Document:

idcen8k_exh-251184.htm

    EXHIBIT 10.1

    THE 2007 EQUITY
PARTICIPATION PLAN

    OF IDCENTRIX,
INC.

    FORM OF

    NON-QUALIFIED STOCK OPTION
AGREEMENT

    

     

    Non-Qualified
Stock Option Agreement (this “Agreement”), dated as
of __________________ (“Date of Grant”),
between iDcentrix, Inc. (“iDcentrix”) and
________________ (the “Participant”).

     

    BACKGROUND

     

    Pursuant
to the terms of The 2007 Equity Participation Plan of iDcentrix, Inc., as
amended (the “Plan”), iDcentrix
desires to (a) provide an incentive to the Participant, (b) encourage the
Participant to contribute materially to the growth of iDcentrix and its
subsidiaries (collectively, the “Company”) and (c)
more closely align the Participant’s economic interests with those of iDcentrix
stockholders by means of a Non-Qualified Stock Option Award.  Whenever
capitalized terms are used in this Agreement, they shall have the meanings set
forth in this Agreement or, if not defined in this Agreement, as set forth in
the Plan.

     

    The Plan
allows the Company to provide rewards and incentives to certain employees of the
Company by, among other things, granting them opportunities to purchase shares
of Common Stock.  The Board or the Committee has determined that it
would be in the best interest of the Company and its stockholders to grant the
Options to the Participant under the Plan.

     

    In
consideration of the covenants and agreements set forth in this Agreement, and
intending to be legally bound hereby, the Participant and iDcentrix hereby agree
as follows:

     

    ARTICLE
1

     

    GRANT
OF OPTIONS

     

    1.1  Grant of
Options.  The Participant is hereby granted Non-Qualified Stock
Options representing the right to purchase __________ shares of Common
Stock subject to the restrictions and conditions set forth in this
Agreement.  References in this Agreement to “Option” and “Options” mean the
options granted hereby, individually and in the aggregate.

     

    1.2  Option
Price.  The price per share of the shares of Common Stock
subject to the Option is $________ (the “Option Price”), which
is the same as the Fair Market Value of a share of Common Stock on the Date of
Grant.

     

    1.3  Grant
Information.  The Options have been granted under the
Plan.  The Board or the Committee authorized the grant of the Options
on the Date of Grant.

     

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    ARTICLE
2

     

    EXERCISABILITY
OF OPTIONS

     

    All of
the Options are unvested on the Date of Grant.  Options shall vest
upon, but only upon, the events described in Section 2.1, unless vesting is
accelerated pursuant to Sections 2.2 or 2.3 or terminated pursuant to Section
2.5.  Vested Options shall be exercisable as described in Sections 2.4
and Article 3, in each case subject to limitations set forth in Article
4.  All Options shall be non-transferable as set forth in Section
5.2.  All shares of Common Stock issued upon exercise of Options shall
be transferable, although:

     

    (a)  transferability
may be subject to pre-clearance, blackout, registration and other requirements
and restrictions under the Company’s insider trading and other compliance
policies and procedures; and

     

    (b)  transfers
by executive officers should be reviewed in advance to determine if there would
be any potential liability for short-swing profits under Section 16(b) of the
Exchange Act.

     

    2.1  Time
Vesting.  If not sooner vested pursuant to Section 2.2 or 2.3
and unless previously forfeited pursuant to Section 2.5, all of the Options
shall vest based on the passage of time according to the following vesting
schedule:

     

    
      	
              Number
      of Shares

            	
              Vesting
      Date

            
	
              _______
      percent of the Options

            	
              __
      anniversary of the Date of Grant

            
	
              _______
      percent of the Options

            	
              __
      anniversary of the Date of Grant

            
	
              _______
      percent of the Options

            	
              __
      anniversary of the Date of Grant

            
	
              _______
      percent of the Options

            	
              __
      anniversary of the Date of Grant

            
	
              _______
      percent of the Options

            	
              __
      anniversary of the Date of Grant

            
	 
      	 
      

    

    

     

    If an
Option in respect of a partial share of Common Stock would vest on any date, the
total number of Options vesting on such date shall be rounded up to the nearest
whole share of Common Stock, calculated on a cumulative basis.

