Issuing Bank would have no
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obligation at such time to issue or amend such Letter of Credit in its renewed
form under the terms of this Agreement; or (B) the beneficiary of any such
Letter of Credit does not accept the proposed renewal of the Letter of Credit.
If any outstanding Letter of Credit shall provide that it shall be
automatically renewed unless the beneficiary thereof receives notice from such
Issuing Bank that such Letter of Credit shall not be renewed, and if at the
time of renewal such Issuing Bank would be entitled to authorize the automatic
renewal of such Letter of Credit in accordance with this subsection 3.02(d)
upon the request of the Company but such Issuing Bank shall not have received
any L/C Amendment Application from the Company with respect to such renewal or
other written direction by the Company with respect thereto, such Issuing Bank
shall nonetheless be permitted to allow such Letter of Credit to renew, and the
Company and the Banks hereby authorize such renewal, and, accordingly, such
Issuing Bank shall be deemed to have received an L/C Amendment Application from
the Company requesting such renewal.
(e) In connection with Letters of Credit that
automatically renew or extend their expiry date, each Issuing Bank may, at its
election (or as required by the Agent at the direction of the Majority Banks),
deliver any notices of termination or other communications to any Letter of
Credit beneficiary or transferee, and take any other action as necessary or
appropriate, at any time and from time to time, in order to cause the expiry
date of such Letter of Credit to be a date not later than the Revolving
Termination Date.
(f) This Agreement shall control in the event of any
conflict with any L/C-Related Document (other than any Letter of Credit).
(g) Each Issuing Bank will also deliver to the Agent,
concurrently or promptly following its delivery of a Letter of Credit, or
amendment to or renewal of a Letter of Credit, to an advising bank or a
beneficiary, a true and complete copy of each such Letter of Credit or
amendment to or renewal of a Letter of Credit.
(h) Each Issuing Bank shall deliver to the Agent such
reports with respect to the Letters of Credit as the Agent may reasonably
request from time to time.
3.03 Existing ABN Letters of Credit; Risk Participations, Drawings
and Reimbursements.
(a) On and after the Closing Date, the Existing ABN
Letters of Credit shall be deemed for all purposes,
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including for purposes of the fees to be collected pursuant to subsections
3.08(a) and 3.08(c), and reimbursement of costs and expenses to the extent
provided herein, Letters of Credit outstanding under this Agreement and
entitled to the benefits of this Agreement and the other Loan Documents, and
shall be governed by the applications and agreements pertaining thereto (which
shall be deemed L/C Related Documents) and by this Agreement (which, as between
the Company, the Issuing Banks, the Agent and the Banks, shall control in the
event of a conflict). Each Bank shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from ABN as the Issuing Bank on the Closing
Date a participation in each such Letter of Credit and each drawing thereunder
in an amount equal to the product of (i) such Bank's Commitment Percentage
times (ii) the maximum amount available to be drawn under such Letter of Credit
and the amount of such drawing, respectively. For purposes of subsection 2.01
and subsection 2.12, the Existing ABN Letters of Credit shall be deemed to
utilize pro rata the Commitment of each Bank. The Company hereby assumes all
obligations of the Facilities Subsidiary with respect to Existing ABN Letters
of Credit Issued for the account of the Facilities Subsidiary.
(b) Immediately upon the Issuance of each Letter of
Credit, each Bank shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Issuing Bank issuing such Letter
of Credit a participation in such Letter of Credit and each drawing thereunder
in an amount equal to the product of (i) the Commitment Percentage of such
Bank, times (ii) the maximum amount available to be drawn under such Letter of
Credit and the amount of such drawing, respectively. For purposes of Section
2.01, each Issuance of a Letter of Credit shall be deemed to utilize the
Commitment of each Bank by an amount equal to the amount of such participation.
(c) In the event of any request for a drawing under a
Letter of Credit by the beneficiary or transferee thereof, the Issuing Bank
which issued such Letter of Credit will promptly notify the Company. The
Company shall reimburse such Issuing Bank, directly or with the proceeds of a
Loan, prior to 10:00 a.m. (San Francisco time), on each date that any amount is
paid by such Issuing Bank under any Letter of Credit (each such date, an "Honor
Date"), in an amount equal to the amount so paid by such Issuing Bank. If the
Company fails to reimburse such Issuing Bank for the full amount of any drawing
under any Letter of Credit by 10:00 a.m. (San Francisco time) on the Honor
Date, such Issuing Bank will promptly notify the Agent and the Agent will
promptly notify each Bank thereof, and the Company shall be deemed to have
requested that Base Rate Committed
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Loans be made by the Banks to be disbursed on the Honor Date under such Letter
of Credit, subject to the amount of the unutilized portion of the Commitment
and subject to the conditions set forth in Section 5.02. Any notice given by
such Issuing Bank or the Agent pursuant to this subsection 3.03(c) may be oral
if immediately confirmed in writing (including by facsimile); provided that the
lack of such an immediate confirmation shall not affect the conclusiveness or
binding effect of such notice.
(d) Each Bank shall upon any notice pursuant to
subsection 3.03(c) make available to the Agent for the account of the relevant
Issuing Bank an amount in Dollars and in immediately available funds equal to
its Commitment Percentage of the amount of the drawing, whereupon the
participating Banks shall (subject to subsection 3.03(e)) each be deemed to
have made a Loan consisting of a Base Rate Committed Loan to the Company in
that amount. If any Bank so notified fails to make available to the Agent for
the account of such Issuing Bank the amount of such Bank's Commitment
Percentage of the amount of the drawing by no later than 12:00 noon (San
Francisco time) on the Honor Date, then interest shall accrue on such Bank's
obligation to make such payment, from the Honor Date to the date such Bank
makes such payment, at a rate per annum equal to the Federal Funds Rate in
effect from time to time during such period. The Agent will promptly give
notice of the occurrence of the Honor Date, but failure of the Agent to give
any such notice on the Honor Date or in sufficient time to enable any Bank to
effect such payment on such date shall not relieve such Bank from its
obligations under this Section 3.03.
(e) With respect to any unreimbursed drawing that is not
converted into Loans consisting of Base Rate Committed Loans to the Company in
whole or in part, because of the Company's failure to satisfy the conditions
set forth in Section 5.02 or for any other reason, the Company shall be deemed
to have incurred from the relevant Issuing Bank an L/C Borrowing in the amount
of such drawing, which L/C Borrowing shall be due and payable on demand
(together with interest) and shall bear interest at a rate per annum equal to
the Base Rate plus 2% per annum, and each Bank's payment to such Issuing Bank
pursuant to subsection 3.03(d) shall be deemed payment in respect of its
participation in such L/C Borrowing and shall constitute an L/C Advance from
such Bank in satisfaction of its participation obligation under this Section
3.03.
(f) Each Bank's obligation in accordance with this
Agreement to make the Loans or L/C Advances, as contemplated by this Section
3.03, as a result of a drawing under a
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Letter of Credit, shall be absolute and unconditional and without recourse to
the relevant Issuing Bank and shall not be affected by any circumstance,
including (i) any set-off, counterclaim, recoupment, defense or other right
which such Bank may have against such Issuing Bank, the Company or any other
Person for any reason whatsoever; (ii) the occurrence or continuance of a
Default, an Event of Default or a Material Adverse Effect; or (iii) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing; provided, however, that each Bank's obligation to make Committed
Loans under this Section 3.03 is subject to the conditions set forth in Section
5.02.
3.04 Repayment of Participations.
(a) Upon (and only upon) receipt by the Agent for the
account of an Issuing Bank of immediately available funds from the Company (i)
in reimbursement of any payment made by such Issuing Bank under the Letter of
Credit with respect to which any Bank has paid the Agent for the account of
such Issuing Bank for such Bank's participation in the Letter of Credit
pursuant to Section 3.03 or (ii) in payment of interest thereon, the Agent will
pay to each Bank, in the same funds as those received by the Agent for the
account of such Issuing Bank, the amount of such Bank's Commitment Percentage
of such funds, and such Issuing Bank shall receive the amount of the Commitment
Percentage of such funds of any Bank that did not so pay the Agent for the
account of such Issuing Bank.
(b) If the Agent or an Issuing Bank is required at any
time to return to the Company, or to a trustee, receiver, liquidator,
custodian, or any official in any Insolvency Proceeding, any portion of the
payments made by the Company to the Agent for the account of such Issuing Bank
pursuant to subsection 3.04(a) in reimbursement of a payment made under the
Letter of Credit or interest or fee thereon, each Bank shall, on demand of the
Agent, forthwith return to the Agent or such Issuing Bank the amount of its
Commitment Percentage of any amounts so returned by the Agent or such Issuing
Bank plus interest thereon from the date such demand is made to the date such
amounts are returned by such Bank to the Agent or such Issuing Bank, at a rate
per annum equal to the Federal Funds Rate in effect from time to time.
3.05 Role of the Issuing Bank.
(a) Each Bank and the Company agree that, in paying any
drawing under a Letter of Credit, each of the Issuing Banks shall not have any
responsibility to obtain any document (other than any sight draft and
certificates
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expressly required by the Letter of Credit) or to ascertain or inquire as to
the validity or accuracy of any such document or the authority of the Person
executing or delivering any such document.
(b) No Agent-Related Person, ABN, nor any of the
respective correspondents, participants or assignees of the Issuing Banks shall
be liable to any Bank for: (i) any action taken or omitted in connection
herewith at the request or with the approval of the Banks (including the
Majority Banks, as applicable); (ii) any action taken or omitted in the absence
of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any L/C-Related Document.
(c) The Company hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided, however, that this assumption is not intended to,
and shall not, preclude the Company's pursuing such rights and remedies as it
may have against the beneficiary or transferee at law or under any other
agreement. No Agent-Related Person, ABN, nor any of the respective
correspondents, participants or assignees of an Issuing Bank, shall be liable
or responsible for any of the matters described in clauses (i) through (vii) of
Section 3.06; provided, however, anything in such clauses to the contrary
notwithstanding, that the Company may have a claim against an Issuing Bank, and
such Issuing Bank may be liable to the Company, to the extent, but only to the
extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Company which the Company proves were caused by such Issuing
Bank's willful misconduct or gross negligence or such Issuing Bank's willful or
grossly negligent failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing: (i) each Issuing Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary; and (ii) such Issuing Bank shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason.
3.06 Obligations Absolute. The obligations of the Company under this
Agreement and any L/C-Related Document to reimburse each Issuing Bank for a
drawing under a Letter of
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Credit, and to repay any L/C Borrowing and any drawing under a Letter of Credit
converted into Loans shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement and each such other
L/C-Related Document under all circumstances, including the following:
(i) any lack of validity or enforceability of this
Agreement or any L/C-Related Document;
(ii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the obligations of the Company in
respect of any Letter of Credit or any other amendment or waiver of or any
consent to departure from all or any of the L/C-Related Documents;
(iii) the existence of any claim, set-off, defense or other
right that the Company may have at any time against any beneficiary or any
transferee of any Letter of Credit (or any Person for whom any such beneficiary
or any such transferee may be acting), the Issuing Banks or any other Person,
whether in connection with this Agreement, the transactions contemplated hereby
or by the L/C-Related Documents or any unrelated transaction;
(iv) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any Letter
of Credit;
(v) any payment by an Issuing Bank under any Letter of
Credit against presentation of a draft or certificate that does not strictly
comply with the terms of any Letter of Credit; or any payment made by such
Issuing Bank under any Letter of Credit to any Person purporting to be a
trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of any Letter of Credit, including any arising in
connection with any Insolvency Proceeding;
(vi) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to departure
from any other guarantee, for all or any of the obligations of the Company in
respect of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing,
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including any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Company or a guarantor.
3.07 Cash Collateral Pledge. Upon (i) the request of the Agent, (A)
if an Issuing Bank has honored any full or partial drawing request on any
Letter of Credit and such drawing has resulted in an L/C Borrowing hereunder,
or (B) if, as of the Revolving Termination Date, any Letters of Credit may for
any reason remain outstanding and partially or wholly undrawn, or (ii) the
occurrence of the circumstances described in subsection 2.09 requiring the
Company to Cash Collateralize Letters of Credit, then, the Company shall
immediately Cash Collateralize the L/C Obligations in an amount equal to the
L/C Obligations. The Company hereby grants to the Agent, for the benefit of
the Agent, the Issuing Banks and the Banks, a security interest in all such
cash and deposit account balances used to Cash Collateralize the Company's
obligations hereunder.
3.08 Letter of Credit Fees.
(a) The Company shall pay to the Agent for the account of
each of the Banks a letter of credit fee with respect to the Letters of Credit
on the average daily maximum amount available to be drawn of the outstanding
Letters of Credit, computed on a quarterly basis in arrears on the last
Business Day of each calendar quarter based upon Letters of Credit outstanding
for that quarter as calculated by the Agent, equal to the Letter of Credit
Rate. Such letter of credit fees shall be due and payable quarterly in arrears
on the last Business Day of each calendar quarter during which Letters of
Credit are outstanding, commencing on the first such quarterly date to occur
after the Closing Date, through the Revolving Termination Date (or such later
date upon which the outstanding Letters of Credit shall expire), with the final
payment to be made on the Revolving Termination Date (or such later expiration
date).
(b) The Company shall pay to the Agent for the account of
each Issuing Bank a letter of credit fronting fee per annum with respect to the
outstanding Letters of Credit issued by such Issuing Bank equal to 0.125% per
annum of the average daily maximum amount available to be drawn under such
outstanding Letters of Credit, computed on a quarterly basis in arrears on the
last Business Day of each calendar quarter based upon Letters of Credit issued
by such Issuing Bank outstanding for that quarter as calculated by the Agent.
Such fronting fees shall be due and payable quarterly in arrears on the last
Business Day of each calendar quarter during which Letters of Credit are
outstanding, commencing on the first such quarterly date to
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occur after the Closing Date, through the Revolving Termination Date (or such
later date upon which the outstanding Letters of Credit shall expire), with the
final payment to be made on the Revolving Termination Date (or such later
expiration date).
(c) The Company shall pay to each Issuing Bank from time
to time on demand the normal issuance, presentation, amendment and other
processing fees, and other standard costs and charges, of such Issuing Bank
relating to letters of credit as from time to time in effect.
3.09 Uniform Customs and Practice. The Uniform Customs and Practice
for Documentary Credits as published by the International Chamber of Commerce
("UCP") most recently at the time of issuance of any Letter of Credit shall
(unless otherwise expressly provided in the Letters of Credit) apply to the
Letters of Credit.
ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY
4.01 Taxes.
(a) Subject to subsection 4.01(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 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 4.01(g), the Company shall
indemnify and hold harmless each Bank and the Agent for the full amount of
Taxes or Other Taxes (including any
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Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 4.01) 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 4.01(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
4.01) 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.
(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 11.08 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;
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(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 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 4.01(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 4.01(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 4.01(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
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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 4.01(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 4.01(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.
(i) If the Company is required to pay additional amounts
to any Bank or the Agent pursuant to subsection 4.01(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.
4.02 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 (including in respect of any LIBOR Bid Loan as
to which the Company has accepted such Bank's Competitive Bid, but as to which
the borrowing date thereof has not arrived) shall be suspended until the
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Bank shall have notified the Agent and the Company that the circumstances
giving rise to such determination no longer exist.
(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 4.04. If the Company is required to so prepay
any Offshore Rate Committed Loan, then concurrently with such prepayment, the
Company may borrow from the affected Bank, in the amount of such repayment, a
Base Rate Committed Loan.
(c) If the obligation of any Bank to make or maintain
Offshore Rate Committed Loans has been so terminated or suspended, the Company
may elect, by giving notice to the Bank through the Agent that all Loans which
would otherwise be made by the Bank as Offshore Rate Committed Loans shall be
instead Base Rate Committed Loans.
(d) Before giving any notice to the Agent under this
Section, the affected Bank shall designate a different Lending Office with
respect to its Offshore Rate Loans if such designation will avoid the need for
giving such notice or making such demand and will not, in the judgment of the
Bank, be illegal or otherwise disadvantageous to the Bank.
4.03 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 Committed Loans or participating in Letters of
Credit, or, in the case of an Issuing Bank, any increase in the cost to such
Issuing Bank of agreeing to issue, issuing or maintaining any Letter of Credit
or of agreeing
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to make or making, funding or maintaining any unpaid drawing under any Letter
of Credit, then the Company shall be liable 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.
4.04 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
Committed 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 of
any Committed Loan after the Company has given a notice in accordance with
Section 2.08;
(d) the prepayment (including pursuant to Section 2.08 or
2.09) of an Offshore Rate Loan, CD Rate
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Committed Loan or Absolute Rate Bid Loan on a day which is not the last day of
the Interest Period with respect thereto;
(e) the conversion pursuant to Section 2.04 of (i) any
Offshore Rate Committed Loan to a CD Rate Committed Loan or a Base Rate
Committed Loan, or (ii) any CD Rate Committed Loan to an Offshore Rate
Committed Loan or Base Rate Committed Loan, on a day that is not the last day
of the respective Interest Period; or
(f) the failure of the Company to borrow any Bid Loan
after having accepted a Competitive Bid therefor;
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
Committed Loans or Absolute Rate Bid Loan hereunder or from fees payable to
terminate the deposits from which such funds were obtained.
4.05 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, LIBO Rate or the CD Rate for any requested
Interest Period with respect to a proposed Offshore Rate Loan or CD Rate
Committed Loan or that the Offshore Rate, LIBO Rate or the CD Rate applicable
pursuant to subsection 2.11(a) for any requested Interest Period with respect
to a proposed Offshore Rate Loan or CD Rate Committed 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 Committed
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 Committed Loans instead of CD Rate
Committed Loans or Offshore Rate Committed Loans, as the case may be.
4.06 Certificate of Bank. Each Bank, if claiming reimbursement or
compensation pursuant to this Article IV, shall deliver to the Company, a
certificate setting forth in reasonable detail the amount payable to such Bank
hereunder
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and such certificate shall be conclusive and binding on the Company in the
absence of manifest error.
4.07 Survival. The covenants, agreements and obligations of the
Company in this Article IV shall survive the payment of all other Obligations.
ARTICLE V
CONDITIONS PRECEDENT
5.01 Conditions of Initial Credit Extensions. The obligation of each
Bank to make its initial Credit Extension 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 5.01(h) and (i), the Majority Banks, and in sufficient
copies for each Bank:
(a) Credit Agreement. This Agreement executed by the
Company, the Agent, the Co-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:
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(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, 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,
provided, however, that if the Company is unable to deliver on the
Closing Date any such bring down certificate (other than the bring
down certificate from the state of incorporation or formation of such
Person) because bring down certificates are not readily provided by
the applicable Secretary of State, the Company shall not be required
to deliver such bring down certificate on the Closing Date but
instead shall deliver it to the Agent within five days of 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
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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 2.12, 4.01 and 11.04;
(f) Certificate. A certificate signed by a Responsible
Officer, dated as of the Closing Date, stating that:
(i) the representations and warranties contained
in Article VI 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 Credit Extension; and
(iii) there has occurred since December 31, 1993,
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 6.11;
(h) Credit Agreements. Copies certified by a Responsible
Officer of the Note Agreements, as amended, the Mortgage Note Agreements, as
amended, and the 1994 Senior Note Agreements;
(i) Other Documents. Such other approvals, opinions,
documents or materials as the Agent or the Majority Banks may request;
(j) Facility B Credit Agreement. All conditions
precedent to the initial extension of credit under the Facility B Credit
Agreement shall have occurred prior to or simultaneously with the Closing;
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(k) Consent to Amendment and Restatement. A Consent to
Amendment and Restatement executed by the Departing Bank, substantially in the
form of Exhibit J; and
(l) Termination of Existing ABN Credit Facilities. On or
before the Closing Date, the Company shall have terminated (i) that certain
$15,000,000 Revolving Credit Agreement dated as of May 1, 1993 between the
Company, ABN, as agent, and the banks party thereto, as amended, and (ii) that
certain $20,000,000 Revolving Credit Agreement dated as of May 1, 1993 between
the Facilities Subsidiary, ABN, as agent, and the banks party thereto, as
amended.
5.02 Conditions to All Credit Extensions. The obligation of each Bank
to make any Committed Loan to be made by it, or any Bid Loan as to which the
Company has accepted the relevant Competitive Bid (including its initial Loan)
or to continue or convert any Committed Loan pursuant to Section 2.04, and the
obligation of each Issuing Bank to Issue any Letter of Credit (including the
initial Letter of Credit) is subject to the satisfaction of the following
conditions precedent on the relevant date of Borrowing, Conversion/Continuation
Date or Issuance Date:
(a) Notice, Application. As to any Committed Loan, 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 Conversion/Continuation, as
applicable, or in the case of any Issuance of any Letter of Credit, the
relevant Issuing Bank and the Agent shall have received an L/C Application or
L/C Amendment Application, as required under Section 3.02;
(b) Continuation of Representations and Warranties. The
representations and warranties made by the Company contained in Article VI
shall be true and correct on and as of such date of Borrowing or
Conversion/Continuation Date with the same effect as if made on and as of such
date of Borrowing or Conversion/Continuation 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
(c) No Existing Default. No Default or Event of Default
shall exist or shall result from such Credit Extension.
Each Notice of Borrowing, Notice of Conversion/Continuation, Competitive Bid
Request and L/C Application or L/C Amendment Application submitted by the
Company hereunder shall constitute a representation and warranty by the Company
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hereunder, as of the date of each such notice, request or application and as of
the date of each Borrowing, each Conversion/Continuation Date, or Issuance
Date, as applicable, that the conditions in Section 5.02 are satisfied.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Bank that:
6.01 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.
6.02 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:
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(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.
6.03 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.
6.04 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.
6.05 Litigation. There are no actions, suits, proceedings, claims or
disputes pending, or to the Company's Knowledge and to the knowledge of 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
(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
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provided for herein or therein not be consummated as herein or therein
provided.
6.06 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 9.01(f).
6.07 ERISA Compliance.
(a) Schedule 6.07 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 6.07,
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
Company's Knowledge nothing has occurred which would cause the loss of such
qualification or tax-exempt status.
(d) Except as specifically disclosed in Schedule 6.07,
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 any Plan to which the Company or any ERISA Affiliate contributes or
is obligated to contribute.
(e) Except as specifically disclosed in Schedule 6.07, no
Plan subject to Title IV of ERISA has any Unfunded Pension Liability.
(f) Except as specifically disclosed in Schedule 6.07, no
member of the Controlled Group has ever represented, promised or contracted
(whether in oral or
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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 6.07, no
ERISA Event has occurred or, to the Company's Knowledge is reasonably expected
to occur with respect to any Plan.
(i) There are no pending or, to the Company's Knowledge,
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 6.07,
neither the Company nor any ERISA Affiliate has incurred nor, to the Company's
Knowledge, 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 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 6.07,
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.
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(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.
6.08 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 7.11, and are intended to be and shall be used in
compliance with Section 8.07. 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.
6.09 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.
6.10 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.
6.11 Financial Condition.
(a) The audited combined financial statements of
financial condition of the Company and its Subsidiaries dated December 31,
1993, 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;
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(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, 1993, there has been no Material
Adverse Effect.
6.12 Environmental Matters.
(a) Except as specifically disclosed in Schedule 6.12,
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 6.12,
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 6.12,
none of the Company, the Partner Entities, 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 6.12,
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
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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.
6.13 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.
6.14 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.
6.15 Solvency. The Company, the General Partner, the Facilities
Subsidiary, and the Restricted Subsidiaries are each Solvent.
6.16 Labor Relations. There are no material strikes, lockouts or
other labor disputes against the Company or any of its Subsidiaries, or, to 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 Company's Knowledge,
threatened against any of them before any Governmental Authority.
6.17 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
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respective businesses, without conflict with the rights of any other Person.
To the Company's Knowledge, 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 6.05, no claim or litigation regarding any of the
foregoing is pending or, to the Company's Knowledge, threatened, and no patent,
invention, device, application, principle or any statute, law, rule,
regulation, standard or code is pending or, to the Company's Knowledge,
proposed, which, in either case, would reasonably be expected to have a
Material Adverse Effect.
6.18 Subsidiaries. The Company has no Subsidiaries other than those
specifically disclosed in part (a) of Schedule 6.18 hereto and has no equity
investments in any other corporation or entity other than those specifically
disclosed in part (b) of Schedule 6.18. Except as disclosed in part (a) of
Schedule 6.18, 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.
6.19 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.
6.20 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.
6.21 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.
6.22 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)
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through 1991, 469 MMBF of its fee Timber during calendar year 1992 and 458 MMBF
of its fee Timber during calendar year 1993.
6.23 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 VII
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, or any Letter of Credit remains outstanding, unless the
Majority Banks waive compliance in writing:
7.01 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 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 ("Independent
Auditor") 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
Independent Auditor 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 Independent Auditor in
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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 7.01;
(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 7.01;
(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.
7.02 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 7.01(a) above, a certificate of the
Independent Auditor 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;
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(b) concurrently with the delivery of the financial
statements referred to in subsections 7.01(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 the Applicable Margin to be in
effect for the immediately following fiscal quarter, and (iii) showing in
detail the calculations supporting such statement in respect of subsection
8.02(h), Section 8.03, subsection 8.04(i), Section 8.05 and Section 8.13, and
supporting the computation of the Fixed Charge Coverage 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.
7.03 Notices. The Company shall promptly upon becoming aware thereof
notify the Agent and each Bank:
(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 Credit Extension set forth in subsection 5.02(b) not to be
satisfied if a Credit Extension 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
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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;
(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:
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(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 7.01(a) or 5.01(g); and
(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 7.03(a) shall describe with particularity any and all clauses or
provisions of this Agreement or other Loan Document that have been breached or
violated.
7.04 Preservation of Corporate Existence, Etc. The Company shall,
except as permitted by Section 8.02, 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;
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(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.
7.05 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.
7.06 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.
7.07 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;
and
(b) all Indebtedness, as and when due and payable, but
subject to any subordination provisions contained in any instrument or
agreement evidencing such Indebtedness.
7.08 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.
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7.09 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.
7.10 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 notice or report required pursuant to subsection 7.03(d),
that could, individually or in the aggregate, result in liability in excess of
$25,000,000.
7.11 Use of Proceeds. The Company shall use the proceeds of the Loans
solely as follows: (a) to refinance existing Indebtedness, and (b) for working
capital and other general corporate purposes not in contravention of any
Requirement of Law or of any Loan Document.
7.12 Solvency. The Company shall at all times be, and shall cause
each of its Restricted Subsidiaries to be, Solvent.
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ARTICLE VIII
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, or any Letter of Credit shall remain outstanding,
unless the Majority Banks waive compliance in writing:
8.01 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
7.07, 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 (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
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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 8.05, (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) from May 31, 1994 to May 31, 1999, exceeds
$25,000,000, and (b) from May 31, 1999 to the Maturity 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 8.05(d);
(i) any Lien existing on the Property of the Company or
its Restricted Subsidiaries on the Closing Date
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and set forth in Schedule 8.01 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.
8.02 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;
(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 any
state of the United States and shall expressly assume in writing all of the
obligations of the Company under this Agreement, the Facility B Credit
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Agreement, the Note Agreements, the 1994 Senior 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 Facility B Credit Agreement, the Note Agreements, the 1994 Senior 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 8.05(i), 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 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 under the Facility B Credit Agreement, the Note
Agreements, the 1994 Senior 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 8.02;
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(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 1994, $3,210,000 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; and
(i) the Company and its Restricted Subsidiaries may
otherwise sell Properties for cash 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, within 180 days after
such sale, 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) if the Net Proceeds
of (x) any such sale exceed $25,000,000, the entire amount of such Net Proceeds
are 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 (y) all such sales which are not then
held in escrow or cash collateral accounts pursuant to subclause (iii)(x) and
which have not been applied to the purchase of productive assets in the same
line of business or distributed to the holders of all Qualified Debt for
application to the repayment of such Qualified Debt exceed $50,000,000 in the
aggregate at any time, all such Net Proceeds in excess of $50,000,000 are
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 incur $1 of
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additional Funded Debt pursuant to subsection 8.05(i); provided, however, that
the Company and its Restricted Subsidiaries may not sell properties that
constitute the Company's Columbia River Unit unless the Note Agreements shall
have been amended so as (A) to delete paragraph 6B(5)(viii) thereof as set
forth in that certain Senior Note Agreement Amendment dated as of September 1,
1993 and (B) to provide for the application of Net Proceeds of the sale of
properties that constitute the Columbia River Unit substantially as provided in
this subsection 8.02(i).
8.03 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>
1994 (including 735 MMBF
of prior years
cumulative carryover
harvest) 1435 MMBF
1995 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 (a) the Net Proceeds from such excess harvest are either (i) applied,
within 180 days after any such excess harvest, pro rata (based on the then
outstanding principal of all Qualified Debt) to the holders of all Qualified
Debt, 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.
8.04 Loans and Investments. The Company shall not suffer or permit
any of its Restricted Subsidiaries to make
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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 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 8.13 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 8.04) 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 8.04;
(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 8.05(f) 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,
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including deposits permitted under subsection 8.01(c), advances to employees
for travel, relocation and other employment related expenses, advances to
contractors performing services for the Company or such Restricted Subsidiary,
advances to owners of timber or timber properties to acquire rights to harvest
timber and other similar advances;
(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 8.04 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 8.04) 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.
8.05 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) Funded Debt represented by the Notes and the 1994
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 1994 Notes and the documentation relating
thereto;
(b) 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;
(c) Indebtedness of any Restricted Subsidiary owing to
the Company or to a Restricted Subsidiary;
(d) 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 8.01(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 (d) 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 (d);
(e) 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;
(f) 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;
(g) 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;
(h) Funded Debt of the Company or any Restricted
Subsidiary secured by a Lien permitted by subsection 8.01(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 subsection (i) below;
(i) 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 8.05, including guarantees of
Indebtedness to the extent permitted by Section 8.04 and not otherwise
permitted by the foregoing subsections of this Section 8.05, 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 (but not including Funded Debt incurred under this
Agreement or the Facility B Credit Agreement) shall not exceed $400,000,000;
(j) 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 8.01(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 (j) 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 (j); and
(k) 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
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Subsidiary becomes a Restricted Subsidiary, the Company could incur at least $1
of additional Funded Debt pursuant to subsection (i) 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 8.01(g) does not violate subclause (iv) to the proviso
to such subsection (g).
8.06 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.
8.07 Use of Proceeds.
(a) The Company shall not and shall not suffer or permit
any of its Subsidiaries to use any portion of the proceeds of the Loans or
other Credit Extension, 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.
(b) The Company shall not and shall not suffer or permit
any of its Subsidiaries to use any portion of the proceed of the Loans or other
Credit Extension, directly or indirectly, (i) knowingly to purchase Ineligible
Securities from a Section 20 Subsidiary during any period in which such Section
20 Subsidiary makes a market in such Ineligible Securities, (ii) knowingly to
purchase during the underwriting or placement period Ineligible Securities
being underwritten or privately placed by a Section 20 Subsidiary, or (iii) to
make payments of principal or interest on
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Ineligible Securities underwritten or privately placed by a Section 20
Subsidiary and issued by or for the benefit of the Company or any Affiliate of
the Company. As used in this Section, "Section 20 Subsidiary" means the
Subsidiary of the bank holding company controlling any Bank, which Subsidiary
has been granted authority by the Federal Reserve Board to underwrite and deal
in certain Ineligible Securities; and "Ineligible Securities" means securities
which may not be underwritten or dealt in by member banks of the Federal
Reserve System under Section 16 of the Banking Act of 1933 (as U.S.C. Section
24, Seventh), as amended.
8.08 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, provided that the
assets of such Subsidiary do not include any assets which could not be disposed
of pursuant to the provisions of Section 8.02 unless the conditions to the sale
of such assets set forth in Section 8.02 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 8.08).
8.09 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
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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 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 8.04(a), (e), (f), (g), (h)
or (i).
8.10 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.
8.11 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
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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.
8.12 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 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 8.12 shall not apply to any
property sold pursuant to subsection 8.02(h).
8.13 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
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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 and the 1994 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 and the "Loans" as defined in the
Facility B Credit Agreement to be paid on the respective Interest Payment Dates
for such Loans and such "Loans" during the calendar quarter immediately
following such immediately preceding calendar quarter, (iii) 25% of the
aggregate amount of all principal in respect of the Notes and the 1994 Notes
scheduled to be paid (determined in accordance with the proviso in clause (ii)
of the definition of "Fixed Charge Coverage Ratio") 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
any scheduled reductions (determined in accordance with the proviso in clause
(ii) of the definition of "Fixed Charge Coverage Ratio") in the Commitments and
the "Commitments" as defined in the Facility B Credit Agreement 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 subsection 8.13(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 Commitments and the
"Commitments" as defined in the Facility B Credit Agreement 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.
8.14 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.
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8.15 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.
8.16 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 or
the ability of the Company to perform its obligations under any Loan Document.
8.17 Available Cash. The Company shall not at any time permit
Available Cash to be less than zero. For purposes of this Section 8.17, 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 and the 1994 Notes to be paid on the interest date immediately
following such immediately preceding calendar quarter, (b) 100% of the
aggregate amount of all interest in respect of the Loans and the "Loans" as
defined in the Facility B Credit Agreement to be paid on the respective
Interest Payment Dates for such Loans and such "Loans" during the calendar
quarter immediately following such immediately preceding calendar quarter, (c)
25% of the aggregate amount of all principal in respect of the Notes and the
1994 Notes scheduled to be paid (determined in accordance with the proviso in
clause (ii) of the definition of "Fixed Charge Coverage Ratio") 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 any scheduled reductions (determined in accordance with the proviso
in clause (ii) of the definition of "Fixed Charge Coverage Ratio") in the
Commitments and the "Commitments" as defined in the Facility B Credit Agreement
during the 12 calendar months immediately following such immediately preceding
calendar quarter, and the Company will not reduce the amount
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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 8.17, 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
Commitments and the "Commitments" as defined in the Facility B Credit Agreement
during the 12 calendar months immediately following such immediately preceding
calendar quarter.
ARTICLE IX
EVENTS OF DEFAULT
9.01 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 of any
L/C Obligation, or any amount of interest on any Bid Loan, or (ii) within 5
days after the same shall become due, any interest (other than interest on Bid
Loans), 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
(c) Specific Defaults. The Company fails to perform or
observe any term, covenant or agreement contained in Sections 7.03 or 7.09 or
Article VIII; 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
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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) Facility B Credit Agreement Cross-Default. An Event
of Default shall have occurred as that term is defined in the Facility B Credit
Agreement; or
(f) 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
(g) 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
(h) 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 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
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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
(i) 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
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
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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
(j) 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
(k) 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
(l) Auditors. The Agent or any Bank shall receive notice
from the Independent Auditor that the Agent and the Banks should no longer use
or rely upon any audit report or other financial data provided by the
Independent Auditor; or
(m) 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.
9.02 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 Committed
Loans and any obligation of the Issuing Banks to
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issue Letters of Credit to be terminated, whereupon such Commitments and
obligations shall forthwith be terminated;
(b) declare an amount equal to the maximum aggregate
amount that is or at any time thereafter may become available for drawing under
any outstanding Letters of Credit (whether or not any beneficiary shall have
presented, or shall be entitled at such time to present, the drafts or other
documents required to draw under such Letters of Credit) to be immediately due
and payable, and 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
(g) or (h) of Section 9.01 above (in the case of clause (i) of paragraph (h)
upon the expiration of the 60-day period mentioned therein), the obligation of
each Bank to make Loans and any obligation of the Issuing Banks to Issue
Letters of Credit 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, the
Issuing Banks, or any Bank.
9.03 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 X
THE AGENT
10.01 Appointment and Authorization.
(a) Each Bank and each Issuing 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
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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 accordance with this Agreement, and to release funds to the Company in
accordance with Section 1(b) of the Cash Collateral Account Agreement and, if
applicable, 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 or any Issuing 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.
(b) Each Issuing Bank shall act on behalf of the Banks
with respect to any Letters of Credit Issued by it and the documents associated
therewith until such time and except for so long as the Agent may agree at the
request of the Majority Banks to act for such Issuing Bank with respect
thereto; provided, however, that each Issuing Bank shall have all of the
benefits and immunities (i) provided to the Agent in this Article X with
respect to any acts taken or omissions suffered by such Issuing Bank in
connection with Letters of Credit Issued by it or proposed to be Issued by it
and the application and agreements for letters of credit pertaining to the
Letters of Credit as fully as if the term "Agent", as used in this Article X,
included such Issuing Bank with respect to such acts or omissions, and (ii) as
additionally provided in this Agreement with respect to the Issuing Banks.
10.02 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.
10.03 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
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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.
10.04 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, 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 5.01, 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
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transactions contemplated by the Loan Documents shall have received notice from
the Bank prior to the initial Credit Extension 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 Credit Extension.
10.05 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 IX;
provided, however, that unless and until the Agent shall have received any such
request, the Agent may (but shall not 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.
10.06 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 any of the Agent-Related Persons to any Bank.
Each Bank represents to the Agent that it has, independently and without
reliance upon any of the Agent-Related Persons 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 any of the Agent-Related Persons 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
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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.
10.07 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
termination of the Letters of Credit, the repayment of the Loans and the
termination or resignation of the Agent) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this
Agreement, the Original Credit 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
the Original Credit Agreement, 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 hereunder or
under the Original
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Credit Agreement (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.
10.08 Agent in Individual Capacity. BofA and ABN and their 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 neither BofA nor ABN was the Agent and
the Co-Agent, respectively, or an Issuing Bank hereunder and without notice to
or consent of the Banks. With respect to its Loans and participation in
Letters of Credit, each of BofA and ABN 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 or the Co-Agent, as the case may be, and the terms "Bank"
and "Banks" shall include each of BofA and ABN in its individual capacity.
10.09 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 the
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 and duties as
Agent shall be terminated. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article X and Sections 11.04 and 11.05 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
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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. Notwithstanding the
foregoing, however, BofA may not be removed as the Agent at the request of the
Majority Banks unless BofA shall also simultaneously be replaced as an "Issuing
Bank" hereunder pursuant to documentation in form and substance satisfactory to
BofA.
10.10 Co-Agent. None of the Banks identified on the facing page or
signature pages of this Agreement as a "co-agent" shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Banks as such. Each Bank acknowledges that it has not
relied, and will not rely, on any of the Banks so identified in deciding to
enter into this Agreement or in taking or not taking action hereunder.
ARTICLE XI
MISCELLANEOUS
11.01 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 9.02(a)), including,
without limitation, any amendment to or waiver of subsection 2.09(b) or any
other provision providing for a mandatory commitment reduction, 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 other Loan Document;
(c) reduce the principal of, or the rate of interest
specified herein on any Loan, or (subject to clause (iii) below) of any fees or
other amounts payable hereunder or under any other Loan Document;
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(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
(e) amend this Section 11.01 or Section 2.16 or any
provision providing for consent or other action by all Banks;
and, provided further, that (i) no amendment, waiver or consent shall, unless
in writing signed by the relevant Issuing Bank in addition to the Majority
Banks or all the Banks, as the case may be, affect the rights or duties of such
Issuing Bank under this Agreement or any L/C-Related Document relating to any
Letter of Credit Issued or to be Issued by it, (ii) 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, and (iii)
the fee letter between the Company and BofA may be amended, or rights and
privileges thereunder waived, in a writing executed by the parties thereto.
11.02 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,
notwithstanding the foregoing, notices pursuant to
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Article III to an Issuing Bank shall not be effective until actually received
by the Issuing Bank at the address specified for the "Issuing Bank" on the
signature page hereof, and notices to the Company or the Agent shall not be
effective until actually received by the Company or the Agent, respectively.
(c) The Company acknowledges and agrees that any
agreement of the Agent, the Issuing Banks, and the Banks at Article II and
Article III herein to receive certain notices by telephone and facsimile is
solely for the convenience and at the request of the Company. The Agent, the
Issuing Banks, 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, the Issuing Banks 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, the Issuing Banks or the Banks in reliance upon such telephonic or
facsimile notice. The obligation of the Company to repay the Loans and L/C
Obligations shall not be affected in any way or to any extent by any failure by
the Agent, the Issuing Banks, and the Banks to receive written confirmation of
any telephonic or facsimile notice or the receipt by the Agent, the Issuing
Banks and the Banks of a confirmation which is at variance with the terms
understood by the Agent, the Issuing Banks, and the Banks to be contained in
the telephonic or facsimile notice.
11.03 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.
11.04 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 5.01(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, the
Original Credit Agreement, any Loan Document and any other
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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, the Agent, and the
Arranger within five Business Days after demand (subject to subsection 5.01(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 costs, fees
and expenses, incurred by the Agent, the Arranger and any Bank.
11.05 Indemnity. Whether or not the transactions contemplated hereby
shall be consummated: The Company shall pay, indemnify, and hold each Bank,
the Agent, BofA as agent under the Original Credit Agreement, 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, the
Original Credit Agreement, any 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, the Original Credit Agreement, or the Loans or the
Letters of Credit 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
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agreements in this Section shall survive payment of all other Obligations.
11.06 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.
11.07 Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of 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.
11.08 Assignments, Participations, Etc.
(a) 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 shall not be unreasonably withheld or delayed, 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, the L/C Obligations and the other rights and
obligations of such Bank hereunder; provided, however, that (i) no assignment
shall in any event be less than $10,000,000 of the combined Commitments of the
assigning Bank under this Agreement and under and as defined in the Facility B
Credit Agreement unless as a result of such assignment the assigning Bank's
rights and obligations
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hereunder shall be reduced to zero; (ii) if a Bank assigns less than all of its
rights and obligations hereunder, such Bank's remaining Commitment plus such
Bank's Commitment under and as defined in the Facility B Credit Agreement,
after giving effect to such assignment, shall not be less than $10,000,000;
(iii) 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; and (iv) no assignment of Committed
Loans shall be effective, and shall instead be void and of no effect, unless
performed simultaneously with an assignment of an identical percentage of the
rights and obligations of the assigning Bank in Committed Loans under and as
defined in the Facility B Credit Agreement.
(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 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
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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,
the Issuing Bank 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, (iv) no such
participation of Committed Loans shall be effective, and shall instead be void
and of no effect, unless performed simultaneously with a participation of an
identical percentage of the rights and obligations of the selling Bank in
Committed Loans under and as defined in the Facility B Credit Agreement, and
(v) 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 11.01, or the right to
grant subparticipations in Committed Loans except in strict compliance with the
immediately preceding clause (iv) applied mutatis mutandis to such
subparticipation. In the case of any such participation, the Participant shall
be entitled to the benefit of Sections 4.01, 4.03 and 11.05 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 Company or any Subsidiary of the Company, or by the Agent on such Company's
or Subsidiary's behalf, in connection with this Agreement, the Original Loan
Agreement, or any 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
126
<PAGE> 132
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 and (I) to such Bank's Affiliates.
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.
11.09 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
127
<PAGE> 133
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 11.09
are in addition to the other rights and remedies (including other rights of
set-off) which the Bank may have.
11.10 Automatic Debits of Fees. With respect to any commitment fee,
facility fee, letter of credit fee or other fee, or any other cost or expense
(including Attorney Costs) due and payable to the Agent, the Issuing Banks 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 11.10 shall be deemed a setoff.
11.11 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.
11.12 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 signed by all the parties
shall be lodged with the Company and the Agent.
11.13 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.
128
<PAGE> 134
11.14 No Third Parties Benefited. This Agreement is made and entered
into for the sole protection and legal benefit of the Company, the Banks, the
Issuing Banks, the Co-Agent 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, the
Co-Agent, the Issuing Banks nor any Bank shall have any obligation to any
Person not a party to this Agreement or other Loan Documents.
11.15 Time. Time is of the essence as to each term or provision of
this Agreement and each of the other Loan Documents.
11.16 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.
11.17 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 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
129
<PAGE> 135
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.
11.18 Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Company,
the Banks, the Issuing Banks, the Co-Agent 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; provided,
however, that (a) the fee letter referenced in subsections 2.12(a) and (c), (b)
any prior arrangements made with respect to the payment by the Company of (or
any indemnification for) any fees, costs or expenses payable to or incurred (or
to be incurred) by or on behalf of the Agent or the Banks, and (c) the
representations and warranties (as of the dates made and deemed made) and the
indemnities of the Company set forth in the Original Credit Agreement and the
Loan Documents (as
130
<PAGE> 136
defined therein) shall, in each case, survive the execution and delivery of
this Agreement.
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: /s/ Diane M. Irvine
------------------------------------------
Title: Vice President and CFO
---------------------------------
Address for notices:
999 Third Avenue, Suite 2300
Seattle, WA 98104
Attn: Chief Financial Officer
Facsimile: (206) 467-3797
Tel: (206) 467-3600
131
<PAGE> 137
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
As Agent
By: /s/ Ivo Bakovic
---------------------------------------
Title: Vice President
-----------------------------------------
Address for notices:
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attn: Agency Management
Services #5596
Facsimile: (415) 622-4894
Tel: (415) 622-1158
Attention: Shannon Collins
Address for payments:
Bank of America NT&SA
ABA 121-000-358
Attention: Agency Management
Services #5596
1850 Gateway Blvd.
Concord, CA 94520
for credit to Account No. 1233-6-14205
132
<PAGE> 138
ABN AMRO BANK N.V.
as a Co-Agent
By: /s/ David McGinnis
------------------------------------------
Title: Vice President
---------------------------------------
By: /s/ Paul Calderon
------------------------------------------
Title: Vice President
---------------------------------------
Address for notices:
600 University Street
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
133
<PAGE> 139
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as a Bank and as an Issuing Bank
By: /s/ Michael J. Balok
------------------------------------------
Title: Vice President
---------------------------------------
Address for notices (BofA as a Bank):
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: Terry Peach
ABA 121-000-358 SF
Domestic and Offshore Lending Office:
Same as address for payments
Address for Notices (BofA as an Issuing Bank):
International Trade Banking Division #2621
333 S. Beaudry Ave., 19th Floor
Los Angeles, California 90017
Attention: Cybele Sierra
Telephone: (213) 345-6630
Facsimile: (213) 345-6684
134
<PAGE> 140
ABN AMRO BANK N.V.
as a Bank and as an Issuing Bank
By: /s/ David McGinnis
-------------------------------------------
Title: Vice President
----------------------------------------
By: /s/ Paul Calderon
------------------------------------------
Title: Vice President
---------------------------------------
Address for notices:
600 University Street
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
135
<PAGE> 141
NATIONSBANK OF NORTH CAROLINA, N.A.
By: /s/ Michael O. Lincoln
------------------------------------------
Title: Sr. Vice President
---------------------------------------
Address for notices:
1 NationsBank Plaza
NC1-002-06-19
Charlotte, NC 28255
Attention: Kay Ostwalt
Facsimile: (704) 386-8694
Tel: (704) 386-1110
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
136
<PAGE> 142
U.S. BANK OF WASHINGTON, N.A.
By: /s/ Peter G. Bentley
------------------------------------------
Title: Senior Vice President
---------------------------------------
Address for Notices:
U.S. Bank of Washington, N.A.
1420 Fifth Avenue WWH276
Seattle, WA 98101
Attention: Peter G. Bentley, Vice President
Facsimile: (206) 587-5259
Tel: (206) 587-5237
Address for payments:
U.S. Bank of Washington, N.A.
Commercial Note Department
Attention: Jackie Ainsworth
Reference: Plum Creek
Domestic and Offshore Lending Office:
Same as notice address
137
<PAGE> 143
WELLS FARGO BANK, N.A.
By: /s/ Ralph Turner
------------------------------------------
Title: Vice President
---------------------------------------
Address for notices:
20 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:
same as notice address
138
<PAGE> 144
SEATTLE FIRST NATIONAL BANK
By: /s/ John Wilson
------------------------------------------
Title: Vice President
---------------------------------------
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
LSC Loans RC #94680
Reference: Plum Creek Timber Company,
L.P., AFS #7007143921
Domestic and Offshore Lending Office:
same as notice address
139
<PAGE> 145
THE BANK OF TOKYO, LTD.
By: /s/ Stanley Lance
------------------------------------------
Title: Vice President
---------------------------------------
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, WA 98101
140
<PAGE> 146
THE BANK OF CALIFORNIA, N.A.
By: /s/ Kevin Sullivan
------------------------------------------
Title: Vice President
---------------------------------------
Address for notices:
400 California Street, 17th Fl.
San Francisco, CA 94104
Attention: Kevin Sullivan
Vice President
Facsimile: (415) 765-3146
Tel: (415) 765-3148
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
141
<PAGE> 147
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:
o Preserves principal
o Meets liquidity needs
o Allows for appropriate diversification of investments
o 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> 148
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:
<TABLE>
<CAPTION>
DURATION MINIMUM CREDIT RATING
-------- ---------------------
S&P MOODY'S
--- -------
<S> <C> <C>
6 months or less A- A3
6 - 18 months AA Aa2
18 months or more AAA Aaa
</TABLE>
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 diversiffy 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> 149
SCHEDULE 2.01
COMMITMENTS
<TABLE>
<CAPTION>
Commitment
Bank Commitment Percentage
- ---- --------------- ------------
<S> <C> <C>
Bank of America National Trust
and Savings Association $ 18,518,518.52 18.51851852%
ABN AMRO Bank N.V $ 18,518,518.52 18.51851852%
NationsBank of
North Carolina, N.A. $ 11,111,111.11 11.11111111%
U.S. Bank of Washington, N.A. $ 11,111,111.11 11.11111111%
Wells Fargo Bank, N.A. $ 11,111,111.11 11.11111111%
Seattle First National Bank $ 11,111,111.11 11.11111111%
The Bank of Tokyo, Ltd. $ 11,111,111.11 11.11111111%
The Bank of California, N.A. $ 7,407,407.41 7.40740741%
--------------- -------------
$100,000,000.00 100.00000000%
</TABLE>
<PAGE> 150
SCHEDULE 3.03
EXISTING ABN LETTERS OF CREDIT
PLUM CREEK TIMBER COMPANY
<TABLE>
<CAPTION>
Letter of Number of Auto-renew
Credit Balance Expiry Notification Days Beneficiary
- --------- ------- ------ --------------------- -----------
<S> <C> <C> <C> <C>
IM60268 165,000 6/8/95 60 Home Indemnity Co.
IM60293 580,000 6/1/95 45 United Pacific Insurance Co.
IM60396 89,073 3/26/95 45 United Pacific Insurance Co.
IM60496 250,000 6/1/95 30 Federal Insurance Co.
</TABLE>
PLUM CREEK MANUFACTURING, INC.
<TABLE>
<CAPTION>
Letter of Number of Auto-renew
Credit Balance Expiry Notification Days Beneficiary
- --------- ------- ------ --------------------- -----------
<S> <C> <C> <C> <C>
IM60269 335,000 6/15/95 60 Home Indemnity Co.
IM60299 125,335 6/15/95 45 United Pacific Co.
</TABLE>
<PAGE> 151
PLUM CREEK TIMBER COMPANY, L.P.
SCHEDULE 6.05
LITIGATION
NONE
<PAGE> 152
SCHEDULE 6.07
6.07(a)
QUALIFIED PLANS:
Plum Creek Pension Plan
Plum Creek Thrift and Profit Sharing Plan
Plum Creek Welfare Plan
- Component Documents listed in Appendix II, thereto
NON-QUALIFIED PLANS:
Plum Creek Management Company, L.P. Executive Unit Award Plan
Plum Creek Management Company, L.P. Key Employee Long Term Incentive Plan
Plum Creek Management Company, L.P. Long Term Incentive Plan
Plum Creek Management Company, L.P. Management Incentive 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 Incentive Sharing Plan
Plum Creek Supplemental Benefits Plan
Plum Creek Timber Company, L.P. Key Employee Supplemental Pension Plan
PC Advisory Corp I Deferred Compensation Plan for Directors
MULTI-EMPLOYER PLANS: None
<PAGE> 153
SCHEDULE 6.07 - CONTINUED
6.07(c)
A favorable determination letter from the IRS has been received for the Plum
Creek Thrift and Profit Sharing Plan.
The Plum Creek Pension Plan, adopted in March 1990, is intended to be a
qualified plan pursuant to Internal Revenue Code section 401(a) and the Trust
is intended to be tax exempt pursuant to Code section 501(a). The current plan
has not 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
(December 31, 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.
6.07(d) and (e) None
6.07(f)
Retiree Life Insurance:
-- Insured plan
-- $10,000 coverage per salaried retiree
-- Approximately 50 retirees covered
-- Plan continues to be available to salaried retirees
Retiree Medical:
-- Liability to cover four retirees for life and two retirees to age 65
-- Plan continues to be available to salaried retirees at retiree-pay-all
basis
-- Liability to provide Mr. Leland and family with coverage until
Mr. Leland is no longer a Board member.
Active Medical
-- Liability to provide Mr. Sletten and family with continuing medical
coverage, under its "COBRA" coverage until December 31, 1995.
The Retiree Life, Retiree Medical, and Active 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, 1993 was
$393,725.
6.07(h), (j), and (k) None
<PAGE> 154
SCHEDULE 6.12
ENVIRONMENTAL MATTERS
6.12(a) None.
6.12(b) Plum Creek Manufacturing L.P. is in the process of applying for a
groundwater discharge permits at the Columbia Falls complex. It has
not been determined yet whether a Groundwater Discharge Permit will
be required at the Pablo or Ksanka facilities.
6.12(c) Consent Decrees:
Columbia Falls Veneer Dryers, May 21, 1990
Evergreen Veneer Dryers, May 26, 1991
Evergreen Boiler, May 19, 1992
Notice of Violation or Citation:
EPA NOV/Evergreen Veneer Dryers, February 21, 1991,
May 1, 1992
Montana Air Quality Bureau Citation/Columbia Falls Boiler,
April 25, 1994
Montana Air Quality Bureau Citation/Columbia Falls Boiler,
August 31, 1994
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)
6.12(d) None.
<PAGE> 155
PLUM CREEK TIMBER COMPANY, L.P.
SCHEDULE 6.18
SUBSIDIARIES
6.18(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
inactive corporation.
6.18(b): None
<PAGE> 156
PLUM CREEK TIMBER COMPANY, L.P.
SCHEDULE 8.01
PERMITTED LIENS
NONE
<PAGE> 157
SCHEDULE 8.04
PERMITTED INVESTMENTS
1. 98% interest in Plum Creek Manufacturing, L.P.
2. 96% interest in Plum Creek Marketing, Inc.
<PAGE> 158
EXHIBIT A
NOTICE OF BORROWING
Date: __________________
To: Bank of America National Trust and Savings Association, as Agent for the
Banks parties to the Amended and Restated Credit Agreement dated as of
November 15, 1994 (as extended, renewed, amended or restated from time to
time, the "Amended and Restated Credit Agreement") among Plum Creek Timber
Company, L.P., certain Banks that are signatories thereto, ABN Amro Bank
N.V., as Co-Agent and an Issuing Bank, and Bank of America National Trust
and Savings Association, as Agent and an Issuing Bank.
Ladies and Gentlemen:
The undersigned, Plum Creek Timber Company, L.P, (the "Company"), refers to
the Amended and Restated 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 Amended and Restated Credit Agreement, of the Borrowing
specified herein:
1. The aggregate amount of the proposed Committed Borrowing is
$_____________________.
2. The Business Day of the proposed Committed Borrowing is
_____________________________, 19___.
3. The Borrowing is to be comprised of $___________ of [CD Rate] [Offshore
Rate] [Base Rate] Committed Loans.
4. [If applicable] The duration of the Interest Period for the [CD Rate
Committed Loans] [Offshore Rate Committed 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 Committed
Borrowing, before and after giving effect thereto and to the application of the
proceeds therefrom:
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<PAGE> 159
(a) the representations and warranties of the Company contained in Article
VI of the Amended and Restated 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 were true
and correct as of such earlier date);
(b) no Default or Event of Default exists; and
(c) the proposed Borrowing will not cause the Effective Amount of all
outstanding Committed Loans and Bid Loans plus the Effective Amount of all L/C
Obligations to exceed the Aggregate Commitment.
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company, L.P.,
its general partner
By: _________________________________
Title: ______________________________
2
<PAGE> 160
EXHIBIT B
NOTICE OF CONVERSION/CONTINUATION
Date: __________________
To: Bank of America National Trust and Savings Association, as Agent for
the Banks parties to the Amended and Restated Credit Agreement dated
as of November 15, 1994 (as extended, renewed, amended or restated
from time to time, the "Amended and Restated Credit Agreement") among
Plum Creek Timber Company, L.P., certain Banks that are signatories
thereto, ABN Amro Bank N.V., as Co-Agent and an Issuing Bank and Bank
of America National Trust and Savings Association, as Agent and an
Issuing Bank.
Ladies and Gentlemen:
The undersigned, Plum Creek Timber Company, L.P. (the
"Company"), refers to the Amended and Restated 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 Amended and Restated Credit
Agreement, of the [conversion] [continuation] of the Committed Loans specified
herein, that:
1. The date of the [conversion] [continuation] is
______________________, 19__.
2. The aggregate amount of the Committed Loans
[converted] [continued] is $______________.
3. The Committed Loans are to be [converted into]
[continued as] [CD Rate] [Offshore Rate] [Base Rate]
Committed Loans.
4. [If applicable] The duration of the Interest Period
for the Committed 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:
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<PAGE> 161
(a) the representations and warranties of the Company
contained in Article VI of the Amended and Restated 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 were true and correct as of such earlier date);
(b) no Default or Event of Default exists; and
(c) the proposed [conversion] [continuation] will not
cause the Effective Amount of all outstanding Committed Loans and Bid Loans
plus the Effective Amount of all L/C Obligations to exceed the Aggregate
Commitment.
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company, L.P.,
its general partner
By: _________________________________
Title: ______________________________
2
<PAGE> 162
EXHIBIT C-1
LEGAL OPINION OF COUNSEL FOR THE COMPANY
[Unless otherwise defined herein, capitalized terms used in this Exhibit C-1
have the meanings assigned to them in the Agreement.]
(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
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<PAGE> 163
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 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.
2
<PAGE> 164
EXHIBIT C-2
LEGAL OPINION OF PERKINS COIE
[Unless otherwise defined herein, capitalized terms used in this Exhibit C-2
have the meanings assigned to them in the Agreement.]
(a) The Agreement constitutes the valid and binding
obligation of the Company enforceable against the Company in accordance with
its terms.
<PAGE> 165
EXHIBIT D
PLUM CREEK TIMBER COMPANY, L.P.
COMPLIANCE CERTIFICATE
DATE: __________________
Reference is made to that certain Amended and Restated Credit Agreement
dated as of November 15, 1994 (the "Credit Agreement") among Plum Creek Timber
Company, L.P., a Delaware limited partnership (the "Company"), certain
financial institutions from time to time parties to the Amended and Restated
Credit Agreement (the "Banks"), ABN Amro Bank N.V., as co-agent and a letter of
credit issuing bank and Bank of America National Trust and Savings Association,
a national banking association, as agent for the Banks (in such capacity, the
"Agent") and as a letter of credit issuing bank. Unless otherwise defined
herein, capitalized terms used herein have the respective meanings assigned to
them in the Amended and Restated 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 7.01(a) of the Amended and
Restated 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
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<PAGE> 166
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;
or
[Use the following paragraph if this Certificate is delivered in connection
with the financial statements required by subsection 7.01(b) of the Amended and
Restated 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 7.01(c) and (d) of the
Amended and Restated 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.
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<PAGE> 167
2. The undersigned has reviewed and is familiar with the terms of the Amended
and Restated 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 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 Amended and Restated 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 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. For the fiscal quarter commencing ___________, the Applicable Margin is
(i) _____% in the case of Offshore Rate Committed Loans, (ii) _____% in the
case of CD Rate Committed Loans and (iii) 0.0000% in the case of Base Rate
Committed Loans.
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: _____________________________
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<PAGE> 168
PLUM CREEK TIMBER COMPANY, L.P.
SCHEDULE 2
COMPLIANCE CERTIFICATE COMPUTATION STATEMENT
($ IN THOUSANDS)
Fixed Charge Coverage Ratio
(used for Applicable Margin and Commitment Fee Percentage)
EBITDA
Net Income
Plus:
DD&A
LIFO Adjustments
Accrued Income Taxes
-----
Total $0 (A)
-----
To:
4 Qtrs. Combined Interest Expense
plus: scheduled principal repayments
-----
Total $0 (B)
-----
"A" divided "B" 0.00 x
NEGATIVE COVENANTS
1) SECTION 8.02(H): ASSET SALES
Maximum Allowed calendar year ________ $0
Sales as of ________ $0
2) SECTION 8.03: HARVESTING RESTRICTIONS (MMBF)
199__ Maximum Allowable Harvest 0
Add: Prior year Cumulative Carryover Harvest 0
-----
Available to Harvest in 199__ 0
Actual 199__ Harvest 0
-----
199__ Carryover Harvest 0
=====
3) SECTION 8.04(I): INVESTMENTS NOT OTHERWISE PERMITTED:
The greater of $30 million or 60% of the
Average annual Pro Forma Free Cash
Flow from the two fiscal years preceding
2 Year Average Proforma Free Cash Flow $0
The greater of $30 million or Average (above) $0
Cumulative investments made through _________ $0
<PAGE> 169
4) SECTION 8.05(b): FUNDED DEBT INCURRED TO FINANCE CAPITAL IMPROVEMENTS:
Maximum Allowed $20,000
Outstanding at ____________ $0
5) SECTION 8.05(d): INDEBTEDNESS INCURRED FOR THE REVOLVING CREDIT
FACILITY
Maximum Allowed $15,000
Outstanding at ____________ $0
6) SECTION 8.05(f): GUARANTEE OF FACILITIES SUBSIDIARY REVOLVING CREDIT
FACILITY:
Maximum Allowed $20,000
Outstanding at ____________ $0
7) SECTION 8.05(g): GUARANTEE OF FACILITY SUBSIDIARY CAPITAL IMPROVEMENT
FUNDED DEBT:
Maximum Allowed $20,000
Outstanding at ____________ $0
8) SECTION 8.05(h): AGGREGATE PRINCIPAL AMOUNT OF INDEBTEDNESS SECURED BY
LIENS:
Maximum Allowed $20,000
Outstanding at ____________ $0
9) SECTION 8.05(i): ADDITIONAL FUNDED DEBT:
Pro Forma Free Cash Flow $0
to
Maximum Pro Forma Annual Interest Charges $0
Ratio = 0.00 x
Amount Outstanding $0
Not to exceed $400 million $400,000
<PAGE> 170
10) SECTION 8.13 (a): RESTRICTED PAYMENTS:
Available Cash means, with respect to any calendar quarter,
(i)(a) Net Income $0
(a) Excluding Gain on sale of any Capital Assets 0
Plus:
(b) DD&A 0
(b) Other non-cash charges (incl. LIFO inventory) 0
(c) Reduction in reserves of the types referred to in clause
(ii)(d) below,
Interest 0
Principal 0
(d) Proceeds received from the sale of Designated Acres 0
(e) Cash from Capital Transactions used to Refinance or
refund indebtedness 0
Less (ii) the sum of:
(a) All payments of Principal Indebtedness 0
(b) Capital Expenditures 0
(c) Capital Expenditures made in prior quarter, anticipated
to financed, but have not been refinanced 0
(d) Reserve for future Principal Payments:
Bank 0
Senior and First Mortgage Notes 0
(d) Reserve for future Capital Expenditures 0
(d) Reserve for additional Working Capital 0
(d) Reserve for future Distributions 0
(d) Reserve for future Interest Payments 0
(e) Other noncash credits 0
(f) The amount of any investments 0
(g) Any investments made in prior quarter anticipated to be
financed, but have not been refinanced 0
--
Available cash - __________ $0
==
General Partner 2% Interest 0
General Partner Incentive Distribution 0
Allocable to Unitholders - net 0
--
Total Distribution $0
==
<PAGE> 171
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 Amended and Restated 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, ABN Amro Bank N.V., as co-agent
("Co-Agent") and the Banks have entered into an Amended and Restated Credit
Agreement dated as of November 15, 1994 (as the same may from time to time be
amended, amended and restated, modified, supplemented or renewed, the "Amended
and Restated Credit Agreement"). Capitalized terms used herein without
definition shall have the meanings given to them in the Amended and Restated
Credit Agreement.
[B. Pursuant to Section 3.07 or subsection 2.09(a)(ii) of
the Amended and Restated Credit Agreement, Agent has required that the Company
immediately Cash Collateralize all or a portion of the L/C Obligations as
provided in that Section or subsection in a cash collateral account at Bank of
America National Trust and Savings Association ("BofA").]
or
[B. In accordance with subsection 2.09(a)[(i)] [(ii)] and
subsection 2.09(c) of the Amended and Restated Credit Agreement, the Company is
required to prepay or Cash Collateralize [CD Rate Committed Loans] [and]
[Offshore Rate Committed Loans] in an amount equal to $ _____________ in a cash
collateral account at Bank of America National Trust and Savings Association
("BofA"). The Company has elected to Cash Collateralize such Committed Loans
which cash collateral amount shall be applied to repay [CD Rate Committed
Loans] [and] [Offshore Rate Committed Loans] at maturity thereof.]
or
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<PAGE> 172
[B. In accordance with subsection 2.09(a)(iii) of the
Amended and Restated Credit Agreement, the Company is required to Cash
Collateralize Bid Loans in an amount equal to $ ___________ in a cash
collateral account at Bank of America National Trust and Savings Association
("BofA"), which amount shall be applied to Bid Loans at maturity thereof.]
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements contained herein, the Company and Agent hereby agree as
follows:
1. Cash Collateral Account.
a. Cash Collateral Account. For purposes of
[Section 3.07] [subsection 2.09(a)(ii)] [subsection 2.09(c)] [subsection
2.09(a)(iii)] of the Credit Agreement, the Company has established with BofA,
for the benefit of Agent on behalf of itself [IF WITH RESPECT TO SUBSECTION
2.09(c): and the Banks] [IF WITH RESPECT TO SECTION 3.07 OR SUBSECTION
2.09(a)(ii): the Issuing Banks and the Banks] [IF WITH RESPECT TO SUBSECTION
2.09(a)(iii): and the Bid Loan Lenders], 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.
