Exhibit
10.21


 


EXECUTION
VERSION


 


AMENDED AND RESTATED


 


FIBER SUPPLY AGREEMENT


 


by and among


 


PLUM CREEK MARKETING, INC.,


 


 


and


 


ESCANABA PAPER COMPANY


 


 


November 15, 2005


 





















 


EXECUTION
VERSION


 


AMENDED AND RESTATED FIBER SUPPLY AGREEMENT


 


THIS AMENDED AND RESTATED FIBER SUPPLY AGREEMENT, (this “Agreement”)
dated as November 15, 2005, by and among PLUM CREEK MARKETING, INC., a
Delaware corporation (“Seller”) and ESCANABA PAPER COMPANY, a Delaware
corporation (“Buyer”), amends and restates the Fiber Supply Agreement, dated as
of May 2, 2005 (the “Original Agreement”), by and between ESCANABA TIMBER
LLC, a Delaware limited liability company, (“Escanaba Timber”) and Buyer.


 


RECITALS


 


WHEREAS, Escanaba Timber and Buyer entered into the Original Agreement,
pursuant to which Escanaba Timber sold and Buyer purchased wood fiber located
on certain timberlands owned by Escanaba Timber;


 


WHEREAS, Escanaba Timber and Plum Creek Timberlands, L.P., a Delaware
limited partnership (“Timberlands Owner”) have entered into a Real Estate
Purchase and Sale Agreement (the “Sale Agreement”), dated as of September 30,
2005, pursuant to which, subject to the terms and conditions thereof, Escanaba
Timber has agreed to sell and Timberlands Owner has agreed to purchase all of
the timberlands presently owned by Escanaba Timber as described in the Sale
Agreement in the Market Region (the “ET Timberlands”);


 


WHEREAS, Timberlands Owner and Seller have entered into as of the date
hereof a Stumpage Agreement pursuant to which Timberland Owner has
committed to make available to Seller from the ET Timberlands all of the wood
fiber necessary for Seller to satisfy its obligations under this Agreement;


 


WHEREAS, one of the conditions to the consummation of the purchase and
sale contemplated by the Sale Agreement is the assignment and assumption of all
of Escanaba Timber’s rights and obligations under the Original Agreement to
Seller and the amendment and restatement of the Original Agreement as provided
herein, in each case effective as of the closing of the transactions
contemplated by the Sale Agreement;


 


NOW, THEREFORE, in consideration of the mutual covenants described in
this Agreement and other good and valuable consideration the receipt and
sufficiency of which are acknowledged, Seller and Buyer hereby agree as
follows:


 


ARTICLE I


 


DEFINITIONS


 


Whenever used in this Agreement, the following terms shall have the
respective meanings given to them in the provisions thereof indicated below:


 





















 


“AAA” shall have the meaning provided
in Section 10.14(a).


 


“AF&PA” shall have the meaning
provided in the definition of “Sustainable Forest Practice Standards”.


 


“Agreement” shall have the meaning provided in the opening
paragraph of this Agreement.


 


“Annual Plan” shall have the meaning
provided in Section 2.3(a).


 


“Annual Volumes” shall have the
meaning provided in Section 2.3(b).


 


“Assumed Volume” shall have the
meaning provided in Section 10.2(b).


 


“Aspen Pulpwood” means pulpwood from
aspen.


 


“Calendar Year” means a full year beginning on January 1
and continuing through December 31 thereof.


 


“Delivery Distance” means the trucking
distance between a harvest site and a Delivery Location (which delivery
location is within the Market Region), which is based on the zones described in
Article IV hereof.


 


“Delivered Product Price” shall have
the meaning provided in Section 4.1(a).


 


“Delivery Location” means a delivery
point for Products purchased hereunder or Products sold by Seller to an
unrelated third party within the Market Region.


 


“ET Timberlands” means the timberlands
owned by Escanaba Timber LLC on the date hereof and as legally described in the
Real Estate Purchase and Sale Agreement dated September 30, 2005 by and
between Escanaba Timber LLC and Plum Creek Timberlands, L.P.


 


“Force Majeure” shall have the meaning
provided in Section 2.4(a).


 


“Force Majeure Period” shall have the
meaning provided in Section 2.4(c).


 


“Hardwood Pulpwood” means pulpwood
from hardwood species of timber.


 


“Hemlock Pulpwood” means pulpwood from
hemlock.


 


“Liens” shall have the meaning
provided in Section 6.2(b).


 


“Losses” shall have the meaning
provided in Section 6.2(b).


 


“Market Region” shall mean the Upper
Peninsula of Michigan and the eleven air mile area of property commonly known
as the “Reciprocity Zone” in the State of Wisconsin. “Mill” shall mean
Buyer’s pulp and paper mill located in Escanaba, Michigan.


 


Annex A-2





















 


 “Mixed
Softwood Pulpwood” means all softwood pulpwood other than Pine Pulpwood and
hemlock.


 


“Most Recent Price by Species” shall
have the meaning provided in Section 4.1(b).


 


“New Owner” shall have the meaning
provided in Section 10.2(b).


 


“Objection Notice” shall have the
meaning provided in Section 10.2(b).


 


“Past Due” shall have the meaning
provided in Section 4.4.


 


“Person” shall have the meaning
provided in Section 10.1(b).


 


“Pine Pulpwood” means the following
species of timber:  Jack Pine Pulpwood,
Red Pine Pulpwood, White Pine Pulpwood and Spruce Pulpwood.


 


“Price Period” shall have the meaning
provided in Section 4.1(b).


 


“Products” means Softwood Pulpwood,
Hardwood Pulpwood,  Aspen Pulpwood and
Hemlock Pulpwood.


 


“Product Category” shall mean any one
of the following:  Hardwood Pulpwood,
Aspen Pulpwood, Mixed Softwood Pulpwood, Pine Pulpwood, or Hemlock Pulpwood.


 


“Product Specifications” shall have
the meaning provided in Section 2.1.


 


“Semi-Annual Period”
shall mean each January 1 through June 30 and July 1 through December 31
of each calendar year throughout the Term.


 


“Semi-Annual Pricing Date”
shall mean each January 7 and July 7 of each year during the Term.


 


“Softwood Pulpwood” shall mean Mixed
Softwood Pulpwood, Hemlock Pulpwood and Pine Pulpwood.


 


“Sustainable Forest Practice Standards”
shall mean practices substantially in compliance with standards substantially
similar to the Sustainable Forestry Initiative of the American Forest and Paper
Association (the “AF&PA”) as those standards may be modified by AF&PA
from time to time.


 


“Transfer” shall mean any sale, lease,
conveyance, exchange, assignment, hypothecation, disposition, foreclosure or
other transfer (excluding the granting of a mortgage or other security
agreement), directly or indirectly (whether by agreement, operation of law or
otherwise), of all or any portion of the ET Timberlands.


 


“Term” shall have the meaning provided
in Section 5.1.


