MAXXAM GROUP HOLDINGS INC.
$130,000,000 12% Senior Secured Notes due 2003
FIRST SUPPLEMENTAL INDENTURE
Dated as of July 8, 1998
to
INDENTURE
Dated as of December 23, 1996
--------------------
U.S. Bank Trust National Association, Trustee
FIRST SUPPLEMENTAL INDENTURE, dated as of July 8, 1998, between
MAXXAM Group Holdings Inc., a Delaware corporation (the "Company"), and
U.S. Bank Trust National Association, a national banking association
(formerly known as First Bank National Association), as Trustee (the
"Trustee").
WHEREAS, the Company and First Bank National Association, as
trustee, executed an Indenture, dated as of December 23, 1996 (the
"Indenture"), in respect of $130,000,000 aggregate principal amount of 12%
Senior Secured Notes due 2003;
WHEREAS, the Indenture was also executed by MAXXAM Inc., a
Delaware corporation ("MAXXAM"), to confirm its agreements set forth in
Article 12 of the Indenture;
WHEREAS, for all purposes of this First Supplemental Indenture,
except as otherwise defined or unless the context otherwise requires, terms
used in capitalized form in this First Supplemental Indenture and defined
in the Indenture have the meanings specified in the Indenture;
WHEREAS, Section 9.02 of the Indenture permits the Company and
the Trustee, with the written consent of the Holders of at least a majority
of the aggregate principal amount of the Securities then outstanding, to
amend, supplement or otherwise modify the Indenture or the Securities as
hereinafter provided; and
WHEREAS, all conditions and requirements necessary to make this
First Supplemental Indenture a valid, binding and legal instrument in
accordance with its terms have been performed and fulfilled and the
execution and delivery hereof have been in all respects duly authorized.
NOW, THEREFORE, in consideration of the above premises, each
party agrees, for the benefit of the other and for the equal and ratable
benefit of the Holders of the Securities, as follows:
ARTICLE I
AMENDMENTS
The Indenture is hereby amended as follows:
1. The definition of the term "Asset Sale" in Section 1.01 of
the Indenture is hereby amended by adding the words "or New Timber Notes"
after the words "Timber Notes" in the second parenthetical of such
definition.
2. The definition of the term "Consolidated Cash Flow Coverage
Ratio" in Section 1.01 of the Indenture is hereby amended by adding the
words "or New Timber Notes" after the words "Timber Notes" in the second
parenthetical of such definition.
3. The definition of the term "Consolidated Interest Expense"
in Section 1.01 of the Indenture is hereby amended by adding the words "or
New Timber Notes" after the words "Timber Notes" in the last clause of such
definition and by adding the following sentence at the end of such
definition:
Notwithstanding the foregoing, if any New Timber Notes are
issued, for each fiscal quarter preceding the New Timber Notes
Issuance Date, Consolidated Interest Expense shall be reduced by
$10.0 million.
4. The definition of the term "Deed of Trust" in Section 1.01
of the Indenture is hereby amended by inserting the words ", prior to the
New Timber Notes Issuance Date," after the words "`Deed of Trust' means"
and by deleting the period at the end of such definition and substituting
the following therefor:
, and, from and after the New Timber Notes Issuance Date, any
deed of trust or other security document which grants a Lien on
assets of Scotia Pacific as security for the obligations of
Scotia Pacific under or in connection with any New Timber Notes,
any New Timber Note Indenture or any revolving credit agreement
or any other liquidity arrangement in connection with any New
Timber Notes, as any of the same may be amended, supplemented or
otherwise modified from time to time.
5. The definition of the term "EBITDA" in Section 1.01 of the
Indenture is hereby amended by adding the words "or New Timber Notes" after
the words "Timber Notes" in clause (A) of such definition.