[IF WITH RESPECT TO SECTION 3.07 AND SUBSECTION 2.09(a)(ii)]
[(b Application to Letters of Credit. Subject to
the prior application by Agent of amounts held hereunder pursuant to Section 2,
on the Honor Date of a Letter of Credit, Agent shall promptly apply any amounts
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<PAGE> 173
remaining in the Cash Collateral Account to reimburse the Issuing Bank which
issued such Letter of Credit for the drawing on such Letter of Credit, and the
Company irrevocably directs Agent to apply such funds at such time to reimburse
such Issuing Bank in accordance with subsection 3.03(c) of the Amended and
Restated Credit Agreement. At any time that there are no outstanding L/C
Obligations and so long as no Default or Event of Default shall then exist,
Agent shall release and transfer to the Company any amounts remaining in the
Cash Collateral Account.]
[IF WITH RESPECT TO SUBSECTION 2.09(c)]
[(b) Application to Committed Loans. Subject to
the prior application by Agent of amounts held hereunder pursuant to Section 2,
on the maturity date of any Interest Period with respect to [a CD Rate
Committed Loan] [and] [an Offshore Rate Committed Loan], Agent shall apply any
amounts remaining in the Cash Collateral Account to repay such [CD Rate
Committed Loan] [or] [[Offshore Rate Committed Loan], and the Company
irrevocably directs Agent to apply such funds at such time to repay [CD Rate
Committed Loans] [or] [Offshore Rate Committed Loans].
[IF WITH RESPECT TO SUBSECTION 2.09(a)(iii)]
[(b) Application to Bid Loans. Subject to the
prior application by Agent of amounts held hereunder pursuant to Section 2, on
the maturity date of any Interest Period with respect to a Bid Loan, Agent
shall apply any amounts remaining in the Cash Collateral Account to repay such
Bid Loan, and the Company irrevocably directs Agent to apply such funds at such
time to repay Bid Loans.]
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 [IF
RESPECT TO SUBSECTION 2.09(c): and the Banks] [IF WITH RESPECT TO SECTION 3.07
OR SUBSECTION 2.09(a)(ii): the Issuing Banks and the Banks] [IF WITH RESPECT TO
SUBSECTION 2.09(a)(iii): and the Bid Loan Lenders] as cash collateral to secure
the Company's Obligations. As security for the payment and performance of all
obligations of the Company hereunder and under the Amended and Restated Credit
Agreement, the Company hereby grants to Agent on behalf of itself [IF WITH
RESPECT TO SUBSECTION 2.09(c): and the Banks] [IF WITH RESPECT TO SECTION 3.07
OR SUBSECTION 2.09(a)(ii): the Issuing Banks and the Banks] [IF WITH RESPECT TO
SUBSECTION 2.09(a)(iii): and the Bid Loan Lenders] a first priority perfected
security interest in all of its rights, title and interest now existing or
hereafter arising in and to the Cash
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<PAGE> 174
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
Amended and Restated 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
Amended and Restated 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 Amended and Restated 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 Uniform
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.
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
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<PAGE> 175
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 be effective upon receipt. 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.
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
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<PAGE> 176
the Company, Agent [and the Banks] [and the Bid Loan Lenders]1 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] [and each Bid Loan Lender]. 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
Amended and Restated 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 the Bid Loan Lenders] 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] [or the Bid Loan Lenders]. The Company, Agent [and the
Banks] [and the Bid Loan Lenders] 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] [or any Bid Loan Lender's]
actual intentions.
c. Interpretation. The terms of this Agreement
shall be interpreted in accordance with the provisions of Article I of the
Amended and Restated 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
____________________
* Bracketed references to Bid Loan Lenders shall be employed only
if the only Obligations secured hereby are Bid Loans. In other
circumstances, references to Banks and Majority Banks should be
employed.
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<PAGE> 177
words of similar import (including, without limitation, in Article I of the
Amended and Restated 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] [the Bid Loan Lenders], 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] [the Bid Loan Lenders], 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] [nor any Bid Loan Lender] 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.
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<PAGE> 178
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: Shannon Collins
Agency Management Services #5596
Tel: (415) 622-1158
Fax: (415) 622-4894
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<PAGE> 179
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
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<PAGE> 180
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 Amended and
Restated Credit Agreement dated as of November 15, 1994 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"), ABN AMRO BANK N.V., as Co-Agent and as a letter of credit issuing
bank, and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent and
as a letter of credit issuing bank (as from time to time amended, amended and
restated, modified, supplemented or renewed, the "Amended and Restated Credit
Agreement"). Any terms defined in the Amended and Restated Credit Agreement
and not defined in this Agreement are used herein as defined in the Amended and
Restated Credit Agreement;
WHEREAS, as provided under the Amended and Restated Credit
Agreement, the Assignor has committed to making committed loans (the "Committed
Loans") to the Company in an aggregate amount not to exceed $__________ (the
"Commitment") and has agreed to provide the Company with Bid Loans from time to
time in the Assignor's sole discretion;
WHEREAS, [the Assignor has made Committed Loans in the
aggregate principal amount of $__________[, and Bid Loans in the aggregate
principal amount of $_________] to the Company] [no Committed Loans are
outstanding under the Amended and Restated Credit Agreement] [no Bid Loans are
outstanding under the Amended and Restated Credit Agreement]; and
WHEREAS, [the Assignor has acquired a participation in an
Issuing Bank's liability under Letters of Credit in an aggregate principal
amount of $_________ (the "L/C Obligations")] [No Letters of Credit are
outstanding under the Amended and Restated Credit Agreement]; and
WHEREAS, the Assignor wishes to assign to the Assignee [part
of the] [all] rights and obligations of the
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<PAGE> 181
Assignor under the Amended and Restated Credit Agreement in respect of (i) its
Commitment, [together with a corresponding portion of each of its outstanding
Committed Loans and L/C Obligations,] in an amount equal to $__________ (the
"Assigned Amount") and (ii) its outstanding Bid Loans in an amount equal to $
________, in each case 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. 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) (A)
__% (the Assignee's Percentage Share") of the Commitment [and the
Committed Loans and the L/C Obligations] of the Assignor, (B) [$
____________ in principal amount of outstanding Bid Loans, and (C)]
all related rights, benefits, obligations, liabilities and indemnities
of the Assignor under and in connection with the Amended and Restated
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, Bid Loans and L/C
Obligations assigned.]
(b) With effect on and after the Effective Date
(as defined herein), the Assignee shall be a party to the Amended and
Restated Credit Agreement and succeed to all of the rights and be
obligated to perform all of the obligations of a Bank under the
Amended and Restated 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 Amended and Restated 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
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<PAGE> 182
rights and be released from its obligations under the Amended and
Restated 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
$__________.
(d) After giving effect to the assignment and
assumption, on the Effective Date the Assignor'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 and $___________
of the principal amount of Bid Loans previously made, and currently
owed, by the Company to the Assignor under the Amended and Restated
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
11.08(a) of the Amended and Restated Credit Agreement.
3. Reallocation of Payments.
Any interest, fees and other payments accrued to the Effective
Date with respect to the Committed Loans, [Bid Loans,] and L/C Obligations 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 and Bid Loans assigned hereunder 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 Amended and Restated Credit Agreement and the Schedules and Exhibits
thereto, together with copies of the most recent financial statements referred
to in Section 7.01
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<PAGE> 183
of the Amended and Restated 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 Amended and Restated 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 and
the Bid Loans assigned hereunder by the Assignor to the Assignee
under Section 11.08(a) of the Amended and Restated 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 4.01(f) of the Amended and Restated Credit Agreement (if
applicable);
(v) the processing fee referred to in
Section 2(b) hereof and in Section 11.08(a) of the Amended and
Restated Credit Agreement shall have been paid to the Agent; and
(vi) the Assignor shall have assigned and
the Assignee shall have assumed a percentage equal to Assignee's
Percentage Share of the rights and obligations of the Assignor under,
and of the Assignor's Committed Loans and L/C Obligations under and as
defined in, the Facility B Credit Agreement.
4
<PAGE> 184
(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 Amended and Restated Credit Agreement
as are delegated to the Agent by the Banks pursuant to the terms of
the Amended and Restated Credit Agreement.
(b) The Assignee shall assume no duties or
obligations held by the Assignor in its capacity as Agent under the
Amended and Restated Agreement.]
7. Withholding Tax.
The Assignee agrees to comply with Section 4.01(f) of the
Amended and Restated 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
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 Amended and Restated 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.
5
<PAGE> 185
(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
Amended and Restated Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the
Amended and Restated 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 Amended and
Restated 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 Amended and Restated 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 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.
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<PAGE> 186
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 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
AMENDED AND RESTATED 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 Amended and Restated Credit Agreement.]
7
<PAGE> 187
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: ____________________________
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<PAGE> 188
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: Agency Management Services #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 Amended and Restated Credit Agreement dated as of
November 15, 1994 (the "Amended and Restated Credit Agreement") among Plum
Creek Timber Company, L.P. (the "Company"), the Banks referred to therein, ABN
AMRO Bank N.V., as Co-Agent and as a letter of credit issuing bank, and Bank of
America National Trust and Savings Association, as Agent and as a letter of
credit issuing bank. Terms defined in the Amended and Restated 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 Amended and Restated Credit Agreement (including,
without limitation, the right, title and interest of the Assignor in and to the
Commitments of the Assignor and all outstanding Committed Loans made by the
Assignor and the Assignor's participation in Letters of Credit) and $__________
of outstanding Bid Loans made by the Assignor thereunder. Before giving effect
to such assignment the Assignor's Commitment is $ ___________, and the
aggregate amount of its outstanding Committed Loans is $_____________ and Bid
Loans is $ _____________, and its participation in L/C Obligations 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 Amended and
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<PAGE> 189
Restated Credit Agreement as fully and to the same extent as if the Assignee
were the Bank originally holding such interest in the Amended and Restated
Credit Agreement.
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:_________________________________________
(c) Domestic and Offshore Lending Office:
[same as notice address]
[or]
Address:__________________________________________
__________________________________________
__________________________________________
Attention:________________________________________
Telephone: (____)_______________________________
Telecopier: (____)_______________________________
Telex (answerback):_______________________________
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:
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<PAGE> 190
[Name of Assignee]
By:_______________________
Title:
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company, L.P.
By:_________________________________
Its:________________________________
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By:__________________________________________
Vice President
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<PAGE> 191
EXHIBIT G
COMPETITIVE BID REQUEST
Date: _______________
VIA FACSIMILE
To: Bank of America National Trust and Savings Association, as Agent for
the Banks parties to the Amended and Restated Credit Agreement, dated
as of November 15, 1994 (as extended, renewed, amended or restated
from time to time, the "Amended and Restated Credit Agreement"), among
Plum Creek Timber Company, L.P., certain Banks that are signatories
thereto, ABN Amro Bank N.V., as Co-Agent and an Issuing Bank and Bank
of America National Trust and Savings Association, as Agent and an
Issuing Bank.
Ladies and Gentlemen:
The undersigned, Plum Creek Timber Company, L.P. (the
"Company"), refers to the Amended and Restated Credit Agreement, the terms
defined therein being used herein as therein defined, and hereby gives you
notice that this is a Competitive Bid Request for Bid Loans pursuant to Section
2.06 of the Amended and Restated Credit Agreement as follows:
1. The Business Day of the proposed Bid Borrowing is
____________________, 199_.
2. The aggregate amount of the proposed Bid Borrowing is
$______________.
3. The proposed Bid Borrowing to be made pursuant to
Section 2.06 shall be comprised of [LIBOR] [Absolute Rate] Bid Loans.
4. The duration of the Interest Period[s] for the Bid
Loans comprised in the Borrowing shall be ____________________,
[____________________] and [____________________].
5. [If applicable] The Interest Payment Dates for the
Bid Loans comprised in the Borrowing shall be ____________________,
[____________________] and [____________________].
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on
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<PAGE> 192
the date of the proposed Bid Borrowing, before and after giving effect thereto
and to the application of the proceeds therefrom:
(a) the representations and warranties of the Company
contained in Article VI of the Amended and Restated 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 were true and correct as of such
earlier date);
(b) no Default or Event of Default exists; and
(c) the proposed Borrowing will not cause the Effective
Amount of all outstanding Committed Loans and Bid Loans, plus the
Effective Amount of all L/C Obligations, to exceed the Aggregate
Commitment.
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company, L.P.,
its general partner
By: ____________________________________________
Title: _________________________________________
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<PAGE> 193
EXHIBIT H
INVITATION FOR COMPETITIVE BIDS
Date: _______________
VIA FACSIMILE
To: The Banks party to the Amended and Restated Credit Agreement referred
to below
Ladies and Gentlemen:
Reference is made to the Amended and Restated Credit Agreement
dated as of November 15, 1994 (as extended, renewed, amended or restated from
time to time, the "Amended and Restated Credit Agreement") among Plum Creek
Timber Company, L.P. (the "Company"), certain Banks that are signatories
thereto, ABN Amro Bank N.V., as Co-Agent and an Issuing Bank, and Bank of
America National Trust and Savings Association, as Agent and an Issuing Bank.
Capitalized terms used herein have the meanings specified in the Amended and
Restated Credit Agreement.
Pursuant to subsection 2.06(b) of the Amended and Restated
Credit Agreement, you are hereby invited to submit offers to make Bid Loans to
the Company based on the following specifications:
1. The Business Day of the proposed Bid Borrowing is
____________________,199_.
2. The aggregate amount of the proposed Bid Borrowing is
$______________.
3. The proposed Bid Borrowing to be made pursuant to
Section 2.06 shall be comprised of [LIBOR] [Absolute
Rate] Bid Loans.
4. The duration of the Interest Period[s] for the Bid
Loans comprised in the Borrowing shall be
____________________, [____________________] and
[____________________].
5. [If applicable] The Interest Payment Dates for the
Bid Loans comprised in the Borrowing shall be
____________________, [____________________] and
[____________________].
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<PAGE> 194
All Competitive Bids must be in the form of Exhibit I to the
Amended and Restated Credit Agreement and must be received by the Agent no
later than 6:30 a.m. (or, in the case of a Competitive Bid by the Agent or an
Affiliate of the Agent in the capacity of a Bank, 6:15 a.m.) (San Francisco
time) on ____________________, 199_.
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
By: ________________________________
Title: _____________________________
2
<PAGE> 195
EXHIBIT I
COMPETITIVE BID
Date: _______________
VIA FACSIMILE
Bank of America National Trust and
Savings Association, as Agent
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attention: Shannon Collins
Agency Management Services #5596
Facsimile: (415) 622-4894
Ladies and Gentlemen:
Reference is made to the Amended and Restated Credit Agreement
dated as of November 15, 1994 (as extended, renewed, amended or restated from
time to time, the "Amended and Restated Credit Agreement"), among Plum Creek
Timber Company, L.P. (the "Company"), certain Banks that are signatories
thereto, ABN Amro Bank N.V., as Co-Agent and an Issuing Bank and Bank of
America National Trust and Savings Association, as Agent and an Issuing Bank.
Capitalized terms used herein have the meanings specified in the Amended and
Restated Credit Agreement.
In response to the Competitive Bid Request of the Company,
dated ______________, 199_, and in accordance with subsection 2.06(c)(ii) of
the Amended and Restated Credit Agreement, the undersigned Bank offers to make
[a] Bid Loan[s] to the Company thereunder in the following principal amount[s]
at the following interest rates for the following Interest Period[s] [with the
following Interest Payment Dates]:
Date of Borrowing: ______________, 199_
Aggregate Maximum Bid Amount: $______________
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<PAGE> 196
<TABLE>
<S> <C> <C>
Principal Principal Principal
Amount (a) $____________________ Amount (a) $____________________ Amount (a) $___________________
(b) $____________________ (b) $____________________ (b) $___________________
(c) $____________________ (c) $____________________ (c) $___________________
Interest: Interest: Interest:
[Absolute [Absolute [Absolute
Rate (a) ____% Rate (a) ____% Rate (a) ____%
(b) ____% (b) ____% (b) ____%
(c) ____%] (c) ____%] (c) ____%]
[or]
[LIBOR Bid [LIBOR Bid [LIBOR Bid
Margin (a) +/- __% Margin (a) +/- __% Margin (a) +/- __%
(b) +/- __% (b) +/- __% (b) +/- __%
(c) +/- __%] (c) +/- __%] (c) +/- __%]
Interest Interest Interest
Period _________________________ Period _________________________ Period ________________________
[Interest Payment [Interest Payment [Interest Payment
Date _________________________] Date __________________________] Date _________________________]
</TABLE>
[NAME OF BANK]
By: ________________________________
Title: _____________________________
2
<PAGE> 197
EXHIBIT J
CONSENT TO AMENDMENT AND RESTATEMENT
Date: _______________
Bank of America National Trust and
Savings Association, as Agent
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attention: Shannon Collins
Agency Management Services #5596
Facsimile: (415) 622-4894
Plum Creek Timber Company, L.P.
999 Third Avenue, Suite 2300
Seattle, WA 98104
Attention: Chief Financial Officer
Facsimile: (206) 467-3797
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of October
28, 1993 (the "Credit Agreement"), among Plum Creek Timber Company, L.P. (the
"Company"), the Banks signatories thereto and Bank of America National Trust
and Savings Association, as Agent. Capitalized terms used herein have the
meanings specified in the Credit Agreement.
The undersigned (the "Departing Bank") is a Bank under the
Credit Agreement. The Departing Bank hereby acknowledges notice of the
proposed amendment and restatement of the Credit Agreement in such form as may
be agreed among the parties thereto (the "Amended and Restated Credit
Agreement"). The Departing Bank hereby consents to, and agrees that the
Departing Bank shall not be a party to, the Amended and Restated Credit
Agreement subject to payment in full of all outstanding Loans, interest accrued
thereon, and fees owed to the Departing Bank on and as of the effective date of
the Amended and Restated Credit Agreement.
In consideration of the Departing Bank's consent to the
Amended and Restated Credit Agreement, the Company acknowledges and agrees that
the representations and warranties (as of the dates made and deemed made) and
the indemnities of the Company set forth in the Credit Agreement
1
<PAGE> 198
and the Loan Documents to or for the benefit of the Departing Bank shall, in
each case, survive the execution and delivery of the Amended and Restated
Credit Agreement and that the Departing Bank shall have no obligations under or
with respect to the Amended and Restated Credit Agreement.
[NAME OF BANK]
By: ________________________________
Title: _____________________________
Accepted and Agreed:
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company, L.P.,
its general partner
By: __________________________________
Title: _______________________________
2
<PAGE> 1
EXHIBIT 10.A.2
================================================================================
CREDIT AGREEMENT
Dated as of November 15, 1994
among
PLUM CREEK TIMBER COMPANY, L.P.
BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Agent
ABN AMRO BANK, N.V.,
as Co-Agent
and
THE OTHER FINANCIAL INSTITUTIONS PARTY THERETO
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION> Page
----
<S> <C> <C>
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Other Interpretive Provisions . . . . . . . . . . . . . . . . . . . . . . . 38
1.03 Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE II THE CREDITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.01 Amounts and Terms of Commitments . . . . . . . . . . . . . . . . . . . . . 40
2.02 Loan Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.03 Procedure for Committed Borrowing . . . . . . . . . . . . . . . . . . . . . 40
2.04 Conversion and Continuation Elections for Committed Borrowings . . . . . . 42
2.05 Bid Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
2.06 Procedure for Bid Borrowings . . . . . . . . . . . . . . . . . . . . . . . 45
2.07 Voluntary Termination or Reduction of Commitments . . . . . . . . . . . . . 49
2.08 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
2.09 Mandatory Prepayments of Loans; Mandatory Commitment Reductions . . . . . . 50
2.10 Extension of Revolving Termination Date; Repayment . . . . . . . . . . . . 53
2.11 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
2.12 Swingline Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
2.13 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
2.14 Computation of Fees and Interest . . . . . . . . . . . . . . . . . . . . . 60
2.15 Payments by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . 61
2.16 Payments by the Banks to the Agent . . . . . . . . . . . . . . . . . . . . 62
2.17 Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . 62
2.18 Loan Traches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
2.19 Effect of Limitations in Facility A Credit Agreement . . . . . . . . . . . . 64
ARTICLE III THE LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
3.01 The Letter of Credit Facility . . . . . . . . . . . . . . . . . . . . . . . 65
3.02 Issuance, Amendment and Renewal of Letters of Credit . . . . . . . . . . . 67
3.03 Risk Participations, Drawings and Reimbursements . . . . . . . . . . . . . 70
3.04 Repayment of Participations . . . . . . . . . . . . . . . . . . . . . . . . 72
3.05 Role of the Issuing Bank . . . . . . . . . . . . . . . . . . . . . . . . . 73
3.06 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
3.07 Cash Collateral Pledge . . . . . . . . . . . . . . . . . . . . . . . . . . 75
3.08 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
3.09 Uniform Customs and Practice . . . . . . . . . . . . . . . . . . . . . . . 76
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE IV TAXES, YIELD PROTECTION AND ILLEGALITY . . . . . . . . . . . . . . . . . . 76
4.01 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
4.02 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
4.03 Increased Costs and Reduction of Return . . . . . . . . . . . . . . . . . . 80
4.04 Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
4.05 Inability to Determine Rates . . . . . . . . . . . . . . . . . . . . . . . 82
4.06 Certificate of Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
4.07 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
ARTICLE V CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
5.01 Conditions of Initial Credit Extensions . . . . . . . . . . . . . . . . . . 83
5.02 Conditions to All Credit Extensions . . . . . . . . . . . . . . . . . . . . 86
ARTICLE VI REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . 87
6.01 Corporate Existence and Power . . . . . . . . . . . . . . . . . . . . . . . 87
6.02 Authorization; No Contravention . . . . . . . . . . . . . . . . . . . . . . 87
6.03 Governmental Authorization . . . . . . . . . . . . . . . . . . . . . . . . 88
6.04 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
6.05 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
6.06 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
6.07 ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
6.08 Use of Proceeds; Margin Regulations . . . . . . . . . . . . . . . . . . . . 91
6.09 Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
6.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
6.11 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
6.12 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
6.13 Regulated Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
6.14 No Burdensome Restrictions . . . . . . . . . . . . . . . . . . . . . . . . 93
6.15 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
6.16 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
6.17 Copyrights, Patents, Trademarks and Licenses, Etc. . . . . . . . . . . . . . 94
6.18 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
6.19 Partnership Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
6.20 Broker's, Transaction Fees . . . . . . . . . . . . . . . . . . . . . . . . 94
6.21 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
6.22 Timber Harvest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
6.23 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
ARTICLE VII AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
7.01 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
7.02 Certificates; Other Information . . . . . . . . . . . . . . . . . . . . . . 97
7.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
7.04 Preservation of Corporate Existence, Etc. . . . . . . . . . . . . . . . . 99
7.05 Maintenance of Property . . . . . . . . . . . . . . . . . . . . . . . . . . 100
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
7.06 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
7.07 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 100
7.08 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
7.09 Inspection of Property and Books and Records . . . . . . . . . . . . . . . . 101
7.10 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
7.11 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
7.12 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
ARTICLE VIII NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
8.01 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
8.02 Merger; Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . 104
8.03 Harvesting Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . 107
8.04 Loans and Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
8.05 Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 109
8.06 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . 112
8.07 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
8.08 Sale of Stock and Indebtedness of Subsidiaries . . . . . . . . . . . . . . . 113
8.09 Certain Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
8.10 Joint Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
8.11 Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
8.12 Sale and Leaseback . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
8.13 Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
8.14 Change in Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
8.15 Issuance of Stock by Subsidiaries . . . . . . . . . . . . . . . . . . . . . 117
8.16 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
8.17 Available Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
ARTICLE IX EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
9.01 Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
9.02 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
9.03 Rights Not Exclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
ARTICLE X THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
10.01 Appointment and Authorization . . . . . . . . . . . . . . . . . . . . . . . 123
10.02 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
10.03 Liability of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
10.04 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
10.05 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
10.06 Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
10.07 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
10.08 Agent in Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . 127
10.09 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
10.10 Co-Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C>
ARTICLE XI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
11.01 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . 128
11.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
11.03 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . 131
11.04 Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
11.05 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
11.06 Marshalling; Payments Set Aside . . . . . . . . . . . . . . . . . . . . . . 132
11.07 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . 132
11.08 Assignments, Participations, Etc. . . . . . . . . . . . . . . . . . . . . . 133
11.09 Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
11.10 Automatic Debits of Fees . . . . . . . . . . . . . . . . . . . . . . . . . 136
11.11 Notification of Addresses, Lending Offices, Etc. . . . . . . . . . . . . . . 137
11.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
11.13 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
11.14 No Third Parties Benefited . . . . . . . . . . . . . . . . . . . . . . . . 137
11.15 Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
11.16 Governing Law and Jurisdiction . . . . . . . . . . . . . . . . . . . . . . 137
11.17 Arbitration; Reference . . . . . . . . . . . . . . . . . . . . . . . . . . 138
11.18 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
SCHEDULES
Schedule 1.01 Corporate Investment Policy
Schedule 2.01 Commitments
Schedule 6.05 Litigation
Schedule 6.07 ERISA
Schedule 6.12 Environmental Matters
Schedule 6.18 Subsidiaries and Equity Investments
Schedule 8.01 Permitted Liens
Schedule 8.04 Permitted Investments
EXHIBITS
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
Exhibit G Competitive Bid Request
Exhibit H Invitation for Competitive Bids
Exhibit I Competitive Bid
Exhibit J Revolving Extension Request
Exhibit K Installment Repayment Election
</TABLE>
iv
<PAGE> 6
CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of November 15, 1994, 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"), ABN AMRO Bank N.V., as a
letter of credit issuing bank and as co-agent for the Banks, and Bank of
America National Trust and Savings Association, as a letter of credit issuing
bank and as agent for the Banks.
WHEREAS, the Banks have agreed to make available to the Company a revolving
credit facility with a letter of credit subfacility 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:
"ABN" means ABN AMRO Bank N.V., a bank organized under the laws of The
Netherlands.
"Absolute Rate" has the meaning specified in subsection 2.06(c).
"Absolute Rate Auction" means a solicitation of Competitive Bids setting
forth Absolute Rates pursuant to Section 2.06.
"Absolute Rate Bid Loan" means a Bid Loan that bears interest at a rate
determined with reference to the Absolute Rate.
"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
1
<PAGE> 7
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.
"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 11.02.
"Agent-Related Persons" means BofA, the Arranger, and any successor agent
arising under Section 10.09 and any successor to BofA as letter of credit
issuing bank or Swingline Bank hereunder, 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 thirty-five million dollars ($35,000,000), as such amount may
be reduced from time to time pursuant to this Agreement.
"Agreement" means this Agreement, as amended from time to time in accordance
with the terms hereof.
"Applicable Margin" means, in respect of all Committed Loans outstanding on
any date (A) for the period from the Closing Date through December 31, 1994,
0.5000% for Offshore Rate Committed Loans, 0.6250% for CD Rate Committed Loans
and 0.0000% for Base Rate Committed Loans, and (B) from January 1, 1995, the
percentage specified below opposite the Fixed Charge Coverage Ratio (which
ratio shall be calculated for the relevant four fiscal quarter period)
calculated for the periods described below.
2
<PAGE> 8
<TABLE>
<CAPTION>
Fixed Charge Coverage Ratio
at End of Fiscal Quarter Applicable Margin
- --------------------------- -----------------
Offshore CD Base
Rate Rate Rate
---- ---- ----
<S> <C> <C> <C>
Greater than or equal to
3:25 to 1:00 0.4375% 0.5625% 0.0000%
Less than 3:25 to 1:00 but
greater than or equal
to 2:75 to 1:00 0.5000% 0.6250% 0.0000%
Less than 2:75 to 1:00 but
greater than or equal to
2:00 to 1:00 0.6250% 0.7500% 0.0000%
Less than 2:00 to 1:00 0.8750% 1.0000% 0.0000%
</TABLE>
The Applicable Margin for each fiscal quarter commencing on and after January
1, 1995 shall be calculated in reliance on the financial reports delivered
pursuant to subsection 7.01(c) and the certificate delivered pursuant to
subsection 7.02(b) with respect to the fiscal quarter ending one fiscal quarter
before the fiscal quarter in question (e.g., June 30 financials determine the
Applicable Margin for the fiscal quarter beginning October 1). If the Company
fails to deliver such financial reports and certificate to the Agent for any
fiscal quarter by the beginning of the next succeeding fiscal quarter (e.g., by
October 1 for the fiscal quarter ending June 30), then the Applicable Margin
for the following fiscal quarter (e.g., October 1 through December 31) shall
equal the next higher Applicable Margin as set forth in the chart above
immediately below the previously effective Applicable Margin; thus if the
Applicable Margin had previously been 0.5000% for Offshore Rate Committed
Loans, 0.6250% for CD Rate Committed Loans and 0.0000% for Base Rate Committed
Loans, a failure to deliver quarterly financials by the first day of the next
fiscal quarter would cause the Applicable Margin to be 0.6250%, 0.7500% and
0.0000%, respectively, for the duration of that quarter. In addition, if such
financial reports and certificate when delivered indicate that the Applicable
Margin for such period should have been higher than the Applicable Margin
provided for in the previous sentence, then the Company shall pay on the date
of delivery of such financial reports and certificate an amount equal to the
positive difference, if any, between the interest that the Company should have
paid hereunder had the
3
<PAGE> 9
financial reports and certificate been delivered on a timely basis over what
the Company actually paid. The Applicable Margin shall be adjusted
automatically as to all Committed Loans then outstanding (without regard to the
timing of Interest Periods) as of the effective date of any change in the
Applicable Margin.
"Arranger" means BA Securities, Inc., a Delaware corporation.
"Assignee" has the meaning specified in subsection 11.08(a).
"Assignment and Acceptance" has the meaning specified in subsection
11.08(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,
(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
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<PAGE> 10
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 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 8.04(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
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<PAGE> 11
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 8.04(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.
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
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<PAGE> 12
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 (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.
References to the "Banks" shall include BofA in its capacity as a Swingline
Bank and an Issuing Bank, and ABN in its capacity as an Issuing Bank; for
purposes of clarification only, to the extent that BofA may have any rights or
obligations in addition to those of the Banks due to its status as a Swingline
Bank or an Issuing Bank, or ABN may have rights or obligations in addition to
those of the Banks due to its status as an Issuing Bank, its status as such
will be specifically referenced.
"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
7
<PAGE> 13
(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 Committed Loan" means a Committed Loan or an L/C Advance
that bears interest based on the Base Rate.
"Bid Borrowing" means a Borrowing hereunder consisting of one or more
Bid Loans made to the Company on the same day by one or more Banks.
"Bid Loan" means a Loan by a Bank to the Company under Section 2.05,
which may be a LIBOR Bid Loan or an Absolute Rate Bid Loan.
"Bid Loan Lender" means, in respect of any Bid Loan, the Bank making
such Bid Loan to the Company.
"BofA" means Bank of America National Trust and Savings Association, a
national banking association.
"Board Foot" means a unit of measurement one foot square and one inch
thick.
"Borrowing" means a borrowing hereunder consisting of Loans of the
same Type made to the Company on the same day by the Banks, or a Swingline Loan
or Loans made to the Company on the same day by the Swingline Bank, in each
case pursuant to Article II, and may be a Committed Borrowing, a Swingline
Borrowing, or a Bid Borrowing and, other than in the case of Base Rate
Committed Loans and Swingline Loans, having the same Interest Period.
"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.
8
<PAGE> 14
"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 Expenditure Tranche" has the meaning specified in Section
2.18.
"Capital Expenditure Tranche Loan" means a Loan allocated by the
Company to the Capital Expenditure Tranche as provided in Section 2.18.
"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 and (iii) sales or other
voluntary or involuntary dispositions of any assets of the Company (other than
(x) sales or other dispositions of inventory in the ordinary course of
business, (y) sales or other dispositions of other current assets including
receivables and accounts and (z) sales or other dispositions of assets as a
part of normal retirements or replacements), in each case prior to the
commencement of the dissolution and liquidation of the Company provided, that
in determining Cash from Capital Transactions, items (i), (ii) and (iii) above
shall include, with respect to each Subsidiary of the Company whose income is
accounted for on a consolidated or combined basis with the Company, a
percentage of each such item of such Subsidiary equal to the Company's
percentage ownership interest in such Subsidiary.
"Cash Collateral Account Agreement" means an agreement or agreements
entered into between the Company and the Agent substantially in the form of
Exhibit E.
"Cash Collateralize" means to pledge and deposit with or deliver to
the Agent, for the benefit of (i) in the case of L/C Obligations, the Agent,
the Issuing
9
<PAGE> 15
Banks and the Banks, (ii) in the case of CD Rate Committed Loans and Offshore
Rate Committed Loans, the Agent and the Banks, (iii) in the case of Swingline
Loans, the Agent, the Swingline Bank and the Banks, and (iv) in the case of Bid
Loans, the Agent and the Bid Loan Lenders, in each case as collateral for the
L/C Obligations, the Committed Loans, the Swingline Loans or the Bid Loans, as
the case may be, cash or deposit account balances pursuant to a Cash Collateral
Account Agreement. Derivatives of such term shall have corresponding meaning.
"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
Committed 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
1.00 - Reserve Percentage Rate
Where:
"Assessment Rate" means for any day of any Interest Period for
CD Rate Committed 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) 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 Committed Loans the rate of interest per annum determined
by the Agent to be the arithmetic mean (rounded upward to the
10
<PAGE> 16
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 Committed 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 Committed 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 Committed Loan" means a Committed 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 5.01 are satisfied or waived by all Banks.
"Co-Agent" means ABN in its capacity as co-agent for the Banks
hereunder.
"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 Fee Percentage" means (A) for the period from the Closing
Date through December 31, 1994, 0.1250%, and (B) from January 1, 1995, the
percentage specified below opposite the Fixed Charge Coverage Ratio (which
ratio shall be calculated for the relevant four fiscal quarter period)
calculated for the periods described below.
<TABLE>
<CAPTION>
Fixed Charge Coverage Ratio
at End of Fiscal Quarter Commitment Fee
- --------------------------- --------------
<S> <C>
Greater than or equal to 2:00 to 1:00 .1250%
Less than 2:00 to 1:00 .1750%
</TABLE>
The Commitment Fee Percentage for each fiscal quarter commencing on and after
January 1, 1995, shall be calculated in reliance on the financial reports
delivered pursuant to subsection 7.01(c) and the certificate delivered pursuant
to subsection 7.02(b) with respect to the fiscal quarter before the fiscal
quarter in question (e.g., June 30 financials determine the Commitment Fee
Percentage for the fiscal quarter beginning October 1). If the Company fails
to deliver such financial reports and certificate to the Agent for any fiscal
quarter by the beginning of the next succeeding fiscal quarter (e.g., by
October 1 for the fiscal quarter ending June 30), then the Commitment Fee
Percentage for the following fiscal quarter (e.g., October 1 through December
31) shall equal 0.1750% for the duration of that quarter.
"Commitment Percentage" means, as to any Bank, the percentage
equivalent of such Bank's Commitment divided by the Aggregate Commitment.
"Committed Borrowing" means a Borrowing hereunder consisting of
Committed Loans made on the same day by the Banks ratably according to their
respective Commitment Percentages and, in the case of CD Rate Committed Loans
and Offshore Rate Committed Loans, having the same Interest Periods.
"Committed Loan" has the meaning specified in Section 2.01, and may be
a CD Rate Committed Loan, an Offshore Rate Committed Loan or a Base Rate
Committed Loan (each, a "Type" of Committed Loan).
"Company's Knowledge" or "Knowledge of the Company" shall mean the
actual knowledge of (i) Rick R. Holley, President and Chief Executive Officer,
Charles P.
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<PAGE> 18
Grenier, Executive Vice President, Robert E. Manne, Executive Vice President,
Diane M. Irvine, Vice President and Chief Financial Officer, James A. Kraft,
Vice President Law, Susanna N. Duke, Director, Law and Secretary, and Mitchell
Leu, Environmental Engineer, and any successor to the offices and officers,
such persons being the principal persons employed by the Company ultimately
responsible for environmental operations and compliance, ERISA and legal
matters relating to the Company and (ii) the Treasurer or any other person
having the primary responsibility for the day-to-day administration of, and
dealings with the Agent and the Banks in connection with, this Agreement.
"Competitive Bid" means an offer by a Bank to make a Bid Loan in
accordance with subsection 2.06(b).
"Competitive Bid Request" has the meaning specified in subsection
2.06(a).
"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/Continuation Date" means any date on which, under Section
2.04, the Company (a) converts Committed Loans of one Type to another Type, or
(b) continues as Committed Loans of the same Type, but with a new Interest
Period, Committed Loans having Interest Periods expiring on such date.
"Credit Extension" means and includes (a) the making of any Committed
Loans, Swingline Loans or Bid Loans hereunder, including any conversion or
continuation thereof, and (b) the Issuance of any Letter of Credit hereunder.
"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.
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<PAGE> 19
"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 $1 of additional Funded Debt pursuant to subsection 8.05(i), and
(b) no condition or event shall exist which constitutes an Event of Default or
Material Default, (iii) the Company is permitted to make the Investment in such
entity resulting from such designation pursuant to, and within the limitations
specified in, subsection 8.04(i), treating the aggregate book value (including
equity in retained earnings) of the Investments of the Company and its
Subsidiaries in such entity immediately prior to such designation as the cost
of such Investment, and provided, further, that if at any time all Designated
Immaterial Subsidiaries on a combined basis would be a "significant subsidiary"
(assuming the Company is the registrant) within the meaning of Regulation S-X
(17 C.F.R. Part 210) the Company shall designate one or more Designated
Immaterial Subsidiaries which are directly owned by the Company and its
Restricted Subsidiaries as Restricted Subsidiaries such that the condition in
this proviso is no longer applicable and the entities so designated shall no
longer be Designated Immaterial Subsidiaries. Any entity which has been
designated a Designated Immaterial Subsidiary shall not thereafter become a
Restricted Subsidiary except pursuant to a designation required by the last
proviso in the preceding sentence, and any Designated Immaterial Subsidiary
which has been designated a Restricted Subsidiary pursuant to the last
14
<PAGE> 20
proviso of the preceding sentence shall not thereafter be redesignated as a
Designated Immaterial Subsidiary.
"Designated Repurchases" means and includes purchases, redemptions or
other acquisitions, in each case at a price not to exceed fair market value, of
the publicly traded limited partnership interests in the Company, which are
retired by the Company within six months of such purchase, redemption or other
acquisition.
"Dollars", "dollars" and "$" each mean lawful money of the United
States.
"Domestic Lending Office" means, with respect to each Bank and the
Swingline Bank, the office of that Bank and the Swingline Bank designated as
such in the signature pages hereto or such other office of the Bank and the
Swingline Bank as it may from time to time specify to the Company and the
Agent.
"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 Amount" means (i) with respect to any Committed Loans,
Swingline Loans or Bid Loans, as the case may be, on any date, the aggregate
outstanding principal amount thereof after giving effect to any Borrowings and
prepayments or repayments thereof occurring on such date; and (ii) with respect
to any outstanding L/C Obligations on any date, the amount of such L/C
Obligations on such date after giving effect to any Issuances of Letters of
Credit occurring on such date and any other changes in the aggregate amount of
the L/C Obligations as of such date, including as a result of any
reimbursements of outstanding unpaid drawings under any Letters of Credit or
any reductions
15
<PAGE> 21
in the maximum amount available for drawing under Letters of Credit taking
effect on such date.
"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), 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
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<PAGE> 22
("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 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.
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<PAGE> 23
"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 9.01.
"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,
"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.
"Facility A Credit Agreement" means the $100,000,000 Amended and
Restated Credit Agreement dated as of the date hereof between the Company, the
Banks, the Co-Agent and the Agent.
"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
18
<PAGE> 24
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.
"Fixed Charge Coverage Ratio" means, as measured quarterly on the last
day of each fiscal quarter for, except as set forth below, the four fiscal
quarter period then ending, the ratio of
(i) EBITDA;
to
(ii) an amount equal to the sum of (A) the combined
interest expense (including capitalized interest) of the Company and
its Subsidiaries for the four fiscal quarter period then ending
calculated in accordance with GAAP, plus (B) the aggregate amount of
scheduled principal repayment on the Indebtedness of the Company and
its Subsidiaries for such period; provided that the aggregate amount
of scheduled principal repayment on the Indebtedness (x) shall not
include the amount of any prepayment of Indebtedness except to the
extent such prepayment includes any amounts that would have been
scheduled principal repayments during such period, (y) shall not
include the amount of any scheduled principal repayment to the extent
the Company refinanced such scheduled repayments and the scheduled
principal repayments under the refinancing have been or will be
included in the calculation of the aggregate amount of scheduled
principal repayments, and (z) with respect to this Agreement, shall
only include (1) the scheduled installments to be made by the Company
pursuant to subsection 2.10(c) hereof during such period, and (2) the
amount of any repayment made by the Company hereunder pursuant to
subsection 2.10(b) hereof.
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"Form 1001" has the meaning specified in subsection 4.01(f).
"Form 4224" has the meaning specified in subsection 4.01(f).
"Funded Debt" means, without duplication, any Indebtedness payable
more than one year from the date of the creation thereof; provided that any
Indebtedness shall be treated as Funded Debt, regardless of its term, if such
Indebtedness is renewable at the option of the Company pursuant to the terms
thereof or of a revolving credit or similar agreement effective for more than
one year after the date of the creation of such Indebtedness, or may be payable
out of the proceeds of similar Indebtedness pursuant to the terms of such
Indebtedness or any such agreement.
"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.
"Guarantee" means the guarantee in paragraph 7 of the Mortgage Note
Agreements.
"Hazardous Materials" means all those substances which are regulated
by, or which may form the basis of
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<PAGE> 26
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.
"Honor Date" has the meaning specified in subsection 3.03(b).
"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
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<PAGE> 27
if the purpose or intent of such agreement is to provide assurance that such
obligation will be paid or discharged, or that any agreements relating thereto
will be complied with, or that the 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 11.05.
"Indemnified Liabilities" has the meaning specified in subsection
11.05.
"Independent Auditor" has the meaning specified in subsection 7.01(a).
"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, (a) with respect to any CD Rate
Committed Loan or Offshore Rate Loan, the last day of each Interest Period
applicable to such Loan, (b) with respect to any Base Rate Committed Loan, the
last Business Day of each calendar quarter and each date a Base Rate Committed
Loan is converted into another Type of Committed Loan, and (c) with respect to
any Swingline Loan, the Business Day agreed upon by the Company and the
Swingline Bank, which will not be later than the fourteenth Business Day
following the Borrowing date thereof or, if sooner, the Revolving Termination
Date; provided, however, that (i) if any Interest Period for a CD Rate
Committed Loan or Offshore Rate Committed
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<PAGE> 28
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, and (ii) as to any Bid Loan, such intervening dates
prior to the maturity thereof as may be specified by the Company and agreed to
by the applicable Bid Loan Lender in the applicable Competitive Bid shall also
be Interest Payment Dates.
"Interest Period" means, (a) with respect to any Offshore Rate
Committed Loan, the period commencing on the Business Day the Loan is disbursed
or on the Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Committed Loan, and ending on the date that is
one week or one, two, three or six months thereafter, as selected by the
Company in its Notice of Borrowing or Notice of Conversion/Continuation, as the
case may be; (b) with respect to any CD Rate Committed Loan, the period
commencing on the Business Day the CD Rate Committed Loan is disbursed or on
the Conversion/Continuation Date on which the Loan is converted into or
continued as a CD Rate Committed 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; (c) with respect to any LIBOR Bid Loan, the period
commencing on the Business Day the Loan is disbursed and ending on the date
one, two, three, six, or twelve months thereafter, as selected by the Company
in the applicable Competitive Bid Request; and (d) with respect to any Absolute
Rate Bid Loan, a period not less than 7 days and not more than 365/366 days, as
applicable, as selected by the Company in the applicable Competitive Bid
Request;
provided that:
(i) if any Interest Period 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
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<PAGE> 29
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;
(iii) no Interest Period for any Bid Loan shall extend
beyond the Revolving Termination Date;
(iv) no Interest Period for any Committed Loan shall
extend beyond the Revolving Termination Date unless and until the
Company duly exercises its election to repay the Loans in installments
in accordance with subsection 2.10(c), after which Interest Periods
may extend beyond the Revolving Termination Date so long as no
Interest Period extends beyond the Maturity Date; and
(v) no Interest Period applicable to a Committed Loan
after the Revolving Termination Date shall extend beyond any date upon
which is due any scheduled principal payment in respect of the
Committed Loans pursuant to subsection 2.10(c) unless the aggregate
principal amount of Committed Loans represented by Base Rate Committed
Loans, or by CD Rate Committed Loans or Offshore Rate Committed Loans
having Interest Periods that will expire on or before such date,
equals or exceeds the amount of such principal payment.
"Invitation for Competitive Bids" means a solicitation for Competitive
Bids, substantially in the form of Exhibit H.
"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 8.04.
"Issuance Date" has the meaning specified in subsection 3.01(a)."
"Issue" means, with respect to any Letter of Credit, to issue or to
extend the expiry of, or to renew or increase the amount of, such Letter of
Credit; and the terms "Issued," "Issuing" and "Issuance" have corresponding
meanings.
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<PAGE> 30
"Issuing Bank" means each of BofA and ABN in its capacity as issuer of
one or more Letters of Credit hereunder, together with any replacement letter
of credit issuer arising under subsection 10.01(b) or Section 10.09.
"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.
"L/C Advance" means each Bank's participation in any L/C Borrowing in
accordance with its Commitment Percentage.
"L/C Amendment Application" means an application form for amendment of
outstanding standby letters of credit as shall at any time be in use at an
Issuing Bank, as such Issuing Bank shall request.
"L/C Application" means an application form for issuances of standby
letters of credit as shall at any time be in use at an Issuing Bank, as such
Issuing Bank shall request.
"L/C Borrowing" means an extension of credit resulting from a drawing
under any Letter of Credit which shall not have been reimbursed on the date
when made nor converted into a Borrowing of Committed Loans under subsection
3.03(c).
"L/C Commitment" means the commitment of the Issuing Banks to Issue,
and the commitment of the Banks severally to participate in, Letters of Credit
from time to time Issued or outstanding under Article III, in an aggregate
amount not to exceed on any date five million dollars $5,000,000, minus the L/C
Obligations under and as defined in the Facility A Credit Agreement, as the
same shall be reduced as a result of a reduction in the L/C Commitment pursuant
to Section 2.07; provided that the L/C Commitment is a part of the Aggregate
Commitment, rather than a separate, independent commitment.
"L/C Obligations" means at any time the sum of (a) the aggregate
undrawn amount of all Letters of Credit then outstanding, plus (b) the amount
of all
25
<PAGE> 31
unreimbursed drawings under all Letters of Credit, including all outstanding
L/C Borrowings.
"L/C-Related Documents" means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other document relating to
any Letter of Credit, including any Issuing Bank's standard form documents for
letter of credit issuances.
"Lending Office" means, with respect to any Bank and the Swingline
Bank, the office or offices of the Bank and the Swingline 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 and the Swingline Bank as it may from
time to time notify the Company and the Agent.
"Letters of Credit" means any standby letters of credit Issued by the
Issuing Bank pursuant to Article III.
"Letter of Credit Rate" means, for any period, a rate per annum equal
to the Applicable Margin with respect to Offshore Rate Committed Loans in
effect for such period. The Letter of Credit Rate shall be adjusted
automatically as to all Letters of Credit then outstanding as of the effective
date of any change in the Letter of Credit Rate.
"LIBO Rate" means, for any Interest Period with respect to a LIBOR Bid
Loan, the rate of interest per annum determined by the Agent to be the
arithmetic mean (rounded upward to the nearest 1/16th of 1%) of the rates of
interest per annum notified to the Agent by BofA as the rate of interest at
which dollar deposits in the approximate amount of the LIBOR Bid Loans to be
borrowed in such Bid Loan Borrowing, and having a maturity comparable to such
Interest Period, would be offered to major banks in the London interbank market
at their request at approximately 11:00 a.m. (London Time) two Business Days
prior to the commencement of such Interest Period.
"LIBOR Auction" means a solicitation of Competitive Bids setting forth
a LIBOR Bid Margin pursuant to Section 2.06.
"LIBOR Bid Loan" means any Bid Loan that bears interest at a rate
based upon the LIBO Rate.
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<PAGE> 32
"LIBOR Bid Margin" has the meaning specified in subsection
2.06(c)(ii)(C).
"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 or the Swingline Bank,
as the case may be, to the Company under Article II or Article III, and may be
a Committed Loan, a Bid Loan, a Swingline Loan or an L/C Advance.
"Loan Documents" means this Agreement, the L/C-Related Documents, and
all documents delivered to the Agent in connection herewith and therewith.
"Majority Banks" means (a) at any time prior to the Revolving
Termination Date, or after the Revolving Termination Date if no Committed Loans
are then outstanding, Banks then holding at least 66-2/3% of the Commitments,
and (b) otherwise, Banks then holding at least 66-2/3% of the then aggregate
unpaid principal amount of the Loans.
"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
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.
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"Maturity Date" means, if the Company exercises its election to repay
the Loans in installments as provided in subsection 2.10(a), the date that is
the second anniversary of the Revolving Termination Date, otherwise, the
Revolving Termination Date.
"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.
"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.
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<PAGE> 34
"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.
"1994 Notes" means the 8.73% Senior Notes due August 1, 2009 in the
aggregate principal amount of $150,000,000 issued and sold pursuant to the 1994
Senior Note Agreements.
"1994 Senior Note Agreements" means those certain Senior Note
Agreements dated as of August 1, 1994 providing for the issuance and sale by
the Company of the 1994 Senior Notes to the purchasers listed in the schedule
of purchasers attached thereto.
"Notes" means those certain senior promissory notes in the aggregate
principal amount of $165,000,000 issued and sold 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, (c) that certain Senior Note Agreement Amendment dated as of
September 1, 1993 and (d) that certain Senior Note Agreement Amendment dated as
of May 20, 1994.
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"Notice of Borrowing" means a notice given by the Company to the Agent
pursuant to Sections 2.03 or 2.12, as the case may be, in substantially the
form of Exhibit A.
"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, the Co-Agent, the Issuing Banks, the Swingline Bank, 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 Committed 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:
IBOR
Offshore Rate = -------------------------------------
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
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<PAGE> 36
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 "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 Committed 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 to all Offshore
Rate Committed Loans then outstanding as of the effective date of any change in
the Eurodollar Reserve Percentage.
"Offshore Rate Committed Loan" means any Committed Loan that bears
interest based on the Offshore Rate.
"Offshore Rate Loan" means any LIBOR Bid Loan or any Offshore Rate
Committed Loan.
"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
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partnership, the certificate of limited partnership, the limited partnership
agreement, and all applicable partnership resolutions.
"Other Taxes" has the meaning specified in subsection 4.01(b).
"Participant" has the meaning specified in subsection 11.08(d).
"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 8.01.
"Person" means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture or
Governmental Authority.
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"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 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 Indebtedness represented by the Notes, the 1994
Senior Notes and this Agreement (including L/C Borrowings and Loans used to
repay L/C Borrowings, but excluding L/C Obligations with respect to undrawn
Letters of Credit).
"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
33
<PAGE> 39
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 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
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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 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 the Facility A Credit Agreement.
"Revolving Extension Request" has the meaning specified in subsection
2.10(a).
"Revolving Facility Tranche" has the meaning specified in Section 2.18.
"Revolving Facility Tranche Loan" means a Loan allocated by the
Company to the Revolving Facility Tranche as provided in Section 2.18.
"Revolving Termination Date" means the earlier to occur of:
(a) October 30, 1995, as such date may be extended in
full compliance with subsection 2.10(a); 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.
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"Solvent" means, as to any Person at any time, that (a) (i) in the
case of a Person that is not a partnership, 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), and (ii) in the case of a
Person that is a partnership, the sum of (A) the fair value of the Property of
such Person plus (B) the sum of the excess of the fair value of each general
partner's non-partnership Property over such partner's non-partnership debts
(together, the "Applicable Property") is greater than the amount of such
Person's liabilities (including disputed, contingent and unliquidated
liabilities), as such value for purposes of both clauses (i) and (ii) 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 (or, in the case of a partnership, the Applicable Property for 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.
"Subsidiary" of a Person means any corporation, partnership or other
entity a majority of (i) the total combined voting power of all classes of
Voting Stock of which or (ii) the outstanding equity interests of which shall,
at the time of which any determination is being made, be owned by the Company
either directly or through Subsidiaries.
"Swingline Bank" means BofA.
"Swingline Borrowing" means a Borrowing hereunder consisting of one or
more Swingline Loans made to the Company on the same day by the Swingline Bank.
"Swingline Clean-Up Day" has the meaning specified in subsection
2.09(a)(iv).
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"Swingline Commitment" has the meaning specified in Section 2.12.
"Swingline Loan" has the meaning specified in Section 2.12.
"Taxes" has the meaning specified in subsection 4.01(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 11.08(e).
"Type" has the meaning specified in the definition of "Committed Loan."
"UCC" means the Uniform Commercial Code as in effect in the State of
California.
"UCP" has the meaning specified in Section 3.09.
"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).
"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
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in the United States, and all of the stock or other ownership interests of
every class of which, except director's qualifying shares, and except in the
case of the Facilities Subsidiary not more than 5% of the outstanding Voting
Stock shall, at the time as of which any determination is being made, be owned
by the Company either directly or through Wholly-Owned Subsidiaries.
"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
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including"; the words "to" and "until" each mean "to but excluding", and the
word "through" means "to and including". 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, the Co-Agent or the Agent merely because of the Agent's, the Co-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 (each such loan, a "Committed Loan") from time to time on
any Business Day during the period from the Closing 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 2.07 or Section 2.09, or as a result of one or more assignments
pursuant to Section 11.08, the Bank's "Commitment"); provided, however, that,
after giving effect to any Committed Borrowings, the Effective Amount of all
Committed Loans, Swingline Loans and Bid Loans and the Effective Amount of all
L/C Obligations shall not at any time exceed the Aggregate Commitment; and
provided, further, that the Effective Amount of the Committed Loans of any Bank
plus such Bank's participation in the Effective Amount of all Swingline Loans,
if any, plus such Bank's Commitment Percentage of the Effective Amount of all
L/C Obligations shall not at any time exceed such Bank's Commitment. Within
the limits of each Bank's Commitment, and subject to the other terms and
conditions hereof, until the Revolving Termination Date, the Company may borrow
under this Section 2.01, prepay pursuant to Section 2.08 and reborrow pursuant
to this Section 2.01.
2.02 Loan Accounts. The Loans made by each Bank (including the
Swingline Bank) and the Letters of Credit Issued by an Issuing Bank shall be
evidenced by one or more loan accounts maintained by such Bank or Issuing Bank,
as the case may be, in the ordinary course of business. The loan accounts or
records maintained by the Agent, the Co-Agent, the Swingline Bank, each Issuing
Bank and each such Bank shall be conclusive absent manifest error of the amount
of the Loans made by the Banks to the Company and the Letters of Credit issued
for the account of 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 or any Letter of Credit.
2.03 Procedure for Committed Borrowing.
(a) Each Committed Borrowing shall be made upon the
Company's irrevocable written notice delivered to the
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Agent in accordance with Section 11.02 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 Committed Loans; (ii) three Business Days prior to the
requested Borrowing date, in the case of CD Rate Committed Loans, and (iii) on
the requested Borrowing date, in the case of Base Rate Committed Loans,
specifying:
(A) the amount of the Committed
Borrowing, which shall be in an aggregate minimum principal
amount of three million dollars ($3,000,000) except in the
case of Offshore Rate Committed Loans with a proposed Interest
Period of one week, in which case the aggregate minimum
principal amount shall be twelve million dollars ($12,000,000)
or, in either case, any multiple of five hundred thousand
dollars ($500,000) in excess thereof;
(B) the requested Committed Borrowing
date, which shall be a Business Day;
(C) whether the Committed Borrowing is
to be comprised of Offshore Rate Committed Loans, CD Rate
Committed Loans or Base Rate Committed Loans;
(D) the duration of the Interest Period
applicable to such Committed Loans included in such notice.
If the Notice of Borrowing shall fail to specify the duration
of the Interest Period for any Committed Borrowing comprised
of CD Rate Committed Loans or Offshore Rate Committed Loans,
such Interest Period shall be 90 days or three months,
respectively; and
(E) with respect to any Committed
Borrowing after the date the Company gives the notice
regarding allocation of Loans pursuant to Section 2.18,
whether the Committed Borrowing shall be allocated to the
Revolving Facility Tranche or the Capital Expenditure Tranche.
(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 Committed Borrowing.
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(c) Each Bank will make the amount of its Commitment
Percentage of the Committed 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 Committed Borrowing date requested by the Company in funds immediately
available to the Agent. The proceeds of all such Committed 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, unless on the date of the Borrowing all or any portion of the proceeds
thereof shall then be required to be applied to the repayment of any
outstanding Swingline Loans pursuant to Section 2.12 or the reimbursement of
any outstanding drawings under Letters of Credit pursuant to Section 3.03, in
which case such proceeds or portion thereof shall be applied to the repayment
of such Swingline Loans or the reimbursement of such Letter of Credit drawings,
as the case may be.
(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 Committed Loan be made as, or converted into or continued as,
an Offshore Rate Committed Loan or a CD Rate Committed Loan.
(e) After giving effect to any Committed Borrowing, there
shall not be more than six different Interest Periods in effect in respect of
all Committed Loans and Bid Loans together then outstanding.
2.04 Conversion and Continuation Elections for Committed
Borrowings.
(a) The Company may upon irrevocable written notice to
the Agent in accordance with subsection 2.04(b):
(i) elect to convert on any Business Day, any
Base Rate Committed Loans (or any part thereof in an amount not less
than $3,000,000 except in the case of a conversion into an Offshore
Rate Committed Loan for an Interest Period of one week which shall be
in an amount not less than $12,000,000, or that is in an integral
multiple of $500,000 in excess thereof) into Offshore Rate Committed
Loans or CD Rate Committed Loans;
(ii) elect to convert on the last day of the
applicable Interest Period any Offshore Rate Committed Loans having
Interest Periods maturing on such day (or any part thereof in an
amount not less than $3,000,000, or that is in an integral multiple of
$500,000 in excess
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thereof) into CD Rate Committed Loans or Base Rate Committed Loans;
(iii) elect to convert on the last day of the
applicable Interest Period any CD Rate Committed Loans having Interest
Periods maturing on such day (or any part thereof in an amount not
less than $3,000,000 except in the case of a conversion into an
Offshore Rate Committed Loan for an Interest Period of one week which
shall be in an amount not less than $12,000,000, or that is in an
integral multiple of $500,000 in excess thereof) into Offshore Rate
Committed Loans or Base Rate Committed Loans; or
(iv) elect to continue on the last day of the
applicable Interest Period any Offshore Rate Committed Loans or CD
Rate Committed Loans having Interest Periods maturing on such day (or
any part thereof in an amount not less than $3,000,000 except in the
case of a continuation of an Offshore Rate Committed Loan for an
Interest Period of one week which shall be in an amount not less than
$12,000,000, or that is in an integral multiple of $500,000 in excess
thereof);
provided, that if the aggregate amount of CD Rate Committed Loans or Offshore
Rate Committed Loans in respect of any Committed Borrowing shall have been
reduced, by payment, prepayment, or conversion of part thereof to be less than
$500,000, such CD Rate Committed Loans or Offshore Rate Committed Loans shall
automatically convert into Base Rate Committed Loans, and on and after such
date the right of the Company to continue such Committed Loans as, and convert
such Committed Loans into, Offshore Rate Committed Loans or CD Rate Committed
Loans, as the case may be, shall terminate.
(b) The Company shall deliver a Notice of Conversion/
Continuation in accordance with Section 11.02 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/Continuation Date, if the Committed Loans are to be
converted into or continued as Offshore Rate Committed Loans; (ii) at least
three Business Days in advance of the Conversion/Continuation Date, if the
Committed Loans are to be converted into or continued as CD Rate Committed
Loans; and (iii) on the Conversion/Continuation Date, if the Committed Loans
are to be converted into Base Rate Committed Loans, specifying:
(A) the proposed Conversion/Continuation
Date;
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(B) the aggregate amount of Committed
Loans to be converted or continued;
(C) the nature of the proposed
conversion or continuation; and
(D) other than in the case of Base Rate
Committed Loans, the duration of the requested Interest
Period.
(c) If upon the expiration of any Interest Period
applicable to CD Rate Committed Loans or Offshore Rate Committed Loans, the
Company has failed to select timely a new Interest Period to be applicable to
such CD Rate Committed Loans or Offshore Rate Committed 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 Committed Loans or Offshore
Rate Committed Loans into Base Rate Committed 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 Committed 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 Committed Loan converted into or continued as an Offshore Rate
Committed Loan or a CD Rate Committed Loan.
(f) Notwithstanding any other provision contained in this
Agreement, after giving effect to any conversion or continuation of any
Committed Loans there shall not be more than six different Interest Periods in
effect in respect of all Committed Loans and Bid Loans, together then
outstanding.
2.05 Bid Borrowings. In addition to Committed Borrowings pursuant
to Section 2.03, each Bank severally agrees that the Company may, as set forth
in Section 2.06, from time to time request the Banks prior to the Revolving
Termination Date to submit offers to make Bid Loans to the Company; provided,
however, that the Banks may, but shall have no obligation to, submit such
offers and the Company may, but shall have no obligation to, accept any such
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offers; and provided, further, that at no time shall (a) the Effective Amount
of all Committed Loans, Swingline Loans, Bid Loans and L/C Obligations exceed
the Aggregate Commitment; or (b) the number of Interest Periods for Bid Loans
then outstanding plus the number of Interest Periods for Committed Loans then
outstanding exceed six different Interest Periods.
2.06 Procedure for Bid Borrowings.
(a) When the Company wishes to request the Banks to
submit offers to make Bid Loans hereunder, it shall transmit to the Agent by
telephone call followed promptly by facsimile transmission, delivered in
accordance with Section 11.02, a notice in substantially the form of Exhibit G
(a "Competitive Bid Request") so as to be received no later than 7:00 a.m. (San
Francisco time) (x) four Business Days prior to the date of a proposed Bid
Borrowing in the case of a LIBOR Auction, or (y) two Business Days prior to the
date of a proposed Bid Borrowing in the case of an Absolute Rate Auction,
specifying:
(i) the date of such proposed Bid Borrowing,
which shall be a Business Day;
(ii) the aggregate amount of such proposed Bid
Borrowing, which shall be in an aggregate minimum principal amount of
$5,000,000 or any multiple of $1,000,000 in excess thereof;
(iii) whether the Competitive Bids requested are to
be for LIBOR Bid Loans or Absolute Rate Bid Loans or both;
(iv) the duration of the Interest Period
applicable thereto, subject to the provisions of the definition of
"Interest Period" herein; and
(v) with respect to any proposed Bid Borrowing
after the date the Company gives the notice regarding allocation of
Loans pursuant to Section 2.18, whether the Bid Borrowing shall be
allocated to the Revolving Facility Tranche or to the Capital
Expenditure Tranche.
Subject to subsection 2.06(c), the Company may not request
Competitive Bids for more than three Interest Periods in a single Competitive
Bid Request and may not request Competitive Bids more than once in any period
of five consecutive Business Days.
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(b) Upon receipt of a Competitive Bid Request, the Agent
will promptly send to the Banks by facsimile transmission an Invitation for
Competitive Bids, which shall constitute an invitation by the Company to each
Bank to submit Competitive Bids offering to make the Bid Loans to which such
Competitive Bid Request relates in accordance with this Section 2.06.
(c) (i) Each Bank may at its discretion submit a
Competitive Bid containing an offer or offers to make Bid Loans in
response to any Invitation for Competitive Bids. Each Competitive Bid
must comply with the requirements of this subsection 2.06(c) and must
be submitted to the Agent by facsimile transmission at the Agent's
office for notices set forth on the signature pages hereto not later
than (A) 6:30 a.m. (San Francisco time) three Business Days prior to
the proposed date of Borrowing, in the case of a LIBOR Auction, or (B)
6:30 a.m. (San Francisco time) on the proposed date of Borrowing, in
the case of an Absolute Rate Auction; provided that Competitive Bids
submitted by the Agent (or any Affiliate of the Agent) in the capacity
of a Bank may be submitted, and may only be submitted, if the Agent or
such Affiliate notifies the Company of the terms of the offer or
offers contained therein not later than (A) 6:15 a.m. (San Francisco
time) three Business Days prior to the proposed date of Borrowing, in
the case of a LIBOR Auction or (B) 6:15 a.m. (San Francisco time) on
the proposed date of Borrowing, in the case of an Absolute Rate
Auction.
(ii) Each Competitive Bid shall be in
substantially the form of Exhibit I, specifying therein:
(A) the proposed date of Borrowing;
(B) the principal amount of each Bid
Loan for which such Competitive Bid is being made, which
principal amount (x) may be equal to, greater than or less
than the Commitment of the quoting Bank, (y) shall be in an
aggregate minimum principal amount of $5,000,000 or any
multiple of $1,000,000 in excess thereof, and (z) may not
exceed the principal amount of Bid Loans for which Competitive
Bids were requested;
(C) in case the Company elects a LIBOR
Auction, the margin above or below LIBOR (the "LIBOR Bid
Margin") offered for each such Bid Loan, expressed as a
percentage (rounded to the nearest 1/16th of 1%) to be added
to or subtracted from the
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applicable LIBOR and the Interest Period applicable thereto;
(D) in case the Company elects an
Absolute Rate Auction, the rate of interest per annum (rounded
upward to the nearest 1/100th of 1%) (the "Absolute Rate")
offered for each such Bid Loan; and
(E) the identity of the quoting Bank.
A Competitive Bid may contain up to three separate offers by the quoting Bank
with respect to each Interest Period specified in the related Invitation for
Competitive Bids.
(iii) Any Competitive Bid shall be disregarded if
it:
(A) is not substantially in conformity
with Exhibit I or does not specify all of the information
required by subsection (c)(ii) of this Section;
(B) contains qualifying, conditional or
similar language;
(C) proposes terms other than or in
addition to those set forth in the applicable Invitation for
Competitive Bids; or
(D) arrives after the time set forth in
subsection (c)(i).
(d) Promptly on receipt and not later than 7:00 a.m. (San
Francisco time) three Business Days prior to the proposed date of Borrowing in
the case of a LIBOR Auction, or 7:00 a.m. (San Francisco time) on the proposed
date of Borrowing, in the case of an Absolute Rate Auction, the Agent will
notify the Company of the terms (i) of any Competitive Bid submitted by a Bank
that is in accordance with subsection 2.06(c), and (ii) of any Competitive Bid
that amends, modifies or is otherwise inconsistent with a previous Competitive
Bid submitted by such Bank with respect to the same Competitive Bid Request.
