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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Sections 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): October 18, 1996
Riverwood Holding, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-11113 58-2205241
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(State of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
1013 Centre Road, Suite 350
Wilmington, Delaware 19805
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(Address of principal executive offices)
c/o Riverwood International Corporation
(770) 644-3000
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(Registrant's telephone number)
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ITEM 5. OTHER EVENTS.
On October 18, 1996, Riverwood International Corporation (the
"Company") and a Company subsidiary completed the sale to Plum Creek Timber
Company, L.P. ("Plum Creek") and a Plum Creek subsidiary of substantially all of
the assets of the U.S. Timberlands/Wood Products business segment. The Company
is an indirect wholly owned subsidiary of Riverwood Holding, Inc., the
registrant. The assets sold consisted of approximately 529,000 acres of owned
timberlands and approximately 9,000 acres of leased timberlands located
principally in Louisiana and Arkansas, a sawmill and a plywood plant located in
Joyce, Louisiana, a sawmill located in Huttig, Arkansas, a seedling nursery in
Texas, and related assets. The consideration for the sale consisted of a cash
price of approximately $550 million (subject to certain postclosing
adjustments), determined through negotiation between the parties. In addition,
Plum Creek assumed certain specified preclosing liabilities. In connection with
the sale, the Company and Plum Creek entered into a long-term supply agreement
under which the Company will purchase, at market-based prices, a majority of the
requirements for pine pulpwood and residual chips of its West Monroe, Louisiana
mill, as well as a portion of the Company's needs for hardwood pulpwood at that
mill.
Consent to the sale was obtained from the lenders under the Company's
senior secured credit agreements. The Company has applied $400.0 million of the
sale proceeds to repay term loan borrowings under these credit agreements,
including approximately $375.0 million of tranche "A" loans, approximately $18.4
million of tranche "B" loans and approximately $6.6 million of tranche "C"
loans. Scheduled term loan principal payments under these credit agreements
have been reduced to reflect this application of proceeds. Annual term loan
amortization requirements will now be approximately $1.0 million, $3.0 million,
$28.0 million, $80.2 million, $124.7 million, $173.0 million, $184.1 million and
$156.0 million for the years 1997 through 2004, respectively. The Company has
applied the remaining sale proceeds to pay outstanding revolving credit
borrowings under its credit agreements. This application of proceeds did not
involve any revolving credit commitment reduction and resulted in revolving
credit availability of approximately $350 million as of October 18, 1996. In
addition, financial and other covenants in the Company's credit agreements have
been amended to reflect the sale as well as its financial results and current
market and
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operating conditions. The Company does not anticipate any significant gain or
loss on the sale.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(C) EXHIBITS.
2a Asset Purchase Agreement, dated as of August 6, 1996, by and among Plum
Creek Timber Company, L.P., Riverwood International Corporation and New
River Timber, LLC, including a list of omitted schedules and exhibits and
an undertaking of the registrant to furnish supplementally a copy of any
such omitted schedule or exhibit to the Securities and Exchange Commission
upon request (incorporated by reference to Exhibit 2 to the Registrant's
Current Report on Form 8-K filed August 22, 1996 (Commission File No. 1-
11113)).
2b Amendment to Asset Purchase Agreement, dated as of October 16, 1996, among
Plum Creek Timber Company, L.P., Riverwood International Corporation and
New River Timber, LLC.
2c Wood Products Supply Agreement, dated as of October 18, 1996, between Plum
Creek Timber Company, L.P. and Riverwood International Corporation,
including a list of omitted annexes and an undertaking of the registrant to
furnish supplementally a copy of any such omitted annex to the Securities
and Exchange Commission upon request.
4a Amendment No. 1, dated as of September 13, 1996, to the Credit Agreement,
dated as of March 20, 1996, among Riverwood International Corporation, the
lenders party thereto, and The Chase Manhattan Bank (formerly known as
Chemical Bank), as administrative agent.
4b Amendment No. 2, dated as of September 17, 1996, to the Credit Agreement,
dated as of March 20, 1996, among Riverwood International Corporation, the
lenders party thereto, and The Chase Manhattan Bank (formerly known as
Chemical Bank), as administrative agent.
99 Press Release, dated October 21, 1996.
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RIVERWOOD HOLDING, INC.
Date: October 21, 1996 By: Bill H. Chastain
---------------------------------
Bill H. Chastain
Secretary
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EXHIBIT INDEX
Exhibit Exhibit Page
Number Description Number
- ------ ----------- ------
2a Asset Purchase Agreement, dated as of August 6, 1996, by and among
Plum Creek Timber Company, L.P., Riverwood International Corporation
and New River Timber, LLC, including a list of omitted schedules and
exhibits and an undertaking of the registrant to furnish
supplementally a copy of any such omitted schedule or exhibit to the
Securities and Exchange Commission upon request (incorporated by
reference to Exhibit 2 to the Registrant's Current Report on Form 8-K
filed August 22, 1996 (Commission File No. 1-11113)).
2b Amendment to Asset Purchase Agreement, dated as of October 16, 1996, among
Plum Creek Timber Company, L.P., Riverwood International Corporation and
New River Timber, LLC.
2c Wood Products Supply Agreement, dated as of October 18, 1996, between Plum
Creek Timber Company, L.P. and Riverwood International Corporation,
including a list of omitted annexes and an undertaking of the registrant to
furnish supplementally a copy of any such omitted annex to the Securities
and Exchange Commission upon request.
4a Amendment No. 1, dated as of September 13, 1996, to the Credit Agreement,
dated as of March 20, 1996, among Riverwood International Corporation, the
lenders party thereto, and The Chase Manhattan Bank (formerly known as
Chemical Bank), as administrative agent.
4b Amendment No. 2, dated as of September 17, 1996, to the Credit Agreement,
dated as of March 20, 1996, among Riverwood International Corporation, the
lenders party thereto, and The Chase Manhattan Bank (formerly known as
Chemical Bank), as administrative agent.
99 Press Release, dated October 21, 1996.
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AMENDMENT TO ASSET PURCHASE AGREEMENT
This AMENDMENT, dated as of October 16, 1996 (this "Amendment"), among
PLUM CREEK TIMBER COMPANY, L.P., a Delaware limited partnership (the "Buyer"),
RIVERWOOD INTERNATIONAL CORPORATION, a Delaware corporation (the "Seller
Parent"), and NEW RIVER TIMBER, LLC, a Delaware limited liability company (the
"Company" and, together with the Seller Parent, the "Sellers") and a wholly
owned subsidiary of the Seller Parent, to the Asset Purchase Agreement (the
"Asset Purchase Agreement"), dated as of August 6, 1996, among the Buyer and the
Sellers,
WITNESSETH:
WHEREAS, the Buyer and the Sellers have executed and delivered the
Asset Purchase Agreement;
WHEREAS, Section 12.4 of the Asset Purchase Agreement provides that no
amendment or modification of the Asset Purchase Agreement shall be valid or
binding unless set forth in writing;
WHEREAS, the Buyer and the Sellers have agreed to amend certain
provisions of the Asset Purchase Agreement, as provided in this Amendment;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements hereinafter set forth, the parties hereto hereby
agree as follows:
1. DEFINITIONS. Capitalized terms used herein without definition
are used as defined in the Asset Purchase Agreement.
2. AMENDMENT TO SECTION 1.1. Section 1.1 of the Asset Purchase
Agreement is hereby amended by amending the definition of the term "Forestry
Consultant" to read in its entirety as follows:
"FORESTRY CONSULTANT" shall mean such firm as may be mutually
acceptable to the Sellers and the Buyer in their reasonable judgment."
3. AMENDMENT TO SECTION 2.3. Section 2.3 of the Asset Purchase
Agreement is hereby amended by inserting the
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phrase ", and subject to adjustment following the Closing pursuant to Section
2.4(d)" immediately prior to the semicolon at the end of clause (i) thereof.
2. AMENDMENT TO SECTION 2.4(d)(i). Section 2.4(d)(i) of the Asset
Purchase Agreement is hereby amended to read in its entirety as follows:
"(d) ADJUSTMENT FOR EXCESS HARVESTING. (i) In the event that,
after the date hereof and prior to the Closing, (x) the respective amounts
of pine sawlogs, pine pulpwood and hardwood pulpwood harvested for the
portion of calendar 1996 preceding the Closing Date exceed by more than
five percent (5%) the respective Scheduled Amounts thereof (which
harvesting may in any event include cutting diseased or insect-infested
trees), or (y) the amount of hardwood sawlogs harvested for the portion of
calendar 1996 preceding the Closing Date exceeds an amount equal to the
Scheduled Amount of hardwood sawlogs PLUS an amount equal to five percent
(5%) of such Scheduled Amount PLUS 1,500 ccf (one hundred cubic feet of
solid wood) of hardwood sawlogs, or (z) the aggregate amount of pine
sawlogs, hardwood sawlogs, pine pulpwood and hardwood pulpwood harvested
for the portion of calendar 1996 preceding the Closing Date exceeds 505,000
ccf, the Base Purchase Price shall be adjusted after the Closing to reflect
such excess harvesting, to the extent of such excess (without duplication
among any such excess amounts). The amount of any such adjustment to the
Base Purchase Price under this Section 2.4(d)(i) shall be mutually
determined by the parties hereto based on the books and records of the
Sellers related to the harvesting prior to the Closing of pine sawlogs,
hardwood sawlogs, pine pulpwood and hardwood pulpwood (collectively, the
"Harvesting Records"). Each party will make the Harvesting Records in such
party's possession available for inspection by any other party at such
other party's reasonable request. If the parties are unable to agree on
the amount of any such adjustment within thirty (30) days from the Closing
Date, such amount shall be determined by the Forestry Consultant, whose
determination shall be conclusive and binding upon the Sellers and the
Buyer."
4. AMENDMENT TO SECTION 2.4(d)(i). Section 2.4(e) of the Asset
Purchase Agreement is hereby amended by
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adding immediately after words "Section 2.4(a)" in the first sentence thereof
the words "and Section 2.4(d)".
5. AMENDMENT TO SECTION 5.1. Section 5.1 of the Asset Purchase
Agreement is hereby amended by adding the following clause to the end of the
second sentence thereof:
", PROVIDED that prior to the Closing the Sellers shall be entitled to
harvest an additional amount of hardwood sawlogs not to exceed 1,500 ccf
(one hundred cubic feet of solid wood) as long as the aggregate amount of
pine sawlogs, hardwood sawlogs, pine pulpwood and hardwood pulpwood
harvested for the portion of calendar 1996 preceding the Closing Date does
not exceed 505,000 ccf".
6. AMENDMENT TO SECTION 6.1(a). The second sentence of Section
6.1(a) of the Asset Purchase Agreement is hereby amended by replacing the phrase
"twelve (12)" with the phrase "thirteen (13)".
7. AMENDMENT TO SECTION 10.4(d)(iii). Section 10.4(d)(iii) of the
Asset Purchase Agreement is hereby amended by inserting the words "and
management" after the phrase "proper and adequate defense" where the same
appears therein, and by inserting the following sentences as the second and
third sentences thereof:
"Whether or not a Third Party Claim has been made or commenced with respect
to any Excluded Liability, the Buyer shall cooperate with each Seller in
all reasonable respects in connection with the defense and management of
such Excluded Liability, and render such assistance to each Seller as may
be reasonably requested in order to ensure the proper and adequate defense
and management thereof, including making available records relating to such
Excluded Liability and furnishing, without expense to the Sellers, such
employees of the Buyer and its Affiliates as may be reasonably necessary
for the preparation of such defense and management or for testimony as
witnesses. Whether or not a Third Party Claim has been made or commenced
with respect to any Assumed Liability, the Sellers shall cooperate with the
Buyer in all reasonable respects in connection with the defense and
management of such Assumed Liability, and render such assistance to the
Buyer as may be reasonably requested in order to ensure the proper and
adequate defense and management thereof, including making available records
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relating to such Assumed Liability and furnishing, without expense to the
Buyer, such employees of the Sellers and their respective Affiliates as may
be reasonably necessary for the preparation of such defense and management
or for testimony as witnesses."
8. MISCELLANEOUS. Except as expressly amended and modified hereby,
the Asset Purchase Agreement is hereby ratified and reaffirmed in all respects
and all the terms and provisions thereof shall be and remain in full force and
effect. The section and other headings in this Amendment are inserted solely as
a matter of convenience and for reference, are not a part of this Amendment, and
shall not be deemed to affect the meaning or interpretation of this Amendment.
This Amendment may be executed in two or more counterparts, each of which shall
be deemed an original, and all of which together shall constitute one and the
same instrument. This Amendment shall be governed by and construed in
accordance with the internal laws of the state of New York applicable to
agreements made and to be performed entirely within such state, without regard
to the conflict of laws principles or rules of such state.
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IN WITNESS WHEREOF, each party hereto has executed or caused this
Amendment to be executed on its behalf, all on the day and year first above
written.
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management
Company, L.P., its
General Partner
By:
-------------------------
Name:
Title:
RIVERWOOD INTERNATIONAL CORPORATION
By:
-------------------------
Name:
Title:
NEW RIVER TIMBER, LLC
By:
-------------------------
Name:
Title:
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WOOD PRODUCTS SUPPLY AGREEMENT
WOOD PRODUCTS SUPPLY AGREEMENT, dated as of October 18, 1996 (the
"Agreement"), between PLUM CREEK TIMBER COMPANY, L.P., a Delaware limited
partnership ("Plum Creek"), and RIVERWOOD INTERNATIONAL CORPORATION, a Delaware
corporation ("Riverwood").
RECITALS
Plum Creek, Riverwood and New River Timber, LLC, a Delaware limited
liability company and an affiliate of Riverwood ("New River"), are parties to
the Asset Purchase Agreement dated as of August 6, 1996 (the "Asset Purchase
Agreement").
Pursuant to the Asset Purchase Agreement, Plum Creek is purchasing
from Riverwood and New River certain assets of their line of business known as
the "Wood Products Division" (the "Division"). The assets of the Division
include a sawmill located in Huttig, Arkansas (the "Huttig Facility"), a sawmill
and plywood plant in Joyce, Louisiana (the "Joyce Facility"), and an aggregate
of approximately 538,000 fee and leasehold acres of timber property located in
the States of Arkansas, Louisiana and Texas, including a nursery located in
Texas, being more particularly described on the Description of the Owned
Timberlands and the Description of the Timberland Leases attached hereto
(collectively, the "Timberlands").
The Division has been and is a significant source of wood fiber
products for Riverwood, consisting of pine pulpwood ("Pine Pulpwood"), chips
("Chips") and hardwood pulpwood ("Hardwood Pulpwood," and together with Pine
Pulpwood, "Pulpwood," and together with Pine Pulpwood and Chips, "Products"),
all of which have been used in connection with the production of paper products
by Riverwood at its West Monroe, Louisiana paper mill (the "West Monroe
Facility"). Following the sale of the Division's assets, Riverwood will need a
long-term, assured source of supply of the Products in order to meet its paper
production requirements and the demands of its customers.
This Agreement is an essential part of the transactions contemplated
by the Asset Purchase Agreement. Without this Agreement, Riverwood, New River
and Plum Creek would not have entered into the Asset Purchase Agreement.
Capitalized and other terms defined in Section 8.1(c), or in
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the provisions hereof referenced therein, are used herein as defined therein.
NOW, THEREFORE, in consideration of the mutual covenants described in
this Agreement, and other good and valuable consideration the receipt and
sufficiency of which are acknowledged, Plum Creek and Riverwood agree as
follows:
ARTICLE I
PURCHASE OF PRODUCTS
Section 1.1 PURCHASE OF PINE PULPWOOD. Plum Creek shall sell and
Riverwood shall purchase each calendar year the quantity of Pine Pulpwood
specified in Annex A. All Pine Pulpwood purchased pursuant to this Agreement
shall satisfy the specifications for Pine Pulpwood set forth in Riverwood's
Specification Nos. RI-3696 and RI-3697, copies of which are set forth in Annex
B, as the same may be modified from time to time in accordance with Section 1.4
(as the same may be so modified, the "Pulpwood Quality Specifications"). For
purposes of this Agreement, each cord of Pine Pulpwood shall weigh not less than
five thousand two hundred (5,200) pounds.
