PLUM CREEK TIMBER COMPANY, L.P.
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
As of January 15, 1999
To each of the Noteholders listed on Schedule I hereto
Re: Senior Note Agreements
Dear Noteholder:
Plum Creek Timber Company, L.P., a Delaware limited partnership (the
"Company"), has heretofore entered into Senior Note Agreements dated as of
August 1, 1994 (said Agreements as heretofore amended by the amendments
dated as of June 15, 1995, May 31, 1996, April 15, 1997 and January 15,
1999 being herein called the "Senior Note Agreements"), pursuant to which
the Company issued its 8.73% Senior Notes due August 1, 2009 in the
aggregate principal amount of $150,000,000, $150,000,000 of which remain
outstanding and are held by the institutions (individually a "Noteholder",
and collectively the "Noteholders") in the respective amounts shown on
Schedule I (the "Notes"). Terms used herein which are not otherwise
defined herein have the meanings ascribed to them in the Senior Note
Agreements, as amended by this Agreement.
The Company proposes to convert its outstanding ownership interests into
shares of stock of Plum Creek Timber Company, Inc., a Delaware corporation
(the "Corporation"), through the merger (the "Merger") of the Company with
and into Plum Creek Acquisition Partners, L.P., a Delaware limited
partnership (the "Operating Partnership"). Prior to the Merger,
Manufacturing will form Plum Creek Manufacturing Holding Company, Inc.
("Holding") and will contribute a nominal amount to Holding in exchange for
96 percent of Holding's outstanding common stock (which will be non-voting
stock), and management of the Company will purchase (the "Management Stock
Purchase") the remaining 4 percent of such outstanding common stock (which
will be voting stock). Manufacturing and Holding will then form four new
Subsidiaries of Holding (the "New Subsidiaries"). Immediately prior to the
Merger, Manufacturing will contribute an undivided 75 percent interest in
substantially all of its assets (allocated in varying proportions) to the
New Subsidiaries in exchange for 75 percent (valued on a fair market value
basis at the time of transfer) of the outstanding capital stock of each of
the New Subsidiaries (which stock will be non-voting preferred stock) and
will contribute an undivided 25 percent interest in substantially all of
its assets to Holding. Immediately thereafter, Holding will contribute
such undivided 25 percent interest (allocated in the same proportion as
Manufacturing's contribution of its undivided interest) to each of the New
Subsidiaries in exchange for 25 percent (valued on a fair market value
basis at the time of transfer) of the outstanding capital stock of each of
the New Subsidiaries (which stock will be voting common stock). The
formation of Holding and the New Subsidiaries and the issuance of the
capital stock by such entities as described above is herein referred to as
the "Facilities Subsidiary Reorganization." The contribution of assets of
Manufacturing to Holding and the New Subsidiaries as described above is
herein referred to as the "Manufacturing Asset Transfer". Immediately
prior to the Merger, the Company will form Plum Creek Southern Timber,
L.L.C. as a Restricted Subsidiary ("Southern Timber, L.L.C."), into which
the Company will contribute all of its timberlands located in Louisiana and
Arkansas in exchange for Southern Timber, L.L.C. assuming (on a joint and
several basis) a portion of the indebtedness of the Company. The formation
of Southern Timber, L.L.C., transfer of Louisiana and Arkansas timberlands
to Southern Timber, L.L.C. and assumption of a portion of the current
indebtedness of the Company and future indebtedness of the Operating
Partnership by Southern Timber, L.L.C. are herein referred to as the
"Southern Timber Transaction." Immediately following the Merger, Marketing
will become a subsidiary of Manufacturing, with 75 percent of the
outstanding capital stock (which will be non-voting preferred stock) owned
by Manufacturing and 25 percent of the outstanding capital stock (which
will be voting common stock) owned by Holding (the "Marketing Stock
Transfer"). In addition, it is proposed that Marketing will be released as
an obligor on the First Mortgage Notes and Marketing and the New
Subsidiaries will each assume and become obligated in respect of varying
percentages of the Debt represented by the Company's 11-1/8% Senior Notes
due June 8, 2007 and the First Mortgage Notes (the "Subsidiary Note
Assumption"). Marketing will form a wholly-owned subsidiary (the "Land
Subsidiary") which will purchase from the Operating Partnership, on a
seller financed basis, certain real property (the "Better Use Property") of
the Operating Partnership that the Operating Partnership has determined has
a higher value as recreational, residential, grazing or agricultural
property than for timber production (the "HBU Transaction"). The foregoing
transactions (herein collectively called the "Conversion Transaction") are
to be effected (i) as provided in the Agreement and Plan of Conversion (the
"Conversion Agreement"), dated as of June 5, 1998, and amended on July 17,
1998, among the Company, the Corporation and Plum Creek Management Company,
L.P. (the sole general partner of the Company), (ii) as described in the
Proxy Statement/Prospectus dated December 9, 1998 (the "Proxy
Statement/Prospectus"), and (iii) as described above. After the
effectiveness of the Conversion Transaction, the Corporation will elect to
be treated as a real estate investment trust for Federal income tax
purposes.