Any such subsequent Competitive Bid shall be disregarded by the Agent unless
such subsequent Competitive Bid is submitted solely to correct a manifest error
in such former Competitive Bid and only if received within the times set forth
in subsection 2.06(c). The Agent's notice to the Company shall specify (1) the
aggregate principal amount of Bid Loans for which offers have been received for
each Interest Period
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specified in the related Competitive Bid Request; and (2) the respective
principal amounts and LIBOR Bid Margins or Absolute Rates, as the case may be,
so offered. Subject only to the provisions of Sections 4.02, 4.05 and 5.02
hereof and the provisions of this subsection (d), any Competitive Bid shall be
irrevocable except with the written consent of the Agent given on the written
instructions of the Company.
(e) Not later than 7:30 a.m. (San Francisco time) three
Business Days prior to the proposed date of Borrowing, in the case of a LIBOR
Auction, or 7:30 a.m. (San Francisco time) on the proposed date of Borrowing,
in the case of an Absolute Rate Auction, the Company shall notify the Agent of
its acceptance or non-acceptance of the offers so notified to it pursuant to
subsection 2.06(d). The Company shall be under no obligation to accept any
offer and may choose to reject all offers. In the case of acceptance, such
notice shall specify the aggregate principal amount of offers for each Interest
Period that is accepted. The Company may accept any Competitive Bid in whole
or in part; provided that:
(i) the aggregate principal amount of each Bid
Borrowing may not exceed the applicable amount set forth in the
related Competitive Bid Request;
(ii) the principal amount of each Bid Borrowing
must be an amount not less than $5,000,000 or any multiple of
$1,000,000 in excess thereof and the principal amount of each Bid Loan
shall be an integral multiple of $1,000,000;
(iii) acceptance of offers may only be made on the
basis of ascending LIBOR Bid Margins or Absolute Rates within
each Interest Period, as the case may be; and
(iv) the Company may not accept any offer that is
described in subsection 2.06(c)(iii) or that otherwise fails to comply
with the requirements of this Agreement.
(f) If offers are made by two or more Banks with the same
LIBOR Bid Margins or Absolute Rates, as the case may be, for a greater
aggregate principal amount than the amount in respect of which such offers are
accepted for the related Interest Period, the principal amount of Bid Loans in
respect of which such offers are accepted shall be allocated by the Agent among
such Banks as nearly as possible (in such integral multiples of $1,000,000 as
the
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Agent may deem appropriate) in proportion to the aggregate principal amounts of
such offers. Determination by the Agent of the amounts of Bid Loans shall be
conclusive in the absence of manifest error.
(g) (i) The Agent will promptly notify each Bank
having submitted a Competitive Bid if its offer has been accepted and, if its
offer has been accepted, of the amount of the Bid Loan or Bid Loans to be made
by it on the date of the Bid Borrowing.
(ii) If, on or before the proposed date of Bid
Borrowing, the Commitments have not been terminated and if, on such proposed
date of Borrowing all applicable conditions to funding referenced in Sections
4.02, 4.05 and 5.02 hereof are satisfied, each Bank that has received notice
pursuant to subsection 2.06(g)(i) that its Competitive Bid has been accepted
shall make the amounts of such Bid Loans available to the Agent for the account
of the Company at the Agent's Payment Office in immediately available funds by
11:00 a.m. (San Francisco time) on such date of Bid Borrowing.
(iii) Promptly following each Bid Borrowing, the
Agent shall notify each Bank of the ranges of bids submitted and the highest
and lowest Bids accepted for each Interest Period requested by the Company and
the aggregate amount borrowed pursuant to such Bid Borrowing.
(iv) From time to time, the Company and the Banks
shall furnish such information to the Agent as the Agent may request relating
to the making of Bid Loans, including the amounts, interest rates, dates of
borrowings and maturities thereof, for purposes of the allocation of amounts
received from the Company for payment of all amounts owing hereunder.
2.07 Voluntary Termination or Reduction of Commitments. The Company
may, upon not less than five Business Days prior notice to the Agent, terminate
the Aggregate Commitment 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 Committed Loans made
on the effective date thereof, the Effective Amount of Committed Loans,
Swingline Loans, Bid Loans and L/C Obligations would exceed the amount of the
Aggregate Commitment then in effect. Once reduced in accordance with this
Section 2.07, the Aggregate Commitment may not be increased. Any reduction of
the Aggregate Commitment shall be applied to each Bank's Commitment in
accordance with such
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Bank's Commitment Percentage. All accrued commitment fees to the effective
date of any reduction or termination of Commitments shall be paid on the
effective date of such reduction or termination.
2.08 Optional Prepayments.
(a) Subject to Section 4.04, the Company may, at any time
or from time to time, by written notice delivered to the Agent at least three
Business Days prior to the proposed prepayment date in the case of Offshore
Rate Committed Loans, CD Rate Committed Loans and Swingline Loans bearing
interest at other than the Base Rate, and on the proposed prepayment date
(which notice must be received by the Agent not later than 9:00 a.m. (San
Francisco time)) in the case of Base Rate Committed Loans and Swingline Loans
bearing interest at the Base Rate, (i) ratably prepay Committed Loans in whole
or in part, in minimum principal amounts of $3,000,000 or any multiple of
$1,000,000 in excess thereof, and (ii) prepay in whole or in part Swingline
Loans in minimum principal amounts of $250,000 or any multiple of $100,000 in
excess thereof, or in such other amounts with the consent of the Swingline
Bank. Such notice of prepayment shall specify (i) the date and amount of such
prepayment, (ii) whether such prepayment is of Base Rate Committed Loans, CD
Rate Committed Loans, Offshore Rate Committed Loans, or Swingline Loans, or any
combination thereof, and (iii) if applicable, whether such prepayment is of a
Revolving Facility Tranche Loan or a Capital Expenditure Tranche Loan, or both.
Such notice shall not thereafter be revocable by the Company and the Agent will
promptly notify (i) in the case of Committed Loans, each Bank thereof and of
such Bank's Commitment Percentage of such prepayment, and (ii) in the case of
Swingline Loans, the Swingline Bank thereof and of the amount 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 4.04.
(b) Bid Loans may not be voluntarily prepaid.
2.09 Mandatory Prepayments of Loans; Mandatory Commitment
Reductions.
(a) Mandatory Prepayments.
(i) Asset Dispositions. If the Company or any of
its Restricted Subsidiaries shall at any time or from
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time to time make or agree to make a sale of Properties permitted by subsection
8.02(i), or harvest excess Timber permitted by Section 8.03, then (A) 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 8.02(i), or (B) 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 Section 8.03, each as applicable.
(ii) L/C Obligations. If on any date the
Effective Amount of L/C Obligations exceeds the L/C Commitment, the Company
shall Cash Collateralize on such date the outstanding Letters of Credit in an
amount equal to the excess of the maximum amount then available to be drawn
under the Letters of Credit over the aggregate L/C Commitment. The Company
hereby grants to the Agent, for the benefit of the Agent, the Issuing Banks and
the Banks, a security interest in all such cash and deposit account balances
used to Cash Collateralize such L/C Obligations. Subject to Section 4.04, if
on any date after giving effect to any Cash Collateralization made on such date
pursuant to the preceding sentence, the Effective Amount of all Loans then
outstanding plus the Effective Amount of all L/C Obligations exceeds the
Aggregate Commitments, the Company shall immediately, and without notice or
demand, prepay the outstanding principal amount of the Loans and L/C Advances
by an amount equal to the applicable excess.
(iii) Bid Loans. If any mandatory prepayments
pursuant to subsections 2.09(a)(i) or (ii) would otherwise require prepayment
of Bid Loans in accordance with subsection 2.09(c), the Company shall Cash
Collateralize the outstanding Bid Loans in an amount equal to the prepayment
amount applicable to Bid Loans, which amount shall be applied by the Agent to
Bid Loans when such Loans mature. The Company hereby grants to the Agent, for
the benefit of the Agent and the Bid Loan Lenders, a security interest in all
such cash and deposit account balances used to Cash Collateralize such
prepayment of Bid Loans.
(iv) Swingline Loans. The Company shall be
required to prepay Swingline Loans (A) if following any reduction of the
Swingline Commitment pursuant to subsection 2.09(b) the aggregate outstanding
principal amount of Swingline Loans would exceed the Swingline Commitment as
reduced, the Company shall prepay on the reduction date the outstanding
principal amount of the Swingline Loans in an amount equal to the excess of the
Swingline Loans over the Swingline Commitment, and (B) so
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that for one Business Day during each successive two calendar week period the
aggregate principal amount of Swingline Loans shall be $0 (a "Swingline
Clean-Up Day"), the Company shall prepay on the Swingline Clean-Up Day the
outstanding principal amount of the Swingline Loans (which Swingline Loans may
not be reborrowed until such Swingline Clean-Up Day has ended).
(v) Revolving Facility Tranche Loans. If the
Company has given a notice pursuant to Section 2.18 allocating all or a
portion of the Loans to the Revolving Facility Tranche, the Company shall
cause, for a period of at least 45 consecutive days during the 12 calendar
month period after the effective date of such notice and during each successive
12 calendar month period prior to the Revolving Termination Date, no L/C
Obligations to be outstanding and the aggregate principal amount of Revolving
Facility Tranche Loans to be $0.
(b) Mandatory Commitment Reductions.
(i) The Aggregate Commitment shall be reduced
from time to time by the amount of any mandatory prepayment required by
subsection 2.09(a)(i).
(ii) No reduction in the Aggregate Commitment
pursuant to Section 2.07 or subsection 2.09(b)(i) shall reduce the L/C
Commitment unless and until the combined Commitment has been reduced to
$5,000,000; thereafter, any reduction in the combined Commitment pursuant to
Section 2.07 shall equally reduce the L/C Commitment.
(iii) (A) At no time shall the Swingline
Commitment exceed the Aggregate Commitment, and any reduction of the Aggregate
Commitment which reduces the Aggregate Commitment below the then current amount
of the Swingline Commitment shall result in an automatic corresponding
reduction of the Swingline Commitment to the amount of the Aggregate
Commitment, as so reduced, without any action on the part of the Swingline
Bank.
(B) At no time shall the Swingline
Commitment exceed the Commitment of the Swingline Bank, and any reduction of
the Aggregate Commitment which reduces the Commitment of the Swingline Bank
below the then current amount of the Swingline Commitment shall result in an
automatic corresponding reduction of the Swingline Commitment to the amount of
the Commitment of the Swingline Bank, as so reduced, without any action on the
part of the Swingline Bank.
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(c) General. Any prepayments pursuant to subsection
2.09(a)(i) or (ii) shall be applied first to any Base Rate Committed Loans then
outstanding, second to Cash Collateralize or to prepay Swingline Loans as
directed by the Swingline Bank in its sole discretion, third, at the Company's
option, to Cash Collateralize or to prepay in the inverse order of their stated
maturity CD Rate Committed Loans and Offshore Rate Committed Loans, fourth to
Bid Loans as provided in Section 2.09(a)(iii). The Company hereby grants to
the Agent (i) for the benefit of the Agent and the Banks in the case of CD Rate
Committed Loans and Offshore Rate Committed Loans and (ii) for the benefit of
the Agent, the Swingline Bank and the Banks in the case of Swingline Loans, a
security interest on all such cash and deposit account balances used to Cash
Collateralize Loans to be prepaid pursuant to this subsection 2.09(c). Subject
to the foregoing and so long as no default or Event of Default shall then
exist, if applicable, any such prepayments shall be applied to Revolving
Facility Tranche Loans and Capital Expenditure Tranche Loans as directed by the
Company. After the Revolving Termination Date, all prepayments shall be
applied in the inverse order of maturity to the principal payments required
under subsection 2.10(c). The Company shall pay, together with each prepayment
under this Section 2.09, accrued interest on the amount prepaid and any amounts
required pursuant to Section 4.04.
(d) Reduction of Commitment. Upon the making of any
mandatory prepayment under subsection 2.09(a)(i), 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. 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.
2.10 Extension of Revolving Termination Date; Repayment.
(a) So long as no Default or Event of Default shall then
exist and so long as the Company may incur at least $1 of additional Funded
Debt pursuant to subsection 8.05(i), in each case on the date of such request
and on the Revolving Termination Date then in effect, at least 55 days but no
more than 60 days before the Revolving Termination Date then in effect, the
Company may request the Banks to extend the Revolving Termination Date then in
effect for an additional 364 days unless the Company has exercised its election
to repay the Obligations in
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installments as provided in subsection 2.10(c). The Company shall request such
extension by delivering to the Agent an irrevocable written request in
substantially the form of Exhibit J (each a "Revolving Extension Request").
The Company understands that this subsection 2.10(a) is included in this
Agreement for the Company's convenience in requesting extensions and
acknowledges that neither the Agent nor any Bank has promised (either expressly
or by implication), and neither the Agent nor any Bank has any obligation or
commitment, to extend the Revolving Termination Date at any time. The Agent
shall promptly deliver to each Bank three (3) copies of each Revolving
Extension Request received by the Agent. If a Bank, in its sole discretion,
consents to any Revolving Extension Request, such Bank shall evidence such
consent by executing and returning two (2) copies of the Revolving Extension
Request to the Agent not later than the last Business Day which is 35 days
before the Revolving Termination Date then in effect. Any failure by any Bank
so to execute and return a Revolving Termination Request shall be deemed a
denial thereof. If the Company shall deliver a Revolving Extension Request to
the Agent pursuant to the first sentence of this subsection 2.10(a), then not
later than the last Business Day which is 30 days before the Revolving
Termination Date then in effect, the Agent shall notify the Company in writing
whether (i) the Agent has received a copy of the Revolving Extension Request
executed by each Bank, in which case the definition of "Revolving Termination
Date" shall be deemed amended as provided in the Revolving Extension Request as
of the date of such written notice from the Agent to the Company, or (ii) the
Agent has not received a copy of the Revolving Extension Request executed by
each Bank, in which case such Revolving Extension Request shall be deemed
denied. The Agent shall deliver to the Company, with each written notice under
clause (i) of the preceding sentence which notifies the Company that the Agent
has received a Revolving Extension Request executed by each Bank, a copy of the
Revolving Extension Request so executed by each Bank.
(b) Unless the Company shall have exercised its election
to repay the Committed Loans outstanding on the Revolving Termination Date in
installments pursuant to and in strict compliance with subsection 2.10(c), the
Company shall repay to the Banks in full on the Revolving Termination Date the
aggregate principal amount of any Committed Loans outstanding on the Revolving
Termination Date.
(c) So long as no Default or Event of Default shall then
exist and so long as the Company may incur at least $1 of additional Funded
Debt pursuant to
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subsection 8.05(i), in each case on the date of such election and the Revolving
Termination Date, at least 25 days before the Revolving Termination Date the
Company may, in lieu of requesting an extension of the Revolving Termination
Date under subsection 2.10(a) or following a decline by the Banks of such
request, elect to repay the aggregate principal amount of Committed Loans
outstanding on the Revolving Termination Date in eight (8) consecutive
quarterly equal installments, each in an amount equal to one-eighth of the
Effective Amount of the Committed Loans on the Revolving Termination Date and
payable on the last Business Day of each January, April, July and October
through the Maturity Date. The Company shall request such repayment election
by delivering to the Agent an irrevocable written request in substantially the
form of Exhibit K. The Agent shall promptly deliver a copy of such notice to
the Banks.
(d) The Company shall repay each Bid Loan on the last day
of the relevant Interest Period.
(e) The Company shall repay to the Swingline Bank in full
on the Revolving Termination Date the aggregate principal amount of the
Swingline Loans outstanding on the Revolving Termination Date.
2.11 Interest.
(a) Subject to subsection 2.11(c): (i) each Committed
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; (ii) each Bid 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 LIBO Rate plus (or minus) the LIBOR Bid Margin, or at the Absolute
Rate, as the case may be; and (iii) each Swingline Loan shall bear interest on
the principal amount thereof from the date when made until it becomes due at a
rate per annum equal to the Base Rate plus the Applicable Margin or any other
rate agreed to by the Swingline Bank in its sole discretion.
(b) Interest on each Loan shall be paid in arrears on
each Interest Payment Date and in the case of a Swingline Loan bearing an
interest rate other than the Base Rate, on the date agreed to by the Swingline
Bank in its sole discretion. Interest shall also be paid on the date of any
prepayment of Committed Loans pursuant to Section 2.08 and 2.09 for the portion
of the Loans so prepaid and upon
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payment (including prepayment) in full thereof and, during the existence of any
Event of Default, interest shall be paid on demand of the Agent at the request
or with the consent of the Majority Banks.
(c) 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
Obligations due and unpaid, at a rate per annum that is determined, in the case
of Loans other than Base Rate Committed Loans and Swingline Loans, by adding 2%
per annum to the Applicable Margin then in effect for such Loans and, in the
case of other Obligations, at a rate equal to the Base Rate plus 2%.
(d) 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.
2.12 Swingline Loans.
(a) Subject to the terms and conditions hereof, the
Swingline Bank severally agrees to make a portion of the Aggregate Commitment
available to the Company by making swingline loans (individually, a "Swingline
Loan"; collectively, the "Swingline Loans") to the Company on any Business Day
during the period from the Closing Date to the Revolving Termination Date in
accordance with the procedures set forth in this Section in an aggregate
principal amount at any one time outstanding not to exceed $15,000,000,
notwithstanding the fact that such Swingline Loans, when aggregated with the
Swingline Bank's outstanding Committed Loans, may exceed the Swingline Bank's
Commitment (the amount of such commitment of the Swingline Bank to make
Swingline Loans to the Company pursuant to this subsection 2.12(a), as the same
shall be reduced pursuant to subsection 2.09(b) or as a result of any
assignment pursuant to Section 11.08, the Swingline Bank's "Swingline
Commitment"); provided, that at no time shall (i) the sum of the Effective
Amount of all Swingline Loans plus the Effective Amount of all Committed Loans
and Bid Loans plus the Effective Amount of all L/C Obligations exceed the
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Aggregate Commitment, or (ii) the Effective Amount of all Swingline Loans
exceed the Swingline Commitment. Additionally, no more than four Swingline
Loans may be outstanding at any one time, and except as otherwise provided in
Section 2.11(c), all Swingline Loans shall at all times bear interest at a rate
per annum equal to the Base Rate, unless otherwise agreed to by the Swingline
Bank in its sole discretion. Within the foregoing limits, and subject to the
other terms and conditions hereof, the Company may borrow under this subsection
2.12(a), prepay pursuant to subsection 2.08(a) and reborrow pursuant to this
subsection 2.12(a).
(b) The Company shall provide the Agent (with a copy to
the Swingline Bank) irrevocable written notice (including notice via facsimile
confirmed immediately by a telephone call) in the form of a Notice of Borrowing
of any Swingline Loan requested hereunder (which notice must be received by the
Swingline Bank and the Agent prior to 12:00 noon (San Francisco time) on the
requested Borrowing date) specifying (i) the amount to be borrowed, (ii) the
requested Borrowing date, which must be a Business Day, and (iii) with respect
to any Swingline Borrowing after the date the Company gives the notice
regarding allocation of Loans pursuant to Section 2.18, whether the Swingline
Borrowing shall be allocated to the Revolving Facility Tranche or the Capital
Expenditure Tranche.
Upon receipt of the Notice of Borrowing, the Swingline Bank
will immediately confirm with the Agent (by telephone or in writing) that the
Agent has received a copy of the Notice of Borrowing from the Company and, if
not, the Swingline Bank will provide the Agent with a copy thereof. Unless the
Swingline Bank has received notice prior to 2:00 p.m. on such Borrowing date
from the Agent (A) directing the Swingline Bank not to make the requested
Swingline Loan as a result of the limitations set forth in the proviso set
forth in the first sentence of subsection 2.12(a); or (B) that one or more
conditions specified in Article V are not then satisfied; then, subject to the
terms and conditions hereof, the Swingline Bank will, not later than 3:00 p.m.
(San Francisco time) on the Borrowing date specified in such Notice, make the
amount of its Swingline Loan available to the Agent for the account of the
Company at the Agent's Payment Office in funds immediately available to the
Agent. The proceeds of such Swingline Loan will then promptly be made
available to the Company by the Agent crediting the account of the Company on
the books of BofA with the aggregate of the amounts made available to the Agent
by the Swingline Bank and in like funds as received by the Agent. Each
Borrowing pursuant to
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this Section shall be in an aggregate principal amount equal to two hundred
fifty thousand dollars ($250,000) or an integral multiple of one hundred
thousand dollars ($100,000) in excess thereof, unless otherwise agreed by the
Swingline Bank.
(c) If (i) any Swingline Loans shall remain outstanding
at 9:00 a.m. (San Francisco time) on the Business Day immediately prior to a
Swingline Clean-Up Day and by such time on such Business Day the Agent shall
have received neither (A) a Notice of Borrowing delivered pursuant to Section
2.03 requesting that Committed Loans be made pursuant to Section 2.01 or Bid
Loans be made pursuant to Section 2.05 on the Swingline Clean-Up Day in an
amount at least equal to the aggregate principal amount of such Swingline
Loans, nor (B) any other notice indicating the Company's intent to repay such
Swingline Loans with funds obtained from other sources, or (ii) any Swingline
Loans shall remain outstanding during the existence of a Default or Event of
Default and the Swingline Bank shall in its sole discretion notify the Agent
that the Swingline Bank desires that such Swingline Loans be converted into
Committed Loans, then the Agent shall be deemed to have received a Notice of
Borrowing from the Company pursuant to Section 2.03 requesting that Base Rate
Committed Loans be made pursuant to Section 2.01 on such Swingline Clean-Up Day
(in the case of the circumstances described in clause (i) above) or on the
first Business Day subsequent to the date of such notice from the Swingline
Bank (in the case of the circumstances described in clause (ii) above) in an
amount equal to the aggregate amount of such Swingline Loans, and the
procedures set forth in subsections 2.03(b) and 2.03(c) shall be followed in
making such Base Rate Committed Loans; provided, that such Base Rate Committed
Loans shall be made notwithstanding the Company's failure to comply with
subsections 5.02(b) and 5.02(c); and provided, further, that if a Borrowing of
Committed Loans becomes legally impracticable and if so required by the
Swingline Bank at the time such Committed Loans are required to be made by the
Banks in accordance with this subsection 2.12(c), each Bank agrees that in lieu
of making Committed Loans as described in this subsection 2.12(c), such Bank
shall purchase a participation from the Swingline Bank in the applicable
Swingline Loans in an amount equal to such Bank's Commitment Percentage of such
Swingline Loans, and the procedures set forth in subsections 2.03(b) and
2.03(c) shall be followed in connection with the purchases of such
participations. Upon such purchases of participations, the prepayment
requirements of subsection 2.09(a)(iv) shall be deemed waived with respect to
such Swingline Loans. The proceeds of such Base Rate Committed Loans, or
participations
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purchased, shall be applied to repay such Swingline Loans. A copy of each
notice given by the Agent to the Banks pursuant to this subsection 2.12(c) with
respect to the making of Committed Loans, or the purchases of participations,
shall be promptly delivered by the Agent to the Company. Each Bank's
obligation in accordance with this Agreement to make the Committed Loans, or
purchase the participations, as contemplated by this subsection 2.12(c), shall
be absolute and unconditional and shall not be affected by any circumstance,
including (1) any set-off, counterclaim, recoupment, defense or other right
which such Bank may have against the Swingline Bank, the Company or any other
Person for any reason whatsoever; (2) the occurrence or continuance of a
Default, an Event of Default or a Material Adverse Effect; or (3) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.
2.13 Fees. In addition to certain fees described in Section 3.08:
(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, BofA and the Arranger dated August
29, 1994 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) 0.075% 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 the Commitment Fee
Percentage. For purposes of calculating utilization under this subsection, (i)
the Aggregate Commitment shall be deemed used to the extent of the Effective
Amount of Committed Loans then outstanding, plus the Effective Amount of L/C
Obligations then outstanding, and (ii) with respect to the Commitment of the
Swingline Bank and each Bid Loan Lender, the making of any Bid Loan or
Swingline Loan, as the case may be, shall not be considered a use of a portion
of such Bid Loan Lender's or Swingline Bank's Commitment. Such commitment fee
shall accrue from the Closing 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
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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 2.07 or Section 2.09, 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 V are not met.
(c) Bid Loan Fee. The Company shall pay to the Agent for
its own account a Bid Loan fee for each Competitive Bid Request submitted by
the Company in the amounts set forth in the letter agreement between the
Company, BofA and the Arranger dated August 29, 1994 and the term sheet
attached thereto. Such Bid Loan fee shall be due and payable on each date the
Company submits a Competitive Bid Request.
2.14 Computation of Fees and Interest.
(a) All computations of interest payable in respect of
Base Rate Committed Loans and Swingline 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.
(b) The Agent will, with reasonable promptness, notify
the Company and the Banks of each determination of an Offshore Rate, LIBO 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 Committed 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
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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.
2.15 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 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
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the date such Bank repays such amount to the Agent, at the Federal Funds Rate
as in effect for each such day.
2.16 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 Committed
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 Committed Borrowing, the Agent may assume that
each Bank has made such amount available to the Agent in immediately available
funds on the Committed 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 Committed
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 2.16(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 such Committed 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 Committed 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 Committed
Borrowing, at a rate per annum equal to the interest rate applicable at the
time to the Committed Loans comprising such Committed Borrowing.
(b) The failure of any Bank to make any Committed Loan on
any date of borrowing shall not relieve any other Bank of any obligation
hereunder to make a Committed Loan on the date of such borrowing, but no Bank
shall be responsible for the failure of any other Bank to make the Committed
Loan to be made by such other Bank on the date of any borrowing.
2.17 Sharing of Payments, Etc. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Committed Loans made
by it any payment (whether voluntary, involuntary, through the exercise of any
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right of set-off, or otherwise) in excess of its Commitment Percentage of
payments on account of the Committed 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 Committed 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 proportionate share (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 2.17 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off, but subject
to Section 11.09) 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
2.17 and will in each case notify the Banks following any such purchases or
repayments. Any Bank or Swingline Bank having outstanding Committed Loans,
Swingline Loans and Bid Loans at any time a right of set-off is exercised by
such Bank or Swingline Bank shall apply the proceeds of such set-off first to
such Bank's Committed Loans, until its Committed Loans are reduced to zero,
then to its Swingline Loans, and thereafter to its Bid Loans.
2.18 Loan Tranches. The Company may, at any time and from time to
time, upon at least five Business Days notice to the Agent, allocate all or a
portion of Committed Borrowings, Bid Borrowings, Swingline Borrowings and L/C
Obligations to a revolving credit facility tranche (the "Revolving Facility
Tranche") or a capital expenditure tranche (the "Capital Expenditure Tranche"),
or both; provided that
(A) at no time shall the Effective
Amount of all Committed Loans, Swingline Loans and Bid Loans
allocated to the Revolving Facility Tranche plus the Effective
Amount of all L/C Obligations exceed $15,000,000;
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(B) at no time shall the Effective
Amount of all Committed Loans, Swingline Loans and Bid Loans
allocated to the Capital Expenditure Tranche exceed
$20,000,000;
(C) upon allocation to the Revolving
Facility Tranche or the Capital Expenditure Tranche, as case
may be, Loans shall remain so allocated notwithstanding any
conversion or continuation of Loans pursuant to Section 2.04;
(D) the Company and each of the Banks
agree that the establishment of the Revolving Facility Tranche
and the Capital Expenditure Tranche is intended to assist the
Company in its compliance with Section 8.05 and the
corresponding provisions of the Note Agreements, the 1994
Senior Note Agreements and the Mortgage Note Agreements.
Accordingly, neither the failure by the Company to comply in
any respect with this Section 2.18 nor the failure by the
Agent or any Bank to identify or remedy such noncompliance
shall give rise to any liability against the Agent or any Bank
or any defense to compliance by the Company with Section 8.05;
and
(E) all Letters of Credit shall be
deemed allocated to the Revolving Facility Tranche.
Such notice of allocation shall specify (i) the effective date of such
allocation which shall not be a date earlier than the date of such notice, (ii)
the aggregate principal amount of Loans (identified by Type of Loan) and L/C
Obligations to be allocated to the Revolving Facility Tranche, the Capital
Expenditure Tranche, or both, as the case may be, and (iii) in the case of
allocations to the Capital Expenditure Tranche, the Company shall represent and
warrant that the proceeds of all Loans allocated thereto have been used solely
to finance capital improvements, expansions and additions to the Company's
property (including Timberlands), plant and equipment. The Agent will promptly
notify the Banks of such notice of allocation of Loans and L/C Obligations.
2.19 Effect of Limitations in Facility A Credit Agreement. Unless
otherwise stated herein to the contrary, the limitations imposed in Article II
and III hereof on the minimum principal amount of each Credit Extension, the
number of Interest Periods in effect and the frequency of Borrowings shall
operate independently of any such limitations imposed on Credit Extensions as
defined in and
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pursuant to the Facility A Credit Agreement and shall not be affected by or
combined with any such limitations therein.
ARTICLE III
THE LETTERS OF CREDIT
3.01 The Letter of Credit Facility.
(a) On the terms and conditions set forth herein, (i)
each Issuing Bank agrees, (A) from time to time on any Business Day during the
period from the Closing Date until 30 days before the Revolving Termination
Date to issue Letters of Credit for the account of the Company or the
Facilities Subsidiary, and to amend or renew Letters of Credit previously
issued by it, in accordance with subsections 3.02(c) and 3.02(d), and (B) to
honor drafts under the Letters of Credit; and (ii) the Banks severally agree to
participate in Letters of Credit Issued for the account of the Company or the
Facilities Subsidiary; provided, that the Issuing Banks shall not be obligated
to Issue, and no Bank shall be obligated to participate in, any Letter of
Credit if as of the date of Issuance of such Letter of Credit (the "Issuance
Date") (1) the Effective Amount of all L/C Obligations plus the Effective
Amount of all Committed Loans, Swingline Loans and Bid Loans exceeds the
Aggregate Commitment, (2) the participation of any Bank in the Effective Amount
of all L/C Obligations plus the Effective Amount of the Committed Loans of such
Bank plus the participation of such Bank, if any, in the Effective Amount of
all Swingline Loans exceeds such Bank's Commitment, or (3) the Effective Amount
of L/C Obligations exceeds the L/C Commitment. Within the foregoing limits,
and subject to the other terms and conditions hereof, the Company's ability to
obtain Letters of Credit shall be fully revolving, and, accordingly, the
Company may, during the foregoing period, obtain Letters of Credit to replace
Letters of Credit which have expired or which have been drawn upon and
reimbursed. The Company shall be primarily liable for all obligations
hereunder and under the L/C-Related Documents with respect to any Letter of
Credit Issued for the account of the Facilities Subsidiary. Notwithstanding
the foregoing, the Company shall cause, for a period of at least 45 consecutive
days during the 364 days after the Closing Date and during each successive 364
day period that the Revolving Termination Date has been extended pursuant to
subsection 2.10(a), no L/C Obligations to be outstanding in accordance with
subsection 2.09(a)(v).
(b) Each of the Issuing Banks is under no obligation to
Issue any Letter of Credit if:
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(i) any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms purport to enjoin or
restrain such Issuing Bank from Issuing such Letter of Credit, or any
Requirement of Law applicable to such Issuing Bank or any request or directive
(whether or not having the force of law) from any Governmental Authority with
jurisdiction over such Issuing Bank shall prohibit, or request that such
Issuing Bank refrain from, the Issuance of letters of credit generally or such
Letter of Credit in particular or shall impose upon such Issuing Bank with
respect to such Letter of Credit any restriction, reserve or capital
requirement (for which such Issuing Bank is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon such Issuing
Bank any unreimbursed loss, cost or expense which was not applicable on the
Closing Date and which such Issuing Bank in good faith deems material to it;
(ii) such Issuing Bank has received written notice
from any Bank, the Agent or the Company, on or prior to the Business Day prior
to the requested date of Issuance of such Letter of Credit, that one or more of
the applicable conditions contained in Article V is not then satisfied;
(iii) the expiry date of any requested Letter of
Credit is (A) more than 364 days after the date of Issuance, unless the
Majority Banks have approved such expiry date in writing, or (B) less than 30
days prior to the Revolving Termination Date, unless all of the Banks have
approved such expiry date in writing;
(iv) the expiry date of any requested Letter of
Credit is prior to the maturity date of any financial obligation to be
supported by the requested Letter of Credit, unless such Letter of Credit is
issued in connection with worker's compensation or to secure self-insurance
deductibles or certain payments required in connection with export log yards,
or all of the Banks have approved such expiry date in writing;
(v) any requested Letter of Credit does not
provide for drafts, or is not otherwise in form and substance reasonably
acceptable to such Issuing Bank, or the Issuance of a Letter of Credit may
violate any policies of such Issuing Bank applicable to customers and credits
of a type similar to the Company and the transactions contemplated in this
Agreement;
(vi) any standby Letter of Credit is for the
purpose of supporting the issuance of any letter of credit by any other Person;
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(vii) such Letter of Credit is in a face amount
less than $100,000 or to be denominated in a currency other than Dollars; or
(viii) the requested Letter of Credit provides for
payment thereunder sooner than the Business Day following the presentation to
such Issuing Bank of the documentation required thereunder.
3.02 Issuance, Amendment and Renewal of Letters of Credit.
(a) Each Letter of Credit shall be issued upon the
irrevocable written request of the Company (or, if such Letter of Credit is to
be for the account of the Facilities Subsidiary, the joint and several
irrevocable written request of the Company and the applicable Facilities
Subsidiary) received by an Issuing Bank (with a copy sent by the Company to the
Agent) at least five days (or such shorter time as such Issuing Bank may agree
in a particular instance in its sole discretion) prior to the proposed date of
issuance. Each such request for issuance of a Letter of Credit shall be made
by an original writing or by facsimile, confirmed immediately in an original
writing, in the form of an L/C Application, and shall specify in form and
detail satisfactory to such Issuing Bank:
(i) the proposed date of issuance of the Letter
of Credit (which shall be a Business Day);
(ii) the face amount of the Letter of Credit;
(iii) the expiry date of the Letter of Credit;
(iv) the name and address of the beneficiary
thereof;
(v) the documents to be presented by the
beneficiary of the Letter of Credit in case of any drawing thereunder;
(vi) the full text of any certificate to be
presented by the beneficiary in case of any drawing thereunder; and
(vii) such other usual and customary matters as the
Issuing Bank may require.
(b) At least three Business Days prior to the Issuance of
any Letter of Credit or any amendment or renewal
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of a Letter of Credit, the Issuing Bank issuing such Letter of Credit will
confirm with the Agent (by telephone or in writing) that the Agent has received
a copy of the L/C Application or L/C Amendment Application from the Company
and, if not, such Issuing Bank will provide the Agent with a copy thereof.
Unless such Issuing Bank has received notice on or before the Business Day
immediately preceding the date such Issuing Bank is to issue, amend or renew a
requested Letter of Credit from the Agent (A) directing such Issuing Bank not
to issue, amend or renew such Letter of Credit because such issuance amendment
or renewal is not then permitted under subsection 3.01(a) as a result of the
limitations set forth in clauses (1) through (3) thereof or subsection
3.01(b)(ii); or (B) that one or more conditions specified in Article V are not
then satisfied; then, subject to the terms and conditions hereof, such Issuing
Bank shall, on the requested date, issue a Letter of Credit for the account of
the Company or amend or renew a Letter of Credit, as the case may be, in
accordance with such Issuing Bank's usual and customary business practices.
(c) From time to time while a Letter of Credit is
outstanding and prior to the Revolving Termination Date, an Issuing Bank will,
upon the written request of the Company received by such Issuing Bank (with a
copy sent by the Company to the Agent) at least five days (or such shorter time
as such Issuing Bank may agree in a particular instance in its sole discretion)
prior to the proposed date of amendment, amend any Letter of Credit issued by
it. Each such request for amendment of a Letter of Credit shall be made by an
original writing or by facsimile, confirmed immediately in an original writing,
made in the form of an L/C Amendment Application and shall specify in form and
detail satisfactory to such Issuing Bank:
(i) the Letter of Credit to be amended;
(ii) the proposed date of amendment of the Letter
of Credit (which shall be a Business Day);
(iii) the nature of the proposed amendment; and
(iv) such other usual and customary matters as
such Issuing Bank may require.
Such Issuing Bank shall be under no obligation to amend any Letter of Credit
if: (A) such Issuing Bank would have no obligation at such time to issue such
Letter of Credit in its amended form under the terms of this Agreement; or (B)
the beneficiary of any such letter of Credit does not accept the proposed
amendment to the Letter of Credit. The
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Agent will promptly notify the Banks of the receipt by it of any L/C
Application or L/C Amendment Application.
(d) Each Issuing Bank and the Banks agree that, while a
Letter of Credit is outstanding and prior to the Revolving Termination Date, at
the option of the Company and upon the written request of the Company received
by an Issuing Bank (with a copy sent by the Company to the Agent) at least five
days (or such shorter time as such Issuing Bank may agree in a particular
instance in its sole discretion) prior to the proposed date of notification of
renewal, such Issuing Bank shall be entitled to authorize the automatic renewal
of any Letter of Credit issued by it. Each such request for renewal of a
Letter of Credit shall be made by an original writing or by facsimile,
confirmed immediately in an original writing, in the form of an L/C Amendment
Application, and shall specify in form and detail satisfactory to such Issuing
Bank:
(i) the Letter of Credit to be renewed;
(ii) the proposed date of notification of renewal
of the Letter of Credit (which shall be a Business Day);
(iii) the revised expiry date of the Letter of
Credit; and
(iv) such other usual and customary matters as the
Issuing Bank may require.
Such Issuing Bank shall be under no obligation so to renew any Letter of Credit
if: (A) such Issuing Bank would have no obligation at such time to issue or
amend such Letter of Credit in its renewed form under the terms of this
Agreement; or (B) the beneficiary of any such Letter of Credit does not accept
the proposed renewal of the Letter of Credit. If any outstanding Letter of
Credit shall provide that it shall be automatically renewed unless the
beneficiary thereof receives notice from such Issuing Bank that such Letter of
Credit shall not be renewed, and if at the time of renewal such Issuing Bank
would be entitled to authorize the automatic renewal of such Letter of Credit
in accordance with this subsection 3.02(d) upon the request of the Company but
such Issuing Bank shall not have received any L/C Amendment Application from
the Company with respect to such renewal or other written direction by the
Company with respect thereto, such Issuing Bank shall nonetheless be permitted
to allow such Letter of Credit to renew, and the Company and the Banks hereby
authorize such renewal, and, accordingly, such Issuing Bank shall be deemed to
have
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received an L/C Amendment Application from the Company requesting such renewal.
(e) In connection with Letters of Credit that
automatically renew or extend their expiry date, each Issuing Bank may, at its
election (or as required by the Agent at the direction of the Majority Banks),
deliver any notices of termination or other communications to any Letter of
Credit beneficiary or transferee, and take any other action as necessary or
appropriate, at any time and from time to time, in order to cause the expiry
date of such Letter of Credit to be a date not later than the Revolving
Termination Date.
(f) This Agreement shall control in the event of any
conflict with any L/C-Related Document (other than any Letter of Credit).
(g) Each Issuing Bank will also deliver to the Agent,
concurrently or promptly following its delivery of a Letter of Credit, or
amendment to or renewal of a Letter of Credit, to an advising bank or a
beneficiary, a true and complete copy of each such Letter of Credit or
amendment to or renewal of a Letter of Credit.
(h) Each Issuing Bank shall deliver to the Agent such
reports with respect to the Letters of Credit as the Agent may reasonably
request from time to time.
3.03 Risk Participations, Drawings and Reimbursements.
(a) Immediately upon the Issuance of each Letter of
Credit, each Bank shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Issuing Bank issuing such Letter
of Credit a participation in such Letter of Credit and each drawing thereunder
in an amount equal to the product of (i) the Commitment Percentage of such
Bank, times (ii) the maximum amount available to be drawn under such Letter of
Credit and the amount of such drawing, respectively. For purposes of Section
2.01, each Issuance of a Letter of Credit shall be deemed to utilize the
Commitment of each Bank by an amount equal to the amount of such participation.
(b) In the event of any request for a drawing under a
Letter of Credit by the beneficiary or transferee thereof, the Issuing Bank
which issued such Letter of Credit will promptly notify the Company. The
Company shall reimburse such Issuing Bank, directly or with the proceeds of a
Loan, prior to 10:00 a.m. (San Francisco time), on each date that any amount is
paid by such Issuing Bank under any
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Letter of Credit (each such date, an "Honor Date"), in an amount equal to the
amount so paid by such Issuing Bank. If the Company fails to reimburse such
Issuing Bank for the full amount of any drawing under any Letter of Credit by
10:00 a.m. (San Francisco time) on the Honor Date, such Issuing Bank will
promptly notify the Agent and the Agent will promptly notify each Bank thereof,
and the Company shall be deemed to have requested that Base Rate Committed
Loans be made by the Banks to be disbursed on the Honor Date under such Letter
of Credit, subject to the amount of the unutilized portion of the Commitment
and subject to the conditions set forth in Section 5.02. Any notice given by
such Issuing Bank or the Agent pursuant to this subsection 3.03(b) may be oral
if immediately confirmed in writing (including by facsimile); provided that the
lack of such an immediate confirmation shall not affect the conclusiveness or
binding effect of such notice.
(c) Each Bank shall upon any notice pursuant to
subsection 3.03(b) make available to the Agent for the account of the relevant
Issuing Bank an amount in Dollars and in immediately available funds equal to
its Commitment Percentage of the amount of the drawing, whereupon the
participating Banks shall (subject to subsection 3.03(d)) each be deemed to
have made a Loan consisting of a Base Rate Committed Loan to the Company in
that amount. If any Bank so notified fails to make available to the Agent for
the account of such Issuing Bank the amount of such Bank's Commitment
Percentage of the amount of the drawing by no later than 12:00 noon (San
Francisco time) on the Honor Date, then interest shall accrue on such Bank's
obligation to make such payment, from the Honor Date to the date such Bank
makes such payment, at a rate per annum equal to the Federal Funds Rate in
effect from time to time during such period. The Agent will promptly give
notice of the occurrence of the Honor Date, but failure of the Agent to give
any such notice on the Honor Date or in sufficient time to enable any Bank to
effect such payment on such date shall not relieve such Bank from its
obligations under this Section 3.03.
(d) With respect to any unreimbursed drawing that is not
converted into Loans consisting of Base Rate Committed Loans to the Company in
whole or in part, because of the Company's failure to satisfy the conditions
set forth in Section 5.02 or for any other reason, the Company shall be deemed
to have incurred from the relevant Issuing Bank an L/C Borrowing in the amount
of such drawing, which L/C Borrowing shall be due and payable on demand
(together with interest) and shall bear interest at a rate per annum equal to
the Base Rate plus 2% per annum, and each Bank's payment to such Issuing Bank
pursuant to subsection 3.03(c) shall be
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deemed payment in respect of its participation in such L/C Borrowing and shall
constitute an L/C Advance from such Bank in satisfaction of its participation
obligation under this Section 3.03.
(e) Each Bank's obligation in accordance with this
Agreement to make the Loans or L/C Advances, as contemplated by this Section
3.03, as a result of a drawing under a Letter of Credit, shall be absolute and
unconditional and without recourse to the relevant Issuing Bank and shall not
be affected by any circumstance, including (i) any set-off, counterclaim,
recoupment, defense or other right which such Bank may have against such
Issuing Bank, the Company or any other Person for any reason whatsoever; (ii)
the occurrence or continuance of a Default, an Event of Default or a Material
Adverse Effect; or (iii) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing; provided, however, that each
Bank's obligation to make Committed Loans under this Section 3.03 is subject to
the conditions set forth in Section 5.02.
3.04 Repayment of Participations.
(a) Upon (and only upon) receipt by the Agent for the
account of an Issuing Bank of immediately available funds from the Company (i)
in reimbursement of any payment made by such Issuing Bank under the Letter of
Credit with respect to which any Bank has paid the Agent for the account of
such Issuing Bank for such Bank's participation in the Letter of Credit
pursuant to Section 3.03 or (ii) in payment of interest thereon, the Agent will
pay to each Bank, in the same funds as those received by the Agent for the
account of such Issuing Bank, the amount of such Bank's Commitment Percentage
of such funds, and such Issuing Bank shall receive the amount of the Commitment
Percentage of such funds of any Bank that did not so pay the Agent for the
account of such Issuing Bank.
(b) If the Agent or an Issuing Bank is required at any
time to return to the Company, or to a trustee, receiver, liquidator,
custodian, or any official in any Insolvency Proceeding, any portion of the
payments made by the Company to the Agent for the account of such Issuing Bank
pursuant to subsection 3.04(a) in reimbursement of a payment made under the
Letter of Credit or interest or fee thereon, each Bank shall, on demand of the
Agent, forthwith return to the Agent or such Issuing Bank the amount of its
Commitment Percentage of any amounts so returned by the Agent or such Issuing
Bank plus interest thereon from the date such demand is made to the date such
amounts are returned by such Bank to the Agent or such Issuing Bank, at
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a rate per annum equal to the Federal Funds Rate in effect from time to time.
3.05 Role of the Issuing Bank.
(a) Each Bank and the Company agree that, in paying any
drawing under a Letter of Credit, each of the Issuing Banks shall not have any
responsibility to obtain any document (other than any sight draft and
certificates expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document.
(b) No Agent-Related Person, ABN, nor any of the
respective correspondents, participants or assignees of the Issuing Banks shall
be liable to any Bank for: (i) any action taken or omitted in connection
herewith at the request or with the approval of the Banks (including the
Majority Banks, as applicable); (ii) any action taken or omitted in the absence
of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any L/C-Related Document.
(c) The Company hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided, however, that this assumption is not intended to,
and shall not, preclude the Company's pursuing such rights and remedies as it
may have against the beneficiary or transferee at law or under any other
agreement. No Agent-Related Person, ABN, nor any of the respective
correspondents, participants or assignees of an Issuing Bank, shall be liable
or responsible for any of the matters described in clauses (i) through (vii) of
Section 3.06; provided, however, anything in such clauses to the contrary
notwithstanding, that the Company may have a claim against an Issuing Bank, and
such Issuing Bank may be liable to the Company, to the extent, but only to the
extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Company which the Company proves were caused by such Issuing
Bank's willful misconduct or gross negligence or such Issuing Bank's willful or
grossly negligent failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing: (i) each Issuing Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary; and (ii) such
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Issuing Bank shall not be responsible for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason.
3.06 Obligations Absolute. The obligations of the Company under this
Agreement and any L/C-Related Document to reimburse each Issuing Bank for a
drawing under a Letter of Credit, and to repay any L/C Borrowing and any
drawing under a Letter of Credit converted into Loans shall be unconditional
and irrevocable, and shall be paid strictly in accordance with the terms of
this Agreement and each such other L/C-Related Document under all
circumstances, including the following:
(i) any lack of validity or enforceability of
this Agreement or any L/C-Related Document;
(ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the obligations of the
Company in respect of any Letter of Credit or any other amendment or waiver of
or any consent to departure from all or any of the L/C-Related Documents;
(iii) the existence of any claim, set-off, defense
or other right that the Company may have at any time against any beneficiary or
any transferee of any Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the Issuing Banks or any
other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by the L/C-Related Documents or any unrelated
transaction;
(iv) any draft, demand, certificate or other
document presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any Letter
of Credit;
(v) any payment by an Issuing Bank under any
Letter of Credit against presentation of a draft or certificate that does not
strictly comply with the terms of any Letter of Credit; or any payment made by
such Issuing Bank under any Letter of Credit to any Person purporting to be a
trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to any
beneficiary or any
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transferee of any Letter of Credit, including any arising in connection with
any Insolvency Proceeding;
(vi) any exchange, release or non-perfection of
any collateral, or any release or amendment or waiver of or consent to
departure from any other guarantee, for all or any of the obligations of the
Company in respect of any Letter of Credit; or
(vii) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Company or a guarantor.
3.07 Cash Collateral Pledge. Upon (i) the request of the Agent, (A)
if an Issuing Bank has honored any full or partial drawing request on any
Letter of Credit and such drawing has resulted in an L/C Borrowing hereunder,
or (B) if, as of the Revolving Termination Date, any Letters of Credit may for
any reason remain outstanding and partially or wholly undrawn, or (ii) the
occurrence of the circumstances described in subsection 2.09 requiring the
Company to Cash Collateralize Letters of Credit, then, the Company shall
immediately Cash Collateralize the L/C Obligations in an amount equal to the
L/C Obligations. The Company hereby grants to the Agent, for the benefit of
the Agent, the Issuing Banks and the Banks, a security interest in all such
cash and deposit account balances used to Cash Collateralize the Company's
obligations hereunder.
3.08 Letter of Credit Fees.
(a) The Company shall pay to the Agent for the account of
each of the Banks a letter of credit fee with respect to the Letters of Credit
on the average daily maximum amount available to be drawn of the outstanding
Letters of Credit, computed on a quarterly basis in arrears on the last
Business Day of each calendar quarter based upon Letters of Credit outstanding
for that quarter as calculated by the Agent, equal to the Letter of Credit
Rate. Such letter of credit fees shall be due and payable quarterly in arrears
on the last Business Day of each calendar quarter during which Letters of
Credit are outstanding, commencing on the first such quarterly date to occur
after the Closing Date, through the Revolving Termination Date (or such later
date upon which the outstanding Letters of Credit shall expire), with the final
payment to be made on the Revolving Termination Date (or such later expiration
date).
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(b) The Company shall pay to the Agent for the account of
each Issuing Bank a letter of credit fronting fee per annum with respect to the
outstanding Letters of Credit issued by such Issuing Bank equal to 0.125% per
annum of the average daily maximum amount available to be drawn under such
outstanding Letters of Credit, computed on a quarterly basis in arrears on the
last Business Day of each calendar quarter based upon Letters of Credit issued
by such Issuing Bank outstanding for that quarter as calculated by the Agent.
Such fronting fees shall be due and payable quarterly in arrears on the last
Business Day of each calendar quarter during which Letters of Credit are
outstanding, commencing on the first such quarterly date to occur after the
Closing Date, through the Revolving Termination Date (or such later date upon
which the outstanding Letters of Credit shall expire), with the final payment
to be made on the Revolving Termination Date (or such later expiration date).
(c) The Company shall pay to each Issuing Bank from time
to time on demand the normal issuance, presentation, amendment and other
processing fees, and other standard costs and charges, of such Issuing Bank
relating to letters of credit as from time to time in effect.
3.09 Uniform Customs and Practice. The Uniform Customs and Practice
for Documentary Credits as published by the International Chamber of Commerce
("UCP") most recently at the time of issuance of any Letter of Credit shall
(unless otherwise expressly provided in the Letters of Credit) apply to the
Letters of Credit.
ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY
4.01 Taxes.
(a) Subject to subsection 4.01(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 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,
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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 4.01(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 4.01) 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 4.01(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
4.01) 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.
(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:
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(i) it shall, no later than the Closing Date (or,
in the case of a Bank which becomes a party hereto pursuant to Section
11.08 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 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 4.01(d) to any Bank for the account of any Lending Office of such
Bank:
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(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 4.01(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 4.01(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 4.01(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 4.01(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.
(i) If the Company is required to pay additional amounts
to any Bank or the Agent pursuant to subsection 4.01(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.
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4.02 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 (including in respect of any LIBOR Bid Loan as
to which the Company has accepted such Bank's Competitive Bid, but as to which
the borrowing date thereof has not arrived) shall be suspended until the Bank
shall have notified the Agent and the Company that the circumstances giving
rise to such determination no longer exist.
(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 4.04. If the Company is required to so prepay
any Offshore Rate Committed Loan, then concurrently with such prepayment, the
Company may borrow from the affected Bank, in the amount of such repayment, a
Base Rate Committed Loan.
(c) If the obligation of any Bank to make or maintain
Offshore Rate Committed Loans has been so terminated or suspended, the Company
may elect, by giving notice to the Bank through the Agent that all Loans which
would otherwise be made by the Bank as Offshore Rate Committed Loans shall be
instead Base Rate Committed Loans.
(d) Before giving any notice to the Agent under this
Section, the affected Bank shall designate a different Lending Office with
respect to its Offshore Rate Loans if such designation will avoid the need for
giving such notice or making such demand and will not, in the judgment of the
Bank, be illegal or otherwise disadvantageous to the Bank.
4.03 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
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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 Committed Loans or participating
in Letters of Credit, or, in the case of an Issuing Bank, any increase in the
cost to such Issuing Bank of agreeing to issue, issuing or maintaining any
Letter of Credit or of agreeing to make or making, funding or maintaining any
unpaid drawing under any Letter of Credit, then the Company shall be liable
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.
4.04 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
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Loan or CD Rate Committed 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 of
any Committed Loan or Swingline Loan after the Company has given a notice in
accordance with Section 2.08;
(d) the prepayment (including pursuant to Section 2.08 or
2.09) of an Offshore Rate Loan, CD Rate Committed Loan or Absolute Rate Bid
Loan on a day which is not the last day of the Interest Period with respect
thereto;
(e) the conversion pursuant to Section 2.04 of (i) any
Offshore Rate Committed Loan to a CD Rate Committed Loan or a Base Rate
Committed Loan, or (ii) any CD Rate Committed Loan to an Offshore Rate
Committed Loan or Base Rate Committed Loan, on a day that is not the last day
of the respective Interest Period; or
(f) the failure of the Company to borrow any Bid Loan
after having accepted a Competitive Bid therefor;
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
Committed Loans or Absolute Rate Bid Loan hereunder or from fees payable to
terminate the deposits from which such funds were obtained.
4.05 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, LIBO Rate or the CD Rate for any requested
Interest Period with respect to a proposed Offshore Rate Loan or CD Rate
Committed Loan or that the Offshore Rate, LIBO Rate or the CD Rate applicable
pursuant to subsection 2.11(a) for any requested Interest Period with respect
to a proposed Offshore Rate Loan or CD Rate Committed 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 Committed
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
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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 Committed Loans instead of
CD Rate Committed Loans or Offshore Rate Committed Loans, as the case may be.
4.06 Certificate of Bank. Each Bank, if claiming reimbursement or
compensation pursuant to this Article IV, 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.
4.07 Survival. The covenants, agreements and obligations of the
Company in this Article IV shall survive the payment of all other Obligations.
ARTICLE V
CONDITIONS PRECEDENT
5.01 Conditions of Initial Credit Extensions. The obligation of each
Bank to make its initial Credit Extension 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 5.01(h) and (i), the Majority Banks, and in sufficient
copies for each Bank:
(a) Credit Agreement. This Agreement executed by the
Company, the Agent, the Co-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
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(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, 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, provided, however,
that if the Company is unable to deliver on the Closing Date any
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such bring down certificate (other than the bring down certificate
from the state of incorporation or formation of such Person) because
bring down certificates are not readily provided by the applicable
Secretary of State, the Company shall not be required to deliver such
bring down certificate on the Closing Date but instead shall deliver
it to the Agent within five days of 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 2.13, 4.01 and 11.04;
(f) Certificate. A certificate signed by a Responsible
Officer, dated as of the Closing Date, stating that:
(i) the representations and warranties contained
in Article VI 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 Credit Extension; and
(iii) there has occurred since December 31, 1993,
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 6.11;
(h) Credit Agreements. Copies certified by a Responsible
Officer of the Note Agreements, as amended, the
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Mortgage Note Agreements, as amended, and the 1994 Senior Note Agreements;
(i) Other Documents. Such other approvals, opinions,
documents or materials as the Agent or the Majority Banks may request;
(j) Facility A Credit Agreement. All conditions
precedent to the initial extension of credit under the Facility A Credit
Agreement shall have occurred prior to or simultaneously with the Closing; and
(k) Termination of Existing ABN Credit Facilities. On or
before the Closing Date, the Company shall have terminated (i) that certain
$15,000,000 Revolving Credit Agreement dated as of May 1, 1993 between the
Company, ABN, as agent, and the banks party thereto, as amended, and (ii) that
certain $20,000,000 Revolving Credit Agreement dated as of May 1, 1993 between
the Facilities Subsidiary, ABN, as agent, and the banks party thereto, as
amended.
5.02 Conditions to All Credit Extensions. The obligation of each Bank
and the Swingline Bank to make any Loans to be made by it, or any Bid Loan as
to which the Company has accepted the relevant Competitive Bid (including its
initial Loan) or to continue or convert any Committed Loan pursuant to Section
2.04, and the obligation of each Issuing Bank to Issue any Letter of Credit
(including the initial Letter of Credit) is subject to the satisfaction of the
following conditions precedent on the relevant date of Borrowing,
Conversion/Continuation Date or Issuance Date:
(a) Notice, Application. As to any Committed Loan or
Swingline Loan, 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
Conversion/Continuation, as applicable, or in the case of any Issuance of any
Letter of Credit, the relevant Issuing Bank and the Agent shall have received
an L/C Application or L/C Amendment Application, as required under Section
3.02;
(b) Continuation of Representations and Warranties. The
representations and warranties made by the Company contained in Article VI
shall be true and correct on and as of such date of Borrowing or
Conversion/Continuation Date with the same effect as if made on and as of such
date of Borrowing or Conversion/Continuation 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 Credit Extension.
Each Notice of Borrowing, Notice of Conversion/Continuation, Competitive Bid
Request and L/C Application or L/C Amendment Application submitted by the
Company hereunder shall constitute a representation and warranty by the Company
hereunder, as of the date of each such notice, request or application and as of
the date of each Borrowing, each Conversion/Continuation Date, or Issuance
Date, as applicable, that the conditions in Section 5.02 are satisfied.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Bank that:
6.01 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.
6.02 Authorization; No Contravention. The execution, delivery and
performance by the Company of this Agreement,
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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.
6.03 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.
6.04 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.
6.05 Litigation. There are no actions, suits, proceedings, claims or
disputes pending, or to the Company's Knowledge and the knowledge of 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
(b) have a reasonable probability of success on the
merits and which, if determined adversely to the
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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.
6.06 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 9.01(f).
6.07 ERISA Compliance.
(a) Schedule 6.07 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 6.07,
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
Company's Knowledge nothing has occurred which would cause the loss of such
qualification or tax-exempt status.
(d) Except as specifically disclosed in Schedule 6.07,
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 any Plan to which the Company or any ERISA Affiliate contributes or
is obligated to contribute.
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(e) Except as specifically disclosed in Schedule 6.07, no
Plan subject to Title IV of ERISA has any Unfunded Pension Liability.
(f) Except as specifically disclosed in Schedule 6.07, 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 6.07, no
ERISA Event has occurred or, to the Company's Knowledge is reasonably expected
to occur with respect to any Plan.
(i) There are no pending or, to the Company's Knowledge,
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 6.07,
neither the Company nor any ERISA Affiliate has incurred nor, to the Company's
Knowledge, 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 ERISA (other than
premiums due and not delinquent under Section 4007 of ERISA) with respect to a
Plan.
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(k) Except as specifically disclosed in Schedule 6.07,
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.
6.08 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 7.11, and are intended to be and shall be used in
compliance with Section 8.07. 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.
6.09 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.
6.10 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.
6.11 Financial Condition.
(a) The audited combined financial statements of
financial condition of the Company and its Subsidiaries
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dated December 31, 1993, 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, 1993, there has been no Material
Adverse Effect.
6.12 Environmental Matters.
(a) Except as specifically disclosed in Schedule 6.12,
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 6.12,
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 6.12,
none of the Company, the Partner Entities, 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,
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Environmental Claim or Hazardous Material arising out of a violation or alleged
violation of any Environmental Law.
(d) Except as specifically disclosed in Schedule 6.12,
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.
6.13 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.
6.14 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.
6.15 Solvency. The Company, the General Partner, the Facilities
Subsidiary, and the Restricted Subsidiaries are each Solvent.
6.16 Labor Relations. There are no material strikes, lockouts or
other labor disputes against the Company or any of its Subsidiaries, or, to 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
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Subsidiaries or, to the Company's Knowledge, threatened against any of them
before any Governmental Authority.
6.17 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 Company's Knowledge, 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 6.05, no claim or litigation regarding any
of the foregoing is pending or, to the Company's Knowledge, threatened, and no
patent, invention, device, application, principle or any statute, law, rule,
regulation, standard or code is pending or, to the Company's Knowledge,
proposed, which, in either case, would reasonably be expected to have a
Material Adverse Effect.
6.18 Subsidiaries. The Company has no Subsidiaries other than those
specifically disclosed in part (a) of Schedule 6.18 hereto and has no equity
investments in any other corporation or entity other than those specifically
disclosed in part (b) of Schedule 6.18. Except as disclosed in part (a) of
Schedule 6.18, 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.
6.19 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.
6.20 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.
6.21 Insurance. The Properties of the Company and its Subsidiaries
are insured with financially sound and reputable insurance companies not
Affiliates of the Company,
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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.
6.22 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, 469 MMBF of its fee Timber during calendar year 1992
and 458 MMBF of its fee Timber during calendar year 1993.
6.23 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 VII
AFFIRMATIVE COVENANTS
The Company covenants and agrees that, so long as any Bank shall have
any Commitment hereunder, or the Swingline Bank shall have any Swingline
Commitment hereunder, or any Loan or other Obligation shall remain unpaid or
unsatisfied, or any Letter of Credit remains outstanding, unless the Majority
Banks waive compliance in writing:
7.01 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 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
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independent public accounting firm ("Independent Auditor") 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 Independent Auditor 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 Independent Auditor 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 7.01;
(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 7.01;
(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.
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7.02 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 7.01(a) above, a certificate of the
Independent Auditor 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 7.01(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 the Applicable Margin to be in
effect for the immediately following fiscal quarter, and (iii) showing in
detail the calculations supporting such statement in respect of subsection
8.02(h), Section 8.03, subsection 8.04(i), Section 8.05 and Section 8.13, and
supporting the computation of the Fixed Charge Coverage 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.
7.03 Notices. The Company shall promptly upon becoming aware thereof
notify the Agent and each Bank:
(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 Credit Extension set forth in subsection 5.02(b) not to
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be satisfied if a Credit Extension 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;
(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;
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(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 7.01(a) or 5.01(g); and
(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 7.03(a) shall describe with particularity any and all clauses or
provisions of this Agreement or other Loan Document that have been breached or
violated.
7.04 Preservation of Corporate Existence, Etc. The Company shall,
except as permitted by Section 8.02, 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;
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(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.
7.05 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.
7.06 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.
7.07 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;
and
(b) all Indebtedness, as and when due and payable, but
subject to any subordination provisions contained in any instrument or
agreement evidencing such Indebtedness.
7.08 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
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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.
7.09 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.
7.10 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 notice or report required pursuant to subsection 7.03(d),
that could, individually or in the aggregate, result in liability in excess of
$25,000,000.
7.11 Use of Proceeds. The Company shall use the proceeds of the Loans
solely as follows: (a) to refinance existing Indebtedness, and (b) for working
capital and other general corporate purposes not in contravention of any
Requirement of Law or of any Loan Document.
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7.12 Solvency. The Company shall at all times be, and shall cause
each of its Restricted Subsidiaries to be, Solvent.
ARTICLE VIII
NEGATIVE COVENANTS
The Company hereby covenants and agrees that, so long as any Bank
shall have any Commitment hereunder, or the Swingline Bank shall have any
Swingline Commitment hereunder, or any Loan or other Obligation shall remain
unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, unless
the Majority Banks waive compliance in writing:
8.01 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
7.07, 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 (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
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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 8.05, (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) from May 31, 1994 to May 31, 1999, exceeds
$25,000,000, and (b) from May 31, 1999 to the Maturity 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
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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 8.05(d);
(i) any Lien existing on the Property of the Company or
its Restricted Subsidiaries on the Closing Date and set forth in Schedule 8.01
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.
8.02 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;
(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;
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(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 any
state of the United States and shall expressly assume in writing all of the
obligations of the Company under this Agreement, the Facility A Credit
Agreement, the Note Agreements, the 1994 Senior 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 Facility A Credit Agreement, the Note Agreements, the 1994 Senior 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 8.05(i), 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 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
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basis or of the Facilities Subsidiary or impair the ability of the Company to
perform its obligations hereunder and under the Facility A Credit Agreement,
the Note Agreements, the 1994 Senior 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 8.02;
(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 1994, $3,210,000 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; and
(i) the Company and its Restricted Subsidiaries may
otherwise sell Properties for cash 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, within 180 days after
such sale, 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) if the Net Proceeds
of (x) any such sale exceed $25,000,000, the entire amount of such Net Proceeds
are 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 (y) all such sales which are not then
held in escrow or cash collateral accounts pursuant to subclause (iii)(x) and
which have not been applied to the purchase of productive assets in the same
line of business or distributed to the holders of Qualified Debt for
application to the repayment of such Qualified Debt exceed $50,000,000 in the
aggregate at any
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time, all such Net Proceeds in excess of $50,000,000 are 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 incur $1 of additional Funded Debt pursuant to
subsection 8.05(i); provided, however, that the Company and its Restricted
Subsidiaries may not sell properties that constitute the Company's Columbia
River Unit unless the Note Agreements shall have been amended so as (A) to
delete paragraph 6B(5)(viii) thereof as set forth in that certain Senior Note
Agreement Amendment dated as of September 1, 1993 and (B) to provide for the
application of the Net Proceeds of the sale of the properties that constitute
the Columbia River Unit substantially as provided in this subsection 8.02(i).
8.03 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>
1994 (including 735 MMBF
of prior years
cumulative carryover
harvest 1435 MMBF
1995 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 (a) the Net Proceeds from such excess harvest are either (i) applied,
within 180 days after any such excess harvest, pro rata (based on the then
outstanding principal of all Qualified Debt) to the holders of all Qualified
Debt, or (ii) applied, within 180 days after any such excess harvest, to
purchase Timber (including Timber on Timberlands
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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.
8.04 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 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 8.13 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 8.04) 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 8.04;
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(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 8.05(f) 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 8.01(c), advances to employees for travel, relocation and other
employment related expenses, advances to contractors performing services for
the Company or such Restricted Subsidiary, advances to owners of timber or
timber properties to acquire rights to harvest timber and other similar
advances;
(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 8.04 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 8.04) 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.