     

    2.2  Accelerated
Vesting.  If not sooner vested and exercisable, and unless
previously cancelled pursuant to Section 2.5 or 4.2, all of the Options shall
vest and become immediately exercisable upon a termination of the Participant's
employment by the Company without Cause (as defined in Section 5.1) within one
year following a Corporate Transaction. 

     

    2.3  Discretionary Vesting and
Exercisability.  The Committee may accelerate the vesting of
any or all of the Options at any time and for any reason.

     

     

    
      
        2

      

      
        
        

        
        

      

      
        
        

      

    

    
    

    
    

     

    2.4  Exercise; Restriction on
Exercise.  No unvested Options shall be
exercisable.  All vested Options shall become exercisable at the time
they first vest and shall cease to be exercisable at the time they expire and
are forfeited as provided in Section 2.5 or Article 4.

     

    2.5  Effect of Termination of
Employment on Vesting; Expiration of Unvested Options.  All
unvested Options expire and are forfeited upon the earliest to occur
of:

     

    (i) the time
of notification of the termination of the Participant’s employment by the
Company for Cause;

     

    (ii) termination
of the Participant’s employment for any reason other than Cause;
and

     

    (iii) expiration
as provided in Section 4.1.

     

    2.6  Corporate
Transaction.  Except as otherwise provided in this Agreement,
the effect of a Corporate Transaction on the Participant’s Option is subject to
Section 9.3 of the Plan.

     

    ARTICLE
3

     

    EXERCISE
OF OPTIONS

     

    3.1  Person Who Can
Exercise.  Exercisable Options may only be exercised by the
Participant, except that (i) in the event of the Disability (as defined in
Section 5.1) of the Participant, those Options may be exercised by the
Participant’s legal guardian or legal representative, and (ii) in the event of
death, those Options may be exercised by the executor or administrator of the
Participant’s estate or the person or persons to whom the Participant’s rights
under those Options pass by will or the laws of descent and
distribution.

     

    3.2  Procedure for
Exercise.  Exercisable Options may be exercised in whole or in
part with respect to any portion thereof that is exercisable; provided that only
an Option or Options to purchase a whole number of shares of Common Stock may be
exercised at any time.  To exercise an exercisable Option, the
Participant (or such other person who shall be permitted to exercise that Option
as set forth in Section 3.1) must complete, sign and deliver to the Secretary of
the Company an exercise notice, substantially in the form attached hereto as
Attachment A, as such form may be amended from time to time by the Company in
its sole discretion, together with payment in full of the Option Price
multiplied by the number of shares of Common Stock with respect to which that
Option is exercised, in accordance with the option exercise procedures of the
Company as in effect from time to time.  The right to exercise any
Option shall be subject to the satisfaction of all conditions set forth in such
form of exercise notice.   Payment of the Option Price shall be
made in cash (including check, bank draft or money order).  The
Participant’s right to exercise the Option shall be subject to the satisfaction
of all conditions set forth in such exercise notice.

     

    3.3  Withholding of
Taxes.

     

    (i)  The
Participant acknowledges that, unless satisfied by the Participant (or such
other person who may be permitted to exercise Options as set forth in Section
3.1, the Company may withhold or deduct from any or all
payments or amounts due to or held for the Participant
(or such other person who may be permitted to exercise Options as set forth in
Section

     

    
      
        3

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

     3.1), whether due from the
Company or held in the account of the Participant (or such other person) at any
broker facilitating the exercise of Options, or secure payment from the
Participant of, an amount (the “Withholding
Amount”) equal to all taxes (including unemployment (including FUTA),
social security and medical (including FICA), and other governmental charges of
any kind as well as income and other taxes) required under any applicable law to
be withheld or deducted with respect to any and all taxable income and other
amounts attributable to the Options. 

       

      (ii)  The
Withholding Amount shall be determined by the Company.

       

      (iii)  Immediately
upon request by the Company, the Participant agrees to pay all, or a portion if
so requested by the Company, of the Withholding Amount to the Company in
cash.

       

      (iv)  The
timing of withholding or deduction from such payments or amounts shall be
determined by the Company.

       

    

    ARTICLE
4

     

    EXPIRATION
OF OPTIONS

     

    4.1  Expiration.  Vested
and unvested Options shall expire and be forfeited at, and no Option may be
exercised after, 5:00 p.m., Eastern Time on the day immediately preceding the
tenth anniversary of the Date of Grant.

