NEW ADDITIONAL SERVICES AGREEMENT
THIS NEW ADDITIONAL SERVICES AGREEMENT (this "Agreement)", dated
as of July 20, 1998, is entered into by and between Scotia Pacific Company
LLC, a Delaware limited liability company (the "Issuer" and, in its
capacity as Services Provider hereunder, the "Services Provider"), and The
Pacific Lumber Company, a Delaware corporation ("Pacific Lumber").
WITNESSETH:
The Issuer and the Trustee have entered into the Indenture,
pursuant to which the Issuer has issued the Timber Notes; and the Issuer,
the Collateral Agent and the Deed of Trust Trustee have entered into the
Deed of Trust, securing, among other things, the Issuer's obligations under
the Timber Notes and the Indenture;
The Issuer and Pacific Lumber are parties to an Additional
Services Agreement dated as of March 23, 1993, which is being terminated
effective as of the date hereof (the "Existing Additional Services
Agreement");
This Agreement is being entered into in connection with the
issuance and sale of the Timber Notes; and
The Issuer is capable of rendering the services described in
Schedule 1 hereto (the "Additional Services") and supplying the equipment,
personnel and expertise necessary to perform the Additional Services as
contemplated by this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements
contained herein and in the Operative Documents and other good and valuable
consideration, the sufficiency of which is hereby acknowledged, the Issuer
and Pacific Lumber hereby agree as follows:
I
DEFINITIONS
1.1 For all purposes of this Agreement, unless the context
otherwise requires, all defined terms shall have the meaning set forth in
Schedule A to the Indenture, which is incorporated by reference as if fully
set forth herein.
II
SERVICES
2.1 Services. Subject to the terms and provisions set forth in
this Agreement, the Services Provider shall provide to Pacific Lumber
(including any subsidiaries of Pacific Lumber) the Additional Services.
2.2 Personnel Matters. Without limiting the generality of
Section 2.1 of this Agreement, the Services Provider shall provide all
labor and professional and supervisory persons necessary to perform the
Additional Services which are not provided by Pacific Lumber; provided that
the Services Provider shall have the right to use independent contractors
or other outside specialists or other persons in performing the Additional
Services as it shall deem advisable in its reasonable judgment.
2.3 Independent Contractor Status. The Services Provider shall
perform the Additional Services as an independent contractor. The number
of employees, the selection and retention of such employees, the hours of
labor and the compensation for services to be paid to any and all such
employees of the Services Provider shall be determined by the Services
Provider. All employees, agents, contractors and subcontractors hired by
the Services Provider to perform services hereunder shall not be deemed to
be the employees, agents, contractors and subcontractors of Pacific Lumber,
and all salaries and compensation payable to them shall be the exclusive
responsibility of the Services Provider.
2.4 Necessary Information. Pacific Lumber shall furnish the
Services Provider with all information, programs, know-how, methods or
methodology within Pacific Lumber's control as may be necessary or
appropriate for the performance of the Additional Services by the Services
Provider.
III
COMPENSATION
3.1 Compensation for Services.
(a) As compensation for the Additional Services provided by
the Services Provider pursuant to this Agreement, Pacific Lumber shall
pay to the Services Provider by deposit to the Collection Account on each
Monthly Deposit Date immediately preceding each Note Payment Date during
the term of this Agreement a fee, in cash (the "Additional Services Fee"),
which, so long as Pacific Lumber is the Services Provider under the
Services Agreement, shall be in an amount equal to the Services Provider's
actual costs of providing the Additional Services for the six (6) full (or
portion thereof) calendar months immediately preceding each such Monthly
Deposit Date, as determined in accordance with generally accepted
accounting principles. The Services Provider shall notify Pacific Lumber
of its costs of providing the Additional Services for such six (6) month
period (or portion thereof) at least two Business Days prior to each such
Monthly Deposit Date. If Pacific Lumber is not the Services Provider under
the New Services Agreement, the Additional Services Fee shall be based upon
a market rate for such services in the relevant area, adjusted in each
subsequent year in the manner in which the Services Fee is adjusted
pursuant to Section 5.1(a) of the New Services Agreement.
(b) The parties hereto acknowledge and agree that the
Services Provider's right to be compensated pursuant to this Agreement
shall be limited to its right to receive the Additional Services Fee and
that the Services Provider shall not be entitled to any further payment
pursuant to this Agreement, whether by way of reimbursement of its expenses
in performing the Additional Services or otherwise. If this New Additional
Services Agreement is terminated and any accrued compensation through the
date of such termination shall remain unpaid, the Services Provider shall
be entitled to receive such accrued and unpaid compensation.
IV
MISCELLANEOUS
4.1 Term. This Agreement shall become effective upon the date
first noted above and shall continue in effect until all amounts payable
under the Timber Notes (including any Additional Timber Notes), the
Indenture and the Deed of Trust shall have been paid in full.
4.2 Termination. Pacific Lumber and the Services Provider
may, at any time, terminate this Agreement by mutual written consent.
4.3 Amendments.
(a) This Agreement may be amended by an agreement in
writing signed by the Services Provider and Pacific Lumber. No such
amendment shall add to the obligations of the Services Provider or require
the Services Provider to assume any obligations or liabilities other than
expressly set forth herein, unless Rating Agency Confirmation shall have
been obtained.
(b) Promptly following the execution of any amendment to
this Agreement, the Issuer will furnish to the Trustee and each Rating
Agency a true, correct and complete copy of such amendment.