8.05 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) Funded Debt represented by the Notes and the 1994
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 1994 Notes and the documentation relating
thereto;
(b) 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
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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;
(c) Indebtedness of any Restricted Subsidiary owing to
the Company or to a Restricted Subsidiary;
(d) Indebtedness incurred by the Company pursuant to the
Revolving Credit Facility (and any extension, renewal, refunding or refinancing
thereof, including any refunding or refinancing in an amount in excess of the
principal amount then outstanding under the Revolving Credit Facility), or any
other Indebtedness pursuant to a bank credit facility which is unsecured or is
secured by Liens permitted by subsection 8.01(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
(d) 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
(d);
(e) 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;
(f) 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;
(g) 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
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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;
(h) Funded Debt of the Company or any Restricted
Subsidiary secured by a Lien permitted by subsection 8.01(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 the Indebtedness
secured by such Lien), the Company could incur at least $1 of additional Funded
Debt pursuant to subsection (i) below;
(i) 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 8.05, including guarantees of
Indebtedness to the extent permitted by Section 8.04 and not otherwise
permitted by the foregoing subsections of this Section 8.05, 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 (but not including Funded Debt incurred under this
Agreement or the Facility A Credit Agreement) shall not exceed $400,000,000;
(j) 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 8.01(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 (j) 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 (j); and
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(k) 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 to subsection (i) 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 8.01(g) does not violate subclause
(iv) to the proviso to such subsection (g).
8.06 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.
8.07 Use of Proceeds.
(a) The Company shall not and shall not suffer or permit
any of its Subsidiaries to use any portion of the proceeds of the Loans or
other Credit Extension, 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.
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(b) The Company shall not and shall not suffer or permit
any of its Subsidiaries to use any portion of the proceed of the Loans or other
Credit Extension, directly or indirectly, (i) knowingly to purchase Ineligible
Securities from a Section 20 Subsidiary during any period in which such Section
20 Subsidiary makes a market in such Ineligible Securities, (ii) knowingly to
purchase during the underwriting or placement period Ineligible Securities
being underwritten or privately placed by a Section 20 Subsidiary, or (iii) to
make payments of principal or interest on Ineligible Securities underwritten or
privately placed by a Section 20 Subsidiary and issued by or for the benefit of
the Company or any Affiliate of the Company. As used in this Section, "Section
20 Subsidiary" means the Subsidiary of the bank holding company controlling any
Bank, which Subsidiary has been granted authority by the Federal Reserve Board
to underwrite and deal in certain Ineligible Securities; and "Ineligible
Securities" means securities which may not be underwritten or dealt in by
member banks of the Federal Reserve System under Section 16 of the Banking Act
of 1933 (as U.S.C. Section 24, Seventh), as amended.
(c) After the date the Company has notified the Agent
that the Company intends to allocate Loans to the Capital Expenditure Tranche
and to qualify such Capital Expenditure Tranche Loans as Indebtedness permitted
under subsection 8.05(b), the Company shall not and shall not suffer any of its
Subsidiaries to use the proceeds of Capital Expenditure Tranche Loans for
purposes other than to finance capital improvements, expansions and additions
to the Company's property (including Timberlands), plant and equipment.
8.08 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, provided that the
assets of such Subsidiary do not include any assets which could not be disposed
of pursuant to the provisions of Section 8.02 unless the conditions to the sale
of such assets set forth in Section 8.02 are complied with, and further
provided that, at the time of
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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 8.08).
8.09 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 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
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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 8.04(a), (e), (f), (g), (h)
or (i).
8.10 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.
8.11 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.
8.12 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 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
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obligations of the Company or any Restricted Subsidiary, provided that this
Section 8.12 shall not apply to any property sold pursuant to subsection
8.02(h).
8.13 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 and the
1994 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 and the "Loans" as defined in the Facility
A Credit Agreement to be paid on the respective Interest Payment Dates for such
Loans and such "Loans" during the calendar quarter immediately following such
immediately preceding calendar quarter, (iii) 25% of the aggregate amount of
all principal in respect of the Notes and the 1994 Notes scheduled to be paid
(determined in accordance with the proviso in clause (ii) of the definition of
"Fixed Charge Coverage Ratio") 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 any scheduled
reductions (determined in accordance with the proviso in clause (ii) of the
definition of "Fixed Charge Coverage Ratio") in the Commitments and the
"Commitments" as defined in the Facility A Credit Agreement 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
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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
subsection 8.13(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 Commitments and the "Commitments" as defined in the Facility A
Credit Agreement 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.
8.14 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.
8.15 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.
8.16 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 or
the ability of the Company to perform its obligations under any Loan Document.
8.17 Available Cash. The Company shall not at any time permit
Available Cash to be less than zero. For purposes of this Section 8.17, 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
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than (a) 50% of the aggregate amount of all interest in respect of the Notes
and the 1994 Notes to be paid on the interest date immediately following such
immediately preceding calendar quarter, (b) 100% of the aggregate amount of all
interest in respect of the Loans and the "Loans" as defined in the Facility A
Credit Agreement to be paid on the respective Interest Payment Dates for such
Loans and such "Loans" during the calendar quarter immediately following such
immediately preceding calendar quarter, (c) 25% of the aggregate amount of all
principal in respect of the Notes and the 1994 Notes scheduled to be paid
(determined in accordance with the proviso in clause (ii) of the definition of
"Fixed Charge Coverage Ratio") 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 any scheduled
reductions (determined in accordance with the proviso in clause (ii) of the
definition of "Fixed Charge Coverage Ratio") in the Commitments and the
"Commitments" as defined in the Facility A Credit Agreement 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 8.17, 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 Commitments and the
"Commitments" as defined in the Facility A Credit Agreement during the 12
calendar months immediately following such immediately preceding calendar
quarter.
ARTICLE IX
EVENTS OF DEFAULT
9.01 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 of any
L/C Obligation, or any amount of interest on any Bid Loan, or (ii) within 5
days after the same shall become due, any interest (other than interest on Bid
Loans), fee or any other amount payable hereunder or pursuant to any other Loan
Document; or
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(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
(c) Specific Defaults. The Company fails to perform or
observe any term, covenant or agreement contained in Sections 7.03 or 7.09 or
Article VIII; 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) Facility A Credit Agreement Cross-Default. An Event
of Default shall have occurred as that term is defined in the Facility A Credit
Agreement; or
(f) 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
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(g) 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
(h) 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 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
(i) 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
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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 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
(j) 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
(k) 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
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(l) Auditors. The Agent or any Bank shall receive notice
from the Independent Auditor that the Agent and the Banks should no longer use
or rely upon any audit report or other financial data provided by the
Independent Auditor; or
(m) 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.
9.02 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 and the Swingline
Commitment of the Swingline Bank to make Loans and any obligation of the
Issuing Banks to issue Letters of Credit to be terminated, whereupon such
Commitments and obligations shall forthwith be terminated;
(b) declare an amount equal to the maximum aggregate
amount that is or at any time thereafter may become available for drawing under
any outstanding Letters of Credit (whether or not any beneficiary shall have
presented, or shall be entitled at such time to present, the drafts or other
documents required to draw under such Letters of Credit) to be immediately due
and payable, and 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
(g) or (h) of Section 9.01 above (in the case of clause (i) of paragraph (h)
upon the expiration of the 60-day period mentioned therein), the obligation of
each Bank and the Swingline Bank to make Loans and any obligation of the
Issuing Banks to Issue Letters of Credit shall automatically terminate and the
unpaid principal
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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,
the Issuing Banks, the Swingline Bank, or any Bank.
9.03 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 X
THE AGENT
10.01 Appointment and Authorization.
(a) Each Bank and each Issuing 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 accordance
with this Agreement, and to release funds to the Company in accordance with
Section 1(b) of the Cash Collateral Account Agreement and, if applicable,
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 or any Issuing 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.
(b) Each Issuing Bank shall act on behalf of the Banks
with respect to any Letters of Credit Issued by it and the documents associated
therewith until such time and except for so long as the Agent may agree at the
request of the Majority Banks to act for such Issuing Bank with respect
thereto; provided, however, that each Issuing Bank shall have all of the
benefits and immunities (i) provided to the Agent in this Article X with
respect to any acts taken or
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omissions suffered by such Issuing Bank in connection with Letters of Credit
Issued by it or proposed to be Issued by it and the application and agreements
for letters of credit pertaining to the Letters of Credit as fully as if the
term "Agent", as used in this Article X, included such Issuing Bank with
respect to such acts or omissions, and (ii) as additionally provided in this
Agreement with respect to the Issuing Banks.
10.02 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.
10.03 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.
10.04 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, 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
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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 5.01, 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 Credit Extension 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 Credit Extension.
10.05 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 IX;
provided, however, that unless and until the Agent shall have received any such
request, the Agent may (but shall not 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.
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10.06 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 any of the Agent-Related Persons to any Bank.
Each Bank represents to the Agent that it has, independently and without
reliance upon any of the Agent-Related Persons 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 any of the Agent-Related Persons 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.
10.07 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
termination of the Letters of Credit, the repayment of the Loans and the
termination or resignation of the Agent) be imposed on, incurred by or asserted
against any such Person in any way relating to 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
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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 hereunder (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.
10.08 Agent in Individual Capacity. BofA and ABN and their 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 neither BofA nor ABN was the Agent and
the Co-Agent, respectively, or an Issuing Bank hereunder and without notice to
or consent of the Banks. With respect to its Loans and participation in
Letters of Credit, each of BofA and ABN 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 or the Co-Agent, as the case may be, and the terms "Bank"
and "Banks" shall include each of BofA and ABN in its individual capacity.
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10.09 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 the
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 and duties as
Agent shall be terminated. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article X and Sections 11.04 and 11.05 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. Notwithstanding the foregoing, however,
BofA may not be removed as the Agent at the request of the Majority Banks
unless BofA shall also simultaneously be replaced as an "Issuing Bank"
hereunder pursuant to documentation in form and substance satisfactory to BofA.
10.10 Co-Agent. None of the Banks identified on the facing page or
signature pages of this Agreement as a "co-agent" shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Banks as such. Each Bank acknowledges that it has not
relied, and will not rely, on any of the Banks so identified in deciding to
enter into this Agreement or in taking or not taking action hereunder.
ARTICLE XI
MISCELLANEOUS
11.01 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
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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 the
Swingline Commitment of the Swingline Bank (or reinstate any such Commitment
terminated pursuant to subsection 9.02(a)), including, without limitation, any
amendment to or waiver of subsection 2.09(b) or any other provision providing
for a mandatory commitment reduction, 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 other Loan Document;
(c) reduce the principal of, or the rate of interest
specified herein on any Loan, or (subject to clause (iii) below) of any fees or
other amounts payable hereunder or under any other 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
(e) amend this Section 11.01 or Section 2.17 or any
provision providing for consent or other action by all Banks;
and, provided further, that (i) no amendment, waiver or consent shall, unless
in writing signed by the relevant Issuing Bank in addition to the Majority
Banks or all the Banks, as the case may be, affect the rights or duties of such
Issuing Bank under this Agreement or any L/C-Related Document relating to any
Letter of Credit Issued or to be Issued by it, (ii) 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, (iii) no
amendment, waiver or consent shall, unless in writing and signed by the
Swingline Bank in addition to the Majority Banks or all the Banks, as the case
may be, affect the rights or duties of the Swingline Bank under this Agreement
or any other Loan Document, and (iv) the fee letter between the Company and
BofA may be amended, or rights and privileges thereunder waived, in a writing
executed by the parties thereto.
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11.02 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,
notwithstanding the foregoing, notices pursuant to Article III to an Issuing
Bank shall not be effective until actually received by the Issuing Bank at the
address specified for the "Issuing Bank" on the signature page hereof, and
notices to the Company or the Agent shall not be effective until actually
received by the Company or the Agent, respectively.
(c) The Company acknowledges and agrees that any
agreement of the Agent, the Issuing Banks, and the Banks at Article II and
Article III herein to receive certain notices by telephone and facsimile is
solely for the convenience and at the request of the Company. The Agent, the
Issuing Banks, 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, the Issuing Banks 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, the Issuing Banks or the Banks in reliance upon such telephonic or
facsimile notice. The obligation of the Company to repay the Loans and L/C
Obligations shall not be affected in any way or to any extent by any failure by
the Agent, the Issuing Banks, and the Banks to receive written confirmation of
any telephonic or facsimile notice or the receipt by the Agent, the Issuing
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<PAGE> 136
Banks and the Banks of a confirmation which is at variance with the terms
understood by the Agent, the Issuing Banks, and the Banks to be contained in
the telephonic or facsimile notice.
11.03 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.
11.04 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 5.01(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, the Agent, and the
Arranger within five Business Days after demand (subject to subsection 5.01(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 costs, fees
and expenses, incurred by the Agent, the Arranger and any Bank.
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11.05 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, any 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 Letters of Credit 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.
11.06 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.
11.07 Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and
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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.
11.08 Assignments, Participations, Etc.
(a) 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 shall not be unreasonably withheld or delayed, 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, the L/C Obligations and the other rights and
obligations of such Bank hereunder; provided, however, that (i) no assignment
shall in any event be less than $10,000,000 of the combined Commitments of the
assigning Bank under this Agreement and under and as defined in the Facility A
Credit Agreement unless as a result of such assignment the assigning Bank's
rights and obligations hereunder shall be reduced to zero; (ii) if a Bank
assigns less than all of its rights and obligations hereunder, such Bank's
remaining Commitment plus such Bank's Commitment under and as defined in the
Facility A Credit Agreement, after giving effect to such assignment, shall not
be less than $10,000,000; (iii) 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; and (iv) no assignment of
Committed Loans shall be effective, and shall instead be void and of no effect,
unless performed simultaneously with an assignment of an identical percentage
of the rights and obligations of the assigning Bank in Committed Loans under
and as defined in the Facility A Credit Agreement. In connection with any
assignment by BofA, its Swingline Commitment may be in whole but not in part
included as part of the assignment transaction, and the Assignment and
Acceptance may be appropriately modified to include an assignment and
delegation of its Swingline Commitment and any outstanding Swingline Loans.
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(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 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, the Issuing Bank 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, (iv) no such participation of Committed Loans shall be
effective, and shall instead be void and of no effect, unless performed
simultaneously with a participation of an identical percentage of the rights
and obligations of the selling Bank in Committed Loans under and as defined in
the Facility A Credit Agreement, and (v) 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 11.01, or the right to grant subparticipations in
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Committed Loans except in strict compliance with the immediately preceding
clause (iv) applied mutatis mutandis to such subparticipation. In the case of
any such participation, the Participant shall be entitled to the benefit of
Sections 4.01, 4.03 and 11.05 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 Company or any Subsidiary of the Company, or by the Agent on such Company's
or Subsidiary's behalf, in connection with this Agreement, the Original Loan
Agreement, or any 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 and (I) to
such Bank's Affiliates. 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
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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.
11.09 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 11.09
are in addition to the other rights and remedies (including other rights of
set-off) which the Bank may have.
11.10 Automatic Debits of Fees. With respect to any commitment fee,
facility fee, letter of credit fee or other fee, or any other cost or expense
(including Attorney Costs) due and payable to the Agent, the Issuing Banks, the
Swingline Bank 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
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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 11.10 shall be deemed a setoff.
11.11 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.
11.12 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 signed by all the parties
shall be lodged with the Company and the Agent.
11.13 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.
11.14 No Third Parties Benefited. This Agreement is made and entered
into for the sole protection and legal benefit of the Company, the Banks, the
Issuing Banks, the Swingline Bank, the Co-Agent 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, the Co-Agent, the Swingline Bank, the Issuing Banks nor any
Bank shall have any obligation to any Person not a party to this Agreement or
other Loan Documents.
11.15 Time. Time is of the essence as to each term or provision of
this Agreement and each of the other Loan Documents.
11.16 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.
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11.17 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 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.
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11.18 Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Company,
the Banks, the Swingline Bank, the Issuing Banks, the Co-Agent 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 subsections 2.13(a) and (c),
and any prior arrangements made with respect to the payment by the Company of
(or any indemnification for) any fees, costs or
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expenses 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: /s/ Diane M. Irvine
-----------------------------------
Title: Vice President and CFO
-----------------------------------
Address for notices:
999 Third Avenue, Suite 2300
Seattle, WA 98104
Attn: Chief Financial Officer
Facsimile: (206) 467-3797
Tel: (206) 467-3600
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BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By: /s/ Ivo Bakovic
-------------------------------
Title: Vice President
----------------------------
Address for notices:
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attn: Agency Management
Services #5596
Facsimile: (415) 622-4894
Tel: (415) 622-1158
Attention: Shannon Collins
Address for payments:
Bank of America NT&SA
ABA 121-000-358
Attention: Agency Management
Services #5596
1850 Gateway Blvd.
Concord, CA 94520
for credit to Account No. 1233-6-14205
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<PAGE> 147
ABN AMRO BANK N.V.
as a Co-Agent
By: /s/ David McGinnis
--------------------------------
Title: Vice President
-----------------------------
By: /s/ Paul Calderon
--------------------------------
Title: Vice President
-----------------------------
Address for notices:
600 University Street
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
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<PAGE> 148
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as a Bank, as the Swingline Bank
and as an Issuing Bank
By: /s/ Michael J. Balok
--------------------------------
Title: Vice President
-----------------------------
Address for notices (BofA as a Bank):
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: Terry Peach
ABA 121-000-358 SF
Domestic and Offshore Lending Office:
Same as address for payments
Address for Notices (BofA as an
Issuing Bank):
International Trade Banking
Division #2621
333 S. Beaudry Ave., 19th Floor
Los Angeles, California 90017
Attention: Cybele Sierra
Telephone: (213) 345-6630
Facsimile: (213) 345-6684
143
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<PAGE> 149
ABN AMRO BANK N.V.
as a Bank and as an Issuing Bank
By: /s/ David McGinnis
-----------------------------
Title: Vice President
-----------------------------
By: /s/ Paul Calderon
-----------------------------
Title: Vice President
-----------------------------
Address for notices:
600 University Street
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
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<PAGE> 150
NATIONSBANK OF NORTH CAROLINA, N.A.
By: /s/ Michael O. Loneln
-----------------------------
Title: Sr. Vice President
-----------------------------
Address for notices:
1 NationsBank Plaza
NC1-002-06-19
Charlotte, NC 28255
Attention: Kay Ostwalt
Facsimile: (704) 386-8694
Tel: (704) 386-1110
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
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<PAGE> 151
U.S. BANK OF WASHINGTON, N.A.
By: /s/ Peter Bentley
-----------------------------
Title: Senior Vice President
-----------------------------
Address for Notices:
U.S. Bank of Washington, N.A.
1420 Fifth 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 Note Department
Attention: Jackie Ainsworth
Reference: Plum Creek
Domestic and Offshore Lending Office:
Same as notice address
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<PAGE> 152
WELLS FARGO BANK, N.A.
By: /s/ Ralph Turner
---------------------------------
Title: Vice President
------------------------------
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:
Same as notice address
147
signatures continue
<PAGE> 153
SEATTLE FIRST NATIONAL BANK
By: /s/ John Wilson
---------------------------------
Title: Vice President
-----------------------------
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
148
signatures continue
<PAGE> 154
THE BANK OF TOKYO, LTD.
By:/s/ Stanley A. Lance
----------------------------------
Title: Vice President
------------------------------
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, WA 98101
149
signatures continue
<PAGE> 155
THE BANK OF CALIFORNIA, N.A.
By: /s/ Kevin Sullivan
---------------------------------
Title: Vice President
------------------------------
Address for notices:
400 California Street, 17th Fl.
San Francisco, CA 94104
Attention: Kevin Sullivan
Vice President
Facsimile: (415) 765-3146
Tel: (415) 765-3148
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
150
<PAGE> 156
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:
o Preserves principal
o Meets liquidity needs
o Allows for appropriate diversification of investments
o 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> 157
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:
<TABLE>
<CAPTION>
DURATION MINIMUM CREDIT RATING
-------- ---------------------
S&P MOODY'S
--- -------
<S> <C> <C>
6 months or less A- A3
6 - 18 months AA Aa2
18 months or more AAA Aaa
</TABLE>
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 diversiffy 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> 158
SCHEDULE 2.01
COMMITMENTS
<TABLE>
<CAPTION>
Commitment
Bank Commitment Percentage
- ---- ---------- ----------
<S> <C> <C>
Bank of America National Trust
and Savings Association $ 6,481,481.48 18.51851852%
ABN AMRO Bank N.V $ 6,481,481.48 18.51851852%
NationsBank of North Carolina, N.A. $ 3,888,888.89 11.11111111%
U.S. Bank of Washington, N.A. $ 3,888,888.89 11.11111111%
Wells Fargo Bank, N.A. $ 3,888,888.89 11.11111111%
Seattle First National Bank $ 3,888,888.89 11.11111111%
The Bank of Tokyo, Ltd. $ 3,888,888.89 11.11111111%
The Bank of California, N.A. $ 2,592,592.59 7.40740741%
-------------- -------------
$35,000,000.00 100.00000000%
============== =============
</TABLE>
<PAGE> 159
PLUM CREEK TIMBER COMPANY, L.P.
SCHEDULE 6.05
LITIGATION
NONE
<PAGE> 160
SCHEDULE 6.07
6.07(a)
QUALIFIED PLANS:
Plum Creek Pension Plan
Plum Creek Thrift and Profit Sharing Plan
Plum Creek Welfare Plan
- Component Documents listed in Appendix II, thereto
NON-QUALIFIED PLANS:
Plum Creek Management Company, L.P. Executive Unit Award Plan
Plum Creek Management Company, L.P. Key Employee Long Term Incentive Plan
Plum Creek Management Company, L.P. Long Term Incentive Plan
Plum Creek Management Company, L.P. Management Incentive 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 Incentive Sharing Plan
Plum Creek Supplemental Benefits Plan
Plum Creek Timber Company, L.P. Key Employee Supplemental Pension Plan
PC Advisory Corp I Deferred Compensation Plan for Directors
MULTI-EMPLOYER PLANS: None
<PAGE> 161
SCHEDULE 6.07 - CONTINUED
6.07(c)
A favorable determination letter from the IRS has been received for the Plum
Creek Thrift and Profit Sharing Plan.
The Plum Creek Pension Plan, adopted in March 1990, is intended to be a
qualified plan pursuant to Internal Revenue Code section 401(a) and the Trust
is intended to be tax exempt pursuant to Code section 501(a). The current plan
has not 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
(December 31, 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.
6.07(d) and (e) None
6.07(f)
Retiree Life Insurance:
-- Insured plan
-- $10,000 coverage per salaried retiree
-- Approximately 50 retirees covered
-- Plan continues to be available to salaried retirees
Retiree Medical:
-- Liability to cover four retirees for life and two retirees to age 65
-- Plan continues to be available to salaried retirees at retiree-pay-all
basis
-- Liability to provide Mr. Leland and family with coverage until
Mr. Leland is no longer a Board member.
Active Medical
-- Liability to provide Mr. Sletten and family with continuing medical
coverage, under its "COBRA" coverage until December 31, 1995.
The Retiree Life, Retiree Medical, and Active 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, 1993 was
$393,725.
6.07(h), (j), and (k) None
<PAGE> 162
SCHEDULE 6.12
ENVIRONMENTAL MATTERS
6.12(a) None.
6.12(b) Plum Creek Manufacturing L.P. is in the process of applying for a
groundwater discharge permits at the Columbia Falls complex. It has
not been determined yet whether a Groundwater Discharge Permit will
be required at the Pablo or Ksanka facilities.
6.12(c) Consent Decrees:
Columbia Falls Veneer Dryers, May 21, 1990
Evergreen Veneer Dryers, May 26, 1991
Evergreen Boiler, May 19, 1992
Notice of Violation or Citation:
EPA NOV/Evergreen Veneer Dryers, February 21, 1991,
May 1, 1992
Montana Air Quality Bureau Citation/Columbia Falls Boiler,
April 25, 1994
Montana Air Quality Bureau Citation/Columbia Falls Boiler,
August 31, 1994
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)
6.12(d) None.
<PAGE> 163
PLUM CREEK TIMBER COMPANY, L.P.
SCHEDULE 6.18
SUBSIDIARIES
6.18(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
inactive corporation.
6.18(b): None
<PAGE> 164
PLUM CREEK TIMBER COMPANY, L.P.
SCHEDULE 8.01
PERMITTED LIENS
NONE
<PAGE> 165
SCHEDULE 8.04
PERMITTED INVESTMENTS
1. 98% interest in Plum Creek Manufacturing, L.P.
2. 96% interest in Plum Creek Marketing, Inc.
<PAGE> 166
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 November 15,
1994 (as extended, renewed, amended or restated from time to time, the
"Credit Agreement") among Plum Creek Timber Company, L.P., certain
Banks that are signatories thereto, ABN Amro Bank N.V., as Co-Agent
and an Issuing Bank, and Bank of America National Trust and Savings
Association, as Agent and an Issuing Bank.
[If applicable] With a copy to Bank of America National Trust
and Savings Association, as the Swingline Bank.
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] [2.12(b)] of the Credit Agreement, of the Borrowing
specified herein:
1. The aggregate amount of the proposed [Committed] [Swingline]
Borrowing is $__________.
2. The Business Day of the proposed [Committed] [Swingline]
Borrowing is ____________________, 19___.
[3. The Borrowing is to be comprised of $__________ of [CD Rate]
[Offshore Rate] [Base Rate] Committed Loans.]
or
[3. The Borrowing is to be comprised of a Swingline Loan.]
1
<PAGE> 167
4. [If applicable] The duration of the Interest Period for the
[CD Rate Committed Loans] [Offshore Rate Committed Loans] included in the
Borrowing shall be [__________ days] [__________ months].
5. [If applicable] The Borrowing shall be allocated to the
[Revolving Facility Tranche] [Capital Expenditure Tranche].
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the proposed
[Swingline] [Committed] Borrowing, before and after giving effect thereto and
to the application of the proceeds therefrom:
(a) the representations and warranties of the Company
contained in Article VI 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 were true and correct as of such earlier date);
(b) no Default or Event of Default exists; and
(c) the proposed Borrowing will not cause [(i)] the
Effective Amount of all outstanding Committed Loans, Swingline Loans and
Bid Loans plus the Effective Amount of all L/C Obligations to exceed the
Aggregate Commitment [and (ii) the Effective Amount of all Swingline Loans
to exceed the Swingline Commitment].
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company, L.P.,
its general partner
By: _________________________________
Title: ______________________________
2
<PAGE> 168
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 November 15,
1994 (as extended, renewed, amended or restated from time to time, the
"Credit Agreement") among Plum Creek Timber Company, L.P., certain
Banks that are signatories thereto, ABN Amro Bank N.V., as Co-Agent
and an Issuing Bank and Bank of America National Trust and Savings
Association, as Agent and an Issuing Bank.
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 Committed Loans specified herein, that:
1. The date of the [conversion] [continuation] is
____________________, 19__.
2. The aggregate amount of the Committed Loans
[converted] [continued] is $__________.
3. The Committed Loans are to be [converted into]
[continued as] [CD Rate] [Offshore Rate] [Base Rate]
Committed Loans.
4. [If applicable] The duration of the Interest Period
for the Committed 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> 169
(a) the representations and warranties of the Company
contained in Article VI 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 were true and correct as of such earlier
date);
(b) no Default or Event of Default exists; and
(c) the proposed [conversion] [continuation] will not
cause the Effective Amount of all outstanding Committed Loans,
Swingline Loans and Bid Loans plus the Effective Amount of all L/C
Obligations to exceed the Aggregate Commitment.
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company, L.P.,
its general partner
By: __________________________________
Title: _______________________________
2
<PAGE> 170
EXHIBIT C-1
LEGAL OPINION OF COUNSEL FOR THE COMPANY
[Unless otherwise defined herein, capitalized terms used in this Exhibit C-1
have the meanings assigned to them in the Agreement.]
(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
1
<PAGE> 171
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 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.
2
<PAGE> 172
EXHIBIT C-2
LEGAL OPINION OF PERKINS COIE
[Unless otherwise defined herein, capitalized terms used in this Exhibit C-2
have the meanings assigned to them in the Agreement.]
(a) The Agreement constitutes the valid and binding
obligation of the Company enforceable against the Company in accordance with
its terms.
<PAGE> 173
EXHIBIT D
PLUM CREEK TIMBER COMPANY, L.P.
COMPLIANCE CERTIFICATE
DATE: _______________________
Reference is made to that certain Credit Agreement dated as of
November 15, 1994 (the "Credit Agreement") 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"),
ABN Amro Bank N.V., as co-agent and a letter of credit issuing bank and Bank of
America National Trust and Savings Association, a national banking association,
as agent for the Banks (in such capacity, the "Agent") and as a letter of
credit issuing bank. 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 7.01(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> 174
or
[Use the following paragraph if this Certificate is delivered in connection
with the financial statements required by subsection 7.01(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 7.01(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> 175
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 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. For the fiscal quarter commencing __________________,
the Applicable Margin is (i) _____% in the case of Offshore Rate Committed
Loans, (ii) _____% in the case of CD Rate Committed Loans and (iii) 0.0000%
in the case of Base Rate Committed Loans.
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:________________________________
3
<PAGE> 176
PLUM CREEK TIMBER COMPANY, L.P.
SCHEDULE 2
COMPLIANCE CERTIFICATE COMPUTATION STATEMENT
($ IN THOUSANDS)
Fixed Charge Coverage Ratio
(used for Applicable Margin and Commitment Fee Percentage)
EBITDA
Net Income
Plus:
DD&A
LIFO Adjustments
Accrued Income Taxes
-----
Total $0 (A)
-----
To:
4 Qtrs. Combined Interest Expense
plus: scheduled principal repayments
-----
Total $0 (B)
-----
"A" divided "B" 0.00 x
NEGATIVE COVENANTS
1) SECTION 8.02(h): ASSET SALES
Maximum Allowed calendar year ________ $0
Sales as of ________ $0
2) SECTION 8.03: HARVESTING RESTRICTIONS (MMBF)
199__ Maximum Allowable Harvest 0
Add: Prior year Cumulative Carryover Harvest 0
-----
Available to Harvest in 199__ 0
Actual 199__ Harvest 0
-----
199__ Carryover Harvest 0
=====
3) SECTION 8.04(i): INVESTMENTS NOT OTHERWISE PERMITTED:
The greater of $30 million or 60% of the
Average annual Pro Forma Free Cash
Flow from the two fiscal years preceding
2 Year Average Proforma Free Cash Flow $0
The greater of $30 million or Average (above) $0
Cumulative investments made through _________ $0
<PAGE> 177
4) SECTION 8.05(b): FUNDED DEBT INCURRED TO FINANCE CAPITAL IMPROVEMENTS:
Maximum Allowed $20,000
Outstanding at ____________ $0
5) SECTION 8.05(d): INDEBTEDNESS INCURRED FOR THE REVOLVING CREDIT
FACILITY
Maximum Allowed $15,000
Outstanding at ____________ $0
6) SECTION 8.05(f): GUARANTEE OF FACILITIES SUBSIDIARY REVOLVING CREDIT
FACILITY:
Maximum Allowed $20,000
Outstanding at ____________ $0
7) SECTION 8.05(g): GUARANTEE OF FACILITY SUBSIDIARY CAPITAL IMPROVEMENT
FUNDED DEBT:
Maximum Allowed $20,000
Outstanding at ____________ $0
8) SECTION 8.05(h): AGGREGATE PRINCIPAL AMOUNT OF INDEBTEDNESS SECURED BY
LIENS:
Maximum Allowed $0
Outstanding at ____________ $0
9) SECTION 8.05(i): ADDITIONAL FUNDED DEBT:
Pro Forma Free Cash Flow $0
to
Maximum Pro Forma Annual Interest Charges $0
Ratio = 0.00 x
Amount Outstanding $0
Not to exceed $400 million $400,000
<PAGE> 178
10) SECTION 8.13(a): RESTRICTED PAYMENTS:
Available Cash means, with respect to any calendar quarter,
(i)(a) Net Income $0
(a) Excluding Gain on sale of any Capital Assets 0
Plus:
(b) DD&A 0
(b) Other non-cash charges (incl. LIFO inventory) 0
(c) Reduction in reserves of the types referred to in clause
(ii)(d) below,
Interest 0
Principal 0
(d) Proceeds received from the sale of Designated Acres 0
(e) Cash from Capital Transactions used to Refinance or
refund indebtedness 0
Less (ii) the sum of:
(a) All payments of Principal Indebtedness 0
(b) Capital Expenditures 0
(c) Capital Expenditures made in prior quarter, anticipated
to financed, but have not been refinanced 0
(d) Reserve for future Principal Payments:
Bank 0
Senior and First Mortgage Notes 0
(d) Reserve for future Capital Expenditures 0
(d) Reserve for additional Working Capital 0
(d) Reserve for future Distributions 0
(d) Reserve for future Interest Payments 0
(e) Other noncash credits 0
(f) The amount of any investments 0
(g) Any investments made in prior quarter anticipated to be
financed, but have not been refinanced 0
--
Available Cash - __________ $0
==
General Partner 2% Interest 0
General Partner Incentive Distribution 0
Allocable to Unitholders - net 0
--
Total Distribution $0
==
<PAGE> 179
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, ABN Amro Bank N.V., as co-agent
("Co-Agent") and the Banks have entered into a Credit Agreement dated as of
November 15, 1994 (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. Pursuant to Section 3.07 or subsection 2.09(a)(ii) of
the Credit Agreement, Agent has required that the Company immediately Cash
Collateralize all or a portion of the L/C Obligations as provided in that
Section or subsection in a cash collateral account at Bank of America National
Trust and Savings Association ("BofA").]
or
[B. In accordance with subsection 2.09(a)[(i)] [(ii)] and
subsection 2.09(c) of the Credit Agreement, the Company is required to prepay
or Cash Collateralize [CD Rate Committed Loans] [and] [Offshore Rate Committed
Loans] in an amount equal to $ _____________ in a cash collateral account at
Bank of America National Trust and Savings Association ("BofA"). The Company
has elected to Cash Collateralize such Committed Loans which cash collateral
amount shall be applied to repay [CD Rate Committed Loans] [and] [Offshore Rate
Committed Loans] at maturity thereof.]
or
[B. In accordance with subsection 2.09(a)[(i)][(ii)] and
subsection 2.09(c) of the Credit
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Agreement, the Swingline Bank has required the Company to Cash Collateralize
Swingline Loans in an amount equal to $_______________ in a cash collateral
account at Bank of America National Trust and Savings Association ("BofA"),
which cash collateral amount shall be applied to repay Swingline Loans at
maturity thereof.]
or
[B. In accordance with subsection 2.09(a)(iii) of the
Credit Agreement, the Company is required to Cash Collateralize Bid Loans in an
amount equal to $ ___________ in a cash collateral account at Bank of America
National Trust and Savings Association ("BofA"), which amount shall be applied
to Bid Loans at maturity thereof.]
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements contained herein, the Company and Agent hereby agree as
follows:
1. Cash Collateral Account.
a. Cash Collateral Account. For purposes of
[Section 3.07] [subsection 2.09(a)(ii)] [subsection 2.09(c)] [subsection
2.09(a)(iii)] of the Credit Agreement, the Company has established with BofA,
for the benefit of Agent on behalf of itself [IF WITH RESPECT TO SUBSECTION
2.09(c) AND NOT RELATING TO SWINGLINE LOANS: and the Banks] [IF WITH RESPECT TO
SUBSECTION 2.07(c) RELATING TO SWINGLINE LOANS: the Swingline Bank and the
Banks] [IF WITH RESPECT TO SECTION 3.07 OR SUBSECTION 2.09(a)(ii): the Issuing
Banks and the Banks] [IF WITH RESPECT TO SUBSECTION 2.09(a)(iii): and the Bid
Loan Lenders], 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
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honor drafts drawn against the Cash Collateral Account, except in each case
as expressly provided in Section 1(b) hereof.
[IF WITH RESPECT TO SECTION 3.07 AND SUBSECTION
2.09(a)(ii)]
[(b Application to Letters of Credit. Subject to
the prior application by Agent of amounts held hereunder pursuant to Section 2,
on the Honor Date of a Letter of Credit, Agent shall promptly apply any amounts
remaining in the Cash Collateral Account to reimburse the Issuing Bank which
issued such Letter of Credit, for the drawing on such Letter of Credit, and the
Company irrevocably directs Agent to apply such funds at such time to reimburse
such Issuing Bank in accordance with subsection 3.03(c) of the Credit
Agreement. At any time that there are no outstanding L/C Obligations and so
long as no Default or Event of Default shall then exist, Agent shall release
and transfer to the Company any amounts remaining in the Cash Collateral
Account.]
[IF WITH RESPECT TO SUBSECTION 2.09(c) AND NOT
RELATING TO SWINGLINE LOANS]
[(b) Application to Committed Loans. Subject to
the prior application by Agent of amounts held hereunder pursuant to Section 2,
on the maturity date of any Interest Period with respect to [a CD Rate
Committed Loan] [and] [an Offshore Rate Committed Loan], Agent shall apply any
amounts remaining in the Cash Collateral Account to repay such [CD Rate
Committed Loan] [or] [[Offshore Rate Committed Loan], and the Company
irrevocably directs Agent to apply such funds at such time to repay [CD Rate
Committed Loans] [or] Offshore Rate Committed Loans].
[IF WITH RESPECT TO SUBSECTION 2.09(c) RELATING TO
SWINGLINE LOANS]
[(b) Application to Swingline Loans. Subject to
the prior application by Agent of amounts held hereunder pursuant to Section 2,
on the maturity date of any Swingline Loan or on any Clean-Up Day, Agent shall
apply any amounts remaining in the Cash Collateral Account to repay such
Swingline Loans and the Company irrevocably directs Agent to apply such funds
at such time to repay Swingline Loans.
[IF WITH RESPECT TO SUBSECTION 2.09(a)(iii)]
[(b) Application to Bid Loans. Subject to the
prior application by Agent of amounts held hereunder pursuant to Section 2, on
the maturity date of any Interest Period with respect to a Bid Loan, Agent
shall apply any amounts remaining in the Cash Collateral Account to repay such
Bid Loan, and the Company irrevocably directs Agent to apply such funds at such
time to repay Bid Loans.]
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<PAGE> 182
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 [IF
RESPECT TO SUBSECTION 2.09(c) AND NOT RELATING TO SWINGLINE LOANS: and the
Banks] [IF WITH RESPECT TO SUBSECTION 2.09(c) RELATING TO SWINGLINE LOANS: the
Swingline Bank and the Banks] [IF WITH RESPECT TO SECTION 3.07 OR SUBSECTION
2.09(a)(ii): the Issuing Banks and the Banks] [IF WITH RESPECT TO SUBSECTION
2.09(a)(iii): and the Bid Loan Lenders] as cash collateral to secure the
Company's Obligations. 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 [IF WITH RESPECT TO
SUBSECTION 2.09(c) AND NOT RELATING TO SWINGLINE LOANS: and the Banks] [IF WITH
RESPECT TO SUBSECTION 2.09(c) RELATING TO SWINGLINE LOANS: the Swingline Bank
and the Banks] [IF WITH RESPECT TO SECTION 3.07 OR SUBSECTION 2.09(a)(ii): the
Issuing Banks and the Banks] [IF WITH RESPECT TO SUBSECTION 2.09(a)(iii): and
the Bid Loan Lenders] 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
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<PAGE> 183
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 Uniform 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.
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 be
effective upon receipt. Failure
5
<PAGE> 184
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.
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 the Bid Loan Lenders]* 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] [and each Bid Loan Lender]. 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 the Bid Loan Lenders] 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
____________________
* Bracketed references to Bid Loan Lenders shall be employed only
if the only Obligations secured hereby are Bid Loans. In other
circumstances, references to Banks and Majority Banks should be
employed.
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<PAGE> 185
against the Company, Agent [or the Banks] [or the Bid Loan Lenders]. The
Company, Agent [and the Banks] [and the Bid Loan Lenders] 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]
[or any Bid Loan Lender'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
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 the Swingline Bank] [the Bid Loan Lenders], 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] [the Bid Loan Lenders], and their permitted successors and assigns,
and no
7
<PAGE> 186
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] [nor any Bid Loan Lender] 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.
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:
8
<PAGE> 187
Notice to be sent to:
Bank of America National Trust and Savings
Association
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attn: Shannon Collins
Agency Management Services #5596
Tel: (415) 622-1158
Fax: (415) 622-4894
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
9
<PAGE> 188
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 November 15, 1994 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"), ABN AMRO BANK N.V., as Co-Agent and as a letter of credit issuing
bank, and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent and
as a letter of credit issuing bank (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 [(i)] committed to making [(A)] committed loans (the "Committed Loans") to
the Company in an aggregate amount not to exceed $__________ (the "Commitment")
[(B) Swingline Loans (the "Swingline Loans") to the Company in an aggregate
amount not to exceed $__________ (the "Swingline Commitment")] and [(ii)] has
agreed to provide the Company with Bid Loans from time to time in the
Assignor's sole discretion;
WHEREAS, [the Assignor has made Committed Loans in the
aggregate principal amount of $__________, [Swingline Loans in the aggregate
principal amount of $__________] [and Bid Loans in the aggregate principal
amount of $_________] to the Company] [no Committed Loans are outstanding under
the Credit Agreement] [no Swingline Loans are outstanding under the Credit
Agreement] [no Bid Loans are outstanding under the Credit Agreement]; and
WHEREAS, [the Assignor has acquired a participation in an
Issuing Bank's liability under Letters of Credit in an aggregate principal
amount of $_________ (the "L/C Obligations")] [and a participation in the
Swingline Bank's liability under Swingline Loans in an
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<PAGE> 189
aggregate principal amount of $___________] [No Letters of Credit and no
Swingline 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 (i) its Commitment, [together with a corresponding portion of
each of its outstanding Committed Loans and L/C Obligations,] in an amount
equal to $__________ (the "Assigned Amount") [and] (ii) [the Swingline
Commitment, [together with a corresponding portion of its outstanding Swingline
Loans,] in an amount equal to $________ and (iii)] its outstanding Bid Loans in
an amount equal to $ ________, in each case 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. 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)
(A) __% (the "Assignee's Percentage Share") of the Commitment [and the
Committed Loans and L/C Obligations] [, the Swingline Commitment [and
the Swingline Loans]] of the Assignor, (B) [$ ____________ in principal
amount of outstanding Bid Loans, and (C)] 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, Swingline Loans, Bid Loans
and L/C Obligations 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 [and the Swingline Bank] under the
Credit
2
<PAGE> 190
Agreement, including the requirements concerning confidentiality, with
a Commitment in an amount equal to the Assigned Amount [and the
Swingline Commitment]. 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
[and as the Swingline 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
Swingline Commitment shall be entirely assumed by the Assignee,] 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
$__________ [and Assignee's Swingline Commitment will be $__________].
(d) After giving effect to the assignment and
assumption, on the Effective Date the Assignor's Commitment will be
$_________[and Assignor's Swingline Commitment will be $0].
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 principal amount of the
Swingline Loans and] the Assignee's Percentage Share of the principal
amount of all Committed Loans and $__________ of the principal
balance of Bid Loans previously made, and currently owed, by the
Company to 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 11.08(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, [Swingline Loans] [Bid Loans,] and
L/C Obligations and the Commitment [and Swingline Commitment] shall be for the
account of the Assignor. Any interest, fees and other
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<PAGE> 191
payments accrued on and after the Effective Date with respect to the Assigned
Amount [, the Swingline Commitment, Swingline Loans] and Bid Loans assigned
hereunder 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 7.01 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 [, the Swingline Commitment, Swingline Loans] and the
Bid Loans assigned hereunder by the Assignor to the Assignee
under Section 11.08(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;
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<PAGE> 192
(iv) the Assignee shall have complied with
Section 4.01(f) of the Credit Agreement (if applicable);
(v) the processing fee referred to in
Section 2(b) hereof and in Section 11.08(a) of the Credit
Agreement shall have been paid to the Agent; and
(vi) the Assignor shall have assigned and the
Assignee shall have assumed a percentage equal to Assignee's
Percentage Share of the rights and obligations of the
Assignor under, and of the Assignor's Committed Loans and
L/C Obligations under and as defined in, the Facility A
Credit Agreement.
(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 4.01(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;
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<PAGE> 193
(iii) 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; 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
6
<PAGE> 194
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; 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
7
<PAGE> 195
Federal court. Each party to this Agreement hereby 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: ____________________________
_____________________________________
Assignor
By: _________________________________
Title: ______________________________
Address: ____________________________
8
<PAGE> 196
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: Agency Management Services #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 November 15, 1994
(the "Credit Agreement") among Plum Creek Timber Company, L.P. (the
"Company"), the Banks referred to therein, ABN AMRO Bank N.V., as Co-Agent and
as a letter of credit issuing bank, and Bank of America National Trust and
Savings Association, as Agent and as a letter of credit issuing bank. 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 [and the Swingline Commitment] of the Assignor and
all outstanding Committed Loans [, Swingline Loans] and Bid Loans made by the
Assignor and the Assignor's participation in Letters of Credit and Swingline
Loans). Before giving effect to such assignment the Assignor's Commitment is
$__________, and the aggregate amount of its outstanding Committed Loans is
$__________ and Bid Loans is $ _____________, and its participation in L/C
Obligations is $_________ and in Swingline Loans is $__________.
2. The Assignee agrees that, upon receiving the consent
of the Company and the Agent to such assignment,
9
<PAGE> 197
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.
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: ________________________________________
(C) Domestic and Offshore Lending Office:
[same as notice address]
[or]
Address: ____________________________________________
____________________________________________
____________________________________________
Attention: __________________________________________
Telephone: (____) __________________________________
Telecopier: (____) __________________________________
Telex (answerback): _________________________________
10
<PAGE> 198
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:
ACKNOWLEDGED AND ASSIGNMENT CONSENTED TO:
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company, L.P.
By: ________________________________
Its: _______________________________
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By: ________________________________
Vice President
11
<PAGE> 199
EXHIBIT G
COMPETITIVE BID REQUEST
Date: _______________
VIA FACSIMILE
To: Bank of America National Trust and Savings Association, as Agent for
the Banks parties to the Credit Agreement, dated as of November 15,
1994 (as extended, renewed, amended or restated from time to time, the
"Credit Agreement"), among Plum Creek Timber Company, L.P., certain
Banks that are signatories thereto, ABN Amro Bank N.V., as Co-Agent
and an Issuing Bank and Bank of America National Trust and Savings
Association, as Agent and an Issuing Bank.
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 that this is a
Competitive Bid Request for Bid Loans pursuant to Section 2.06 of the Credit
Agreement as follows:
1. The Business Day of the proposed Bid Borrowing is
____________________, 199_.
2. The aggregate amount of the proposed Bid Borrowing is
$______________.
3. The proposed Bid Borrowing to be made pursuant to
Section 2.06 shall be comprised of [LIBOR] [Absolute Rate] Bid Loans.
4. The duration of the Interest Period[s] for the Bid
Loans comprised in the Borrowing shall be ____________________,
[____________________] and [____________________].
5. [If applicable] The Interest Payment Date for the Bid
Loans comprised in the Borrowing shall be ____________________,
[____________________] and [____________________].
6. [If applicable] The proposed Bid Borrowing shall be
allocated to [the Revolving Facility tranche] [the Capital Expenditure
Tranche].
1
<PAGE> 200
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the proposed Bid
Borrowing, before and after giving effect thereto and to the application of the
proceeds therefrom:
(a) the representations and warranties of the Company
contained in Article VI 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 were true and correct as of such earlier
date);
(b) no Default or Event of Default exists; and
(c) the proposed Borrowing will not cause the Effective
Amount of all outstanding Committed Loans, Swingline Loans and Bid
Loans, plus the Effective Amount of all L/C Obligations, to exceed
the Aggregate Commitment.
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company, L.P.,
its general partner
By: _____________________________
Title:_____________________________
2
<PAGE> 201
EXHIBIT H
INVITATION FOR COMPETITIVE BIDS
Date: _______________
VIA FACSIMILE
To: The Banks party to the Credit Agreement referred to below:
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of November
15, 1994 (as extended, renewed, amended or restated from time to time, the
"Credit Agreement") among Plum Creek Timber Company, L.P. (the "Company"),
certain Banks that are signatories thereto, ABN Amro Bank N.V., as Co-Agent and
an Issuing Bank, and Bank of America National Trust and Savings Association, as
Agent and an Issuing Bank. Capitalized terms used herein have the meanings
specified in the Credit Agreement.
Pursuant to subsection 2.06(b) of the Credit Agreement, you
are hereby invited to submit offers to make Bid Loans to the Company based on
the following specifications:
1. The Business Day of the proposed Bid Borrowing is
____________________, 199_.
2. The aggregate amount of the proposed Bid Borrowing is
$______________.
3. The proposed Bid Borrowing to be made pursuant to
Section 2.06 shall be comprised of [LIBOR] [Absolute
Rate] Bid Loans.
4. The duration of the Interest Period[s] for the Bid
Loans comprised in the Borrowing shall be______________,
[____________________] and [____________________].
5. [If applicable] The Interest Payment Dates for the
Bid Loans comprised in the Borrowing shall be
______________________,[____________________]
and [____________________].
1
<PAGE> 202
6. [If applicable] The proposed Bid Borrowing shall be
allocated to [the Revolving Facility Tranche] [the Capital Expenditure
Tranche].
All Competitive Bids must be in the form of Exhibit I to the
Credit Agreement and must be received by the Agent no later than 6:30 a.m. (or,
in the case of a Competitive Bid by the Agent or an Affiliate of the Agent in
the capacity of a Bank, 6:15 a.m.) (San Francisco time) on ______________,
199_.
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By: ____________________________
Title: ____________________________
2
<PAGE> 203
EXHIBIT I
COMPETITIVE BID
Date: _______________
VIA FACSIMILE
Bank of America National Trust and
Savings Association, as Agent
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attention: Shannon Collins
Agency Management Services #5596
Facsimile: (415) 622-4894
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of November
15, 1994 (as extended, renewed, amended or restated from time to time, the
"Credit Agreement"), among Plum Creek Timber Company, L.P. (the "Company"),
certain Banks that are signatories thereto, ABN Amro Bank N.V., as Co-Agent and
an Issuing Bank and Bank of America National Trust and Savings Association, as
Agent and an Issuing Bank. Capitalized terms used herein have the meanings
specified in the Credit Agreement.
In response to the Competitive Bid Request of the Company,
dated ______________, 199_, and in accordance with subsection 2.06(c)(ii) of
the Credit Agreement, the undersigned Bank offers to make [a] Bid Loan[s] to
the Company thereunder in the following principal amount[s] at the following
interest rates for the following Interest Period[s] [with the following
Interest Payment Dates]:
Date of Borrowing: ______________, 199_
Aggregate Maximum Bid Amount: $______________
1
<PAGE> 204
<TABLE>
<S> <C> <C>
Principal Principal Principal
Amount (a) $____________________ Amount (a) $____________________ Amount (a) $___________________
(b) $____________________ (b) $____________________ (b) $___________________
(c) $____________________ (c) $____________________ (c) $___________________
Interest: Interest: Interest:
[Absolute [Absolute [Absolute
Rate (a) ____% Rate (a) ____% Rate (a) ____%
(b) ____% (b) ____% (b) ____%
(c) ____%] (c) ____%] (c) ____%]
[or]
[LIBOR Bid [LIBOR Bid [LIBOR Bid
Margin (a) +/- __% Margin (a) +/- __% Margin (a) +/- __%
(b) +/- __% (b) +/- __% (b) +/- __%
(c) +/- __%] (c) +/- __%] (c) +/- __%]
Interest Interest Interest
Period _________________________ Period _________________________ Period ________________________
[Interest Payment [Interest Payment [Interest Payment
Date _________________________] Date __________________________] Date _________________________]
</TABLE>
[NAME OF BANK]
By: ________________________________
Title: _____________________________
2
<PAGE> 205
EXHIBIT J
REVOLVING EXTENSION REQUEST
Date: __________________
To: Bank of America National Trust and Savings Association, as Agent for
the Banks parties to the Credit Agreement dated as of November 15,
1994 (as extended, renewed, amended or restated from time to time, the
"Credit Agreement") among Plum Creek Timber Company, L.P., certain
Banks that are signatories thereto, ABN Amro Bank N.V., as Co-Agent
and an Issuing Bank, and Bank of America National Trust and Savings
Association, as Agent and an Issuing Bank.
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 irrevocably requests, pursuant to
Section 2.10(a) of the Credit Agreement, that the Banks extend the Revolving
Termination Date for an additional 364 days to ___________, 199_.
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the Revolving Termination
Date:
(a) the representations and warranties of the Company
contained in Article VI 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 were true and correct as of such earlier date); and
1
<PAGE> 206
(b) no Default or Event of Default exists, or would
result from such extension.
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company, L.P.,
its general partner
By:__________________________________
Title:_______________________________
The undersigned Bank hereby consents to the request to extend the Revolving
Termination Date, as set forth above.
[BANK]
By:______________________________
Title:___________________________
2
<PAGE> 207
EXHIBIT K
NOTICE OF INSTALLMENT REPAYMENT ELECTION
Date: __________________
To: Bank of America National Trust and Savings Association, as Agent for
the Banks parties to the Credit Agreement dated as of November 15,
1994 (as extended, renewed, amended or restated from time to time, the
"Credit Agreement") among Plum Creek Timber Company, L.P., certain
Banks that are signatories thereto, ABN Amro Bank N.V., as Co-Agent
and an Issuing Bank, and Bank of America National Trust and Savings
Association, as Agent and an Issuing Bank.
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 2.10(c) of the Credit Agreement, that the Company elects to
repay in installments the aggregate Committed Loans outstanding on the
Revolving Termination Date in accordance with subsection 2.10(c) of the Credit
Agreement.
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the Revolving Termination
Date:
(a) the representations and warranties of the Company
contained in Article VI 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 were true and correct as of such earlier date); and
(b) no Default or Event of Default exists, or would
result from such installment repayment election.
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company, L.P.,
its general partner
By:__________________________________
Title:_______________________________
<PAGE> 1
EXHIBIT 10.B.1
PLUM CREEK
SUPPLEMENTAL BENEFITS PLAN
ADOPTED
EFFECTIVE
JANUARY 1, 1993
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PREAMBLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION I -- DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Deferred Compensation Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Pension Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.8 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.9 RSP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.10 Surviving Spouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2 -- BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.1 Plan Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 3 -- PARTICIPANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.1 Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 4 -- BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.1 Supplemental Pension Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.2 Supplemental Thrift Plan Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.3 Other Supplemental Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.4 Time and Manner of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 5 -- GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.1 Unfunded Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.2 Discretionary Investment by Company . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.3 Incapacity of Participant, Surviving Spouse
or Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.4 Nonassignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.5 No Right to Continued Employment . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.6 Withholding Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.7 Termination and Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.8 ERISA Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.9 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.10 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
<PAGE> 3
Table of Contents
(continued)
<TABLE>
<CAPTION>
Page
----
<S> <C>
SIGNATURE PAGE . . . . . . . . . . . . . . . . . . . . . . . . . 12
APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
APPENDIX B . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
APPENDIX C . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
<PAGE> 4
PREAMBLE
THIS SUPPLEMENTAL RETIREMENT PLAN (hereinafter referred to as the
"Plan" and known as the Plum Creek Supplemental Benefits Plan) is adopted
effective January 1, 1993 by Plum Creek Timber Company, L.P. (hereinafter
"Company").
WHEREAS, the purpose of the Plan is to attract and retain exceptional
executives by providing retirement benefits to selected officers and key
salaried employees of outstanding competence.
NOW, THEREFORE, the Company does hereby adopt the Plan as set forth in
the following pages, effective January 1, 1993.
1
<PAGE> 5
SECTION 1
DEFINITIONS
For purposes of this Plan, the following terms shall have the meanings
indicated:
1.1 Beneficiary
"Beneficiary" means the individual(s) designated by a
Participant to receive benefits from this Plan in the event of
his or her death. If no designated Beneficiary survives the
Participant, the Beneficiary shall be the person or persons in
the first of the following classes who survive the
Participant:
(a) spouse at date of death,
(b) descendants, per stirpes,
(c) parents,
(d) brothers and sisters,
(e) estate.
1.2 Board
"Board" means the Board of Directors of PC Advisory Corp. I,
the general partner of PC Advisory Partners I, L.P., which
serves as the general partner of Plum Creek Management
Company, L.P., which serves as the general partner of the
Company.
1.3 Code
"Code" means the Internal Revenue Code of 1986, as amended.
1.4 Company
"Company" means Plum Creek Timber Company, L.P., a Delaware
limited partnership.
1.5 Deferred Compensation Plans
"Deferred Compensation Plans" means the Plum Creek Management
Company Key Employee Salary and Incentive Compensation
Deferral Plan and such additional deferred compensation plans
as may be designated by the Company from time to time.
1.6 Participant
"Participant" means each individual who participates in the
Plan in accordance with Section 3.
2
<PAGE> 6
1.7 Pension Plan
"Pension Plan" means the Burlington Resources Inc. Pension
Plan as in effect on December 31, 1992, a copy of which is
attached in Appendix B.
1.8 Plan
"Plan" means the Plum Creek Supplemental Benefits Plan either
in its present form or as amended from time to time.
1.9 RSP
"RSP" means the Burlington Resources Inc. Retirement Savings
Plan, as in effect on December 31, 1992, a copy of which is
attached in Appendix C.
1.10 Surviving Spouse
"Surviving Spouse" means the person to whom surviving spouse
death benefits are to be paid pursuant to the terms of the
Pension Plan.
1.11 Thrift Plan
"Thrift Plan" means the Plum Creek Thrift and Profit Sharing
Plan.
1.12 Plan Administrator
"Plan Administrator" shall be the Vice President, Human
Resources of the Company.
3
<PAGE> 7
SECTION 2
ADMINISTRATION
2.1 Plan Administrator
This Plan shall be administered by the Plan Administrator of
the Company. Subject to approval by the Board, the Plan
Administrator shall have discretion and authority to interpret
the Plan, prescribe, amend and rescind rules relating to it,
and take all other action necessary for its administration,
which actions shall be final and binding upon all
Participants.
4
<PAGE> 8
SECTION 3
PARTICIPANTS
3.1 Participants
The President and Vice Presidents of the Company who were
participants in the Burlington Resources Inc. Supplemental
Benefits Plan on December 31, 1992 shall be Participants in
this Plan.
The Board of Directors shall determine and designate any other
officers and key salaried employees of the Company who are
eligible to become Participants and receive benefits under the
Plan. Each Participant must be a selected management or highly
compensated employee, or entitled to qualified plan benefits
in excess of the Code Section 415 limitations on benefits. A
Participant who is not a select management or highly
compensated employee shall be eligible only for the benefits
described in Sections 4.1(a)(1) and 4.2(a)(1). Individuals
who are Participants shall be listed in Appendix A.
5
<PAGE> 9
SECTION 4
BENEFITS
4.1 Supplemental Pension Benefits
Upon the termination of employment of a Participant, the
Company shall pay or cause to be paid to such Participant (or
his or her Surviving Spouse in the case of his or her death)
supplemental pension benefits under this Plan which equals the
amount described in (a) less the amount described in (b).
Supplemental pension benefits under this Section 4 shall be
vested and nonforfeitable to the same extent that the related
benefits under the Pension Plan would be vested and
nonforfeitable.
(a) Pension Plan Amount
The amount which the Participant would have been
entitled to receive under the Pension Plan as in
effect on December 31, 1992 if the Participant had
continued participation in the Pension Plan and had
the Pension Plan's benefit formula been applied:
(1) without regard to the limitations of Section
415 of the Code (including, without
limitation, the maximum benefit payable under
Section 415(b)(1), the actuarial reduction
for early retirement of Section 415(b)(2)(C),
the reduction for limited service or
participation of Section 415(b)(5) and the
combined limits of Section 415(e)),
(2) by including in the Participant's
compensation during the period for which the
Pension Plan benefits are computed, to the
extent not already done so under the Pension
Plan, any amount that has not been taken into
account due to the limitations of Section
401(a)(17) of the Code ($235,840 for plan
years beginning in 1993) or due to a
reduction of compensation that has occurred
pursuant to an election of the Participant
under Section 125 or Section 401(k) of the
Code or under the Deferred Compensation
Plans, and
(3) by taking into account any service granted to
the Participant and any benefit formula
adjustments required by an employment
contract.
(b) Offset Amount
The amount specified for each Participant listed in
Appendix A increased annually from 12/31/92 to the
December 31st immediately preceding the date of
termination of employment by the immediate PBGC
interest rate in effect on January 1 of each year.
6
<PAGE> 10
(c) Determination of Lump Sum Supplemental Pension
Benefit Payments
For purposes of determining the amount described in
Section 4.1(a), the amount of a lump sum payment of
supplemental pension benefits to a Participant (or
his or her Surviving Spouse in the event of the
Participant's termination of employment on account of
death) shall be determined by calculating the benefit
according to the terms of the Pension Plan as a whole
life annuity, then calculating the present value of
such benefit, using the actuarial assumptions
specified in the Pension Plan for determining
benefits of equivalent value except, in lieu of the
Pension Benefit Guaranty Corporation ("PBGC") rates
for calculating lump sums specified in the Pension
Plan, the interest rate shall be the immediate PBGC
rate in effect on January 1 of the year in which the
lump sum payment becomes distributable.
The amount of a lump sum payment of supplemental
pension benefits to a Participant's Surviving Spouse
shall be determined as if the Participant had
terminated his or her employment on the date of
death. Pre-retirement death benefit provisions under
the Pension Plan shall not apply.
4.2 Supplemental Thrift Plan Benefits
Upon the termination of employment of a Participant, the
Company shall pay or cause to be paid to such Participant (or
his or her Beneficiary in the case of his or her death)
supplemental Thrift Plan benefits determined by calculating
the amount described in (a) less the amount described in (b).
(a) The Company shall periodically determine the amount
of any additional employer-matching contributions
that would have been credited to a Participant's
account under the RSP if he or she was an employee of
Burlington Resources Inc. and contributed at the
maximum employee contribution rate offered under the
RSP without regard to:
(1) the maximum dollar limit under Code Section
415(c)(1)(A) on RSP annual additions ($30,000
for plan years beginning in 1993);
(2) the maximum limit under Code Section
401(a)(17) on the compensation taken into
account under the RSP ($235,840 for plan
years beginning in 1993); and
(3) any further reductions in the compensation
which would have been taken into account
under the RSP as a result of any deferrals of
compensation elected by the Participant
pursuant to Section 125 or Section 401(k) of
the Code or under the Deferred Compensation
Plans.
(b) The Company matching contribution to the Thrift Plan
on behalf of the Participant for the same period of
time for which the amount in (a) is determined.
7
<PAGE> 11
From time to time, as determined by the Board of Directors,
the Company shall allocate amounts equal to such additional
employer-matching contributions to a ledger account (the
"Memorandum Account") for the Participant as of the time or
times that such amounts would have been contributed to the RSP
if permitted thereunder. Interest will be credited to the
balance in each Participant's Memorandum Account on a
semi-monthly basis or at such other intervals as may be
determined by the Board of Directors. From time to time the
Board of Directors shall determine the rate to be used in
crediting such interest and in so doing may take into account
the earnings, losses, appreciation or depreciation
attributable to any discretionary investment made pursuant to
Section 5.2, and any other factors it deems appropriate.
Supplemental Thrift Plan benefits under this Section 4.2 shall
be vested and nonforfeitable to the same extent that the
related benefits under the Thrift Plan are vested and
nonforfeitable.
4.3 Other Supplemental Benefits
Upon the termination of employment of a Participant, the
Company shall pay or cause to be paid to such Participant (or
his or her Beneficiary in the case of his or her death) other
supplemental benefits, if any, as determined by the Board and
contained in the Participant's employment contract or other
agreement with the Company. Other supplemental benefits under
this Section 4.3 shall be vested and nonforfeitable to the
extent provided in the applicable employment contract or
agreement.
4.4 Time and Manner Of Payment
The payment of any supplemental pension benefits owed to a
Participant (or his or her Surviving Spouse) pursuant to
Section 4.1 shall be made in a lump sum, as determined under
Section 4.1(c), as soon as practicable after the Participant's
termination of employment with the Company. The payment of any
supplemental RSP benefits pursuant to Section 4.2 owed to a
Participant (or his or her Beneficiary) shall likewise be made
in a lump sum as soon as practicable after the Participant's
termination of employment with the Company and shall be in an
amount equal to the Participant's Memorandum Account balance
at the time of payment. The payment of any other supplemental
benefits pursuant to an employment contract under Section 4.3
shall be made as provided in the employment contract. Such
payment shall constitute a complete discharge of all
obligations to the Participant and his or her Surviving Spouse
or Beneficiary under the Plan.
8
<PAGE> 12
SECTION 5
GENERAL PROVISIONS
5.1 Unfunded Obligation
The supplemental benefits to be paid to Participants and/or
their Surviving Spouses and Beneficiaries pursuant to this
Plan are unfunded obligations of the Company, and shall, until
actual payment, continue to be part of the general funds of
the Company. The Company is not required to segregate any
monies from its general funds, or to create any trusts, or to
make any special deposits with respect to these obligations.
Title to and beneficial ownership of any investments including
trust investments which the Company may make to fulfill these
obligations shall at all times remain in the Company. Any
investments and the creation or maintenance of any trust or
memorandum accounts shall not create or constitute a trust or
a fiduciary relationship between the Plan Administrator or the
Company and a Participant, or otherwise create any vested or
beneficial interest in any Participant or his or her Surviving
Spouse or Beneficiary or his or her creditors in any assets of
the Company whatsoever. The Participants and their Surviving
Spouses and Beneficiaries shall have no claim against the
Company for any changes in the value of any assets which may
be invested or reinvested by the Company with respect to this
Plan.
5.2 Discretionary Investment by Company
The Plan Administrator, after consulting with the actuary
employed by the Company in conjunction with the Pension Plan,
may from time to time direct the investment by the Company of
an amount sufficient to meet all or such portion of the
supplemental pension benefits to be paid under this Plan as
the Plan Administrator, in its sole discretion, shall
determine. The Plan Administrator may in its sole discretion
determine that all or some portion of the amount to be
invested shall be paid into one or more grantor trusts to be
established by the Company of which it shall be the
beneficiary, and to the assets of which it shall become
entitled as and to the extent that Participants (or their
Surviving Spouses or Beneficiaries in the case of their
deaths) receive benefits under this Plan. The Plan
Administrator may designate an investment advisor to direct
investments and reinvestments of the funds, including
investments of any grantor trusts hereunder.