     

    4.2  Earlier
Expiration.  Options shall expire and be forfeited earlier than
the time provided in Section 4.1 as follows:

     

    (i)  all
unvested Options shall expire and be forfeited as provided in Section
2.4;

     

    (ii)  upon
notice of termination of the Participant’s employment by the Company for Cause,
all vested Options shall expire and be forfeited immediately at the time notice
of such termination is given (unless otherwise determined by the Company in its
sole discretion);

     

    (iii)  upon
termination of the Participant’s employment by the Company without Cause or the
Participant’s resignation from employment with the Company other than in
connection with death or Disability, all vested Options shall expire and be
forfeited immediately at the close of business on the ninetieth (90th) day
following the date of such termination (or, if such date is not a business day,
on the next succeeding business day); and

     

    (iv)  upon
termination of the Participant’s employment due to the Participant’s death or
Disability, all vested Options shall expire and be forfeited immediately at the
close of business on the 12-month anniversary of the date of such termination
(or, if such date is not a business day, on the next succeeding business
day).

     

    4.3  Cancellation.  Vested
and unvested Options which expire unexercised shall be treated as
cancelled.

     

    
      
        4

      

      
        
        

        
          

        

      

      
        
        

      

    

    4.4  Effective
Date.  For purposes hereof, except as otherwise set forth in
Sections 2.5, the date of resignation or termination of employment means the
last date of actual employment or the last day of services for the Company as a
director, even if a different date is used for administrative convenience in
connection with any employee retirement, benefit or welfare plans.

     

     

    ARTICLE
5

     

    MISCELLANEOUS

     

    5.1  Definitions.

     

    (i)  “Cause” shall
mean:

     

    (a)  neglect
or willful misconduct which is or is reasonably expected to be materially and
demonstrably injurious to the Company or its customers or vendors;

     

    (b)  material
breach by the Participant of his offer letter,  his Proprietary
Information and Inventions Agreement, the Company’s Employee Handbook or
applicable law;

     

    (c)  willful
or continuing refusal or failure (in either case other than due to death or
Disability) by the Participant to substantially perform his or her duties or
responsibilities for or owed to the Company; or

     

    (d)  conviction
of or plea of guilty or no contest by the Participant to a felony or a crime of
moral turpitude.

     

    (ii)  “Disability”  shall
mean disability as determined by the Committee in accordance with the standards
and procedures similar to those under the Company’s long-term disability plan,
if any.  If at any time that the Company does not maintain a long-term
disability plan, “Disability” shall mean any physical or mental disability which
is determined to be total and permanent by a doctor selected in good faith by
the Committee.

     

    5.2  Plan
Provisions.  The Participant acknowledges receipt of the Plan
and agrees to be bound by the Plan.

     

    5.3  Options Not
Transferable.  Options may not be transferred by the
Participant (other than by will or laws of descent and distribution). Any
attempt by the Participant to effect a transfer of Options that is not permitted
by the Plan or this Agreement shall be null and void.

     

    5.4  Code Section
409A.  The parties recognize that certain provisions of this
Agreement may be affected by Code Section 409A and agree to negotiate in good
faith to amend this Agreement with respect to any changes that the Board or the
Committee reasonably determines are necessary or advisable to comply with Code
Section 409A.

     

    5.5  Notices.  All
notices, requests
and demands to or upon the parties hereto shall be in writing (including
by telecopy) to be effective, and, unless otherwise expressly provided

     

    
      
        5

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    herein, shall
be deemed to have been duly given or made, when delivered by hand, or three days
after being deposited in the mail, postage prepaid, or, in the case of telecopy
or email notice, when received, addressed as follows to the Company and the
Participant, or to such other address as may be hereafter notified by the
parties hereto:

     

    (i)  If to the
Company, to it at the following address:

     

    iDcentrix,
Inc.

    2101
Rosecrans Avenue, Suite 4240

    El
Segundo, CA  90245

    Attn:  CEO

    

    With a
copy to:

    

    Kelley Drye & Warren
LLP

    400 Atlantic Street, 13th
Floor

    Stamford,
CT  06902

    Attn:  M. Ridgway
Barker

    Facsimile:  203-327-2669

    

    

    (ii)   If to the
Participant, to his or her most recent primary residential address or business
telecopy or email address as shown on the records of the Company.