In connection with the Conversion Transaction the Company is requesting
certain amendments to, and consents and waivers under and in respect of,
the Senior Note Agreements and, subject to the terms and provisions hereof,
the undersigned Noteholders are agreeable thereto. Accordingly, the
Company agrees with you as follows:
1. Amendments to Senior Note Agreements.
(a) Clause (vi) of paragraph 5A of the Senior Note Agreements is hereby
amended to read in its entirety as follows:
(vi) to the extent not delivered pursuant to clause (i), (ii),
(iii), (iv) or (v), promptly upon transmission thereof, copies of all such
financial statements, proxy statements, notices and reports as the Company
or the Corporation sends to its public security holders and copies of all
registration statements (without exhibits) and all reports which either the
Company or the Corporation files with the Securities and Exchange
Commission and any governmental body or agency succeeding to the functions
of the Securities and Exchange Commission;
(b) Paragraph 5A of the Senior Note Agreements is hereby further amended
by adding the following paragraph at the end thereof:
In preparing the financial statements, computations and reports
provided for herein the Facilities Subsidiary and its Subsidiaries shall be
considered as consolidated or combined subsidiary entities of the Company
(and not accounted for on the equity method of accounting or as an
investment) notwithstanding that the Voting Stock thereof shall not be
owned by the Company, either directly or indirectly, and without regard to
whether they would be considered as such subsidiary entities under
generally accepted accounting principles.
(c) Paragraph 6B(1)(ix) of the Senior Note Agreements is hereby amended
to read in its entirety as follows:
(ix) from and after the time the Facilities Subsidiary becomes a
Restricted Subsidiary, Liens on (x) the accounts, rights to payment for
goods sold or services rendered that are evidenced by chattel paper or
instruments (and rights against persons who guarantee payment or collection
of the foregoing) of Manufacturing and its Subsidiaries which are
Restricted Subsidiaries, (y) the inventory of Manufacturing and its
Subsidiaries which are Restricted Subsidiaries and (z) the proceeds (as
defined in the Uniform Commercial Code in any applicable jurisdiction)
thereof, in each case securing the obligations of Manufacturing and such
Restricted Subsidiaries under the Facility Subsidiary's Revolving Credit
Facility (and any extension, renewal, refunding or refinancing thereof)
permitted by paragraph 6B(2)(x),
(d) Paragraph 6B(2)(i) of the Senior Note Agreements is hereby amended to
read in its entirety as follows:
(i) Funded Debt represented by the Notes, the Other Senior Notes
and the Assumption Agreements;
(e) Paragraph 6B(2)(vii) of the Senior Note Agreements is hereby amended
to read in its entirety as follows:
(vii) the Company's guarantee of Funded Debt (and related obligations
not constituting Debt) incurred by Manufacturing to finance the making of
capital improvements, expansions and additions to the property, plant and
equipment of Manufacturing and its Subsidiaries which are Restricted
Subsidiaries pursuant to the Facilities Subsidiary's Facility, provided
that such guarantee shall be subordinated to the Notes by subordination
provisions substantially the same as those contained in paragraph 7I of the
Mortgage Note Agreements, and provided, further, that the aggregate
outstanding principal amount of such Funded Debt shall at no time exceed
$20,000,000,
(f) Paragraph 6B(2)(x) of the Senior Note Agreements is hereby amended to
read in its entirety as follows:
(x) from and after the time the Facilities Subsidiary becomes a
Restricted Subsidiary, Debt incurred by Manufacturing or any of its
Subsidiaries which is a Restricted Subsidiary pursuant to the Facilities
Subsidiary's Revolving Credit Facility (and any extension, renewal,
refunding or refinancing thereof, including any refunding or refinancing in
an amount in excess of the principal amount then outstanding under the
Facilities Subsidiary's Revolving Credit Facility) which is unsecured or is
secured by Liens permitted by paragraph 6B(1)(ix), not in excess of an
aggregate principal amount of $20,000,000 at any time outstanding, provided
that neither Manufacturing nor any such Restricted Subsidiary shall suffer
to exist any Debt permitted by this clause (x) on any day after the date of
the Merger unless there shall have been a period of at least 45 consecutive
days within the 12 months immediately preceding such day during which
Manufacturing and all of such Restricted Subsidiaries shall have been free
from all Debt permitted by this clause (x),
(g) That portion of the first sentence of paragraph 6B(6) of the Senior
Note Agreements ending with the words "years preceding such year of
determination;" in clause (b) thereof is hereby amended (effectively
immediately notwithstanding the provisions of paragraph 3 hereof) in its
entirety as follows:
In any calendar year, harvest Timber (the term "harvest" and
correlative terms shall include, without duplication, both the harvesting
activities to be conducted by the Company and sales of Timber to other
Persons for current harvesting activities being conducted by such Persons)
on the Timberlands then owned directly or indirectly by the Company in
excess of the amount set forth for such calendar year in the following
table:
Calendar Year Maximum Cunits to be Harvested
------------- ------------------------------
1998 through 2000 2330 MCCF
2001 and each calendar year thereafter 2270 MCCF
plus, in each year, the amount, if any, by which (a) the sum of (x) the
cumulative amount set forth in the table above for the years preceding such
year of determination and (y) 2,342 MCCF, exceeds (b) the cumulative amount
actually harvested in such years preceding such year of determination;
(h) Xxxxxxxxx 0X of the Senior Note Agreements is amended in its entirety
to read as follows:
The Company covenants that it will not, and will not permit any
Subsidiary to, engage in any business other than Permitted Businesses. In
addition, the Company will not, and will not permit any Restricted
Subsidiary to, (i) sell, transfer or otherwise dispose of any of its
Timberlands or Timber (collectively, "Timber Properties") to Holding or any
Subsidiary of Holding (whether or not at the time they are Restricted
Subsidiaries, and herein collectively called the "Manufacturing Entities")
unless such transaction is a transaction permitted under clause (v) or
(vii) of paragraph 6B(5), or (ii) invest in or otherwise transfer to any of
the Manufacturing Entities the proceeds ("Timber Proceeds") of the sale or
disposition of any such Timber Properties (unless such proceeds are derived
from a transaction permitted under clause (v) or (vii) of paragraph 6B(5)).