5.3 Incapacity of Participant, Surviving Spouse or Beneficiary
If the Plan Administrator finds that any Participant,
Surviving Spouse 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 therefor shall have been
made by a duly appointed legal representative) at the
discretion of the Plan Administrator may be paid to the
spouse, child, parent or brother or sister of such
Participant, Surviving Spouse or Beneficiary, or to any person
whom the Plan Administrator has determined has incurred
expense for such Participant, Surviving
9
<PAGE> 13
Spouse or Beneficiary. Any such payment shall be a complete
discharge of the obligations of the Company under the
provisions of the Plan.
5.4 Nonassignment
The right of a Participant or his or her Surviving Spouse or
Beneficiary to the payment of any amounts under the Plan may
not be assigned, transferred, pledged or encumbered nor shall
such right or other interests be subject to attachment,
garnishment, execution or other legal process.
5.5 No Right to Continued Employment
Nothing in the Plan shall be construed to confer upon any
Participant any right to continued employment with the Company
or a subsidiary nor interfere in any way with the right of the
Company or a subsidiary to terminate the employment of such
Participant at any time without assigning any reason therefor.
5.6 Withholding Taxes
Appropriate payroll taxes shall be withheld from cash payments
made to Participants pursuant to this Plan.
5.7 Termination and Amendment
The Board may from time to time amend, suspend, or terminate
the Plan, in whole or in part, and if the Plan is suspended or
terminated, the Board may reinstate any or all of its
provisions. The Plan Administrator may amend the Plan provided
that it may not suspend or terminate the Plan, substantially
increase the administrative cost of the Plan or increase the
obligations of the Company, or expand the classification of
employees who are eligible to participate in the Plan. No
amendment, suspension or termination may, however, impair the
right of a Participant or his or her Surviving Spouse or
Beneficiary to receive the supplemental benefits accrued prior
to the effective date of such amendment, suspension or
termination.
If the Plan is terminated, Participants, Surviving Spouses and
Beneficiaries who have accrued benefits under the Plan as of
the date of termination will receive payment of such benefits
at the times specified in the Plan.
5.8 ERISA Exemption
The portion of this Plan providing benefits in excess of the
limitations of Section 415 of the Code is intended to qualify
for exemption from the Employee Retirement Income Security Act
of 1974 ("ERISA") as an unfunded excess benefit plan under
Sections 3(36) and 4(b)(5) of ERISA. The portion of this Plan
providing benefits in excess of the limitation of Section
401(a)(17) of the Code and other supplemental benefits is
intended to qualify for exemption from Parts II, III and IV of
ERISA as a plan maintained primarily for the purpose of
providing deferred compensation for a select group of
10
<PAGE> 14
management or highly compensated employees under Sections
201(2), 301(a)(3) and 401(a)(1) of ERISA.
5.9 Applicable Law
The Plan shall be construed and governed in accordance with
the laws of the State of Washington.
5.10 Indemnification
The Company agrees, to the extent permitted by law, to
indemnify and hold the Plan Administrator harmless from and
against any liability that the Plan Administrator may incur in
the administration of the Plan (including attorneys' fees and
expenses), unless arising from the Plan Administrator's own
gross negligence, willful misconduct, or willful breach of the
provisions of its obligations under this Plan.
11
<PAGE> 15
The Plum Creek Supplemental Benefits Plan is adopted by Plum Creek Timber
Company, L.P.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed on this 8th
day of June, 1993.
For PLUM CREEK TIMBER COMPANY, L.P.
By PLUM CREEK MANAGEMENT COMPANY,
L.P., General Partner
/s/ SUSANNA N. DUKE /s/ KEITH SLETTEN
- ------------------------ ------------------------------
Witness Authorized Officer
Vice President Human Resources
------------------------------
Title
(CORPORATE SEAL)
12
<PAGE> 16
APPENDIX A
TO THE
PLUM CREEK SUPPLEMENTAL BENEFITS PLAN
Pursuant to Section 3.1 Participants, the following individuals are
Participants in the Plan commencing on the date specified, and each individual
shall remain a Participant until his or her entire benefit under the Plan is
distributed. The offset amount for each Participant pursuant to Section 4.1(b)
is shown below.
<TABLE>
<CAPTION>
Offset Amount Pursuant to
Name Section 4.1 (b) Commencement Date
------------------ ------------------------- -----------------
<S> <C> <C> <C>
1. Charles P. Grenier $ 85,822.88 01/01/93
2. Richard R. Holley $ 103,817.95 01/01/93
3. James A. Kraft $ 63,620.87 01/01/93
4. Robert E. Manne $ 121,427.55 01/01/93
5. Keith B. Sletten $ 269,104.59 01/01/93
6. David D. Leland $3,517,430.10 01/01/93
</TABLE>
ACKNOWLEDGED AND APPROVED:
By: /s/ Keith Sletten
----------------------------------
Title: Vice President Human Resources
------------------------------
Date: June 8, 1993
-------------------------------
13
<PAGE> 17
APPENDIX B
TO THE
PLUM CREEK SUPPLEMENTAL BENEFITS PLAN
BURLINGTON RESOURCES INC. PENSION PLAN
AS OF DECEMBER 31, 1992
14
<PAGE> 18
BURLINGTON RESOURCES INC.
PENSION PLAN
ADOPTED
EFFECTIVE JANUARY 1, 1989
<PAGE> 19
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PREAMBLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1 - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.01 Accrued Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.02 Active Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.03 Actuarially Equivalent . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.04 Adoption Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.05 Affiliated Companies . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.06 Authorized Leave of Absence . . . . . . . . . . . . . . . . . . . . . . 3
1.07 Basic Monthly Compensation . . . . . . . . . . . . . . . . . . . . . . . 3
1.08 Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.09 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.10 Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.11 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.12 Credited Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.13 Deferred Retirement Benefit . . . . . . . . . . . . . . . . . . . . . . 5
1.14 Deferred Retirement Date . . . . . . . . . . . . . . . . . . . . . . . . 5
1.15 Disabled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.16 Early Retirement Benefit . . . . . . . . . . . . . . . . . . . . . . . . 5
1.17 Early Retirement Date . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.18 Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.19 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
</TABLE>
<PAGE> 20
Table of Contents
(continued)
<TABLE>
<CAPTION>
Page
-----
<S> <C> <C>
1.20 Eligible Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.21 Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.22 Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.23 Employment Commencement Date . . . . . . . . . . . . . . . . . . . . . . . 7
1.24 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.25 Final Average Monthly Earnings . . . . . . . . . . . . . . . . . . . . . . 7
1.26 Hour of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.27 Integration Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.28 Normal Retirement Benefit . . . . . . . . . . . . . . . . . . . . . . . . 8
1.29 Normal Retirement Date . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.30 Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.31 Pension Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.32 Pension Starting Date . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.33 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.34 Plan Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.35 Plan Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.36 Predecessor Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.37 Primary Social Security Benefit . . . . . . . . . . . . . . . . . . . . . 9
1.38 Retirement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.39 Social Security Covered Compensation . . . . . . . . . . . . . . . . . . . 10
1.40 Social Security Retirement Age . . . . . . . . . . . . . . . . . . . . . . 10
1.41 Trust or Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
<PAGE> 21
Table of Contents
(continued)
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1.42 Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.43 Vested Termination Benefit . . . . . . . . . . . . . . . . . . . . . . . 11
1.44 Vested Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.45 Year of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.46 Additional Definitions in Plan . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2 - PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.01 Eligibility for Participation . . . . . . . . . . . . . . . . . . . . . . 13
2.02 Reemployment After Termination . . . . . . . . . . . . . . . . . . . . . 13
2.03 Change of Employment Status . . . . . . . . . . . . . . . . . . . . . . . 13
2.04 Leased Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3 - RETIREMENT DATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.01 Normal Retirement Date . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.02 Early Retirement Date . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.03 Deferred Retirement Date . . . . . . . . . . . . . . . . . . . . . . . . 14
3.04 Vested Termination Date . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4 - RETIREMENT BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.01 Accrued Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.02 Normal Retirement Benefit . . . . . . . . . . . . . . . . . . . . . . . 16
4.03 Early Retirement Benefit . . . . . . . . . . . . . . . . . . . . . . . . 16
4.04 Deferred Retirement Benefit . . . . . . . . . . . . . . . . . . . . . . 17
4.05 Vested Termination Benefit . . . . . . . . . . . . . . . . . . . . . . . 17
4.06 Reemployment After Retirement . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
<PAGE> 22
Table of Contents
(continued)
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
4.07 Benefits For Terminated Participants . . . . . . . . . . . . . . . . . . 18
SECTION 5 - FORMS OF PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.01 Forms of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.02 Automatic Form of Benefit . . . . . . . . . . . . . . . . . . . . . . . 21
5.03 Limitation on Forms of Payment . . . . . . . . . . . . . . . . . . . . . 22
5.04 Explanation of Forms of Payment . . . . . . . . . . . . . . . . . . . . 22
SECTION 6 - DEATH BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.01 Pre-Retirement Spouse's Death Benefit . . . . . . . . . . . . . . . . . . 23
6.02 Post Retirement Spouse's Death Benefit . . . . . . . . . . . . . . . . . 26
SECTION 7 - VESTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.01 Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.02 Termination Prior to Vesting . . . . . . . . . . . . . . . . . . . . . . 27
7.03 Forfeitures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 8 - LIMITATIONS ON BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.01 Limitation on Benefits . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.02 Maximum Annual Benefit Payable Under the Plan . . . . . . . . . . . . . 30
8.03 Additional Limitation Relating to Defined Contribution Plans . . . . . . 32
SECTION 9 - TOP HEAVY PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.01 Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.02 Top Heavy Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.03 Minimum Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.04 Benefit Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
</TABLE>
<PAGE> 23
Table of Contents
(continued)
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
9.05 Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 10 - ADMINISTRATION OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.01 Plan Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.02 The Pension Committee . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.03 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
10.04 Bonding and Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 42
10.05 Commencement of Benefits . . . . . . . . . . . . . . . . . . . . . . . . 43
10.06 Appeal Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
10.07 Plan Administration - Miscellaneous . . . . . . . . . . . . . . . . . . . 45
10.08 Domestic Relations Orders . . . . . . . . . . . . . . . . . . . . . . . 48
10.09 Plan Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
10.10 Deductible Contribution . . . . . . . . . . . . . . . . . . . . . . . . 49
10.11 Payment of Benefits Through Purchase of Annuity Contract . . . . . . . . 49
SECTION 11 - PARTICIPATION BY OTHER EMPLOYERS . . . . . . . . . . . . . . . . . . . . . . 51
11.01 Adoption of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
11.02 Prior Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
11.03 Withdrawal from Participation . . . . . . . . . . . . . . . . . . . . . . 51
11.04 Company As Agent For Employers . . . . . . . . . . . . . . . . . . . . . 51
SECTION 12 - AMENDMENT AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12.01 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12.02 Amendment - Consolidation or Merger . . . . . . . . . . . . . . . . . . 52
12.03 Termination of the Plan . . . . . . . . . . . . . . . . . . . . . . . . 52
</TABLE>
<PAGE> 24
Table of Contents
(continued)
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
12.04 Effect of Withdrawal from Plan . . . . . . . . . . . . . . . . . . . . . 53
12.05 Allocation of the Trust on Termination of Plan . . . . . . . . . . . . . 53
SECTION 13 - FUNDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
13.01 Contributions to the Trust . . . . . . . . . . . . . . . . . . . . . . . 54
13.02 Trust for Exclusive Benefit of Participants . . . . . . . . . . . . . . 54
13.03 Disposition of Credits and Forfeitures . . . . . . . . . . . . . . . . . 54
13.04 Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
13.05 Investment Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SIGNATURE PAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
APPENDIX I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
</TABLE>
<PAGE> 25
PREAMBLE
THIS RETIREMENT PLAN (hereinafter referred to as the "Plan" and known as
the Burlington Resources Inc. Pension Plan) is adopted effective January 1,
1989 by Burlington Resources Inc. (hereinafter "Company").
WHEREAS, the purpose of the Plan is to provide retirement benefits to
employees who become covered under the plan, and
WHEREAS, effective January 1, 1989 the Burlington Northern Inc. Pension
Plan shall spin off assets and liabilities to form this Plan; and
WHEREAS, this Plan is intended to provide identical benefits on the
effective date to those provided under the predecessor Burlington Northern Inc.
Pension Plan on December 31, 1988; and
WHEREAS, the Plan shall be maintained for the exclusive benefit of covered
employees, and is intended to comply with the Internal Revenue Code of 1986, as
amended, the Employee Retirement Income Security Act of 1974, as amended, and
other applicable law;
NOW, THEREFORE, effective January 1, 1989, the Company does hereby adopt
the Plan as set forth in the following pages.
1
<PAGE> 26
SECTION 1
DEFINITIONS
The following terms when used herein shall have the following meaning, unless a
different meaning is plainly required by the context. Capitalized terms are
used throughout the Plan text for terms defined by this and other sections.
1.01 Accrued Benefit
"Accrued Benefit" means on any date, the benefit determined under the
formula specified in Section 4.01, as of such date.
Notwithstanding the foregoing, a Participant's Accrued Benefit shall
not be less than his or her Accrued Benefit on December 31, 1988 under
the terms of the Burlington Northern Inc. Pension Plan in effect on
such date.
1.02 Active Participant
"Active Participant" means a Participant who currently qualifies as an
Eligible Employee.
1.03 Actuarially Equivalent
"Actuarially Equivalent" and similar terms (for purposes other than
determining contributions to the Trust) means that the present value
of two payments or series of payments shall be of equal value when
computed at an 8% rate of interest and on the basis of the male
mortality rates under the 1983 Group Annuity Mortality Table,
provided; however, the interest rate and mortality table described
below shall be used to calculate lump sum benefits if they result in a
larger lump sum benefit.
Lump sum benefits shall be calculated based on the 1984 Unisex Pension
Mortality Table set forward one year, and the interest rate shall be
the Pension Benefit Guaranty Corporation interest rate for immediate
or deferred annuities from a single employer plan in effect on
January 1 of the Plan Year which contains the Pension Starting Date.
1.04 Adoption Agreement
"Adoption Agreement" means the agreement executed by each Employer
pursuant to Section 11.01 whereby such Employer adopts the Plan.
2
<PAGE> 27
1.05 Affiliated Companies
"Affiliated Companies" means:
(a) the Employer,
(b) any other corporation which is a member of a controlled group
of corporations which includes the Employer (as defined in
Section 414(b) of the Code),
(c) any other trade or business under common control with the
Employer (as defined in Section 414(c) of the Code), or
(d) any other member of an affiliated service group which includes
the Employer (as defined in Section 414(m) of the Code).
For purposes of the limitation on benefits in Sections 8.02 and 8.03,
the determination of whether an entity is an Affiliated Company will
be made by modifying Sections 414(b) and (c) of the Code as specified
in Section 415(h) of the Code.
1.06 Authorized Leave of Absence
"Authorized Leave of Absence" means any absence authorized by an
Employer under the Employer's standard personnel practices, provided,
that the Participant returns to active employment within the period
specified in such Authorized Leave of Absence, or is specifically not
required by the Employer to return to work after such Authorized Leave
of Absence terminates.
1.07 Basic Monthly Compensation
"Basic Monthly Compensation" means a Participant's monthly salary, or
total monthly pay during the last full month of Credited Service with
respect to a Participant paid on an hourly basis, including average
monthly overtime over the last twelve full months of Credited Service
and pre-tax employee contributions to a qualified retirement plan or
welfare benefit plan, but excluding non-deferred bonuses paid or
accrued and the other extraordinary items which are not considered
Earnings.
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<PAGE> 28
1.08 Beneficiary
"Beneficiary" means the person or persons designated to be the
Beneficiary by the Participant in writing to the Pension Committee. In
the event a married Participant designates someone other than his or
her spouse as Beneficiary, such initial designation or subsequent
change shall be invalid unless the spouse consents in a writing which
names the designated Beneficiary and is notarized, or witnessed by a
Plan representative. If no designated Beneficiary survives the
Participant, the Pension Committee may direct that payment of
benefits which may be due may be made to the Participant's estate.
1.09 Code
"Code" means the Internal Revenue Code of 1986, as amended and
including all regulations promulgated pursuant thereto.
1.10 Company
"Company" means Burlington Resources Inc., a Delaware corporation.
1.11 Compensation
"Compensation" for any tax year has the meaning set forth in Section
415(c)(3) of the Code.
1.12 Credited Service
"Credited Service" means:
(a) with respect to an individual who becomes a Participant on
January 1, 1989, the Participant's Credited Service under the
Predecessor Plan as of December 31, 1988, and
(b) all Plan Years commencing on and after January 1, 1989 during
which an Employee completes 1,000 or more Hours of Service for
an Employer, and
(c) with respect to the Plan Years in which service commences and
terminates, the fraction of a Plan Year which is equal to the
Hours of Service for an Employer during such Plan Year divided
by 2,280, and
(d) any period of time immediately following a period during which
the Employee is an Active Participant, during which the
Participant:
4
<PAGE> 29
(i) is Disabled,
(ii) is on Authorized Leave of Absence, or
(iii) is laid off due to a reduction of force for a period
not exceeding twelve consecutive months.
1.13 Deferred Retirement Benefit
"Deferred Retirement Benefit" has the meaning set forth in Section
4.04.
1.14 Deferred Retirement Date
"Deferred Retirement Date" has the meaning set forth in Section 3.03.
1.15 Disabled
"Disabled" means a Participant who has not attained age 65 and who
is entitled to benefits under the Employer-sponsored long or short
term disability plan.
1.16 Early Retirement Benefit
"Early Retirement Benefit" has the meaning set forth in Section 4.03.
1.17 Early Retirement Date
"Early Retirement Date" has the meaning set forth in Section 3.02.
1.18 Earnings
"Earnings" for each Plan Year means the total earnings, including
overtime payments for each full month earned by an Employee from an
Employer, including nondeferred cash incentive bonuses paid or accrued
and salary reduction amounts contributed by an Employer on behalf of
the employee to a qualified retirement plan or welfare benefit plan;
but excluding payments under non-qualified deferred compensation
plans, stock option, stock bonus, capital income and phantom stock
plans and all other commissions and extra or added compensation or
benefits of any kind or nature.
Notwithstanding the foregoing, annual Earnings in excess of $200,000
shall be disregarded; provided, however, that this $200,000 limit
shall be automatically adjusted to the maximum permissible dollar
limitation permitted by the Commissioner of the Internal Revenue
Service. In determining Earnings of a
5
<PAGE> 30
Participant for purposes of this limitation, the family aggregation
rules of Section 414(q)(6) of the Code shall apply, except in applying
such rules, the term "family" shall include only the spouse of the
Participant and any lineal descendants of the Participant who have not
attained age 19 before the close of the year. If as a result of the
application of such rules the adjusted $200,000 limitation is
exceeded, then the limitation shall be prorated among the affected
individuals in proportion to each such individual's Earnings as
determined under this Section 1.18 prior to the application of this
limitation.
1.19 Effective Date
"Effective Date" means January 1, 1989, or with respect to any
Employer specified in appendices to this Plan, the date such Employer
adopted the Plan.
1.20 Eligible Employee
"Eligible Employee" means any Employee, except any leased employee and
any Employee who is covered under a collective bargaining agreement
where retirement benefits were the subject of good faith bargaining
which does not provide for retirement benefits under this Plan.
Notwithstanding the foregoing, an Employee whose employment commenced
after the first day of the calendar month following his or her 60th
birthday and before January 1, 1988 shall not be considered an
Eligible Employee earlier than January 1, 1988.
1.21 Employee
"Employee" means any person who is employed by an Employer as a common
law employee determined from appropriate personnel records of the
Employer and any leased employee within the meaning of Code Section
414(n)(2); provided, however, if leased employees constitute twenty
percent (20%) or less of all Employer's non-highly compensated work
force, the term "Employee" shall not include a leased employee who is
covered by a plan maintained by the leasing organization which meets
the requirements of Code Section 414(n)(5).
1.22 Employer
"Employer" means Burlington Resources Inc., a Delaware corporation. The
term "Employer" shall also include other companies as provided from
time to time in appendices to this Plan.
6
<PAGE> 31
1.23 Employment Commencement Date
"Employment Commencement Date" means the date on which an Employee
first completes an Hour of Service for the Employer or an Affiliated
Company during the current period of employment,
1.24 ERISA
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, including all regulations thereunder.
1.25 Final Average Monthly Earnings
"Final Average Monthly Earnings" means the highest average monthly
Earnings received by the Participant during any 60 consecutive month
period within the last ten years prior to termination. In the event
the Participant has been employed for less than 60 consecutive months,
the computation period shall be based upon (1) the most recent 60
months of employment (whether or not consecutive), or (2) the total
period of employment, whichever is less.
If a Participant is Disabled or is on an Authorized Leave of Absence,
such Participant shall be deemed to receive monthly Earnings during
the period he or she is Disabled or on Authorized Leave of Absence
equal to his or her Earnings for the last calendar month immediately
prior to such Disability or Authorized Leave of Absence.
Notwithstanding the foregoing, an individual who was hired after age
60 and before January 1, 1988 shall be deemed an Active Participant
for purposes of determining Final Average Monthly Earnings for all
periods he or she would have been an Active Participant under the
Predecessor Plan but for the prior exclusion from participation of
employees who were hired after age 60.
1.26 Hour of Service
"Hour of Service" means each hour for which an employee is paid or
entitled to payment by the Employer or any Affiliated Company on
account of:
(a) Performance of duties;
(b) A period of time during which no duties are performed
(irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military duty, or
Authorized Leave of Absence. Hours under this paragraph shall
be
7
<PAGE> 32
calculated and credited pursuant to 29 CFR 2530.200b-2(b) and
(c), which are incorporated herein by this reference; and
(c) An award of back pay, irrespective of mitigation of damages,
agreed to by the Employer or any Affiliated Company. However,
hours credited under (a) or (b) above shall not also be
credited under this subsection (c).
An employee shall be credited with 190 Hours of Service for each month
in which he or she has at least one Hour of Service.
1.27 Integration Level
"Integration Level" means one thirty-sixth of the Social Security Wage
Base (ie., the maximum earnings subject to Social Security taxes) in
the year of termination; provided that the Integration Level
multiplied by twelve shall not exceed Social Security Covered
Compensation.
1.28 Normal Retirement Benefit
"Normal Retirement Benefit" has the meaning set forth in Section 4.02.
1.29 Normal Retirement Date
"Normal Retirement Date" has the meaning set forth in Section 3.01.
1.30 Participant
"Participant" means any Eligible Employee who qualifies for
participation pursuant to Section 2.01 or 2.02. A vested Participant
shall cease to be a Participant when his or her benefit payments from
the plan are completed.
1.31 Pension Committee
"Pension Committee" means the Committee as from time to time
constituted and appointed by the Chief Executive Officer of the
Company to administer the Plan.
1.32 Pension Starting Date
"Pension Starting Date" means (i) the first day of the month for which
a Plan benefit is payable as an annuity, or (ii) in the case of a Plan
benefit not payable in the form of an annuity, the first day on which
all events have occurred which entitle the Participant to such
benefit.
8
<PAGE> 33
1.33 Plan
"Plan" means the Burlington Resources Inc. Pension Plan either in its
previous or present form or as amended from time to time.
1.34 Plan Administrator
"Plan Administrator" means the person or entity designated in Section
10 to administer the Plan.
1.35 Plan Year
"Plan Year" means the twelve month period commencing each January 1
and ending each December 31 from and after the Effective Date.
1.36 Predecessor Plan
"Predecessor Plan" initially means the Burlington Northern Inc.
Pension Plan and its predecessor plans, including, without limitation,
the Employees Retirement Income Plan of The El Paso Company and
Affiliated Companies. In the event the Plan recognizes service under
other predecessor plans, the term "Predecessor Plan" shall also
include other plans as provided from time to time in appendices to
this Plan.
1.37 Primary Social Security Benefit
"Primary Social Security Benefit" means the Participants estimated
monthly old age benefit at age 65 from Social Security based on the
Social Security Act provisions in effect on January 1 preceding the
termination date. If the Participant terminates prior to attaining
Early Retirement Age, the Primary Social Security Benefit shall be
calculated on the assumption that his or her earnings remain constant
until age 65. The Primary Social Security Benefit for a Participant
who terminates after attaining Early Retirement Age shall be
determined based on earnings at termination and shall not be adjusted
for any difference between the Primary Social Security Benefit
determined under this provision and the actual primary Social
Security benefit to which he or she ultimately becomes entitled.
Earnings prior to termination may be determined by projecting earnings
backward at 6% per year. A Participant shall be given the opportunity
to provide an actual earnings history in the form specified by the
Pension Committee which will be used in the calculation of the Primary
Social Security Benefit in lieu of the above approximation. However,
the Participant must supply such actual earnings history within one
year after termination. Periods of compensation under the Railroad
9
<PAGE> 34
Retirement Act shall be treated as periods of compensation under the
Social Security Act.
1.38 Retirement Date
The Retirement Date for a Participant shall be one of the dates
specified in Sections 3.01, 3.02 or 3.03, on which benefits are to
commence.
1.39 Social Security Covered Compensation
"Social Security Covered Compensation" means the Participant's average
(without indexing) annual Social Security Wage Base (ie. the maximum
earnings for any employee subject to Social Security taxes) for each
calendar year during the 35-year period ending with the calendar year
in which the Participant attains (or will attain) his or her Social
Security Retirement Age.
A Participant's Social Security Covered Compensation shall be adjusted
for each Plan Year. In determining a Participant's Social Security
Covered Compensation for a Plan Year, the Social Security Wage Base
for the current Plan Year and any subsequent Plan Year shall be
assumed to be the same as the Social Security Wage Base in effect as
of the beginning of the Plan Year for which the determination is being
made. A Participant's Social Security Covered Compensation for a Plan
Year after the 35-year period described above is the Participant's
Social Security Covered Compensation for the Plan Year during which
the Participant attained Social Security Retirement Age. A
Participant's Social Security Covered Compensation for a calendar year
before the 35-year period is the Social Security Wage Base in effect
as of the beginning of the Plan Year.
1.40 Social Security Retirement Age
"Social Security Retirement Age" means the following ages depending on
the Participant's year of birth: age 65 for Participants born prior to
1938, age 66 for Participants born after 1937 but prior to 1955, and
age 67 for Participants born after 1954.
1.41 Trust or Trust Fund
"Trust" or "Trust Fund" means the trust fund into which shall be paid
all contributions and from which all benefits shall be paid under this
Plan.
10
<PAGE> 35
1.42 Trustee
"Trustee" means the trustee or trustees who receive, hold, invest, and
disburse the assets of the Trust in accordance with the terms and
provisions set forth in a trust agreement.
1.43 Vested Termination Benefit
"Vested Termination Benefit" has the meaning set forth in Section 4.05.
1.44 Vested Termination Date
"Vested Termination Date" has the meaning set forth in Section 3.04.
1.45 Year of Service
"Year of Service" means each January 1 to December 31 period in which
an employee has 1,000 or more Hours of Service. An employee's Years of
Service shall also include all periods of Credited Service pursuant to
Section 1.12(d) which are not otherwise included pursuant to this
Section 1.45.
Where the Employer maintains the plan of a predecessor employer,
service for such predecessor employer will be treated as service for
the Employer, to the extent required by the Code.
Notwithstanding the foregoing, in no event shall a Participant's Years
of Service on the Effective Date be less than his or her Years of
Service on December 31, 1988 under the Burlington Northern Inc.
Pension Plan.
1.46 Additional Definitions in Plan
The following terms are defined in the following sections of the Plan:
<TABLE>
<CAPTION>
Section
-------
<S> <C>
Aggregate Account 9.02(e)
Aggregation Group 9.02(h)
Determination Date 9.02(c)
Joint and Survivor Annuity 5.01(b)
Key Employee 9.02(g)
Lump Sum 5.01(c)
Present Value of Accrued Benefits 9.02(f)
Single Life Annuity 5.01(a)
</TABLE>
11
<PAGE> 36
<TABLE>
<CAPTION>
Section
-------
<S> <C>
Super Top Heavy 9.02(b)
Top Heavy 9.02(a)
Valuation Date (for Top Heavy) 9.02(d)
</TABLE>
12
<PAGE> 37
SECTION 2
PARTICIPATION
2.01 Eligibility for Participation
Each Eligible Employee shall become a Participant under this Plan on
the later of the Effective Date and the first day of the month coinciding with
or next following completion of a twelve consecutive month period within which
the Employee has at least 1,000 Hours of Service. The twelve-month period used
for this determination shall start on the Employee's Employment Commencement
Date and January firsts thereafter.
2.02 Reemployment After Termination
Upon the reemployment of a terminated former Active Participant as an
Eligible Employee, he or she shall immediately become an Active Participant.
An employee who terminates prior to becoming a Participant and is later
reemployed shall become a Participant upon satisfying the requirements of
Section 2.01. In the event 1,000 Hours of Service were earned during a twelve
month period described in Section 2.01 prior to termination, such service shall
be restored upon reemployment.
2.03 Change of Employment Status
If a person who is not a Participant becomes an Eligible Employee
because of a change in employment status, such person shall become a
Participant immediately as of the date of such change if he or she has
satisfied the service requirement of Section 2.01; otherwise, the Eligible
Employee shall become a Participant as of the first day of the month coinciding
with or following satisfaction of such service requirement.
2.04 Leased Employees
Notwithstanding any Plan provision to the contrary, for purposes of
applying the qualified plan requirements set forth in Section 414(n)(3) of the
Code, the term "Employees" shall have the meaning set forth in Plan Section
1.21 herein. However, a leased Employee shall not be eligible to become a
Participant in this Plan.
13
<PAGE> 38
SECTION 3
RETIREMENT DATES
3.01 Normal Retirement Date
The Normal Retirement Date for a Participant shall be the first day of
the month coinciding with or next following the attainment of age 65. A
Participant who terminates prior to retirement with a vested Accrued Benefit
shall commence receiving his or her benefit at the Normal Retirement Date,
unless such Participant qualifies for and elects to receive benefits at an
Early Retirement Date.
A Participant shall retire on his or her Normal Retirement Date if:
(a) during the two-year period immediately preceding the Normal
Retirement Date such Participant was employed in a bona fide
executive or high policy making position, and
(b) the aggregate amount of his or her Accrued Benefit together
with any other non-forfeitable retirement benefit from a
pension, profit sharing, deferred compensation plan or any
combination of such plans derived from Employer contributions
is Actuarially Equivalent to at least $44,000 per year
commencing at Normal Retirement Date, payable in the form of a
single life annuity.
3.02 Early Retirement Date
Each Participant who satisfies the early retirement requirements of
his or her Employer's Adoption Agreement may elect, in writing, an Early
Retirement Date. Such Early Retirement Date shall be before the Normal
Retirement Date and after termination on the first day of any month coinciding
with or following the date the early retirement requirements are met.
3.03 Deferred Retirement Date
The Deferred Retirement Date for a Participant who continues working
after the Normal Retirement Date shall be the first day of the month coinciding
with or next following his or her termination date; provided, however, the
Deferred Retirement Date for a Participant shall not be later than April 1
following the calendar year in which he or she attains age 70-1/2, regardless
of whether he or she remains in service after that date.
14
<PAGE> 39
3.04 Vested Termination Date
In lieu of a retirement benefit, a Participant who is vested and
terminates prior to retirement may elect in writing upon termination of
employment, to receive the Vested Termination Benefit on a Vested Termination
Date, which shall be the first day of the month following the month in which
termination of employment occurs.
15
<PAGE> 40
SECTION 4
RETIREMENT BENEFITS
4.01 Accrued Benefit
The Accrued Benefit for any Participant shall be determined in
accordance with the Adoption Agreement of such Participant's Employer, and the
provisions of this Section 4.01. The Accrued Benefit shall be reduced by the
Actuarial Equivalent of any prior distribution from the Plan. The Accrued
Benefit is payable in the form of a single life annuity commencing at Normal
Retirement Date.
Notwithstanding any other contrary provision of the Plan, the Accrued
Benefit at any time during 1989 for a Participant who is not a highly
compensated employee described in Section 414(q)(1)(A) or (B) of the Code,
shall not be less than his or her Accrued Benefit would have been at such time
if the Accrued Benefit had been determined under the terms of the Burlington
Northern Inc. Pension Plan in effect on December 31, 1988.
Also notwithstanding any Plan provision to the contrary, the Accrued
Benefit for a Participant who is a highly compensated employee described in
Section 414(q)(1)(A) or (B) of the Code, shall be the greater of his or her
Accrued Benefit under the Burlington Northern Inc. Pension Plan as of December
31, 1988, and the Accrued Benefit determined under the terms of this Plan;
provided that such Participant shall not receive a distribution after December
31, 1988 of a benefit that exceeds the benefit he or she had accrued as of
December 31, 1988 under such Predecessor Plan until the date this Plan is
adopted.
4.02 Normal Retirement Benefit
A Participant's monthly Normal Retirement Benefit shall equal his or
her vested Accrued Benefit as of the date of termination, and then adjusted for
form of payment.
4.03 Early Retirement Benefit
The monthly Early Retirement Benefit for a Participant who terminates
on or after his or her earliest Early Retirement Date shall be determined in
accordance with the Adoption Agreement of such Participant's Employer.
16
<PAGE> 41
4.04 Deferred Retirement Benefit
A Participant's monthly Deferred Retirement Benefit shall equal his or
her vested Accrued Benefit as of the date of termination, and then adjusted for
form of payment. Service and Earnings beyond Normal Retirement Date shall be
taken into consideration. In no event shall the benefit provided under this
paragraph be less than the retirement benefit to which the Participant would
have been entitled if he or she had actually retired on the Normal Retirement
Date.
In the event a Participant continues working after the date benefits
are required to commence following age 70-1/2 pursuant to Section 10.05, the
Deferred Retirement Benefit shall be recalculated and adjusted annually.
4.05 Vested Termination Benefit
The monthly Vested Termination Benefit shall equal the Participant's
vested Accrued Benefit pursuant to Section 4.01(a)(2) as of the date of
termination, then adjusted for form of payment. In the event the Participant
will receive an annuity form of payment, such benefit shall be reduced by 1/180
for each of the first 60 months by which the Vested Termination Date precedes
the Normal Retirement Date, and reduced by 1/360 for each of the next 60 months
by which the Vested Termination Date precedes the Normal Retirement Date, and
reduced Actuarially thereafter.
4.06 Reemployment After Retirement
Upon reemployment, a retired Participant shall resume accruing
benefits under the Plan. A Participant shall cease to receive retirement
benefits during any month during which the Participant works on 8 or more days
(or works during 8 or more separate work shifts) and which is before the date
benefits are required to be paid following age 70-1/2 pursuant to Section
10.05. In the event such a Participant is reemployed and works on less than 8
days (and works less than 8 separate work shifts) in any month, he or she shall
continue receiving retirement benefits during such month. At the Participant's
subsequent retirement, benefits payable shall be based on his or her total
Credited Service and Earnings at the time of subsequent retirement, and shall
be reduced by the Actuarially Equivalent value of benefits previously received
by the Participant. In no event shall the benefit upon subsequent retirement,
prior to any reduction for previously received benefits, be less than the
initial retirement benefit.
17
<PAGE> 42
4.07 Benefits For Terminated Participants
Benefits under the Plan shall be determined and paid in accordance
with the provisions of the Plan in effect on the most recent date of a
termination of employment.
18
<PAGE> 43
SECTION 5
FORMS OF PAYMENT
5.01 Forms of Payment
The following forms of benefit payments are available under this Plan:
(a) Single Life Annuity:
A single life annuity shall be payable monthly from the
Retirement Date or Vested Termination Date through the first
of the month preceding death. The amount of the monthly
benefit shall equal the monthly Normal, Early or Deferred
Retirement Benefit or Vested Termination Benefit, whichever
applies.
(b) Joint and Survivor Annuity:
A reduced joint and survivor annuity shall be payable monthly
to a Participant from the Retirement Date or Vested
Termination Date through the first of the month preceding
death. Following the Participant's death, a benefit equal to
25%, 50%, 75% or 100% of the reduced mount payable to the
Participant shall be payable for life to the Participant's
spouse, if living at the time of the Participant's death. A
Participant who elects a Normal, Early or Deferred Retirement
Benefit may elect which percentage shall be payable to the
spouse. A Participant who elects a Vested Termination Benefit
may not elect a 25%, 75% or 100% joint and survivor annuity.
If the spouse dies after the Participant's benefit begins, the
Participant's payments will be in the same reduced amount as is
otherwise payable under the joint and survivor annuity. If the
spouse dies prior to the date as of which the Participant's
benefit begins, any election of a form of benefit under this
Section 5.01(b) shall be automatically canceled. If the
Participant dies prior to the date as of which his or her
benefit is to begin, the spouse shall not be entitled to
receive any payments under this Section 5.01(b). However, a
spouse joint annuitant may be entitled to a benefit under
Section 6.01.
(i) The 25% joint and survivor annuity shall be equal to
the Participant's benefit payable in the form of a
single life annuity multiplied by the following
factor (not to exceed 1):
19
<PAGE> 44
FACTOR = .93 - .0025 x (AGE DIFFERENCE) where
AGE DIFFERENCE is the Participant's age less
the spouse's age (computed to the birthdate
anniversary nearest the Retirement Date or
Vested Termination Date, whichever applies).
(ii) The 50% joint and survivor annuity shall be equal to
the Participant's benefit payable in the form of a
single life annuity multiplied by the following
factor (not to exceed 1):
FACTOR = .87 - .005 x (AGE DIFFERENCE) where
AGE DIFFERENCE is the Participant's age less
the spouse's age (computed to the birthdate
anniversary nearest the Retirement Date or
Vested Termination Date, whichever applies).
(iii) The 75% joint and survivor annuity shall be equal to
the Participant's benefit payable in the form of a
single life annuity multiplied by the following
factor (not to exceed 1):
FACTOR = .82 - .006 x (AGE DIFFERENCE) where
AGE DIFFERENCE is the Participant's age less
the spouse's age (computed to the birthdate
anniversary nearest the Retirement Date or
Vested Termination Date, whichever applies).
(iv) The 100% joint and survivor annuity shall be equal to
the Participant's benefit payable in the form of a
single life annuity multiplied by the following
factor (not to exceed 1):
FACTOR = .79 - .0075 x (AGE DIFFERENCE) where
AGE DIFFERENCE is the Participant's age less
the spouse's age (computed to the birthdate
anniversary nearest the Retirement Date or
Vested Termination Date, whichever applies).
(c) Lump Sum:
A lump sum distribution shall be a single sum payment,
Actuarially Equivalent to the Participant's Early, Normal or
Deferred Retirement Benefit, or Vested Termination Benefit,
whichever applies and shall represent the Participant's entire
interest in the Plan.
A Participant in the Plan on January 1, 1989 may elect a lump
sum form of payment of any amount if he or she elects to
receive a Vested Termination Benefit. Such a Participant may
elect a lump sum form of payment if the amount is $25,000 or
less if he or she elects to receive a Normal, Early or
Deferred Retirement Benefit.
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An Eligible Employee who becomes a Participant after January
1, 1989 may elect a lump sum form of payment if he or she
elects to receive a Vested Termination Benefit or a Normal,
Early or Deferred Retirement Benefit, provided, a lump sum may
only be elected if the amount is $25,000 or less.
5.02 Automatic Form of Benefit
Unless a Participant elects otherwise, benefits shall be paid as
provided below:
(a) Married Participants
The qualified joint and survivor annuity under this Plan with
respect to a married Participant shall be the 50% joint and
survivor annuity. Any Participant who is married on his or
her Retirement Date or Vested Termination Date, whichever
applies, shall automatically be deemed to have elected the 50%
joint and survivor annuity option, effective as of such date,
with his or her spouse as the joint annuitant.
A Participant may reject the statutory 50% joint and survivor
annuity option, by filing a written notice with the Pension
Committee within 90 days prior to his or her Pension Starting
Date. Such initial notice, or any subsequent change, must
specify the forms of payment elected and acknowledge the
effect of the election, and must be signed by the
Participant's spouse. The spouse's signature must be
notarized, or witnessed by a Plan representative. In the event
the statutory 50% joint and survivor annuity option is
rejected and another form is not elected, benefits shall be
paid in the form of a single life annuity.
A married Participant may file a rejection notice or revoke
any such notice at anytime during the ninety-day period
immediately preceding the Pension Starting Date.
(b) Single Participants
The qualified joint and survivor annuity under the Plan with
respect to an unmarried Participant shall be the single life
annuity. Any unmarried Participant shall receive his or her
Retirement or Vested Termination Benefits in the form of a
single life annuity.
An unmarried Participant may reject the single life annuity
option by filing a written notice with the Pension Committee
with ninety days prior to his or her Pension Starting Date. An
unmarried Participant may file a rejection notice or revoke
any such notice at any time during the ninety-day period
immediately preceding the Pension Starting Date.
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5.03 Limitation on Forms of Payment
A Participant may not elect a joint annuitant other than his or her
spouse. A Participant must elect a form of payment under which payments will be
completed within the Participant's and Beneficiary's life times or within their
life expectancies.
5.04 Explanation of Forms of Payment
The Pension Committee shall furnish each Participant with a written
explanation in non-technical language of the terms and conditions of the forms
of payment within a reasonable period (but not more than ninety days) prior to
the Participant's Pension Starting Date.
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SECTION 6
DEATH BENEFITS
6.01 Pre-Retirement Spouse's Death Benefit
In the event an Eligible Employee or a Participant dies before
commencing to receive Retirement or Vested Termination Benefits under the Plan,
his or her spouse may receive a pre-retirement death benefit. The amount of the
spouse's benefit and time of commencement is described below. The spouse of a
Participant who has started to receive benefits is not entitled to this death
benefit.
(a) Death While Employed
If an Eligible Employee dies while in the employ of an
Employer, such Employee's surviving spouse shall receive a
monthly benefit. The monthly benefit shall commence on the
later of:
(i) the first day of the month following death, or
(ii) the Participant's Normal Retirement Date, determined
as if he or she had survived, or the first day of any
earlier month elected by the surviving spouse which
is on or after the Participant's death.
The amount of such monthly benefit shall be equal to 50% of
the Accrued Benefit determined for such Eligible Employee,
(iii) if death occurs on or after Normal Retirement Date,
as if he or she had retired on the day immediately
prior to his or her death, or
(iv) if death occurs before Normal Retirement Date, based
on the assumption that such Eligible Employee died on
his or her Normal Retirement Date, completed 30 years
of Credited Service and that his or her Basic Monthly
Compensation at death continued until Normal
Retirement Date, provided that such Basic Monthly
Compensation shall be increased by the average mount
of non-deferred cash bonus actually earned by such
Eligible Employee during the five calendar years
preceding his or her death.
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<PAGE> 48
The monthly benefit described in this subparagraph (a) shall
continue to be paid to such surviving spouse until the earlier
of such spouse's death or remarriage provided, however, that
had the Participant been vested prior to death, the spouse
shall receive a monthly benefit after remarriage equal to the
amount payable to the surviving spouse under a 50% joint and
survivor annuity form of payment as if the Participant had
commenced receiving Retirement or Vested Termination Benefit
payments as of the date spouse benefits commence.
At the death of a spouse entitled to benefits under this
subparagraph (a), provided such spouse did not remarry, a lump
sum payment shall be made to his or her estate in the event
dependent children of the Eligible Employee survive such
spouse. The lump sum payment shall be Actuarially Equivalent
to the payment of the monthly amount described above which was
payable to the spouse commencing on the first day of the month
following the spouse's death and continuing through the first
day of the month preceding the youngest child's eighteenth
birthday.
If at the Eligible Employee's death there is no surviving
spouse, a lump sum payment shall be paid to or on behalf of the
Eligible Employee's dependent children, to be used for the
benefit of such children as the person providing the care and
support for such children shall deem appropriate. The lump sum
payment shall be Actuarially Equivalent to the payment of the
monthly benefit described in the first paragraph of this
subsection (a) commencing on the first day of the month
following the Participant's death and continuing through the
first day of the month preceding the youngest child's
eighteenth birthday.
If an Eligible Employee should die before becoming a
Participant, he or she shall be treated as having become a
Participant on the day he or she became an Eligible
Employee.
Notwithstanding the foregoing, in no event shall the
Actuarially Equivalent value of the spouse benefit payable
under this subsection 6.01(a) be less than the Actuarially
Equivalent value of the pre-retirement survivor annuity
benefit required pursuant to Code Section 417.
(b) Death Following Termination Prior to Early Retirement Date
If the Participant dies after becoming vested and terminating
employment, and prior to becoming eligible to elect an Early
Retirement Date, such Participant's surviving spouse shall
receive a monthly benefit provided they were married
throughout the one year period ending on the date of death.
The monthly benefit shall commence on the later of:
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<PAGE> 49
(i) the first of the month following death, or
(ii) the Participant's Normal Retirement Date, determined
as if he or she had survived, or the first day of any
earlier month elected by the surviving spouse which
is on or after the Participant's earliest Early
Retirement Date,
and continue through the first of the month preceding the
spouse's death.
The benefit shall equal the amount payable to the surviving
spouse under a 50% joint and survivor annuity form of payment
as if the Participant had commenced receiving a Vested
Termination Benefit as of the date spouse benefits commence.
The spouse of a Participant in the Plan on January 1, 1989 may
elect to receive a lump sum form of payment of any amount in
lieu of the monthly benefit described above. The spouse of a
Participant who became a Participant after January 1, 1989 may
elect to receive a lump sum form of payment if the mount is
$25,000 or less, in lieu of the monthly benefit described
above. Such election must be in writing and prior to the
actual commencement of monthly benefits. A lump sum benefit is
only payable on the first of the month following the
Participant's date of death, or as soon thereafter as
administratively feasible. The lump sum benefit shall be
Actuarially Equivalent to the monthly benefit described above.
(c) Death Following Termination, Following Early Retirement Date
If the Participant dies after becoming vested and terminating
employment, and after his or her Normal Retirement Date, or
after he or she becomes eligible to elect an Early Retirement
Date, such Participant's surviving spouse shall receive a
monthly benefit provided they were married throughout the one
year period ending on the date of death. The monthly benefit
shall commence on the later of:
(i) the first day of the month following death, or
(ii) the Participant's Normal Retirement Date, determined
as if he or she had survived, or the first day of any
earlier month elected by the surviving spouse which
is on or after the Participant's death,
and continue through the first of the month preceding the
spouse's death.
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<PAGE> 50
The benefit shall equal the amount payable to the surviving
spouse under a 50% joint and survivor annuity form of payment
as if the Participant had commenced receiving Retirement
Benefit payments as of the date spouse benefits commence.
The surviving spouse may elect to receive a lump sum form of
payment in lieu of the monthly benefit described above,
provided the Actuarial Equivalent of the benefit provided
under this subparagraph (c) and the benefit payable under
Section 6.02, if any, does not exceed $25,000. In the event
the surviving spouse elects a lump sum payment, any benefit
payable under Section 6.02 shall also be paid as a lump sum.
Such election must be in writing and prior to the date monthly
benefits would otherwise commence. A lump sum benefit is only
payable on the first of the month following the Participant's
date of death, or as soon thereafter as administratively
feasible. The lump sum benefit shall be Actuarially Equivalent
to the monthly benefit described above.
6.02 Post-Retirement Spouse's Death Benefit
Upon the death of a Participant who was a Participant in the
Burlington Northern Inc. Pension Plan on December 31, 1983 and who terminated
on or after his or her earliest Retirement Date, and had Credited Service prior
to January 1, 1984, the Participant's surviving spouse, if the Participant was
married to such spouse throughout the one-year period ending on the Retirement
Date, shall receive a monthly benefit commencing on the first day of the month
following the date of the Participant's death, and continuing through the first
day of the month preceding the spouse's death. The amount of such monthly
benefit shall be equal to .5% (1/2 percent) of such Participant's "limited
compensation" multiplied by the number of his or her years of Credited Service
as of January 1, 1984. For purposes of this Section 6.02, "limited
compensation" means 90% of the Participant's Basic Monthly Compensation as of
December 31, 1983 increased by the average amount of non-deferred cash bonus
paid or accrued to such Participant from 1979 through 1983.
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<PAGE> 51
SECTION 7
VESTING
7.01 Vesting
Each Participant shall have a vested, nonforfeitable right to his or
her Accrued Benefit multiplied by the appropriate vesting percentage in
accordance with the following table:
<TABLE>
<CAPTION>
Years of Service Percent Vested
---------------- --------------
<S> <C>
Less than 5 0%
5 100%
</TABLE>
In addition, each Participant shall have a 100% nonforfeitable right
to his or her Accrued Benefit on death, or the date he or she attains age 65,
provided he or she is an Employee on such date. An employee who terminates with
0% vested shall be deemed "nonvested".
7.02 Termination Prior to Vesting
For vesting and Accrued Benefit purposes, all Years of Service and
Credited Service before and after a break-in-service shall be aggregated.
Notwithstanding the foregoing, in the event service is forfeited under
the terms of a Predecessor Plan and the individual later becomes a Participant
in this Plan, such forfeited service shall remain forfeited.
7.03 Forfeitures
Any forfeitures arising under this Plan shall be used only to offset
future Employer contributions and shall not affect any Participant's Accrued
Benefit.
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<PAGE> 52
SECTION 8
LIMITATIONS ON BENEFITS
8.01 Limitation on Benefits
To prevent discrimination in favor of highly-compensated Participants
upon early termination of the Plan, the following limitations govern allocation
of Trust assets.
(a) General Rule
During the first ten years after any "Commencement Date" (as
defined below) or if later, until the full current costs of
the plan are first met, the benefits provided by the
Employer's contributions to employees in the "Restricted
Group" (as defined below) are subject to the limitations set
forth in paragraph (c) below.
(b) Definitions
For the purposes of these limitations:
(1) Commencement Date means the Effective Date, or the
effective date of any subsequent amendment of the
Plan which substantially increases the extent of
possible discrimination as to contributions and
benefits actually payable in the event of subsequent
discontinuance of contributions or Plan termination;
(2) the Restricted Group consists of the twenty-five
highest-paid employees as of any Commencement Date,
including any employees who are not Participants but
may later become Participants, whose annual
retirement benefit provided by the Employer's
contributions can be anticipated to exceed $1,500.
(c) Limitation
Subject to the conditions set forth in paragraphs (a) and (b)
above, the amount of Employer contributions (or funds
attributable thereto) that may be applied for the benefit of
any Participant in the Restricted Group shall not exceed the
greater of:
(1) Employer contributions (or funds attributable
thereto) which would have been applied to provide
retirement benefits for the Participant under the
Plan if the Plan as in effect on the day preceding
the Commencement Date had been continued without
change;
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<PAGE> 53
(2) $20,000;
(3) the sum of (i) the Employer's contributions (or funds
attributable thereto) which would have been applied
to provide retirement benefits for the employee if
the Plan had been terminated on the day before the
Commencement Date, plus (ii) 20% of the first $50,000
of the Participant's average annual compensation
during the last five years multiplied by the number
of years since the Commencement Date for which the
full current costs have been met; or
(4) (i) if the Participant is a substantial owner (as
defined in Section 4022(b)(5) of ERISA), a dollar
amount equal to the present value of the benefit
guaranteed for the Participant under Section 4022 of
ERISA or, if the Plan has not terminated, the present
value of the benefit that would be guaranteed if the
Plan had terminated on the date the benefit
commences, or (ii) if the Participant is not a
substantial owner, a dollar mount equal to the
present value of the maximum benefit described in
Section 4022(b)(3)(B) of ERISA (determined on the
date the Plan terminates or the date benefits
commence, whichever is earlier).
For purposes of subparagraph (4), the present value of any
benefit shall be determined in accordance with regulations of
the Pension Benefit Guaranty Corporation, and for purposes of
clause (ii), without regard to any other limitations in
Section 4022 of ERISA.
(d) Limitations Not Effective
The limitations contained in this Section 8.01 shall not
restrict the current payment of benefits in a form of payment
that does not provide more rapid payments than a single life
annuity, while the Plan is in full effect and the full current
costs are met. Further, the limitations shall not restrict the
payment of a lump sum benefit or other form of payment more
rapid than a single life annuity, to a Participant in the
Restricted Group provided the Participant agrees to repay
benefits received in the event the full current costs are not
met or the Plan terminates early. Such Participant must agree
to repay amounts paid to him or her to the extent they exceed
the greater of the amount he or she would have received if the
restrictions under this Section 8.01 had been applied, or the
amount he or she would have received under a single life
annuity form of payment. The agreement to repay must be
secured by deposit in escrow of property having a market value
of 125% of the amount subject to repayment, and the value of
the escrow shall be maintained at not less than 110% of such
amount.
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<PAGE> 54
(e) Excess Funds
Any funds not allocated to a Participant as a result of this
Section shall be used proportionately to provide additional
benefits for all other Participants.
8.02 Maximum Annual Benefit Payable Under the Plan
For purposes of this Section 8.02, the Employer and any affiliated
Companies shall be considered a single employer, to the extent required by the
Code.
(a) Primary Rule
Notwithstanding any other Plan provision to the contrary, the
annual Employer provided benefit payable to or on behalf of a
Participant under the Plan (after any adjustments required
under the Plan to reflect commencement of benefits other than
at Normal Retirement Date, an optional form of payment or
death benefit coverage) shall not exceed the lesser of:
(1) $90,000 adjusted in accordance with this Section
8.02) or, if greater, the Participant's current
Accrued Benefit on December 31, 1982 under the
Burlington Northern Inc. Pension Plan; or
(2) the Participant's average annual Compensation from
the Employer for the consecutive calendar years (not
in excess of three such years) during which he or she
was an active Participant in the Plan and for which
such average is highest.
(b) Cost-of-Living Adjustment
The $90,000 limit prescribed above shall be automatically
adjusted for cost-of-living increases, to the maximum
permissible dollar limitation determined by the Commissioner
of the Internal Revenue Service. The dollar amount applicable
in computing the benefit payable to any Participant shall be
the dollar amount in effect for the calendar year in which the
benefit commences. For 1989, the limit is $98,064.
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<PAGE> 55
(c) Adjustment for Early or Late Retirement
For purposes of Sections 8.02 and 8.03, if the Participant's
benefit commences before the Social Security Retirement Age,
the limit prescribed in Section 8.02(a)(1) shall be
Actuarially reduced to reflect such early commencement. If the
Participant's benefit commences after the Social Security
Retirement Age, the limit prescribed in Section 8.02(a)(1)
shall be Actuarially increased for purposes of Sections 8.02
and 8.03 to reflect such late commencement.
(d) Annual Benefit
Notwithstanding the foregoing, if the benefit to be paid to a
Participant under the Plan is not in the form of an "Annual
Benefit" as described below, the benefit considered to be
payable to a Participant under the Plan for purposes of
Sections 8.02 and 8.03 shall be Actuarially adjusted to the
extent required under Section 415(b)(2) of the Code. For
purposes of the foregoing, "Annual Benefit" means the benefit
payable annually in the form of a straight life annuity
without ancillary benefits or in the statutory 50% joint and
survivor annuity option.
(e) Interest Rate
Any Actuarial adjustments under this Section 8.02 shall be
based on the Actuarial Equivalent factors applicable for
comparable purposes under the Plan on the applicable date,
except that the interest rate shall be 5%.
(f) Special Provisions Regarding Participants With Fewer Than Ten
Years of Participation or Service
In the case of any Participant who Participates in the Plan
for fewer than ten years, the maximum dollar benefit otherwise
applicable under Section 8.02(a)(1) shall be multiplied by a
fraction whose numerator is the Participant's years of
participation in the Plan (including fractions thereof, but
not less than one) and whose denominator is ten.
In the case of any Participant who was employed by the
Employer for fewer than ten years, the maximum benefit
otherwise applicable under Sections 8.02(a)(2) and 8.03 shall
be multiplied by a fraction whose numerator is the
Participant's years of employment with the Employer (including
fractions thereof, but not less than one) and whose
denominator is ten.
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<PAGE> 56
(g) Aggregation With Other Defined Benefit Plans
If a Participant also participates in any other defined
benefit pension plan maintained by the Employer, the
provisions of Sections 8.02 and 8.03 shall be applied on an
aggregate basis to the benefits payable under this Plan and
each such other plan. Any reduction in the aggregate benefits
payable under this Plan and any such other plan due to the
application of this Section shall be made on a pro rata basis.
8.03 Additional Limitation Relating to Defined Contribution Plans
(a) Primary Rule
For Participants who participate in this Plan and a defined
contribution plan maintained by the Employer, the sum of (1)
and (2) below for any calendar year may not exceed 1.0, as
determined by the Pension Committee.
(1) The defined benefit plan fraction for any year is
equal to the quotient of (i) divided by (ii) below
expressed as a fraction:
(i) The projected annual benefit (determined by
projecting service, but not Earnings, to
normal retirement age) of the Participant
under the Plan determined as of the close of
the year.
(ii) The lesser of: (a) 1.25 multiplied by the
dollar limitation determined under Section
8.02 (a)(1) in effect for such year, or (b)
1.4 multiplied by the limitation determined
under Section 8.02 (a)(2) (generally, 100%
of the Participant's average annual
Compensation).
(2) The defined contribution plan fraction for any year
is equal to the quotient of (i) divided by (ii) below
expressed as a fraction:
(i) The sum of the "annual additions" to the
Participant's accounts for the current year,
as of the close of the year, and for all
prior years.
(ii) The sum of the lesser of the following
amounts for such year and for each prior year
of service with the Employer (regardless of
whether a plan was in existence during those
years): (a) 1.25 multiplied by the dollar
limitation in effect for defined contribution
plans under Section 415 of the Code for such
year, or (b) 1.4 multiplied by 25% of a
Participant's Compensation for such year.
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<PAGE> 57
(b) Remedy
If such sum exceeds 1.0, the benefit under this defined
benefit Plan shall be reduced to the extent necessary to
satisfy the limitation of this section.
33
<PAGE> 58
SECTION 9
TOP HEAVY PROVISIONS
9.01 Scope
Notwithstanding any Plan provision to the contrary, for any Plan Year
in which the Plan is Top Heavy within the meaning of Section 416(g) of the
Code, the provisions of this Section 9 shall govern to the extent they conflict
with or specify additional requirements to the Plan provisions governing Plan
Years which are not Top Heavy.
9.02 Top Heavy Status
(a) Top Heavy
This Plan shall be "Top Heavy" if, as of the Determination
Date, (1) the sum of the Aggregate Accounts of Key Employees,
or (2) the Present Value of Accrued Benefits of Key Employees
under this Plan and any plan of an Aggregation Group, exceeds
60% of the Aggregate Accounts or the Present Value of Accrued
Benefits of all Participants under this Plan and any plan of
an Aggregation Group.
The Present Value of Accrued Benefits and/or Aggregate Account
balance of a Participant who was previously a Key Employee but
is no longer a Key Employee (or his or her Beneficiary), shall
not be taken into account for purposes of determining Top
Heavy status. Further, a Participant's Present Value of
Accrued Benefits and/or Aggregate Account balance shall not be
taken into account if he or she has not performed services for
the Affiliated Companies during the five year period ending
on the Determination Date.
(b) Super Top Heavy
This Plan shall be "Super Top Heavy" if, as of the
Determination Date, (1) the sum of the Aggregate Accounts of
Key Employees, or (2) the Present Value of Accrued Benefits of
Key Employees under this Plan and any plan of an Aggregation
Group, exceeds 90% of the Aggregate Accounts or the Present
Value of Accrued Benefits of all Participants under this Plan
and any plan of an Aggregation Group.
(c) Determination Date
Whether the Plan is Top Heavy for any Plan Year shall be
determined as of the Determination Date. "Determination Date"
means (a) the last day
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<PAGE> 59
of the preceding Plan Year, or (b) in the case of the first
Plan Year, the last day of such Plan Year.
(d) Valuation Date
"Valuation Date" means, for purposes of determining Top
Heaviness, the Determination Date.
(e) Aggregate Account
"Aggregate Account" means, with respect to a Participant, his
or her adjusted account balance in a defined contribution
plan, as determined under the top heavy provisions of such
plan.
(f) Present Value of Accrued Benefits
"Present Value of Accrued Benefits" means the sum of:
(i) the Actuarial Equivalent present value of the accrued
normal retirement benefit under the Plan as of the
Valuation Date, and
(ii) distributions prior to the Valuation Date, made
during the Plan Year that contains the Determination
Date and the four preceding Plan Years.
(g) Key Employee
"Key Employee" means an employee or former employee (and his
or her Beneficiaries) who, at any time during the Plan Year
containing the Determination Date or any of the four preceding
Plan Years, is included in one of the following categories as
within the meaning of Section 416(i) of the Code and
regulations thereunder.
(i) an officer of the Employer whose annual aggregate
Compensation from Affiliated Companies exceeds 50% of
the dollar limitation under Section 415(b)(1)(A) of
the Code (for 1989, this amount is $49,032), provided
that no more than 50 employees shall be considered
officers, or if less, the greater of 10% of the
employees or 3,
(ii) one of the ten employees owning the largest interest
in the Employer who owns more than a 0.5% interest of
the Employer, and whose annual aggregate Compensation
from the Affiliated Companies exceeds the dollar
limitation under Section 415(c)(1)(A) of the Code
(for 1989, this amount is $30,000),
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<PAGE> 60
(iii) an employee who owns more than 5% of the Employer, or
(iv) an employee who owns more than 1% of the Employer
with annual aggregate Compensation from the
Affiliated Companies that exceeds $150,000.
(h) Aggregation Group
"Aggregation Group" means the group of plans that must be
considered as a single plan for purposes of determining
whether the plans within the group are Top Heavy (Required
Aggregation Group), or the group of plans that may be
aggregated for purposes of Top Heavy testing (Permissive
Aggregation Group). The Determination Date for each plan must
fall within the same calendar year in order to aggregate the
plans.
(i) The Required Aggregation Group includes each plan of
the Affiliated Companies in which a Key Employee is a
participant in the Plan Year containing the
Determination Date or any of the four preceding Plan
Years, and each other plan of the Affiliated
Companies which, during this period, enables any plan
in which a Key Employee participates to meet the
minimum participation standards or non-discriminatory
contribution requirements of Code Sections 401(a)(4)
and 410.
(ii) A Permissive Aggregation Group may include any plan
sponsored by an Affiliated Company provided the group
as a whole continues to satisfy the minimum
participation standards and non-discriminatory
contribution requirements of Code Sections 401(a)(4)
or 410.
Each plan belonging to a Required Aggregation Group shall be
deemed Top Heavy, or non-Top Heavy in accordance with the
group's status. In a Permissive Aggregation Group that is
determined Top Heavy only those plans that are required to be
aggregated shall be Top Heavy. In a Permissive Aggregation
Group that is not Top Heavy, no plan in the group shall be Top
Heavy.
9.03 Minimum Benefit
(a) General Rule
For any Top Heavy Plan Year, a non-Key Employee who completes
a Year of Service shall have an Accrued Benefit at least equal
to the minimum benefit described herein. The minimum Accrued
Benefit at any point in time equals the lesser of:
(i) two percent multiplied by Top Heavy Years of Service,
or
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<PAGE> 61
(ii) twenty percent,
multiplied by such Participant's "Average Compensation".
"Average Compensation" means a Participant's average
Compensation for the five consecutive years when such
Participant had the highest aggregate Compensation from the
Employer. However, Compensation received for non-Top Heavy
Plan Years shall be disregarded. The benefit described herein
is expressed as an annual benefit in the form of a single life
annuity (with no ancillary benefits), commencing at normal
retirement age.
A non-Key Employee shall not be denied this minimum benefit
because he or she was not employed on a specified date, failed
to make any mandatory employee contributions, or failed to
earn a specified amount of Compensation.
(b) Special Two Plan Rule
Where this Plan and a defined contribution plan belong to an
Aggregation Group that is determined Top Heavy, the minimum
benefit required under (a) above for any non-Key Participant
who also participates in the defined contribution plan shall
be reduced by the minimum contribution and forfeiture
allocated to the non-Key Participant's accounts pursuant to the
defined contribution plan's top heavy provisions. Such offset
shall be in accordance with the safe harbor rules of Treasury
Regulation 1.416-1(m-12).
9.04 Benefit Limitation
For any Top Heavy Plan Year in which the Employer does not make the
extra minimum allocation provided below, 1.0 shall replace the 1.25 factor
found in the denominators of the defined benefit and defined contribution plan
fractions for purposes of calculating the combined limitation on benefits under
a defined benefit and defined contribution plan pursuant to Section 415(e) of
the Code [see Section 8.03].
If this Plan is Top Heavy, but is not Super Top Heavy, the above
referenced fractions shall remain unchanged provided the Employer provides an
extra minimum Accrued Benefit for each non-Key Employee. The extra benefit (in
addition to the minimum benefit set forth in Section 9.03) shall equal the
lesser of:
(i) one percent multiplied by Top Heavy Years of Service, or
(ii) ten percent,
multiplied by such Participant's "Average Compensation", as defined in Section
9.03.
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9.05 Vesting
(a) Top Heavy Schedule.
For any Top Heavy Plan Year, each Participant who completes an
Hour of Service in such Year shall become vested and have a
nonforfeitable right to retirement benefits he or she has
earned under the Plan in accordance with the following table:
<TABLE>
<CAPTION>
Years of Service Vesting Percentage
---------------- ------------------
<S> <C>
Less than 2 0%
2 20%
3 40%
4 60%
5 or More 100%
</TABLE>
Provided, however, that a Participant's vesting percentage
shall not be less than the percentage determined under the
table in Section 7.01.
(b) Return to Non-Top Heavy Status
If the Plan becomes Top Heavy and ceases to be Top Heavy in
any subsequent Plan Year, the vesting schedule shall
automatically revert to the vesting schedule in effect before
the Plan became Top Heavy. Such reversion shall be treated as
a Plan amendment pursuant to the terms of the Plan, and shall
not cause a reduction of any Participant's nonforfeitable
interest in the Plan on the date of such amendment.
A Participant with three or more Years of Service as of the
end of the election period, may elect to remain covered by the
Top Heavy vesting schedule. The Participant's election period
shall commence on the adoption date of the amendment and shall
end 60 days after the latest of:
(i) the adoption date of the amendment,
(ii) the effective date of the amendment, or
(iii) the date the Participant receive written notice of
the amendment from the Pension Committee.
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SECTION 10
ADMINISTRATION OF THE PLAN
10.01 Plan Administrator
Each Employer, and the members of the Pension Committee, and the
Senior Vice President-Finance and the Senior Vice President-Human Resources and
Administration of the Company (or officers holding the equivalent positions)
shall be deemed fiduciaries. Each fiduciary shall have only those specific
powers, duties, responsibilities and obligations provided to them under the
Plan or the Trust, as follows:
(a) The Company shall have the sole authority to appoint and
remove the Trustee and the investment manager.
