ESCROW AGREEMENT dated as of March 1, 1999, among The Pacific Lumber
Company ("PL"), Salmon Creek Corporation ("Salmon Creek") and Citibank,
N.A. (the "Escrow Agent").
Salmon Creek is receiving (net of certain expenses to be paid pursuant to
the Headwaters Escrow Instructions among PL, Salmon Creek, Scotia Pacific
Company LLC ("ScoPac") and the United States of America) an aggregate of
approximately $299.5 million in cash (the "Cash") in connection with the
sale of certain property known as the "Headwaters Forest". PL will cause
Salmon Creek to deposit all but $15 million (representing the estimated
expenses (the "Expenses" which shall include, without limitation, the
stated amount of any letters of credit and the amount of any other security
posted within 90 days of the date hereof pursuant to any agreement executed
and delivered contemporaneously with the sale of the Headwaters Forest) of
PL and its subsidiaries in connection with the negotiation and consummation
of the sale of the Headwaters Forest and the other agreements executed and
delivered contemporaneously therewith) of the Cash in escrow for the
benefit of ScoPac to be held and disposed of as herein provided. It is the
intention of PL and Salmon Creek that the Escrowed Funds (as hereinafter
defined) be used, to the extent determined to be necessary by ScoPac after
the date hereof, to support the Timber Notes issued by ScoPac.
In consideration of the execution of the Agreement and the mutual covenants
herein contained, the parties agree as follows:
1. Deposit of Cash. Upon the execution and delivery of this
Agreement, Salmon Creek will deliver to the Escrow Agent, all
but $15 million of the Cash (such delivery shall be accomplished
by depositing such Cash into the account of Salmon Creek at the
Escrow Agent, such account a restricted account subject to this
Agreement) (the amount of the Cash deposited by Salmon Creek is
hereinafter referred to as the Escrowed Funds). The Escrow Agent
shall acknowledge receipt of the actual amount of the Escrowed
Funds deposited by Salmon Creek when such Escrowed Funds have
been received by the Escrow Agent. The Escrowed Funds shall be
deposited initially into an escrow account in the custody of the
Escrow Agent. Escrowed Funds received in immediately available
funds and received no later than 1:00 p.m. New York time on the
date of deposit shall be invested in the AIM Prime Portfolio
Private Class Fund, until such time as the Escrow Agent has
received written direction from ScoPac to liquidate such
investment or has been otherwise directed in writing by Salmon
Creek pursuant to Section 2. In the event that it shall be
determined by PL that the Expenses are less than $15 million, PL
shall cause Salmon Creek to make an additional deposit (the
"Additional Deposit") under this Escrow Agreement in an amount
equal to the amount by which $15 million exceeds the actual
amount of the Expenses. In the event that all or a portion of
that certain property known as the Grizzly Creek grove is sold
while this Agreement remains in effect, then PL shall make an
Additional Deposit hereunder equal to the net proceeds of such
sale. Any Additional Deposit shall become part of the Escrowed
Funds for all purposes of this Agreement. The Escrowed Funds
shall remain the property of Salmon Creek (or PL, in the case of
the Grizzly Creek deposit) unless and until disbursed pursuant to
Section 3 hereof.
2. Investment of Escrowed Funds.
(a) Investment by Investment Managers. From time to time, Salmon
Creek may direct that the investment of a portion of
the Escrowed Funds (up to a maximum amount equal to the
difference between the total amount of the Escrowed Funds minus
the Escrowed Funds invested directly by the Escrow Agent pursuant
to Section 2(b)), be made in Eligible Investments by
one of the investment management institutions listed on Schedule
A hereto (collectively, the "Investment Managers") by
delivery to the Escrow Agent of a certificate, in the form
attached hereto as Annex 1 (an "Investment Request"), signed
by Salmon Creek. Investment Requests must be received by the
Escrow Agent by 11:30 a.m., New York time. Any Investment
Request received by the Escrow Agent after 11:30 a.m., New York
time will be deemed to have been received on the next business
day. The Escrow Agent shall deliver the funds requested in the
Investment Request (which shall not be an amount in excess of the
purchase price of the securities to be acquired plus customary
fees and expenses) out of the Escrowed Funds to the Investment
Manager, against confirmed delivery by such Investment Manager
to, and receipt by the Escrow Agent of, certificates or
instruments evidencing ownership of the Eligible Investments
purchased by such Investment Manager, together with any other
required documents. Such securities, certificates, instruments
and other documents referred to in the foregoing sentence shall
be delivered to and shall be held by the Escrow Agent either
directly or through the Federal Reserve/Treasury Book-Entry
System for United States and federal agency securities, The
Depository Trust Company, a clearing agency registered with the
Securities and Exchange Commission, or through any other
clearing agency or similar depository. The Escrow Agent shall
have no duty to determine whether, or to verify that, any
investment made pursuant to an Investment Request constitutes an
Eligible Investment, except to verify the due execution
of the Investment Request.