Any Timber Proceeds being used to "purchase productive assets in the same
line of business" under the provisions of paragraph 6B(5)(viii) shall not
be used for any purpose except for the acquisition of Timber Properties to
be owned directly by the Company or a Restricted Subsidiary which is not
one of the Manufacturing Entities. Notwithstanding the foregoing, the
Company and its Restricted Subsidiaries may sell Timber to the
Manufacturing Entities in connection with, and in transactions which
constitute part of, harvesting activities conducted in accordance with the
requirements of paragraph 6B(6). All acquisitions of Timber Properties by
the Company and its Restricted Subsidiaries shall be made only by the
Company directly or indirectly through Restricted Subsidiaries which are
not Manufacturing Entities.
(i) Paragraph 7A (xiv) of the Senior Note Agreements is amended in its
entirety to read as follows:
(xiv) this Agreement, the Southern Timber Assumption Agreement or any
Future Southern Timber Assumption Agreement shall at any time, for any
reason, cease to be in full force and effect or shall be declared to be
null and void in whole or in any material part by the final judgment (which
is nonappealable or has not been stayed pending appeal or as to which all
rights to appeal have expired or been exhausted) of any court or other
governmental or regulatory authority having jurisdiction in respect
thereof, or the validity or the enforceability of this Agreement, the
Southern Timber Assumption Agreement or any Future Southern Timber
Assumption Agreement shall be contested by or on behalf of the Company, or
the Company shall renounce this Agreement, the Southern Timber Assumption
Agreement or any Future Southern Timber Assumption Agreement, or deny that
it is bound by the terms hereof or has any further liability hereunder; or
(j) The proviso following clause (b)(vii) of the definition of Available
Cash and the definitions of Designated Repurchases (and the references to
that term in paragraphs 6B(3) and 6B(9) of the Senior Note Agreements) and
Distribution Support Agreement in paragraph 10B of the Senior Note
Agreements are hereby deleted, clause (ii) of the definition of Capital
Transaction is hereby amended to read "(ii) sales of equity interests by
the Corporation the proceeds of which are contributed to the Company", and
the following definitions set forth in paragraph 10B of the Senior Note
Agreements are hereby amended in their entirety to read as follows:
"Facilities Subsidiary's Facility" shall mean any facility pursuant
to which Manufacturing may incur Debt for purposes of making capital
improvements, additions to, or expansions of, property, plant and equipment
of the Facilities Subsidiary or its Subsidiaries which are Restricted
Subsidiaries.
"Facilities Subsidiary" shall mean, collectively, Manufacturing,
Marketing, Holding, the New Subsidiaries and any other Subsidiary of
Manufacturing satisfying the requirements of clause (ii) of the definition
of Wholly-Owned Subsidiary contained herein.
"Facility's Subsidiary Revolving Credit Facility" shall mean any
facility pursuant to which Manufacturing or any of its Subsidiaries which
is a Restricted Subsidiary may obtain revolving credit, take-down credit,
the issuance of standby and payment letters of credit and back-up for the
issuance of commercial paper.
"General Partner" shall mean Plum Creek Timber I, L.L.C., a limited
liability company organized and existing under the laws of the State of
Delaware, and its successors and assigns as General Partner of the Company.
"Mortgage Note Agreements" shall mean the Note Agreements, dated as
of May 31, 1989 and amended as of January 1, 1991, April 22, 1993,
September 1, 1993, May 20, 1994, June 15, 1995, May 31, 1996, April 15,
1997 and January 15, 1999, providing for the issuance and sale of
$160,000,000 original aggregate principal amount of the 11-1/8% First
Mortgage Notes of the Facilities Subsidiary to the purchasers listed in the
schedule of purchasers attached thereto.
"Partnership Agreement" shall mean the Agreement of Limited
Partnership of the Company, as in effect at the time of and after giving
effect to the Merger, and as the same may, from time to time, be amended,
modified or supplemented in accordance with the terms thereof.
"Restricted Payment" shall mean (a) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock of or other ownership interests in the Company or any shares of
Voting Stock of a Facilities Operating Subsidiary not owned by the Company
(directly or indirectly), now or hereafter outstanding, except a dividend
payable solely in shares of stock of or ownership interests in the Company,
and (b) any redemption, retirement, purchase or other acquisition, direct
or indirect, of any shares of any class of stock of or other ownership
interests in the Company or any shares of Voting Stock of a Facilities
Operating Subsidiary not owned by the Company (directly or indirectly), now
or hereafter outstanding, or of any warrants, rights or options to acquire
any such shares or interests, except to the extent that the consideration
therefor consists of shares of stock of or other ownership interests in the
Company.
"Restricted Subsidiary" shall mean any Wholly-Owned Subsidiary other
than any Designated Immaterial Subsidiary.