6. The following three definitions are hereby inserted in
Section 1.01 of the Indenture in the appropriate alphabetical order:
"NEW TIMBER NOTES" means any secured notes in an aggregate
original principal amount not exceeding $900,000,000 issued by
Scotia Pacific during the period from July 1, 1998 through
September 30, 1998 (and any secured notes issued by Scotia
Pacific in exchange for such secured notes pursuant to one or
more exchange offers registered under the Securities Act), as any
such secured notes may be amended, supplemented or otherwise
modified from time to time, provided that any New Timber Notes
outstanding on the New Timber Notes Issuance Date (i) are
collateralized by timberlands comprising at least a majority
(measured by area) of the timberlands then owned by Pacific
Lumber and the other Restricted Subsidiaries of the Company, and
(ii) are initially rated "BBB" or higher by Standard & Poor's
Rating Services, a Division of The McGraw Hill Companies, Inc.
and "Baa2" or higher by Xxxxx'x Investor Service, Inc., or any
successor to any such corporation's business of rating
securities.
"NEW TIMBER NOTES ISSUANCE DATE" means the first date on which
any New Timber Notes shall be outstanding.
"NEW TIMBER NOTE INDENTURE" means, at any time, any indenture
pursuant to which any New Timber Notes outstanding at such time were
issued, as such indenture has been or may be amended, supplemented or
otherwise modified from time to time.
7. The definition of the term "Scotia Pacific" in Section 1.01
of the Indenture is hereby amended by deleting the word "corporation" after
the word "successor" and replacing it with the word "entity".
8. The definition of the term "Scotia Pacific Agreements" in
Section 1.01 of the Indenture is hereby amended by inserting the words "(i)
prior to the New Timber Notes Issuance Date," after the words "`Scotia
Pacific Agreements' means" and by deleting the period at the end of such
definition and substituting the following therefor:
and (ii) from and after the New Timber Notes Issuance Date, any
agreements between Scotia Pacific and Pacific Lumber (or among
Scotia Pacific, Pacific Lumber and Salmon Creek) in effect on the
date of issuance of any New Timber Notes as the same may be
amended after such date in accordance with the terms thereof,
including, without limitation, any master purchase agreement, any
services agreement, any additional services agreement, any
environmental indemnification agreement and any reciprocal rights
agreement entered into in connection with New Timber Notes.
9. The definition of the term "Unrestricted Subsidiary" in
Section 1.01 of the Indenture is hereby amended by adding the words "or New
Timber Notes" after the words "Timber Notes" in the parenthetical of the
third sentence of such definition.
10. Section 4.03(a) of the Indenture is hereby amended by
deleting the parenthetical "(other than Scotia Pacific so long as there are
any Timber Notes outstanding)" therein.
11. The first clause of Section 4.03(b) of the Indenture is
hereby amended by inserting the number "(x)," immediately preceding the
number "(xi)" in the first parenthetical of such subsection and by adding
the words "or New Timber Notes" after the words "Timber Notes" in the first
parenthetical of such subsection.
12. Section 4.03(b)(xi) of the Indenture is hereby amended by
inserting the words "or any New Timber Notes or any New Timber Note
Indenture" after the words "under the Timber Notes or the Timber Note
Indenture" and by deleting the word ", as" from the last clause after the
words "with the Timber Notes" and substituting therefor the words "or any
New Timber Notes, including Indebtedness under any revolving credit
agreement or any other liquidity arrangement in connection with any New
Timber Notes, as any of".
13. Section 4.03(c) of the Indenture is hereby amended by
deleting the parenthetical "(other than Scotia Pacific so long as there are
any Timber Notes outstanding)" therein.
14. Section 4.05(a) of the Indenture is hereby amended by
adding, in clause (i) thereof, the words "or other equity interests"
between the words "Redeemable Stock" and "of Scotia Pacific," "Redeemable
Stock" and "of any Restricted Subsidiary" and "outstanding Stock" and "of
Scotia Pacific", and by adding the following at the end of such subsection:
None of the foregoing provisions of this Section 4.05(a) shall be
deemed to have been violated by any merger of Scotia Pacific into
a limited liability company which, at the time of such merger, is
wholly owned by Pacific Lumber.