Section 1.2 PURCHASE OF WOOD CHIPS. Plum Creek shall sell and
Riverwood shall purchase each calendar year the quantity of Chips specified in
Annex A. All Chips purchased pursuant to this Agreement shall satisfy the
specifications for chips as set forth in Riverwood's Chip Specification No. RI-
3695, a copy of which is set forth in Annex C, as the same may be modified from
time to time in accordance with Section 1.4 (as the same may be so modified, the
"Chip Quality Specifications," and together with the Pulpwood Quality
Specifications, the "Product Specifications"). For the purposes of this
Agreement, a ton shall weigh two thousand (2,000) pounds.
Section 1.3 PURCHASE OF HARDWOOD PULPWOOD. Plum Creek shall sell and
Riverwood shall purchase each calendar year the quantity of Hardwood Pulpwood
specified for such year in Annex A. Riverwood shall have an option to purchase
in each calendar year any quantity of Hardwood Pulpwood produced by Plum Creek
in excess of such quantity thereof so specified in Annex A. All Hardwood
Pulpwood purchased pursuant to this Agreement shall satisfy the specifications
for Hardwood Pulpwood set forth in the Pulpwood Quality Specifications. For the
purposes of this Agreement, each
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cord of Hardwood Pulpwood shall weigh not less than five thousand seven hundred
(5,700) pounds.
Section 1.4 MODIFICATION OF SPECIFICATIONS. Riverwood may, from time
to time, and upon at least ninety (90) days' prior written notice to Plum Creek,
modify any of the Pulpwood Quality Specifications or Chip Quality Specifications
that Riverwood applies to all of its Product suppliers to the West Monroe
Facility or any other Facility (as defined below). Riverwood shall not
discriminate against Plum Creek in modifying the Product Specifications. All
Products sold by Plum Creek to Riverwood following such notice shall satisfy
such modified Product Specifications. Notwithstanding anything herein to the
contrary, if such modification would cause an effective decrease in Plum Creek's
production of any Products, Plum Creek's obligations to provide such Products
under Section 1.1, 1.2 or 1.3, as applicable, shall be reduced pro rata and
Riverwood shall pay to Plum Creek an increase in Product price as a result of
any increased costs in production or volume loss necessary to satisfy such
modified Product Specifications until expiration of the current Price Period (as
defined below). Thereafter, the determination of Product prices pursuant to
Section 2.1 shall reflect such modified Product Specifications.
Section 1.5 VARIATION OF QUANTITIES. Plum Creek may not substitute
any type of Product for any other type of Product without Riverwood's prior
written consent (such consent not to be unreasonably withheld).
Section 1.6 ANNUAL PLAN. (a) The parties shall each use their
respective best commercially reasonable efforts to agree upon and complete, not
later than October 1 of each calendar year during the Term (as defined below), a
written production and delivery plan with respect to the Products to be made
available for purchase by Riverwood during the next calendar year as provided in
Sections 1.1, 1.2 and 1.3 (the "Annual Plan"), including a schedule for delivery
of Products to the West Monroe Facility or to other Facilities as designated by
Riverwood. Such Annual Plan may reflect any substitution of Products upon which
the parties shall have agreed as provided in Section 1.5.
(b) Following adoption of each Annual Plan, the parties shall each use
their respective best commercially reasonable efforts to implement such Annual
Plan in accordance with its terms. Products shall be delivered throughout the
calendar year in accordance with the Annual
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Plan for such year, PROVIDED that during any one or more consecutive calendar
quarters of any calendar year, Plum Creek may vary its deliveries, and Riverwood
may vary its purchases, of Pine Pulpwood or Chips above or below the relevant
Cumulative Quarterly Quantity (as defined below) therefor by up to five percent
(5%) of the Yearly Quantity (as defined below) therefor, and of Hardwood
Pulpwood above or below the relevant Cumulative Quarterly Quantity therefor by
up to ten percent (10%) of the Yearly Quantity therefor, as long as delivery and
purchase obligations are reconciled, and the Yearly Quantity of such Product
shall have been delivered and purchased, by the end of each calendar year. Any
other fluctuations in deliveries during any calendar quarter will be reconciled
by the end of such quarter. The term "Yearly Quantity" means, for any calendar
year, the annual quantity for the relevant Product to be purchased and sold
hereunder during such year as specified in Annex A. The term "Cumulative
Quarterly Quantity" means, for any one or more consecutive quarters in any
calendar year, the Yearly Quantity for the relevant Product for such year,
multiplied by the number of such quarters, and divided by four.
(c) A failure in good faith of the parties to agree on an Annual Plan
shall not constitute a breach of this Agreement entitling a party to exercise
its termination rights under Article VII or affect the parties' obligations to
comply with all other terms and conditions of this Agreement.
Section 1.7 FORCE MAJEURE; NON-DISCRIMINATION. (a) For the purposes
of this Agreement, (1) the term "Force Majeure" means any cause, condition or
event beyond a party's reasonable control that delays or prevents such party's
performance of its obligations hereunder, including war, acts of government,
acts of public enemy, riots, civil strife, lightning, fires, explosions, storms,
floods, power failures, other acts of God or nature, labor strikes, lockouts or
other disputes, and other similar events or circumstances; PROVIDED, HOWEVER,
that adverse financial or market conditions shall not constitute Force Majeure,
and (2) the term "Affected Party" means the party that becomes subject to Force
Majeure, and (3) the term "Non-Affected Party" means the party that is not the
Affected Party.
(b) Subject to the provisions of this Section 1.7, the Affected Party
shall not be liable hereunder to the Non-Affected Party for a delay in or
failure of performance by the Affected Party of its obligations hereunder that
is
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caused by Force Majeure. If Force Majeure results in a reduction, but not a
complete cessation, of the Affected Party's production or operations in
connection with this Agreement, the Affected Party (i) shall use its best
efforts to meet its obligations hereunder to the extent commercially reasonable
(including, in the case of Plum Creek, substituting Pulpwood for Chips if
Riverwood elects to accept such substitution in its reasonable discretion), (ii)
shall treat the Non-Affected Party on a preferred basis as and to the extent
provided in Section 1.7(c) with respect to its purchase or sale hereunder, as
the case may be, of the respective quantities of Products set forth in Annex A
under the heading "Preferred Quantity" (the "Preferred Quantities"), and (iii)
otherwise shall treat the Non-Affected Party no less favorably than the Affected
Party treats all of its other customers (if Plum Creek is the Affected Party) or
suppliers (if Riverwood is the Affected Party) during the period of such reduced
production or operations.
(c) If Riverwood becomes subject to Force Majeure, Plum Creek shall be
the preferred supplier of Products in Preferred Quantities to Riverwood at the
West Monroe Facility and the Other Facilities, and accordingly Riverwood shall
not reduce its purchases of any Product from Plum Creek below the respective
Preferred Quantity thereof unless Riverwood shall have previously suspended its
purchases of such Product from all other suppliers to the West Monroe Facility
and the Other Facilities. If Plum Creek becomes subject to Force Majeure,
Riverwood shall be Plum Creek's preferred customer for Products in Preferred
Quantities, and accordingly Plum Creek shall not reduce its sales of any Product
to Riverwood below the respective Preferred Quantity thereof unless Plum Creek
shall have previously suspended its sales of such Product to all other
customers.
(d) The amount by which the quantity of any Product otherwise required
to be purchased or sold hereunder shall be permitted to be reduced as a result
of Force Majeure shall be prorated for the period during which such Force
Majeure is in effect and continuing (such period, the "Force Majeure Period"),
based on the respective Yearly Quantity for each calendar year in which such
Force Majeure is in effect, prorated (if applicable) for the portion of such
year constituting all or part of such Force Majeure Period. The Affected Party
shall not be required to make up the volume not purchased or produced during the
Force Majeure Period. The Affected Party shall be entitled to
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make up such volume to the extent of Product delivery or purchase variations
otherwise permitted by Section 1.6(b), subject to Section 1.7(e).
(e) If the Affected Party reduces the volume of any Product to be
purchased or sold due to Force Majeure (the amount of such reduction, the
"Reduction Amount"), the Affected Party shall give written notice to the Non-
Affected Party of such reduction and the effective date thereof. If such
reduction continues in effect for a period of 60 days or more, the Non-Affected
Party shall then have the right, in the case of Plum Creek, to sell all or part
of the Reduction Amount of such Product not purchased by Riverwood to another
buyer or buyers, and in the case of Riverwood, to purchase all or part of the
Reduction Amount of such Product not sold by Plum Creek from another seller or
sellers, subject to the following:
(i) The Non-Affected Party shall not enter into any contract for any
such sale or purchase for a term longer than one (1) year's duration.
(ii) The Non-Affected Party shall give the Affected Party written notice
of each such contract, including the volume sold or purchased thereunder
and the term thereof.
(iii) The annual volume commitment of the Non-Affected Party for such
Product as specified in Section 1.1, 1.2 or 1.3 (as applicable) and Annex A
shall be reduced by such volume sold or purchased under such contract for
the duration thereof.
(iv) The Affected Party may, at any time, increase the volume of such
Product to be purchased or sold hereunder by all or part of the Reduction
Amount, provided the amount of such increase shall not exceed an amount
equal to the Reduction Amount minus the volume of such Product that the
Non-Affected Party has already committed to sell or purchase to or from any
third party as provided in and in compliance with this Section 1.7(e).
ARTICLE II
PRICE AND DELIVERY TERMS
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Section 2.1 PRICES. (a) The initial prices for the Products shall be
as has been separately agreed between the parties. Such prices shall remain in
effect until December 31, 1996. Beginning on January 1, 1997 and at the
beginning of every calendar quarter thereafter (each such calendar quarter
period, a "Price Period"), the prices to be paid for the Products to be
delivered during such Price Period shall be adjusted in accordance with the
provisions of this Section 2.1. Riverwood and Plum Creek shall negotiate in
good faith to determine the prices for Products for the next Price Period prior
to expiration of the current Price Period. If the parties cannot agree on such
prices at least ten (10) days prior to expiration of the current Price Period,
the parties shall submit the issue to arbitration as provided in Section 2.4.
(b) The price of each Product for any Price Period shall be equal to
the then current fair market value of such Product in the Region (as defined
below), including exports from the Region. The determination of fair market
value for any Product shall take into account all relevant factors, including
quality specifications, prices for such Product paid by Riverwood to other
suppliers to the West Monroe Facility or the Other Facilities, prices for such
Product obtained for sales by Plum Creek from the Region, published prices for
such Product in the Region in any industry publications, and delivery costs.
Volume may be considered as a factor in determining the fair market value of any
Product but shall not be used to impute any price premium or discount.
Notwithstanding the foregoing, the fair market value of Pine Pulpwood or
Hardwood Pulpwood shall be calculated by determining the Stumpage Price (as
defined below) of such Product and adding to such amount the amount of Delivery
Cost (as defined below).
(c) The term "Region" means the region consisting of (1) the portion of
Arkansas south of a line running due west to due east and intersecting the city
of Little Rock, Arkansas, (2) Louisiana, (3) the portion of Mississippi south of
Interstate 20, and (4) the portion of Texas east of a line running due north to
due south and intersecting the town of Tyler, Texas. The term "Stumpage Price"
means, for Pine Pulpwood or Hardwood Pulpwood, the fair market price paid "at
the stump" for such Product in the Region. The term "Delivery Cost" means, for
Pine Pulpwood or Hardwood Pulpwood, the fair market delivery cost for cutting
such Product and hauling such Product a distance of twenty-five (25) miles in
northern Louisiana; PROVIDED that for any Price Period ending on or prior to
December 31, 1997, such
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fair market delivery cost shall be deemed to be an amount equal to the lesser of
(i) the actual cost then being incurred by Plum Creek for cutting such Product
and hauling such Product a distance of twenty-five (25) miles in northern
Louisiana, excluding any cost attributable to silvicultural or forest management
activities, including clearing brush, and (ii) the actual cost being incurred by
Riverwood as of the date hereof for cutting such Product and hauling such
Product a distance of twenty-five (25) miles in northern Louisiana, excluding
any cost attributable to silvicultural or forest management activities,
including clearing brush.
(d) A failure in good faith of the parties to agree on the prices to be
paid for any Product shall not constitute a breach of this Agreement entitling a
party to exercise its termination rights under Article VII or affect the
parties' obligations to comply with all other terms and conditions of this
Agreement.
Section 2.2 DELIVERY TERMS. All Products covered by this Agreement
shall be delivered to Riverwood F.O.B. to the West Monroe Facility or to
Riverwood's Farmerville, Wild Spur or Martin chip mill facilities located in
northern Louisiana (the "Other Facilities"), pursuant to the delivery
requirements in the Annual Plan. In addition, Riverwood may, from time to time,
acquire or construct one or more additional chip or paper mill facilities within
ten (10) miles of the West Monroe Facility or any Other Facility, and Products
shall be delivered to Riverwood F.O.B. to any such additional facility (such
additional facilities, together with the West Monroe Facility and the Other
Facilities, the "Facilities"). Riverwood may direct that Plum Creek deliver
Products not in accordance with the Annual Plan or that Plum Creek deliver
Products to other facilities owned by Riverwood or any affiliate of Riverwood,
in addition to the Facilities, as long as (i) Riverwood gives Plum Creek at
least thirty (30) days' prior written notice, and (ii) Riverwood pays Plum Creek
for the increased costs of delivery (if any) resulting from such a redirection
of Products. Risk of loss and title shall pass when Products are unloaded at
the designated facility.
Section 2.3 PAYMENT. Riverwood shall pay Plum Creek within twenty
(20) days after Riverwood's receipt of each invoice for any Products delivered
to Riverwood, based upon the volume of the Products delivered, as determined by
the weight of such Products at the time of delivery. Such
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invoices shall not be delivered by Plum Creek to Riverwood more frequently than
weekly.
Section 2.4 DISPUTES. (a) If Riverwood and Plum Creek do not agree on
the prices for all Products for the next Price Period at least ten (10) days
prior to the expiration of the current Price Period, the fair market price for
any Product as to which the parties shall not have so agreed shall be determined
by an arbitrator selected by the parties. If the parties fail to agree on the
selection of an arbitrator by the end of the current Price Period, the parties
shall each select an arbitrator within five (5) days thereafter and the two
arbitrators shall select a third arbitrator within five (5) days of their
selection. Any arbitrator shall be independent and shall have no affiliation
with either party or any affiliate of either party. The arbitrators shall be
experienced in the timber and paper industries, familiar with the factors taken
into account in pricing wood fiber products in such industries, and otherwise
qualified to make the pricing determinations required by this Section 2.4. If
one of the parties does not select an arbitrator within five (5) days after the
end of the current Price Period, the arbitrator chosen solely by the other party
shall be responsible for determining the fair market price for any Product as to
which the parties shall not have previously agreed.
(b) Each party shall each submit to the arbitrator or arbitrators and
to the other party within ten (10) days of the date of selection of the
arbitrator or arbitrators, as applicable, the last price proposal made to the
other party prior to initiating the arbitration proceedings. Each party may
submit information in support of its price proposal, consistent with the fair
market value analysis described in Section 2.1. Within ten (10) days of the
date the parties have submitted their price proposals, the arbitrator or
arbitrators shall, with respect to each Product for which the price is in
dispute, select either the proposed price submitted by Plum Creek or the
proposed price submitted by Riverwood. The arbitrator or arbitrators, in making
such decision, shall select the proposed price that most accurately reflects the
fair market price for such Product, taking into account all of the factors set
forth in Sections 2.1(b) and 2.1(c). If a party has failed to timely submit its
price proposal for any Product, the arbitrator or arbitrators shall select the
other party's price proposal for such Product. During the pendency of the
arbitration proceedings, the price for any Product in dispute shall be the price
for such Product that was in effect at the end of
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the Price Period in which the dispute arose. Once the price for such Product
has been determined by such arbitration, such price shall be retroactive to the
beginning of the Price Period for which such price is applicable. The
arbitration decision shall be final, binding and conclusive upon both parties
for such Price Period. The expenses of any arbitration hereunder shall be borne
equally by the parties.