"Wholly-Owned Subsidiary" shall mean any Subsidiary organized under
the laws of any state of the United States of America which conducts the
major portion of its business in the United States of America and (i) in
the case of any Subsidiary, all the stock and other ownership interests of
which are owned by the Company either directly or indirectly through
Wholly-Owned Subsidiaries (other than Manufacturing or one or any of its
Subsidiaries) and (ii) at such time as the Mortgage Notes shall have been
paid in full and retired, (x) Manufacturing provided that all the stock and
other ownership interests thereof are owned by the Company either directly
or indirectly through Wholly-Owned Subsidiaries (other than a Subsidiary of
Manufacturing), (y) Holding provided that (1) Holding shall engage in no
business except the ownership of its Subsidiaries, (2) all the outstanding
stock and ownership interests thereof (other than Voting Stock) shall be
owned by the Company either directly or indirectly through Manufacturing,
(3) at least 51% of the Voting Stock thereof (to the extent it is not so
owned by the Company or Manufacturing) shall be owned by the Management
Voting Group, (4) the Voting Stock of Holding shall not account for more
than 4% of the equity ownership of Holding (nor, through such ownership,
shall it account for more than 1% of the direct or indirect equity
ownership of any Subsidiary of Holding) and (5) no more than 35% of the
Voting Stock of Holding shall be owned by any one individual, and (z) any
other Subsidiary of Manufacturing, provided that all the outstanding stock
and ownership interests thereof (other than Voting Stock) shall be owned by
the Company (either directly or indirectly through Wholly-Owned
Subsidiaries of the type described in clause (i) above) and the Voting
Stock of which (to the extent it is not so owned by the Company) shall be
owned by Holding.
(k) The following new defined terms are hereby added to paragraph 10B of
the Senior Note Agreements in proper alphabetical order:
"Assumption Agreements" means those certain Assumption Agreements
executed as contemplated by (and in substantially the respective forms
designated as Exhibits A, B, C and D to) the Amendment to Senior Note
Agreements dated as of January 15, 1999, together with any assumption
agreements executed after January 15, 1999, and that are contemplated by
paragraph 2, clause (b)(ii) of the Southern Timber Assumption Agreement.
"Company" means Plum Creek Acquisition Partners, L.P., successor to
Plum Creek Timber Company, L.P. pursuant to the Merger, and its successors
and assigns as permitted by the provisions of paragraph 6B(5).
"Corporation" shall mean Plum Creek Timber Company, Inc., a Delaware
corporation, and its successors.
"Facilities Operating Subsidiaries" shall mean Marketing, Holding and
the New Subsidiaries and "Facilities Operating Subsidiary" shall mean any
one of them.
"Future Southern Timber Assumption Agreements" means assumption
agreements that are contemplated by paragraph 2, clause (b)(ii) of the
Southern Timber Assumption Agreement.
"Holding" shall mean Plum Creek Manufacturing Holding Company, Inc. a
Delaware corporation.
"Management Voting Group" shall mean, at any time, a group consisting
of four or more individuals who are then current officers of the Company
who legally and beneficially own in the aggregate not less than 51% of the
outstanding Voting Stock of Holding.
"Merger" shall mean the merger of Plum Creek Timber Company, L.P.
with and into Plum Creek Acquisition Partners, L.P. as provided in the
Agreement and Plan of Conversion, dated as of June 5, 1998, and amended on
July 17, 1998, among Plum Creek Timber Company, Inc., Plum Creek Timber
Company, L.P. and Plum Creek Management Company, L.P.
"New Subsidiaries" shall mean Plum Creek Northwest Lumber, Inc., a
Delaware corporation, Plum Creek Northwest Plywood, Inc., a Delaware
corporation, Plum Creek MDF, Inc., a Delaware corporation, and Plum Creek
Southern Lumber, Inc., a Delaware corporation, and "New Subsidiary" shall
mean any one of them.
"Other Senior Notes" means the following outstanding Senior Notes of
the Company (other than the "Notes" as defined herein):
(i) the 8.73% Senior Notes due August 1, 2009; (ii) the 11-1/8%
Senior Notes due June 8, 2007; (iii) the Senior Notes, Series A, B, C and
D, due November 13, 2006, 2008, 2011 and 2016, respectively; and (iv) the
Senior Notes, Series E, F and G, due February 12, 2007, 2009 and 2011,
respectively.
"Southern Timber Assumption Agreement" means that certain Assumption
Agreement executed as contemplated by (and in substantially the form of
Exhibit D to) the Amendment to Senior Note Agreements dated as of
January 15, 1999.
"Ton" shall mean 2,000 pounds of green saw logs and pulpwood. For
purposes of conversion of Timber in the Company's Maine timberlands, one
million Tons shall equal 355 MCCF.
2. Consent and Waiver.
The undersigned Noteholders hereby consent to the consummation of the
Manufacturing Asset Transfer, the Management Stock Purchase, the Marketing
Stock Transfer, the Facilities Subsidiary Reorganization, the HBU
Transaction, the Southern Timber Transaction (provided the assumption of
indebtedness portion of the Southern Timber Transaction is effected in the
manner specified in paragraph 3D hereof) and the Subsidiary Note Assumption
(provided the same is effected in the manner specified in paragraph 3D
hereof) and the formation of Holding and the New Subsidiaries and hereby
waive compliance by the Company with the provisions of paragraphs 6B(3)
(Loans, Advances, Investments and Contingent Liabilities), 6B(4) (Sale of
Stock and Debt of Subsidiaries), 6B(9) (Transactions with Affiliates), and
6D (Issuance of Stock by Subsidiaries) of the Senior Note Agreements solely
for purposes of effectuating (and only to the extent necessary to
effectuate) such transactions in the context of consummating the entire
Conversion Transaction as described in and as contemplated by the
Conversion Agreement and the Proxy Statement/Prospectus. The effectiveness
of this Agreement shall not, except as expressly provided herein, operate
as a waiver of any right, power or remedy of any of the holders of the
Notes under this Agreement or the Senior Note Agreements, nor constitute a
waiver of any other provision of this Agreement or the Senior Note
Agreements.