(b) The Company shall be the Plan Administrator. The Pension
Committee acting on behalf of the Company shall have the sole
authority to and responsibility for the administration of the
Plan as specified in the Plan and the Trust, including the
discretionary authority to interpret the provisions of the
Plan and the facts and circumstances of claims for benefits.
The Senior Vice President-Human Resources and Administration
(or the officer holding the equivalent position) shall have
the responsibility of implementing the administration of the
Plan as the Pension Committee shall direct.
(c) The Trustee shall have the responsibility for administration
of the Trust and management of the assets held under the Trust
as provided therein.
Each fiduciary may rely upon any such direction, information
or action of another fiduciary as being proper under the Plan
or the Trust, and is not required to inquire into the
propriety of any such direction, information or action. Each
fiduciary may designate any person, partnership or
corporation, to carry out any of its responsibilities under the
Plan or the Trust. Any such designation shall be reduced to
writing, and such writing shall be kept with the records of
such fiduciary. No fiduciary guarantees the Trust Fund in any
manner against investment loss or depreciation in asset value.
10.02 The Pension Committee
(a) General
The Chief Executive Officer of the Company shall appoint a
committee consisting of three or more members which shall be
known as the Pension Committee. The Pension Committee shall be
responsible for carrying out the Company's duties as Plan
Administrator and, except for duties specifically
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<PAGE> 64
vested in the Trustee, for the administration of the
provisions of the Plan. The Chief Executive Officer of the
Company shall have the right at any time, with or without
cause, to remove any member or members of the Pension
Committee. A member of the Pension Committee may resign,
effective upon delivery of a written resignation to the Chief
Executive Officer of the Company.
Upon the resignation, removal or failure or inability for any
reason of any member of the Pension Committee to act
hereunder, the Chief Executive Officer of the Company shall
appoint a successor member if the failure to do so would cause
the Pension Committee to consist of less than three members.
All successor members of the Pension Committee shall have all
the rights, privileges and duties of their predecessors, but
shall not be held accountable for the acts of their
predecessors.
(b) Notice to Trustee of Committee Members
Promptly after the appointment of the original members, and
any successor member of the Pension Committee, the Trustee
shall be notified as to the names of the persons appointed as
members or successor members of the Pension Committee by
delivery to the Trustee of a certified copy of the
appointment.
(c) Procedures
The Pension Committee may act at a meeting, or by writing
without a meeting, by a vote or written assent of a majority
of its members. The Pension Committee shall elect a chairman
and a secretary. The secretary may, but need not be, a member
of the Pension Committee. The chairman shall be the Plan's
agent for service of legal process, and shall forward all
necessary communication to the Trustee. The chairman may sign
all reports required by law on behalf of all members of the
Pension Committee.
The Pension Committee shall keep a record of all of its
proceedings and shall keep or cause to be kept all books of
account, records and other data as may be necessary or
advisable in its judgement for the administration of the Plan,
including records relating to each Participant's service
accrued benefits, notifications to Participants and annual
reports to the Internal Revenue Service, the Department of
Labor and the Pension Benefit Guaranty Corporation.
The Pension Committee may adopt such additional rules and
procedures as it deems desirable for the conduct of its
affairs and the administration of the Plan, provided that any
such rules and procedures shall be consistent with the
provisions of the Plan and ERISA.
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(d) Decisions Affecting a Member
Each member of the Pension Committee shall be an employee of
one of the Employers. Such status shall not disqualify the
Committee member from taking any action hereunder or render
him or her accountable for any distribution or other material
advantage received by him or her under the Plan, provided that
no member of the Pension Committee who is a Participant shall
take part in any action of the Pension Committee or any matter
involving solely his or her rights under the Plan.
(e) Allocation and Delegation of Responsibilities
The members of the Pension Committee may allocate their
responsibilities among themselves and may designate any
person, partnership or corporation to carry out any of their
responsibilities. Any such allocation or designation shall be
reduced to writing and such writing shall be kept with the
records of the Pension Committee.
The Pension Committee may employ such counsel (who may be
counsel for any Employer) and agents and may obtain for such
administrative, clerical, medical, legal, audit, actuarial, and
other services as it may require in carrying out the
provisions of the Plan.
(f) Plan Interpretation and Records
The Pension Committee shall have the duty and authority to
interpret and construe the Plan in regard to all questions of
eligibility, the status and rights of Participants and
surviving spouses under the Plan, and the manner, time and
amount of payment of any distributions under the Plan. Each
Employer shall, from time to time, upon request of the Pension
Committee, furnish to the Pension Committee and certify
thereto as correct such data and information as the Pension
Committee shall require in the performance of its duties.
(g) Exclusive Benefit
The members of the Pension Committee, and each of them, shall
discharge their duties with respect to the Plan (i) solely in
the interest of the Participants and their surviving spouses,
and (ii) for the exclusive purposes of providing benefits to
Participants and their surviving spouses and of defraying
reasonable expenses of administering the Plan.
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<PAGE> 66
(h) No Compensation
No member of the Pension Committee shall receive any
compensation or fee for his or her services on the Pension
Committee, but the Employers shall reimburse the Pension
Committee members for any necessary expenditures incurred in
the discharge of their duties as Pension Committee members.
(i) Reliance on Information
The members of the Pension Committee and the Employers and
their officers and directors shall be entitled to rely on all
tables, valuations, certificates and reports made by its
accountants and upon all opinions given by legal counsel
employed by them. The members of the Pension Committee and the
Employers and their officers and directors, shall be fully
protected in respect of any action taken or suffered by them
in good faith in reliance upon any such actuary, accountants
or counsel, and all action so taken or suffered shall be
conclusive upon all Participants and Beneficiaries under the
Plan.
(j) Indemnification
To the extent permitted by law, the Employers hereby jointly
and severally indemnify the members of the Pension Committee,
and each of them, from the effects and consequences of their
acts, omissions and conduct in their official capacity, except
to the extent that such effects and consequences shall result
from their own willful misconduct.
10.03 Expenses
All costs and expenses incurred in administering the Plan and the
Trust Fund, including without limitation the expenses of the Pension Committee,
the fees of the actuary, the fees of counsel and any agents for the Pension
Committee, the fees and expenses of the Trustee, the fees of counsel for the
Trustee and other administrative expenses shall be paid by the Trustee from the
Trust Fund to the extent such expenses are not paid by the Employers. The
Pension Committee, in its sole discretion, after considering the nature of a
particular expense, shall determine the portion of such expense which is to be
borne by a particular Employer.
10.04 Bonding and Insurance
To the extent required by law, every Pension Committee member, every
fiduciary of the Plan and every person handling Plan funds shall be bonded. The
Pension Committee shall take such steps as are necessary to assure compliance
with applicable bonding requirements. The Pension Committee may apply for and
obtain fiduciary liability insurance insuring the Plan against damages by
reason of breach of fiduciary responsibility
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<PAGE> 67
at the Plan's expense and insuring each fiduciary against liability to the
extent permissible by law at the Employer's expense.
10.05 Commencement of Benefits
(a) Conditions of Payment
Benefit payments under the Plan shall not be payable prior to
the fulfillment of the following conditions:
(1) The Pension Committee has been furnished with such
applications, proofs of birth or death, address, form
of benefit election, spouse consent if required and
other information the Pension Committee deems
necessary;
(2) The Participant has terminated employment with the
Employer, reached age 70-1/2 or died; and
(3) The Participant or Beneficiary is eligible to receive
benefits under the Plan as determined by the Pension
Committee.
The Pension Committee may rely upon all such information so
furnished it, including the Participant's current mailing
address.
(b) Commencement of Payment
Unless a Participant elects otherwise, the payment of benefits
shall commence no later than 60 days after the end of the Plan
Year in which the latest of the following occurs:
(1) the date the Participant reaches Normal Retirement
Date,
(2) the tenth anniversary of the year in which the
Participant commenced participation in the Plan, or
(3) the Participant terminates employment with the
Employer;
provided that payments shall not commence later than the April
1 following the calendar year in which the Participant reaches
age 70-1/2.
In no event shall payments commence prior to the Participant's
Normal Retirement Date if the Participant's Accrued Benefit
exceeds $3,500 without the written consent of the Participant
and the spouse. Spouse consent must acknowledge the effect of
such election and be notarized or witnessed by a Plan
representative.
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<PAGE> 68
If the information required in Section 10.05(a) above is not
available prior to such date, the amount of payment will not be
ascertainable. In such event, the commencement of payment
shall be delayed until no more than 60 days after the date the
amount of such payment is ascertainable.
The Pension Committee shall direct the Trustee to make all
payments under the Plan.
10.06 Appeal Procedure
(a) Submission of Claim
A claim for benefit payment shall be considered filed when an
application form is submitted to the Pension Committee.
(b) Notice of Denial
Any time a claim for benefits is wholly or partially denied,
the Participant or Beneficiary (hereinafter "Claimant") shall
be given written notice of such action within 90 days after
the claim is filed, unless special circumstances require an
extension of time for proceeding. If there is an extension,
the Claimant shall be notified of the extension and the reason
for the extension within the initial 90 day period. The
extension shall not exceed 180 days after the claim is filed.
Such notice will indicate the reason for denial, the pertinent
provisions of the Plan on which the denial is based, an
explanation of the claims appeal procedure set forth herein,
and a description of any additional material or information
necessary to perfect the claim and an explanation of why such
material or information is necessary.
(c) Right to Request Review
Any person who has had a claim for benefits denied by the
Pension Committee, who disputes the amount of benefit payment
determined by the Pension Committee, or is otherwise adversely
affected by action of the Pension Committee, shall have the
right to request review by the Pension Committee. Such request
must be in writing, and must be made within 60 days after such
person is advised of the Pension Committee's action. If
written request for review is not made within such 60-day
period, the Claimant shall forfeit his or her right to review.
The Claimant or a duly authorized representative of the
Claimant may review all pertinent documents and submit issues
and comments in writing.
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<PAGE> 69
(d) Review of Claim
The Pension Committee shall then review the claim. It may hold
a hearing if it deems it necessary and shall issue a written
decision reaffirming, modifying or setting aside its former
action within 60 days after receipt of the written request for
review, or 120 days if special circumstances, such as a
hearing, require an extension. The Claimant shall be notified
in writing of any such extension within 60 days following the
request for review. A copy of the decision shall be furnished
to the Claimant. The decision shall set forth its reasons and
pertinent Plan provisions on which it is based. The decision
shall be final and binding upon the Claimant and the Pension
Committee and all other persons involved.
10.07 Plan Administration - Miscellaneous
(a) Limitations on Assignments
Benefits under the Plan may not be assigned, sold,
transferred, or encumbered, in whole or in part, either
directly or by operation of law or otherwise, and any attempt
to do so shall be void. The interest of a Participant in
benefits under the Plan shall not be subject to debts or
liabilities of any kind and shall not be subject to
attachment, garnishment or other legal process, except as
provided in Section 10.08 relating to Domestic Relations
Orders, or otherwise permitted by law.
(b) Masculine and Feminine, Singular and Plural
Whenever used herein, words in one gender shall include the
opposite gender, the singular shall include the plural and the
plural shall include the singular whenever the context shall
plainly so require.
(c) Small Benefits
In cases where the Actuarially Equivalent present value of a
vested or payable benefit is less than or equal to the maximum
permissible amount under the Code which may be distributed
without the consent of a Participant or his or her spouse (in
1989, the amount is $3,500), the Pension Committee shall
direct such present value be paid in a lump sum distribution
as soon as practical following termination and prior to the
Pension Starting Date.
(d) No Additional Rights
No person shall have any rights in or to the Trust, or any
part thereof, or under the Plan, except as, and only to the
extent, expressly provided for in
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<PAGE> 70
the Plan. Neither the establishment of the Plan, the granting
of a retirement benefit nor any action of the Employer or the
Pension Committee shall be held or construed to confer upon
any person any right to be continued as an employee, or, upon
dismissal, any right or interest in the Trust other than as
herein provided. The Employer expressly reserves the right to
discharge any employee at any time.
(e) Governing Law
This Plan shall be construed in accordance with applicable
federal law and the laws of the State of Washington, wherein
venue shall lie for any dispute arising hereunder.
(f) Disclosure to Participants
Each Participant shall be advised of the general provisions of
the Plan and, upon written request addressed to the Pension
Committee, shall be furnished any information requested
regarding the Participant's status, rights and privileges
under the Plan as may be required by law.
(g) Income Tax Withholding Requirements
Any retirement benefit payment made under the Plan shall be
subject to any applicable income tax withholding requirements.
For this purpose, the Pension Committee shall provide the
Trustee with any information the Trustee needs to satisfy such
withholding obligations and with any other information that
may be required under the Code.
(h) Severability
If any provision of this Plan shall be held illegal or invalid
for any reason, such determination shall not affect the
remaining provisions of this Plan which shall be construed as
if said illegal or invalid provision had never been included.
(i) Facility of Payment
Whenever, in the Pension Committee's opinion, a person
entitled to receive any benefit payment is under a legal
disability or is incapacitated in any way so as to be unable
to manage his or her affairs, the Pension Committee may direct
the Trustee to make payments to such person or to his or her
guardian or other legal representative, or in the absence of a
guardian or legal representative, to a custodian for such
person under a Uniform Gifts to Minors Act or to any relative
of such person by blood or marriage, for such person's
benefit. Any payment made in good faith pursuant to this
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<PAGE> 71
provision shall fully discharge the Employer and the Plan of
any liability to the extent of such payment.
(j) Correction Of Errors
Any Employer contribution to the Trust made under a mistake of
fact (or investment proceeds of such contribution if a lesser
amount) shall be returned to the Employer within one year after
payment of the contribution.
In the event an incorrect amount is paid to a Participant or
Beneficiary, any remaining payments may be adjusted to correct
the error. The Pension Committee may take such other action it
deems necessary and equitable to correct any such error.
(k) Responsibility to Advise Pension Committee of Current Address
Each person entitled to receive a payment under the Plan shall
file with the Pension Committee in writing his or her complete
mailing address and each change therein. A check or
communication mailed to any person at the address on file with
the Pension Committee shall be deemed to have been received by
such person for all purposes of the Plan, and no member of the
Pension Committee, the Employers or the Trustee shall be
obligated to search for or ascertain the location of any
person. If the Pension Committee doubts whether payments are
being received by the person entitled thereto, it shall, by
registered mail addressed to the person concerned at the last
address known to the Pension Committee, notify such person
that all future Pension payments will be withheld until such
person submits to the Pension Committee evidence that he or
she is still living and the proper mailing address.
(l) Notices to Participants and Surviving Spouses
All notices, reports and statements given, made, delivered or
transmitted to a Participant or surviving spouse shall be
deemed to have been duly given, made or transmitted when
mailed by first class mail with postage prepaid and addressed
to such Participant or spouse at the address last appearing on
the records of the Pension Committee. A Participant or
surviving spouse may record any change of address from time to
time by written notice filed with the Pension Committee.
(m) Notices to Employers or Pension Committee
Written directions, notices and other communications from
Participants or surviving spouses to the Employers or the
Pension Committee shall be deemed to have been duly given,
made or transmitted either when delivered
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<PAGE> 72
to such location as shall be specified upon the forms
prescribed by the Pension Committee for the giving of such
directions, notices and other communications or when mailed by
first class mail with postage prepaid and addressed to the
addressee at the address specified on such forms.
10.08 Domestic Relations Orders
Notwithstanding any Plan provisions to the contrary, benefits under
the Plan may be paid to someone other than the Participant, Beneficiary or
joint annuitant, pursuant to a Qualified Domestic Relations Order, in
accordance with Section 414(p) of the Coda. A Qualified Domestic Relations
Order is a judgment, decree, or order ("Order") including approval of a
property settlement agreement) that:
(a) relates to the provision of child support, alimony payments or
marital property rights to a spouse, former spouse, child or
other dependent of a Participant;
(b) is made pursuant to a state domestic relations law (including
a community property law);
(c) creates or recognizes the existence of an alternate payee's
right to, or assigns to an alternate payee the right to,
receive all or a portion of the benefits payable to a
Participant under the Plan;
(d) specifies the name and last known address of the Participant
and each alternate payee;
(e) specifies the amount or method of determining the amount of
benefit payable to an alternate payee;
(f) specifies the number of payments or period during which
payments are to be made;
(g) names each plan to which the order applies;
(h) does not require any form, type or amount of benefit not
otherwise provided under the Plan;
(i) does not conflict with a prior Domestic Relations Order that
meets the requirements of this section.
Payments to an alternate payee pursuant to a Qualified Domestic
Relations Order may commence on the date the Participant attains age 50 as if
the Participant retired on such date, regardless of whether the Participant
continues working after that date.
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<PAGE> 73
The Pension Committee shall determine whether an order meets the
requirements of this section within a reasonable period after receiving an
order. The Pension Committee shall notify the Participant and any alternate
payee that an order has been received and with respect to benefits which are in
pay status shall establish a separate account under the Plan for any alternate
payee pending determination that an order meets the requirements of this
section. If within eighteen months after such a separate account is
established, the order has not been determined to be a qualified Order, the
amount in the separate account shall be distributed to the individual who would
have been entitled to such amount if there had been no order.
10.09 Plan Qualification
Any modification or amendment of the Plan may be made retroactive, as
necessary or appropriate, to establish and maintain a "qualified plan" pursuant
to Section 401 of the Code, and ERISA and regulations thereunder and the exempt
status of the Trust under Section 501 of the Code.
Notwithstanding anything herein to the contrary, this Plan shall be
contingent upon a favorable Internal Revenue Service ruling that the Plan, with
respect to each Employer, is qualified under Section 401(a) of the Code and
exempt from income taxation under Section 501(a) of the Code. In the event the
Plan is not initially recognized as a "qualified plan", or the assets of the
Plan are not initially exempt under Section 501 of the Code with respect to an
Employer and the Plan is not amended retroactively for any reason to correct the
defaults, then the Employer may terminate its participation in the Plan and
direct the Trustee to pay and deliver to such Employer within one year the
portion of the Trust Fund applicable to Participants employed by such Employer,
determined by the Company. In the event all Employers terminate participation
under this section, all amounts contributed by the Employer to the Plan, plus
investment earnings, less expenses paid, shall be returned within one year.
10.10 Deductible Contribution
Notwithstanding anything herein to the contrary, any contribution by
the Employer to the Trust is conditioned upon the deductibility of the
contribution by the Employer under the Code and, to the extent any such
deduction is disallowed, the Employer may within one year following a final
determination of the disallowance, demand repayment of such disallowed
contribution and the Trustee shall return such contribution less any losses
attributable thereto within one year following the disallowance.
10.11 Payment of Benefits Through Purchase of Annuity Contract
In lieu of paying benefits directly from the Trust to a Participant or
a Beneficiary, the Trustee may purchase, with Trust assets, an individual
annuity contract from an insurance company which, as far as possible, provides
benefits equal to (or Actuarially Equivalent to) those provided in the Plan for
such Participant or Beneficiary, but provides
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<PAGE> 74
no optional form of retirement income or benefit which would not be permitted
under the Plan, whereupon the liability of the Trust and of the Plan will cease
and terminate with respect to such benefits that are so purchased and for which
the premiums are duly paid. Such an individual annuity contract may be
purchased by the Trustee on a single-premium basis or on the basis of annual
premiums payable over a period of years and may be purchased at any time on or
after the Participant's Vested Termination Date, Retirement Date or death to
provide the benefits due under the Plan to the Participant or a Beneficiary on
or after the date of such purchase.
Any annuity contract distributed by the Trustee to a Participant or
Beneficiary under the provisions of the Plan shall bear on the face thereof the
designation "NOT TRANSFERABLE", and such contract shall contain a provision to
the effect that the contract may not be sold, assigned, discounted or pledged
as collateral for a loan or as security for the performance of an obligation or
for any other purpose to any person other than the issuer thereof.
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SECTION 11
PARTICIPATION BY OTHER EMPLOYERS
11.01 Adoption Of Plan
With the consent of the Company, any corporation which is a current
member or a former member of the affiliated group (as defined in Section 1504
of the Code) of which the Company is the common parent corporation or a
successor company thereto may become a participating Employer under the Plan by
(a) taking such action as shall be necessary to adopt the Plan, (b) filing with
the Pension Committee a duly certified copy of the Adoption Agreement in form
specified by the Company as adopted by such corporation, (c) becoming a party
to the trust agreement establishing the Trust Fund, and (d) executing and
delivering such instruments and taking such other action as may be necessary or
desirable to put the Plan into effect with respect to such corporation. The
Adoption Agreement shall specify the terms under which each such corporation
shall participate in the Plan, including the amount of benefits to be provided
to the employees of such corporation. Such Adoption Agreement shall also
contain any modifications of the terms of this Plan as may be desired by such
corporation and agreed to by the Company.
11.02 Prior Service
Unless otherwise specified in an Adoption Agreement, periods of
service credited under a retirement plan of an Employer, or service with an
Employer which did not maintain a retirement plan; prior to the time such
Employer becomes a participating Employer shall not be considered in
determining a Participant's Years of Service and Credited Service.
11.03 Withdrawal from Participation
Any Employer may withdraw from participation in the Plan at any time
by filing with the Pension Committee a duly certified copy of a resolution of
its board of directors to that effect and giving notice of its intended
withdrawal to the Pension Committee, the other Employers and the Trustees prior
to the effective date of withdrawal.
11.04 Company As Agent For Employers
Each corporation which shall become a participating Employer pursuant
to Section 11.01 shall be deemed to have appointed the Company its agent to
exercise on its behalf all of the powers and authorities hereby conferred upon
the Company by the terms of the Plan, including, but not by way of limitation,
the power to amend and terminate the Plan. The authority of the Company to act
as such agent shall continue until such Employer shall withdraw from the Plan.
Notwithstanding the foregoing, the Company shall not have the authority to
amend the adoption agreement executed by another Employer.
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SECTION 12
AMENDMENT AND TERMINATION
12.01 Amendment
The Plan may at any time and from time to time be amended or modified,
without further approval of the Board of Directors of the Company, by written
instrument which is approved by the Senior Vice President-Human Resources and
Administration and which is duly adopted by the Compensation and Nominating
Committee of the Board of Directors of the Company.
Each Employer may at any time and from time to time amend or modify
its Adoption Agreement with the consent of the Company by written instrument
duly executed by such Employer. Any such amendment or modification shall become
effective on such date as the Company or the Employer, as the case may be, shall
determine and may apply to Participants in the Plan at the time thereof as well
as to future Participants.
Any amendments made pursuant to this section shall be subject to any
advance notice or other requirements of ERISA.
12.02 Amendment - Consolidation or Merger
In the event the Plan's assets and liabilities are merged into,
transferred to or otherwise consolidated with any other retirement plan, then
such must be accomplished so as to ensure that each Participant would (if the
other retirement plan then terminated) receive a benefit immediately after the
merger, transfer or consolidation, which is equal to or greater than the
benefit the Participant would have been entitled to receive immediately before
the merger, transfer or consolidation (as if the Plan had then terminated).
This provision shall not be construed as limiting the powers of the Company to
appoint a successor Trustee.
12.03 Termination of the Plan
The termination of the Plan shall not cause or permit any part of the
Trust to be diverted to purposes other than for the exclusive benefit of the
Participants, or cause or permit any portion of the Trust to revert to or
become the property of an Employer at any time prior to the satisfaction of all
liabilities with respect to the Participants.
Upon termination of this Plan, the Pension Committee shall continue to
act for the purpose of complying with the preceding paragraph and shall have
all power necessary or convenient to the winding up and dissolution of the Plan
as herein provided. While so acting, the Pension Committee shall be in the same
status and position with respect to other persons as if the Plan remained in
existence.
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12.04 Effect of Withdrawal from Plan
If an Employer shall withdraw from or terminate participation in the
Plan under Section 11.03, the Company shall, subject to Section 12.05,
determine the manner by which the benefits of Participants who are employees
(or former employees) of such Employer shall be provided.
12.05 Allocation of the Trust on Termination of Plan
In the event of a complete Plan termination, the right of each
Participant to benefits accrued to the date of such termination that would be
vested under the provisions of the Plan in the absence of such termination
shall continue to be vested and non-forfeitable; and the right of each
Participant to any other benefits accrued to the date of termination shall be
fully vested and non-forfeitable to the extent then funded under the priority
rules set forth in Section 4044 of ERISA. In any event, a Participant or a
Beneficiary shall have recourse only against Plan assets for the payment of
benefits thereunder, subject to any applicable guarantee provisions of Title IV
of ERISA. The Pension Committee shall direct the Trustee to allocate Trust
assets to those affected Participants to the extent and in the order of
preference set forth in Section 4044 of ERISA. Upon Plan termination, each
Participant shall elect a form of payment pursuant to Section 5 and benefits
shall be distributed by purchase of nontransferable annuity contracts or lump
sum payments in accordance with the Participants election; provided, however,
that small benefits shall be distributed pursuant to Section 10.07(c). If Trust
assets as of the date of Plan termination exceed the amounts required under the
priority rules set forth in Section 4044 of ERISA, such excess shall, after all
liabilities of the Plan have been satisfied, revert to the Employer to the
extent permitted by applicable law.
If at any time the Plan is terminated with respect to any group of
Participants under such circumstances as to constitute a partial Plan
termination within the meaning of Section 411(d)(3) of the Code, each affected
Participant's right to benefits that have accrued to the date of partial
termination that would be vested under the provisions of the Plan in the
absence of such termination shall continue to be so vested; and the right of
each affected Participant to any other benefits accrued to the date of such
termination shall be vested to the extent assets would be allocable to such
benefits under the priority rules set forth in Section 4044 of ERISA in the
event of a complete Plan termination. In any event, affected Participants shall
have recourse only against Plan assets for payment of benefits thereunder,
subject to any applicable guarantee provisions of Title IV of ERISA. Subject to
the foregoing, the vested benefits of such Participants shall be payable as
though such termination had not occurred; provided, however, that the Pension
Committee, in its discretion, subject to any necessary governmental approval,
may direct that the amounts held in the Trust that are allocable to the
Participants as to whom such termination occurred be segregated by the Trustee
as a separate plan. The assets thus allocated to such separate plan shall be
applied for the benefit of such Participants in the manner described in the
preceding paragraph.
53
<PAGE> 78
SECTION 13
FUNDING
13.01 Contributions to the Trust
As a part of this Plan the Company shall maintain one or more Trusts.
From time to time, the Employers shall make such contributions to the Trust as
it determines, with the advice of its actuary, are required to maintain the
Plan on a sound actuarial basis.
Employees shall not be required or permitted to make contributions.
The Pension Committee shall, with the approval of the board of
directors of the Company, establish a funding policy and method consistent with
the objectives of the Plan and ERISA and shall communicate such policy and
method, and any changes in such policy and method, to the Trustee.
13.02 Trust for Exclusive Benefit of Participants
The Plan and Trust are for the exclusive benefit of Participants.
Except as provided in Sections 10.07(j) (Correction of Errors), 10.08 (Domestic
Relations Orders) and 10.10 (Deductible Contribution), no portion of the Trust
shall be diverted to purposes other than this or revert to or become the
property of the Employer at any time prior to the satisfaction of all
liabilities with respect to the Participants.
13.03 Disposition of Credits and Forfeitures
In no event shall any credits or forfeitures which may arise under the
Plan be used to increase benefits under the Plan.
13.04 Trustee
As a part of this Plan, the Company has entered into an agreement with
a Trustee. The Company has the power and duty to appoint the Trustee and it
shall have the power to remove the Trustee and appoint successors at any time.
As a condition to exercising its power to remove any Trustee hereunder, the
Company must first enter into an agreement with a successor Trustee. The
Pension Committee may delegate the authority to direct the investment of all or
a portion of the Trust Fund to the Trustee.
Each Trustee shall hold all monies and other property received by it
and invest and reinvest the same, together with the income therefrom, on behalf
of the Participants collectively in accordance with the provisions of the Trust
agreement. Each Trustee shall make distributions from the Trust Fund at such
time or times to such person or persons and in such amounts as the Pension
Committee shall direct in accordance with the Plan.
54
<PAGE> 79
13.05 Investment Manager
The Company has the power to appoint, remove or change from time to
time an Investment Manager to direct the investment of all or a portion of the
Trust held by the Trustee. For purposes of this section "Investment Manager"
shall mean any fiduciary (other than the Trustee) who:
(a) has the power to manage, acquire, or dispose of any asset of
the Plan;
(b) is either
(1) registered as an investment advisor under the
Investment Advisors Act of 1940, or
(2) is a bank, or
(3) is an insurance company qualified under the laws of
more than one state to perform the services described
in subparagraph (a); and
(c) has acknowledged in writing that he, she or it is a fiduciary
with respect to the Plan.
55
<PAGE> 80
The Burlington Resources Inc. Pension Plan is adopted by Burlington Resources
Inc.
IN WITNESS WHEREOF, Burlington Resources Inc. has caused this Plan to be duly
executed on this 19th day of December, 1989.
FOR BURLINGTON RESOURCES INC.
/s/ RJ FRENCH /s/ AR BOYCE
- ---------------------------------- -------------------------------------
Witness Authorized Officer
Sr. Vice President
-------------------------------------
Title
(CORPORATE SEAL)
56
<PAGE> 81
APPENDIX I
Burlington Resources Inc. Pension Plan
"Employer" is defined in Section 1.22 shall also include the following
employers during the specified time periods.
<TABLE>
<CAPTION>
Employer Beginning Ending
-------- --------- -------
<S> <C> <C> <C>
1. El Paso Natural Gas Company 1/1/89
2. Glacier Park Company 1/1/89
3. BR Services Inc. 1/1/89
4. Meridian Minerals Company 1/1/89
5. Meridian Oil, Inc. 1/1/89
6. Plum Creek Timber Company, Inc. 1/1/89 6/07/89
7. Plum Creek Timber Company, L.P. 6/8/89
8. Plum Creek Management Company 6/8/89
9. Plum Creek Manufacturing, Inc. 6/8/89
</TABLE>
Acknowledged and Accepted
By: /s/ RJ FRENCH
-------------------------------------------
Title: Director Benefits
---------------------------------------
Date: 12-19-89
---------------------------------------
57
<PAGE> 82
FIRST AMENDMENT
TO THE
BURLINGTON RESOURCES INC.
PENSION PLAN
The Burlington Resources Inc. Pension Plan ("Plan"), as adopted effective
January 1, 1989, is amended as follows pursuant to Section 12.01 of the Plan,
effective January 1, 1991, except as otherwise specified:
1. Effective January 1, 1989, Section 1.12 Credited Service,
subparagraphs (b) and (c), shall be replaced in their entirety by the
following:
(b) all Plan Years commencing on and after January 1, 1989 during
which an Eligible Employee completes 1,000 or more Hours of
Service for an Employer, and
(c) with respect to the Plan Years in which service as an Eligible
Employee commences and terminates, the fraction of a Plan Year
which is equal to the number of months during which the
Participant has at least one Hour of Service for an Employer
during the Plan Year divided by 12, and
2. Section 1.18 Earnings shall be amended by replacing the first
paragraph in its entirety with the following:
"Earnings" for each Plan Year means the total earnings, including
overtime payments for each full month earned by an Employee from an
Employer, including nondeferred cash incentive bonuses paid or accrued
and salary reduction amounts contributed by an Employer on behalf of
the employee to a qualified retirement plan or welfare benefit plan;
but excluding payments under non-qualified deferred compensation
plans, stock option, stock bonus, capital income and phantom stock
plans, Christmas bonuses and all other commissions and extra or added
compensation or benefits of any kind or nature.
3. Section 1.20 Eligible Employee shall be amended by replacing the first
sentence in its entirety with the following:
"Eligible Employee" means any Employee who is employed on a regular,
full-time basis, who is regularly scheduled to work at least 32 hours
per week, except any leased employee and any Employee who is covered
under a collective bargaining agreement where retirement benefits were
the subject of good faith bargaining which does not provide for
retirement benefits under this Plan.
4. Section 3.01 Normal Retirement Date shall be amended by inserting the
following clause at the end of the last sentence:
"or Vested Termination Date".
<PAGE> 83
5. Section 3.04 Vested Termination Date shall be replaced in its entirety
by the following:
A Participant who is vested and terminates prior to a Retirement Date
may elect in writing upon termination of employment, to receive the
Vested Termination Benefit on a Vested Termination Date, which shall
be the first day of the month following the month in which termination
of employment occurs, or the first day of any month following
attainment of age 55 and before the Normal Retirement Date. Such
individual shall not be entitled to a retirement benefit,
6. Section 4.06 Reemployment After Retirement shall be replaced in its
entirety by the following:
Upon reemployment, a retired Participant shall resume accruing benefits
under the Plan. A Participant shall cease to receive retirement
benefits during any month in which the Participant completes at least
40 Hours of Service and which is before the date benefits are required
to be paid following age 70-1/2 pursuant to section 10.05. In the
event such a Participant is reemployed and completes less than 40
Hours of Service in any month, he or she shall continue receiving
retirement benefits during such month. At the Participant's subsequent
retirement, benefits payable shall be based on his or her total
Credited Service and Earnings at the time of subsequent retirement,
and shall be reduced by the Actuarially Equivalent value of benefits
previously received by the Participant. In no event shall the benefit
upon subsequent retirement, prior to any reduction for previously
received benefits be less than the initial retirement benefit.
7. Section 5.01 Forms of Payment shall be amended by deleting the phrase
". . . (completed to the birthdate anniversary nearest the Retirement
Date or Vested Termination Date, whichever applies). . ." in
subparagraphs (b)(i) and (b)(iv).
IN WITNESS WHEREOF, Burlington Resources Inc. has caused this first amendment
to be duly executed in this 1st day of January 1990.
FOR BURLINGTON RESOURCES INC
By: A. R. BOYCE
----------------------------------
R. J. FRENCH Its: Sr. V.P. Hum. Res. & Admin.
- ------------------------------------ ---------------------------------
Witness
(CORPORATE SEAL)
<PAGE> 84
SECOND AMENDMENT TO THE
BURLINGTON RESOURCES INC.
PENSION PLAN
The Burlington Resources Inc. Plan ("Plan"), as adopted effective January 1,
1989, is amended as follows pursuant to Section 12.01 of the Plan, effective
January 1, 1992:
1. Section 11.03 Withdrawal From Participation shall be amended by
inserting the following paragraph immediately following the first
paragraph:
In the event an Employer ceases to be an Affiliated Company,
the Company, in its sole discretion, may terminate that Employer's
participation in the Plan. In this circumstance, an Employer shall not
be entitled to notice prior to the effective date of withdrawal of
participation in the Plan.
2. Section 11.04 Company as Agent for Employers shall be replaced in its
entirety by the following:
Each corporation which shall become a participating Employer
pursuant to Section 11.01 shall be deemed to have appointed the
Company its agent to exercise on its behalf all of the powers and
authorities hereby conferred upon the Company by the terms of the
Plan, including, but not by way of limitation, the power to amend and
terminate the Plan. The authority of the Company to act as such agent
shall continue until such Employer withdraws from the Plan in
accordance with Section 11.03.
IN WITNESS WHEREOF, Burlington Resources Inc. has caused this second amendment
to be duly executed on this 1st day of December 1992.
FOR BURLINGTON RESOURCES INC.
By: /s/ Harold E. Hanschild
-----------------------------------
M.A. Salin VP Human Resources
- ------------------------------------ Title: -------------------------------
Witness
(CORPORATE SEAL)
Prepared for Review by Legal Counsel
<PAGE> 85
APPENDIX 1
Burlington Resources Inc. Pension Plan
"Employer" as defined in Section 1.22 shall also include the following
employers during the specified time periods.
<TABLE>
<CAPTION>
Employer Beginning Ending
-------- --------- ------
<S> <C> <C> <C>
1. El Paso Natural Gas Company 1/1/89 7/1/92
2. Glacier Park Company 1/1/89 10/31/92
3. BR Services Inc. 1/1/89
4. Meridian Minerals Company 1/1/89
5. Meridian Oil, Inc. 1/1/89
6. Plum Creek Timber Company, Inc. 1/1/89 6/7/89
7. Plum Creek Timber Company, L.P. 6/8/89 3/30/90
8. Plum Creek Management Company 6/8/89 12/31/92
9. Plum Creek Manufacturing, Inc. 6/8/89 3/30/90
</TABLE>
Acknowledged and Accepted:
By: /s/ Harold E. Hanschild
------------------------------
Title: VP Human Resources
---------------------------
Date: 4/20/93
----------------------------
53
<PAGE> 86
APPENDIX C
TO THE
PLUM CREEK SUPPLEMENTAL BENEFITS PLAN
BURLINGTON RESOURCES INC. RETIREMENT SAVINGS PLAN
AS OF DECEMBER 31, 1992
15
<PAGE> 87
BURLINGTON RESOURCES INC.
RETIREMENT SAVINGS PLAN
(Effective as of January 1, 1990)
<PAGE> 88
BURLINGTON RESOURCES INC. RETIREMENT SAVINGS PLAN
(Effective as of January 1, 1990)
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Article Section Page
- ------- ------- ----
<S> <C> <C> <C>
1 Restatement and Renaming of the Plan
------------------------------------
1.1 Restatement and Renaming of the Plan 1
1.2 Applicability 1
1.3 Purpose of the Plan 2
2 Definitions
-----------
2.1 General Definitions 3
2.2 Gender and Number 18
3 Participation and Service
-------------------------
3.1 Date of Participation 19
3.2 Duration 19
3.3 Transfers to Participation 20
3.4 Inactive Participant 20
4 Contributions Elected by Participants
-------------------------------------
4.1 Basic Contributions 21
4.2 Elections 24
4.3 Election Changes 24
4.4 Suspension of Basic Contributions 25
4.5 Compensation Reduction 26
4.6 Supplemental Contributions 26
4.7 Changes in Supplemental Contributions 27
4.8 Suspension of Supplemental Contributions 27
4.9 Transfer and Crediting of Basic and
Supplemental Contributions 27
4.10 Flex Contributions 28
4.11 Restrictions on Basic Contributions and
Flex Contributions 28
5 Company Matching Contributions and Rollovers
--------------------------------------------
5.1 Company Matching Contributions 32
5.2 Restrictions on Company Matching
Contributions 33
5.3 Deductibility Limitation 36
5.4 Transfer of Company Matching Contributions 36
5.5 Crediting of Company Matching
Contributions 36
5.6 Rollovers 36
</TABLE>
-i-
<PAGE> 89
BURLINGTON RESOURCES INC. RETIREMENT SAVINGS PLAN
(Effective as of January 1, 1990)
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Article Section Page
- ------- ------- ----
<S> <C> <C> <C>
6 Maximum Contributions and Benefit Limitations
---------------------------------------------
6.1 Limitation on Annual Additions 40
6.2 Other Defined Contribution Plans 40
6.3 Defined Benefit Plans 41
6.4 Adjustment of Allocations 41
6.5 Limitation of Certain Annual Compensation
to $200,000 42
7 Benefits
--------
7.1 Vesting 43
7.2 Distributions Upon Separation from
Service (Excluding Death) 44
7.3 Distributions Upon Death or Divorce 45
7.4 Form of Payments 46
7.5 Timing of Payments 48
7.6 Withdrawals 49
7.7 Hardship Withdrawals 50
7.8 Loans to Participants and Beneficiaries 53
7.9 Debiting of Investment Funds 57
7.10 Missing Persons 57
7.11 Requirement for Consent to
Certain Distributions 59
8 Investment Elections
--------------------
8.1 Investment of Contributions 59
8.2 Investment Transfers 59
8.3 Investment Elections 60
8.4 Transfer of Assets 60
8.5 Voting Company Stock 60
8.6 Tender Offers 61
9 Accounts and Records of the Plan
--------------------------------
9.1 Accounts and Records 64
9.2 Investment Funds 65
9.3 Valuation Adjustments 65
10 Financing
---------
10.1 Financing 67
10.2 Employer Contributions 67
10.3 Non-Reversion 68
10.4 Transaction Involving Employer Securities 68
</TABLE>
-ii-
<PAGE> 90
BURLINGTON RESOURCES INC. RETIREMENT SAVINGS PLAN
(Effective as of January 1, 1990)
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Article Section Page
- ------- ------- ----
<S> <C> <C> <C>
11 Administration
--------------
11.1 Named Fiduciaries 70
11.2 Committee 71
11.3 Organization of Committee 71
11.4 Procedures 72
11.5 Committee's Powers and Duties 72
11.6 Committee's Decisions Conclusive 73
11.7 Indemnity 74
11.8 Claims Procedure 74
12 Plan Amendment, Termination, Merger,
and Adoption by Affiliates
------------------------------------
12.1 Amendment and Termination 77
12.2 Distribution on Termination 77
12.3 Corporate Reorganization 78
12.4 Plan Merger or Transfer 78
12.5 Affiliate Participation 79
12.6 Action Binding on Participating
Affiliates 79
12.7 Termination of Participation of
Affiliate 80
13 Top-Heavy Provisions
--------------------
13.1 Application 81
13.2 Key Employees 81
13.3 Top-Heavy Group 83
13.4 Additional Rules 84
13.5 Code Section 415(h) Adjustment 85
13.6 Minimum Contributions 85
14 Miscellaneous Provisions
------------------------
14.1 Employment Rights 86
14.2 No Examination or Accounting 86
14.3 Investment Risk 86
14.4 Non-Alienation 86
14.5 Incompetency 88
14.6 Severability 89
14.7 Service of Legal Process 89
14.8 Headings of Articles and Sections 89
14.9 Applicable Law 89
</TABLE>
-iii-
<PAGE> 91
BURLINGTON RESOURCES INC.
RETIREMENT SAVINGS PLAN
(Effective as of January 1, 1990)
Article 1. Restatement and Renaming of the Plan
1.1 Restatement and Renaming of the Plan. Effective January 1,
1990, The El Paso Company amends and restates the Employees Savings Plan of The
El Paso Company and Affiliated Companies as provided herein. This amended and
restated plan is a continuation of the plan originally established effective as
of January 1, 1961, and is hereby renamed the Burlington Resources Inc.
Retirement Savings Plan (the "Plan"). Upon such amendment and restatement, The
El Paso Company cedes the sponsorship of the renamed Plan to its parent
company, Burlington Resources Inc., and Burlington Resources Inc. (the
"Company") accepts such sponsorship and adopts the Plan as its own. In
addition, effective as of January 1, 1990, the Company hereby merges its
Burlington Resources Inc. Thrift and Profit Sharing Plan into this Plan, which
shall continue as the survivor of such merger. The Plan covers Employees of
Burlington Resources Inc. and selected Affiliates, including subsidiaries of
The El Paso Company which were participating in the Plan immediately prior to
this restatement.
1.2 Applicability. Except as otherwise provided, the Plan
provisions set forth herein are applicable only to Employees in the employ of
the Company or its Affiliates on or after January 1, 1990. With respect to any
Employee who has had a balance transferred directly to this Plan from the
Burlington Resources Inc. Thrift and Profit Sharing Plan, this Plan shall, to
the full extent legally required, be treated as a continuation of the plan from
which the balance was transferred and shall include all the Employee's years of
participation in such plan
-1-
<PAGE> 92
prior to the Employee's participation in this Plan and shall preserve all
legally protected, valuable rights of the Employee with respect to the
transferred balance in accordance with Code sections 414(1) and 411(d)(6), as
well as any other applicable laws.
1.3 Purpose of the Plan. This Plan is intended to encourage and
assist Eligible Employees in adopting a regular program of saving to provide
additional security for their retirement. For tax purposes, the Plan is
intended to qualify as a profit sharing plan with a qualified cash or deferred
arrangement and nondiscriminatory matching contributions. In accordance with
Code section 401(a)(27), this determination shall be made for Basic
Contributions and Flex Contributions that are provided on a before-tax basis
without regard to whether the Company and its Affiliates have current or
accumulated profits. However, Company Matching Contributions shall be
conditioned on the availability of current and/or accumulated profits.
-2-
<PAGE> 93
Article 2. Definitions
2.1 General Definitions. Whenever used in the Plan, the following
terms shall have the respective meanings set forth below unless otherwise
expressly provided herein:
(a) "Affiliate" means a corporation or other employer which, at
the time for which the determination is made, is controlled
by, or under common control with, the Company, within the
meaning of sections 414 and 1563 of the Code. The
determination of control shall be made without reference to
paragraphs (a)(4) and (e)(3)(C) of section 1563, and solely
for the purpose of applying the limitations of Article 6 and
section 13.5 of this Plan and for the purpose of allowing a
related corporation or other employer to adopt the Plan with
the Company's permission under an arrangement resulting in
treatment of the Plan as a multiple employer plan described in
Code section 413(c), the phrase "more than 50 percent" shall
be substituted for the phrase "at least 80 percent" each place
it appears in section 1563(a)(1). In addition, to the extent
that the context may so require, "Affiliate" shall mean a
member of an affiliated service group (within the meaning of
Code section 414(m)) of which the Company or an Affiliate is a
member, any leasing organization (as defined in Code section
414(n)) to the extent its employees constitute Leased
Employees with respect to the Company or any Affiliate, and
any other entity required to be aggregated with the Company in
accordance with section 414(o) of the Code.
(b) "Alternate Payee" means a spouse, former spouse, child or
other dependent of a Participant who is recognized by a
Qualified Domestic Relations Order as having a right to
receive all, or a portion of, the benefits payable under the
Plan with respect to a Participant.
-3-
<PAGE> 94
(c) "Annual Addition" means with respect to any Participant, the
sum of the following items for a Plan Year (which is also the
limitation year): (i) all employer and Employee contributions
(including as employer contributions both before-tax Basic
Contributions and Flex Contributions elected by the
Participant) and all forfeitures allocated to the Participant
under this and any other qualified defined contribution plan
maintained by the Company or an Affiliate, and (ii) any
contributions allocated to any individual medical account
under a qualified defined benefit plan or a welfare benefit
fund to the extent required by Code section 415(1) or
419A(d)(2). The Annual Additions resulting from contributions
to the Plan shall be determined on a cash basis as of the time
of the contribution, except that contributions made after the
end of the prior Plan Year and treated as attributable to
such prior year for purposes of deductions and percentage
testing under sections 4.11 and 5.2 shall be treated as Annual
Additions for such prior year.
(d) "Basic Contributions" means contributions made by the Employer
or Employee under section 4.1 at the election of the Employee
and any similar amounts transferred from another plan.
(e) "Beneficiary" means the person or persons (who may be named
contingently or successively) designated by a Participant (or
the Beneficiary of a deceased Participant) to receive his
Account in the event of his death. Each designation shall be
in the form prescribed by the Committee, shall be effective
only when filed in writing as prescribed by the Committee, and
shall revoke all prior designations by the same Participant.
The designation by a married Participant of someone other than
his spouse as a Beneficiary shall be invalid unless
-4-
<PAGE> 95
the spouse consents in writing to such designation, the
consent acknowledges the effect of such designation and is
notarized or is witnessed by a Plan representative, and the
Beneficiary designation complies in all other respects with
the requirements of Code sections 401(a)(11)(B)(iii)(I) and
417(a)(2). However, no consent shall be required if it is
established to the satisfaction of the Plan representative
that such consent cannot be obtained because there is no
spouse or because the spouse cannot be located. If there is no
surviving spouse and if no other Beneficiary is designated,
then the Beneficiary shall be the Participant's estate. If a
designation is ineffective in whole or in part, all or such
part of the Participant's Account as has not been distributed,
shall be payable to the Participant's surviving spouse, or if
the deceased Participant has no surviving spouse, to his
estate. If a designated Beneficiary is receiving payments and
does not survive to receive all payments due hereunder, the
remaining payments shall be made to his Beneficiary or, if
there is none, to his estate.
(f) "Board of Directors" means the Board of Directors of the
Company.
(g) "Change Date" means the first day of any month as of which a
Participant is allowed to make an election that changes his
level of contributions or his investments under the Plan in
accordance with the terms and limitations specified below and
elsewhere in the Plan. A Change Date may be used by a
Participant to begin, stop, increase, or decrease the amount
of Basic Contributions
-5-
<PAGE> 96
or Supplemental Contributions to his Account under the Plan,
or to change the before-tax or after-tax nature of Basic
Contributions, or to direct the way that amounts in his
Account are to be invested, or to make any number of the
foregoing choices on any Change Date, provided that the
Participant may not make any such choices on a Change Date
that is less than three months after the last Change Date on
which he elected to make one or more of the foregoing choices,
unless the particular choice on such early Change Date is
specifically authorized by a Plan provision that makes an
exception to this three-month rule. January 1, 1990, and any
initial date on which a new Participant or a rehired
Participant first makes an election are two such specifically
authorized exceptions. All choices that are implemented on
behalf of a Participant on a Change Date are subject to the
completion of such forms and the satisfaction of such other
reasonable procedural requirements, with such reasonable
advance notice, as may be specified in the Plan or prescribed
by the Committee.
(h) "Code" means the Internal Revenue Code of 1986, as amended
from time to time. Where reference is made to an incorrect or
outdated Code section, the reference shall be reformed to
indicate a proper Code section that is consistent with the
context and the intended meaning.
(i) "Committee" means the Thrift and Profit Sharing Committee
appointed by the Chief Executive Officer to administer the
Plan as described in section 11.2 hereof.
(j) "Company" means Burlington Resources Inc.
(k) "Company Matching Contributions" means the matching
contributions made by an Employer under section 5.1 on behalf
of a Participant, conditioned on the making of
-6-
<PAGE> 97
certain Basic Contributions, as described in Articles 4 and 5,
and includes any similar amounts transferred from an Other
Plan.
(l) "Compensation" means, with respect to a Participant for a
period considered under the Plan, the Participant's full
salary and wages from an Employer (including all payments of
salary, wages, short-term disability or sick pay continuation
of salary and wages, spot bonuses and annual performance
bonuses, commissions, shift differentials, and overtime
compensation) plus his before-tax Basic Contributions under
this Plan, but excluding all amounts described in the next
following sentence, and provided, in addition, that Flex
Contributions shall also be treated as Compensation hereunder,
but only if and to the extent that a Participant elects to
have unmatched Flex Contributions made on his behalf under the
Plan and then only for the purpose of making such Flex
Contributions. All of the following items shall be excluded in
determining a Participant's Compensation: (i) gifts and other
non-bonus payments of like character, (ii) reimbursement for
expenses or allowances therefor, including automobile
allowances and moving allowances, (iii) any amount contributed
by the Employer to any pension plan or plan of deferred
compensation other than this Plan, (iv) any amount contributed
by the Employer to this Plan other than before-tax
contributions elected by the Participant, (v) any amount paid
by an Employer or a separate funding vehicle under a long-term
disability plan, (vi) termination payments, (vii) income
attributable to the exercise of options or lapse of
restrictions on Company stock, (viii) any other special or
extraordinary forms of remuneration, whether or not paid
pursuant to an incentive compensation plan and (ix)
-7-
<PAGE> 98
any amount paid by the Employer for other fringe benefits,
such as health and welfare, hospitalization, group life
insurance benefits, or perquisites.
(m) "Disability" means a total and presumably permanent incapacity
resulting from personal injury or sickness whether or not
resulting from employment with the Employer, which in the
opinion of the Committee, after reviewing any medical evidence
and requiring any reasonable medical examination the Committee
considers necessary, will prevent a Participant or inactive
Participant from performing the principal duties of his
occupation and from engaging in any employment or occupation
for remuneration or profit for which he is or may reasonably
become qualified by training, education or experience. The
Committee may rely upon the adjudication of such Participant's
or inactive Participant's total and permanent disability by
the Social Security Administration, or such other evidence as
the Committee, in its discretion, deems appropriate.
(n) "Effective Date" means, unless otherwise expressly provided,
January 1, 1990.
(o) "Eligible Employee" means any Employee employed by an Employer
other than an Employee, if there is any, who is (i) a member
of a unit covered by a collective bargaining agreement under
which retirement benefits were the subject of good faith
bargaining and no provision was made for including such
Employee in the Plan, (ii) a nonresident alien who receives no
earned income from an Employer which constitutes income from
sources within the United States, or (iii) a Leased Employee.
(p) "Employee" means any person who is employed as a common law
employee by the Company or an Affiliate, as determined from
appropriate personnel records, and shall also
-8-
<PAGE> 99
include any Leased Employee to the extent required under Code
section 414(n) and Code section 401(a), 410, 411, 415 or 416.
(q) "Employer" means either the Company or any Affiliate which,
with the approval of the Company, elects to become a party to
the Plan by adopting the Plan for the benefit of some or all
of its Eligible Employees.
(r) "ERISA" means the Employee Retirement Income Security Act of
1974, as mended from time to time.
(s) "Flex Contribution" means an amount transferred from the Code
section 125 FlexPlan of Burlington Resources Inc. on a before-
tax basis at a Participant's election and credited to his
Basic Account.
(t) "Highly Compensated Employee" means an Employee described in
Code section 414(q) and generally includes any Employee who,
during the current Plan Year or immediately preceding Plan
Year:
(1) was at any time a 5-percent owner (as defined in
subsection 13.2(b) of the Plan);
(2) received compensation in excess of $75,000, as
adjusted by reference to Code section 414(q);
(3) received compensation in excess of $50,000, as
adjusted by reference to Code section 414(q), and was
in the group of Employees consisting of the top 20
percent of all active Employees when ranked on the
basis of compensation paid for the Plan Year; or
(4) was at any time an officer and received compensation
in excess of $45,000, as adjusted by reference to
Code section 415(b)(1)(A), for the Plan Year;
provided that for this purpose no more than 50
Employees or, if lesser, the greater of 3 Employees
or 10 percent of all Employees shall be considered
officers and, if no officer has
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compensation exceeding $45,000, as adjusted, the
officer with the highest compensation shall be
treated as a Highly Compensated Employee under this
subparagraph.
For purposes of this subsection, "compensation" means Section
415 Compensation for the Plan Year plus any Code section
401(k) deferrals (including before-tax Basic Contributions and
Flex Contributions under this Plan) and any Code section 125
salary reduction amounts under a plan maintained by the
Company or an Affiliate for the Plan Year.
For the Plan Year for which the determination is being made, a
person, who during the preceding Plan Year, was not an
Employee described in subparagraphs (2), (3) or (4) shall not
be treated as so described during the current Plan Year,
unless he is among the group of 100 Employees receiving the
highest compensation. In determining the group of Employees
consisting of the top 20 percent of all active Employees under
subparagraph (3), Employees who are nonresident aliens
receiving no U.S. source income from the Company or an
Affiliate and, except as prohibited by Treasury regulations,
Employees who are covered by a collective bargaining agreement
shall be disregarded. A former Employee shall be treated as a
Highly Compensated Employee if he was a Highly Compensated
Employee when he incurred a Separation from Service or at any
time after attaining age 55. If an Employee is a family member
of a 5-percent owner or a Highly Compensated Employee among
the group of 10 Employees receiving the highest compensation
for the Plan Year, then such Employee shall not be considered
a separate Employee under this subsection and any
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compensation paid to him shall be treated as having been paid
to the Highly Compensated Employee. For this purpose, "family
member" means the Employee's spouse and lineal ascendants or
descendants and the spouses of such lineal ascendants or
descendants.
(u) "Investment Fund" means any of the following funds of the
Trust Fund, all of which may hold a reasonable amount of cash
and liquid assets in addition to the assets described below,
but may not include direct holdings by the Trustee of
securities of an Employer except as specifically authorized in
the case of the Company Stock Fund, and each of which may make
appropriate investments either directly, or indirectly by
means of securities of a regulated investment company or trust
or interests in an insurance company's pooled account or a
common trust fund or collective investment fund of a bank or
similar financial institution with a similar investment
purpose, in accordance with the description of the fund:
(1) A "Company Stock Fund" which shall be invested
primarily in shares of the common stock of the
Company.
(2) An "Equity Fund" which shall be invested primarily in
such common stocks and other equity securities, as
described in the Trust, as the Trustee, acting in
accordance with the provisions of the Trust and
instructions from the Committee or an investment
manager designated by the Committee, deems advisable.
(3) An "Income Fund" which shall be invested primarily in
such interest bearing deposits of banks and similar
financial institutions, securities, guaranteed
investment contracts of insurance companies, and
other similar investment vehicles, as described
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in the Trust, as the Trustee, acting in accordance
with the provisions of the Trust and instructions
from the Committee or an investment manager
designated by the Committee, deems advisable.
(4) An "International Equity Fund" which shall be
invested primarily in such common stocks and other
equity securities of major companies headquartered
outside the United States, as described in the Trust,
as the Trustee, acting in accordance with the
provisions of the Trust and instructions from the
Committee or an investment manager designated by the
Committee, deems advisable.
(5) An "Over-the-Counter Equity Fund" which shall be
invested primarily in such common stocks and other
equity securities of smaller, often newer companies
in the United States, as described in the Trust, as
the Trustee, acting in accordance with the provisions
of the Trust and instructions from the Committee or
an investment manager designated by the Committee,
deems advisable.
(6) A "Real Estate Fund" which shall be invested in such
real estate and such real estate-related investments,
as described in the Trust, as the Trustee, acting in
accordance with the provisions of the Trust and
instructions from the Committee or an investment
manager designated by the Committee, deems advisable.
(7) A "Loan Fund" which shall be invested individually
for each borrowing Participant in any loans that such
Participant has under the Plan.
(8) "Additional Funds" which may be established from time
to time by the Committee and which shall be invested
in such appropriate investments, as described in the
Trust, as the Trustee, acting in
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accordance with the provisions of the Trust and
instructions from the Committee or an investment
manager designated by the Committee, deems advisable.
(v) "Leased Employee" means a person who is not a common law
employee but who performs services for the Company or an
Affiliate pursuant to an agreement with a leasing organization
(within the meaning of Code section 414(n)(2)) if such person
has performed the services on substantially a full-time basis
for a period of at least one year, the services are of a type
historically performed by Employees, and the person is
required to be treated as an Employee pursuant to Code section
414(n), but only for the period and the purposes to which such
requirements apply.
(w) "Other Plan" means the Burlington Resources Inc. Thrift and
Profit Sharing Plan and any similar defined contribution plan
if it is maintained by an Affiliate and is designated by the
Committee as an Other Plan for purposes of section 3.3 or
section 12.4, provided that such plan is qualified under Code
section 401(a) and does not provide a life annuity form of
benefit.
(x) "Participant's Account or Account" means the separate account
maintained for each Participant which represents his total
proportionate interest in the Trust Fund as of any Valuation
Date and which consists of the sum of his Basic Account, his
Company Match Account, his IRA Account, his Supplemental
Account, his Rollover Account and his ESOP Rollover Account
(together with any additional Accounts that the Committee may
establish from time to time and including any subaccount that
may be maintained under an existing Account), as described
further below and in section 12.4 with respect to amounts
attributable to certain balances transferred
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directly to this Plan from similar accounts in an Other Plan.
(1) "Basic Account" means the Account maintained for each
Participant under each Investment Fund in which all
or part of the Participant's Basic Contributions and
any Flex Contributions have been invested and
adjusted from time to time as provided in section
9.3.
(2) "Company Match Account" means the Account maintained
for each Participant under each Investment Fund in
which all or part of the Company Matching
Contributions conditioned on certain Basic
Contributions have been invested and adjusted from
time to time as provided in section 9.3. This Account
includes the former subaccount I relating to the
value of contributions for periods before 1985 and
having a December 31, 1989 grandfathered value
(excluding any subsequent earnings and investment
gains or losses thereon) that continues to be
available for withdrawals under section 7.6. This
Account also includes the former subaccount II
relating to the value of contributions for periods
after 1984.
(3) "Rollover Account" means the Account described in
section 5.6 maintained for each Participant under
each Investment Fund in which all or part of the
Participant's rollover contributions have been
invested and adjusted from time to time as provided
in section 9.3.
(4) "Supplemental Account" means the Account maintained
for each Participant under each Investment Fund in
which all or part of the Supplemental Contributions
which have been made by the Participant have been
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invested and adjusted from time to time as provided
in section 9.3.
(5) "IRA Account" means, with respect to amounts
attributable to certain balances transferred to this
Plan from an Other Plan, the Account maintained for
each Participant under each Investment Fund in which
all or part of the deductible contributions made by
the Participant, as permitted under the terms of the
Other Plan and Code section 219 prior to January 1,
1987, have been invested and adjusted from time to
time as provided in section 9.3.
(6) "ESOP Rollover Account" means the Account described
in subsection 5.6(f).
(y) "Participant" means any Eligible Employee who has met the
requirements to become a Participant as set forth in section
3.1 hereof, and shall include, where appropriate to the
context, any former Participant described in section 3.2 and
any inactive Participant described in section 3.4.
(z) "Pay" means all remuneration for service performed for the
Company or an Affiliate which is currently includible in gross
income and generally reportable on Form W-2, which
remuneration shall, except as prohibited by applicable law and
regulations, be the same as Section 415 Compensation. In
addition, except as prohibited by Treasury regulations, the
Company may elect to include as Pay all before-tax Basic
Contributions, Flex Contributions, and other Code section
401(k) elective deferrals and all Code section 125 salary
reduction amounts, if any, under a plan maintained by the
Company or an Affiliate, provided that such treatment and the
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determination of Pay in general shall be applied on a
consistent basis in accordance with Code section 414(s) and
the regulations thereunder.
(aa) "Plan Year" means the calendar year.
(bb) "Qualified Domestic Relations Order" means a judgment, decree
or order (including approval of a property settlement
agreement) pursuant to a state domestic relations law
(including a community property law) that provides benefits to
an Alternate Payee in accordance with Code section 414(p) and
subsections 7.3(b) and 11.5(o) and section 14.4 of this Plan
and the procedures established thereunder.
(cc) "Qualified Nonelective Contributions" means any contributions
described in Code section 401(m)(4)(C).
(dd) "Section 415 Compensation" means, generally, an Employee's
taxable W-2 earnings, with such modifications as may be
required to conform to the definition of "participant's
compensation" in Code section 415(c)(3) and the regulation
thereunder, and, to the extent consistent with such
authorities, shall be construed as an Employee's wages,
salaries, commissions, professional fees and other amounts
received for personal services rendered in the course of
employment with the Company and Affiliates: (1) including
amounts received through accident or health insurance (but
only to the extent includible in gross income), disability
payments (whether or not excludable from gross income), earned
income from sources outside the United States (whether or not
excludable or deductible from gross income), amounts paid or
reimbursed for nondeductible moving expenses, the value of
nonqualified stock options to the extent includible in gross
income in the taxable year in which granted, and amounts
includible in gross income upon making the election described
in Code section
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83(b); but (2) excluding Company or Affiliate contributions to
a deferred compensation plan (to the extent excludable from
gross income when contributed), distributions from a qualified
plan, amounts realized on the exercise of nonqualified stock
options or when restricted property either becomes
transferable or is no longer subject to a substantial risk of
forfeitures, amounts realized on the disposition of stock
acquired under a qualified or incentive stock option, and
other amounts which receive special tax benefits.
(ee) "Separation from Service" means any termination of the
employment relationship between an Employee and the Company or
Affiliate for any reason including death, resignation,
discharge, retirement or Disability. A Separation from Service
shall not occur upon a Participant's transfer to a position
where he continues to be an Employee but is no longer an
Eligible Employee (whether by reason of becoming a member of a
labor union or otherwise), nor shall a Separation from Service
occur as a result of a leave of absence authorized by the
Employer or Affiliate if the Employee returns to employment
upon expiration of such leave. Except as otherwise agreed by
the parties to the transaction, a disposition of the stock or
other ownership interest in a subsidiary or a disposition of
substantially all the assets used in a trade or business of an
Employer shall be treated as a Separation from Service for the
purpose of making lump sum distributions to the Employees who
continue to work in essentially the same business and
employment position following the disposition, provided that
the date of such disposition is treated as a permissible
distribution event under Code sections 401(k)(2)(B)(i)(II) and
401(k)(10).
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(ff) "Supplemental Contributions" means the after-tax contributions
made by a Participant under section 4.6 and any similar
amounts transferred from an Other Plan.
(gg) "Trust" or "Trust Agreement" means any agreement in the nature
of a trust established to form a part of the Plan to receive,
hold, invest, and dispose of the Trust Fund.
(hh) "Trust Fund" means the assets of every kind and description
held under any Trust Agreement forming a part of the Plan.
(ii) "Trustee" means the corporation, or persons acting as trustee
under any Trust Agreement at any time of reference.
(jj) "Valuation Date" means the last day of each month and such
other dates as may be declared by the Committee.
2.2 Gender and Number. Except when otherwise indicated by the
context, any masculine or feminine terminology herein shall also include the
opposite gender, and the definition of any term herein in the singular or
plural shall also include the opposite number.
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Article 3. Participation and Service
3.1 Date of Participation. Each person who is an Eligible Employee
and was a participant in this Plan or an Other Plan on December 31, 1989, shall
become a Participant on January 1, 1990. Except as provided in section 3.3 with
regard to transfers, each Employee who is not at the time a Participant and who
is or becomes an Eligible Employee on or after January 1, 1990, shall become a
Participant in the Plan on the first day of the month coincident with or next
following the date he first completes an hour of service as an Eligible
Employee. For this purpose, the term "hour of service" shall mean any hour for
which an Employee is paid or entitled to payment for services rendered to an
Employer or an Affiliate.
3.2 Duration. An Employee who becomes a Participant shall remain a
Participant until he has a Separation from Service, and thereafter shall be a
former Participant for as long as he is entitled to receive any benefits
hereunder.
A Participant who has a Separation from Service and is subsequently reemployed
as an Eligible Employee shall become a Participant as of the date of his
reemployment, and shall be eligible to elect to make Basic Contributions or
Supplemental Contributions beginning with the first day of the month coincident
with or next following his reemployment date.
A Participant who is transferred from one Employer to another Employer and
continues to perform services as an Eligible Employee shall remain a
Participant on the same basis as immediately prior to the transfer, except as
he may be affected by special provisions of his Employer's adoption agreement
relating to this Plan.
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3.3 Transfers to Participation. An Employee other than a
Participant who is transferred by or from an Employer or Affiliate into
employment that causes him to be an Eligible Employee shall become a
Participant pursuant to section 3.1 on the first day of the month coincident
with or next following his date of transfer, except that he shall become a
Participant and make elections hereunder as of the date of his transfer if he
was a participant in an Other Plan immediately prior to his transfer.