(b) Investment by Escrow Agent. $10 million of Escrowed Funds
(plus income accrued thereon as from the date hereof)
shall at all times be held in the AIM Prime Portfolio Private
Class Fund unless (i) Salmon Creek shall instruct the Escrow
Agent in writing to invest all or a portion of such Escrowed
Funds in another institutional money market fund registered under
the Investment Company Act of 1940 or (ii) the Escrow Agent shall
have received a request for the disbursement thereof in the form
of Annex 2 attached hereto or in accordance with the provisions
of Section 5(k).
3. Disposition of Escrowed Funds. From time to time, ScoPac may
direct the Escrow Agent to disburse Escrowed Funds as directed by
it (whereupon such funds shall no longer constitute Escrowed
Funds) by delivery to the Escrow Agent of a certificate in the
form attached hereto as Annex 2 (a "Disbursement Request"). In
the event that, in order to comply with a Disbursement Request,
investments of Escrowed Funds made at the direction of Salmon
Creek must be liquidated, the Escrow Agent shall notify Salmon
Creek and request that Salmon Creek arrange for the liquidation
of the applicable investment, whereupon the Escrow Agent will
release the certificates or instruments evidencing ownership of
the investments to be sold against delivery to the Escrow Agent
by the Investment Manager of the sale proceeds of such liquidated
investments. If Salmon Creek shall fail to promptly comply with
the preceding sentence, the Escrow Agent shall sell the
investments itself in order to satisfy such Disbursement Request
and, to the extent it is unable to sell such investments and
additional funds are required, the Escrow Agent shall, subject to
Section 5(k) hereof, request instructions from a court of
competent jurisdiction and shall liquidate or deliver for
liquidation such investments in accordance with such instructions
once received. As soon as practicable after receipt by the
Escrow Agent of the proceeds of the sale of such investment, the
Escrow Agent shall deliver such Escrowed Funds as and to the
extent directed in such Disbursement Request.
4. Investments; Disposition of Income. "Eligible Investments" means
any one or more of the following, which, in each case, matures
(or is redeemable by the holder thereof without the incurrence of
a loss) not later than one year from the date on which funds are
invested therein: (a) direct obligations of, and obligations
fully guaranteed or insured by, the United States of America or
any agency or instrumentality of the United States of America,
the obligations of which are backed by the full faith and credit
of the United States of America; (b) demand deposits (including
but not limited to controlled disbursement accounts or other
similar accounts) and time deposits with, and certificates of
deposit and bankers' acceptances issued by, the Escrow Agent or
any bank or trust company organized under the laws of the United
States of America or any State thereof whose unsecured,
unguaranteed long-term senior debt obligations are rated "AA" by
Standard & Poor's ("S&P") and "Aa2" by Xxxxx'x Investors Service,
Inc. ("Moody's") or higher, or whose unsecured, unguaranteed
commercial paper obligations are rated "A-1" by S&P and/or "P-1"
by Moody's or higher; (c) repurchase agreements entered into with
entities whose unsecured, unguaranteed long-term debt obligations
are rated "AA" by S&P and "Aa2" by Moody's or higher, or whose
unsecured unguaranteed commercial paper obligations are rated
"A-1" by S&P and/or "P-1" by Moody's or higher, pursuant to a
written agreement with respect to any obligation described in
clause (a) above, (d) commercial paper (including both
noninterest-bearing discount obligations and interest-bearing
obligations payable on demand or on a specified date not later
than 270 days from the date of acquisition thereof) and having a
rating of "A-1" by S&P and/or "P-1" by Moody's or higher; (e)
taxable auction rate securities commonly known as "money market
notes" that at the time of purchase have been rated and the
ratings for which (i) for direct issues, must not be less than
"P-1" if rated by Moody's and not less than "A-1" if rated by
S&P, or (ii) for collateralized issues which follow the asset
coverage tests set forth in the Investment Company Act of 1940,
as amended, must have long-term ratings of at least "AAA" if
rated by S&P and "Aaa" if rated by Moody's; (f) direct