 


Annex A-3





















 


“Valuation Consultant” shall mean
either George Banzhaf & Company of Milwaukee, Wisconsin or
Steigerwaldt Land Services of Tomahawk, Wisconsin, or if such firms are no
longer in existence, another reputable, professionally qualified Person meeting
all of the following criteria.  Such
Person (i) is not an Affiliate of either Seller or Buyer, (ii) during
the past two (2) years has not transacted substantial business with either
Seller or Buyer, and (iii) does not have less than five (5) years
experience relating to sales of timber within the Market Region.  If Seller and Buyer are unable to agree on
the Valuation Consultant, an arbitrator selected pursuant to Section 10.14
below shall select such Valuation Consultant. 
Seller and Buyer shall provide to the Valuation Consultant such
information as the Valuation Consultant shall reasonably request to facilitate
the determinations to be made by the Valuation Consultant hereunder.


 


ARTICLE II


 


PURCHASE OF PRODUCTS


 


Section 2.1             Purchase of Softwood Pulpwood, Hardwood Pulpwood and Aspen Pulpwood. 
Seller agrees to sell, and Buyer agrees to purchase, receive and pay
for, in each calendar year (a “Calendar Year”), the Annual Volumes of
Products.  All Products purchased
pursuant to this Agreement shall satisfy, respectively, the specifications for
the Products set forth in Annex A, as may be modified from time to time in
accordance with Section 2.2 (the “Product Specifications”).  For the purposes of this Agreement, a ton
shall weigh two thousand (2,000) pounds.


 


Section 2.2             Modification
of Specifications.  Buyer may, from
time to time, and upon at least two (2) months prior written notice to
Seller, reasonably modify any of the Product Specifications that Buyer applies
to substantially all of its Product suppliers to the Mill.  Buyer shall not modify the Product
Specifications to set higher standards for Seller than for any such other
Products suppliers.  All Products sold by
Seller to Buyer following the date the new specifications become effective
shall satisfy such modified Product Specifications.  If Product Specifications are modified to set
higher standards, the Annual Volumes shall be adjusted downward as deemed
reasonably necessary by Seller, and subject to Buyer’s reasonable approval, as
a result of said higher standards.


 


Section 2.3             Annual
Plan.


 


(a)           Prior
to September 1 of each Calendar Year during the Term, Seller shall
complete and submit to Buyer a written delivery plan with respect to the
Products to be made available for purchase by Buyer during the next Calendar
Year (the “Annual Plan”).  Said Annual
Plan shall include estimates of delivery of the Products by Delivery Distances,
month and accumulated into estimated quarterly deliveries.  The Annual Plan shall set forth the quantity
of Products Seller intends to make available to Buyer during the next Calendar
Year, said quantities to be subject to the terms of Article III.   The parties acknowledge and agree that
Escanaba Timber submitted an Annual Plan 


 


Annex A-4





















 


for 2006 that includes the obligation to deliver and
sell 535,000 tons of Products to Buyer (the “Original 2006 Plan”).  Pursuant to Article III hereof, Seller
and Buyer agree that the Original 2006 Plan will be amended to reduce the
volume to be sold and delivered during 2006 to 500,000 tons of Products.


 


(b)           Buyer shall within 30 days of receipt of said Annual
Plan confirm with Seller the volumes of the Products Buyer agrees to purchase
from Seller during the next Calendar Year; provided, however, that unless
Seller agrees otherwise, Buyer must agree to purchase at least ninety percent
(90%) of the volumes set forth in the Annual Plan.  Said agreed upon volumes shall then become in
the aggregate the “Annual Volumes” Buyer agrees to purchase and Seller agrees
to deliver in the next Calendar Year.


 


(c)           Following adoption of each Annual Plan (or as adjusted
according to Section 2.3(b) above), the parties shall act in good
faith and each use their respective reasonable best efforts to implement such
Annual Plan in accordance with its terms. 
Products shall be delivered throughout the Calendar Year in accordance
with the Annual Plan for such year; provided, however, that
during any Calendar Year, Seller may vary its deliveries, and Buyer may vary
its purchases of Products, subject to Section 4.2 herein, as long as
variations in delivery are immaterial and will not impair the operations of the
Mill or the operations of Seller on the ET Timberlands.


 


Section 2.4             Force
Majeure .


 


(a)           For the purposes of this Agreement, the term “Force
Majeure” means any cause, condition or event beyond Buyer’s and/or Seller’s
reasonable control that delays or prevents either party’s performance of its
obligations hereunder, including war, acts of terrorism (which shall not
include civil demonstrations), acts of government, acts of public enemy, riots,
lightning, fires, explosions, storms, floods, infestation, power failures,
other acts of God or nature, labor strikes or lockouts by employees, or other
disputes involving either party, an involuntary ceasing of operations at the
Mill for a minimum of thirty (30) consecutive days, and other similar events or
circumstances; provided, however, that “Force Majeure” shall not include (i) a
party’s financial inability to perform (unless such inability is caused by a
general suspension of payments by banks in the United States),  (ii) an act, omission or circumstance
arising from the negligence or willful misconduct of the party claiming that a
Force Majeure event has occurred, or (iii) adverse financial or market
conditions.  The parties shall use
reasonable best efforts to mitigate the effects of the Force Majeure, and if
the cause of Force Majeure can be minimized or remedied, both parties shall use
reasonable best efforts to do so promptly.


 


(b)           Subject to the provisions of this Section 2.4,
neither party shall be liable hereunder for a delay in or failure of
performance of its obligations hereunder that is caused by Force Majeure.  If Force Majeure results in a reduction, but
not a complete cessation, of Buyer’s operations in connection with this
Agreement, Buyer shall not reduce its purchases of any Product from Seller in
greater proportion than the reduction in Buyer’s purchases of any such Products
from all its suppliers of pulpwood to 


 


Annex A-5





















 


the Mill. 
Notwithstanding anything contained in this Agreement to the contrary,
Force Majeure (other than a general suspension of payments by banks in the
United States) shall not excuse Buyer from its obligation to pay, pursuant to
the terms of this Agreement, Seller for any quantity of Product delivered by
Seller.


 


(c)           The quantity of any Product otherwise required to be
purchased or delivered hereunder shall be reduced as a result of Force Majeure
for the period during which such Force Majeure is in effect and continuing
(such period, the “Force Majeure Period”), based on the respective quantity for
each Calendar Year in which such Force Majeure is in effect, prorated (if
applicable) for the portion of such year constituting all or part of such Force
Majeure Period.  If the Force Majeure
Period is less than 15 days, (i) Buyer shall be required to purchase the
volume of Products not purchased during the Force Majeure Period within the
next 180 days following the end of the Force Majeure Period, and (ii) Seller
shall be required to make available the volume of Products not delivered during
the Force Majeure Period within the next 180 days following the end of the
Force Majeure Period.  If the Force
Majeure Period is more than 14 days, Buyer shall not be required to purchase
the volume of Products not purchased during the Force Majeure Period, and
Seller shall not be required to make available the volume of Products not
delivered during the Force Majeure Period. 
Notwithstanding anything contained in this Agreement to the contrary,  Seller shall have the right, but not the
obligation, to sell that quantity of the Product Buyer is unable to purchase
because of Force Majeure to any third party purchaser or purchasers in the
event Force Majeure prevents Buyer from performing hereunder.