     

    5.6  No Right to Continued
Employment.  The Participant acknowledges and agrees that,
notwithstanding the fact that the vesting of the Options is contingent upon his
or her continued employment by the Company, this Agreement does not constitute
an express or implied promise of continued employment or confer upon the
Participant any rights with respect to continued employment by the
Company.

     

    5.7  Amendments and Conflicting
Agreements.  This Agreement may be amended  by a
written instrument (a) executed by the parties which specifically states that it
is amending this Agreement, (b) executed by the Company which so states if such
amendment is not material and adverse to the Participant or relates to
administrative matters or (c) executed by the Company if such amendment is made
pursuant to the Plan.

     

    5.8  Governing
Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAW THEREOF THAT WOULD CALL FOR THE APPLICATION
OF THE SUBSTANTIVE LAW OF ANY JURISDICTION OTHER THAT THE STATE OF
NEVADA.

     

    5.9  Interpretation.  Whenever
the word “including” is used herein, it shall be deemed to be followed by the
phrase “without limitation.”  Unless otherwise specified herein, all
determinations, consents, elections and other decisions by the Committee may be
made, withheld or delayed in its sole and absolute discretion.

     

     

    
      
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    5.10  Agreement Binding on
Transferees.  This Agreement may be transferred or assigned by
and shall be binding upon the Company, its successors, transferees and
assigns.  This Agreement may be transferred and assigned by the
Participant, only in connection with a transfer of Options pursuant to Section
5.2 and shall be binding upon any assignee of the Participant, including his
executor, administrator, beneficiaries and permitted transferees.  Any
purported assignment not made in accordance with the preceding sentence shall be
null and void.

     

    5.11  Titles.  Titles
are provided herein for convenience only and are not to serve as a basis for
interpretation or construction of this Agreement.

     

    5.12  Counterparts.  This
Agreement may be executed in counterparts, which together shall constitute one
and the same instrument and which will be deemed effective whether received in
original form or by other electronic means (including
PDF).   Facsimile signatures shall be as effective as original
signatures.

     

    5.13  Construction.  The
construction of this Agreement is vested in the Committee, and the Committee’s
construction shall be final and conclusive on all persons.

     

    

     

    *                      *                      *

    

    
      
        7

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN WITNESS WHEREOF, the
Company has caused this Agreement to be executed by a duly authorized
officer.

     

    IDCENTRIX, INC.

    

    

    

    By:________________________________

    Name:______________________________                                                                   

     

    

    

    PARTICIPANT’S
ACCEPTANCE

    

    The
Participant acknowledges that he or she has read this Agreement, has received
and read the Plan, and understands the terms and conditions of this Agreement
and the Plan and hereby accepts the foregoing Options and agrees to be bound by
the terms and conditions of this Agreement and the Plan.

     

    

    PARTICIPANT

    

    

    

    _______________________________

    

     

    
      
        
          8 

        

         

      

      
         

        
        

      

      
         

      

    

    

     

    Employee
Stock Option Exercise Form

    

    

    

    Employee
Name______________________________________________________________

    

    

    Social
Security Number / National Insurance Number
__________________________________

    

    

    Address____________________________________________________________________

    

    

                 _____________________________________________________________________

    

    

    City
_____________________________    State  ________     Zip
/Postal Code _____________

    

    

    Exercise
of  _____________ shares at ___________ per share exercise price
equals US$_________ 

    (“total
exercise price”), which I represent is being remitted simultaneously herewith in
the form of 
cash in the amount of US$__________.

    

    Employee's
original per share exercise price _______________ granted on ____/____/____
(price
may be different than the above price due to stock
splits).                                 
(mm/  dd  /year)

    

    

    Name(s)
to be reflected on stock
certificate____________________________________________

    

           Address________________________________________

    

                                                                      
                 
 ________________________________________

    

    

     

    9maxxam_8k-050508ex101.htm

    
 

    Exhibit
10.1

     

    In
re Scotia Development

     

    Term
Sheet Regarding Global Settlement and Plan Support

     

    May 1,
2008

     

    The
signatories to this Term Sheet (the “Agreement”) hereby acknowledge their
agreement on the terms set forth herein, which agreement shall be further set
forth into definitive documentation mutually acceptable to the
Parties.  Notwithstanding the forgoing, this Agreement is binding on
the Parties.