obligations or shares of any money market fund or other similar
investment company all of whose investments consist of
obligations described in the foregoing clauses of this definition
and that is rated "Aam" by S&P and "Aa" by Moody's or higher; (g)
any investments hereafter developed which are substantially
comparable to those described above or (h) any investments that
have been approved by a majority vote of the ScoPac Board of
Managers (including the affirmative vote of the two independent
managers). Any income received by the Escrow Agent from
investments of the Escrowed Funds (whether made by the Escrow
Agent or by Investment Managers) shall be added to the Escrowed
Funds, be deemed deposited in accordance with Section 1 hereof,
and be distributed as provided in this Agreement. The Escrow
Agent shall be held harmless and fully indemnified by PL and
Salmon Creek, in accordance with the provisions of Section 5(c)
hereof, against any claims arising from the action or inaction of
Salmon Creek, including, without limitation, Salmon Creek's
failure to arrange for the liquidation of any investment in
accordance with the provisions of Section 3 hereof.
5. Concerning the Escrow Agent. (a) The Escrow Agent shall not be
required to invest any funds held hereunder except as
directed in writing pursuant to Section 2 of this Escrow
Agreement. Uninvested funds held hereunder shall not earn or
accrue interest.
(b) This Escrow Agreement expressly sets forth all the duties of
the Escrow Agent with respect to any and all matters
pertinent hereto. No implied duties or obligations shall be read
into this agreement against the Escrow Agent. The
Escrow Agent shall not be bound by the provisions of any
agreement among the other parties hereto except this Escrow
Agreement. The Escrow Agent's duties are ministerial in nature.
The Escrow Agent shall not be required to expend or risk any of
its own funds or otherwise incur any financial or other liability
in the performance of any of its duties hereunder.
(c) The Escrow Agent shall not be liable for any action taken or
omitted or for any loss or injury resulting from its actions or
its performance or lack of performance of its duties hereunder,
except for its own gross negligence or willful misconduct, and
except with respect to claims based upon such gross negligence or
willful misconduct that are successfully asserted against the
Escrow Agent. The other parties hereto shall jointly and
severally indemnify and hold harmless the Escrow Agent (and any
successor Escrow Agent) from and against any and all losses,
liabilities, claims, actions, taxes, damages and expenses,
including reasonable attorneys fees and disbursements, arising
out of or in connection with this Escrow Agreement including the
legal costs and expenses of defending itself against any claim or
liability in connection with its performance hereunder. Without
limiting the foregoing, the Escrow Agent shall in no event be
liable in connection with its investment or reinvestment of any
cash held by it hereunder in good faith, in accordance with the
terms hereof, or as a result of any liquidation of any such
investment prior to its maturity, including, without limitation,
any liability for any delays (not resulting from its gross
negligence or willful misconduct) in the investment or
reinvestment of the Escrowed Funds, or any loss of interest
incident to any such delays or for the failure of the parties to
give the Escrow Agent any instructions to invest or reinvest the
Escrowed Funds or any earnings thereon.
(d) The Escrow Agent shall be entitled to conclusively rely upon
any order, judgment, certification, demand, notice, instrument or
other writing delivered to it hereunder without being required to
determine the authenticity or the correctness of any fact stated
therein or the propriety or validity or the service thereof. The
Escrow Agent may act in reliance upon any instrument or signature
believed by it to be genuine and may assume that any person
purporting to give notice or receipt or advice or make any
statement or execute any document in connection with the
provisions hereof has been duly authorized to do so.
(e) The Escrow Agent may consult with legal counsel of its own
choosing at the expense of the parties hereto with respect to any
matter relating to this Escrow Agreement and shall not be liable
for any action taken or omitted in accordance with any advice of
such counsel.