3. Conditions to Effectiveness.
Except as provided in paragraph 1(g) hereof, the amendments, consents and
waivers set forth in paragraphs 1 and 2 hereof shall become effective at
the "Effective Time" (as defined in the Conversion Agreement), subject to
the fulfillment to your satisfaction (or your waiver) of the following
conditions:
A. Opinion of Company's Counsel. You shall have received favorable
opinions from (i) Xxxxx X. Xxxxx, General Counsel of the Company, covering
such matters incident to the transactions described herein as you may
reasonably request, and (ii) Skadden, Arps, Slate, Xxxxxxx & Xxxx, special
tax counsel to the Company and the Corporation in connection with the
Conversion Transaction, substantially in the form referenced in Annex I
attached to the Proxy Statement/Prospectus and covering such other matters
incident to the transactions described herein as you may reasonably
request. Such opinions shall be addressed to you, shall be dated the date
of the Effective Time, and shall be otherwise satisfactory in substance and
form to you and to your special counsel.
B. Opinion of Noteholders' Counsel. You shall have received a favorable
opinion from Xxxxxxx Xxxx & Xxxxxxxxx, special counsel for the Noteholders,
covering such matters incident to the transactions described herein as you
may reasonably request, addressed to you, dated the date of the Effective
Time and otherwise satisfactory in substance and form to you.
C. Merger. The Merger shall have become effective in the manner
provided for in the Conversion Agreement prior to July 31, 1999 and the
Operating Partnership shall have executed and delivered an Assumption
Agreement in substantially the form of Exhibit A hereto in conformity with
the provisions of clause (iv) of paragraph 6B(5) of the Senior Note
Agreements (together with an Officers' Certificate specifying compliance
with the matters referred to in said clause (iv)). No provision of the
Conversion Agreement shall have been amended, nor compliance with any
provision thereof, or satisfaction of any condition to the Conversion
Transaction set forth therein, shall have been waived without your consent.
D. Assumption of Certain Notes. Marketing and each New Subsidiary shall
have executed and delivered a Subsidiary Assumption Agreement (a
"Subsidiary Assumption Agreement") substantially in the respective forms of
Exhibits B and C hereto thereby becoming an obligor in respect of a portion
of the First Mortgage Notes and the 11-1/8% Senior Notes due June 8, 2007
(all as more particularly described in Exhibits B and C). Southern Timber,
L.L.C. shall have executed and delivered the Southern Timber Assumption
Agreement substantially in the form of Exhibit D hereto thereby becoming an
obligor in respect of a portion of the indebtedness of the Company (all as
more particularly described in Exhibit D).
E. First Mortgage Notes. The Mortgage Note Agreements shall have been
amended by an amendment agreement in substantially the form of agreement
heretofore delivered to you by the Company (the "First Mortgage Note
Amendment") and all amendments, waivers and consents provided for therein
shall have become and remain effective.
F. Other Senior Notes. The Note Agreements relating to the Other Senior
Notes (as defined in paragraph 1(j) above) shall have been amended by
amendment agreements substantially in the form of this Agreement (with such
changes therein as to form but not of substance, as may be appropriate in
the circumstances) and all amendments, waivers and consents provided for in
such amendment agreements shall have become and remain effective.
G. Rating of Notes. The Notes shall have received an investment grade
rating from one of the four "nationally recognized statistical rating
organizations" and you shall have received evidence that such rating
remains in effect at the Effective Time.
H. Amendment Fee. The Company shall have paid to each Noteholder an
amendment fee in an amount equal to 0.02% of the principal amount of Notes
held by such Noteholder as specified on Schedule I hereto. Such fee shall
be payable within ten days of the date that the Company receives executed
counterparts of this Agreement from the Required Holders, whether or not
the Conversion Transaction is consummated.
I. Representations and Warranties; No Default. The representations and
warranties contained in paragraph 4 hereof shall be true in all material
respects on and as of the date of the Effective Time; there shall exist on
the date of the Effective Time no Event of Default or Default; and the
Company shall have delivered to you an Officers' Certificate, dated the
date of the Effective Time, to both such effects.
J. Proceedings. All proceedings taken or to be taken in connection with
the transactions contemplated hereby and all documents incident thereto
shall be satisfactory in substance and form to you, and you shall have
received all such counterpart originals or certified or other copies of
such documents as you may reasonably request.
K. Noteholders Consent. The Company shall have received executed
counterparts of this Agreement from the Required Holders.
4. Representations and Warranties.
The Company (the term "Company" as used herein including both Plum Creek
Timber Company, L.P. and the Operating Partnership as its successor in the
Merger) represents and warrants as follows:
A. Organization. The Company is a limited partnership duly organized,
validly existing and in good standing under the Delaware Revised Uniform
Limited Partnership Act and has all requisite partnership power and
authority to own and operate its properties, to conduct its business as now
conducted and as proposed to be conducted and to enter into and perform its
obligations under this Agreement and (after giving effect to the Merger)
the Assumption Agreement, the Senior Note Agreements, the Notes and the
Subsidiary Assumption Agreement to which it is a party. As of the
Effective Time the Facilities Operating Subsidiaries will each be a duly
organized and validly existing corporation and in good standing under the
laws of its jurisdiction of incorporation with all requisite corporate
power and authority to own and operate its properties, to conduct its
business as proposed to be conducted and to enter into and perform its
obligations under the Subsidiary Assumption Agreement to which it is a
party.
B. Qualification. Each of the Company and its Subsidiaries is duly
qualified or registered for transaction of business and in good standing as
a foreign limited partnership or corporation in each jurisdiction in which
the failure so to qualify or be registered would have a material adverse
effect on the business, property or assets, condition (financial or other),
operations or prospects of the Company and its Subsidiaries taken as a
whole, or on the ability of the Company to perform its obligations under
this Agreement or the Conversion Agreement, or (after giving effect to the
Merger) the Assumption Agreement, the Senior Note Agreements or the Notes,
or in the ability of the parties to the Subsidiary Assumption Agreements
and the Southern Timber Assumption Agreement to perform their obligations
thereunder.