     

    
      	
              Parties

            	
               

              · Mendocino
      Redwood Company, LLC (“MRC”)

               

               

              · Marathon
      Structured Finance Fund L.P. (“Marathon”)

               

               

              · MAXXAM
      Inc. (“MAXXAM”), MAXXAM Group Inc. (“MGI”), and MAXXAM Group Holdings,
      Inc. 

                 
      (“MGHI”, and together with MAXXAM and MGI, the “MAXXAM
      Entities”)

               

               

              · The
      Pacific Lumber Company, Scotia Development LLC, Britt Lumber Co., Inc.,
      Salmon Creek LLC, 

                 
      and Scotia Inn Inc. (collectively, the “Palco Debtors”)

               

            
	
              Terms
      of

              Amended
      MRC/Marathon Plan

            	
              MRC
      and Marathon agree to amend the terms of the First Amended Joint Plan of
      Reorganization for the Debtors Proposed by Mendocino Redwood Company, LLC
      and Marathon Structured Finance Fund L.P., to, among other things,
      accomplish the items listed on the attached Exhibit A (as such plan may be
      further modified, amended or superseded; provided however, that
      (i) any material modifications or amendments to the MRC/Marathon Plan or
      (ii) any modifications or amendments to the MRC/Marathon Plan that
      adversely affect the Palco Debtors or the MAXXAM Entities must be
      consented to by the MAXXAM Entities and the Palco Debtors, such consent
      not to be unreasonable withheld (the “MRC/Marathon
  Plan”).

            
	
              Concessions by the MAXXAM
      Entities

            
	
              Support
      of MRC/Marathon Plan

            	
              MAXXAM
      Entities will:

              · immediately
      withdrawal as co-proponent of any plan of reorganization (including all
      related amendments, 

                
      supplements, and predecessor plans) in any of the bankruptcy cases of the
      Palco Debtors or Scopac 

                
      (collectively, the “Debtors”), including, but not limited to the following
      plans:

               

              o First
      Alternative Plan of Reorganization for the Palco Debtors [Docket Entry
      2209];

               

              o First
      Alternative Plan of Reorganization for Scotia Pacific Co. LLC [Docket
      Entry 2502]; and

               

              o Plan
      Proponents’ Third Amended Joint Plan of Reorganization for the Debtors
      [Docket Entry 2507].

               

              · immediately
      withdrawal of (i) any objections filed by the MAXXAM Entities against the
      MRC/Marathon Plan 

                
      and (ii) any proffers by the MAXXAM Entities filed, offered, or adduced in
      support of any plan other than the MRC/Marathon Plan.

              · Effective
      immediately, agree not to provide or assist any of the Debtors with exit
      financing or post-confirmation

                
       investments in connection with any plan of reorganization in any of
      the Debtors’ Reorganization Cases;

              · Express
      support for and use best efforts to defend the MRC/Marathon Plan;
      and

              · Use
      best efforts to oppose any competing plans.

              For
      avoidance of any doubt, none of the MAXXAM Entities shall be a plan
      proponent of the MRC/Marathon Plan.

            
	
              Tax
      Considerations

            	
              · MAXXAM
      agrees to indemnify, release and hold harmless MRC, Marathon, Newco,
      Townco and any and all

                 of
      their affiliates (collectively, the “Tax Indemnified Parties”) for all
      claims by whomever asserted arising from 

                
      or consisting of claims for federal, state or local income taxes,
      including alternative minimum taxes and claims 

                
      related thereto, plus any and all losses, claims, costs, legal fees,
      penalties and interest and other liabilities, including 

                
      without limitation, any obligation to reimburse any of the Debtors’
      bankruptcy estates on account of any of the foregoing,

                
      all as it relates to taxes of the Debtors, for all periods (past, present,
      and future);

              · In
      the event any such taxes are asserted against any of the Tax Indemnified
      Parties, the Tax Indemnified Parties agree they 

                
      will not compromise, settle or pay such liability without the written
      consent of MAXXAM, unless MAXXAM shall at any 

                
      time fail to defend, indemnify, release and hold harmless such
      entities.  MAXXAM’s unwillingness to compromise, settle
      

                
      or pay any asserted taxes will in no way relieve MAXXAM of its obligation
      to indemnify, release, hold harmless or defend 

                
      any of the Tax Indemnified Parties; and

              · The
      indemnity obligations provided herein arise upon receipt of written notice
      from any of the Tax Indemnified Parties 

                
      providing notice of a request for payment from a taxing authority or any
      third party, including the Debtors, for any taxes 

                
      of the Debtors as described above.