Section 2.5 TESTING AND VERIFICATION; NON-CONFORMING PRODUCT. (a)
Riverwood shall be entitled to sample and test Products in accordance with the
procedures described in Annex D, as such procedures may be modified or changed
by Riverwood from time to time in accordance with this Section 2.5 (as so
modified or changed, the "Test Procedures"). Riverwood may from time to time
modify any of the Test Procedures as to any Product that Riverwood applies to
all of its suppliers of such Product to the West Monroe Facility or any other
Facility. Riverwood shall not discriminate against Plum Creek in modifying the
Test Procedures. Plum Creek shall have the right to inspect at all reasonable
times Riverwood's method of measurement of weight and quality specification
compliance in order to verify accuracy in such measurements. Riverwood shall
modify its measurement practices if Plum Creek reasonably demonstrates that
existing practices have produced material errors in measurement. Riverwood
shall pay any underpayments, and Plum Creek shall reimburse any overpayments,
for discrepancy in Product measurements for the period of time for which the
parties agree such procedural error is reasonably estimated to have occurred.
(b) If any shipment of any Product fails to satisfy the applicable
Product Specifications, as determined by Riverwood pursuant to the Test
Procedures, Riverwood shall have the right to reject such shipment. Riverwood
shall notify Plum Creek of any such rejection as soon as is reasonably possible.
If such rejected shipment is of Pulpwood, Riverwood shall have the options
respecting non-conforming Pulpwood set forth in Annex E. If such rejected
shipment is of Chips, Riverwood shall either return the rejected Product to Plum
Creek at Plum Creek's expense or, in Riverwood's sole discretion, offer to
accept such rejected Chips as wood fuel, provided Riverwood then has a need for
wood fuel. If Plum Creek elects to sell the rejected product to Riverwood as
wood fuel, Riverwood will pay to Plum Creek a reasonable price for such product,
equal to the then-current average price paid for such wood fuel by Riverwood to
unaffiliated third parties.
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ARTICLE III
TERM
Section 3.1 INITIAL TERM. This Agreement shall remain in full force
and effect for twenty (20) years from the date hereof (the "Initial Term"),
unless sooner terminated as provided in Section 7.1.
Section 3.2 EXTENDED TERM. Either party may, at its sole option,
extend the Initial Term of this Agreement by written notice to the other party
for a period of up to ten (10) additional years upon written notice to such
other party delivered not later than twelve (12) months prior to the expiration
of the Initial Term (the Initial Term, as the same may be extended pursuant to
this Section 3.2, the "Term"). If both parties exercise such option, the Initial
Term shall be extended by the longer of the two periods so elected.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 4.1 WARRANTY OF QUALITY. Plum Creek warrants and covenants
that it will use its best commercially reasonable efforts to cause all Chips to
meet the Chip Quality Specifications, and to cause all Pine Pulpwood and
Hardwood Pulpwood to meet the Pulpwood Quality Specifications.
Section 4.2 OWNERSHIP OF PRODUCTS. (a) Plum Creek represents and
warrants that it is, and at all times during the Term will be, the owner of all
Products, and that it shall sell such Products to Riverwood free and clear of
any and all Liens (as defined below). Plum Creek shall protect, indemnify,
defend and hold harmless Riverwood against any Losses (as defined below)
incurred or sustained by Riverwood arising out of or resulting from any Liens
affecting any Products.
(b) The term "Liens" means any and all liens, charges, mortgages, deeds
to secure debt, pledges, security interests, options, adverse claims or other
encumbrances of any nature whatsoever. The term "Losses" means any and all
claims, liabilities, obligations, losses, fines, costs, royalties, proceedings,
deficiencies or damages (whether
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absolute, accrued, conditional or otherwise and whether or not resulting from
third party claims) including but not limited to out-of-pocket expenses and
reasonable attorneys' and accountants' fees incurred in the investigation or
defense of any of the same or in enforcing any of their respective rights
hereunder.
Section 4.3 PLUM CREEK POWER AND AUTHORITY; ENFORCEABILITY. Plum
Creek represents and warrants that it is a limited partnership duly organized
and validly existing under the laws of the State of Delaware, and that it has
all requisite partnership authority to enter into this Agreement and to perform
its obligations hereunder. Plum Creek represents and warrants that this
Agreement has been duly authorized, executed and delivered by Plum Creek and
constitutes the legal, valid and binding obligation of Plum Creek, enforceable
against Plum Creek in accordance with its terms, except as enforceability may be
limited by (I) bankruptcy, reorganization, insolvency, moratorium, receivership
or other similar laws affecting or relating to the enforcement of creditors'
rights or remedies generally, and (II) general principles of equity (whether
considered at law or in equity).
Section 4.4 COMPLIANCE WITH LAWS; MAINTENANCE OF TIMBERLANDS. (a)
Plum Creek agrees that its performance of this Agreement shall comply in all
material respects with applicable state and federal laws and regulations,
including, but not limited to, all environmental laws and the Fair Labor
Standards Act of 1938, as amended.
(b) Plum Creek agrees to cultivate, manage and maintain the Timberlands
in accordance with the Sustainable Forestry Principles of the American Forest
and Paper Association (the "AFPA"), as modified by the AFPA from time to time
(and in the event that the AFPA at any time in the future ceases to exist or to
establish such principles, then the principles of any successor entity
performing a similar function shall apply) and with the Best Forestry Management
Practices published by the Louisiana and Arkansas Forestry Associations,
respectively, and in a manner which will enable it to perform all of its
obligations hereunder.
Section 4.5 PLUM CREEK AS INDEPENDENT CONTRACTOR. No relationship of
employer and employee, or master and servant, is intended to exist, nor shall
any be construed to exist, between Riverwood and Plum Creek, or between
Riverwood and any servant, agent, employee, subcontractor or supplier of or to
Plum Creek. Each party hereto shall
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select and pay its own servants, agents, employees, subcontractors and
suppliers, and neither such party nor any of its servants, agents, employees,
subcontractors and suppliers shall be subject to any orders, supervision or
control of the other party hereto. The parties acknowledge that this Agreement
does not create a partnership, joint venture or any relationship other than a
contract between independent parties.
Section 4.6 INDEMNITY BY PLUM CREEK. Riverwood shall in no way be
liable for any personal injuries (including death), property damage or other
Losses caused by, resulting from, or attributable to, the negligence,
intentional misconduct or bad faith of Plum Creek, or of any servant, agent,
employee, subcontractor or supplier of or to Plum Creek, in performing Plum
Creek's obligations under this Agreement, or in the operation of the business of
Plum Creek or any such servant, agent, employee, subcontractor or supplier in
connection with this Agreement. Plum Creek shall protect, defend, indemnify and
hold harmless each of Riverwood, its parents Riverwood Holding, Inc. and RIC
Holding, Inc., and its subsidiaries and other affiliates, and each of its and
their respective agents, officers, partners, directors, employees, successors
and assigns, from and against any claim, demand, cause of action, lawsuit or
other Loss arising out or resulting from any such negligence, intentional
misconduct or bad faith of Plum Creek, or of any servant, agent, employee,
subcontractor or supplier of or to Plum Creek, except solely to the extent such
Loss is finally judicially determined to have arisen out of or resulted from the
negligence, intentional misconduct or bad faith of any of Riverwood, its parents
Riverwood Holding, Inc. and RIC Holding, Inc., and its subsidiaries and other
affiliates, or any of its or their respective servants, agents, officers,
partners, directors, employees, subcontractors or suppliers.
Section 4.7 RIVERWOOD POWER AND AUTHORITY; ENFORCEABILITY. Riverwood
represents and warrants that it is a corporation duly organized and validly
existing under the laws of the State of Delaware, and that it has all requisite
corporate authority to enter into this Agreement and to perform its obligations
hereunder. Riverwood represents and warrants that this Agreement has been duly
authorized, executed and delivered by Riverwood and constitutes the legal, valid
and binding obligation of Riverwood, enforceable against Riverwood in accordance
with its terms, except as enforceability may be limited by (I) bankruptcy,
reorganization, insolvency, moratorium,
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receivership or other similar laws affecting or relating to the enforcement of
creditors' rights or remedies generally, and (II) general principles of equity
(whether considered at law or in equity).
Section 4.8 INDEMNITY BY RIVERWOOD. Plum Creek shall in no way be
liable for any personal injuries (including death), property damage or other
Losses caused by, resulting from, or attributable to, the negligence,
intentional misconduct or bad faith of Riverwood, or of any servant, agent,
employee, subcontractor or supplier of or to Riverwood, in performing
Riverwood's obligations under this Agreement, or in the operation of the
business of Riverwood or any such servant, agent, employee, subcontractor or
supplier in connection with this Agreement. Riverwood shall protect, defend,
indemnify and hold harmless each of Plum Creek, its general partner Plum Creek
Management Company, L.P., and its subsidiaries and other affiliates, and each of
its and their respective agents, officers, partners, directors, employees,
successors and assigns, from and against any claim, demand, cause of action,
lawsuit or other Loss arising out or resulting from any such negligence,
intentional misconduct or bad faith of Riverwood, or of any servant, agent,
employee, subcontractor or supplier of or to Riverwood, except solely to the
extent such Loss is finally judicially determined to have arisen out of or
resulted from the negligence, intentional misconduct or bad faith of any of Plum
Creek, its general partner, and its subsidiaries and other affiliates, or any of
its or their respective servants, agents, officers, partners, directors,
employees, subcontractors or suppliers.
ARTICLE V
REMEDIES
Section 5.1 ALTERNATIVE PURCHASE OR SALE RIGHTS. (a) In the event
Plum Creek fails or is unable for any reason other than Force Majeure to deliver
the quantities of any of the Products required by this Agreement, then, in
addition to any other remedies available to Riverwood, Riverwood may purchase an
equivalent quantity of such Products from any other source or sources, and Plum
Creek shall reimburse Riverwood for the reasonable difference between
Riverwood's costs in purchasing such Products and the costs that Riverwood would
have incurred had Plum Creek delivered such Products in accordance with this
Agreement. Riverwood shall use its reasonable efforts to obtain the
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Products at reasonable prices and delivery costs and to mitigate its damages
accordingly.
(b) In the event Riverwood fails or is unable for any reason other than
Force Majeure to purchase the quantities of any of the Products required by this
Agreement, then, in addition to any other remedies available to Plum Creek, Plum
Creek may sell an equivalent quantity of such Products to any other buyer or
buyers, and Riverwood shall reimburse Plum Creek for the reasonable difference
between Plum Creek's price in selling such Products to such third party and the
price that Plum Creek would have received had Riverwood purchased such Products
in accordance with this Agreement. Plum Creek shall use its reasonable efforts
to sell the Products at reasonable fair market prices and to mitigate its
damages accordingly.
Section 5.2 EQUITABLE RELIEF. Each party understands and acknowledges
that monetary damages will not be a sufficient remedy for breach of this
Agreement by such party, and that the other party shall be entitled to
injunctive relief and for specific performance as remedies for any such breach.
Such remedies shall not be deemed to be such other party's exclusive remedies
for any such breach of this Agreement, but shall be in addition to any other
remedies provided herein or available at law, in equity or otherwise.
Section 5.3 CONSENT TO JURISDICTION. In connection with any
proceeding initiated by either party under or with respect to this Agreement and
the transactions contemplated hereby, each party hereby consents to the
jurisdiction of any United States Federal Court sitting in the State of
Louisiana having jurisdiction in the matter and to the jurisdiction of the
Fourth Judicial District Court, Ouachita Parish, Louisiana. Each party
acknowledges and agrees that any controversy that may arise under this Agreement
is likely to involve complicated and difficult issues, and therefor it hereby
irrevocably and unconditionally waives any right it may have to a trial by jury
in respect of any litigation directly or indirectly arising out of or relating
to this Agreement, or the breach, termination or validity of this Agreement, or
the transactions contemplated by this Agreement. Each party certifies and
acknowledges that (A) no representative, agent or attorney of any other party
has represented expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce the foregoing waiver, (B) it understands
and has considered the implications of this
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waiver, (C) it makes this waiver voluntarily, and (D) it has been induced to
enter into this Agreement by, among other things, the mutual waivers and
certifications in this Section 5.3.
Section 5.4 WAIVER OF CONSEQUENTIAL DAMAGES. Each party hereby waives
any right to recover consequential, punitive, exemplary or similar damages in
any arbitration, lawsuit, litigation or proceeding arising out or resulting from
this Agreement. Each party certifies and acknowledges that (A) no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of arbitration,
litigation or other proceeding, seek to enforce the foregoing waiver, (B) it
understands and has considered the implications of this waiver, (C) it makes
this waiver voluntarily, and (D) it has been induced to enter into this
Agreement by, among other things, the mutual waivers and certifications in this
Section 5.4.
ARTICLE VI
RIGHT OF FIRST OFFER OR REFUSAL
Section 6.1 LIMITS ON CERTAIN TRANSFERS OF TIMBERLANDS. As indicated
in the Recitals, Riverwood and New River have transferred and conveyed their
right, title and interest in and to the Timberlands to Plum Creek. So long as
this Agreement is in effect and subject to the terms and conditions hereof, Plum
Creek agrees not to effect, cause or permit any Transfer (as defined below) to
any other Person except in compliance with the terms of this Article VI. The
term "Transfer" means any sale, lease, conveyance, exchange, grant of usufruct,
disposition or other transfer, directly or indirectly (whether by agreement,
operation of law, or otherwise), of all or any portion of the Timberlands or all
or any portion of Plum Creek's interest in the Timberlands.
Section 6.2 LIMITATION ON TRANSFERS FOR THREE YEARS. (a) During the
period beginning on the date hereof and ending on the third anniversary of the
date hereof (such three-year period, the "Initial Period"), Plum Creek agrees
not to effect, cause or permit any Transfer to any other Person, except pursuant
to Permitted Transfers (as defined below). The term "Permitted Transfer" means
any Transfer (whether during the Initial Period or after the Initial Period):
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(i) that is a transfer to any one or more Persons, in one or a series
of transactions, of up to an aggregate of fifty thousand (50,000) acres of
the Timberlands on any terms and conditions (the "Initial 50,000 Acres");
(ii) to any Person (other than a natural person) that is an affiliate
of Plum Creek controlled by Plum Creek and that assumes all liabilities and
obligations of Plum Creek under this Agreement in accordance with Section
8.2, PROVIDED that such Person shall not be a Specified Entity and at all
times prior to the end of the Initial Period shall be and remain an
affiliate of Plum Creek controlled by Plum Creek;
(iii) to any Person that merges or consolidates with or into Plum
Creek, or acquires all or substantially all of the assets of Plum Creek,
and that assumes all liabilities and obligations of Plum Creek under this
Agreement in accordance with Section 8.2;
(iv) in connection with a land exchange, swap or similar arrangement
involving Plum Creek's acquisition of replacement timbered property located
in northern Louisiana or southern Arkansas ("Replacement Property"),
PROVIDED that (1) Plum Creek shall have demonstrated to Riverwood's
reasonable satisfaction that Plum Creek's obligations under this Agreement
can be satisfied by use and exploitation of such Replacement Property,
(2) such Replacement Property shall be and become subject to this
Agreement, and Plum Creek's liabilities and obligations and Riverwood's
rights hereunder, including under this Article VI, (3) such Replacement
Property shall be made subject to the recorded memorandum described in
Section 6.9, and (4) such Replacement Property shall be deemed to
constitute a part of the Timberlands for purposes of this Article VI; or
(v) consisting of operating leases for hunting or other recreational
or other operational purposes entered into by Plum Creek, or stumpage sales
made by Plum Creek, in each case in the ordinary course of business.
(b) Any Permitted Transfer of all or part of the Initial 50,000 Acres
pursuant to and in compliance with Section 6.2(a)(i) (a "Permitted 50,000 Acre
Transfer") shall be free of any right of Riverwood granted under this
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Agreement, subject to compliance with the provisions of Sections 6.2 and 6.10.