 


(d)           Force Majeure shall not relieve a party of its obligations
or liability hereunder unless such party shall give notice (including a
reasonable description of such Force Majeure) to the other party as soon as
reasonably possible and in any event within fifteen (15) days of the occurrence
of such Force Majeure.  Upon request, the
party whose obligations were suspended shall provide the other party with a
plan for remedying the effects of such Force Majeure.  The party prevented from performing by Force
Majeure shall keep the other party advised by written notice of all matters
affecting such Force Majeure, and the extent of the delay by reason
thereof.  Such party shall notify the
other party in writing of the termination of such Force Majeure within three (3) days
after such termination.


 


ARTICLE III


 


MINIMUM VOLUMES


 


Section 3.1             Minimum
Volumes by Calendar Year.  With
respect to the Products to be purchased by Buyer hereunder, Seller shall make
available to Buyer in the applicable Annual Plan the following minimum volumes
of Products for each Calendar Year during the Term of this Agreement:


 


Annex A-6





















 


(a)           2005.   From the date hereof through December 31,
2005, 55,000 tons of Hardwood Pulpwood; 7,000 tons of Mixed Softwood Pulpwood;
and 9,000 tons of Aspen Pulpwood.


 


(b)           2006
– 2016.  For the Calendar Years
beginning January 1, 2006 and ending December 31, 2016, 500,000 tons.


 


(c)           2017
– 2019 - To the extent Buyer and Seller mutually agree to extend the Term
pursuant to Section 5.2 below, for Calendar Years beginning January 1,
2017 and ending December 31, 2019, 500,000 tons.


 


ARTICLE IV


 


PRICE AND DELIVERY TERM


 


Section 4.1             Prices.  


 


(a)           The
price to be paid by Buyer to Seller for the Products sold and purchased
hereunder shall be the fair market value thereof as hereinafter determined (the
“Delivered Product Price”).  The parties
agree that the initial Delivered Product Prices for the Products for the period
from the date hereof through December 31, 2005 shall be as set forth in Schedule 4.1.  The Delivered Product Prices for the Products
shall be adjusted as of January 1, 2006 and each subsequent July 1
and January 1 thereafter and shall be effective for deliveries first made
on July 15 and January 15 of each calendar year.  The parties agree that the Products shall be
comprised of five categories:  Hardwood
Pulpwood, Aspen Pulpwood, Mixed Softwood Pulpwood, Pine Pulpwood, and Hemlock
Pulpwood (each, a “Product Category”). 
Each six-month calendar period described in this Section is
hereinafter referred to as a “Semi-Annual Period.”


 


(b)           Not
later than January 7, 2006 and each subsequent July 7 and January 7
of each Calendar Year during the Term (or on such date as the parties may
mutually agree) (each, a “Semi-Annual Pricing Date”), Seller and Buyer will
determine the Delivered Product Price for the ensuing half-year utilizing the
process described in this Section.  On or
before December 15, 2005 and each subsequent June 15 and December 15
of each Calendar Year of the Term, Seller and Buyer will jointly and mutually agree
upon a schedule of standard haul rates by haul zone (the “Standard Haul
Pricing Table”).  The Standard Haul
Pricing Table to be effective on January 1, 2006 is as follows:


 


	
  Zone

  	
   

  	
  Miles

  	
   

  	
  Haul Rate

  	
   

  
	
  1

  	
   

  	
  0-30

  	
   

  	
  $

  	
  5.64

  	
   

  
	
  2

  	
   

  	
  30-60

  	
   

  	
  $

  	
  7.45

  	
   

  
	
  3

  	
   

  	
  60-90

  	
   

  	
  $

  	
  9.07

  	
   

  
	
  4

  	
   

  	
  90-120

  	
   

  	
  $

  	
  11.17

  	
   

  
	
  5

  	
   

  	
  120-150

  	
   

  	
  $

  	
  13.09

  	
   

  
	
  6

  	
   

  	
  150-180

  	
   

  	
  $

  	
  14.79

  	
   

  
	
  7

  	
   

  	
  180-210

  	
   

  	
  $

  	
  16.49

  	
   

  



 


Annex A-7





















 


(c)           In
addition, not later than each Semi-Annual Pricing Date during the Term, Seller
and Buyer will each assemble a table of the volume weighted open market
delivered prices and a table of volumes by Delivery Distance for each Product
Category (in the case of Seller, the delivered prices Seller received from
unrelated third parties, excluding the Annual Volumes, in the immediately
preceding Semi-Annual Period for Products produced from the ET Timberlands (or
other timberlands owned by Seller or Seller’s affiliated companies in the
Market Region as of Sepember 30, 2005) 
and delivered in the Market Region for each Product Category and in the
case of Buyer, the prices Buyer paid to unrelated third parties, excluding the
Annual Volumes, for Products produced from within the Market Region and
delivered to any Delivery Location in the immediately preceding Semi-Annual
Period) (the “Delivered Price and Volume Tables”).    Buyer shall include all payments made to
its suppliers of Products for purposes of its calculations hereunder except for
fuel adjustments or snow bonuses, the payments for which are provided for in Section 4.1(h) hereof.  In addition, for purposes of assembling their
respective Delivered Price and Volume Tables, each party must include the
prices and volumes of any Products sold by Seller and purchased by Buyer in any
Semi-Annual Period in excess of the Annual Volumes.  The prices shown in each party’s Delivered
Price and Volume Table shall be the weighted average for all volume sold in
each Product Category and Zone during the preceding Semi-Annual Period.  An example of a Delivered Price and Volume
Table is as follows:


 


Delivered Prices ($/ton):


 


	
  Zone

  	
   

  	
  Hardwood

  	
   

  	
  Aspen

  	
   

  	
  Mixed Sftwd

  	
   

  	
  Pine

  	
   

  	
  Hemlock

  	
   

  
	
  1

  	
   

  	
  $

  	
  30.00

  	
   

  	
  $

  	
  35.00

  	
   

  	
  $

  	
  40.00

  	
   

  	
  $

  	
  45.00

  	
   

  	
  $

  	
  25.00

  	
   

  
	
  2

  	
   

  	
  $

  	
  31.00

  	
   

  	
  $

  	
  36.00

  	
   

  	
  $

  	
  41.00

  	
   

  	
  $

  	
  46.00

  	
   

  	
  $

  	
  26.00

  	
   

  
	
  3

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  37.00

  	
   

  	
  $

  	
  43.00

  	
   

  	
   

  	
   

  	
  $

  	
  27.00

  	
   

  
	
  4

  	
   

  	
  $

  	
  33.00

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  44.00

  	
   

  	
  $

  	
  48.00

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
  $

  	
  35.00

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  44.00

  	
   