(f) The Escrow Agent does not have any interest in the Escrowed
Funds deposited hereunder but is serving as escrow agent
only and having only possession thereof. Any payments of income
from this Escrow Agreement shall be subject to withholding
regulations then in force with respect to United States taxes.
The parties hereto will provide the Escrow Agent with appropriate
W-9 forms for tax identification, number certification, or W-8
forms for nonresident alien certifications. This paragraph and
paragraph (c) shall survive notwithstanding any termination of
this Escrow Agreement or the resignation of the Escrow Agent.
(g) The Escrow Agent makes no representation as to the validity,
value, genuineness or the collectability of any security or other
documents or instrument held by or delivered to it.
(h) The Escrow Agent shall not be called upon to advise any party
as to the wisdom in selling or retaining or taking or refraining
from any action with respect to any securities or other property
deposited hereunder.
(i) The Escrow Agent (and any successor Escrow Agent) may at any
time resign as such by delivering the Escrowed Funds,
subject to subparagraph (1) below, to any successor Escrow Agent
jointly designated by the other parties hereto in writing, or to
any court of competent jurisdiction, whereupon the Escrow Agent
shall be discharged of and from any and all further obligations
arising in connection with this Escrow Agreement. The
resignation of the Escrow Agent will take effect on the earlier
of (i) the appointment of a successor (including a court of
competent jurisdiction) or (ii) the day which is 30 days after
the date of delivery of its written notice of resignation to the
other parties hereto. If at that time the Escrow Agent has not
received a designation of a successor Escrow Agent, the Escrow
Agent's sole responsibility after that time shall be to safekeep
the Escrowed Funds until receipt of a designation of successor
Escrow Agent or a joint written disposition instruction by the
other parties hereto or a final and nonappealable order of a
court of competent jurisdiction.
(j) The Escrow Agent shall have no responsibility for the
contents of any writing of any third party contemplated herein
as a means to resolve disputes and may rely without any liability
upon the contents thereof.
(k) In the event of any disagreement resulting in adverse claims
or demands being made in connection with the Escrowed Funds and
of which the Escrow Agent has been put on written notice by PL,
Salmon Creek or ScoPac, or in the event that the Escrow Agent in
good faith is in doubt as to what action it should take
hereunder, the Escrow Agent shall be entitled to retain the
Escrowed Funds until the Escrow Agent shall have received (i) a
final nonappealable order of a court of competent jurisdiction
directing delivery of the Escrowed Funds or (ii) a written
agreement executed by the other parties hereto and ScoPac
directing delivery of the Escrowed Funds, in which event the
Escrow Agent shall disburse the Escrowed Funds in accordance with
such order or agreement.
(l) The Escrow Agent shall be paid by Salmon Creek the fee to be
set forth on Schedule B hereto. All fees shall be paid in United
States currency and payable in the United States at the office of
the Escrow Agent. It is understood that the Escrow Agent's fees
may be adjusted from time to time to conform with its then
current guidelines.
(m) No printed or other matter in any language (including,
without limitation, prospectuses, notices, reports and
promotional material) which mentions the Escrow Agent's name or
the rights, powers or duties of the Escrow Agent shall be issued
by the other parties hereto or on such parties, behalf unless the
Escrow Agent shall first have given its specific written consent
thereto.
(n) The Escrow Agent shall not incur any liability for following
the instructions herein contained or expressly provided for, or
written instruction given by the parties hereto.
(o) The Escrow Agent shall not be required to institute legal
proceedings of any kind and shall not be required to initiate or
defend any legal proceedings which may be instituted against it
in respect of the subject matter of this Escrow Agreement. If
the Escrow Agent does elect to act it will do so only to the
extent that it is indemnified to its satisfaction against the
cost and expense of such defense or initiation.
(p) If at any time the Escrow Agent is served with any judicial
or administrative order, judgment, decree, writ or other
form of judicial or administrative process which in any way
affects the Escrowed Funds (including but not limited to orders
of attachment or garnishment or other forms of levies or
injunctions or stays relating to the transfer of the Escrowed
Funds), the Escrow Agent is authorized to comply therewith in any
manner it or legal counsel of its own choosing deems appropriate;
and if the Escrow Agent complies with any such judicial or
administrative order, judgment, decree, writ or other form of
judicial or administrative process, the Escrow Agent shall not be
liable to any of the parties hereto or to any other person or
entity even though such order, judgment, decree, writ or process
may be subsequently modified or vacated or otherwise determined
to have been without legal force or effect.