(c) Any Permitted Transfer to any affiliate of Plum Creek pursuant to
and in compliance with Section 6.2(a)(ii) (a "Permitted Controlled Affiliate
Transfer") shall be free of any right of first offer or refusal of Riverwood
under this Article VI, but shall be subject to the provisions of Sections 6.2,
6.4, 6.9 and 8.2. Plum Creek agrees to cause such affiliate of Plum Creek to be
and remain an affiliate of Plum Creek that is controlled by Plum Creek, at all
times prior to the end of the Initial Period. If at any time after the end of
the Initial Period, such Person is not, or will not be, an affiliate of Plum
Creek that is controlled by Plum Creek, Plum Creek shall comply with the
provisions of Section 6.4.
(d) Any Permitted Transfer pursuant to and in compliance with Section
6.2(a)(iii) shall be free of any right of first offer, purchase or first refusal
of Riverwood under this Article VI, but shall be subject to the provisions of
Section 6.2, 6.9 and 8.2.
(e) Any Permitted Transfer pursuant to and in compliance with Section
6.2(a)(iv) (a "Permitted Land Swap Transfer") shall be free of any right of
Riverwood granted under this Agreement, subject to compliance with the
provisions of Sections 6.2, 6.9 (with respect to the relevant Replacement
Property) and 6.10.
(f) Except as provided in Sections 6.2(b), 6.2(c), 6.2(d) and 6.2(e),
all Transfers shall be subject to Riverwood's rights under this Agreement,
including Riverwood's rights of first offer, purchase or first refusal as and to
the extent described in this Article VI, and shall be subject to the provisions
of Section 6.9. Any purported Transfer that does not comply with all of the
requirements of this Article VI shall be null and void and shall be of no force
or effect.
(g) Any Person to which a Permitted Controlled Affiliate Transfer, or
any Transfer pursuant to and in compliance with Section 6.2(a)(iii), is made,
shall be entitled to effect any Permitted Transfer pursuant to and in compliance
with Section 6.1(a)(i), subject to the requirement thereof that not more than an
aggregate of the Initial 50,000 Acres shall be permitted to be transferred
pursuant thereto. Any such Person, and any Person to which a Transfer referred
to in Section 6.2(f) is made, shall be
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subject to and shall comply with the provisions of this Article VI to which Plum
Creek is subject.
Section 6.3 TRANSFERS SUBJECT TO RIGHT OF FIRST OFFER. (a) Subject to
the terms and conditions of this Section 6.3, Riverwood shall have a right of
first offer (the "First Offer Right") with respect to any proposed Transfer,
other than (I) a Specified Transfer (as defined below) to which Section 6.5
applies and for which Plum Creek has given a Specified Transfer Notice (as
defined below), (II) a Permitted 50,000 Acre Transfer, (III) a Permitted Land
Swap Transfer, or (IV) a Permitted Controlled Affiliate Transfer.
(b) If, at any time following the expiration of the Initial Period
during the Term, Plum Creek desires to effect, cause or permit a Transfer (other
than a Specified Transfer to which Section 6.5 applies and for which Plum Creek
has given a Specified Transfer Notice, a Permitted 50,000 Acre Transfer, a
Permitted Land Swap Transfer, or a Permitted Controlled Affiliate Transfer),
Plum Creek shall, prior to effecting, causing or permitting any such Transfer,
give to Riverwood written notice of such desire (a "Transfer Notice"). Such
Transfer Notice shall specify the acreage and interest proposed to be
transferred (the "Notice Acreage"), and the proposed purchase price for the
Notice Acreage (the "Notice Price"), which price shall be an all-cash price.
Any purported Transfer Notice that does not comply with all of the requirements
of this Article VI shall be null and void and shall be of no force or effect.
(c) Following receipt of such Transfer Notice, Riverwood may exercise
its First Offer Right to purchase the Notice Acreage by giving written notice
thereof (a "Notice of Election") to Plum Creek not later than the date that is
thirty (30) days after the date on which Riverwood receives such Transfer Notice
(such date of receipt, the "Notice Date").
(d) In the event that Riverwood does not give a Notice of Election to
Plum Creek within the applicable period specified in Section 6.3(c), Plum Creek
shall be free to effect a Transfer of all (but not less than all) of the Notice
Acreage to one (but not more than one) Person in one (but not more than one)
transaction, without further restriction under this Section 6.3 (but subject to
Section 6.4 and Section 6.9(b)), within one hundred eighty (180) days of the
Notice Date, at a price that is not less than the Notice Price, and otherwise
upon the terms specified in
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the Transfer Notice. If Plum Creek does not consummate any such Transfer within
such time period or upon such terms, such Notice Acreage shall become and remain
subject to all of the rights of Riverwood under this Article VI.
Section 6.4 INDIRECT TRANSFERS SUBJECT TO RIGHT OF PURCHASE. (a)
Subject to the terms and conditions of this Section 6.4, Riverwood shall have a
right of purchase (the "Purchase Right") with respect to the Timberlands and any
interest therein, in the event of any Transfer Event (as defined below). The
term "Transfer Event" means any Transfer, transaction, occurrence or event
pursuant to which any affiliate of Plum Creek that acquires Timberlands or any
interest therein in a Permitted Controlled Affiliate Transfer shall no longer be
an affiliate of Plum Creek controlled by Plum Creek (such Person, a "Former
Affiliate").
(b) If, at any time following the expiration of the Initial Period
during the Term, Plum Creek desires to effect, cause or permit a Transfer Event,
or any other Transfer Event shall occur, Plum Creek shall, prior to effecting,
causing or permitting any such Transfer Event, and concurrently with the
occurrence of any other Transfer Event, give to Riverwood written notice of such
desire or of such occurrence (a "Transfer Event Notice"). Such Transfer Event
Notice shall provide reasonably detailed information concerning such Transfer
Event, including its status and the identity of the Persons involved therein.
Any purported Transfer Event Notice that does not comply with all of the
requirements of this Article VI shall be null and void and shall be of no force
or effect.
(c) Following receipt of such Transfer Event Notice, Riverwood may
exercise its Purchase Right to purchase the Timberlands and interest therein
held by the Former Affiliate (the "Subject Property"), for a price equal to the
fair market value of such Subject Property, by giving written notice thereof (a
"Transfer Event Notice of Election") to Plum Creek not later than the date that
is thirty (30) days after the date on which such fair market value shall have
been determined in accordance with Section 6.4(d).
(d) Within fifteen (15) days of the date on which Riverwood receives
such Transfer Event Notice (such date of receipt, the "Transfer Event Notice
Date"), Plum Creek shall choose a nationally recognized investment banking firm
(the "Plum Creek Firm") and Riverwood shall choose a nationally
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recognized investment banking firm (the "Riverwood Firm"). Such firms shall
jointly determine the method of evaluating the fair market value of the Subject
Property, and such fair market value. If such firms are unable to agree on such
method of evaluation or such fair market value, such firms shall jointly
designate a third nationally recognized investment banking firm (the "Third
Firm"), which shall determine the fair market value of the Subject Property, and
such determination shall be final and binding on the parties. Any such fair
market value determination, whether by the Plum Creek Firm and Riverwood Firm
jointly or by the Third Firm, shall be on the basis of the most likely sales
price for such Subject Property or similar property in an arms length
transaction in the then current market, and shall take into account the form of
conveyance and any Liens to which the Subject Property is then subject. Plum
Creek shall bear the fees and expenses of the Plum Creek Firm, and Riverwood
shall bear the fees and expenses of the Riverwood Firm. The fees and expenses
of the Third Firm shall be borne equally by the parties.
Section 6.5 TRANSFERS SUBJECT TO RIGHT OF FIRST REFUSAL. (a) Subject
to the terms and conditions of this Section 6.5, Riverwood shall have a right of
first refusal (the "First Refusal Right") with respect to any proposed Transfer
to any Specified Entity (as defined below), other than a Permitted 50,000 Acre
Transfer. Riverwood shall have such First Refusal Right regardless of whether
it has previously elected not to exercise any First Offer Right with respect to
the acreage or interest proposed to be transferred pursuant to such Transfer.
(b) If, at any time following the expiration of the Initial Period
during the Term, Plum Creek desires to effect, cause or permit a Transfer to a
Specified Entity (a "Specified Transfer"), other than a Permitted 50,000 Acre
Transfer, Plum Creek shall, prior to effecting, causing or permitting any such
Specified Transfer, give to Riverwood written notice of such desire (a
"Specified Transfer Notice"). Plum Creek shall not give such Specified Transfer
Notice, or effect, cause or permit any such Specified Transfer, unless and until
it shall have received a bona fide, legally binding offer in writing from a
Specified Entity with respect to a Transfer that includes all the material
economic terms on which such Specified Transfer would occur (a "Transfer
Offer"), which Plum Creek desires to accept and pursuant to which Plum Creek
would effect, cause or permit such Specified Transfer. Such Specified Transfer
Notice shall specify the acreage and interest
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proposed to be transferred (the "Specified Acreage"), the identity of the
proposed transferee Specified Entity, the purchase price for the Specified
Acreage (the "Specified Price"), and the terms for payment of such price, the
date agreed on by Plum Creek and such proposed transferee for the closing of
such Specified Transfer, and the other terms of the Transfer Offer. The
Specified Transfer Notice shall be accompanied by a copy of any document
evidencing the Transfer Offer and, if the terms of the proposed Specified
Transfer have been reduced to a written contingent purchase agreement (a
"Contract"), a copy of such Contract. Any purported Specified Transfer Notice
that does not comply with all of the requirements of this Article VI shall be
null and void and shall be of no force or effect.
(c) Following receipt of such Specified Transfer Notice, Riverwood may
exercise its First Refusal Right to purchase the Specified Acreage by giving
written notice thereof (a "Specified Notice of Election") to Plum Creek as
follows:
(i) If the Specified Price is an all-cash price, or other price
acceptable to Riverwood, such Specified Notice of Election shall be given
not later than the date that is thirty (30) days after the date on which
Riverwood receives such Specified Transfer Notice (such date of receipt,
the "Specified Notice Date").
(ii) In the event that the Specified Price contains terms (including
such terms as a "like-kind" exchange under Section 1031 of the Internal
Revenue Code) that Riverwood in its reasonable judgment determines that it
cannot meet, then Riverwood may, within five (5) days of the Specified
Notice Date, propose a reasonable cash equivalent in lieu of such terms to
Plum Creek, and if Plum Creek agrees with such proposal, such Specified
Notice of Election shall be given not later than the date that is thirty
(30) days after the date on which Plum Creek so notifies Riverwood in
writing.
(iii) If Plum Creek does not accept Riverwood's proposal, any dispute as
to the amount of such reasonable cash equivalent shall be settled by
arbitration in accordance with the provisions of Section 6.6, and such
Specified Notice of Election shall be given not later than the date that is
thirty (30) days after the date on which the parties shall
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have been notified in writing of the final arbitration determination of
such cash equivalent.
(d) In the event that Riverwood does not give such Specified Notice of
Election to Plum Creek within the applicable period specified in Section 6.5(c),
Plum Creek shall be free to effect the Specified Transfer of all (but not less
than all) the Specified Acreage, without further restriction under this Section
6.5 (but subject to Section 6.9), to the proposed transferee Specified Entity
within one hundred twenty (120) days of the Specified Notice Date, at a price
equal to the Specified Price, and otherwise upon the terms specified in the
Specified Transfer Notice, any accompanying document evidencing the Transfer
Offer, and any accompanying Contract. If Plum Creek does not consummate such
Specified Transfer within such time period or upon such terms, such Specified
Acreage shall again become and remain subject to all of the rights of Riverwood
under this Article VI.
(e) The term "Specified Entity" shall mean any of (X) Georgia-Pacific
Corporation, International Paper Company, Weyerhaeuser Company, Willamette
Industries, Inc., Boise Cascade Corporation or Stone Container Corporation, (Y)
any other timber products company having an integrated paper division consisting
in whole or in part of a paper plant within 100 miles of the West Monroe
Facility, and having assets valued in excess of the Specified Amount (as defined
below) at the time of the proposed Specified Transfer, or (Z) any successor,
subsidiary or affiliate of any Person specified in either of the foregoing
clauses (x) and (y). The term "Specified Amount" shall mean an amount equal to
$100,000,000, plus or minus, for each then elapsed year in the Term,
$100,000,000 multiplied by the percentage increase or decrease in such year, if
any, in the Consumer Price Index for All Urban Consumers (CPI-U), U.S. City
Average, All Items (1982-84=100), as published from time to time by the U.S.
Department of Labor, Bureau of Labor Statistics. If the referenced index (1982-
1984=100) of the CPI-U is revised, the base index will be converted to a new
base reference index in accordance with the conversion table published by the
Bureau of Labor Statistics.
Section 6.6 ARBITRATION TO DETERMINE CASH EQUIVALENT PRICE. (a)
Either party may initiate arbitration to determine the reasonable cash
equivalent of the Specified Price (or portion thereof), if Riverwood has
proposed a cash equivalent in accordance with Section 6.5(c), and Plum Creek has
not accepted such proposal within
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ten (10) days after the Specified Notice Date. The party desiring to initiate
such arbitration shall give notice to the other party of such desire (an
"Arbitration Notice") within fifteen (15) days of such Specified Notice Date.
Upon the giving of such Arbitration Notice, all other time periods specified in
Sections 6.5 and 6.7 relating to a Specified Transfer shall be extended until
the arbitration provided for in this Section 6.6 has been completed.
(b) The reasonable cash equivalent of the Specified Price (or portion
thereof) shall be determined (I) by an arbitrator selected by the parties, or
(II) if the parties fail to agree on the selection of such arbitrator within
five (5) days of date of delivery of the applicable Arbitration Notice, by a
majority of a committee of three (3) arbitrators consisting of one arbitrator
chosen by Plum Creek, one arbitrator chosen by Riverwood, and a third chosen by
the first two arbitrators, or (III) if either party fails to notify the other
party of its choice of an arbitrator for such committee within ten (10) days of
the date of delivery of the applicable Arbitration Notice, solely by the
arbitrator so chosen by the other party.
(c) All arbitrators chosen hereunder shall have at least ten (10)
years' experience in the timber and paper industries, and the arbitration shall
be conducted in accordance with the rules of the American Arbitration
Association as then in effect. Such arbitration shall be held within the state
of Louisiana at such location as the arbitrator or arbitrators shall determine.
The final determination of the arbitrator or arbitrators shall be made within
five (5) days after the appointment thereof, and shall be final and binding on
the parties. The expenses of the arbitration shall be borne equally by the
parties.
Section 6.7 CLOSING TERMS. (a) If Riverwood provides a Specified
Notice of Election to purchase any Specified Acreage pursuant to Section 6.5 and
the related Specified Transfer Notice was accompanied by a definitive Contract
that had been executed and delivered by Plum Creek and the applicable Specified
Entity, Riverwood and Plum Creek shall close such purchase in substantial
accordance with the material economic terms of such Contract, subject to
Sections 6.5(c) and 6.6.
(b) If such Specified Transfer Notice was not so accompanied by such a
definitive Contract, Riverwood and Plum Creek shall close such purchase of such
Specified Acreage in substantial accordance with the material economic
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terms of the Transfer Offer, subject to Sections 6.5(c) and 6.6, and to the
extent consistent therewith the following terms and conditions. The following
terms and conditions shall also apply to the consummation of any purchase by
Riverwood of any Notice Acreage pursuant to an exercise of any First Offer Right
in respect thereof in accordance with Section 6.3, or of any Subject Property
pursuant to an exercise of any Purchase Right in respect thereof in accordance
with Section 6.4. Plum Creek shall, and cause any Former Affiliate to, comply
with the following terms and conditions.
(i) Riverwood shall pay one-half, and Plum Creek (or the Former
Affiliate, as applicable) shall pay one-half, of all real estate and other
similar transfer taxes on the deed or deeds given by Plum Creek (or the
Former Affiliate, as applicable). Riverwood shall pay the costs of
recording all documents to be recorded and all costs of examining and
insuring title. Each party shall pay its own attorney's fees. There shall
be a proration of any applicable ad valorem taxes. Each party shall pay
all other expenses of the transaction incurred by it, including all
brokers' commissions.