  	
  $

  	
  50.00

  	
   

  	
  $

  	
  29.00

  	
   

  
	
  6

  	
   

  	
  $

  	
  37.00

  	
   

  	
  $

  	
  41.00

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  50.00

  	
   

  	
  $

  	
  31.00

  	
   

  
	
  7

  	
   

  	
  $

  	
  39.00

  	
   

  	
  $

  	
  45.00

  	
   

  	
  $

  	
  50.00

  	
   

  	
  $

  	
  53.00

  	
   

  	
  $

  	
  33.00

  	
   

  



 


Volume (in tons)


 


	
  Zone

  	
   

  	
  Hardwood

  	
   

  	
  Aspen

  	
   

  	
  Mixed Sftwd

  	
   

  	
  Pine

  	
   

  	
  Hemlock

  	
   

  
	
  1

  	
   

  	
  1,200

  	
   

  	
  100

  	
   

  	
  1,500

  	
   

  	
  450

  	
   

  	
  300

  	
   

  
	
  2

  	
   

  	
  100

  	
   

  	
  600

  	
   

  	
  1,200

  	
   

  	
  650

  	
   

  	
  600

  	
   

  
	
  3

  	
   

  	
   

  	
   

  	
  1,500

  	
   

  	
  300

  	
   

  	
   

  	
   

  	
  900

  	
   

  
	
  4

  	
   

  	
  1,500

  	
   

  	
   

  	
   

  	
  500

  	
   

  	
  850

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
  600

  	
   

  	
   

  	
   

  	
  800

  	
   

  	
  950

  	
   

  	
  900

  	
   

  
	
  6

  	
   

  	
  200

  	
   

  	
  500

  	
   

  	
   

  	
   

  	
  250

  	
   

  	
  600

  	
   

  
	
  7

  	
   

  	
  800

  	
   

  	
  60

  	
   

  	
  600

  	
   

  	
  650

  	
   

  	
  300

  	
   

  



 


Annex A-8





















 


(d)           When
each party has assembled its internal Delivered Price and Volume Table, each
party will deduct the Standard Haul Rate for each Zone from the respective
prices for each Product Category to arrive at a pre-haul price for each Product
Category in each Zone (the “Road Side Price”). 
For each Product Category, each party will then calculate a “Weighted
Average Road Side Price” by taking the sum of the volumes times the road side
price for each haul zone, divided by the total volume delivered for each
product as follows:


 


	
  (Delivered
  Price - Haul Rate) x Volume for each zone

  	
  =

  	
  Weighted
  Average Road Side

  
	
  Total Volume in each Product Category

  	
   

  	
  Price in
  each Product Category

  



 


For illustration purposes, using the Delivered Price and Volume Table
shown above, the calculations would be as follows:


 


Roadside Prices:


 


	
  Zone

  	
   

  	
  Hardwood

  	
   

  	
  Aspen

  	
   

  	
  Mixed Sftwd

  	
   

  	
  Pine

  	
   

  	
  Hemlock

  	
   

  
	
  1

  	
   

  	
  $

  	
  24.36

  	
   

  	
  $

  	
  29.36

  	
   

  	
  $

  	
  34.36

  	
   

  	
  $

  	
  39.36

  	
   

  	
  $

  	
  19.36

  	
   

  
	
  2

  	
   

  	
  $

  	
  23.55

  	
   

  	
  $

  	
  28.55

  	
   

  	
  $

  	
  33.55

  	
   

  	
  $

  	
  38.55

  	
   

  	
  $

  	
  18.55

  	
   

  
	
  3

  	
   

  	
   

  	
   

  	
  $

  	
  27.93

  	
   

  	
  $

  	
  33.93

  	
   

  	
   

  	
   

  	
  $

  	
  17.93

  	
   

  
	
  4

  	
   

  	
  $

  	
  21.83

  	
   

  	
   

  	
   

  	
  $

  	
  32.83

  	
   

  	
  $

  	
  36.83

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
  $

  	
  21.91

  	
   

  	
   

  	
   

  	
  $

  	
  30.91

  	
   

  	
  $

  	
  36.91

  	
   

  	
  $

  	
  15.91

  	
   

  
	
  6

  	
   

  	
  $

  	
  22.21

  	
   

  	
  $

  	
  26.21

  	
   

  	
   

  	
   

  	
  $

  	
  35.21

  	
   

  	
  $

  	
  16.21

  	
   

  
	
  7

  	
   

  	
  $

  	
  22.51

  	
   

  	
  $

  	
  28.51

  	
   

  	
  $

  	
  33.51

  	
   

  	
  $

  	
  36.51

  	
   

  	
  $

  	
  16.51

  	
   

  
	
  **

  	
   

  	
  $

  	
  22.71

  	
   

  	
  $

  	
  27.82

  	
   

  	
  $

  	
  33.31

  	
   

  	
  $

  	
  37.28

  	
   

  	
  $

  	
  17.24

  	
   

  
																							



 










**  Weighted Average Roadside
Price by Product


 


(e)           Not
later than each Semi-Annual Pricing Date during the Term, Seller and Buyer will
submit to the other their respective Weighted Average Road Side Price for each
of the Product Categories.  Seller’s and
Buyer’s combined Weighted Average Road Side Price for each Product Category
will be computed using a 1/3 weight for Seller’s prices and 2/3 weight for
Buyer’s prices, the result of which is hereinafter referred to as the “Combined
Road Side Average.”  The Combined Road
Side Average for each Product Category will be added to the Haul Rate in each
Zone to determine the final Delivered Product Price for each Product Category
in each Zone.


 


(f)            The foregoing notwithstanding, in the event Buyer
materially changes the sourcing of Products into its Mill (i.e., purchases five
percent (5%) or more of the total Products used at the Mill in any Semi-Annual
Period (excluding the 


 


Annex A-9





















 


annual Volumes) from sources outside the
Market Region, or uses purchased stumpage to source twenty percent (20%)
or more of the total Products Buyer uses at the Mill in any Semi-Annual Period
(excluding the Annual Volumes)), the parties agree to examine the method for
determining the fair market value for the products sold and purchased
hereunder.  If Seller notifies Buyer that
Seller reasonably believes than an adjustment to the pricing mechanism is
appropriate in light of the foregoing circumstances, Seller and Buyer agree to
negotiate in good faith to determine an appropriate adjustment in Buyer’s
Delivered Price and Volume Table for the relevant Price Period in an effort to
accurately reflect market data for Buyer’s purchases of Products used in its
Mill operations.  In the event Seller and
Buyer are unable to agree on such an adjustment within 20 days following any
such request by Seller, Seller and Buyer shall retain the Valuation Consultant
to make any such determination, which determination shall be binding upon the
parties.  Buyer agrees to provide to
Seller its sourcing percentages periodically upon request.