6. Notices. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall
be delivered by hand or telecopy (with hard copy to follow), or
sent, postage prepaid, by registered, certified or express mail,
or reputable overnight courier service and shall be deemed given
when so delivered by hand or telecopied, or if mailed, when
received, as follows:
(a) if to PL, to: The Pacific Lumber Company
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: President
with copies to: Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000 3903
Attention: Xxxxxx Xxxxxx
(b) if to Salmon Creek, to: Salmon Creek Corporation
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Treasury Dept.
(c) if to the Escrow Agent, to: Citibank, N.A.
Escrow Administration
000 Xxxx Xxxxxx,
0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx XxXxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
7. Termination. This Escrow Agreement shall automatically terminate
upon the complete distribution of the Escrowed Funds in
accordance with the terms hereof.
8. Successors. This Escrow Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of
the parties hereto, provided that this Agreement may not be
assigned by any party without the prior written consent of the
other parties, which consent will not be unreasonably withheld
except that the Escrow Agent may assign this Agreement to its
parent holding company or any subsidiary or affiliate upon
written notice to, but without obtaining the consent of, the
other parties hereto.
9. Governing Law. This Escrow Agreement 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 conflicts of
law principles of such State. Each of PL and Salmon Creek hereby
submits to the personal jurisdiction of, and each agrees that all
proceedings relating hereto shall be brought in, courts located
within The City and State of New York. Each of PL and Salmon
Creek hereby waives the right to trial by jury and to assert
counterclaims (other than mandatory counterclaims) in any such
proceedings. To the extent that in any jurisdiction any of PL or
Salmon Creek may be entitled to claim, for itself or its assets,
immunity from suit, execution, attachment (whether before or
after judgment) or other legal process, each hereby irrevocably
agrees not to claim, and hereby waives, such immunity. Each of
PL or Salmon Creek waives personal service of process and
consents to service of process by certified or registered mail,
return receipt requested, directed to it at the address last
specified for notices hereunder, and such service shall be deemed
completed ten (10) calendar days after the same is so mailed.
Any court order shall be accompanied by a legal opinion by
counsel for the presenting party satisfactory to the Escrow Agent
to the effect that said order is final and non-appealable. The
Escrow Agent shall act on such court order and legal opinion
without further question.
10. Entire Agreement. This Escrow Agreement contains the entire
agreement and understanding among the parties hereto with respect
to the subject matter hereof and supersedes all prior agreements
and understandings relating to such subject matter.
11. Amendments. Except as expressly provided in this Escrow
Agreement, no amendment, modification, termination, cancellation,
recision or supersession to this Escrow Agreement shall be
effective unless it shall be in writing and signed by each of the
parties hereto and ScoPac (as authorized by the consent or
majority vote of the ScoPac Board of Managers (including the
affirmative consent or vote of the two independent managers)).
The Escrow Agent shall execute any amendment to this Agreement
signed by each of the other parties hereto and ScoPac (as
authorized by the consent or majority vote of the ScoPac Board of
Managers (including the affirmative consent or vote of the two
independent managers)) that does not adversely affect the rights
or increase the duties of the Escrow Agent hereunder.
12. Counterparts. This Escrow Agreement may be executed in one or
more counterparts, all of which shall be considered one and the
same agreement, and shall become effective when one or more such
counterparts have been signed by each of the parties and
delivered to the other party.
13. Interpretation. The headings contained in this Escrow Agreement
are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Escrow Agreement.
14. Severability. If any provision of this Escrow Agreement or the
application of any such provision to any person or circumstance
shall be held invalid, illegal or unenforceable in any respect by
a court of competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision hereof.
15. Third Party Beneficiary. ScoPac shall be a third party
beneficiary of this Agreement. The Noteholders and the Trustee,
as such terms are defined in the Indenture between ScoPac and
State Street Bank and Trust Company, are not third party
beneficiaries of this Agreement and shall have no right or
entitlement to enforce this Agreement.