(ii) Plum Creek (or the Former Affiliate, as applicable) shall convey
the property to Riverwood by limited warranty deed, subject only to
Permitted Exceptions (as defined below). In no event shall the property be
subject to any deed to secure debt, or any mortgage, Lien or judgment, held
by a person claiming by, through or under Plum Creek (or the Former
Affiliate, as applicable). The obligation of Plum Creek (or the Former
Affiliate, as applicable) to convey title to any property in accordance
with this Section 6.7(b) shall not be affected by whether or not Riverwood
examined title or gives any notice to Plum Creek with respect to title. If
Riverwood notifies Plum Creek of the existence of any objections to Plum
Creek's title other than the Permitted Exceptions, Plum Creek shall cause
such objections to be cured prior to Closing (as defined below) or shall
indemnify Riverwood against such items; PROVIDED, HOWEVER, that Plum
Creek's obligation to cure or indemnify hereunder shall be limited to the
removal of any and all mortgages, deeds to secure debt and similar monetary
Liens evidencing indebtedness of Plum Creek (or the Former Affiliate).
Riverwood, at its expense, may obtain title insurance in connection with
its purchase. The term "Permitted Exceptions" means (X) any and all
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Permitted Encumbrances (as defined in the Asset Purchase Agreement) in
existence immediately prior to the consummation of the closing of the
transactions provided for in the Asset Purchase Agreement on the date
hereof, (Y) liens and encumbrances incurred by Plum Creek (or the Former
Affiliate, as applicable) in the ordinary course of its business consistent
with Riverwood's current operation of the relevant property or with
standard industry practice in the Region and (Z) other liens and
encumbrances that in the aggregate do not materially impair the use or
value of the Notice Acreage, Subject Property or Specified Acreage, as
applicable.
(iii) Plum Creek shall make representations and warranties to Riverwood
at the time of Riverwood's delivery of the Notice of Election, Transfer
Event Notice of Election or Specified Notice of Election, as applicable,
and at the time of Closing, that are similar in scope and duration to those
given by Riverwood to Plum Creek pursuant to the Asset Purchase Agreement.
Plum Creek shall make assignments to Riverwood at the time of Closing
relating to the Notice Acreage, Subject Property or Specified Acreage, as
applicable, that are similar in scope and effect to those given by
Riverwood to Plum Creek pursuant to the Asset Purchase Agreement (including
assignments of related contracts and insurance proceeds).
(iv) The closing (the "Closing") of any transaction contemplated by
this Section 6.7 shall be held on or before (X) in the case of a Specified
Transfer, the latest of (1) the date specified for closing under the
Contract, if any, (2) the date specified for closing in the Specified
Notice of Transfer, or (3) the date that is one hundred twenty (120) days
after Riverwood delivers its Specified Notice of Election, and (Y) in the
case of any other Transfer or Transfer Event, the date that is one hundred
twenty (120) days after Riverwood delivers its Notice of Election or
Transfer Event Notice of Election, as applicable. The exact time, place,
and date of Closing will be selected by Riverwood at least ten (10) days
prior to Closing. At Closing, Plum Creek (or the Former Affiliate, as
applicable) shall execute and deliver to Riverwood one or more limited
warranty deeds in proper form for recording, an affidavit that Plum Creek
(or the Former Affiliate, as applicable) is not a foreign person as defined
in and in compliance
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with Section 1445 of the Internal Revenue Code of 1986, satisfactory
evidence of the power and authority of Plum Creek (or the Former Affiliate,
as applicable) to perform hereunder, and a settlement statement. Subject
only to the Permitted Exceptions, possession of the property shall be given
to Riverwood at Closing.
(c) Any purchase of property by Riverwood pursuant to any right granted
under this Article VI shall include all necessary or appropriate rights of
access to such property.
Section 6.8 ACCESS. From the Notice Date, the Transfer Event Notice
Date or Specified Notice Date (as applicable) until the later of (X) the date
that is thirty (30) days thereafter and (Y) if a Notice of Election, a Transfer
Event Notice of Election or Specified Notice of Election (as applicable) has
been timely given, the date of the Closing pursuant to Section 6.7, Plum Creek
and its affiliates shall allow the Buyer and its representatives reasonable
access at reasonable times to all the employees, books, records, files,
documents (including title commitments, title policies, and surveys), assets,
properties, contracts and agreements of Plum Creek or any of its affiliates
related to the Notice Acreage, the Subject Property or Specified Acreage (as
applicable), as Riverwood may reasonably request, and shall furnish Riverwood
and its representatives with such copies of such documents (at Riverwood's sole
cost and expense), and such other information, concerning the Notice Acreage,
the Subject Property or Specified Acreage (as applicable), as Riverwood may
reasonably request; PROVIDED that (X) such access will not materially interfere
with the operation of the Notice Acreage, the Subject Property or Specified
Acreage (as applicable), and (Y) Plum Creek shall not be obligated to obtain any
information requiring the initiation or conduct of sampling or analysis of
soils, groundwater or other environmental media at or from any of the Notice
Acreage, the Subject Property or Specified Acreage (as applicable).
Section 6.9 MEMORANDA OF RIGHTS; TRANSFEREES TO ASSUME THIS AGREEMENT.
(a) Plum Creek acknowledges and agrees that one or more memoranda of the rights
of Riverwood granted in this Agreement, including the rights of Riverwood
granted in this Article VI, in the customary forms used in the States of
Louisiana and Arkansas, or consisting of this Agreement in recordable form, or
both (and including a complete legal description of the Timberlands), may be
placed of record in all jurisdictions where any portion
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of the Timberlands is located, and Plum Creek shall execute and record each such
memorandum in all jurisdictions where any portion of the Timberlands is located
prior to recording any mortgage, deed of trust or other document of any kind.
(b) Plum Creek further agrees to cause any transferee of all or any
portion of the Timberlands or Plum Creek's interest therein, other than a
transferee in a Permitted 50,000 Acre Transfer, to assume the liabilities and
obligations of Plum Creek under this Agreement as they relate to the Timberlands
or interest therein so transferred and to execute and record evidence of such
assumption in the jurisdictions affected.
(c) This Agreement, Riverwood's rights hereunder (including under this
Article VI) and Plum Creek's liabilities and obligations hereunder (including
under this Article VI) shall be a covenant that runs with the land and shall
bind all successors and assigns to or of the property comprising all or any
portion of the Timberlands or any Replacement Property.
Section 6.10 RELEASES OF RIGHTS. (a) Riverwood shall provide a
written release of its First Offer Right and First Refusal Right under this
Article VI for any proposed Permitted 50,000 Acre Transfer within five (5)
business days of the date on which Riverwood receives a written request by Plum
Creek for such release, accompanied by a form of such release in form and
substance reasonably acceptable to Plum Creek and Riverwood and in proper form
for recording to Plum Creek, and by evidence reasonably satisfactory to
Riverwood that such Transfer complies with the provisions of Sections 6.2(a) and
8.2. Such release shall also release any memoranda of the rights of Riverwood
granted in this Agreement that shall have been recorded pursuant to Section 6.9
against the portion of the Initial 50,000 Acres that is the subject of such
Permitted 50,000 Acre Transfer.
(b) Riverwood shall provide a written release of its First Offer Right
and First Refusal Right under this Article VI for any Permitted Land Swap
Transfer within ten (10) business days of the date on which Riverwood receives a
written request by Plum Creek for such release, accompanied by a form of such
release in form and substance reasonably acceptable to Plum Creek and Riverwood
and in proper form for recording to Plum Creek, and by evidence reasonably
satisfactory to Riverwood that such Transfer complies with the provisions of
Sections 6.2(a) and 8.2 (including all agreements and instruments necessary or
appropriate to
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comply with and carry out the requirements of the proviso to Section 6.2(a)(iv),
in form and substance satisfactory to Riverwood in its reasonable judgment).
Such release shall also release any memoranda of the rights of Riverwood granted
in this Agreement that shall have been recorded pursuant to Section 6.9 against
the portion of the Timberlands that is the subject of such Permitted Land Swap
Transfer.
(c) All release requests pursuant to this Section 6.10 shall be made to
Riverwood in accordance with Section 8.4. All such releases shall be sent by
overnight mail to Plum Creek in accordance with Section 8.4. Plum Creek shall
pay any recording charges for recording of any such releases but shall not be
obligated to pay Riverwood any fees or other consideration for the releases.
ARTICLE VII
TERMINATION
Section 7.1 TERMINATION. This Agreement may be terminated in the
following manner:
(a) at any time by the mutual written agreement of the parties;
(b) at the expiration of the Term;
(c) by either party following a material breach by the defaulting party
of any of its monetary obligations hereunder, written notice of such breach
to the defaulting party, and the continued failure by the defaulting party
to cure such breach in all material respects for a period of thirty (30)
days, following which the nondefaulting party will have no further
obligations hereunder;
(d) by either party at any time following a material breach by the
defaulting party of any of its other obligations hereunder, written notice
of such breach to the defaulting party, and the continued failure by the
defaulting party to cure such breach in all material respects for a period
of ninety (90) days, provided that if the breach is not reasonably
susceptible of cure within ninety (90) days, such defaulting party shall
have such additional time as is necessary as long as the defaulting party
initiates
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cure within the ninety (90) day period and diligently pursues completion of
the cure, following which the nondefaulting party shall have no further
obligations hereunder.
Termination shall not relieve a defaulting party of any liability to the
nondefaulting party for breach of its obligations hereunder. The provisions of
Sections 4.2, 4.5, 4.6, 4.8, 5.3, 5.4 and 7.1 and Article VIII shall survive any
termination of this Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 DEFINITIONS. (a) The words "hereby," "herein," "hereof,"
"hereunder" and words of similar import refer to this Agreement as a whole and
not merely to the specific section, paragraph or clause in which such word
appears. The word "party" or "parties" means a party or the parties to this
Agreement, unless preceded by the word "third" or unless the context shall
otherwise expressly require. All references herein to Articles, Sections,
Annexes and Exhibits shall be deemed references to Articles and Sections of, and
Annexes and Exhibits to, this Agreement unless the context shall otherwise
require. The words "include," "includes" and "including" shall be deemed to be
followed by the phrase "without limitation," unless already expressly followed
by such phrase or the phrase "but not limited to." The definitions given for
terms in this Section 8.1 shall apply equally to both the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. Except as
otherwise expressly provided herein, all references to "Dollars," "dollars" or
"$" shall be deemed references to the lawful money of the United States of
America.
(b) To the extent this Agreement describes property located in
Louisiana, or rights therein, the terms "real property," "real estate" and words
of similar import shall include immovable property; the term "personal property"
and words of similar import shall include movable property; and the term
"easements" and words of similar import shall include servitudes.
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(c) Whenever used in this Agreement, the following terms shall have the
respective meanings given to them below, and the terms listed in Annex F shall
have the respective meanings given to them in the provisions hereof indicated in
Annex F.
"AFFILIATE" of a Person means any other Person directly, or indirectly
through one or more intermediaries, controlling, controlled by or under
common control with the first Person. For purposes hereof, Clayton,
Dubilier & Rice Fund V Limited Partnership, a Cayman Islands exempted
limited partnership, and Clayton, Dubilier & Rice, Inc., a Delaware
corporation, each shall be deemed to be an affiliate of Riverwood. As used
in this definition of the term "affiliate," and elsewhere herein with
respect to any affiliate of any Person, "control" (including the terms
"controlled by" and "under common control with") means the possession,
directly or indirectly, of the power to direct or cause the direction of
the management policies of a Person, whether through the ownership of
voting securities, by voting trust, contract or similar arrangement, as
trustee or executor, or otherwise.
"PERSON" means any individual, sole proprietorship, trust, estate,
executor, legal representative, unincorporated association, association,
institution, corporation, company, partnership, limited liability company,
limited liability partnership, joint venture, government (whether national,
Federal, state, county, city, municipal or otherwise, including, without
limitation, any instrumentality, division, agency, body or department
thereof) or other entity.
Section 8.2 ASSIGNMENT BY PLUM CREEK. Except as provided in this
Section 8.2, this Agreement may not be assigned by Plum Creek in whole or in
part. Notwithstanding the foregoing, at any time during the Term, Plum Creek
may assign this Agreement (A) to any lender or lenders as security for
obligations to such lender or lenders in respect of financing arrangements of
Plum Creek or any affiliate thereof with such lender or lenders, or (B) upon
prior written notice to Riverwood, to any Person (X) that is and at all times
remains an affiliate of Plum Creek controlled by Plum Creek, or that merges or
consolidates with or into Plum Creek, or that acquires all or substantially all
of the assets of Plum Creek, and (Y) that assumes all liabilities and
obligations of Plum Creek under
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this Agreement pursuant to an instrument in form and substance reasonably
satisfactory to Riverwood. Plum Creek shall cause any Person that merges or
consolidates with or into Plum Creek, or that acquires all or substantially all
of the assets of Plum Creek, so to assume all liabilities and obligations of
Plum Creek under this Agreement. No such assignment or assumption pursuant to
the two preceding sentences shall in any way affect the liabilities or
obligations of Plum Creek under this Agreement, and in the event of any such
assignment or assumption, Plum Creek shall remain fully liable for its
liabilities and obligations under this Agreement. Any purported assignment or
transfer of this Agreement in violation of this Section 8.2 shall be void and of
no force or effect.
Section 8.3 ASSIGNMENT BY RIVERWOOD. Except as provided in this
Section 8.3, this Agreement may not be assigned by Riverwood in whole or in
part. Notwithstanding the foregoing, at any time during the Term, Riverwood may
assign this Agreement (A) to any lender or lenders as security for obligations
to such lender or lenders in respect of financing arrangements of Riverwood or
any affiliate thereof with such lender or lenders, or (B) upon prior written
notice to Plum Creek, to any Person (X) that is and at all times remains an
affiliate of Riverwood controlled by Riverwood, or that merges or consolidates
with or into Riverwood, or that acquires all or substantially all of the assets
of Riverwood or the West Monroe Facility, and (Y) that assumes all liabilities
and obligations of Riverwood under this Agreement pursuant to an instrument in
form and substance reasonably satisfactory to Plum Creek. Riverwood shall cause
any Person that merges or consolidates with or into Riverwood, or that acquires
all or substantially all of the assets of Riverwood or the West Monroe Facility,
so to assume all liabilities and obligations of Riverwood under this Agreement.
No such assignment or assumption pursuant to the two preceding sentences shall
in any way affect the liabilities or obligations of Riverwood under this
Agreement, and in the event of any such assignment or assumption, Riverwood
shall remain fully liable for its liabilities and obligations under this
Agreement. Any purported assignment or transfer of this Agreement in violation
of this Section 8.3 shall be void and of no force or effect.
Section 8.4 NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing or by electronic means producing a
written record (facsimile machine, telex, telecopier or telegraph),
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personally-delivered or mailed by registered or certified United States mail,
return receipt requested, first-class postage prepaid, or by nationally-
recognized overnight courier, effective upon delivery, or one (1) day after
mailing if by overnight courier, or three (3) days after mailing if by United
States mail, addressed as follows:
If to Riverwood: Riverwood International Corporation
3350 Cumberland Circle, Suite 1400
Atlanta, Georgia 30339
Telecopy No. (770) 644-2923
Attention: Mr. Frank McCauley
with a copy to: Riverwood International Corporation
3350 Cumberland Circle, Suite 1400
Atlanta, Georgia 30339
Telecopy No. (770) 644-2929
Attention: Bill H. Chastain, Esq.
with a copy to: Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Telecopy No. (212) 909-6836
Attention: David Brittenham, Esq.
and prior to Closing provide a copy to:
Riverwood International Corporation
1000 Jonesboro Road
West Monroe, Louisiana 71292
Telecopy No. (318) 362-2272
Attention: Mr. C. Steven Clark
If to Plum Creek: Plum Creek Timber Company, L.P.
500-12th Avenue W.