3.4 Inactive Participant. Any Participant who transfers to an
employment status with the Company or an Affiliate in which he is no longer an
Eligible Employee shall become an inactive Participant. An inactive Participant
shall not be eligible to make Basic Contributions or Supplemental Contributions
based on Compensation earned after the date of his transfer during the period
he is an Employee. If a Participant becomes an inactive Participant, his
Account shall continue to be held under the Plan until he becomes entitled to a
distribution under the provisions of Article 7. An inactive Participant shall
have the right to receive a loan or make a withdrawal under the provisions of
sections 7.6, 7.7, or 7.8, and to exercise voting and investment election
rights under Article 8.
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Article 4. Contributions Elected by Participants
4.1 Basic Contributions
(a) On or after the Effective Date, each Participant may
elect to have his Employer contribute to the Plan on
his behalf an amount equal to any whole percentage
from two percent to eight percent of his Compensation
from such Employer during the period in which the
election is in effect. Such amount shall be
contributed as a Basic Contribution that is made on a
before-tax basis in lieu of current cash payment of
the percentage of Compensation that the Participant
elected to defer. Such election shall be made in
accordance with the rules set forth in this Article 4
and such other consistent rules of an administrative
nature as the Committee may prescribe. No before-tax
Basic Contributions may be elected under this
subsection 4.1(a) for any period during which the
Participant has in effect an election to make
after-tax contributions pursuant to subsection 4.1(d)
below.
(b) The Committee shall adopt reasonable procedures to
assist a Participant in fulfilling his responsibility
of ensuring that the before-tax Basic Contributions
and Flex Contributions made on his behalf under this
Plan, together with any elective deferrals under
other qualified plans of the Company and its
Affiliates, for the Participant's taxable year do not
exceed $7,000 (or such other amount as may be
prescribed under Code section 402(g)(5)), less any
other elective deferrals of the Participant under
other plans of other employers. The Participant will
be treated as having a calendar taxable year and as
having no elective
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deferrals other than Basic Contributions and Flex
Contributions and elective deferrals under other
qualified plans of the Company and its Affiliates,
unless the Participant notifies the Committee
differently, in writing, before his initial election
of Basic Contributions for the Plan Year. For
purposes of this subsection, "elective deferrals"
include:
(i) employer contributions to a Code section
401(k) qualified cash or deferred arrangement
to the extent excluded from the Participant's
gross income for the taxable year pursuant to
Code section 402(a)(8);
(ii) employer contributions to a simplified
employee pension to the extent excluded from
the Participant's gross income for the
taxable year under Code section 402(h)(1)(b),
and
(iii) employer contributions to purchase an annuity
contract under Code section 403(b) under a
salary reduction agreement.
If the Participant notifies the Committee in writing
no later than March 1 following his taxable year of
the amount of any excess before-tax Basic
Contributions and Flex Contributions that exist under
this subsection for such taxable year, after the
application of the limitations specified under
subsection 4.1(c), the Plan may, but need not,
distribute such excess (and any income and investment
gain or loss allocable to such excess) to him no
later than April 15 following such taxable year and,
if so distributed, such excess shall not be included
as an Annual Addition for the Participant
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for the immediately preceding Plan Year. The Pay of
the Participant for the Plan Year of the excess
before-tax Basic Contributions and Flex Contributions
shall be increased by the excess amount that is
distributed under this subsection. The distribution
described in this subsection may be made
notwithstanding any other Plan provision. The
Committee shall adopt reasonable procedures for
coordinating distributions of excess before-tax Basic
Contributions and Flex Contributions under this
section and section 4.11, in accordance with any
applicable legal requirements.
(c) In furtherance of the limitation set forth in
subsection 4.1(b) above, a Participant's before-tax
Basic Contributions and Flex Contributions under this
Plan and his Code section 401(k) elective deferrals
under other qualified plans of the Company and its
Affiliates in each Plan Year shall be restricted,
based on the chronological order in which such
elective deferrals are contributed, so as not to
exceed the $7,000 or other applicable annual limit
specified pursuant to subsection 4.1(b). If a
Participant's election to have before-tax Basic
Contributions or Flex Contributions made on his
behalf causes him to reach the point at which the
total of such contributions under the Plan for the
year equals such annual limit, then all further Basic
Contributions of the Participant in excess of such
limit for such year shall be restricted so as not to
exceed the maximum percentage that is eligible for
Company Matching Contributions under Article 5 and
shall be made and accounted for on an after-tax
basis, and all further Flex Contributions elected by
the
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Participant shall be paid to the Participant in cash
rather than contributed to the Plan.
(d) In lieu of electing to make any Basic Contributions
on a before-tax basis as provided in subsection
4.1(a), a Participant may elect to make after-tax
Basic Contributions of a similar amount and subject
to similar rules. After-tax Basic Contributions that
are made pursuant to the foregoing sentence or to
subsection 4.1(c) shall be eligible for Company
Matching Contributions under section 5.1 to the same
extent as if they had been before-tax Basic
Contributions, and they shall also be treated as such
for all other purposes of the Plan except those
directly related to their tax character.
4.2 Elections. Each Participant (or Employee expected to become a
Participant by the time that the election will take effect) shall make the
elections described in section 4.1 by completing an election form which will be
made available to Participants by the Committee prior to the Change Date on
which it is to be effective. The Participant shall return the election form in
accordance with such reasonable notice requirements and other rules as the
Committee may specify so that the form may be processed as of the next Change
Date as of which the Participant wishes to have the Employer make Basic
Contributions on his behalf. Except as otherwise provided herein, all elections
shall be irrevocable for each month beginning on or after the effective date of
the election.
4.3 Election Changes. Elections made in accordance with section
4.2 shall remain in effect until a new election to begin, stop, increase, or
decrease the Participant's Basic Contributions is filed, in accordance with
such reasonable notice requirements and other rules as the Committee may
specify, prior
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to the Change Date for which the Participant desires the change to become
effective. Any new election so filed shall become effective on the specified
Change Date and shall remain in effect until changed under the rules of this
section.
If a Participant has less than 5 Years of Employment and is making Basic
Contributions of 4 percent or 5 percent of Compensation under this Plan as of
December 31, 1989, such Participant's election of Basic Contributions shall
automatically be increased to 6 percent of Compensation as of January 1, 1990,
unless the Participant files a new election and specifies a different level of
Basic Contributions commencing as of such date. If a Participant has at least
10 Years of Employment and is making Basic Contributions of 6 percent or 7
percent of Compensation under the Burlington Resources Inc. Thrift and Profit
Sharing Plan as of December 31, 1989, such Participant's election of Basic
Contributions under this Plan shall automatically be increased to 8 percent of
Compensation as of January 1, 1990, unless the Participant files a new election
and specifies a different level of Basic Contributions commencing as of such
date. On or after January 1, 1990, the Committee may in its discretion provide
for rules and procedures pursuant to which the percentage of Compensation being
contributed as Basic Contributions will increase automatically from 6 percent
or 7 percent to 8 percent of Compensation (without becoming subject to rules
limiting the frequency of Change Dates) as of the beginning of any month in
which occurs a change that increases the level of matchable Basic Contributions
for which the Participant is eligible to 8 percent of Compensation.
4.4 Suspension of Basic Contributions. A Participant may suspend
his Basic Contributions under the Plan by filing a written notice in accordance
with such reasonable notice requirements and other rules as the Committee may
specify. The
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suspension shall become effective as of the specified Change Date following the
filing of such written notice.
Such Participant shall be eligible to resume Basic Contributions under the Plan
by filing a new election form with the Committee in accordance with section 4.2
prior to the next available Change Date on which he desires his election to
become effective. A Participant shall not be permitted to make up suspended
Basic Contributions.
4.5 Compensation Reduction. Except as otherwise provided in
subsections 4.1(c) and 4.1(d) with respect to after-tax Basic Contributions,
each Participant who makes an election to have the Employer contribute a
percentage of his Compensation as Basic Contributions under this Plan shall, by
the act of making such election, agree to have his Compensation reduced by an
equivalent percentage for so long as the election remains in effect.
4.6 Supplemental Contributions. A Participant may elect to make
after-tax Supplemental Contributions as of any Change Date by filing the
appropriate form prior to the proposed date of commencement of such
contributions in accordance with such reasonable notice requirements and other
rules as the Committee may specify, including any requirement relating to the
Participant's written consent to the payroll deduction of Supplemental
Contributions. Such Supplemental Contributions may be elected only if the
Participant has in effect at the time an election to make Basic Contributions
in an amount greater than or equal to the maximum percentage of Compensation (6
percent or 8 percent as applicable) for which the Participant is eligible to
receive a Company Matching Contribution. Such Supplemental Contributions shall,
upon satisfaction of the conditions for making such contributions, be in any
whole percentage between one percent and five percent of the Participant's
Compensation as he shall elect
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to contribute on an after-tax basis with respect to Compensation from the
Employer during the period in which the election is in effect. In no event
shall a Supplemental Contribution be matched by a Company Matching Contribution
on behalf of the Participant.
4.7 Changes in Supplemental Contributions. A Participant may
change the percentage of his Supplemental Contributions as of any Change Date
by filing a form indicating the changed percentage in accordance with the
election procedures of section 4.6 and subject to the conditions in such
section and section 4.8 for continued eligibility to make Supplemental
Contributions.
4.8 Suspension of Supplemental Contributions. A Participant may
elect to suspend his Supplemental Contributions effective as of any Change Date
by filing the appropriate form in accordance with such reasonable notice
requirements and other rules as the Committee may specify. A Participant may
thereafter elect to have his Supplemental Contributions resumed, at the same or
a changed rate permitted under section 4.6, effective as of the next available
Change Date. In addition, a Participant's Supplemental Contributions will be
automatically suspended during any period in which he is permitted to elect the
required level of Basic Contributions specified in section 4.6 and has chosen
not to do so. A Participant shall not be permitted to make up suspended
Supplemental Contributions.
4.9 Transfer and Crediting of Basic and Supplemental
Contributions. Each Participant's Basic Contributions and Supplemental
Contributions shall be transferred to the Trust Fund not later than 30 days
after the end of the month in which a corresponding amount would have been paid
to the Participant in the absence of his election of such contributions. Basic
Contributions shall be allocated to the Participant's Basic Account, and
Supplemental Contributions shall be allocated to the
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Participant's Supplemental Account, as of the last day of the month for which
they are made.
4.10 Flex Contributions. Once each year in accordance with rules
established by the Committee that are consistent with the rules of the
Employer's Code section 125 cafeteria plan covering the Participant, the
Participant may elect to have his Employer transfer to the Trust Fund, as a
Flex Contribution made on a before-tax basis on his behalf, all or a portion of
the amounts available for such transfer under such cafeteria plan. The Flex
Contribution shall be transferred to the Trust when the amounts subject to this
election are made available and shall then be credited immediately to the
Participant's Basic Account. In no event shall a Flex Contribution be matched
by a Company Matching Contribution on behalf of the Participant.
4.11 Restrictions on Basic Contributions and Flex Contributions. In
conjunction with Participant elections of Basic Contributions and at such other
times throughout the Plan Year as the Committee may determine, the Committee
shall require testing of the elections of before-tax Basic Contributions and
Flex Contributions by Participants (and any other Employer contributions that
the Company elects to include in the testing under the conditions specified
below) to assure that the average deferral percentage for the Plan Year of
Participants who are Highly Compensated Employees will not exceed the greater
of:
(a) 1.25 times the average deferral percentage for the Plan Year
of all other Participants who are non-Highly Compensated
Employees, or
(b) the lesser of (i) 2 percentage points more than, or (ii) 2
times the average deferral percentage for the Plan Year of all
other Participants who are non-Highly Compensated Employees.
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For purposes of this section, the term "average deferral percentage" for each
group of Participants for any period shall be the average of the percentages,
calculated separately for each Participant in such group, of the aggregate
amount of Pay that each Participant elects to have contributed to the Plan for
the period as before-tax Basic Contributions or Flex Contributions, provided
that, if the Company so elects in accordance with rules prescribed by the
Secretary of the Treasury, Qualified Nonelective Contributions and Code section
401(m) matching contributions (including Company Matching Contributions under
this Plan) that meet the withdrawal and vesting requirements of Code sections
401(k)(2)(B) and (C) shall be added to before-tax Basic Contributions and Flex
Contributions in computing each Participant's average deferral percentage.
Except as provided in Treasury Regulations, excess before-tax Basic
Contributions and Flex Contributions under subsection 4.1(b) shall be treated
as an amount elected under section 4.2 and contributed to the Plan, whether or
not such excess contribution is distributed.
Advance testing done under this section shall be based on a Participant's
annual rate of Pay in effect at the time of the test, and corrections to be
made to reduce the amount in excess of the maximum permissible deferral
percentage shall be made from Pay to be earned for the remainder of the Plan
Year. Final Plan Year compliance with the restrictions of this section shall be
based on the Participant's actual Pay and before-tax contributions for the
Plan Year.
The adjustments in this paragraph shall be made if, at the end of the Plan
Year, the percentage of before-tax Basic Contributions and Flex Contributions
elected by Highly Compensated Employees (and any other Employer contributions
that are included in the testing at the Company's election) would (if not
distributed) cause the average deferral percentage of such Participants to
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exceed the maximum deferral percentage permitted for the Plan Year under this
section. In such a case, before the end of the following Plan Year, the excess
amount of such contributions (and income and investment gain or loss
attributable thereto) for the Highly Compensated Employees shall be distributed
to such Participants in the order of their average deferral percentages,
beginning with the Highly Compensated Employees with the highest average
deferral percentage until the limitations of this section are met. Except as
otherwise required by applicable regulations, any amount distributed under this
paragraph to a Highly Compensated Employee shall be included in that Employee's
taxable wages for the Plan Year for which the contribution was made. The
distribution described in this section may be made notwithstanding any other
Plan provision. The Committee shall adopt reasonable procedures for
coordinating distributions of excess contributions under this section and
subsection 4.1(b).
Moreover, notwithstanding the foregoing rules, the Committee shall take steps
to ensure that this section 4.11 is interpreted and administered so as to
comply with applicable legal requirements for the determination of what amounts
constitute excess Code section 401(k) elective deferrals and for the return of
such excess amounts and any income and investment gain or loss attributable
thereto. If two or more plans which include Code section 401(k) cash or
deferred arrangements are considered as one plan for purposes of Code section
401(a)(4) or 410(b), the cash or deferred arrangements included in such plans
shall be treated as one arrangement for purposes of this section 4.11. If any
Highly Compensated Employee is a participant under two or more cash or deferred
arrangements of an Employer or Affiliate, all such cash or deferred
arrangements shall be treated as one such arrangement for purposes of
determining the actual deferral percentage with respect to such Employee.
Moreover, no benefits other than Code section 401(m) matching contributions
shall be conditioned on a
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Participant's election of before-tax Basic Contributions or Flex Contributions
under this Plan.
All determinations under this section 4.11 shall comply with Code section
401(k) and the regulations thereunder. In the event of any conflict, the rules
of such Code section and regulations shall control.
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Article 5. Company Matching Contributions and Rollovers
5.1 Company Matching Contributions.
(a) Subject to section 5.2 and the other limitations under this
Plan, the Employer shall make Company Matching Contributions
in an amount equal to 100 percent of the Basic Contributions
made on behalf of each Participant who has such Basic
Contributions allocated to his Account, as determined under
the table below in accordance with the Participant's actual
level of Basic Contributions and his Years of Employment
during the month to which the contributions relate. Any
increase that occurs in a Participant's Years of Employment
during a month shall be given effect as of the beginning of
that month. Such Company Matching Contributions shall be
allocated to the Company Match Account of the Participants for
whom matchable Basic Contributions are made, at the times and
as of the monthly Valuation Dates applicable to such Basic
Contributions.
<TABLE>
<CAPTION>
Maximum Level of Basic
Contributions to be Matched
Participant's (Expressed as a Percentage
Years of Employment of Compensation)
------------------- ---------------------------
<S> <C>
Up to 10 years 6 percent
10 or more years 8 percent
</TABLE>
For this purpose, "Years of Employment" mean the sum of the
number of years and any fraction of a year (counting each
completed calendar month as 1/12th of a year) of employment
with the Company or an Affiliate, as determined from
appropriate personnel records, and subject to the limitation
that Years of Employment for periods prior to January 1, 1990,
shall be determined
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under any applicable provisions of the Plan as in effect at
the time.
(b) Notwithstanding subsection 5.1(a), Company Matching
Contributions may be made only if and to the extent that the
Company and its Affiliates have current and/or accumulated
profits, as determined in accordance with the Company's
accounting records prior to taxes and contributions to this
Plan that are treated for tax purposes as made by an Employer.
5.2 Restrictions on Company Matching Contributions. At such times
throughout the Plan Year as the Committee may determine, the Committee shall
require testing to assure that the contribution percentage for the Plan Year of
Participants who are Highly Compensated Employees will not exceed the greater
of:
(a) 1.25 times the contribution percentage for the Plan Year of
all other Participants who are non-Highly Compensated
Employees, or
(b) the lesser of (i) 2 percentage points more than, or (ii) 2
times the contribution percentage for the Plan Year of all
other Participants who are non-Highly Compensated Employees.
For purposes of this section, the term "contribution percentage" for each group
of Participants shall be the average of the ratios, calculated separately for
each Participant in such group, of the aggregate amount of Company Matching
Contributions, after-tax Basic Contributions, and Supplemental Contributions
made by or on behalf of the Participant for the Plan Year to that Participant's
Pay for the Plan Year. To the extent permitted by Treasury Regulations, the
Company may elect, in computing contribution percentages, to treat Qualified
Nonelective Contributions and Code section 401(k) elective deferrals (including
before-tax
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Basic Contributions and Flex Contributions) for the Plan Year as Company
Matching Contributions.
Advance testing under this section shall be based on a Participant's level of
Basic Contributions and Supplemental Contributions and his annual rate of Pay
in effect at the time of the test, and corrections to be made to reduce the
amount in excess of the maximum permissible contribution percentage shall be
from Company Matching Contributions and Supplemental Contributions to be made
for the remainder of the Plan Year. Final Plan Year compliance with the
restrictions of this section shall be based on the Participant's actual
contributions and Pay for the Plan Year.
The adjustments in this paragraph shall be made if, at the end of the Plan
Year, the contribution percentage of Highly Compensated Employees exceeds the
maximum contribution percentage permitted for the Plan Year under this section.
In such a case, before the end of the following Plan Year
(1) the excess Supplemental Contributions (and income and
investment gain or loss attributable thereto) for Highly
Compensated Employees shall be distributed to such
Participants,
(2) The excess after-tax Basic Contributions and the related
Company Matching Contributions (and the income and investment
gain or loss attributable thereto) for Highly Compensated
Employees shall be distributed to such Participants, and
(3) the remaining excess Company Matching Contributions (and
income and investment gain or loss attributable thereto) for
Highly Compensated Employees shall be distributed to such
Participants, in the order of their contribution percentages
beginning with the Highly Compensated Employee with the
highest contribution percentage until the limitations of this
section are met. Except as otherwise
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required by applicable regulations, any amount distributed
under this paragraph to a Highly Compensated Employee (other
than a return of his after-tax Basic Contributions or
Supplemental Contributions) shall be included in that
Employee's taxable wages for the Plan Year for which the
contribution was made. The distribution described in this
section may be made notwithstanding any other Plan provision.
In the event that this Plan satisfies the requirements of section 410(b) of the
Code only if aggregated with one or more other plans, or if one or more other
plans satisfy the requirements of section 410(b) of the Code only if aggregated
with this Plan, then this section 5.2 shall be applied by determining the
contribution percentages of eligible Participants as if all such plans were a
single plan. If a Highly Compensated Employee participates in two or more plans
of an Employer or Affiliate to which such contributions are made, all such
contributions shall be aggregated for purposes of this section. Any Employee
required to be taken into consideration under Code section 401(m)(5) shall be
treated as an eligible Employee in accordance with such Code section for
purposes of the application of this section 5.2. Moreover, the determination of
excess contributions under this section 5.2 shall be made after first
determining the excess deferrals (within the meaning of Code section 402(g))
pursuant to subsection 4.1(b) of this Plan and then determining the excess Code
section 401(k) deferrals pursuant to section 4.11 of this Plan.
All determinations under this section 5.2 shall comply with Code section 401(m)
and the regulations thereunder, including any such regulations as may be
necessary to prevent the multiple use of the alternative percentage limitations
in Code sections 401(k)(3)(A)(ii)(II) and 401(m)(2)(A)(ii) with respect to any
Highly Compensated Employee and also including regulations
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permitting appropriate aggregation of plans and contributions. In the event of
any conflict, the rules of such Code sections and regulations shall control.
5.3 Deductibility Limitation. The dollar amount of Company
Matching Contributions shall be limited to the amount deductible under section
404 of the Code for the taxable year in which such amounts accrue or are paid,
including by means of carryover deductions.
5.4 Transfer of Company Matching Contributions. The Company
Matching Contributions under subsection 5.1 hereof shall be transferred to the
Trust Fund together with the Basic Contributions to which they relate in
accordance with the timing rules of section 4.9.
5.5 Crediting of Company Matching Contributions. The Company
Matching Contributions described in section 5.1 shall be credited to the
Company Match Account of the Participants on whose behalf they are made
according to the amount of their matched Basic Contributions (those not in
excess of the applicable percentage of Compensation specified in section 5.1)
for the period. The crediting shall occur as of the last day of the month to
which the Company Matching Contributions relate.
5.6 Rollovers. Amounts which an Eligible Employee has received
from any other qualified employee benefit plan may, subject to the Committee's
approval and in accordance with uniform, nondiscriminatory procedures designed
to protect the qualification and the integrity of the administrative design of
the Plan, be transferred by the Eligible Employee to this Plan in cash and/or
common stock of the Company (or a former parent of the Company), provided the
following conditions are satisfied:
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(a) Amounts that have previously been distributed to the Eligible
Employee from another qualified plan and rolled over to this
Plan shall be fully vested and shall be credited to the
Eligible Employee's Rollover Account.
(b) The amounts tendered to the Committee must have previously
been received by the Eligible Employee as a qualified total
distribution described in Code section 402(a)(5) ant must be
transferred following a distribution from:
(1) A plan qualified under Code section 401(a); or
(2) A rollover or conduit individual retirement account
or annuity which has received a rollover contribution
described in Code section 408(d)(3) (determined
without regard to section 408(d)(3)(D) thereof);
(c) The amounts tendered must not include nondeductible employee
contributions to a qualified plan by an Eligible Employee or
amounts attributable to:
(1) Contributions to an individual retirement account or
annuity that are deductible under Code section 219,
(2) Accumulated deductible employee contributions
described in Code section 72(o)(5)(B), or
(3) A partial distribution described in Code section
402(a)(5)(D) .
(d) The transfer to this Plan of amounts described in paragraph
(b) will only be accepted if the Eligible Employee presents to
the Committee the Internal Revenue Service Form 1099, or
equivalent, and the original and any other distribution
checks, a copy thereof, or such other evidence as the
Committee may require to ensure that they verify the nature of
the amount and ensure that its receipt will not adversely
affect the qualified status of this Plan.
(e) Amounts must be received by the Committee not later than 60
days after a distribution was received by the Eligible
Employee.
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(f) Previous rollovers of amounts received on account of
termination of a tax credit employee stock ownership plan of a
former parent of the Company or an Affiliate shall be retained
in this Plan and are subject to the rules below in addition to
the other specified requirements for rollovers,
(1) while held in this Plan, such amounts and the related
earnings must be held in a separate ESOP Rollover
Account and must be invested in the Company Stock
Fund and remain so invested, without regard to the
otherwise applicable provisions for Investment Fund
changes, until withdrawn or otherwise distributed in
accordance with the terms of the Plan, provided,
however, that this requirement to invest in the
Company Stock Fund shall not apply to the extent that
any such amounts and related earnings have been
transferred to the Loan Fund and continue to secure
an outstanding loan to the Eligible Employee, and
(2) following receipt by this Plan, such amounts and the
related earnings may be used as security for a loan
and in determining the available loan amount pursuant
to section 7.8(c) and may be withdrawn on account of
hardship, but not for other reasons, provided,
however, that the ESOP Rollover Account shall be the
last Account that is made available for loans or
hardship withdrawals.
(g) An Eligible Employee who makes a rollover when he is not
otherwise a Participant shall be treated as a Participant for
purposes of implementing Plan provisions related to rollovers.
Upon approval by the Committee, rollover amounts shall be transmitted to the
Trustee, to be invested, except as provided in paragraph (f) above, in such
Investment Funds as the Eligible
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Employee may select in accordance with the rules provided in Article 8.
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Article 6. Maximum Contributions and
Benefit Limitations
6.1 Limitation on Annual Additions. Notwithstanding anything to
the contrary contained in this Plan, the total Annual Additions under this Plan
to a Participant's Account for any Plan Year, which shall be the limitation
year for purposes of Code section 415, shall not exceed the lesser of:
(a) $30,000 or such adjusted amount as may be prescribed under
Code section 415(d), or
(b) 25 percent of the Participant's Section 415 Compensation for
the limitation year.
6.2 Other Defined Contribution Plans. If the Company or an
Affiliate maintains or maintained any other defined contribution plan, as
defined in Code section 414(i), for its Employees, some or all of whom are
Participants of this Plan, then the limitation of section 6.1 shall apply to
employer contributions, forfeitures, and Employee contributions credited to the
Participant under all such plans.
If a Participant receives allocations under this Plan and another defined
contribution plan, then any reductions necessary to make allocations for the
Participant under all such plans comply with the limit of section 6.1 shall
first be made under such other plan, except that the reductions shall be made
first under this Plan if the Participant is covered under this Plan at a time
during the Plan Year when he has ceased to be covered under such other plan and
is no longer eligible to receive further allocations of Annual Additions for
the year under such other plan.
Any reductions under this Plan for such a Participant which are necessary to
comply with the above limitations shall be made prospectively to prevent the
occurrence of excess contributions and
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other Annual Additions to the Participant's Account for the limitation year.
Such reductions shall be made in the following order of priority with respect
to the listed contributions to the extent that they are still available for
such prospective reduction: first, by reducing the Participant's Flex
Contributions, second, by reducing his Supplemental Contributions, third, by
reducing his unmatched Basic Contributions, and, finally, by reducing his other
Basic Contributions and his Company Matching Contributions proportionally. If
such prospective reductions are not sufficient to satisfy applicable limits,
the Committee may require a return of Supplemental Contributions to the
Participant in accordance with Income Tax Regulation section 1.415-6(a)(6)(iv).
6.3 Defined Benefit Plans. If a Participant in this Plan is or was
also a Participant in a defined benefit plan, as defined in section 414(j) of
the Code, maintained by the Company or any Affiliate, then in addition to the
limitations contained in section 6.1 of this Plan, the projected benefit of the
Participant under the defined benefit plan shall be limited to the extent
necessary to comply with the limitation set forth in Code section 415(e).
6.4 Adjustment of Allocations. If an allocation to a Participant's
Account would exceed the limits described in this Article, and the excess is a
result of an allocation of forfeitures, a reasonable error in estimating a
Participant's Section 415 Compensation, or other appropriate circumstances
recognized by the Commissioner of Internal Revenue, then, except in the case of
a return of Supplemental Contributions pursuant to section 6.2, any amount
which cannot be allocated shall be held in a suspense account and shall be
allocated to the applicable Account of such Participant as of the last day of
the first calendar month in which such an allocation is permissible.
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6.5 Limitation of Certain Annual Compensation to $200,000.
Compensation, Pay, and any other elements of remuneration considered under the
Plan shall be limited as necessary to comply with the requirement of Code
section 401(a)(17) (and related Code sections and regulations) that the annual
compensation (within the meaning of such Code sections and regulations) of each
Employee taken into account under the Plan for any year shall not exceed
$200,000 (or such adjusted amount as may be prescribed by the Secretary of the
Treasury in connection with the adjustments prescribed under Code section
415(d)).
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Article 7. Benefits
7.1 Vesting. The interest of a Participant in his Participant's
Account shall be fully vested in him at all times. For all purposes of the
Plan, a vested interest means an interest that is nonforfeitable in the sense
that it constitutes a claim that is unconditional and legally enforceable
against the Plan. No benefit or interest which has become nonforfeitable under
the provisions of this Plan shall be subject to becoming forfeitable, or being
divested, by reason of subsequent events or conduct of the Participant. Being
vested does not mean that a Participant's Account balance is guaranteed against
investment risk or that a Participant has a right to receive his benefit.
Benefits under the Plan shall be paid only in accordance with the Plan
provisions related to distributions. Participants shall not be considered to
have a vested right to amounts allocated under a mistake of fact or under any
other circumstances causing them to be subject to a possible reversion to the
Employer pursuant to section 10.3.
Any balances in a Participant's Company Match Account which have been forfeited
following the Participant's Separation from Service prior to January 1, 1986,
in accordance with the provisions of a prior version of this Plan shall be
subject to reinstatement as follows. If the Participant returns to employment
with the Company or an Affiliate before he has five consecutive "one-year
breaks in service," he may repay to the Plan in cash, provided he makes such
repayment prior to the later of the end of a period of five consecutive
"one-year breaks in service" or the fifth anniversary of his resumption of
employment with the Company or an Affiliate as an Employee, the full value of
the amount distributed to him (excluding amounts attributable to his IRA
Account) upon his previous Separation from Service. Amounts attributable to the
Participant's IRA Account may not be repaid to the Plan. Upon such repayment,
the amount previously forfeited by the Participant shall
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be credited to his Company Match Account, and the amount repaid by the
Participant shall be treated as previously taxed amounts and credited to the
same Accounts and in the same amounts determined by the original distribution
to the Participant. All such amounts shall be fully vested and nonforfeitable,
as provided in the first paragraph of this section 7.1. The amount repaid to
the Plan is not eligible for a Company Matching Contribution pursuant to
section 7.1. The restoration of the amount previously forfeited by the
Participant, shall be provided by the Company by means of a special
contribution to the Plan. For purposes of this paragraph, a "one-year break in
service" means a one-year period, measured from the Participant's date of
employment as an Employee (or from any anniversary of such date) during which
the Participant is not credited with at least one hour of service on account of
an hour for which he is paid or entitled to payment in accordance with
Department of Labor Regulations, 29 CFR section 2530.200b-2, or on account of
the rules of Code section 410(a)(5)(E)) relating to maternity or paternity
leaves.
7.2 Distributions Upon Separation from Service (Excluding Death).
Every Participant (or inactive Participant) who incurs a Separation from
Service for any reason other than death, shall have the value of his
Participant's Account, distributed to him as soon as practicable after his
Separation from Service (subject to his right to defer distribution in the
event that his Account balance exceeds $3,500). When the Participant has
elected a deferred distribution, the Committee may periodically deduct from the
Participant's Account an amount to be determined from time to time to reimburse
the Plan for the cost of administering such Account. A Participant or inactive
Participant who is absent from employment due to illness, injury or physical or
mental incapacity, shall not be treated as having incurred a Separation from
Service, for purposes of this section 7.2, until such time as the Committee
makes a determination that the Participant or inactive Participant
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has incurred a Disability. Unless a Participant is subsequently rehired as an
Eligible Employee, no Employer contributions shall be allocated to such
Participant's Account with respect to Plan Years subsequent to the Plan Year in
which his Separation from Service occurred.
7.3 Distributions Upon Death or Divorce.
(a) Upon the death of a Participant, the Committee shall direct
the Trustee to pay the Participant's entire Account balance to
his Beneficiary, as identified in accordance with subsection
2.1(e).
(1) If a distribution to the Participant has commenced
prior to his death in accordance with section 7.2,
the remainder of his Participant's Account will be
distributed to his Beneficiary under the method of
distribution in effect prior to his death, unless the
Beneficiary elects to accelerate the payments and
receive the remaining balance in a lump sum instead.
(2) If distribution to the Participant had not commenced
at the time of his death, the entire balance of the
Participant's Account will be distributed to his
Beneficiary in a lump sum as soon as practicable and
in any event not later than one year after the
Participant's death.
(b) Benefits under the Plan may be paid to an Alternate Payee,
rather than to the Participant or his designated Beneficiary,
in the manner provided by an order that is determined by the
Committee to be a Qualified Domestic Relations Order.
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7.4 Form of Payments.
(a) Distribution of benefits payments to Participants who do not
elect a deferred distribution of benefits pursuant to sections
7.2 and 7.11 shall be in a lump sum cash payment (except to
the extent that the Participant elects to receive common stock
of the Company, as provided below) to be made as soon as
practicable following the event giving rise to the
distribution.
Distribution of benefits to Participants who qualify for a
deferred distribution shall, as elected by the Participant, be
(i) in a lump sum distribution as soon as practicable after
the Valuation Date which is coincident with or immediately
following the Participant's Separation from Service or after
any deferred Valuation Date falling within the time limits for
benefit payouts under the Plan that the Participant may
select, or (ii) in substantially equal installments, payable
either quarterly or annually, following Separation from
Service over a period specified by the Participant that ends
on or before the April 1 of the year following the year in
which the Participant attains age 70-1/2. If a Participant has
elected a deferred lump sum or installments and later wishes
to change the form of payment, the Participant may elect
either an immediate lump sum of his remaining Account balance
or installment payments that begin as soon as administratively
possible.
(b) Notwithstanding any other provision of this section 7.4, when
any distribution is to be made from the Company Stock Fund,
the value of the Participant's interest in the Company Stock
Fund shall be distributed in cash, unless the Participant (or
his Beneficiary) elects instead to
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receive whole shares of the common stock of the Company plus
cash in lieu of any fractional share. In the case of a
distribution of common stock of the Company, the number of
shares available to be distributed, in whole or in part, by
the Trustee are the number of shares credited to the
Participant's Account as of the Valuation Date for the
distribution.
If common stock of the Company is distributed from the Plan at
a time when it is not readily tradeable on an established
securities market, then, if and to the extent required by Code
section 401(a)(23), the Plan shall provide the Participant
with a put option that complies with the requirements of
section 409(h) of the Code. Such put option shall provide that
if the Participant exercises the put option, the Employer, or
the Plan if the Plan so elects, shall repurchase the such
stock as follows:
(1) If the distribution constitutes a total distribution,
payment of the fair market value of Participant's
Account balance shall be made in five substantially
equal annual payments. The first installment shall be
paid not later than 30 days after the Participant
exercises the put option. The Plan will pay a
reasonable rate of interest and provide adequate
security on amounts not paid after 30 days.
(2) If the distribution does not constitute a total
distribution, the Plan shall pay the Participant, not
later than 30 days after the Participant exercises
the put option, an amount equal to the fair market
value of the common stock of the Company being
repurchased.
For purposes of this subsection 7.4(b), "total distribution" shall mean a
distribution to a Participant or a Participant's
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Beneficiary, within one taxable year of such recipient, of the entire balance
to the credit of the Participant.
7.5 Timing of Payments. Payments on account of an event described
in section 7.2 or 7.3 shall commence as soon as practicable after such event,
or after the deferred distribution date (not later than April 1 of the year
after the year in which the Participant attains age 70-1/2) that the
Participant elects in accordance with the terms of the Plan. The precise timing
of any distribution is subject to normal processing delays and any other
administrative exigencies or special circumstances affecting the distribution
and cannot, therefore, be guaranteed. However, distributions will normally be
paid within approximately 45 days after the end of the month following the
later to occur of (i) the Participant's Separation from Service or other
distribution event, or (ii) receipt of any properly completed election form
that is necessary to process the distribution. No interest or investment gains
or losses will be allocated for the processing period with respect to an amount
that is distributed.
In addition, the timing of all payments under the Plan shall conform to the
outside limits specified in Code sections 401(a)(9) and 401(a)(14) and all
other applicable Code provisions. For this purpose, the entire value of the
Account of a Participant who, at the time, has already had a Separation from
Service and has not been rehired as an Employee shall be distributed by the
April 1 of the year following the year in which the Participant attains age
70-1/2. Moreover, unless the Participant otherwise elects in accordance with
the Plan, the payment of his benefits must begin no later than the 60th day
after the close of the Plan Year in which occurs the latest of (i) the
Participant's attainment of age 65, (ii) the 10th anniversary of the year in
which the Participant commenced participation in the Plan, or (iii) the
Participant's Separation from Service. Further, if a Participant who has not
had
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a Separation from Service continues in employment beyond the April 1 of the
year following the year of his attainment of age 70-1/2, his benefits shall
commence and minimum required payments shall be made to him during his
continued employment to the extent necessary to comply with Code section
401(a)(9) and related regulations. When any Participant has a Separation from
Service after having begun to receive benefit payments during employment on
account of this rule related to required payouts, his entire remaining Account
balance shall be paid out as soon as administratively feasible following such
separation.
7.6 Withdrawals. A Participant who is still an Employee may
withdraw any amount up to the value of the Participant's Supplemental Account,
his IRA Account, and the grandfathered December 31, 1989 value in his Company
Match Account that corresponds to the former subaccount I under the prior
version of such Account. The withdrawal may be made as of the last day of the
month following compliance with such reasonable advance notice requirements and
other rules as the Committee may specify. To make a withdrawal of all or part
of the grandfathered December 31, 1989 value of the former subaccount I that is
now included in the Company Match Account, the Participant must also withdraw
the entire remaining balance in his Supplemental Account. A withdrawal under
this section may be made for any reason upon written request to the Committee
specifying the form of distribution, the amount to be withdrawn, and the
Account (or Accounts, and the priority thereof) from which the withdrawal is to
be paid. The amount to be withdrawn from each specified Account shall be
limited as set forth above and also shall not exceed the Participant's balance
in such Account. Withdrawals shall be paid in cash.
In the case of a withdrawal elected in accordance with this section, the
Committee shall direct the Trustee to pay the Participant or inactive
Participant the amount so requested and the
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amount so withdrawn shall be debited, on a pro rata basis, from each of the
Investment Funds in which the Participant's Account is invested. In addition,
for any Participant who was subject to a suspension of Company Matching
Contributions as of December 31, 1989, due to a recent withdrawal under this
section that did not comply with the hardship standards of section 7.7, such
suspension shall be lifted and Company Matching Contributions shall recommence
as of January 1, 1990, for any matchable Basic Contributions being made by the
Participant as of such date.
7.7 Hardship Withdrawals.
(a) Any Participant or inactive Participant shall be permitted to
make a cash withdrawal, in any whole percentage increment or
dollar amount, of up to 100% of the unwithdrawn amount in his
Basic Account (excluding any earnings arising after 1988 on
before-tax Basic Contributions, Flex Contributions, and other
similar Code section 401(k) deferrals that may have been
transferred directly to this Plan from an Other Plan), his
Supplemental Account, his Company Match Account, his Rollover
Account, and his ESOP Rollover Account by making application
therefor which demonstrates to the satisfaction of the
Committee that the Participant is confronted by a financial
hardship.
(b) The Committee shall establish a hierarchy among the Accounts
available for a hardship withdrawal under section 7.7(a) and
shall use it to determine the order in which funds are
considered to be withdrawn when less than a total withdrawal
occurs.
(c) Application for withdrawals shall be made on such forms as the
Committee prescribes and may be made at any time, effective
upon the last day of the month following satisfaction of the
advance notice requirement specified by the Committee.
Distribution of withdrawals shall be made in a
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lump sum as soon as is administratively possible following
such date. Withdrawal distributions shall be based on the
value of a Participant's Account as of the Valuation Date
immediately preceding, or coinciding with, the effective date
of the withdrawal.
(d) For purposes of this section 7.7 "financial hardship" means an
immediate and heavy financial need occurring in the personal
affairs of the Participant (including a need that is
reasonably foreseeable or voluntarily incurred by the
Participant), as determined by the Committee based on all
relevant facts and circumstances, taking into consideration
that the need to pay the funeral expenses of a family member
would generally constitute an immediate and heavy financial
need and the need to purchase a boat or television set
generally would not. In any event, the following distributions
shall be deemed to be made on account of an immediate and
heavy financial need:
(1) Payment of medical expenses (described in Code
section 213(d)) incurred by the Participant, the
Participant's spouse, or dependents (as defined in
Code section 152).
(2) Purchase, excluding mortgage payments, of a principal
residence for the Participant.
(3) Payment of tuition for the next semester or quarter
of post-secondary education for the Participant, the
Participant's spouse, children, or dependents.
(4) Payment to prevent the eviction of the Participant
from his principal residence or the foreclosure of
the mortgage on the Participant's principal
residence.
(5) Such other deemed financial needs as published from
time to time by the Commissioner of Internal Revenue.
(e) A hardship distribution may not exceed the amount necessary to
meet the immediate and heavy financial need
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created by the hardship and not capable of being satisfied
from other resources reasonably available to the Participant,
generally including assets held by his spouse or minor
children, but not including assets held for a child under an
irrevocable trust or under the Uniform Gift to Minors Act. The
Committee shall consider all relevant facts and circumstances
and shall generally treat the requested distribution as
necessary to meet the financial need upon receipt of a written
representation that in the Participant's opinion his financial
need cannot reasonably be relieved:
(1) through reimbursement or compensation by insurance or
otherwise,
(2) by reasonable liquidation of the Participant's
assets, to the extent that such liquidation itself is
feasible and does not itself cause an immediate and
heavy financial need,
(3) by suspension of the Participant's before-tax Basic
Contributions and Flex Contributions and his other
contributions under the Plan, or
(4) by other distributions or nontaxable loans (including
withdrawals and loans under sections 7.6 and 7.8 of
this Plan) from plans maintained by the Employer or
any other employer or by borrowing from commercial
sources on reasonable commercial terms.
(f) The Committee may, without further investigation, accept the
written statement of the Participant as to the foregoing
matters unless it has reason to believe the statement is in
error. In addition, hardship withdrawals shall be further
limited to prevent the distribution of earnings arising after
1988 on before-tax Basic Contributions and Flex Contributions,
and also to prevent the distribution of Company Matching
Contributions and the earnings thereon to the extent necessary
to satisfy the
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withdrawal restrictions of Code section 401(k)(2)(B) in the
event that such Company Matching Contributions are used to
satisfy the average deferral percentage test of section 4.11.
(g) The foregoing notwithstanding, the Committee shall not approve
a hardship withdrawal for any reason unless such hardship
withdrawal complies with any applicable Treasury regulations.
7.8 Loans to Participants and Beneficiaries. The Committee, in its
sole discretion and upon proper written application, may permit the Plan to
make a loan to an eligible Participant or Beneficiary, provided that all loans
shall comply with such rules and regulations as the Committee may establish for
making Plan loans consistent with the following terms and conditions:
(a) Loans shall be made available on a nondiscriminatory and
reasonably equivalent basis to all Participants and
Beneficiaries who are actively employed by the Company or an
Affiliate or are otherwise "parties in interest" for purposes
of ERISA section 3(14). Subsequent references to a Participant
in this section shall be deemed to include a Beneficiary who
is eligible for a loan. Loans may be processed as of the first
day of any month.
(b) To receive a loan from the Plan, a Participant and his spouse
must sign a promissory note in the proper amount on a form
prescribed by the Committee and authorize payroll deductions
for payment of interest and principal in accordance with
procedures adopted by the Committee. To secure repayment of
the loan, the Participant and the Participant's spouse, if
any, shall, within the 90 day period before the loan is made,
consent to any distribution resulting from a setoff of the
loan against the Participant's Account under subsection (i).
However, except as otherwise specified by applicable law, the
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consent of the Participant's spouse shall not be required if
it is established to the satisfaction of a Plan representative
that such consent cannot be obtained because there is no
spouse or because the spouse cannot be located.
(c) The amount of the loan shall not be less than $1,000 nor more
than 50 percent of the first $100,000 of the vested balance in
the Participant's Account (excluding any IRA Account balance).
The 50 percent limitation shall be reduced by the highest
outstanding balance of loans to the Participant from the Plan
during the 1-year period ending on the day before the date on
which the loan is made.
If such Participant is also covered under another qualified
plan maintained by the Company or an Affiliate, the above
limitations shall be applied as though all such qualified
plans are one plan. In no event may a Participant have more
than 2 loans from this Plan outstanding at any time nor may a
Participant obtain more than 1 loan from the Plan in any
period of 12 consecutive months.
(d) The Committee shall establish a hierarchy among the Accounts
listed in subsection 2.1(x) (other than the IRA Account) to be
used in determining the order in which funds are considered to
be withdrawn from a Participant's Account when a loan is made
and the order in which funds are considered to be restored to
such Account when loan repayments are received. Alternative
hierarchies may be offered to provide the Participant a choice
between (i) preserving his possible right to a tax deduction
for payments of loan interest and (ii) abandoning this right
in favor of making additional Account balances available for
borrowing. The Account hierarchy or hierarchies shall be
disclosed in the loan forms and agreed to by the
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Participant, who shall remain solely responsible for his
personal tax situation, there being no guarantee of interest
deductibility or of specific tax treatment of any sort for
Participants or their Beneficiaries with respect to particular
transactions under the Plan.
(e) The loan repayment period shall be 1, 2, 3, 4, or 5 years as
elected by the Participant. In no event, however, shall the
loan repayment period end later than the end of the second
month following the month in which the Participant ceases to
be a party in interest for purposes of section 3(14) of ERISA.
(f) Each loan shall bear an interest rate equal to one percentage
point above the prime rate, as shown in the Money Rates
published in The Wall Street Journal on the first business day
of the month immediately prior to the quarter in which the
loan is approved; provided, however, that such interest rate
shall be reduced, if necessary, so as not to violate any
applicable usury law then in effect. The interest rate so
determined shall be fixed for the term of the loan.
(g) The Committee shall establish a Loan Fund representing the
Participant's individual investment of amounts that have been
withdrawn from his various Accounts and lent to him against
the security of such Accounts. Each repayment of principal on
the loan received by the Trustee from the Participant shall
reduce the Participant's investment in his Loan Fund and such
repayment of principal together with each payment of loan
interest shall increase pro rata the amount invested in each
other Investment Fund in accordance with the Participant's
investment elections at the time of such repayment, subject to
any Investment Fund restrictions.
(h) Except as otherwise provided below, repayment in equal
semimonthly installments of interest and principal shall
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be accomplished through regular payroll deductions. The
obligation to make repayments of principal and interest shall
be suspended during the period not to exceed one year that the
Participant is on an authorized leave of absence without pay
(including a layoff that has not yet resulted in a Separation
from Service). If the unpaid leave continues thereafter, the
Participant shall be required to recommence repayments, on a
monthly basis by check, until he returns to pay status and
resumes regular repayments by means of payroll deductions. To
satisfy legal requirements, the Committee may specify rules
for redetermining the amount, timing, or manner of repayments
following a period of suspension due to unpaid leave; but such
redeterminations shall not be made for other reasons. The
obligation to make repayments shall continue during a paid
leave of absence or a transfer to a paid status as an Employee
who is no longer an Eligible Employee. Where it is not
feasible in such a case to continue processing the loan
repayments as payroll deductions under a payroll system that
currently covers the Participant, the repayments shall be made
by the Participant by check on a monthly basis. A Participant
shall be entitled at any time to prepay, without penalty, the
total accrued interest and outstanding principal amount of the
loan by direct payment. No other prepayments outside the
regular payment schedule shall be permitted.
(i) If a Participant (i) incurs a Separation from Service and
either receives an immediate distribution of his remaining
interest in the Plan or does not pay the total accrued
interest and outstanding principal amount of the loan within
60 days or (ii) is in default for 90 days on any required loan
payment prior to his repayment of the total principal and
interest on an outstanding loan under the Plan, the
Participant's note shall be canceled and the
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principal deemed distributed by the Trust Fund to him or, if
applicable, his Beneficiary. This paragraph shall not apply,
however, as long as a Participant, notwithstanding his
Separation from Service, continues to be a party in interest
under section 3(14) of ERISA and therefore has a legal right
to continue his loan during such time as he is not in default
on his regular loan payments. In this case, the regular loan
payments may be made by check or other means suitable to the
Committee once the Participant ceases to be covered by a
payroll of the Company or an Affiliate.
(j) The Company and the Trustee may make suitable arrangements,
consistent with the requirements of the Code and ERISA, for
holding the Participant's note under an agency, subtrust, or
other arrangement that provides adequate safeguards while
simplifying the handling of the loan and eliminating the need
to transfer the actual note to the Trustee.
(k) The foregoing provisions of this section notwithstanding, the
Committee reserves the right to stop granting loans to
Participants at any time.
7.9 Debiting of Investment Funds. If a Participant makes less than
a total withdrawal of his Participant's Account or obtains a Plan loan under
Article 7 of the Plan and has his Participant's Account invested in more than
one Investment Fund, a portion of the amount withdrawn from his Participant's
Account shall be debited from each such Investment Fund in the proportion which
the current dollar balance of the Participant in such Fund bears to the value
of his Participant's Account.
7.10 Missing Persons. If the Company or the Committee shall be
unable, within two years after the Participant's distribution becomes due from
the Trust Fund to a Participant, inactive
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Participant or Beneficiary, to make payment because the identity or whereabouts
of such person cannot be ascertained, the Committee (a) shall be deemed to have
elected to continue the Participant's interest in his Participant's Account (in
which event the Committee shall not have the power to change the Participant's
investment elections in effect when the distribution became due) until such
time as (b) the Committee (i) pays such benefit pursuant to state escheat laws
or (ii) directs that such Participant's interest in his Participant's Account
and all further benefits with respect to such person be discontinued and all
liability for the payment thereof terminated; provided, however, that in the
event of the subsequent reappearance of the Participant, inactive Participant
or Beneficiary, the benefit due such person (adjusted upward or downward in the
manner provided in section 9.3 as if the Participant's Account had not been
terminated) shall be paid in a single sum unless such discontinued interest was
paid pursuant to state escheat laws. The amount of any discontinued interest
shall be applied to reduce Company Matching Contributions under section 5.1,
and reinstatement of a benefit shall be accomplished by the making of a special
Employer Contribution in an appropriate amount to restore to the Trust the
Participant's distribution.
7.11 Requirement for Consent to Certain Distributions.
Notwithstanding any other provision regarding the Plan distributions, the Plan
may not immediately distribute the balance of a Participant's Account that
exceeds $3,500 without the written consent of the Participant. Where the
Participant does not consent to a distribution that is subject to the foregoing
requirement, this section shall be interpreted and administered so as to comply
with Code section 411(a)(11) by delaying any distribution that might otherwise
be required under the Plan to the extent necessary to comply with said Code
section.
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Article 8. Investment Elections
8.1 Investment of Contributions. Each Participant may elect to
have all or any whole percentage of the total amount of his Accounts (excluding
the ESOP Rollover Account or any other specialized Account to the extent that
it is subject to particular investment restrictions) invested in any one or
more of the available Investment Funds. If a Participant does not make an
election in accordance with procedures approved by the Committee within the
election period provided for that purpose, the balances in his Participant's
Account shall be invested in the Income Fund.
8.2 Investment Transfers. As of any Change Date, each Participant
may change the Investment Funds in which the balances in his Participant's
Account are invested by electing, in increments of any whole percentage of the
Account total, to have the assets in a particular Investment Fund transferred
within a reasonable time after the election to any one or more of the other
Investment Funds. As of any other date that the Committee may designate as a
special election date for unusual reasons (such as the introduction of a new
Investment Fund, the transfer of a Participant entitled to make a special
election under section 3.3, or the investment of a rollover contribution
received pursuant to section 5.6), each Participant shall be allowed to make a
special election, without regard to the normal limits on the frequency of
investment elections, in order to make a similar change in his choice of
Investment Funds and have such assets and his Account balances transferred
accordingly to other Investment Funds. The election may apply to the investment
of amounts previously allocated to his Participant's Account or to future
contributions, or both. As of January 1, 1990, any Participant who had
previously been investing different types of future contributions in different
ways under prior rules of the Plan will have all his future contributions
invested in the same way as indicated by his most
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recent election for the investment of his Basic Contributions, unless he makes
a new investment election applicable to all of his future contributions under
the Plan.
8.3 Investment Elections. Each Participant may make the election
described in section 8.1 by filing an election form with the Committee upon
becoming a Participant. The elections described in sections 8.1 and 8.2 may be
changed, together or separately, on any permissible Change Date, to be
effective as of the Valuation Date next following receipt of such reasonable,
advance written notice thereof as may be required by the Committee. Each
investment election shall be within the independent control of the Participant
who makes it. Neither the Trustee, the Employer, nor anyone else other than the
Participant shall be liable for any loss that may result from the exercise of
such control by the Participant.
8.4 Transfer of Assets. The Committee shall see that appropriate
agreements and procedures exist to require the Trustee to transfer the
appropriate amounts of money or other property to and from the appropriate
Investment Funds in order to carry out the aggregate transfer transactions
after the Committee has caused the necessary entries to be made in the
Participants' Accounts and in the Investment Funds and has reconciled
offsetting transfer elections, in accordance with the elections of Participants
and accounting and investment rules approved by the Committee.
8.5 Voting Company Stock. Each Participant who has common stock of
the Company allocated to his Participant's Account shall be entitled to
instruct the Trustee regarding the voting of the number of such shares
allocated to the Account at all stockholders meetings of the Company,
determined on the last practicable day prior to such stockholders meeting. If
clear and timely instructions have not been received from the Participant, or
if
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shares of the Company's common stock have not yet been allocated to the
Accounts of Participants, the Trustee shall vote such shares in the same
proportion as are voted the shares for which clear and timely voting
instructions have been received from Participants, unless the Trustee
determines in the exercise of its fiduciary responsibility that it must vote
such shares in a different manner to protect the interest of Participants and
Beneficiaries. As agreed by the Company and the Trustee, the Company or the
Trustee will send, or cause to be sent, to each Participant who has common
stock of the Company allocated to his Participant's Account a voting
instruction form and the same proxy solicitation material as is sent to
stockholders generally.
8.6 Tender Offers. Notwithstanding any other provisions of the
Plan to the contrary:
(a) If any person shall make a tender offer to acquire (by
purchase or exchange) common stock of the Company, including
shares of such common stock that are held in the Trust, the
Trustee shall act as follows:
(1) The Trustee shall ensure that the materials made
available to shareholders generally in connection
with the tender offer are provided to each
Participant who has shares of common stock of the
Company allocated to his Participant's Account, and
the response of the Trustee as to whether to accept
or reject the tender offer with respect to the full
and fractional shares of such common stock that are
so allocated shall be made in accordance with the
instructions of the Participant given to the Trustee
on forms provided for that purpose.
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(2) Notwithstanding paragraph (1) above, if the Trustee
in its sole discretion determines that under the
circumstances of a particular tender offer there is
not sufficient time to pass the decision through to
Participants in the manner anticipated in paragraph
(1), or if the Trustee fails to receive clear and
timely instructions from a Participant in a case
where instructions have been sought by the Trustee as
provided in paragraph (1), the Trustee shall in its
sole discretion determine whether to accept or reject
the tender offer (in whole or in part) with respect
to the affected full and fractional shares of common
stock of the Company that are allocated to the
Accounts of Participants.
(3) With respect to full and fractional shares of common
stock of the Company that have been acquired by the
Plan and are not yet allocated (including any such
common stock held in a suspense account because it
cannot be allocated currently due to the Code section
415 limits), the Trustee shall in its sole discretion
determine whether to accept the tender offer (in
whole or in part).
(b) If any tender offer is accepted (in whole or in part pursuant
to subsection (a), the Trustee shall have the power to
transfer common stock of the Company in order to effect such
acceptance.
(c) For purposes of this section 'tender offer' shall mean any
offer to acquire common stock of the Company which is subject
to either section 13(e) or 14(d) of the Securities Exchange
Act of 1934 and which under applicable rules and regulations
is required to be the subject of a filing with the Securities
and Exchange Commission on either Schedule 13E-4 or Schedule
14D-9.
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(d) The foregoing notwithstanding, nothing herein shall serve to
modify the related rules of the Trust Agreement or to expand
the duties of the Trustee unless and until the Trustee gives
its consent in the manner provided in the Trust Agreement.
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Article 9. Accounts and Records of the Plan
9.1 Accounts and Records. The accounts and records of the Plan
shall be maintained at the direction of the Committee and shall accurately
disclose the status of the Accounts of each Participant or his Beneficiary in
the Plan. Such accounts and records may be kept in dollars or in units or both,
as determined in accordance with generally acceptable principles of trust
accounting approved by the Committee. The information maintained shall be
sufficient to determine the number of shares of Company Stock that are
allocated to the Participant's Account as of any Valuation Date and the tax
status of distributions with respect to matters such as the determination of
net unrealized appreciation on shares of the Company's common stock that are
distributed and the determination of the Code section 72 contract and the
Participant's investment in such contract for purposes of any withdrawal or
other distributions from the Plan.
Each Account of a Participant shall be assigned a share of each Investment Fund
in which the Participant's Account is invested in the proportion which the
balance of each such Account bears to the total Participant's Account. The
Committee shall cause records to be maintained relative to a Participant's
Account so that there may be determined as of any Valuation Date the current
value of his Accounts in the Trust Fund and the adjustments from the previous
Valuation Date that have produced such current value. Any portion of a
Participant's Account that is invested in the Loan Fund in order to secure the
outstanding balance of a loan to the Participant is subject to a possible
setoff and deemed distribution for tax purposes, as described in subsection
7.8(i), and is therefore not available for actual payments to a Participant.
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Each Participant shall be advised from time to time, at least once each Plan
Year, as to the status of his Participant's Account and the portions thereof
attributable to each Account existing thereunder in accordance with section
2.1(x).
9.2 Investment Funds. The Trust Fund shall consist of the
Investment Funds, and each Participant who has any interest in an Investment
Fund shall have an undivided proportionate interest. In order to implement and
carryout investment objectives and policies established by the Committee, the
Committee shall have the right from time to time to establish additional
Investment Funds and to close Investment Funds and to transfer the assets to
other Investment Funds pursuant to new investment elections by the
Participants.
9.3 Valuation Adjustments. As of each Valuation Date, the
recordkeeper, in accordance with accounting principles approved by the
Committee, shall credit the Accounts of Participants and Beneficiaries with
contributions made during the accounting period and debit such Accounts with
withdrawals and distributions for such period, and shall also adjust the net
credit balances of such Accounts in the respective Investment Funds of the
Trust Fund, upward or downward, pro rata (using reasonable assumptions about
the availability of current period contributions, withdrawals, and
distributions for purposes of sharing in current period earnings and investment
gains or losses), so that such net credit balances will equal the net worth of
each Investment Fund of the Trust Fund as of that Valuation Date. The net worth
of an Investment Fund shall be determined by the Trustee and reported to the
recordkeeper under procedures approved by the Committee, by subtracting from
the fair market value of assets held in such Investment Fund any expenses,
withdrawals, distributions and transfers chargeable to that Investment Fund
which have been incurred but not yet paid. All determinations made by the
Trustee with respect to fair market
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values and net worth shall be made in accordance with generally accepted
principles of trust accounting, and the accounting based thereon in accordance
with procedures approved by the Committee, shall be conclusive and binding upon
all persons having an interest under the Plan.
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Article 10. Financing
10.1 Financing. The Company shall maintain a Trust Fund to finance
the benefits under the Plan, by entering into one or more Trust Agreements or
insurance contracts approved by the Company, or by causing insurance contracts
to be held under a Trust Agreement. Any Trust Agreement is designated as and
shall constitute a part of this Plan, and all rights which may accrue to any
person under this Plan shall be subject to all the terms and provisions of such
Trust Agreement. The Company may modify any Trust Agreement or insurance
contract from time to time to accomplish the purpose of the Plan and may
replace any insurance company or appoint a successor Trustee or Trustees. By
entering into such Trust Agreements or insurance contracts, the Company shall
vest in the Trustee, or in one or more investment managers appointed under the
terms of the Trust Agreement from time to time by action of the Committee,
responsibility for the management and control of the Trust Fund. In the event
the Committee appoints any such investment manager, the Trustee shall not be
liable for the acts or omissions of the investment manager or have any
responsibility to invest or otherwise manage any portion of the Trust Fund
subject to the management and control of the investment manager. The Company
from time to time shall establish a funding policy which is consistent with the
objectives of the Plan and shall communicate it to the Trustee and each
investment manager so that they may coordinate investment policies with such
funding policy. Nothing in this section 10.1 shall eliminate the
responsibility of Participants for the results of investment elections that are
within their control, as provided in section 8.2.
10.2 Employer Contributions. Each Employer shall make such
contributions to the Trust Fund as are required by this Plan, subject to the
right of the Company to discontinue the Plan.
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10.3 Non-Reversion. Anything in this Plan to the contrary
notwithstanding, it shall be impossible at any time for the contributions of
the Employer or any part of the Trust Fund to revert to the Employer or
Affiliate or to be used for or diverted to any purpose other than the exclusive
benefit of Participants or their Beneficiaries, except that:
(a) If all or any part of a contribution is made by the Employer
by a mistake of fact, upon written request to the Committee,
such contribution or such portion and any increment thereon
shall be returned to the Employer within one year after the
date of payment.
(b) If all or any part of an Employer's Company Matching
Contributions under the Plan is disallowed as a deduction for
federal income tax purposes, then to the extent such
contribution is disallowed, the contribution and any increment
thereon shall be returned to the Employer within one year
after such disallowance.
(c) If all or any part of an Employer's contribution would give
rise to an excise tax under Code section 4972(b), a correcting
distribution with respect to such contribution shall be made
to the Employer to the extent permitted by said Code section
in order to avoid payment of an excise tax on excess
contributions.
(d) Any Basic Contributions or Flex Contributions that are
returned to an Employer pursuant to this section 10.3 shall be
paid over by the Employer to the Participant on whose behalf
they were made (or to his Beneficiary).
10.4 Transactions Involving Employer Securities. In any transaction
with a party in interest, as defined in section 3(14) of ERISA, involving the
acquisition or sale of Employer securities by the Plan, the Plan shall pay no
commission and the terms of the
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acquisition or sale shall be such that the Plan receives no less than adequate
consideration, as determined under section 3(18) of ERISA, or otherwise
satisfies the requirements of section 408(e) of ERISA.
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Article 11. Administration
11.1 Named Fiduciaries. The fiduciaries named in this section shall
have only those specific powers, duties, responsibilities and obligations as
are specifically given them under this Plan or the Trust. The Employer shall
have the sole responsibility for making the contributions specified in Articles
4 and 5 (other than the contributions made by Employees on an after-tax basis).
The Company shall have the sole authority to appoint and remove the Trustee and
to amend or terminate, in whole or in part, this Plan or the Trust. The
Company, acting directly or through the Committee, shall have the sole
responsibility for the administration of this Plan, which responsibility is
specifically described in this Plan and the Trust Agreement. The Senior Vice
President-Human Resources and Administration of the Company, or the officer
holding a position of comparable responsibilities, shall have the
responsibility of implementing the Plan as the Committee shall direct. The
Trustee shall have the sole responsibility for the administration of the Trust
and the management of the assets held under the Trust, all as specifically
provided in the Trust Agreement. A fiduciary may rely upon any direction,
information or action of another fiduciary as being proper under this Plan or
the Trust, and is not required under this Plan or the Trust to inquire into the
propriety of any such direction, information or action. It is intended under
this Plan and the Trust that each fiduciary shall be responsible for the proper
exercise of his or its own powers, duties, responsibilities and obligations
under this Plan and the Trust and shall not be responsible for any act or
failure to act of another fiduciary. No fiduciary guarantees the Trust Fund in
any manner against investment loss or depreciation in asset value. Any party
may serve in more than one fiduciary capacity with respect to the Plan or
Trust.
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11.2 Committee. Responsibility for the general administration of
the Plan and for carrying out the provisions hereof shall be placed in a
Committee of three or more members, each of whom shall be an Employee of an
Employer and each of whom shall be appointed by the Chief Executive Officer of
the Company and serve at the pleasure of the latter. Any member of the
Committee may resign by notice in writing filed with the Secretary of the
Committee, such resignation to become effective no earlier than the date of
such written notice.
All usual and reasonable expenses of the Committee will be paid by the Company.
Members of the Committee shall not receive compensation with respect to their
services for the Committee.
11.3 Organization of Committee. The Committee shall elect a
Chairman and a Secretary. The Secretary need not be one of the members of the
Committee. The Committee shall issue directions to the Trustee concerning all
benefits which are to be paid from the Trust Fund pursuant to the provisions of
the Plan. The Committee may authorize one or more of its number, or any agent,
to direct any payment on behalf of the Committee (including instructions to the
Trustee as to the application or disbursement of the Trust fund) and may
appoint agents and clerks, and retain such professional services, including
legal, medical, accounting, and actuarial specialists, as may be required in
carrying out the provisions of the Plan.
The Committee shall hold meetings upon notice, at such place or places, and at
such time or times, as they may determine. A majority of the members of the
Committee at the time in office shall constitute a quorum for the transaction
of business. All resolutions or actions taken by the Committee at a meeting
shall be by vote of the majority of the Committee present. Action by the
Committee may be taken without a formal meeting by the
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written authorization of all of the members thereof. A Committee member shall
be disqualified from acting upon any matter affecting only himself.
11.4 Procedures. The Committee shall adopt administrative rules as
it deems desirable and shall keep all such books of accounts, records and other
data as may be necessary for the proper administration of the Plan. The
Committee shall keep a record of all actions and forward all necessary
communications to the Trustee, Company or Employer, Participants, inactive
Participants, Beneficiaries, Alternate Payees, providers of services to the
Plan, and other interested parties, as the case may be.
11.5 Committee's Powers and Duties. The Committee shall have such
powers and duties as may be necessary to discharge its functions hereunder,
including but not limited to, the following:
(a) To construe and interpret the Plan, to decide all questions of
eligibility and determine the amount, manner and time of
payment of any benefits hereunder;
(b) To make a determination as to the right of any person to a
benefit;
(c) To obtain from the Employer and from Employees such
information as shall be necessary for the proper
administration of the Plan and, when appropriate, to furnish
such information promptly to the Trustees or other persons
entitled thereto;
(d) To prepare and distribute, in such manner as the Committee
determines to be appropriate, information explaining the Plan;
(e) To furnish the Employer, upon request, such reports with
respect to the administration of the Plan as are reasonable
and appropriate;
(f) To establish and maintain such accounts in the name of the
Employer and of each Participant as are necessary;
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(g) To instruct the Trustee with respect to the payment of
benefits hereunder;
(h) To provide for any required bonding of fiduciaries and other
persons who may from time to time handle Plan assets;
(i) To prepare and file any reports required by the Code, ERISA,
the Securities Act of 1933, the Securities Exchange Act of
1934, or any other applicable law;
(j) To engage an independent public accountant to conduct such
examinations and to render such opinions as may be required by
the ERISA;
(k) To allocate contributions and Trust Fund earnings and
investment gains or losses to the Accounts of Participants;
(l) To establish a funding policy and method consistent with the
objectives of the Plan and the requirements of ERISA;
(m) To correct any errors and remedy any defects in the
administration of this Plan, including, if necessary, by
requiring any Employer to make a Qualified Nonelective
Contribution that prevents discrimination under Code section
401(k) or 401(m) without materially increasing the cost of the
Plan;
(n) To establish reasonable claims procedures in accordance with
the terms of this Plan and ERISA; and
(o) To establish procedures for identifying and complying with
Qualified Domestic Relations Orders.