C. Financial Statements. The Company has delivered to you a complete
and correct copy of the Proxy Statement/Prospectus (which for the purposes
of this paragraph 4 shall include only those documents incorporated by
reference as of the date hereof). The unaudited pro forma condensed
consolidated financial statements of the Corporation contained in the Proxy
Statement/Prospectus (the "Pro Forma Statements") comply as to form in all
material respects with the applicable accounting requirements of the
Securities Act of 1933, as amended, and the Securities Exchange Act of
1934, as amended, and the published rules and regulations thereunder and
the assumptions on which the pro forma adjustments reflected in the Pro
Forma Statements are based provide a reasonable basis for presenting the
significant effects of the transactions contemplated by the Pro Forma
Statements and such pro forma adjustments give appropriate effect to such
assumptions and are properly applied in the Pro Forma Statements. Inasmuch
as the Corporation at the Effective Time will be entirely a holding company
owning the Operating Partnership, with no substantial assets or liabilities
apart from the Operating Partnership, the Pro Forma Statements
substantially reflect the pro forma position of the Operating Partnership
and its Subsidiaries after giving effect to the Merger.
D. Subsidiaries. As of the Effective Time the Company will own,
directly or indirectly, all of the issued and outstanding equity interests
of all of its Subsidiaries except, in the case of Holding and its
Subsidiaries, the Voting Stock of Holdings owned by the Management Voting
Group, which interests will have been duly authorized and validly issued,
fully paid and non-assessable and be owned free and clear of any Liens
(except for Liens on the shares of Voting Stock of Holdings owned by the
Management Voting Group in favor of the Company as security for the unpaid
subscription price for such shares of Voting Stock). As of the Effective
Time there will be outstanding no warrants or options to acquire, or
instruments convertible into or exchangeable for, any equity interest in
any such Subsidiary.
E. Changes, etc. Since the date of the Proxy Statement/Prospectus (a)
the Company and its Subsidiaries have not incurred any material liabilities
or obligations, direct or contingent, or entered into any material
transactions not in the ordinary course of business except for those
transactions described in the Proxy Statement/Prospectus as constituting a
part of the Conversion Transaction, and (b) there has not been (i) any
material adverse change in the business, property or assets, condition
(financial or other), operations or prospects of the Company and its
Subsidiaries taken as a whole, or (ii) any Restricted Payment of any kind
declared, paid or made by the Company other than regular quarterly
declarations and payments of distributions to unit holders of the Company
in accordance with paragraph 6A of the Senior Note Agreements.
F. Actions Pending. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened against
the Company or any of its Subsidiaries, or any properties or rights of the
Company or any of its Subsidiaries, by or before any court, arbitrator or
administrative or governmental body which questions the validity of this
Agreement, the Conversion Agreement, the Assumption Agreement, the Southern
Timber Assumption Agreement or the Subsidiary Assumption Agreements or any
action taken or to be taken pursuant to any thereof, which would be
reasonably likely to result in any material adverse change in the business,
properties or assets, condition (financial or other), operations or
prospects of the Company and its Subsidiaries taken as a whole, or in the
ability of the Company to perform its obligations under this Agreement, the
Conversion Agreement or (after giving effect to the Merger) the Assumption
Agreement, the Senior Note Agreements or the Notes, or in the ability of
the parties to the Subsidiary Assumption Agreements or the Southern Timber
Assumption Agreement to perform their obligations thereunder.
G. Compliance with other Instruments, etc. Neither the Company nor any
Subsidiary of the Company is in violation of any term of the Partnership
Agreement or of any term of any agreement or instrument to which it is a
party or by which it or its properties is bound or any term of any
applicable law, ordinance, rule or regulation of any governmental authority
or any term of any applicable order, judgment or decree of any court,
arbitrator or governmental authority, the consequences of which violation
would be reasonably likely to have a material adverse effect on the
business, properties or assets, condition( financial or other), operations
or prospects of the Company and its Subsidiaries taken as a whole or on the
ability of the Company to perform its obligations under this Agreement, or
(after giving effect to the Merger) the Assumption Agreement, the Senior
Note Agreements or the Notes, or on the ability of the parties to the
Subsidiary Assumption Agreements or the Southern Timber Assumption
Agreement to perform their obligations thereunder. The execution, delivery
and performance by the Company of this Agreement and (after giving effect
to the Merger) the Assumption Agreement, the Senior Note Agreements and the
Notes, and the execution of the Subsidiary Assumption Agreements and the
Southern Timber Assumption Agreement by the parties thereto, will not in
any case result in any violation of or be in conflict with or constitute a
default under any such term or result in the creation of (or impose any
obligation on the Company or any such party to create) any Lien upon any of
the properties or assets of the Company or any of its Subsidiaries,
pursuant to any such term.
H. Governmental Consent. No consent, approval or authorization of, or
declaration or filing with, any governmental authority is required for the
valid execution, delivery and performance by the Company of this Agreement,
or, after giving effect to the Merger, the Assumption Agreement, the Senior
Note Agreements or the Notes, or by any party thereto of the Subsidiary
Assumption Agreements or the Southern Timber Assumption Agreement.