P.O. Box 1990
Columbia Falls, Montana 59912
Telecopy No. (406) 892-6177
Attention: Charles Grenier/
Lindsay Crawford
with a copy to: Plum Creek Timber Company, L.P.
999 Third Avenue, Suite 2300
Seattle, Washington 98104-4096
Telecopy No. (206) 467-3799
Attention: James A. Kraft, Esq.
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with a copy to: Cairncross & Hempelmann, P.S.
701 Fifth Avenue, Suite 7000
Seattle, Washington 98104
Telecopy No. (206) 587-2308
Attention: Daniel C. Vaughn, Esq.
Any party may change its address or the addressee specified for notices by
designating a new address or addressee by notice in accordance with this Section
8.4.
Section 8.5 AMENDMENT; WAIVER. No amendment, modification or
discharge of Agreement, and no waiver hereunder, shall be valid or binding
unless set forth in writing and duly executed by the party against whom
enforcement of the amendment, modification, discharge or waiver is sought Any
such waiver shall constitute a waiver only with respect to the specific matter
described in such writing and shall in no way impair the rights of the party
granting such waiver in any other respect or at any other time. The failure of
either party to insist in any one or more instances upon strict performance of
any of the provisions of this Agreement or take advantage of any of its rights
hereunder shall not be construed as a waiver of any such provisions or the
relinquishment of any such rights, but the same shall continue and remain in
full force and effect.
Section 8.6 ENTIRE AGREEMENT. This instrument, together with the
Asset Purchase Agreement, constitutes the entire agreement between the parties
relating to the subject matter hereof and there are no agreements,
understandings, conditions, representations, or warranties not expressly set
forth herein.
Section 8.7 SOVEREIGN LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Louisiana, without
reference to the conflicts of laws or choice of law provisions thereof, except
to the extent that the laws of the State of Arkansas or the State of Texas may
govern the rights of the parties with respect to real estate located therein.
Notwithstanding the foregoing, any arbitration pursuant to Section 2.4, 6.4(d)
or 6.6 shall be governed by the Federal Arbitration Act, 9 U.S.C. Section 1 ET
SEQ. and any determination in any such arbitration shall be an arbitration award
enforceable in accordance with such Act.
Section 8.8 BINDING AGREEMENT. Subject to the limitations of Sections
8.2 and 8.3, this Agreement shall bind and inure to the benefit of the parties
and their
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respective successors and assigns, and to the benefit of each Person entitled to
indemnification under Section 4.6 or 4.8.
Section 8.9 HEADINGS. The section and other headings in this
Agreement are inserted solely as a matter of convenience and for reference, are
not a part of this Agreement, and shall not be deemed to affect the meaning or
interpretation of this Agreement.
Section 8.10 COUNTERPARTS; RECORDATION. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original,
and all of which together shall constitute one and the same instrument. For
purposes of recording this Agreement in the counties and parishes where the
Timberlands are located, (A) a complete copy of this Agreement and the
Description of the Owned Timberlands and the Description of the Timberland
Leases attached hereto will be recorded in Union Parish, Louisiana and (B)
counterparts of this Agreement recorded in other counties and parishes may
contain only Descriptions of the Owned Timberlands and Descriptions of the
Timberland Leases located in said county or parish; provided that the foregoing
shall not be construed to limit or otherwise affect the rights and obligations
of the parties under Section 6.9.
Section 8.11 ANNEXES AND EXHIBITS. All annexes and exhibits to this
Agreement referenced herein are incorporated herein by reference.
Section 8.12 SEVERABILITY, ETC. (a) Any term or provision of this
Agreement that is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability, without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or unenforceability
of any of the terms or provisions of this Agreement in any other jurisdiction.
If any term or provision of this Agreement is so broad as to be invalid or
unenforceable, the provision shall be interpreted to be only so broad as is
valid or enforceable. Subject to the foregoing provisions of this Section 8.12,
if any term or provision of this Agreement is invalid or unenforceable for any
reason, such circumstances shall not have the effect of rendering such term or
provision invalid or unenforceable in any other case or circumstance.
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(b) The parties acknowledge and agree that (I) the rights granted to
Riverwood under Article VI are granted in connection with a contract that gives
rise to obligations of continuous or periodic performance, and are granted only
for so long a period as required for the performance of those obligations, and
(II) the ten year limitation provided for in Article 2628 of the Civil Code of
the State of Louisiana shall not apply to the rights granted to Riverwood under
Article VI.
(c) If, under applicable law at any time, any right granted to
Riverwood under any provision of Article VI would (absent the provisions of this
Section 8.12(c)) be void or unenforceable (under the so-called "Rule against
Perpetuities" or any comparable rule of law, statute or constitutional
provision) by reason of the fact that, under the other terms and conditions of
this Agreement, such right will continue in effect beyond, or might be exercised
at a time after the expiration of, a fixed period of years in excess of 21 years
(or such other number of years as may be prescribed by such rule of law, statute
or constitutional provision) after the date hereof, then, notwithstanding any
other provision of this Agreement to the contrary, such right shall not continue
in effect beyond, and may not be exercised at any time after, the earlier of (X)
the date that is 21 years after the date of death of the last to survive of the
descendants of Joseph P. Kennedy who are living on the date hereof and (Y) such
earlier date after which such right cannot in any lawful manner whatsoever be
validly continued in effect or exercised. The foregoing provisions of this
Section 8.12(c) relating to rights of Riverwood are not intended to extend the
duration of any such right, but are intended to impose a limit on the duration
thereof, or time within which any such right may be exercised, to the extent
(and only to the extent) necessary to avoid such right being held void or
unenforceable.
36
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement 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:
-------------------------------------
Name:
Title:
RIVERWOOD INTERNATIONAL CORPORATION
By:
-------------------------------------
Name:
Title:
37
<PAGE>
STATE OF
---------------------
PARISH (COUNTY) OF
-----------
On this _____ day of ___________, 1996, before me, the undersigned
authority in and for the above stated jurisdiction, personally appeared
__________________, the __________________ of PLUM CREEK MANAGEMENT COMPANY,
L.P., a Delaware limited partnership, which is the general partner of PLUM CREEK
TIMBER COMPANY, L.P., a Delaware limited partnership, to me personally known,
who, after being by me duly sworn, declared that he executed the above and
foregoing instrument for and on behalf of PLUM CREEK MANAGEMENT COMPANY, L.P.,
as the general partner of PLUM CREEK TIMBER COMPANY, L.P., for the purposes,
intents and consideration therein contained, as the free act and deed of each
said limited partnership.
In Witness Whereof, I have hereunto signed this acknowledgment with the
said appearer and the two undersigned competent witnesses at
_______________________, on the date set forth above, after reading of the
whole.
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management
WITNESSES: Company, L.P.,
its General Partner
By:
- ----------------------- -----------------------
APPEARER
- ----------------------- -----------------------
Notary Public
Printed Name:
----------------
My Commission Expires:
-------
38
<PAGE>
STATE OF
---------------------
PARISH (COUNTY) OF
-----------
On this _____ day of ___________, 1996, before me, the undersigned
authority in and for the above stated jurisdiction, personally appeared
__________________, the __________________ of RIVERWOOD INTERNATIONAL
CORPORATION, a Delaware corporation, to me personally known, who, after being by
me duly sworn, declared that he executed the above and foregoing instrument for
and on behalf of RIVERWOOD INTERNATIONAL CORPORATION, for the purposes, intents
and consideration therein contained, as the free act and deed of said
corporation.
In Witness Whereof, I have hereunto signed this acknowledgment with the
said appearer and the two undersigned competent witnesses at
_______________________, on the date set forth above, after reading of the
whole.
WITNESSES: RIVERWOOD INTERNATIONAL
CORPORATION
By:
- ----------------------- -----------------------
APPEARER
- ----------------------- -----------------------
Notary Public
Printed Name:
----------------
My Commission Expires:
-------
39
<PAGE>
Omitted Annexes to the Wood Products Supply
Agreement, dated as of October 18, 1996,
between Plum Creek Timber Company, L.P. and
Riverwood International Corporation
-----------------------------------
Annex A Quantity
Annex B Pine and Hardwood Quality Specifications
Annex C Chip Quality Specifications
Annex D Chip Sampling and Testing Procedures
Annex E Pulpwood Deduct Codes and Penalties
Annex F Definitions
In lieu of filing these annexes to the Wood Products Supply Agreement,
the Registrant agrees to furnish supplementally a copy of any such omitted annex
to the Securities and Exchange Commission upon request.
<PAGE>
EXECUTION COPY
AMENDMENT No. 1, dated as of September 13, 1996 (this "Amendment"), to
the Credit Agreement, dated as of March 20, 1996 as hereby or hereafter amended,
supplemented or otherwise modified, the "Credit Agreement"), among Riverwood
International Corporation (as successor to RIC Holding, Inc.) (the "Borrower"),
the Foreign Subsidiary Borrowers (as therein defined), the several banks and
other financial institutions parties to the Credit Agreement (the "Lenders") and
The Chase Manhattan Bank (formerly known as Chemical Bank), as administrative
agent for the Lenders thereunder (in such capacity, the "Administrative Agent").
W I T N E S S E T H :
WHEREAS, the Borrower has requested that the Administrative Agent,
the Lenders and the Machinery Credit Agreement Lenders agree to amend subsection
7.14(a) of the Credit Agreement; and
WHEREAS, the Administrative Agent, the Lenders and the Machinery
Credit Agreement Lenders are willing to agree to the requested amendment but
only on the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties agree as follows:
A. DEFINITIONS. Unless otherwise defined herein, terms defined in
the Credit Agreement shall have their defined meanings when used herein.
B. AMENDMENT OF SUBSECTION 7.14(a) (PERMITTED TIMBER SECURITIZATION
TRANSACTION). Subsection 7.14(a) of the Credit Agreement is hereby amended by
deleting the phrase "the 180th day following the Effective Date" in the third
line thereof and substituting therefor "November 30, 1996".
C. CONDITIONS TO EFFECTIVENESS. The effectiveness of this Amendment
shall be subject to the satisfaction of the following conditions precedent:
<PAGE>
1. AMENDMENT. The Administrative Agent shall have received
counterparts of this Amendment executed by the Borrower and consented to by the
Combined Required Lenders.
2. REAFFIRMATION OF GUARANTEES. The Administrative Agent shall have
received a reaffirmation of the Holding Guarantee and the Subsidiaries Guarantee
executed by Holding and the Domestic Subsidiaries, respectively, forms of which
are attached hereto as Exhibit A and Exhibit B, respectively.
D. REPRESENTATIONS AND WARRANTIES.
In order to induce the Administrative Agent, the Lenders and the
Machinery Credit Agreement Lenders to enter into this Amendment, the Borrower
hereby represents and warrants to the Administrative Agent and such lenders as
follows:
The representations and warranties of the Borrower contained in
Section 5 of the Credit Agreement are true and correct in all material respects
on and as of the Amendment Effective Date (after giving effect hereto) as if
made on and as of the Amendment Effective Date (except where such
representations and warranties expressly relate to an earlier date in which case
such representations and warranties were true and correct in all material
respects as of such earlier date); PROVIDED that all references to the "Credit
Agreement" in such Section 5 shall be and are deemed to mean this Amendment as
well as the Credit Agreement as amended hereby.
E. MISCELLANEOUS.
1. EFFECTIVE DATE. As used in this Amendment the term "Amendment
Effective Date" shall mean the date on which all conditions precedent pursuant
to Section C hereof shall have been satisfied.
2. APPLICABLE LAW AND JURISDICTION. This Amendment has been executed
and delivered in New York, New York, and the rights and obligations of the
parties hereto shall be governed by, and shall be construed and enforced in
accordance with, the laws of the State of New York.
3. COUNTERPARTS. This Amendment may be executed by the parties
hereto in any number of separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.
2
<PAGE>
4. FEES AND EXPENSES. The Borrower agrees to pay and reimburse the
Administrative Agent for all of its reasonable out-of-pocket costs and expenses
in connection with the negotiation, preparation, execution and delivery of this
Amendment, including without limitation the reasonable fees and expenses of
Simpson Thacher & Bartlett.
5. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon and
inure to the benefit of the Borrower and its successors and assigns, and upon
the Administrative Agent, the Lenders and the Machinery Credit Agreement Lenders
and their successors and assigns. The execution and delivery of this Amendment
by any Lender shall be binding upon its successors and assigns.
6. CONTINUING EFFECT. Except as expressly amended and waived hereby,
the Credit Agreement as amended by this Amendment shall continue to be and shall
remain in full force and effect in accordance with its terms. This Amendment
shall not constitute an amendment or waiver of any provision of the Credit
Agreement not expressly referred to herein and shall not be construed as an
amendment, waiver or consent to any action on the part of the Borrowers that
would require an amendment, waiver or consent of the Administrative Agent, the
Lenders or the Machinery Credit Agreement Lenders except as expressly stated
herein. Any reference to the "Credit Agreement" in the Loan Documents or any
related documents shall be deemed to be a reference to the Credit Agreement as
amended and waived by this Amendment.
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed and delivered by their respective duly authorized officers as of the
day and year first above written.
RIVERWOOD INTERNATIONAL CORPORATION
By:
-----------------------------------
Title:
THE CHASE MANHATTAN BANK (formerly known
as Chemical Bank), as Administrative
Agent,Swing Line Lender, Issuing Lender
and Lender
By:
-----------------------------------
Title:
3
<PAGE>
CONSENT TO:
ACADIA PARTNERS, L.P.
By: Acadia FW Partners, L.P.
as General Partner of Acadia
Partners, L.P.
By: Acadia MGP, Inc. as
Managing General
Partner of the General
Partner
By:
---------------------------
Title:
AERIES FINANCE LTD.
By:
---------------------------
Title:
ARAB AMERICAN BANK
By:
---------------------------
Title:
BHF-BANK AKTIENGESELLSCHAFT
By:
---------------------------
Title:
By:
---------------------------
Title:
4
<PAGE>
BANCO ESPIRITO SANTO e COMERCIAL
de LIBOSA, NASSAU BRANCH
By:
---------------------------
Title:
By:
---------------------------
Title:
BANK OF AMERICA ILLINOIS
By:
---------------------------
Title:
BANK OF MONTREAL
By:
---------------------------
Title:
THE BANK OF NOVA SCOTIA
By:
---------------------------
Title:
BANK OF TOKYO-MITSUBISHI, LTD.
By:
---------------------------
Title:
BANKERS TRUST COMPANY
By:
---------------------------
Title:
5
<PAGE>
THE BANK OF NEW YORK
By:
---------------------------
Title:
BANQUE NATIONALE DE PARIS
By:
---------------------------
Title:
By:
---------------------------
Title:
BANQUE WORMS CAPITAL CORPORATION
By:
---------------------------
Title:
By:
---------------------------
Title:
BARCLAYS BANK PLC
By:
---------------------------
Title:
CAPTIVA FINANCE LTD.
By:
---------------------------
Title:
6
<PAGE>
CHL HIGH YIELD LOAN PORTFOLIO,
a unit of The Chase Manhattan Bank
By:
---------------------------
Title:
CIBC INC.
By:
---------------------------
Title:
CERES FINANCE, LTD.
By:
---------------------------
Title:
CHRISTIANIA BANK OG KREDITKASSE
By:
---------------------------
Title:
CITIBANK
By:
---------------------------
Title:
CoBANK, ACB
By:
---------------------------
Title:
7
<PAGE>
COMERICA BANK
By:
---------------------------
Title:
COMPAGNIE FINANCIERE DE CIC ET
DE L'UNION EUROPEENNE
By:
---------------------------
Title:
By:
---------------------------
Title:
CREDIT AGRICOLE
By:
---------------------------
Title:
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND",
NEW YORK BRANCH
By:
---------------------------
Title:
By:
---------------------------
Title:
CREDITANSTALT-BANKVERIEN
By:
---------------------------
Title:
By:
---------------------------
Title:
8
<PAGE>
CREDIT SUISSE
By:
---------------------------
Title:
By:
---------------------------
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By:
---------------------------
Title:
FIRSTRUST BANK
By:
---------------------------
Title:
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By:
---------------------------
Title:
THE FUJI BANK, LIMITED,
ATLANTA AGENCY
By:
---------------------------
Title:
GOLDMAN SACHS CREDIT PARTNERS
By:
---------------------------
Title:
9
<PAGE>
HIBERNIA NATIONAL BANK
By:
---------------------------
Title:
IMPERIAL BANK
By:
---------------------------
Title:
INDOSUEZ CAPITAL FUNDING II, LTD.