11.6 Committee's Decisions Conclusive. The Committee shall exercise
its power hereunder in a uniform and nondiscriminatory manner. Any and all
disputes with respect to the Plan which may arise involving Participants or
their Beneficiaries shall be referred to the Committee and its decision shall
be final, conclusive and binding. Furthermore, if any question arises as to the
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meaning, interpretation or application of any provision hereof, the decision of
the Committee with respect thereto shall be final.
11.7 Indemnity. The Company shall indemnify each member of the
Committee (which, for purposes of this section, includes any Employee to whom
the Committee has delegated fiduciary duties) 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 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 Employer of any claim asserted against the Committee
member, which notice, in the event of a lawsuit shall be given within 10 days
after receipt by the Committee member, which notice, in the event of a lawsuit
shall be given within 10 days after receipt by the Committee member of the
complaint, and (ii) the receipt by the Company of an offer from the Committee
member of an opportunity to participate in the settlement or defense of such
claim.
11.8 Claims Procedure.
(a) Claims for Benefits. Inquiries about benefits under the Plan
may be made to appropriate Human Resources personnel of the
Company and their designated field representatives. Formal
claims for benefits shall be made in writing to the Chairman
of the Committee. Written inquiries to Human Resources
personnel and field representatives that cannot be resolved
within a reasonable time will be treated as formal claims and
forwarded to the Chairman of the Committee, in which case the
claimant shall be advised of this action and of the claims
procedure under the Plan.
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(b) Notice of Denial of Claim. If a claim for benefits is wholly
or partially denied, the Chairman of the Committee shall
within a reasonable period of time, but no later than 90 days
after receipt of the claim, notify the claimant of the denial
of benefits. If special circumstances justify extending the
period up to an additional 90 days, the claimant shall be
given written notice of this extension within the initial
90-day period and such notice shall set forth the special
circumstances and the date a decision is expected. A notice of
denial
(1) shall be written in a manner calculated to be
understood by the claimant; and
(2) shall contain (i) the specific reasons for denial of
the claim, (ii) specific reference to the Plan
provisions on which the denial is based, (iii) a
description of any additional material or information
necessary for the claimant to perfect the claim,
along with an explanation why such material or
information is necessary, and (iv) an explanation of
the Plan's claim review procedures.
(c) Request for Review of Denial of Claim. Within 60 days of the
receipt by the claimant of the written denial of his claim or,
if the claim has not been granted within a reasonable period
of time (which shall not be less than the 90 days described in
subsection (b)), the claimant may file a written request with
the full Committee that it conduct a full review of the denial
of the claim, including a hearing if deemed necessary by the
full Committee. In connection with the claimant's appeal, the
claimant may review pertinent documents and may submit issues
and comments in writing.
(d) Decision of Review of Denial of Claim. The full Committee
shall deliver to the claimant a written decision on the claim
promptly, but not later than 60 days
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after the receipt of the claimant's request for such review,
unless special circumstances exist which justify extending
this period up to an additional 60 days. If the period is
extended, the claimant shall be given written notice of this
extension during the initial 60-day period. The decision on
review of the denial of the claim
(1) shall be written in a manner calculated to be
understood by the claimant;
(2) shall include specific reasons for the decision; and
(3) shall contain specific references to the Plan
provisions on which the decision is based.
All decisions made under the procedure set out in this section shall be final,
binding, and conclusive.
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Article 12. Plan Amendment, Termination, Merger, and
Adoption by Affiliates
12.1 Amendment and Termination. The Company expects the Plan to be
permanent and continue indefinitely, but since future conditions affecting the
Company cannot be anticipated or foreseen, the Company must necessarily and
does hereby reserve the right to amend, modify or terminate the Plan for itself
and all other Employers at any time by action of the Compensation and
Nominating Committee of the Board of Directors. In addition, the Senior Vice
President-Human Resources and Administration of the Company may approve any
modifications or amendments to the Plan that are necessary or appropriate to
meet the requirements of ERISA, the Code, or any other law as now in effect or
as hereafter amended, and the Chief Executive Officer of the Company (or the
Senior Vice President-Human Resources and Administration if acting pursuant to
authority delegated by the Chief Executive Officer) may approve any
modification or amendment which does not significantly increase benefit costs.
No amendment of the Plan shall cause any part of the Trust Fund to be used for,
or diverted to, purposes other than for the exclusive benefit of the
Participants or their beneficiaries covered by the Plan. Retroactive Plan
amendments may not decrease the accrued benefits of any Participant determined
as of effective date of the amendment applies or, if later, as of the time the
amendment was adopted; provided, however, that retroactive amendments to
preserve the qualification of the Plan shall be permitted to the full extent
permitted by the Internal Revenue Service or section 1140 of the Tax Reform Act
of 1986 or any other applicable laws.
12.2 Distribution on Termination. Upon termination of the Plan in
whole or in part, or upon complete discontinuance of contributions to the Plan
by the Employers, the value of the proportionate interest in the Trust Fund of
each Participant
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affected by such termination having an interest in the Trust Fund shall be
determined as of the date of such termination or discontinuance. The Accounts
of such Participants shall continue to be fully vested and nonforfeitable, and
thereafter distribution shall be made to such Participants as directed by the
Committee in accordance with the Plan and applicable law.
Upon the partial termination of the Plan, the Committee may in its sole
discretion determine the timing of a distribution of the balance of the
affected Participants' Accounts in accordance with the provisions of the Plan
and applicable law.
12.3 Corporate Reorganization. The bankruptcy, dissolution, merger,
consolidation or reorganization of the Company or any other Employer, or the
sale of all or substantially all of the assets or stock of the Company or any
other Employer, shall not automatically terminate the Plan, unless a Plan
termination is otherwise required under this Article 12 and no provision is
made for continuation of the Plan.
12.4 Plan Merger or Transfer. In the event of and effective as of
the date of merger or consolidation with, or transfer of assets and liabilities
of the Plan to or from any other employee benefit plan, each Participant in
this Plan will (if the Plan had then terminated) receive a benefit immediately
after the merger, consolidation or transfer which is not less than the benefit
the Participant would have been entitled to receive immediately before the
merger, consolidation or transfer of assets (if this Plan had then terminated).
As of January 1, 1990, the Plan shall receive a direct transfer of assets from
the Burlington Resources Inc. Thrift and Profit Sharing Plan. The Plan shall
be treated as a continuation of such Other Plan with respect to the transferred
balances and with respect to
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the affected Participants, (that is, those Participants who were participants
in such Other Plan on December 31, 1989). The actual transfer of assets shall
take place as soon as administratively practicable after January 1, 1990,
subject to the prior satisfaction of applicable legal requirements, including
the furnishing by both plans of any necessary advance notices to the Internal
Revenue Service. Following such transfer, each affected Participant's years of
participation in such Other Plan shall be carried over to this Plan, and his
transferred balance shall continue to be fully vested and shall continue to be
subject to the legally required protections under Code sections 414(1) and
411(d)(6), and other applicable laws that preserve certain rights of a
Participant with respect to such a balance. In the future the Committee may
authorize a direct transfer to this Plan from an Other Plan that it has
designated, subject to the satisfaction of requirements similar to those
applicable to the Burlington Resources Inc. Thrift and Profit Sharing Plan, as
described above and elsewhere in this Plan.
12.5 Affiliate Participation. Subject to the approval of the
Company, any Affiliate desiring to become an Employer may elect to become a
party to the Plan by adopting the Plan for the benefit of any specified group
of its Employees, with such modification of the terms of the Plan with respect
to such Employees as the Company may approve, effective as of the date
specified in such adoption, by filing with the Company an adoption agreement or
such other or additional instruments evidencing the adoption as the Company may
require.
12.6 Action Binding on Participating Affiliates. As long as the
Company is a party to the Plan and the Trust Agreement, it shall be empowered
to act thereunder for any Employer in all matters respecting the Committee and
the Trustee and the designation of Affiliates and any action taken by the
Company with respect
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thereto shall automatically include and be binding upon any Employer which is a
party to the Plan.
12.7 Termination of Participation of Affiliate. The Company
reserves the right, in its sole discretion and at any time, to terminate the
participation in this Plan of any or all Employers. Such termination shall be
effective immediately upon notice of such termination from the Company to the
Trustee and the Employer being terminated. In event of such termination, this
Plan shall not terminate, but the portion of the Plan attributable to the
Affiliate shall become a separate Plan, and the Company shall inform the
Trustee of the portion of the Trust Fund that is then attributable to the
participation of such terminated Affiliate. Such portion shall as soon
thereafter as is administratively feasible be set apart by the Trustee as a
separate Trust which shall be a part of the separate Plan of such terminated
Affiliate.
Any Affiliate may withdraw from the Plan and Trust and end its status as an
Employer hereunder, by action of its Board of Directors, after obtaining
approval of the Company.
Thereafter, the administration, control, and operation of the Plan with respect
to such terminated Affiliate shall be on a separate basis in accordance with
the terms hereof, or as such terms may be amended by appropriate action of such
terminated Affiliate in accordance with the provisions of Article 12.
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Article 13. Top-Heavy Provisions
13.1 Application. The provisions of this Article 13 shall be
interpreted and administered in accordance with the requirements of Code
section 416. If as of the Determination Date in any Plan Year
(a) the sum of the Account balances of Employees who are "Key
Employees" for such Plan Year exceeds 60% of the sum of the
Account balances of all Employees and their Beneficiaries; or
(b) the Plan is part of a Top-Heavy Group;
then the following provisions under this Article 13 shall apply for such Plan
Year. The foregoing notwithstanding, the provisions of this Article 13 shall
not apply to the Plan in any Plan Year during which it is part of an
Aggregation Group (as defined in section 13.3), whether or not it is top-heavy
as a single plan, unless the Aggregation Group of which it is a part is
top-heavy in such Plan Year.
The "Determination Date" is the date for determining the applicability of this
Article 13 is:
(i) for the first Plan Year, the last day of the Plan Year; and
(ii) for any other Plan Year, the last day of the preceding Plan
Year.
13.2 Key Employees.
(a) A "non-Key Employee" means any Participant who is not a Key
Employee (as hereafter defined), but who is an Employee on the
last day of the Plan Year. For purposes of this Article 13,
the term "Key Employee" means any Employee or former Employee
(and the Beneficiary of such an Employee) who at any time
during the Plan Year
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in which a determination of top-heaviness is made or any of
the four preceding Plan Years is:
(1) an officer of the Company or an Affiliate whose
Section 415 Compensation during the relevant Plan
Year exceeded 50% of the dollar limitation in effect
under Code section 415(b)(1)(A); provided that no
more than 50 Employees shall be treated as officers;
(2) one of the 10 Employees having Section 415
Compensation for the relevant Plan Year in excess of
the dollar limitation in effect under Code section
415(c)(1)(A) and owning (or considered as owning
within the meaning of Code section 318) the largest
interests in the Company or an Affiliate; provided,
however, that if 2 Employees have the same interest
in the Company or an Affiliate, then the Employee
with the greater Section 415 Compensation shall be
treated as having the larger interest;
(3) a 5-percent owner of the Company or an Affiliate; or
(4) a 1-percent owner of the Company or an Affiliate
having annual Section 415 Compensation of more than
$150,000.
(b) An Employee is considered a "5-percent owner" if the Employee
owns (or is considered as owning within the meaning of Code
section 318, as modified by Code section 416(i)(1)(B)) more
than 5 percent of the outstanding stock of the Company or an
Affiliate or stock possessing 5 percent of the total combined
voting power of all of the stock of the Company or an
Affiliate. For purposes of this paragraph, "stock" shall also
mean the appropriate ownership interest of
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an Affiliate which is not a corporation. The same rules apply
to determine whether an Employee is a 1-percent owner.
(c) If an Employee who has not terminated his employment ceases
to be a Key Employee, such Employee's Account balance or
accrued benefit shall be disregarded under the top-heavy plan
computation for any Plan Year following the last Plan Year
for which he was treated as a Key Employee. The Account
balance or accrued benefit of any Employee or former
Employee, who has not performed any services for the Company
or any Affiliate at any time during the 5-year period ending
on the Determination Date, will not be taken into account to
determine whether the Plan or Aggregation Group is top-heavy.
13.3 Top-Heavy Group. For purposes of determining whether the Plan
is a part of a Top-Heavy Group, the following rules shall apply:
(a) Aggregation Group. The Aggregation Group shall include any
plan maintained by the Company or an Affiliate which covers a
Key Employee and any other plan which enables a plan covering
a Key Employee to meet the requirements of Code section
401(a)(4) or 410.
(b) Top-Heavy Group. An Aggregation Group is a Top-Heavy Group if
the sum of the account balances of Key Employees under all
defined contribution plans included in the group and the
present value of the accumulated accrued benefits for Key
Employees under all defined benefit plans in the group exceeds
60% of a similar sum determined for all Employees and their
Beneficiaries under all such plans in the group. The present
value of accrued benefits under defined benefit plans and the
account balances under defined contribution plans shall
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be determined separately as of each plan's determination date.
For purposes of determining whether an Aggregation Group is a
Top-Heavy Group, the present value of accrued benefits under
all defined benefit plans in the Aggregation Group shall be
determined using a single set of actuarial assumptions, as
defined in such defined benefit plans. The determination of
whether the Aggregation Group is a Top-Heavy Group shall be
made using each plan's results as of that plan's determination
date which falls within the calendar year. In any Plan Year,
in testing for top-heaviness under this Article 13, the
Company may, in its discretion, take into account accumulated
accrued benefits and account balances in any other plan
maintained by it or an Affiliate, so long as such expanded
Aggregation Group continues to meet the requirements of Code
sections 401(a)(4) and 410.
13.4 Additional Rules. In determining the present value of the
accrued benefits under a defined benefit plan and the sum of the account
balances under a defined contribution plan, Company contributions and voluntary
Employee contributions shall be taken into account and any rollover
contribution or similar transaction initiated by the Employee, which results in
a transfer to this Plan, shall not be taken into account. The present value of
the accrued benefits in a defined benefit plan and the account balance in a
defined contribution plan shall include any amount distributed to an Employee
or Beneficiary within the five-year period ending on that plan's determination
date.
The present value of any Employee's accrued benefit under any defined benefit
plan as of any determination date shall be calculated (i) as of the most recent
Actuarial Valuation Date which is within a 12-month period ending on the
Determination Date,
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(ii) as if his employment terminated as of such valuation date, and (iii)
without regard to the automatic preretirement survivor annuity benefit or any
other nonproportional subsidy. The term "Actuarial Valuation Date" shall mean
the valuation date used for computing plan costs for minimum funding.
13.5 Code Section 415(h) Adjustment. If the Plan is determined to
be top-heavy in any Plan Year, then the combined limits of Code section 415(e)
and section 6.3 of the Plan shall be applied in accordance with Code section
416(h)(1) by substituting "1.0" for "1.25" in computing the defined benefit
fraction and the defined contribution fraction under Plan section 6.3 and
paragraphs 2(B) and 3(B) of Code section 415(e).
13.6 Minimum Contributions. If this Plan is determined to be
top-heavy in any Plan Year under the provisions of section 13.1 or 13.3, then
the aggregate contributions to be made by the Employer on behalf of each
non-Key Employee for the Plan Year (excluding any contributions under sections
4.1, and 5.1, to the extent required in applicable regulations) shall not be
less than 3 percent of the Participant's Section 415 Compensation for such year
(or such lesser percentage as represents the maximum percentage of Section 415
Compensation contributed on behalf of a Key Employee for the Plan Year), as
determined under section 416(c) of the Code.
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Article 14. Miscellaneous Provisions
14.1 Employment Rights. Neither anything contained in this Plan nor
any modification of the same or act done in pursuance hereof shall be construed
as giving any person any legal or equitable right against the Committee, the
Employer, the Company, the Trustee or the Trust Fund, unless specifically
provided herein, or as giving any person a right to be retained in the employ
of the Employer. All Participants shall remain subject to assignment,
reassignment, promotion, transfer, layoff, reduction, suspension and discharge
to the same extent as if this Plan had never been established.
14.2 No Examination or Accounting. Neither this Plan nor any action
taken thereunder shall be construed as giving any person the right to an
accounting or to examine the books or affairs of an Employer.
14.3 Investment Risk. The Participants and their Beneficiaries
shall assume all risks in connection with any decreases in the value of any
assets or funds which may be invested or reinvested in the Trust Fund which
supports this Plan.
14.4 Non-Alienation. Except as permitted under the Plan in
accordance with Code section 401(a)(13) and ERISA section 206(d) with respect
to matters such as loans to Participants and assignments to Alternate Payees
under Qualified Domestic Relations Orders, no benefit payable at any time under
the Plan shall be subject to the debts or liabilities of a Participant or his
spouse or Beneficiary, and any attempt to alienate, sell, transfer, assign,
pledge or otherwise encumber any such benefit, whether presently or thereafter
payable, shall be void. Subject to the foregoing exception, no benefit under
the Plan shall be
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subject in any manner to alienation, sale, transfer, assignment, pledge,
attachment, garnishment or encumbrance of any kind. In accordance with
procedures consistent with Code section 414(p) that are established by the
Committee (including procedures requiring prompt notification of the affected
Participant and each Alternate Payee of the Plan's receipt of a domestic
relations order and its procedures for determining the qualified status of such
order), judicial orders for purposes of enforcing family support obligations or
pertaining to domestic relations (which orders do not alter the amount, timing
or form of benefit other than to have it commence at the earliest legally
permissible date) shall be honored by the Plan if the Committee determines that
they constitute Qualified Domestic Relations Orders. Except as may otherwise be
required by regulations of the Secretary of Labor, such orders may not require
a retroactive transfer of all or part of a Participant's Account to or for the
benefit of an Alternate Payee without permitting an appropriate adjustment for
earnings and investment gains or losses that have occurred in the interim, nor
shall such orders require the Plan to provide loans, self-directed investment
elections, or other rights to Alternate Payees that are not available to
Beneficiaries generally. In furtherance of this purpose, the investment
restrictions of subsection 5.6(f) shall continue to apply to any portion of a
Participant's ESOP Rollover Account that is retained under the Trust after
having been transferred to an Alternate Payee. To the full extent permitted by
Code section 414(p)(10) and by the terms of a Qualified Domestic Relations
Order, amounts assigned to an Alternate Payee may be paid as soon as possible
in a lump sum, notwithstanding the age, financial hardship, employment status,
or other factors affecting the ability of the Participant to make a withdrawal
or otherwise receive a distribution of balances to his credit under the Plan.
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In cases where such full and prompt payment of amounts assigned to an Alternate
Payee will not be made, the assigned amounts will be transferred within a
reasonable time to the Income Fund and, pending payment, shall be maintained in
a separate Account, for the benefit of the Alternate Payee.
14.5 Incompetency. Every person receiving or claiming benefits
under the Plan shall be conclusively presumed to be mentally competent and of
age until the date on which the Committee receives a written notice, in a form
and manner acceptable to the Committee, that such person is incompetent or a
minor, for whom a guardian or other person legally vested with the care of his
person or estate has been appointed; provided, however, that if the Committee
shall find that any person to whom a benefit is payable under the Plan is
unable to care for his affairs because of incompetency, or is a minor, any
payment due (unless a prior claim therefor shall have been made by a duly
appointed legal representative) may be paid to the spouse, a child, a parent or
a brother or sister, or to any person or institution deemed by the Committee to
have incurred expense for such person otherwise entitled to payment. To the
extent permitted by law, any such payment so made shall be a complete discharge
of liability therefor under the Plan.
In the event a guardian of the estate of any person receiving or claiming
benefits under the Plan shall be appointed by a court of competent
jurisdiction, benefit payments may be made to such guardian provided that
proper proof of appointment and continuing qualification is furnished in a form
and manner acceptable to the Committee. To the extent permitted by law, any
such payment so made shall be a complete discharge of any liability therefor
under the Plan.
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14.6 Severability. In the event any provision of this Plan shall be
held illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining parts of this Plan, and it shall be construed and enforced
as if such illegal or invalid provision had never been inserted herein.
14.7 Service of Legal Process. The Committee is hereby designated
agent of the Plan for the purpose of receiving service of summons, subpoena or
other legal process.
14.8 Headings of Articles and Sections. The headings of Articles
and sections are included solely for convenience of reference, and if there is
any conflict between such headings and the text of the Plan, the text shall
control.
14.9 Applicable Law. The Plan and all rights hereunder shall be
governed, construed and administered in accordance with the laws of the State
of Washington with the exception that any Trust Agreement which may constitute
a part of the Plan shall be construed and enforced in all respects under and by
the laws of the State in which the Trustee thereunder is located.
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IN WITNESS WHEREOF, The El Paso Company and the Company have caused
the Plan to be executed effective as of January 1, 1990.
THE EL PASO COMPANY
By Thomas E. Ricks
-------------------------------
Title Vice President & Controller
----------------------------
Date Signed 12/22/89
----------------------
ATTEST:
By Donald J. Masters, Jr.
-------------------------------
Title Secretary
----------------------------
BURLINGTON RESOURCES INC.
By A. R. Boyce
-------------------------------
Title SUP HUM. RES. & ADMIN.
----------------------------
Date Signed 12/22/89
-----------------------------
ATTEST:
By Leslie S. Leland
-------------------------------
Title Corporate Secretary
----------------------------
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IN WITNESS WHEREOF, The El Paso Company and the Company have caused
the Plan to be executed effective as of January 1, 1990.
THE EL PASO COMPANY
By Thomas E. Ricks
-------------------------------
Title Vice President & Controller
----------------------------
Date Signed 12/22/89
----------------------
ATTEST:
By Donald J. Masters, Jr.
-------------------------------
Title Secretary
----------------------------
BURLINGTON RESOURCES INC.
By A. R. Boyce
-------------------------------
Title SUP HUM. RES. & ADMIN.
----------------------------
Date Signed 12/22/89
----------------------
ATTEST:
By Leslie S. Leland
-------------------------------
Title Corporate Secretary
----------------------------
<PAGE> 182
AMENDMENT
BURLINGTON RESOURCES INC. RETIREMENT SAVINGS PLAN
AND
PREDECESSOR PLANS
This amendment applies to the Burlington Resources Inc. Retirement Savings Plan
("RSP") and to the predecessor plans described in RSP section 1.1; namely, the
Employees Savings Plan of The El Paso Company and Affiliated Companies ("El
Paso Predecessor Plan") and the Burlington Resources Inc. Thrift and Profit
Sharing Plan ("BR Predecessor Plan"). Collectively, the RSP, El Paso
Predecessor Plan, and BR Predecessor Plan are referred to herein as the
"Plans." Except as otherwise provided herein for specific provisions, all
provisions of this amendment are effective as of January 1, 1990, with respect
to RSP and as of January 1, 1989, with respect to the El Paso Predecessor Plan
and the BR Predecessor Plan.
1. Section 2.1(1) of each of the Plans is hereby amended by adding the
following at the end thereof:
As required by section 6.5 and by sections 4.11 and 5.2 as revised
pursuant to this Amendment, Compensation shall be determined after
application of the dollar limit of Code section 401(a)(17) and the
family aggregation rules of Code section 414(q)(6) in cases governed
by those Code sections. For this purpose, for years beginning after
December 31, 1988, the annual Compensation of each Participant taken
into account under the Plan for any year shall not exceed $200,000.
This limitation shall be adjusted by the Plan as permitted by the
Secretary of the Treasury at the same time and in the same manner as
under section 415(d) of the Code, except that the dollar increase in
effect on January 1 of any calendar year is effective for years
beginning in such calendar year and the first adjustment to the
$200,000 limitation is effected on January 1, 1990. If the Plan
determines Compensation on a period of time that contains fewer than
12 calendar months, then the annual Compensation limit is an amount
equal to the annual Compensation limit for the calendar year in which
the Compensation period begins multiplied by the ratio obtained by
dividing the number of full months in the period by 12.
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In determining the Compensation of a Participant for purposes of this
limitation, the rules of section 414(q)(6) of the Code shall apply,
except in applying such rules, the term "family" shall include only
the spouse of the Participant and any lineal descendants of the
Participant who have not attained age 19 before the close of the year.
If, as a result of the application of such rules the adjusted $200,000
limitation is exceeded, then the limitation shall be prorated among
the affected individuals in proportion to each such individual's
Compensation as determined under this section prior to the application
of this limitation. The rules regarding permitted disparity and the
use of Compensation for a prior Plan Year do not apply to this Plan
because it does not provide for any permitted disparity or any use of
Compensation for a prior Plan Year in determining an Employee's
contributions or benefits.
2. Section 2.1(z) of the RSP and the BR Predecessor Plan and section
2.1(aa) of the El Paso Predecessor Plan are each amended by adding the
following at the end thereof:
As required by section 6.5 and by sections 4.11 and 5.2 as revised
pursuant to this Amendment, Pay shall be determined after the
application of the dollar limit of Code section 401(a)(17) and the
family aggregation rules of Code section 414(a)(6) in cases governed
by those Code sections. For this purpose, for years beginning after
December 31, 1988, the annual Pay of each Participant taken into
account under the Plan for any year shall not exceed $200,000. This
limitation shall be adjusted by the Plan as permitted by the Secretary
of the Treasury at the same time and in the same manner as under
section 415(d) of the Code, except that the dollar increase in effect
on January 1 of any calendar year is effective for years beginning in
such calendar year and the first adjustment to the $200,000 limitation
is effected on January 1, 1990. If the Plan determines Pay on a period
of time that contains fewer than 12 calendar months, then the annual
Pay limit is an amount equal to the annual Pay limit for the calendar
year in which the Pay period begins multiplied by the ratio obtained
by dividing the number of full months in the period by 12.
In determining the Pay of a Participant for purposes of this
limitation, the rules of section 414(q)(6) of the Code shall apply,
except in applying such rules, the term "family" shall include only
the spouse of the Participant and any lineal descendants of the
Participant who have not attained age 19 before the close of the year.
If, as a result of the application of such rules the adjusted $200,000
limitation is exceeded, then the limitation shall be prorated among
the affected individuals in proportion to each such individual's Pay
as determined under this section prior to the application of this
limitation. The rules regarding permitted disparity and
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<PAGE> 184
the use of Pay for a prior Plan Year do not apply to this Plan because
it does not provide for any permitted disparity or any use of Pay for
a prior Plan Year in determining an Employee's contributions or
benefits.
3. Section 2.1(dd) of each of the Plans is hereby amended to read as
follows:
(dd) "Section 415 Compensation" means, generally, an Employee's
taxable W-2 earnings for income tax purposes under Code
section 3401(a), with such modifications as may be required to
conform to the definition of "participant's compensation" in
Code section 415(c)(3) and the regulation thereunder, and, to
the extent consistent with such authorities, shall be
construed as an Employee's wages, salaries, commissions,
professional fees and other amounts received for personal
services rendered in the course of employment with the Company
and Affiliates: (1) including amounts received through
accident or health insurance (but only to the extent
includible in gross income), disability payments (whether or
not excludable from gross income), earned income from sources
outside the United States (whether or not excludable or
deductible from gross income), amounts paid or reimbursed for
nondeductible moving expenses, the value of nonqualified stock
options to the extent includible in gross income in the
taxable year in which granted, and amounts includible in gross
income upon making the election described in Code section
83(b); but (2) excluding Company or Affiliate contributions to
a deferred compensation plan (to the extent excludable from
gross income when contributed), distributions from a qualified
plan, amounts realized on the exercise of nonqualified stock
options or when restricted property either becomes
transferable or is no longer subject to a substantial risk of
forfeitures, amounts realized on the disposition of stock
acquired under a qualified or incentive stock option, and
other amounts which receive special tax benefits.
4. Section 4.11 of each of the Plans is hereby amended to read as
follows:
4.11 Restrictions on Basic Contributions and Flex
Contributions. In conjunction with Participant elections of Basic
Contributions and at such other times throughout the Plan Year as the
Committee may determine, the Committee shall require testing of the
elections of before-tax Basic Contributions and Flex Contributions by
Participants (and any other Employer con-
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<PAGE> 185
tributions that the Company elects to include in the testing under the
conditions specified below) to assure that the average deferral
percentage for the Plan Year of Participants who are Highly
Compensated Employees will not exceed the greater of:
(a) 1.25 times the average deferral percentage for the
Plan Year of all other Participants who are
non-Highly Compensated Employees, or
(b) the lesser of (i) 2 percentage points more than, or
(ii) 2 times the average deferral percentage for the
Plan Year of all other Participants who are
non-Highly Compensated Employees.
For purposes of this section, the term "average deferral percentage"
for each group of Participants for any period shall be the average of
the percentages, calculated separately for each Participant in such
group, of the aggregate amount of Pay that each Participant elects to
have contributed to the Plan for the period as before-tax Basic
Contributions or Flex Contributions, provided that, if the Company so
elects in accordance with rules prescribed by the Secretary of the
Treasury, Qualified Nonelective Contributions and Code section 401(m)
matching contributions (including Company Matching Contributions under
this Plan) that meet the withdrawal and vesting requirements of Code
sections 401(k)(2)(B) and (C) shall be added to before-tax Basic
Contributions and Flex Contributions in computing each Participant's
average deferral percentage. Except as provided in Treasury
Regulations, excess before-tax Basic Contributions and Flex
Contributions under subsection 4.1(b) shall be treated as an amount
elected under section 4.2 and contributed to the Plan, whether or not
such excess contribution is distributed.
Advance testing done under this section shall be based on a
Participant's annual rate of Pay in effect at the time of the test,
and corrections to be made to reduce the amount in excess of the
maximum permissible deferral percentage shall be made from Pay to be
earned for the remainder of the Plan Year. Final Plan Year compliance
with the restrictions of this section shall be based on the
Participant's actual Pay and before-tax contributions for the Plan
Year.
The adjustments in this paragraph shall be made if, at the end of the
Plan Year, the percentage of before-tax Basic Contributions and Flex
Contributions elected by Highly Compensated Employees (and any other
Employer contributions that are included in the testing at the
Company's election) would (if not distributed) cause the average
deferral percentage of such Participants to exceed the maximum
deferral percentage permitted for the Plan Year under this section. In
such a case, before the end of the following Plan Year, the excess
amount of such contributions (and the income and investment gain or
loss attributable thereto) for the Highly Compensated Employees shall
be distributed to such Participants in the order of their average
deferral percentages, beginning with the Highly Compensated Employees
with the highest average deferral
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<PAGE> 186
percentage until the limitations of this section are met. For this
purpose, the income and investment gain or loss attributable to the
excess contribution being distributed shall be determined under the
Plan's normal method of accounting for the period following such
contribution and continuing until the end of the Plan Year in which
such contribution was made, excluding any subsequent period in the
following Plan Year prior to the distribution of the excess amount.
Except as otherwise required by applicable regulations, any amount
distributed under this paragraph to a Highly Compensated Employee
shall be included in that Employee's taxable wages for the Plan Year
for which the contribution was made. The distribution described in
this section may be made notwithstanding any other Plan provision.
The Committee shall adopt reasonable procedures for coordinating
distributions of excess contributions under this section and
subsection 4.1(b).
Moreover, notwithstanding the foregoing rules, the Committee shall
take steps to ensure that this section 4.11 is interpreted and
administered so as to comply with applicable legal requirements for
the determination of what amounts constitute excess Code section
401(k) elective deferrals and for the return of such excess amounts
and any income and investment gain or loss attributable thereto. If
two or more plans which include Code section 401(k) cash or deferred
arrangements are considered as one plan for purposes of Code section
401(a)(4) or 410(b), the cash or deferred arrangements included in
such plans shall be treated as one arrangement for purposes of this
section 4.11. If any Highly Compensated Employee is a participant
under two or more cash or deferred arrangements of an Employer or
Affiliate, all such cash or deferred arrangements shall be treated as
one such arrangement for purposes of determining the actual deferral
percentage with respect to such Employee. Moreover, no benefits other
than Code section 401(m) matching contributions shall be conditioned
on a Participant's election of before-tax Basic Contributions or Flex
Contributions under this Plan.
If a Participant is an eligible Highly Compensated Employee who is
subject to the family aggregation rules of Code section 414(q)(6)
because he is a 5 percent owner or is one of the 10 most highly
compensated Employees, the combined average deferral percentage for
the family group (which is treated as one Highly Compensated Employee)
must be determined by combining the Code section 401(k) elective
contributions, Pay, and amounts treated as Code section 401(k)
elective contributions of all the eligible family members. The Code
section 401(k) elective contributions, Pay, and amounts treated as
Code section 401(k) elective contributions of all family members are
disregarded for purposes of determining the average deferral
percentage for the group of non-Highly Compensated Employees. If an
Employee is required to be aggregated as a member of more than one
family group in the Plan, all eligible Employees who are members of
those family groups that include that Employee are aggregated as one
family group.
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<PAGE> 187
The determination and correction of excess contributions of a Highly
Compensated Employee whose average deferral percentage is determined
under the family aggregation rules of the preceding paragraph is
accomplished by reducing the average deferral percentage as required
under the "leveling" method described previously in this section and
allocating the excess contributions for the family group among the
family members in proportion to the elective contribution of each
family member that is combined to determine the average deferral
percentage.
All determinations under this section 4.11 shall comply with Code
section 401(k) and the regulations thereunder. In the event of any
conflict, the rules of such Code section and regulations shall
control.
5. Section 5.2 of each of the Plans is hereby amended to read as follows:
5.2 Restrictions on Company Matching Contributions. At
such times throughout the Plan Year as the Committee may determine,
the Committee shall require testing to assure that the contribution
percentage for the Plan Year of Participants who are Highly
Compensated Employees will not exceed the greater of:
(a) 1.25 times the contribution percentage for the Plan
Year of all other Participants who are non-Highly
Compensated Employees, or
(b) the lesser of (i) 2 percentage points more than, or
(ii) 2 times the contribution percentage for the Plan
Year of all other Participants who are non-Highly
Compensated Employees.
For purposes of this section, the term "contribution percentage" for
each group of Participants shall be the average of the ratios,
calculated separately for each Participant in such group, of the
aggregate amount of Company Matching Contributions, after-tax Basic
Contributions, and Supplemental Contributions made by or on behalf of
the Participant for the Plan Year to that Participant's Pay for the
Plan Year. To the extent permitted by Treasury Regulations, the
Company may elect, in computing contribution percentages, to treat
Qualified Nonelective Contributions and Code section 401(k) elective
deferrals (including before-tax Basic Contributions and Flex
Contributions) for the Plan Year as Company Matching Contributions.
Advance testing under this section shall be based on a Participant's
level of Basic Contributions and Supplemental Contributions and his
annual rate of Pay in effect at the time of the test, and corrections
to be made to reduce the amount in excess of the maximum permissible
contribution percentage shall
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<PAGE> 188
be from Company Matching Contributions and Supplemental Contributions
to be made for the remainder of the Plan Year. Final Plan Year
compliance with the restrictions of this section shall be based on the
Participant's actual contributions and Pay for the Plan Year.
The adjustments in this paragraph shall be made if, at the end of the
Plan Year, the contribution percentage of Highly Compensated Employees
exceeds the maximum contribution percentage permitted for the Plan
Year under this section. In such a case, before the end of the
following Plan Year
(1) the excess Supplemental Contributions (and
income and investment gain or loss
attributable thereto) for Highly Compensated
Employees shall be distributed to such
Participants,
(2) The excess after-tax Basic Contributions and
the related Company Matching Contributions
(and the income and investment gain or loss
attributable thereto) for Highly Compensated
Employees shall be distributed to such
Participants, and
(3) the remaining excess Company Matching
Contributions (and income and investment gain
or loss attributable thereto) for Highly
Compensated Employees shall be distributed to
such Participants, in the order of their
contribution percentages beginning with the
Highly Compensated Employee with the highest
contribution percentage until the limitations
of this section are met.
(4) For purposes of the foregoing, the income and
investment gain or loss attributable to the
excess contribution being distributed shall
be determined under the Plan's normal method
of accounting for the period following such
contribution and continuing until the end of
the Plan Year in which such contribution was
made, excluding any subsequent period in the
following Plan Year prior to the distribution
of the excess amount. Except as otherwise
required by applicable regulations, any
amount distributed under this paragraph to a
Highly Compensated Employee (other than a
return of his after-tax Basic Contributions
or Supplemental Contributions) shall be
included in that Employee's taxable wages for
the Plan Year for which the contribution was
made. The distribution described in this
section may be made notwithstanding any other
Plan provision.
In the event that this Plan satisfies the requirements of section
410(b) of the Code only if aggregated with one or more other plans, or
if one or more other plans satisfy the requirements of section 410(b)
of the Code only if aggregated
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<PAGE> 189
with this Plan, then this section 5.2 shall be applied by determining
the contribution percentages of eligible Participants as if all such
plans were a single plan. If a Highly Compensated Employee
participates in two or more plans of an Employer or Affiliate to which
such contributions are made, all such contributions shall be
aggregated for purposes of this section. Any Employee required to be
taken into consideration under Code section 401(m)(5) shall be treated
as an eligible Employee in accordance with such Code section for
purposes of the application of this section 5.2. Moreover, the
determination of excess contributions under this section 5.2 shall be
made after first determining the excess deferrals (within the meaning
of Code section 402(g)) pursuant to subsection 4.1(b) of this Plan and
then determining the excess Code section 401(k) deferrals pursuant to
section 4.11 of this Plan. In addition, the treatment of family
members who are subject to the aggregation rules of Code section
414(q)(6) shall follow the procedures set forth in section 4.11,
except that such procedures shall be applied under this section by
substituting the contributions subject to this section 5.2 and section
401(m) of the Code in lieu of the contributions subject to section
4.11 of the Plan and section 401(k) of the Code.
All determinations under this section 5.2 shall comply with Code
section 401(m) and the regulations thereunder, including any such
regulations as may be necessary to prevent the multiple use of the
alternative percentage limitations in Code sections
401(k)(3)(A)(ii)(II) and 401(m)(2)(A)(ii) with respect to any Highly
Compensated Employee and also including regulations permitting
appropriate aggregation of plans and contributions. In the event of
any conflict, the rules of such Code sections and regulations shall
control.
6. Sections 7.7(d) and 7.7(e) of the RSP are hereby amended to read as
follows, effective as of January 1, 1992:
(d) For purposes of this section 7.7 "financial hardship" means an
immediate and heavy financial need occurring in the personal
affairs of the Participant (including a need that is
reasonably foreseeable or voluntarily incurred by the
Participant), as determined by the Committee based on all
relevant facts and circumstances, taking into consideration
that the need to pay the funeral expenses of a family member
would generally constitute an immediate and heavy financial
need and the need to purchase a boat or television set
generally would not. In any event, distributions for the
following reasons shall be deemed to be made on account of an
immediate and heavy financial need:
(1) To pay medical expenses (described in Code section
213(d)) previously incurred by the Participant, the
Participant's spouse, or dependents (as defined in
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<PAGE> 190
Code section 152), or to provide funds necessary for
these persons to obtain medical care (described in
Code section 213(d)).
(2) To pay costs, excluding mortgage payments, directly
related to the purchase of a principal residence for
the Participant.
(3) To pay tuition and related educational fees for the
next 12 months of post-secondary education for the
Participant, the Participant's spouse, children, or
dependents.
(4) To make a payment necessary to prevent the eviction
of the Participant from his principal residence or
the foreclosure of the mortgage on the Participant's
principal residence.
(5) To satisfy such other deemed financial needs as may
be published from time to time by the Commissioner of
Internal Revenue.
(e) A hardship distribution may not exceed the amount necessary to
meet the immediate and heavy financial need created by the
hardship and not capable of being satisfied from other
resources reasonably available to the Participant, generally
including assets held by his spouse or minor children, but not
including assets held for a child under an irrevocable trust
or under the Uniform Gift to Minors Act. If the Participant so
requests and agrees to have taxes withheld from the
distribution, the foregoing amount shall include an additional
amount considered necessary to pay any taxes or penalties that
are imposed by the federal government or by a state that
requires a tax withholding election for the distribution and
that are reasonably anticipated to result from the
distribution. The Committee shall consider all relevant facts
and circumstances and shall generally treat the requested
distribution as necessary to meet the financial need upon
receipt of a written representation that in the Participant's
opinion his financial need cannot reasonably be relieved:
(1) through reimbursement or compensation by insurance or
otherwise,
(2) by reasonable liquidation of the Participant's
assets, to the extent that such liquidation itself is
feasible and does not itself cause an immediate and
heavy financial need,
(3) by suspension of the Participant's before-tax Basic
Contributions and Flex Contributions and his other
contributions under the Plan, or
(4) by other distributions or nontaxable loans (including
withdrawals and loans under sections 7.6 and 7.8 of
this Plan) from plans maintained by the Employer or
any other employer or by borrowing from commercial
sources on reasonable commercial terms.
For purposes of this paragraph, a need cannot reasonably be relieved
by one of the actions listed above if the effect would be to increase
the amount of the need. For example, the need to
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<PAGE> 191
purchase a principal residence cannot reasonably be relieved by a Plan
loan if the loan would disqualify the Employee from obtaining other
necessary financing.
7. Section 7.8(c) of each of the Plans is hereby amended to read
as follows:
(c) The amount of the loan shall not be less than $1,000 nor more
than 50 percent of the first $100,000 of the vested balance in
the Participant's Account (excluding any IRA Account balance).
The 50 percent limitation shall be reduced by the highest
outstanding balance of loans to the Participant from the Plan
during the 1-year period ending on the day before the date on
which the loan is made.
If such Participant is also covered under another qualified
plan maintained by the Company or an Affiliate, the above
limitations shall be applied as though all such qualified
plans are one plan. A Participant shall not be allowed to have
more than two loans from this Plan outstanding at any time or
to obtain more than one loan from the Plan in any period of 12
consecutive months, provided, however, that these restrictions
shall not apply if a Participant, for valid reasons such as a
prior suspension of loan repayments during a period of unpaid
leave, needs an additional loan that will be used in part to
repay a loan that would otherwise extend beyond its original
term of five years.
8. Section 7.8(i) of each of the Plans is hereby amended to read
as follows:
(i) If a Participant (i) incurs a Separation from Service and
either receives an immediate distribution of his remaining
interest in the Plan or does not pay the total accrued
interest and outstanding principal amount of the loan within
60 days, or (ii) is in default for 90 days on any required
loan payment prior to his repayment of the total principal and
interest on an outstanding loan under the Plan and a permitted
distribution event for the amount to be treated as a
distribution has occurred under the rules for profit sharing
plans or under Code section 401(k)(2)(B), the Participant's
note shall be canceled and the principal deemed distributed by
the Trust Fund to him or, if applicable, his Beneficiary, and
a corresponding reduction shall be made to the Account from
which the deemed distribution is made. This paragraph shall
not apply, however, as long as a Participant, notwithstanding
his Separation from Service, continues to be a party in
interest under section 3(14) of ERISA and therefore has a
legal right
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<PAGE> 192
to continue his loan during such time as he is not in default
on his regular loan payments. In this case, the regular loan
payments may be made by check or other means suitable to the
Committee once the Participant ceases to be covered by a
payroll of the Company or an Affiliate.
9. Section 7.11 of each of the Plans is hereby amended to read as follows:
7.11 Requirement for Consent to Certain Distributions.
Notwithstanding any other provision regarding the Plan distributions,
the Plan may not immediately distribute the balance of a Participant's
Account that exceeds or has ever exceeded $3,500 without the written
consent of the Participant. Where the Participant does not consent to
a distribution that is subject to the foregoing requirement, this
section shall be interpreted and administered so as to comply with
Code section 411(a)(11) by delaying any distribution that might
otherwise be required under the Plan to the extent necessary to comply
with said Code section.
10. Section 8.5 of each of the Plans is hereby amended to read as follows:
8.5 Voting Company Stock. Each Participant and
Beneficiary who has common stock of the Company allocated to his
Account shall be entitled to instruct the Trustee regarding the voting
of the number of such shares allocated to the Account at all
stockholders meetings of the Company, determined on the last
practicable day prior to such stockholders meeting. If clear and
timely instructions have not been received from the Participant or
Beneficiary, or if shares of the Company's common stock have not yet
been allocated to the Accounts of Participants and Beneficiaries, the
Trustee shall vote such shares in the same proportion as are voted the
shares for which clear and timely voting instructions have been
received from Participants and Beneficiaries, unless the Trustee
determines in the exercise of its fiduciary responsibility that it
must vote such shares in a different manner to protect the interest of
Participants and Beneficiaries. As agreed by the Company and the
Trustee, the Company or the Trustee will send, or cause to be sent, to
each Participant and Beneficiary who has common stock of the Company
allocated to his Account a voting instruction form and the same proxy
solicitation material as is sent to stockholders generally.
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<PAGE> 193
11. Except as amended above, the terms of the Plans as in effect prior to
this amendment shall continue unchanged.
Adopted, effective as indicated above, pursuant to section 12.1 of each of the
Plans.
By A. R. Boyce
---------------------------
Senior Vice President - Human Resources and Administration
Burlington Resources Inc.
Date Signed 12/13/91
--------
ATTEST:
By Leslie S. Leland
-------------------------------
Title Corporate Secretary
----------------------------
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<PAGE> 194
AMENDMENT ONE
BURLINGTON RESOURCES INC.
RETIREMENT SAVINGS PLAN
(As adopted effective as of January 1, 1990)
1. Subsection 7.8(b) is hereby amended to read as follows, effective for
loans granted on or after January 15, 1990:
"(b) To receive a loan from the Plan, a Participant must
sign a promissory note in the proper amount on a form
prescribed by the Committee and authorize payroll
deductions for payment of interest and principal in
accordance with procedures adopted by the Committee.
To secure repayment of the loan, the Participant
shall, within the 90 day period before the loan is
made, consent to any distribution resulting from a
setoff of the loan against the Participant's Account
under subsection (i)."
2. Except as amended above, the terms of the Plan as in effect prior to
this amendment shall continue unchanged.
Adopted, effective as indicated above, pursuant to section 12.1 of the Plan.
BURLINGTON RESOURCES INC.
By A. R. Boyce
---------------------------------
Title SVP--Human Resources & Admin.
------------------------------
Date Signed 8/23/90
------------------------
ATTEST:
By Leslie S. Leland
-------------------------------
Title Corporate Secretary
----------------------------
<PAGE> 1
Exhibit 10.B.8
PLUM CREEK MANAGEMENT
COMPANY, L.P.
EXECUTIVE AND KEY EMPLOYEE
SALARY AND INCENTIVE COMPENSATION DEFERRAL PLAN
(A Restatement of the Plum Creek Management Company
Key Employee Salary and Incentive Compensation Deferral Plan).
As amended January 1, 1994
<PAGE> 2
PLUM CREEK MANAGEMENT COMPANY, L.P.
EXECUTIVE AND KEY EMPLOYEE
SALARY AND INCENTIVE COMPENSATION DEFERRAL PLAN
SECTION 1 - RESTATEMENT, PURPOSE, AND EFFECTIVE DATE
1.1 Restatement. Plum Creek Management Company, L.P., a Delaware limited
partnership (the "Company"), hereby restates and amends the "Plum Creek
Management Company Key Employee Salary and Incentive Compensation Deferral
Plan" and renames it the "PLUM CREEK MANAGEMENT COMPANY, L.P. EXECUTIVE AND
KEY EMPLOYEE SALARY AND INCENTIVE COMPENSATION DEFERRAL PLAN (the "Plan"), for
the benefit of certain executive and other key employees of the Company, Plum
Creek Timber Company, L.P. (the "Partnership"), Plum Creek Manufacturing, L.P.
(the "Manufacturing Partnership"), and Plum Creek Marketing, Inc. (the
"Marketing Subsidiary"), (collectively, except for the Company, the "Related
Companies"). Subject to the terms and conditions described herein, the Plan
provides the opportunity for executive and key employees of the Company and
Related Companies, to defer all or some part of their Base Salary and/or
Incentive Compensation.
1.2 Purpose. The purpose of the Plan is to help attract and retain the
services of executive and key employees at the Company and Related Companies by
providing them with the opportunity to defer receipt of all or some part of
their Base Salary and/or Incentive Compensation.
1.3 Effective Date. The restatement and amendment of the Plan shall be
effective immediately upon its adoption by the Board of Directors of PC
Advisory Corp. I (the "Board"), the general partner of PC Advisory Partners I,
L.P., which serves as the general partner of Plum Creek Management Company,
L.P., which serves as the general partner of the Company.
SECTION 2 - DEFINITIONS
2.1 Definitions. When used in the Plan, the following terms shall have the
meanings specified below.
(a) "Beneficiary" means the person or persons to whom payments are
to be made pursuant to the terms of the Plan in the event of the
Participant's death. The designation shall be on a form provided by
the Committee, executed by the Participant, and delivered to the
Committee. A Participant may change his or her Beneficiary designation
at any time. If no Beneficiary is designated, the designation is
ineffective, or in the event the Beneficiary dies before the balance
of the Memorandum Account is paid, the balance shall be paid to the
Participant's estate (unless the Committee for a given year has
designated investment in an annuity, in which case the payment options
selected by the Participant with respect thereto shall govern), and to
the extent required by community property law, to his or her surviving
spouse.
1
<PAGE> 3
(b) "Board" means the Board of Directors of PC Advisory Corp. I, the
general partner of PC Advisory Partners I, L.P., which serves as the general
partner of Plum Creek Managements Company, L.P., which serves as the general
partner of the Company.
(c) "Code" means the Internal Revenue Code of 1986 (or any successor to
such Code), as amended and in effect at the time of reference.
(d) "Committee" means a committee of two or more Board members appointed by
the Board, none of whom is eligible to participate in the Plan.
(e) "Company" means Plum Creek Management Company, L.P., a Delaware limited
partnership.
(f) "Employees" means employees regularly employed on a salaried basis by
the Company and/or Related Companies.
(g) "Executive Employee" means employees with the title of Vice
President or higher.
(h) "Participant" means an Employee who has been selected by the Committee
to participate in the Plan.
(i) "Plan Year" means the calendar year.
(j) "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 he or she is prevented from engaging in further employment
with the Company or Related Companies and the 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.
(k) "Plan" means the Plum Creek Management Company, L.P., Executive and Key
Employee Salary and Incentive Compensation Deferral Plan as restated and
amended and set forth herein.
(l) "Related Company" means the Partnership, the Manufacturing Partnership,
the Marketing Subsidiary, but not the Company, and any other entity owned,
directly or indirectly, by the Partnership to the extent of 50% or more,
including any partnerships, corporations, or other entities that meet any
element of the foregoing definition in the future.
(m) "Salary and/or Incentive Compensation" means the base salary being paid
to a Participant for the Plan Year or partial year, and/or incentive
compensation to be paid to the Participant during the same Plan Year under the
terms of the "Plum Creek Incentive Compensation Program," but exclusive of all
other forms of cash or non-cash compensation. (Executive Employees shall have
the right to defer base salary only).
2
<PAGE> 4
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 the Plan, to prescribe, amend, and rescind rules and
regulations relating to the Plan, to provide for conditions and assurances
deemed necessary or advisable to protect the interests of the Company and/or
Related Companies, 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 whomsoever.
3.2 Indemnification of Committee. The Company shall indemnify each member
of the Committee (which, for purposes of this section 3.2, includes any
Employee to whom the Committee has delegated fiduciary duties) 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 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 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.
SECTION 4 - ELIGIBILITY AND PARTICIPATION
4.1 Eligibility and Participation. Participants in the Plan shall be
selected by the Committee from among those Employees who are recommended for
participation by the President and Chief Executive Officer of the Partnership
and who, in the opinion of the Committee, are key employees in a position to
contribute materially to the continued growth and long-term success of the
Company and/or Related Companies, and each of whom is a select management or
highly compensation Employee.
SECTION 5 - DEFERRALS
5.1 Deferred Payment. Before January 1 of any calendar year (or, with
respect to individuals who first become Participants during a year, on or
before the date on which they become Participants) each Participant may elect
to have the payment of all or a portion of his or her Salary for the year
beginning January 1 (or, if later, so much of the year as commences on the day
following the date on which the individual becomes a Participant) and/or
Incentive Compensation (Executive Employees shall be limited to deferrals of
base salary only), payable during that calendar year, deferred until his or her
retirement, death, Permanent Disability, resignation or any other termination
of employment with the Company. The election shall be irrevocable and shall be
made on a form prescribed by the Committee. The election shall apply only to
that calendar year or partial year. If a Participant has not made an election,
the Salary and/or Incentive Compensation paid to him or her for that year shall
be paid in accordance with the Company's or Related Companies customary payroll
practices.
3
<PAGE> 5
5.2 Memorandum Account. The Company shall establish a ledger account (the
"Memorandum Account"), for each Participant who has elected to defer the
receipt of some or all of his or her Salary and/or Incentive Compensation for
the purpose of reflecting the Company's obligation to pay the deferred Salary
and/or Incentive Compensation as provided in Section 5.4. A separate Memorandum
Account shall be established for each Deferral for each Participant. Interest
shall accrue on the deferred Salary and/or Incentive Compensation to the date
of distribution, and shall be credited to the Memorandum Account at the end of
each calendar quarter or such other periods as may be determined by the
Committee. The Committee shall determine the rate of interest periodically and
in so doing may take into account the earnings, losses, appreciation or
depreciation attributable to any discretionary investments made pursuant to
section 5.3.
5.3 Discretionary Investment by Company. The deferred Salary and/or
Incentive Compensation to be paid to Participants is an unfunded obligation of
the Company. The Committee may annually direct that an amount equal to the
deferred Salary and/or Incentive Compensation for that year shall be invested
as the Committee, in its sole discretion, shall determine. The Committee may in
its sole discretion may determine that all or some portion of an amount equal
to the deferred Salary and/or Incentive Compensation shall be paid into one or
more grantor trusts to be established by the Company or a Related Company of
which it shall be the beneficiary, and to the assets of which it shall become
entitled as and to the extent that Participants receive benefits under this
Plan. The Committee may designate an investment advisor to direct investments
and reinvestment of the funds, including investment of any grantor trusts
hereunder.
5.4 Payment of Deferred Salary and/or Incentive Compensation. Upon the
retirement, death, Permanent Disability, resignation, or termination of
employment of a Participant who has elected to defer Salary and/or Incentive
Compensation for any year, the Company shall pay to such Participant (or his or
her Beneficiary in the case of his or her death) an amount equal to the balance
of the Participants Memorandum Account, plus interest (at a rate determined by
the Committee pursuant to Section 5.2) on the outstanding account balance to
the date of distribution and subject to approval of the Committee, as follows:
(a) a lump sum cash payment; or
(b) in periodic installments over a period of years to be determined
by the Committee, in its discretion.
Payment of deferred Salary and/or Incentive Compensation shall commence or be
made in January of the year following the Participant's retirement, death,
Permanent Disability, resignation or other termination of employment, provided
that with respect to a Participant who retires or otherwise terminates on
January 1, the Committee, in its discretion, may direct that payment shall
commence or be made on January 1, of the year following retirement.
5.5 Acceleration of Payment of Deferred Salary and/or Incentive
Compensation. The Committee, in its sole discretion, may accelerate the payment
of the unpaid balance of a Participant's Memorandum Account in the event of the
Participant's retirement, death, Permanent Disability, resignation or other
termination of employment, or upon its determination
4
<PAGE> 6
that a Participant who is in distribution status, (or his or her Beneficiary in
the case of death) has incurred a severe financial hardship. The Committee in
making its determination may consider such factors and require such information
as it deems appropriate.
5.6 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 at the 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.
5.7 Nonassignment. The right of a Participant or Beneficiary to the payment
of any amounts under the Plan may not be assigned, transferred, pledged or
encumbered nor shall such right or other interests be subject to attachment,
garnishment, execution or other legal process.
SECTION 6 - UNFUNDED OBLIGATION
6.1 Unfunded Obligation. The deferred amounts to be paid to Participants
pursuant to this Plan are unfunded obligations of the Company. The Company is
not required to segregate any monies from its general funds, to create any
trusts, or to make any special deposits with respect to this obligation. Title
to and beneficial ownership of any investments including trust investments
which the Company or Related Companies may make to fulfill this obligation
shall at all times remain in the Company or the Related Companies as the case
may be. Any investments and the creation or maintenance of any trust or
memorandum accounts shall not create or constitute a trust or a fiduciary
relationship between the Committee, or the Company and/or Related Companies,
and a Participant, or otherwise create any vested or beneficial interest in any
Participant, or his or her Beneficiary, or his or her creditors, in any assets
of the Company or Related Companies whatsoever. Participants shall have no
claim against the Company or Related Companies for any changes in the value of
any assets which may be invested or reinvested by the Company with respect to
this Plan.
SECTION 7 - RIGHTS OF EMPLOYMENT
7.1 Employment. Nothing in this Plan shall interfere with or limit in any
way the right of the Company or Related Companies 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 Related Company.
7.2 Participant. No Employee shall have the right to be selected as a
Participant, or, having been so selected, to be selected again as a
Participant.
SECTION 8 - TERMINATION AND AMENDMENT
8.1 Termination and Amendment. The Board may from time to time amend,
suspend or terminate the Plan, in whole or in part, and if the Plan is
suspended or terminated, the Board may reinstate any or all of its provisions.
The Committee may amend the Plans provided that
5
<PAGE> 7
it may not suspend or terminate the Plan, substantially increase the
administrative cost of the Plan or the obligation of the Company or Related
Companies or expand the classification of employees who are eligible to
participate in the Plan. No amendment, suspension, or termination may impair
the right of a Participant or designated Beneficiary to receive the deferred
Salary and/or Incentive Compensation benefit accrued prior to the effective
date of such amendment, suspension or termination.
SECTION 9 - WITHHOLDING TAXES
9.1 Withholding Taxes. Appropriate payroll taxes shall be withheld from
cash payments made to Participants pursuant to this Plan.
SECTION 10 - REQUIREMENTS OF LAW AND GOVERNING LAW
10.1 Requirements of Law. The operation and administration of 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.
10.2 Governing Law. The Plan, and all agreements under the Plan shall be
constructed in accordance with and governed by the laws of the State of
Washington.
For PLUM CREEK TIMBER COMPANY, L.P.
By PLUM CREEK MANAGEMENT COMPANY,
L.P., General Partner
KEITH B. SLETTEN
----------------------------------
Keith B. Sletten
Vice President Human Resources
February 11, 1994
----------------------------------
Date
6
<PAGE> 1
EXHIBIT 10.B.9
PC ADVISORY CORP. I
DEFERRED COMPENSATION PLAN
FOR DIRECTORS
<PAGE> 2
PC ADVISORY CORP. I
DEFERRED COMPENSATION PLAN FOR DIRECTORS
SECTION 1 - ESTABLISHMENT, PURPOSE, AND EFFECTIVE DATE
1.1 Establishment. PC Advisory Corp. I, (the "Company") a Delaware
corporation hereby establishes the "PC Advisory Corp. I Deferred Compensation
Plan for Directors" (the "Plan") for the benefit of the members of the
Company's Board of Directors, ("Director's"). Subject to the terms and
conditions described herein, the Plan provides the opportunity for Directors to
defer receipt of all or some part of their annual Board retainer, Committee
Chairman retainer, and Board and Committee meeting fees.
1.2 Purpose. The purpose of this Plan is to help attract and retain highly
qualified individuals to serve as members of the Company's Board of Directors.
1.3 Effective Date. The Plan, upon its adoption by the Board shall be
effective January 1, 1993. The "Plan Year" is the calendar year.
SECTION 2 - ADMINISTRATION
2.1 Administration. The Plan shall be administered by the Board of
Directors. The Board, by majority action thereof, shall interpret the Plan,
prescribe, amend and rescind rules relating to it from time to time as it deems
proper and in the best interests of the Company, and to take any other action
necessary for the administration of the Plan. Any decision or interpretation
adopted by the Board shall be final and conclusive and shall be binding upon
all Participants.
SECTION 3 - PARTICIPATION
3.1 Participation. Participation in this Plan is voluntary. Each Director
of the Company may elect to participate in the Plan by written notice to the
Company upon his or her election to the Board of Directors. The deferral
election, which is irrevocable, shall remain in effect for the Plan Year. A
referral election by a Director who is elected to the Board during a Plan Year,
shall remain in effect until the start of the next Plan Year.
SECTION 4 - DEFERRALS
4.1 Compensation, Memorandum Account. Each Director who elects to defer
all or some part of his or her Compensation will be deemed to be a
"Participant" in the Plan. A Participant may elect to have all or a specified
percentage of his or her Compensation deferred until such time as that
individual ceases to be a Director. "Compensation" shall include the annual
Board retainer, Board meeting fees, Committee Chairperson retainer, and
Committee
1
<PAGE> 3
meeting fees. The Company shall establish a ledger account (the "Memorandum
Account") for each Participant and shall credit such account for the deferred
Compensation at the same time and in the same amount as such Compensation
would have been paid to the Director, absent the deferral election. Interest
shall be credited to each Memorandum Account at the end of each quarter or
such other periods as may be determined by the Board. The Board shall
periodically determine the rate of interest credited to each Memorandum Account.
4.2 Discretionary Investment by Company. The deferred Compensation to be
paid to the Participant is an unfunded obligation of the Company. The Board
may annually direct that an amount equal to the deferred Compensation for that
year shall be invested, as the Board, in its sole discretion, shall determine.
The Board may in its sole discretion determine that all or some portion of an
amount equal to the deferred Compensation shall be paid into one or more
grantor trusts to be established by the Company, or it may elect to participate
in one or more grantor trusts established by Plum Creek Timber Co., L.P., (the
"Limited Partnership"). If the Board establishes a separate grantor trust for
the Plan; it may designate an investment advisor to direct investments and
reinvestment of the funds.
4.3 Payment of Deferred Salary and/or Incentive Compensation. Upon the
retirement, death, permanent disability, resignation, or other termination of
Board service of a Participant who has elected to defer Compensation for any
Plan Year, the Company shall pay to such Participant (or his or her Beneficiary
in the case of his or her death) an amount equal to the balance of the
Participants' Memorandum Account, plus interest (at a rate determined by the
Board pursuant to Section 4.1) on the outstanding account balance to the date
of distribution and subject to approval of the Board, as follows:
(a) a lump sum cash payment; or
(b) in periodic installments over a period of years to be
determined by the Board, in its discretion.
Payment of deferred Compensation shall commence or be made in January of the
year following the Participant's retirement, death, permanent disability,
resignation or termination of Board service.
4.4 Acceleration of Payment of Deferred Compensation. The Board, in its
sole discretion, may accelerate the payment of the unpaid balance of a
Participant's Memorandum Account in the event of the Participant's retirement,
death, permanent disability, resignation or other termination of Board service,
or upon its determination that a Participant who is in distribution status, (or
his or her Beneficiary in the case of death) has incurred a severe financial
hardship. The Board in making its determination may consider such factors and
require such information as it deems appropriate.
2
<PAGE> 4
4.5 Incapacity of Participant or Beneficiary. If the Board finds that a
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 at the discretion
of the Board, be paid to the spouse, child, parent or brother or sister of such
Participant or Beneficiary or to any person whom the Board has determined has
incurred expense on behalf 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.
4.6 Nonassignment. The fight of a Participant or Beneficiary to the
payment of any amounts under the Plan may not be assigned, transferred, pledged
or encumbered nor shall such right or other interests be subject to attachment,
garnishment, execution or other legal process.
SECTION 5 - UNFUNDED OBLIGATION
5.1 Unfunded Obligation. The deferred amounts to be paid to Participants
pursuant to this Plan are unfunded obligations of the Company. The Company is
not required to segregate any monies from its general funds, to create any
trusts, or to make any special deposits with respect to this obligation. Title
to and beneficial ownership of any investments including trust investments
which the Company may make to fulfill this obligation shall at all times remain
in the Company. Any investments and the creation or maintenance of any trust or
Memorandum Accounts shall not create or constitute a trust or a fiduciary
relationship between the Board and a Participant, or otherwise create any
vested or beneficial interest in any Participant, or his or her Beneficiary, or
his or her creditors, in any assets of the Company whatsoever. The Participants
shall have no claim against the Company for any changes in the value of any
assets which may be invested or reinvested by the Company with respect to this
Plan.
SECTION 6 - TERMINATION AND AMENDMENT
6.1 Termination and Amendment. The Board of Directors may from time to
time amend, suspend or terminate the Plan, in whole or in part, and if the Plan
is suspended or terminated, the Board may reinstate any or all of its
provisions. No amendment, suspension, or termination may impair the right of a
Participant or designated Beneficiary to receive the deferred Compensation
benefit accrued prior to the effective date of such amendment, suspension or
termination.
SECTION 7 - REQUIREMENTS OF LAW AND GOVERNING LAW
7.1 Requirements of Law. The operation and administration of 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.
3
<PAGE> 5
7.2 Governing Law. The Plan, and all agreements under the Plan shall be
constructed in accordance with and governed by the laws of the State of
Washington.
Approved by the authorization
of the Board of Directors of
PC Advisory Corp. I:
KEITH B. SLETTEN
----------------------------------
Keith B. Sletten
Vice President Human Resources
February 19, 1993
---------------------------------
Date
4
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from the Combined
Financial Statements of Plum Creek Timber Company, L.P. for the year ended
December 31, 1994 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 60,942
<SECURITIES> 0
<RECEIVABLES> 28,026
<ALLOWANCES> 1,160
<INVENTORY> 54,685
<CURRENT-ASSETS> 149,329
<PP&E> 750,976
<DEPRECIATION> 93,497
<TOTAL-ASSETS> 823,226
<CURRENT-LIABILITIES> 55,824
<BONDS> 531,400
<COMMON> 0
0
0
<OTHER-SE> 222,977
<TOTAL-LIABILITY-AND-EQUITY> 823,226
<SALES> 578,657
<TOTAL-REVENUES> 578,657
<CGS> 372,467
<TOTAL-COSTS> 414,523
<OTHER-EXPENSES> 4,477
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 47,410
<INCOME-PRETAX> 113,136
<INCOME-TAX> 924
<INCOME-CONTINUING> 112,212
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 112,212
<EPS-PRIMARY> 2.36
<EPS-DILUTED> 0
</TABLE>