 


(g)               Notwithstanding anything herein to the contrary,
Seller acknowledges and agrees that as a result of differences, by way of
example, in product specifications or pre-sorting requirements imposed by Buyer
under this Agreement and those imposed by other purchasers of the same Products
from Seller, inclusion of sale prices to other purchasers of such Products with
different specifications, pre-sorting requirements or other similar types of
differences (including increased prices paid by other customers that
incorporate fuel adjustments or snow bonuses, whether or not formally
characterized as such) in customer requirements in determining Seller’s
Weighted Average Road Side Price would be inappropriate absent an adjustment to
the calculation of Seller’s Weighted Average Road Side Price. Amount to reflect
the different cost of selling the same Product with different product
specifications, pre-sorting requirements or other comparable differences in
specifications.  In the event Buyer
notifies Seller of any instance where Buyer reasonably believes that such an
adjustment is necessary in light of the foregoing circumstances, Buyer agrees
to negotiate in good faith with Seller an appropriate adjustment in Seller’s
Pricing Amount for the relevant Price Period to reflect such cost
differential.  In the event Seller and
Buyer are unable to agree on such an adjustment within 20 days following any
such request by Buyer, Seller and Buyer shall retain the Valuation Consultant
to make any such determination, which determination shall be binding upon the
parties.


 


(h)               In addition to the other amounts payable hereunder, in
the event Buyer pays any amounts to any pulpwood supplier to any Delivery
Location for fuel adjustments or snow bonuses, Buyer shall make comparable and
contemporaneous payments to Seller.  Any
such payments made to Seller or any payments made to Seller from other pulpwood
customers (whether or not formally characterized as fuel adjustments or snow
bonuses) pursuant to this Section 4.1(g) shall not be used in
calculating the Delivered Price and Volume Table.


 


Section 4.2             Pay
or Take.  


 


(a)           Seller agrees to sell and deliver, subject to Force
Majeure,  and Buyer agrees to purchase,
subject to Force Majeure, the Annual Volumes of Products 


 


Annex A-10





















 


to be produced under the direction of Seller
during each Calendar Year as determined in Section 2.3 (c).  If for any Calendar Year, Seller fails for
any reason other than Force Majeure to tender to Buyer at least ninety percent
(90%) of the designated Annual Volumes of Products, Seller will pay Buyer at a
rate of $15.00 per ton multiplied by the difference between (x) ninety percent
(90%) of the Annual Volumes of Products for the applicable Calendar Year minus
(y) the volume of Products actually tendered by Seller during such Calendar
Year, as liquidated damages and not as a penalty, and Buyer shall have no
further claim for damages on account of such shortfall in the delivery of the
Annual Volumes.  Payment shall be made by
Seller to Buyer on demand no later than fifteen (15) days from Buyer’s written
request for such payment. 
Notwithstanding the foregoing, if adverse weather conditions during the
last ninety (90) days of any Calendar Year prevent Seller from delivering the
Annual Volumes for said Calendar Year, the payments provided for in this Section 4.2(a) shall
not apply unless and to the extent said volumes (together with any volumes
required with respect to the first quarter of the following Calendar Year) are
not delivered on or before March 31 of the following Calendar Year.  Seller shall keep Buyer advised of any such
adverse weather conditions and Buyer’s need for additional time to deliver said
volumes.


 


(b)           If for any Calendar Year, Buyer fails for any reason
other than Force Majeure to purchase at least ninety percent (90%) of the
Annual Volumes of Products from Seller, then Buyer shall pay Seller for the
shortage at a rate of $15.00 per ton multiplied by the difference between (x)
ninety percent (90%) of the Annual Volumes of Products for the applicable
Calendar Year minus (y) the volume of Products actually purchased by Buyer
hereunder during such Calendar Year, as liquidated damages and not as a
penalty, and Seller shall have no further claim for damages on account of Buyer’s
failure to purchase the Annual Volumes. 
Payment shall be made by Buyer to Seller on demand no later than fifteen
(15) days from Seller’s written request for such payment.


 


Section 4.3             Delivery
Terms.  All Products covered by this
Agreement shall be delivered to Buyer F.O.B. to the Mill, Buyer’s Bovine or
Trout Lake woodyards or to such other locations in the Market Region as Buyer
and Seller may reasonably agree (any such location, a “Delivery
Location”).  Risk of loss and title shall
pass when the Products are unloaded at the Delivery Location.


 


Section 4.4             Payment.  Buyer shall pay Seller within fifteen (15)
days after the date of delivery for any Products delivered to Buyer, based upon
the volume of the Products delivered, as determined by the weight of such
Products at the time of delivery. 
Payments made after fifteen (15) days from the date of delivery shall be
considered past due (“Past Due”).  For
payments that are Past Due, Buyer shall pay interest at a rate per annum equal
to the daily prime rate as reported in the Wall Street Journal plus four
percent (4%) for each day that the payments are Past Due.  Such interest shall be calculated daily on
the basis of a year of 365 days and the actual number of days for which
interest is due.  If at any time during
the Term there are any payments outstanding to Seller that are Past Due, then,
in addition to any other remedies it may have hereunder, Seller may suspend
deliveries to Buyer until such time as all Past Due payments have been paid in
full.  In such event, Seller shall have
no obligation to supply or make up any portion of the Annual Volumes scheduled
for delivery and not delivered 


 


Annex A-11





















 


during such suspension and
shall in no way be liable to Buyer for any Losses (as defined below in Section 6.2(b))
or payments pursuant to Section 4.2(a) related to any shortfall in
delivered volumes of Products arising out of said suspension.


 


Section 4.5             Disputes.  If the personnel designated by Buyer and
Seller with operational responsibility for implementing this Agreement are
unable to agree as to any matter set forth in this Article IV then such
matter shall be addressed by the executives responsible for timberland
management for Seller and wood procurement for Buyer.  If such executives are unable to agree, then
such matter shall be determined by an arbitrator pursuant to Section 10.14.


 


Section 4.6             Compliance with Product
Specifications.  If any
shipment of any Product fails to satisfy the applicable Product
Specifications,   Buyer shall have the
right to reject such shipment. Buyer shall notify Seller of any such rejection
as soon as reasonably possible.


 


Section 4.7             Limitation of Warranties.  EXCEPT FOR THE WARRANTIES EXPRESSLY SET FORTH
IN THIS AGREEMENT, THE PRODUCTS ARE BEING SOLD “AS IS,” AND SELLER IS NOT
MAKING ANY OTHER WARRANTIES, WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED,
INCLUDING, IN PARTICULAR, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE (AS DEFINED IN THE DELAWARE UNIFORM COMMERCIAL CODE),
ALL OF WHICH ARE HEREBY EXPRESSLY EXCLUDED, DISCLAIMED AND WAIVED BY BUYER.


 


ARTICLE V


 


TERM


 


Section 5.1             Term.  This Agreement shall expire on December 31,
2016, unless this Agreement is sooner terminated for cause pursuant to Section 9.1
hereof, or unless this Agreement is extended as provided in Section 5.2
(the “Term”). 