By:
---------------------------
Title:
ING CAPITAL CORPORATION
By:
---------------------------
Title:
ING CAPITAL ADVISORS, INC.
By:
---------------------------
Title:
KEYPORT LIFE INSURANCE COMPANY
By:
---------------------------
Title:
LEHMAN COMMERCIAL PAPER INC.
By:
---------------------------
Title:
10
<PAGE>
MS SENIOR FUNDING INC.
By:
---------------------------
Title:
MEDICAL LIABILITY MUTUAL INSURANCE
By:
---------------------------
Title:
MELLON BANK, N.A.
By:
---------------------------
Title:
MERRILL LYNCH PRIME RATE PORTFOLIO
By: Merrill Lynch Asset Management, L.P.,
as Investment Advisor
By:
---------------------------
Title:
MERRILL LYNCH SENIOR FLOATING RATE
FUND, INC.
By:
---------------------------
Title:
MERRILL LYNCH, PIERCE, FENNER
By:
---------------------------
Title:
MIDLAND BANK PLC, NEW YORK BRANCH
By:
---------------------------
Title:
11
<PAGE>
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By:
---------------------------
Title:
MORGAN GUARANTY TRUST CO.
By:
---------------------------
Title:
NATIONAL BANK OF KUWAIT
By:
---------------------------
Title:
NATIONAL CITY BANK
By:
---------------------------
Title:
NATIONSBANK, N.A.
By:
---------------------------
Title:
NEW YORK LIFE INSURANCE AND ANNUITY
CORPORATION
By:
---------------------------
Title:
12
<PAGE>
NEW YORK LIFE INSURANCE
COMPANY
By:
---------------------------
Title:
ORIX USA CORPORATION
By:
---------------------------
Title:
PNC BANK, NATIONAL ASSOCIATION
By:
---------------------------
Title:
PEARL STREET L.P.
By:
---------------------------
Title:
PILGRIM AMERICA PRIME RATE TRUST
By:
---------------------------
Title:
PRIME INCOME TRUST
By:
---------------------------
Title:
PROTECTIVE LIFE INSURANCE COMPANY
By:
---------------------------
Title:
13
<PAGE>
RESTRUCTURED OBLIGATIONS BACKED
BY SENIOR ASSETS B.V.
By:
---------------------------
Title:
SENIOR DEBT PORTFOLIO
By:
---------------------------
Title:
SENIOR HIGH INCOME PORTFOLIO, INC.
By:
---------------------------
Title:
SOCIETE GENERALE
By:
---------------------------
Title:
SOUTHERN PACIFIC THRIFT & LOAN
ASSOCIATION
By:
---------------------------
Title:
STRATA FUNDING LIMITED
By:
---------------------------
Title:
TORONTO DOMINION (TEXAS), INC.
By:
---------------------------
Title:
14
<PAGE>
USL CAPITAL CORPORATION
By:
---------------------------
Title:
WELLS FARGO BANK, N.A.
By:
---------------------------
Title:
THE YASUDA TRUST BANKING COMPANY,
LTD.
By:
---------------------------
Title:
15
<PAGE>
EXHIBIT A
REAFFIRMATION OF HOLDING GUARANTEE
The undersigned hereby (i) acknowledges receipt of a copy of, and
hereby consents to the matters set forth in, the foregoing Amendment and (ii)
ratifies and confirms in all respects its obligations under the Holding
Guarantee (as defined in such Amendment).
Dated as of: September __, 1996
RIVERWOOD HOLDING, INC.
By:
-----------------------------------
Title:
16
<PAGE>
EXHIBIT B
REAFFIRMATION OF SUBSIDIARIES GUARANTEE
The undersigned hereby (i) acknowledge receipt of a copy of, and
hereby consent to the matters set forth in, the foregoing Amendment and (ii)
ratify and confirm in all respects their obligations under the Subsidiaries
Guarantee (as defined in such Amendment).
Dated as of: September __, 1996
NEW RIVER TIMBER, INC.
By:
---------------------------
Title:
SLEVIN SOUTH COMPANY
By:
---------------------------
Title:
RIVERWOOD INTERNATIONAL
ENTERPRISES, INC.
By:
---------------------------
Title:
RIVERWOOD INTERNATIONAL MACHINERY, INC.
By:
---------------------------
Title:
PINE PIPELINE, INC.
By:
---------------------------
Title:
17
<PAGE>
RIVERWOOD SWEDISH INVESTMENTS, INC.
By:
---------------------------
Title:
18
<PAGE>
AMENDMENT No. 2 dated as of September 17, 1996 (this "AMENDMENT"), to
the Credit Agreement, dated as of March 20, 1996, as amended (the "CREDIT
AGREEMENT"), among Riverwood International Corporation (as successor to RIC
Holding, Inc.) (the "PARENT BORROWER"), the Foreign Subsidiary Borrowers (as
therein defined), the several banks and other financial institutions parties to
the Credit Agreement (the "LENDERS") and The Chase Manhattan Bank (formerly
known as Chemical Bank), as administrative agent for the Lenders thereunder (in
such capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H :
WHEREAS, the Parent Borrower has requested that the Administrative
Agent, the Lenders and the Machinery Credit Agreement Lenders agree to amend (a)
subsections 4.4(b), 4.4(f) and 8.6(j) of the Credit Agreement with respect to
the sale by Riverwood of certain assets, including 538,000 acres of owned or
leased timberlands, two sawmills, a plywood plant, a tree nursery and related
inventory, to Plum Creek Timber Company, L.P. ("PLUM CREEK") (such sales,
collectively, the "TIMBERLAND SALE") pursuant to the Asset Purchase Agreement,
dated as of August 6, 1996 (the "TIMBERLAND SALE AGREEMENT"), among Plum Creek,
the Parent Borrower and New River Timber, LLC, (b) certain reporting
requirements contained in subsections 7.1 and 7.2 of the Credit Agreement and
(c) the financial covenants in subsection 8.1 of the Credit Agreement and
certain negative covenants contained in the Credit Agreement; and
WHEREAS, the Administrative Agent, the Lenders and the Machinery
Credit Agreement Lenders are willing to agree to the requested amendments and
waiver on the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties agree as follows:
A. DEFINITIONS. Unless otherwise defined herein, terms defined in
the Credit Agreement shall have their defined meanings when used herein.
B. AMENDMENT OF SUBSECTION 1.1 (DEFINED TERMS). Subsection 1.1 of
the Credit Agreement is hereby amended by
<PAGE>
adding the following new definition, to appear in alphabetical order:
"'TIMBERLAND SALE': the sale by Riverwood and Timber LLC to Plum
Creek Timber Company, L.P., of all or part of their right, title and
interest in and to approximately 529,000 acres of owned timberlands,
approximately 9,000 acres of leased timberlands, two sawmill facilities, a
plywood facility, a tree nursery, certain related inventory (including
purchased timber and timber rights) and certain other related assets, or as
may otherwise be provided in the Asset Purchase Agreement, dated as of
August 6, 1996, among Plum Creek Timber Company, L.P., Riverwood and Timber
LLC."
C. AMENDMENT OF SUBSECTION 4.4(b) (OPTIONAL AND MANDATORY
PREPAYMENTS). Subsection 4.4(b) of the Credit Agreement is hereby amended by
inserting before "and" at the end of clause (y) thereof the following:
"(or, with respect to the Timberland Sale, $400,000,000)";
D. AMENDMENT OF SUBSECTION 4.4(c) (OPTIONAL AND MANDATORY
PREPAYMENTS). Subsection 4.4(c) of the Credit Agreement is hereby amended by
deleting in its entirety the last proviso contained therein.
E. AMENDMENT OF SUBSECTION 4.4(f) (OPTIONAL AND MANDATORY
PREPAYMENTS). Subsection 4.4(f) of the Credit Agreement is hereby amended by
inserting at the end of the second sentence thereof the following:
", PROVIDED, HOWEVER, that (x) any such payment (including such payment
resulting from the Timberland Sale) made within twelve months, or in the
case of the Timberland Sale eighteen months, prior to the date on which an
installment of the principal thereof is scheduled to be made may, at the
option of the Parent Borrower with respect to the Tranche A Term Loans and,
so long as no holder thereof declines its share of such prepayment after it
is permitted to do so as contemplated by the next succeeding sentence of
this subsection 4.4(f), the Tranche B Term Loans and the Tranche C Term
Loans, be applied to such installment and (y) in the event that any Lender
holding a Tranche B Term Loan or a Tranche C Term Loan declines to accept
its share of the prepayment related to the Timberland Sale, the Parent
Borrower may apply up to $75,000,000
2
<PAGE>
of such declined shares in the aggregate to such installments of the
Tranche A Term Loan as it may elect."
F. AMENDMENT OF SUBSECTION 7.1(c) (FINANCIAL STATEMENTS). Subsection
7.1(c) of the Credit Agreement is hereby amended by deleting it in its entirety
and substituting in place thereof the following:
"(c) as soon as available, but in any event not later than the fifth
Business Day after the 30th day following the end of each fiscal month of
each fiscal year of Holding (or the 45th day in the case of any such month
ending on the last day of a fiscal quarter), an unaudited consolidated
balance sheet for Holding and its consolidated Subsidiaries as at the end
of such month and related consolidated statement of operations, summary
statement of cash flows and a preliminary calculation of EBITDA (which
preliminary calculation shall reflect the Parent Borrower's reasonable best
estimate thereof but need not be computed in accordance with GAAP), setting
forth, with respect to any such month ending after March 31, 1997, in
comparative form the budgeted figures (as adjusted consistent with past
practice but computed only with respect to its consolidated statement of
operations) for the relevant period and the figures as at the end of, or
for, the corresponding fiscal month of the previous fiscal year."
G. AMENDMENT OF SUBSECTION 7.2(d) (CERTIFICATES; OTHER INFORMATION).
Subsection 7.2(d) of the Credit Agreement is hereby amended by deleting it in
its entirety and substituting in place thereof the following:
"(d) [intentionally omitted];"
H. AMENDMENT OF SUBSECTION 8.1(a) (MAINTENANCE OF CONSOLIDATED NET
WORTH). Subsection 8.1(a) of the Credit Agreement is hereby amended by deleting
in its entirety and substituting in place thereof the following:
"(a) MAINTENANCE OF CONSOLIDATED NET WORTH. Permit Consolidated Net
Worth of Holding at any time to be less than the sum of (i) $450,000,000
and (ii) 50% of the Consolidated Net Income (if positive) of Holding for
each completed fiscal year of Holding commencing on or after January 1,
1997."
3
<PAGE>
I. AMENDMENT OF SUBSECTION 8.1(b) (MAINTENANCE OF CONSOLIDATED
INTEREST EXPENSE RATIO). Subsection 8.1(b) of the Credit Agreement is hereby
amended by deleting it in its entirety and substituting in place thereof the
following:
"(b) MAINTENANCE OF CONSOLIDATED INTEREST EXPENSE RATIO. Permit, for
any period of four consecutive fiscal quarters of Holding (or, if less than
four full fiscal quarters shall have begun after and elapsed since the
Effective Date, such lesser number of elapsed full fiscal quarters) ending
during any test period set forth below, the Consolidated Interest Expense
Ratio at the last day of such consecutive fiscal quarter period, to be less
than the ratio set forth opposite such test period below:
Test Period Ratio
----------- -----
December 31, 1996 - December 30, 1997 0.9 to 1.00
December 31, 1997 - December 30, 1998 1.00 to 1.00
December 31, 1998 - December 30, 1999 1.35 to 1.00
December 31, 1999 - December 30, 2000 1.75 to 1.00
December 31, 2000 - December 30, 2001 1.85 to 1.00
December 31, 2001 - December 30, 2002 2.25 to 1.00
December 31, 2002 - December 30, 2003 2.50 to 1.00
Thereafter 3.00 to 1.00"
J. AMENDMENT OF SUBSECTION 8.1(c) (MAINTENANCE OF LEVERAGE RATIO).
Subsection 8.1(c) of the Credit Agreement is hereby amended by deleting it in
its entirety and substituting in place thereof the following:
"(c) MAINTENANCE OF MINIMUM EBITDA. Permit EBITDA, for any period of
four consecutive fiscal quarters of Holding ending during any test period
set forth below (except that EBITDA for the test period ending December 31,
1996 shall be computed based on the results of the last three consecutive
fiscal quarters ending on such date multiplied by 4/3), to be less than the
amount set forth opposite such test period below:
4
<PAGE>
Test Period Ratio
----------- -----
December 31, 1996 - December 30, 1997 $150,000,000
December 31, 1997 - December 30, 1998 $160,000,000
December 31, 1998 - December 30, 1999 $240,000,000
December 31, 1999 - December 30, 2000 $300,000,000
December 31, 2000 - December 30, 2001 $325,000,000
December 31, 2001 - December 30, 2002 $375,000,000
Thereafter $400,000,000"
K. AMENDMENT OF SUBSECTION 8.6(j) (LIMITATION ON SALE OF ASSETS).
Subsection 8.6(j) of the Credit Agreement is hereby amended by deleting it in
its entirety and substituting in place thereof the following:
"(j) any Asset Sale contemplated on Schedule 8.6(j), or any other
Asset Sales by RIC Holding or any of its Subsidiaries the Net Cash Proceeds
of which other Asset Sales do not exceed $50,000,000 in the aggregate after
the Effective Date, PROVIDED that (A) in the case of any such Asset Sale
other than the Timberland Sale, an amount equal to 100% of the Net Cash
Proceeds of such Asset Sale LESS the Reinvested Amount is applied in
accordance with subsection 4.4(b)(ii), or (B) in the case of the Timberland
Sale, $400,000,000 in proceeds of such Asset Sale is applied in accordance
with subsection 4.4(b)(ii)."
L. AMENDMENT OF SCHEDULE 8.6(j) (PERMITTED ASSET SALES). Schedule
8.6(j) of the Credit Agreement is hereby amended by inserting at the end of such
Schedule the following:
"6. The Timberland Sale."
M. AMENDMENT OF SUBSECTION 8.7(d) (LIMITATION ON DIVIDENDS).
Subsection 8.7(d) of the Credit Agreement is hereby amended by inserting at the
end thereof the following:
"PROVIDED, FURTHER, that the cash dividends paid in respect of a repurchase
from any single Management Investor shall be limited to $300,000 in any
period of twelve consecutive months and the cash dividends paid
5
<PAGE>
in respect of repurchases from Management Investors shall not exceed in the
aggregate during each fiscal year of Holding set forth below the amount set
forth opposite such fiscal year below:
Fiscal Year Amount
----------- ------
1996 $3,000,000
1997 $3,000,000
1998 $4,000,000
1999 and thereafter $5,000,000
N. AMENDMENT OF SUBSECTION 8.8 (LIMITATION ON CAPITAL EXPENDITURES).
Subsection 8.8 of the Credit Agreement is hereby amended by deleting it in its
entirety and substituting in place thereof the following:
"8.8 LIMITATION ON CAPITAL EXPENDITURES. Make or commit to make any
Capital Expenditures (excluding any expenses incurred in connection with
normal replacement and maintenance programs properly charged to current
operations); PROVIDED that RIC Holding and its Subsidiaries may make
Capital Expenditures in an amount not to exceed, for any test period set
forth below, the amount set forth opposite such test period below:
Test Period Ratio
----------- -----
Effective Date - December 31, 1996 $190,000,000
January 1, 1997 - December 31, 1997 $190,000,000
January 1, 1998 - December 31, 1998 $175,000,000
January 1, 1999 - December 31, 1999 $160,000,000
January 1, 2000 - December 31, 2000 $160,000,000
January 1, 2001 - December 31, 2001 $160,000,000
January 1, 2002 - December 31, 2002 $160,000,000
January 1, 2003 - December 31, 2003 $160,000,000
January 1, 2004 - December 31, 2004 $160,000,000"
; PROVIDED that (x) the Capital Expenditures permitted to be made during
any such test period shall be reduced
6
<PAGE>
by the aggregate amount spent for acquisitions made during such test period
pursuant to subsection 8.10(ii), (y) up to $50,000,000 of any Capital
Expenditures permitted to be made during any test period and not made
during such test period may be carried over and expended during the next
succeeding test period and (z) up to $25,000,000 of any Capital
Expenditures permitted to be made during any test period and not made
during such test period (to the extent not expended during the next
succeeding test period) may be carried over and expended during the second
succeeding test period."