I. Franchises, Licenses, Agreements, etc. At the Effective Time the
Company and its Subsidiaries will each be in possession of and operating in
substantial compliance with all franchises, grants, authorizations,
approvals, licenses, permits, easements, consents, certificates and orders
required to own or lease its respective properties and to permit the
conduct of its business, except for those franchises, grants,
authorizations, approvals, licenses, permits, easements, consents,
certificates and orders (collectively, "Permitted Exceptions") (i) which
are routine in nature and are expected to be obtained or given in the
ordinary course of business after the Effective Time, (ii) which are
administrative in nature and which are expected to be obtained or given in
the ordinary course of business after the Effective Time, or (iii) the
failure of which to be obtained or given would not individually or in the
aggregate materially and adversely affect the business, property or assets,
condition (financial or other), operations or prospects of the Company and
its Subsidiaries taken as a whole, or impair the ability of the Company to
perform its obligations under this Agreement, the Conversion Agreement, the
Assumption Agreement, the Senior Note Agreements or the Notes, or in the
ability of the parties to the Subsidiary Assumption Agreements or the
Southern Timber Assumption Agreement to perform their respective
obligations thereunder.
J. Title to Properties. At the Effective Time the Company and its
Subsidiaries will have good title to their real properties (other than
properties which are leased) and good title to all of their other
properties and assets, subject to no Lien of any kind except Liens
permitted by paragraph 6B(1) of the Senior Note Agreements. All leases
necessary in any material respect for the conduct of the businesses of the
Company and its Subsidiaries, are valid and subsisting and are in full
force and effect.
K. Environmental Matters.
(a) At the Effective Time the Company and its Subsidiaries will have all
environmental permits or licenses necessary for the conduct of its business
as to be conducted as of the Effective Time and, as to any such permit or
license that has expired or is about to expire, or is needed for the
proposed conduct of its business, the Company or such Subsidiary has or
will have timely and properly applied for renewal or receipt of the same.
The Company and its Subsidiaries are currently operating in material
compliance with the limits set forth in such environmental permits or
licenses and any noncompliance with such permits or licenses will not
result in any material liability or penalty to the Company or any of its
Subsidiaries and neither the Company nor any Subsidiary has any knowledge
of any threatened or pending proceeding for the revocation, loss or
termination of any such environmental permits or licenses.
(b) All facilities located on the real property owned by the Company and
its Subsidiaries at the Effective Time after giving effect to the
Conversion Transaction which are subject to regulation by the Federal
Resource Conservation and Recovery Act, as in effect on the date hereof,
are and have been operated by the Company and its Subsidiaries in material
compliance with such Act and neither the Company nor any of its
Subsidiaries, has received or, to the knowledge of the Company, been
threatened with, a notice of violation regarding such facilities which
reasonably can be expected to have a material adverse effect on the
business, properties or assets, condition (financial or other), operations
or prospects of the Company and its Subsidiaries taken as a whole.
(c) With respect to the real property to be owned by the Company and its
Subsidiaries as of the Effective Time, there has not occurred to the best
knowledge of the Company (i) any Release of any Hazardous Substance in a
Reportable Quantity, (ii) any discharge of any substance into ground,
surface, or navigable waters for which a notice of violation has been
received or threatened under any federal, state or local laws, rules or
regulations concerning water pollution, or (iii) any assertion of any Lien
pursuant to federal, state or local environmental law resulting from any
use, spill, discharge or clean-up of any hazardous or toxic substance or
waste, which occurrence can reasonably be expected to have a material
adverse effect on the business, properties or assets, condition (financial
or other), operations or prospects of the Company and its Subsidiaries
taken as a whole. As used in this paragraph, the terms "Release",
"Hazardous Substance", and "Reportable Quantity" shall have the meanings
assigned such terms under the Comprehensive Environmental Response
Compensation and Liability Act, as amended (CERCLA).
L. Status under Certain Statutes. Neither the Company nor any of its
Subsidiaries is subject to regulation under the Investment Company Act of
1940, the Public Utility Holding Company Act of 1935, the Transportation
Acts or the Federal Power Act, in each case as amended.
M. Year 2000. With respect to the Company and its Subsidiaries (after
giving effect to the Conversion Transaction), (a) a review and assessment
has been initiated of all areas within the Company's and its Subsidiaries'
business and operations (including those affected by suppliers, vendors and
customers) that could be adversely affected by the "Year 2000 Problem"
(that is, the risk that computer applications used by the Company or any of
its Subsidiaries (or suppliers, vendors and customers) may be unable to
recognize and properly perform date-sensitive functions involving certain
dates prior to and any date after December 31, 1999), (b) a plan and
timetable has been developed for addressing the Year 2000 Problem on a
timely basis, and (c) to date, that plan has been implemented in accordance
with that timetable. Any reprogramming required to avoid a Year 2000
Problem will be completed by June 30, 1999, except where failure to do so,
individually or in the aggregate, could not reasonably be expected to
result in a material adverse effect on the business, properties or assets,
condition (financial or other), operations or prospects of the Company and
its Subsidiaries taken as a whole. The cost to the Company and its
Subsidiaries of such reprogramming and testing and of the reasonably
foreseeable consequences of the Year 2000 Problem to the Company and its
Subsidiaries (including reprogramming errors and the failure of others'
systems or equipment) will not result in a Default or a material adverse
effect on the business, properties or assets, condition (financial or
other), operations or prospects of the Company and its Subsidiaries taken
as a whole. Except for such reprogramming referred to in the preceding
sentence as may be necessary, the computer and management information
systems of the Company and its Subsidiaries are and, with ordinary course
upgrading and maintenance, will continue through the final maturity date of
the Notes to be sufficient to permit the Company and its Subsidiaries to
conduct their respective businesses without a reasonable likelihood of
resulting in a material adverse effect on the business, property or assets,
condition (financial or other) or results of operations or prospects of the
Company and its Subsidiaries taken as a whole.