 


Section 5.2             Extension of Term.               The
Term of this Agreement may be extended for one (1) additional three (3) year
term upon the mutual written agreement of each of Buyer and Seller, which
extension term shall commence concurrently with the expiration of the initial
term, upon the same terms and conditions as contained in this Agreement or on
such other terms and conditions as may otherwise be agreed upon by Buyer and
Seller.  


 


Annex A-12





















 


ARTICLE VI


 


REPRESENTATIONS, WARRANTIES AND COVENANTS


 


Section 6.1             Warranty of Quality.  Seller warrants and covenants that it will
act in good faith and use its reasonable best efforts to cause all Products to
meet the Product Specifications.


 


Section 6.2             Ownership of Products.  (a)  Seller warrants and covenants that
all Products delivered to Buyer will be free and clear of all Liens (as defined
in Section 6.2(b) below). 
Seller shall protect, indemnify, defend and hold harmless Buyer against
any Losses (as defined in Section 6.2(b) below) incurred or sustained
by Buyer arising out of or resulting from any Liens applicable to any of the
Products at the time delivered by Seller.


 


(b)  The term “Liens” means any and all
liens, charges, mortgages, deeds to secure debt, pledges, security interests, options
of record, adverse claims or other encumbrances of a liquidated amount or which
are otherwise statutorily enforceable, other than liens for ad valorem taxes
not yet due and payable; provided, however, none of the aforementioned shall
constitute a “Lien” in the event the same fails to prevent Seller from
performing any of its obligations hereunder. 
The term “Losses” means any and all claims, liabilities, obligations,
losses, fines, costs, royalties, proceedings, deficiencies or damages (whether
absolute, accrued, conditional or otherwise and whether or not resulting from
third party claims) including, but not limited to, out-of-pocket expenses and
reasonable actual attorneys’ and actual accountants’ fees incurred in the
investigation or defense of any of the same or in enforcing any of their
respective rights hereunder.


 


Section 6.3             Power and Authority;
Enforceability.  Seller
represents and warrants that it is a corporation duly organized and validly
existing under the laws of the State of Delaware, and that it has all requisite
corporate authority to enter into this Agreement and to perform its obligations
hereunder.  Seller represents and
warrants that this Agreement has been duly authorized, executed and delivered
by Seller and constitutes the legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, except as may be
limited by (i) bankruptcy, reorganization, insolvency, moratorium,
receivership or other similar laws affecting or relating to the enforcement of
creditors’ rights or remedies generally, and (ii) general principles of
equity (whether considered at law or in equity).


 


Section 6.4             Compliance with Laws;
Maintenance of Timberlands. 
Seller agrees that its performance of this Agreement shall comply in all
material respects with applicable state and federal laws and regulations,
including, but not limited to, all environmental laws and the Fair Labor
Standards Act of 1938, as amended.


 


Section 6.5             Seller as Independent
Contractor.  No
relationship of employer and employee, or master and servant, is intended to
exist, nor shall any be construed to exist, between Buyer and Seller, or
between Buyer and any servant, agent, 


 


Annex A-13





















 


employee, subcontractor or
supplier of or to Seller as a result of the parties entering into or performing
this Agreement.  Each party hereto shall
select and pay its own servants, agents, employees, subcontractors and
suppliers, and neither such party nor any of its servants, agents, employees,
subcontractors and suppliers shall be subject to any orders, supervision or
control of the other party hereto.  The
parties acknowledge that this Agreement does not create a partnership, joint
venture or any relationship other than a contract between independent parties.


 


Section 6.6             Buyer Power and
Authority; Enforceability. 
Buyer represents and warrants that it is a corporation duly organized
and validly existing under the laws of the State of Delaware, and that it has
all requisite corporate authority to enter into this Agreement and to perform
its obligations hereunder. Buyer represents and warrants that this Agreement
has been duly authorized, executed and delivered by Buyer and constitutes the
legal, valid and binding obligation of Buyer, enforceable against Buyer in
accordance with its terms, except as may be limited by (i) bankruptcy,
reorganization, insolvency, moratorium, receivership or other similar laws
affecting or relating to the enforcement of creditors’ rights or remedies
generally; and (ii) general principles of equity (whether considered at
law or in equity).


 


ARTICLE VII


 


DEFAULT AND INDEMNIFICATION


 


Section 7.1             Indemnity.  


 


(a)           Buyer shall in no way be liable for any personal
injuries (including death), property damage or other Losses caused by,
resulting from, or attributable to, Seller’s performance under this Agreement,
the operation of the business of Seller or the acts of any servant, agent,
employee, subcontractor or supplier of Seller in connection with this Agreement,
except to the extent such Loss is finally judicially determined to have arisen
out of or resulted from the negligence or intentional misconduct of any of
Buyer, its subsidiaries and other affiliates, or any of its or their respective
servants, agents, officers, partners, directors, employees, subcontractors or
suppliers. Seller shall protect, defend, indemnify and hold harmless NewPage Holding
Corporation, NewPage Corporation, Buyer, and their respective subsidiaries
and affiliates, and each of its and their respective agents, officers,
partners, directors, employees, successors and assigns, from and against any
claim, demand, cause of action, lawsuit or other Loss arising out or resulting
from performance of this Agreement by Seller, or of any servant, agent,
employee, subcontractor or supplier of or to Seller, including any Loss based
on the strict liability of Buyer except to the extent such Loss is finally
judicially determined to have arisen out of or resulted from the negligence or
intentional misconduct of any of Buyer, its subsidiaries and other affiliates
(other than Seller), or any of its or their respective servants, agents,
officers, partners, directors, employees, subcontractors or suppliers.


 


(b)           Seller shall in no way be liable for any personal
injuries (including death), property damage or other Losses caused by,
resulting from, or 


 


Annex A-14





















 


attributable to, Buyer’s performance under
this Agreement, the operation of the business of Buyer or the acts of any
servant, agent, employee, subcontractor or supplier of Buyer in connection with
this Agreement, except to the extent such Loss is finally judicially determined
to have arisen out of or resulted from the negligence or intentional misconduct
of any of Seller, its subsidiaries and other affiliates, or any of its or their
respective servants, agents, officers, partners, directors, employees,
subcontractors or suppliers.  Buyer shall
protect, defend, indemnify and hold harmless Seller, and its subsidiaries and
other affiliates, including, but not limited to, Timberland Owner, and each of
its and their respective agents, officers, partners, directors, employees,
successors and assigns, from and against any claim, demand, cause of action,
lawsuit or other Loss arising out or resulting from performance of this
Agreement by Buyer, or of any servant, agent, employee, subcontractor or
supplier of or to Buyer, including any Loss based on the strict liability of
Seller, except to the extent such Loss is finally judicially determined to have
arisen out of or resulted from the negligence, or intentional misconduct of any
of Seller, its subsidiaries and other affiliates, or any of its or their
respective servants, agents, officers, partners, directors, employees,
subcontractors or suppliers.