O. AMENDMENT TO SUBSECTION 8.10 (LIMITATION ON CERTAIN ACQUISITIONS.
The portion of clause (ii) of subsection 8.10 of the Credit Agreement before the
proviso thereto is hereby amended by deleting it in its entirety and
substituting in place thereof the following:
"(ii) both (A) the aggregate consideration paid by RIC Holding and its
Subsidiaries in connection with all such acquisitions made pursuant to this
clause (ii) since the Effective Date does not exceed at any time an amount
equal to $30,000,000 and (B) at the time of any such acquisition RIC
Holding and its Subsidiaries would be permitted to make Capital
Expenditures in an amount equal to the consideration being paid for such
acquisition;"
P. CONDITIONS TO EFFECTIVENESS. (a) The effectiveness of this
Amendment (other than of Sections H, I and J hereof) shall be subject to the
satisfaction of the following conditions precedent:
1. AMENDMENT. The Administrative Agent shall have received
counterparts of this Amendment executed by the Borrower and consented to by
the requisite number of lenders to the Credit Agreement and the Machinery
Credit Agreement for each of the amendments provided for herein.
2. NO DEFAULT. No Default or Event of Default shall have occurred
and be continuing on the Amendment Effective Date (as hereinafter defined)
or after giving effect to this Amendment.
3. CERTIFICATE. The Administrative Agent shall have received a
certificate of the Borrower, dated the
7
<PAGE>
Amendment Effective Date, certifying the satisfaction of clause 2 above.
4. REAFFIRMATION OF GUARANTEES. The Administrative Agent shall have
received a reaffirmation of the Holding Guarantee and the Subsidiaries
Guarantee executed by Holding and the Domestic Subsidiaries, respectively,
forms of which are attached hereto as Exhibit A and Exhibit B,
respectively.
(b) The effectiveness of Sections H, I, and J hereof shall be subject
to the satisfaction of the conditions precedent specified in paragraph (a) of
this Section P and the condition precedent that the Timberland Sale shall have
been consummated in accordance with the Timberland Sale Agreement (including the
execution and delivery of the Wood Products Supply Agreement referred to
therein) in all material respects, other than with respect to matters to which
the Administrative Agent has expressly agreed.
Q. AGREEMENTS RELATED TO TIMBERLAND SALE. In connection with the
Timberland Sale, (a) the Parent Borrower hereby irrevocably agrees to make an
optional prepayment of the Revolving Credit Loans in an amount equal to the
excess of the Net Cash Proceeds of the Timberland Sale over the portion of the
Net Cash Proceeds thereof required to be used to prepay the Term Loans, on the
date of such prepayment of the Term Loans, and (b) the Parent Borrower hereby
elects to permit any Lender having a Tranche B Term Loan or Tranche C Term Loan
to decline receipt of its share of any such prepayment as contemplated by
subsection 4.4(f). This paragraph shall constitute notice to the Lenders by the
Parent Borrower and the Administrative Agent as required and contemplated by
subsections 4.4(a) and 4.4(f).
R. REPRESENTATIONS AND WARRANTIES. In order to induce the
Administrative Agent, the Lenders and the Machinery Credit Agreement Lenders to
enter into this Amendment, the Parent Borrower hereby represents and warrants to
the Administrative Agent and the Lenders that the representations and warranties
of the Borrowers contained in the Loan Documents are true and correct in all
material respects on and as of the Amendment Effective Date (after giving effect
hereto) as if made on and as of the Amendment Effective Date (except where such
representations and warranties expressly relate to an earlier date in which case
such representations and warranties were true and
8
<PAGE>
correct in all material respects as of such earlier date); PROVIDED that all
references to the "Credit Agreement" in any Loan Document shall be and are
deemed to mean the Credit Agreement as amended hereby.
S. MISCELLANEOUS.
1. EFFECTIVE DATE. As used in this Amendment the term "AMENDMENT
EFFECTIVE DATE" shall mean the date on which all conditions precedent set forth
in paragraph (a) of Section P hereof shall have been satisfied.
2. APPLICABLE LAW AND JURISDICTION. This Amendment has been executed
and delivered in New York, New York, and the rights and obligations of the
parties hereto shall be governed by, and shall be construed and enforced in
accordance with, the laws of the State of New York.
3. COUNTERPARTS. This Amendment may be executed by the parties
hereto in any number of separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.
4. FEES AND EXPENSES. The Parent Borrower agrees to pay and
reimburse the Administrative Agent for all of its reasonable out-of-pocket costs
and expenses in connection with the negotiation, preparation, execution and
delivery of this Amendment, including without limitation the reasonable fees and
expenses of Simpson Thacher & Bartlett.
5. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon and
inure to the benefit of the Parent Borrower and its successors and assigns, and
upon the Administrative Agent, the Lenders and the Machinery Credit Agreement
Lenders and their successors and assigns. The execution and delivery of this
Amendment by any Lender or Machinery Credit Agreement Lender prior to the
Amendment Effective Date shall be binding upon its successors and assigns and
shall be effective as to any loans or commitments assigned to it after such
execution and delivery.
6. CONTINUING EFFECT. Except as expressly amended hereby, the Credit
Agreement as amended by this Amendment shall continue to be and shall remain in
full force and effect in accordance with its terms. This Amendment shall not
constitute an amendment or waiver of any provision of the Credit Agreement not
expressly referred to herein and shall not be construed as an amendment, waiver
or consent to any action on the part of the Borrowers that would require an
amendment, waiver or
9
<PAGE>
consent of the Administrative Agent, the Lenders or the Machinery Credit
Agreement Lenders except as expressly stated herein. Any reference to the
"Credit Agreement" in the Loan Documents or any related documents shall be
deemed to be a reference to the Credit Agreement as amended by this Amendment.
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed and delivered by their respective duly authorized officers as of the
day and year first above written.
RIVERWOOD INTERNATIONAL CORPORATION
By:
-------------------------------------
Title:
THE CHASE MANHATTAN BANK (formerly known
as Chemical Bank), as Administrative
Agent,Swing Line Lender, Issuing
Lender and Lender
By:
-------------------------------------
Title:
CONSENTED TO:
ACADIA PARTNERS, L.P.
By: Acadia FW Partners, L.P.
as General Partner of Acadia
Partners, L.P.
By: Acadia MGP, Inc. as
Managing General
Partner of the General
Partner
By:
-------------------------
Title:
10
<PAGE>
AERIES FINANCE LTD.
By:
---------------------------
Title:
ARAB AMERICAN BANK
By:
---------------------------
Title:
BHF-BANK AKTIENGESELLSCHAFT
By:
---------------------------
Title:
By:
---------------------------
Title:
BANCO ESPIRITO SANTO e COMERCIAL
de LISBOA, NASSAU BRANCH
By:
---------------------------
Title:
By:
---------------------------
Title:
BANK OF AMERICA ILLINOIS
By:
---------------------------
Title:
11
<PAGE>
BANK OF MONTREAL
By:
---------------------------
Title:
THE BANK OF NOVA SCOTIA
By:
---------------------------
Title:
BANK OF TOKYO-MITSUBISHI, LTD.
By:
---------------------------
Title:
THE BANK OF NEW YORK
By:
---------------------------
Title:
BANQUE NATIONALE DE PARIS
By:
---------------------------
Title:
By:
---------------------------
Title:
12
<PAGE>
BANQUE WORMS CAPITAL CORPORATION
By:
---------------------------
Title:
By:
---------------------------
Title:
BZW DIVISION OF BARCLAYS BANK PLC
By:
---------------------------
Title:
CAPTIVA FINANCE LTD.
By:
---------------------------
Title:
CHL HIGH YIELD LOAN PORTFOLIO,
a unit of The Chase Manhattan Bank
By:
---------------------------
Title:
CIBC INC.
By:
---------------------------
Title:
CERES FINANCE, LTD.
By:
---------------------------
Title:
13
<PAGE>
CHRISTIANIA BANK OG KREDITKASSE
By:
---------------------------
Title:
CITIBANK
By:
---------------------------
Title:
CoBANK, ACB
By:
---------------------------
Title: CoBANK, ACB
COMERICA BANK
By:
---------------------------
Title:
COMPAGNIE FINANCIERE DE CIC ET
DE L'UNION EUROPEENNE
By:
---------------------------
Title:
By:
---------------------------
Title:
CREDIT AGRICOLE
By:
---------------------------
Title:
14
<PAGE>
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH
By:
---------------------------
Title:
By:
---------------------------
Title:
CREDITANSTALT-BANKVERIEN
By:
---------------------------
Title:
By:
---------------------------
Title:
CREDIT SUISSE
By:
---------------------------
Title:
By:
---------------------------
Title:
DLJ CAPITAL FUNDING, INC.
By:
---------------------------
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By:
---------------------------
Title:
15
<PAGE>
FIRSTRUST BANK
By:
---------------------------
Title:
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By:
---------------------------
Title:
THE FUJI BANK, LIMITED,
ATLANTA AGENCY
By:
---------------------------
Title:
GOLDMAN SACHS CREDIT PARTNERS
By:
---------------------------
Title:
HIBERNIA NATIONAL BANK
By:
---------------------------
Title:
IMPERIAL BANK
By:
---------------------------
Title:
INDOSUEZ CAPITAL FUNDING II, LTD.
By:
---------------------------
Title:
16
<PAGE>
ING CAPITAL CORPORATION
By:
---------------------------
Title:
ING CAPITAL ADVISORS, INC.
By:
---------------------------
Title:
KEYPORT LIFE INSURANCE COMPANY
By:
---------------------------
Title:
MEDICAL LIABILITY MUTUAL INSURANCE COMPANY
By:
---------------------------
Title:
MELLON BANK, N.A.
By:
---------------------------
Title:
MERRILL LYNCH PRIME RATE PORTFOLIO
By: Merrill Lynch Asset Management, L.P.,
as Investment Advisor
By:
---------------------------
Title:
17
<PAGE>
MERRILL LYNCH SENIOR FLOATING RATE
FUND, INC.
By:
---------------------------
Title:
MERRILL LYNCH, PIERCE, FENNER
By:
---------------------------
Title:
MIDLAND BANK PLC, NEW YORK BRANCH
By:
---------------------------
Title:
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By:
---------------------------
Title:
MORGAN GUARANTY TRUST CO.
By:
---------------------------
Title:
MORGAN STANLEY SENIOR FUNDING INC.
By:
---------------------------
Title:
18
<PAGE>
NATIONAL BANK OF KUWAIT
By:
---------------------------
Title:
NATIONAL CITY BANK
By:
---------------------------
Title:
NATIONSBANK, N.A.
By:
---------------------------
Title:
NEW YORK LIFE INSURANCE AND ANNUITY
CORPORATION
By:
---------------------------
Title:
NEW YORK LIFE INSURANCE
COMPANY
By:
---------------------------
Title:
ORIX USA CORPORATION
By:
---------------------------
Title:
PNC BANK, NATIONAL ASSOCIATION
By:
---------------------------
Title:
19
<PAGE>
PILGRIM AMERICA PRIME RATE TRUST
By:
---------------------------
Title:
PROTECTIVE LIFE INSURANCE COMPANY
By:
---------------------------
Title:
RESTRUCTURED OBLIGATIONS BACKED
BY SENIOR ASSETS B.V.
By:
---------------------------
Title:
SENIOR DEBT PORTFOLIO
By: Boston Management and Research,
as Investment Advisor
By:
---------------------------
Title:
SENIOR HIGH INCOME PORTFOLIO, INC.
By:
---------------------------
Title:
SOCIETE GENERALE
By:
---------------------------
Title:
20
<PAGE>
SOUTHERN PACIFIC THRIFT & LOAN
ASSOCIATION
By:
---------------------------
Title:
STRATA FUNDING LTD.
By:
---------------------------
Title:
TORONTO DOMINION (TEXAS), INC.
By:
---------------------------
Title:
WELLS FARGO BANK, N.A.
By:
---------------------------
Title:
THE YASUDA TRUST BANKING COMPANY,
LTD.
By:
---------------------------
Title:
21
<PAGE>
EXHIBIT A
REAFFIRMATION OF HOLDING GUARANTEE
The undersigned hereby (i) acknowledges receipt of a copy of, and
hereby consents to the matters set forth in, the foregoing Amendment and (ii)
ratifies and confirms in all respects its obligations under the Holding
Guarantee (as defined in such Amendment).
Dated as of: September __, 1996
RIVERWOOD HOLDING, INC.
By:
--------------------------------
Title:
22
<PAGE>
EXHIBIT B
REAFFIRMATION OF SUBSIDIARIES GUARANTEE
The undersigned hereby (i) acknowledge receipt of a copy of, and
hereby consent to the matters set forth in, the foregoing Amendment and (ii)
ratify and confirm in all respects their obligations under the Subsidiaries
Guarantee (as defined in such Amendment).
Dated as of: September __, 1996
NEW RIVER TIMBER, INC.
By:___________________________
Title:
SLEVIN SOUTH COMPANY
By:___________________________
Title:
RIVERWOOD INTERNATIONAL
ENTERPRISES, INC.
By:___________________________
Title:
RIVERWOOD INTERNATIONAL MACHINERY, INC.
By:___________________________
Title:
PINE PIPELINE, INC.
By:___________________________
Title:
23
<PAGE>
EXHIBIT B
RIVERWOOD SWEDISH INVESTMENTS, INC.
By:___________________________
Title:
24
<PAGE>
NEWS RELEASE
Investor Relations: Jim Caverlee
(770) 644-3023
Media Contact: Jonna Manes
(770) 644-3014
RIVERWOOD INTERNATIONAL COMPLETES U.S. TIMBERLANDS/WOOD PRODUCTS SALE
ATLANTA, Ga. (October 21, 1996) -- Riverwood International Corporation today
announced that it has completed the previously announced sale of its U.S.
Timberlands/Wood Products business unit to Plum Creek Timber Company, L.P.
(NYSE:PCL).
Proceeds of approximately $550 million were used to repay $400 million of
the outstanding balance under Riverwood's senior secured term loan facility.
The remainder of the proceeds were applied to its revolving credit facility,
bringing total availability under that facility to approximately $350 million.
Required amortization payments under the senior secured term loan facility have
been reduced to reflect the application of the proceeds from the sale of the
timber assets. Covenants under the company's credit agreements have been
adjusted to reflect the company's sale of the timber assets as well as its
financial results and current market and operating conditions. The increased
revolving credit availability and the more favorable debt amortization
schedule will provide additional liquidity for Riverwood's operations and
planned capital expenditures.
Assets sold included approximately 529,000 acres of owned timberlands and
approximately 9,000 acres of leased timberlands located principally in
Louisiana and Arkansas, a sawmill and a plywood plant located in Joyce,
Louisiana,a saw mill located in Huttig, Arkansas, and a seedling nursery in
Texas.
- (more) -
<PAGE>
-2-
Plum Creek and Riverwood have also entered into a 20-year supply agreement,
with a 10-year renewal option, under which Riverwood will purchase a majority
of the pine pulpwood and residual chip requirements and a portion of the
hardwood pulpwood requirements at market based prices for its West Monroe,
Louisiana papermill.
Riverwood International Corporation is a global paperboard, packaging and
packaging machinery company headquartered in Atlanta, Ga., with total assets of
approximately $2.7 billion.
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