N. Incorporated Representations and Warranties. All of the
representations and warranties made in paragraph 4 of the First Mortgage
Note Amendment (as defined in paragraph 3E above) are true and correct and
are incorporated herein by reference with the same effect as if set forth
at length herein.
O. Disclosure. The Proxy Statement/Prospectus fairly describes, in all
material respects, the general nature of the business and principal
properties of the Company and its Subsidiaries after giving effect to the
Conversion Transaction. Neither this Agreement, the Proxy
Statement/Prospectus nor any other document, certificate or statement
furnished to you by or on behalf of the Company or any Subsidiary in
connection herewith contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein and therein not misleading. There is no fact peculiar to
the Company which materially adversely affects or in the future may (so far
as the Company can now reasonably foresee) materially adversely affect the
businesses, property or assets, condition (financial or other) or results
of operations or prospects of the Company and its Subsidiaries and which
has not been set forth in this Agreement, or in the Proxy
Statement/Prospectus.
5. Expenses; Indemnification.
The Company shall, whether or not the transactions contemplated hereby are
consummated, save each holder of Notes harmless for all out-of-pocket
expenses arising in connection with the execution and delivery or
performance of this Agreement, the Assumption Agreement, the Southern
Timber Assumption Agreement or the Subsidiary Assumption Agreements,
including the reasonable fees and expenses of special counsel for the
Noteholders. The Company shall also indemnify and save each holder of
Notes harmless from and against all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever (including, without limitation, any
taxes, and any additional taxes imposed on any amounts payable pursuant to
this paragraph 5) which may at any time be imposed on, incurred by or
asserted against any holder of Notes in any way arising out of, relating to
or resulting from this Agreement or the transactions contemplated hereby.
The obligations of the Company under this paragraph 5 shall survive the
transfer of any Note or portion thereof or interest therein by a holder of
Notes or any transferee and the payment of any Note.
6. Miscellaneous.
A. Continuity and Integration of Agreements. The Senior Note
Agreements, as supplemented and amended by this Agreement, shall remain in
full force and effect and are hereby ratified and confirmed, and the Senior
Note Agreements and this Agreement shall be deemed to be and construed as a
single agreement. Without limitation of the foregoing, or any provision of
the Senior Note Agreements, all representations and warranties made herein
or in any certificate or document delivered in connection herewith shall
for all purposes be deemed made by the Company in, and delivered by the
Company pursuant to and in connection with, the Senior Note Agreements.
B. Survival of Representations and Warranties. All representations and
warranties contained herein shall survive the execution and delivery of
this Agreement, and the transfer of any Note by a holder thereof. Such
representations and warranties may be relied upon by any transferee of a
Note from a holder thereof.
C. Successors and Assigns. All covenants and agreements in this
Agreement contained by or on behalf of any of the parties hereto shall bind
and inure to the benefit of the respective successors and assigns of the
parties hereto whether so expressed or not.
D. Descriptive Headings. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
E. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument.
F. Operating Partnership a Party. The Operating Partnership is a party
to this Agreement for purposes of making the representations and warranties
in paragraph 4 hereof and to acknowledge its obligations under paragraph 5
hereof after the Merger.
THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE
RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW
YORK.
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this letter and return the same
to the Company whereupon this letter shall become a binding agreement among
us.
Very truly yours,
PLUM CREEK TIMBER COMPANY, L.P.
By: Plum Creek Management Company, L.P.,
its General Partner
By:____________________________
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Chief Financial Officer
PLUM CREEK ACQUISITION PARTNERS, L.P.
By: Plum Creek Timber I, L.L.C.,
its General Partner
By: Plum Creek Timber Company, Inc.,
its Managing Member
By:____________________________
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Chief Financial Officer
The foregoing Agreement is accepted as of the date first above written:
AMERUS LIFE HOLDINGS, INC. (formerly Central Life Assurance Company)
By:
Name:
Title:
FARM BUREAU LIFE INSURANCE COMPANY
By:
Name:
Title:
FIRST COLONY LIFE INSURANCE COMPANY
By:
Name:
Title:
GUARANTEE LIFE INSURANCE COMPANY
By:
Name:
Title:
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By:
Name:
Title:
MUTUAL OF OMAHA INSURANCE COMPANY
By:
Name:
Title:
NEW YORK LIFE INSURANCE COMPANY
By:
Name:
Title:
PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY
By:
Name:
Title:
By______________________________
Name:
Title:
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By:
Name:
Title:
TRANSAMERICA LIFE AND ANNUITY
INSURANCE COMPANY
By:
Name:
Title:
TRANSAMERICA OCCIDENTAL LIFE
INSURANCE COMPANY
By:
Name:
Title:
UNITED OF OMAHA LIFE INSURANCE
COMPANY
By:
Name:
Title:
SCHEDULE I
8.73% Senior Notes due 2009
(Issued 8/1/94)
Name of Noteholder Principal Amount
------------------ of Notes
----------------
AmerUs Life Holdings, Inc. (formerly Central
Life Assurance Company $ 6,000,000
Farm Bureau Life Insurance Company 6,000,000
First Colony Life Insurance Company 10,000,000
Guarantee Life Insurance Company 4,000,000
Massachusetts Mutual Life Insurance Company 10,000,000
Mutual of Omaha Insurance Company 4,000,000
New York Life Insurance Company 3,000,000
Principal Mutual Life Insurance Company 25,000,000
Teachers Insurance and Annuity Association of America 51,000,000
TransAmerica Life and Annuity Insurance Company 10,000,000
TransAmerica Occidental Life Insurance Company 10,000,000
United of Omaha Life Insurance Company 11,000,000
---------------
$ 150,000,000