 


Section 7.2             Certain Remedies.  Notwithstanding anything in this Agreement to
the contrary, Buyer’s sole and exclusive remedies against Seller (following the
expiration of any applicable cure period) in the event that Seller breaches its
obligation to provide the Annual Volumes of Products required under this
Agreement shall be (a) to receive the payment provided pursuant to Section 4.2(a) of
this Agreement, and (b) to terminate this Agreement pursuant to Section 9.1
of this Agreement.  


 


ARTICLE VIII


 


CONSENT TO JURISDICTION


 


Section 8.1             Consent to Jurisdiction.  In connection with any proceeding initiated
by any party under or with respect to this Agreement and the transactions
contemplated hereby, each party hereby consents to the jurisdiction of any
United States Federal Court sitting in the state of Michigan having
jurisdiction in the matter.  Each party
acknowledges and agrees that any controversy that may arise under this Agreement
is likely to involve complicated and difficult issues, and therefor it hereby
irrevocably and unconditionally waives any right it may have to a trial by jury
in respect of any litigation directly or indirectly arising out of or relating
to this Agreement, or the breach, termination or validity of this Agreement, or
the transactions contemplated by this Agreement.


 


ARTICLE IX


 


TERMINATION


 


Section 9.1             Termination for Cause.  This Agreement shall immediately terminate if
any one of the following events (each, a “default”) has occurred and is
continuing on the tenth (10th) day after receipt of notice of an intent to
cancel by reason of such default (each, an “Event of Default”):


 


Annex A-15





















 


(a)           Breach of any term of this Agreement, which breach is
not cured within sixty (60) days after receipt of written notice thereof;


 


(b)           Insolvency or the filing by or against Seller,
Timberlands Owner or Buyer of a petition in bankruptcy (which, in the event of
an involuntary bankruptcy, is not dismissed within ninety (90) days from the
date of its commencement), or appointment by a court of a temporary or
permanent receiver, trustee or custodian; or


 


(c)           If the Mill for any reason ceases all pulping
operations for a period that exceeds twelve (12) consecutive months at any time
during the Term.


 


Section 9.2             Effect of Termination.  Termination shall not relieve a defaulting
party of any liability to the nondefaulting party for breach of its obligations
hereunder.


 


ARTICLE X


 


MISCELLANEOUS


 


Section 10.1           Definitions.  


 


(a)           The words “hereby,” “herein,” “hereof,” “hereunder”
and words of similar import refer to this Agreement as a whole and not merely
to the specific section, paragraph or clause in which such word appears.  The word “party” or “parties” means a party
or the parties to this Agreement, unless preceded by the word “third” or unless
the context shall otherwise expressly require. 
All references herein to Articles, Sections, Annexes and Exhibits shall
be deemed references to Articles and Sections of, and Annexes and Exhibits to,
this Agreement unless the context shall otherwise require.  The words “include,” “includes” and “including”
shall be deemed to be followed by the phrase “without limitation,” unless
already expressly followed by such phrase or the phrase “but not limited to.”  The definitions given for terms in this Section 10.1
and in Article I above shall apply equally to both the singular and plural
forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.


 


(b)           Whenever used in this Agreement, the following terms
shall have the respective meanings given to them below.


 


“Affiliate” of a Person means any
other Person directly, or indirectly through one or more intermediaries,
controlling, controlled by or under common control with the first Person.  As used in this definition of the term “affiliate,”
and elsewhere herein with respect to any affiliate of any Person, “control”
(including the terms “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of a Person, whether through the ownership
of voting securities, by voting trust, contract or similar arrangement, as
trustee or executor, or otherwise.


 


Annex A-16





















 


“Person”
means any individual, sole proprietorship, trust, estate, executor, legal
representative, unincorporated association, association, institution,
corporation, company, partnership, limited liability company, limited liability
partnership, joint venture, government (whether national, Federal, state,
county, city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof) or other entity.


 


Section 10.2           Assignment
by Seller.  


 


Except
as provided in this Section 10.2, this Agreement may not be assigned by
Seller in whole or in part. 
Notwithstanding the foregoing, at any time during the Term, Seller may
assign this Agreement (i) to any lender or lenders as security for
obligations to such lender or lenders in respect to financing arrangements of
Seller or any Affiliate thereof with such lender or lenders, or (ii) upon
prior written notice to Buyer, to any Person that is and at all times remains
an Affiliate of Seller or that merges or consolidates with or into Seller or
that acquires all or substantially all of the ET Timberlands.


 


Section 10.3           Assignment
by Buyer.  


 


Except as provided in this Section 10.3,
this Agreement may not be assigned by Buyer in whole or in part.  Notwithstanding the foregoing, at any time
during the Term, Buyer may assign this Agreement (a) to any lender or
lenders as security for obligations to such lender or lenders in respect of
financing arrangements of Buyer or any affiliate thereof with such lender or
lenders, or (b) upon prior written notice to Seller, to any Person that is
and at all times remains an Affiliate of Buyer or that merges or consolidates
with or into Buyer.  Notwithstanding the
foregoing, Buyer shall be obligated, and shall be permitted under this Section 10.3,
to assign this Agreement in whole to any Person that acquires all or
substantially all of the assets or stock of Buyer.


 


Section 10.4           Notices.  All notices, requests, demands and other
communications provided for hereunder shall be in writing and personally
delivered or sent by regular U.S. certified mail, telecopy or Federal Express
(or similar type of overnight delivery) to the applicable party at the address
indicated below:


 


	
  If to Buyer:

  	
  Escanaba Paper Company

  7100 County 426 M.5 Road

  Escanaba, Michigan 49829

  



 


Annex A-17





















 


	
  With a copy to:



  	
  James D. Okraszewski

  7100 County 426 M.5 Road

  Escanaba, Michigan 49829

  Telecopier No.  906-789-3276

  Telephone No.  906-233-2150

  
	
   

  	
   

  
	
  and

  	
  Mark Lukacs

  7100 County 426 M.5 Road

  Escanaba, Michigan 49829

  Telecopier No.  906-233-3221

  Telephone No.  906-233-2600

  
	
   

  	
   

  
	
  If to Seller:

  



  	
  Plum Creek Marketing, Inc.

  2831 North Lincoln Road

  Escanaba, Michigan 49829

  Attn: Pete Madden

  Telecopier No.  906-789-9076

  Telephone No.  906-789-9130

  
	
   

  	
   

  
	
  with a copy to:

  	
  Plum Creek Marketing, Inc.

  999 Third Avenue, Suite 4300

  Seattle, Washington 98104

  Telecopier No.  206-467-3799

  Telephone No.  206-467-3690

  



 


or, as to each party, at such other address as shall be designated by
such party in a written notice to the other party complying as to delivery with
the terms of this Section.  Notice shall
be deemed received when (i) hand delivered; (ii) sent, after receipt
of confirmation or answer back if sent by telecopy; (iii) five Business
Days after deposit in the U.S. mails, postage prepaid, for certified mail; and (iv) one
Business Day after delivery to Federal Express (or similar type of overnight
delivery), properly addressed to the applicable party.