16. Representations. Each of PL and Salmon Creek hereby represents
and warrants (a) that this Escrow Agreement has been duly
authorized, executed and delivered on its behalf and constitutes
its legal, valid and binding obligation and (b) that the
execution, delivery and performance of this Escrow Agreement by
it does not and will not violate any applicable law or
regulation.
IN WITNESS WHEREOF, the parties hereto have caused this Escrow
Agreement to be duly executed and delivered as of the date first above
written.
THE PACIFIC LUMBER COMPANY
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Vice President
SALMON CREEK CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Vice President
CITIBANK, N.A., as Escrow Agent
By: /s/ Xxxxxx XxXxxxx
Name: Xxxxxx XxXxxxx
Title: Assistant Vice President
ANNEX 1
INVESTMENT REQUEST
Salmon Creek Corporation ("Salmon Creek"), hereby instructs Citibank,
N.A. (the "Escrow Agent") to deliver to [_______________] (the "Investment
Manager") the amount of [$______________] of Escrowed Funds (as such term
is defined in the Escrow Agreement dated as of March 1, 1999 by and among
Salmon Creek, The Pacific Lumber Company and the Escrow Agent (the "Escrow
Agreement")), against delivery by the Investment Manager to the Escrow
Agent of certificates or instruments evidencing ownership of the following
securities: ______________ (the "Purchased Securities") in the following
manner:
Trade Date: _______________________________________
Settlement Date:___________________________________
Par Amount: _______________________________________
Discount Amount: __________________________________
Payment to Broker: ________________________________
Cusip Number: _____________________________________
Broker Name and DTC Code: _________________________
Maturity Rate: ____________________________________
Rate: _____________________________________________
Total Purchase / Sell Price: ______________________
The Purchased Securities constitute Eligible Investments, as defined
in the Escrow Agreement. The amount requested hereby does not exceed the
purchase price paid by the Investment Manager for the Purchased Securities
plus customary fees and expenses.
IN WITNESS WHEREOF, each of the undersigned has executed this
Certificate as of the ____ day of ____________, ________.
SALMON CREEK CORPORATION
_________________________
Authorized Signatory
ANNEX 2
CERTIFICATE
The undersigned, the Secretary of Scotia Pacific Company LLC (the
"Company") does hereby certify that (capitalized terms used herein and not
defined shall have the meaning ascribed thereto in the Indenture dated as
of July 20, 1998 between the Company and State Street Bank and Trust
Company, as Trustee (the "Indenture")):
1. Attached hereto as Exhibit A are true, complete and correct
copies of resolutions duly adopted by the Board of Managers of
the Company (the "Resolutions"); such resolutions have not been
amended, modified or rescinded since this adoption and are in
full force and effect on the date hereof. Unless the Resolutions
authorize the payment of funds exclusively to or to the order of
the Trustee under the Indenture or the Collateral Agent under the
Indenture, at least one of the following clauses (a), (b) or (c)
is true and correct as of the date hereof: (a) the Resolutions
were adopted by a majority of the Board of Managers of the
Company (including the affirmative vote of the two independent
managers), (b) a Rating Agency Confirmation has been received
that gives effect to the release or disposition of funds directed
by the Resolutions, or (c) the Company has received an opinion
from a nationally recognized investment banking firm to the
effect that, based on the revised harvest schedule and the other
assumptions provided to such firm and set forth in a certificate
delivered to such firm, the funds that would be available to the
Company based on such harvest schedule, assumptions and otherwise
under the Indenture after giving effect to the release or
disposition of funds directed by the Resolutions would be
adequate to (i) pay Scheduled Amortization (as such term is
defined in the Indenture) on the Class A-1 and Class A-2 Timber
Notes and (ii) amortize the Class A-3 Timber Notes on a schedule
consistent with the original harvest schedule as of July 9, 1998
(assuming that the Class A-3 Timber Notes are not refinanced on
January 20, 2014).
2. Pursuant to the Resolutions, Citibank, N.A., as Escrow Agent, is
hereby directed to transfer Escrowed Funds, including interest
accrued thereon, held pursuant to the Escrow Agreement dated as
of March 1, 1999, among The Pacific Lumber Company, Salmon Creek
Corporation and the Escrow Agent as follows.
[
]
IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of the __ day of ____________, ________.
_______________________
Secretary