4.4 Notices. All notices and other communications required or
permitted hereunder shall be in writing and, unless otherwise provided in
this Agreement, shall be deemed to have been duly given when delivered in
person or by mail or when dispatched by telegram or electronic facsimile
transfer (confirmed in writing by mail simultaneously dispatched) to the
addressee at the address specified below:
If to Pacific Lumber:
The Pacific Lumber Company
X.X. Xxx 00
Xxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attention: Vice President,
Finance and
Administration
If to the Services Provider:
Scotia Pacific Company LLC
X.X. Xxx 000
Xxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attention: Vice President,
Finance and
Administration
If to any Rating Agency:
Standard & Poor's, a division of
The McGraw Hill Companies
00 Xxxxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Fax: (000) 000-0000
Attention: Asset-Backed Surveillance
Group
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: ABS Monitoring Department
or such other address as either party may from time to time designate by
like notice.
4.5 Governing Law. This Agreement shall be governed by the
internal laws of the State of California without regard to principles of
conflicts of laws.
4.6 Counterparts. This Agreement may be executed in any number
of counterparts, each of which when so executed shall be deemed an original
but all of which together shall constitute one and the same instrument.
4.7 Entire Agreement. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof.
4.8 Headings. The section headings of this Agreement are only
for the purpose of reference and shall not affect the meaning hereof.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this New
Additional Services Agreement as of the date first above written.
SCOTIA PACIFIC COMPANY LLC
By: /S/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Vice President-Finance
and Administration
THE PACIFIC LUMBER COMPANY
By: /S/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: President
SCHEDULE 1
Additional Services
The Services Provider shall perform the following Additional Services.
1. Provide advice to and be available for consultation with
Pacific Lumber in respect of all matters relating to the preparation,
filing and prosecution of Timber Harvesting Plans, sustained yield plans,
habitat conservation plans, similar plans or permits by Pacific Lumber (or
any of its subsidiaries) in respect of any timber property and timber
harvesting rights owned by Pacific Lumber (or any of its subsidiaries).
2. File, jointly on behalf of Pacific Lumber and the Issuer,
all Timber Harvesting Plans in respect of any timber property owned by the
Issuer with respect to which Pacific Lumber (or any of its subsidiaries)
owns timber harvesting rights.
3. Provide advice to and be available for consultation with
Pacific Lumber (or any of its subsidiaries) in respect of all matters
relating to compliance with all federal, state and local laws, rules and
regulations, including laws relating to streams, waterways, wildlife
habitat and endangered species.
4. Provide supervisory and oversight services to Pacific Lumber
in connection with Pacific Lumber's measures to replant and otherwise
regenerate commercial timber stands in respect of any timber property owned
by Pacific Lumber and timber property with respect to which Pacific Lumber
(or any of its subsidiaries) has timber harvesting rights.
5. Update the Issuer's geographical information system with
information provided by Pacific Lumber relating to any timber property
owned by Pacific Lumber and timber property with respect to which Pacific
Lumber (or any of its subsidiaries) has timber harvesting rights. Provide
Pacific Lumber (or any of its subsidiaries) with access to the Issuer's
geographical information system and provide necessary personnel and
technical assistance to Pacific Lumber to enable Pacific Lumber to utilize
the Issuer's geographical information system in connection with Pacific
Lumber's (or any of its subsidiaries) operations. Provide Pacific Lumber,
upon the request of Pacific Lumber, with copies of all Data Processing
Information related to the Issuer's geographical information system.
6. Provide personnel and technical assistance to Pacific Lumber
(or any of its subsidiaries) to enable Pacific Lumber to manage the
harvesting of any timber owned by Pacific Lumber in a manner reasonably
calculated to produce growth, consistent with the production of the quality
and quantity of Pacific Lumber's current merchantable timber.
7. Provide advice to and be available for consultation with
Pacific Lumber (or any of its subsidiaries) in respect of federal, state
or local legislative matters affecting or relating to any timber property
and timber harvesting rights owned by Pacific Lumber and timber property
with respect to which Pacific Lumber has timber harvesting rights or the
operation, management or harvesting thereof.
8. Provide personnel and technical assistance to Pacific Lumber
(or any of its subsidiaries) to enable Pacific Lumber to monitor compliance
with each Timber Harvesting Plan, sustained yield plan, habitat
conservation plan, similar plan or permit and to obtain all certificates of
completion or similar certifications from the requisite Governmental
Authority.
9. Provide personnel and technical assistance to Pacific Lumber
(or any of its subsidiaries) to enable Pacific Lumber to prepare and file
any development or strategic plan required by any Governmental Authority to
be prepared in respect of any timber, timber property or timber harvesting
rights owned by Pacific Lumber.
10. Provide advice to and be available for consultation with
Pacific Lumber (or any of its subsidiaries) in respect of any updates,
upgrades, or improvements to, or replacement of, the Data Processing
Equipment.
11. Provide advice to and be available for consultation with
Pacific Lumber (or any of its subsidiaries) in respect of any governmental
or regulatory filings or reports required by Pacific Lumber.
12. Provide personnel and technical assistance to assist Pacific
Lumber's (or any of its subsidiaries) efforts to maintain in force and
effect or to obtain each permit, license, franchise, right of way, license
or easement necessary to the harvesting, cutting, severing, sale, marketing
or disposition of any timber, timber property or timber harvesting rights
owned by Pacific Lumber.
13. Provide such other services as may be necessary or
appropriate to carry out the services described in the preceding
paragraphs.