 


Section 10.5           Amendment; Waiver.  No amendment, modification or discharge of
this Agreement, and no waiver hereunder, shall be valid or binding unless set
forth in writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought.  Any such waiver shall constitute a waiver
only with respect to the specific matter described in such writing and shall in
no way impair the rights of the party granting such waiver in any other respect
or at any other time.  The failure of
either party to insist in any one or more instances upon strict performance of
any of the provisions of this Agreement or take advantage of any of its rights
hereunder shall not be construed as a waiver of any such provisions or the
relinquishment of any such rights, but the same shall continue and remain in
full force and effect.


 


Annex A-18





















 


Section 10.6           Entire Agreement.  This instrument constitutes the entire
agreement between the parties relating to the subject matter hereof, and there
are no agreements, understandings, conditions, representations, or warranties
not expressly set forth herein.


 


Section 10.7           Sovereign Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Michigan, without
reference to the conflicts of laws or choice of law provisions thereof.


 


Section 10.8           Binding Agreement.  Subject to the provisions of Sections 10.2
and 10.3, this Agreement shall bind and inure to the benefit of the parties and
their respective successors and assigns.


 


Section 10.9           Headings.  The section and other headings in this
Agreement are inserted solely as a matter of convenience and for reference, are
not a part of this Agreement, and shall not be deemed to affect the meaning or
interpretation of this Agreement.


 


Section 10.10         Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.


 


Section 10.11         Annexes and Exhibits.  All annexes, attachments, schedules and
exhibits to this Agreement referenced herein are incorporated herein by
reference.


 


Section 10.12         Severability, etc.  Any term or provision of this Agreement that
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability, without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or unenforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.  If any term or provision of this Agreement is
so broad as to be invalid or unenforceable, the provision shall be interpreted
to be only so broad as is valid or enforceable. 
Subject to the foregoing provisions of this Section 10.12, if any
term or provision of this Agreement is invalid or unenforceable for any reason,
such circumstances shall not have the effect of rendering such term or
provision invalid or unenforceable in any other case or circumstance.


 


Section 10.13         No Presumption Against
Drafter.  Each of the
parties hereto has jointly participated in the negotiation and drafting of this
Agreement.  In the event of an ambiguity
or a question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by each of the parties hereto and no
presumptions or burdens of proof shall arise favoring any party by virtue of
the authorship of any of the provisions of this Agreement.


 


Annex A-19





















 


Section 10.14         Arbitration.  


 


(a)           All controversies, disputes, or claims arising among
the parties in connection with, or with respect to, any provision of this
Agreement which have not been resolved within twenty (20) days after either
Buyer, on the one hand, or Seller, on the other hand, has notified the other in
writing of such controversy, dispute or claim, shall be settled by arbitration
administered by the American Arbitration Association (“AAA”) under its
Commercial Arbitration Rules, and judgment on the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.  Notwithstanding anything contained in this Section 10.14
or the AAA Commercial Arbitration Rules to the contrary, any arbitrator
appointed hereunder to resolve disputes shall be an attorney licensed to
practice law in the United States with experience in commercial real estate and
the timber and paper industries and shall have expertise appropriate to the
dispute.  In addition to the
aforementioned qualifications, any arbitrator appointed hereunder to resolve
disputes arising out of any Article IV matter shall have a familiarity
with the factors taken into account in pricing wood fiber products and shall
otherwise be qualified to make the pricing determinations required by Article IV.


 


(b)           Nothing herein contained shall bar the right of any of
the parties to seek and obtain temporary injunctive relief from a court of
competent jurisdiction in accordance with applicable law against threatened
conduct that will cause loss or damage, pending completion of the arbitration,
and the prevailing party therein shall be entitled to an award of its
reasonable attorneys’ fees and costs.


 


(c)           Notwithstanding anything contained in this Agreement
to the contrary, in the event that any controversy, dispute, or claim exceeds
$10,000,000, this Section 10.14 shall not apply.


 


Except
as otherwise provided in this Agreement, this Section shall be
interpreted, governed by and enforced in accordance with the United States
Arbitration Act, 9 U.S.C. Section 1-14.


 


Section 10.15         Sustainable Forestry
Initiative.  Seller
shall cause the harvesting activities on the ET Timberlands to be in accordance
with the Sustainable Forestry Initiative during the Term of this
Agreement.  From time to time it may be
necessary to agree upon a recognized successor or alternative standard to the
Sustainable Forestry Initiative, which shall be negotiated in good faith to
reflect changes or developments in the evolution of widely accepted industry
standards.


 


Section 10.16         Publicity.  This Agreement is confidential and no party
shall issue press releases or engage in other types of publicity of any nature
dealing with the commercial and legal details of this Agreement without the
other party’s prior written approval. 
However, approval of such disclosure shall be deemed to be given to the
extent such disclosure is required to comply with applicable laws, governmental
rules, regulations or other governmental requirements, or in connection with
any financing arrangements of such party. 
In such event, the publishing party shall, to the extent 


 


Annex A-20





















 


reasonably practicable,
furnish, in advance, a copy of such proposed disclosure, to the other party.


 


Section 10.17         Estoppel Certificates.  Any party shall, at no cost to the requesting
party, from time to time, upon twenty (20) days prior request by the other
party(ies), execute, acknowledge and deliver to the requesting party a
certificate signed by an officer of the certifying party stating that this
Agreement is unmodified and in full force and effect (or, if there have been
modifications, that this Agreement is in full force and effect as modified, and
setting forth such modifications) and the dates through which payments have
been made, and either stating that to the knowledge of the signer of such
certificate no default exists under this Agreement or specifying each such
default to which the signer has knowledge.


 


Section 10.18         Prevailing Party.  If any party brings any proceeding for the
judicial or other interpretation, enforcement, termination, cancellation or
rescission of this Agreement, or for damages for the breach thereof, the
prevailing party in any such proceeding or appeal thereon shall be entitled to
its reasonable attorneys’ fees and court and other reasonable costs incurred,
to be paid by the losing party as fixed by the court in the same or a separate
proceeding, and whether or not such proceeding is pursued to decision or
judgment.  


 


Section 10.19         Original Agreement.  The parties agree that upon execution of this
Agreement by the parties hereto, the Original Agreement shall be superseded and
replaced in all respects by this Agreement and Escanaba Timber LLC is hereby
released from any obligation accruing under the Original Agreement arising
after the date hereof, except for the obligation to return the deposit made under
Section 4.4 of the Original Agreement. 



 


[SIGNATURES ON FOLLOWING PAGE]


 


Annex A-21





















 


IN WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.


 


Annex A-22





















 


 


	
   

  	
  PLUM CREEK
  MARKETING INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rick R.
  Holley

  	
   

  
	
   

  	
   

  	
  Name: Rick
  R. Holley

  
	
   

  	
   

  	
  Title:
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  ESCANABA
  PAPER COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter
  Vogel

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name: Peter
  Vogel

  
	
   

  	
  Title: President

  



 


Annex A-23