15. Section 4.06(b)(ix) of the Indenture is hereby amended by
(A) deleting the word "the" immediately prior to the words "Deed of Trust"
and substituting therefor the word "any", (B) inserting the words ", any
New Timber Note Indenture" following the words "Timber Note Indenture" and
(C) deleting the word ", as" in the last clause following the words "in
connection with the Timber Notes" and substituting therefor the words "or
any New Timber Notes, including any revolving credit agreement or any other
liquidity arrangement in connection with any New Timber Notes, as any of".
16. Section 4.10(xiii) of the Indenture is hereby amended by (A)
deleting the words "or the" after the words "the Timber Note Indenture" and
substituting therefor the words ", any New Timber Notes, any New Timber
Note Indenture or any", (B) inserting the words "or any New Timber Notes
(including in connection with any revolving credit agreement or any other
liquidity arrangement in connection with any New Timber Notes)" following
the words "with the Timber Notes" in the first instance in which such
phrase appears in such subsection and (C) inserting the words "or any New
Timber Notes" following the words "with the Timber Notes" in the second
instance in which such phrase appears in such subsection.
17. Section 4.11 of the Indenture is hereby amended by deleting
the word "the" after the words "the Timber Note Indenture," and
substituting therefor the words "any New Timber Note Indenture, any".
18. Section 5.01(iii) of the Indenture is hereby amended by
inserting the words "(A) a merger of the Company into a limited liability
company which, immediately prior to such merger, is a Wholly Owned
Restricted Subsidiary or (B)" following after the words "except in the case
of".
ARTICLE II
MISCELLANEOUS PROVISIONS
Section 2.1. Indenture. Except as amended hereby, the Indenture
and the Securities are in all respects ratified and confirmed and all their
terms shall remain in full force and effect.
Section 2.2. Governing Law. THE LAWS OF THE STATE OF NEW YORK
SHALL GOVERN THIS FIRST SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICA-
TION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY, EXCEPT
THAT THE LAWS OF THE STATE OF MINNESOTA SHALL GOVERN MATTERS CONCERNING THE
VALIDITY AND PERFECTION OF SECURITY INTERESTS OF THE TRUSTEE IN FAVOR OF
THE HOLDERS IN THE ACCOUNTS, WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 2.3. Successors. All agreements of the Company in this
First Supplemental Indenture shall bind its successors. All agreements of
the Trustee in this First Supplemental Indenture shall bind its successors.
Section 2.4. Multiple Counterparts. This First Supplemental
Indenture may be executed in any number of counterparts, each of which
shall be an original; but such counterparts shall together constitute but
one and the same instrument.
Section 2.5. Effectiveness and Operativeness. The provisions of
this First Supplemental Indenture shall become effective immediately upon
its execution and delivery by the Trustee in accordance with the provisions
of Article 9 of the Indenture; provided, however, that the amendments
provided for in Article I shall only become operative concurrently with the
consummation of a financing transaction by Scotia Pacific Company LLC.
Section 2.6. Termination. If the amendments provided for in
Article I have not become operative on or prior to September 30, 1998, such
amendments shall be deemed to have been rescinded and this First
Supplemental Indenture shall be of no force or effect.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, all as of the date first
written above.
Attest: MAXXAM GROUP HOLDINGS INC.
By: /S/ XXXX X. XXXXX By: /S/ XXXXXX X. XXXXX
Name: Xxxx X. Xxxxx Name: Xxxxxx X. Xxxxx
Title: Assistant Secretary Title: Assistant Treasurer
Attest: U.S. BANK TRUST NATIONAL
ASSOCIATION
By: /S/ XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx By: /S/ XXXXXXX X. XXXXXXXX
Title: Assistant Secretary Name: Xxxxxxx X. Xxxxxxxx
Title: Assistant Vice
President
MAXXAM Inc. hereby consents to the
execution and delivery of this
First Supplemental Indenture and
confirms its agreements set forth
Attest: in Article 12 of the Indenture
By: /S/ XXXX X. XXXXX By: /S/ XXXXXXX X. XXXXXX
Name: Xxxx X. Xxxxx Name: Xxxxxxx X. Xxxxxx
Title: Assistant Secretary Title: Secretary