            
	
              Release
      and Covenant Not to Sue with Respect to MRC

            	
              Effective
      immediately, each of the MAXXAM Entities on behalf of themselves, their
      predecessors, successors, and assigns, hereby fully and completely
      releases MRC and its affiliates, and each of their respective officers,
      directors and professionals from all liability and covenants not to sue
      regarding (i) any and all prepetition and postpetition claims, causes of
      action, suits, debts, obligations, liabilities, demands, losses, costs,
      and expenses of any kind, character, or nature whatsoever, known or
      unknown, fixed or contingent (the “Released Claims”), that the MAXXAM
      Entities may have or claim as of the date hereof and (ii) any and all
      Released Claims relating to any of the Debtors or their respective
      bankruptcy cases that may arise at any time in the future; provided however, that
      nothing herein shall release any claims or obligations arising under this
      Agreement.

            
	
              Release
      and Covenant Not to Sue with Respect to Marathon

            	
              Effective
      immediately, each of the MAXXAM Entities on behalf of themselves, their
      predecessors, successors, and assigns, hereby fully and completely
      releases Marathon and its affiliates, and each of their respective
      officers, directors and professionals of liability and covenants not to
      sue regarding (i) any and all Released Claims that the MAXXAM Entities may
      have or claim as of the date hereof and (ii) any and all Released Claims
      relating to any of the Debtors or their respective bankruptcy cases that
      may arise at any time in the future; provided however, that
      nothing herein shall release any claims or obligations arising under this
      Agreement; provided
      further that such releases and covenants by and on behalf of the
      MAXXAM Entities shall not apply to any cause of action for any fraud,
      gross negligence or willful misconduct perpetrated against the MAXXAM
      Entities; provided,
      further that the MAXXAM Entities represent and warrant that they
      are not aware of and have no reason to believe that there is any basis
      for, and have no intention to assert, any cause of action for any such
      fraud, gross negligence or willful misconduct

            
	
              Release
      and Covenant Not to Sue with Respect to Palco Debtors

            	
              Effective
      upon entry of an order by the Bankruptcy Court approving this term of this
      Agreement, each of the MAXXAM Entities on behalf of themselves, their
      predecessors, successors, and assigns, fully and completely releases each
      of the Palco Debtors and each of their respective officers, directors and
      professionals from liability and covenants not to sue regarding (i) any
      and all Released Claims that the MAXXAM Entities may have or claim as of
      the date hereof and (ii) any and all Released Claims relating to any of
      the Debtors or their respective bankruptcy cases that may arise at any
      time in the future; provided however, that
      nothing herein shall release any claims or obligations arising under this
      Agreement.

            
	
              Concessions by the Palco
      Debtors

            
	
              Support
      of MRC/Marathon Plan

            	
              Palco
      Debtors will:

              · immediately
      withdraw as co-proponents of any plan of reorganization (including all
      related amendments, supplements, 

                
      and predecessor plans) in any of the Debtors’ bankruptcy cases, including,
      but not limited to the following plans:

               

              o First
      Alternative Plan of Reorganization for Scotia Pacific Co. LLC [Docket
      Entry 2502]; and

               

              o Plan
      Proponents’ Third Amended Joint Plan of Reorganization for the Debtors
      [Docket Entry 2507].

               

              · immediately
      withdraw the First Alternative Plan of Reorganization for the Palco
      Debtors [Docket Entry 2209];

              · to
      the extent permitted by the bankruptcy court, immediately withdraw (i) all
      objections filed by the Palco Debtors against 

                
      the MRC/Marathon Plan and (ii) all proffers by the Palco Debtors filed,
      offered, or adduced in support of any plan, other 

                
      than the MRC/Marathon Plan.

              · agree
      not to provide or assist any of the Debtors with exit financing or
      post-confirmation investments in connection with 

                
      any plan of reorganization in any of the Debtors’ reorganization
      cases;

              · express
      support for and use best efforts to defend the MRC/Marathon Plan;
      and

              · use
      best efforts to oppose any competing plans.

              For
      avoidance of any doubt, none of the Palco Debtors shall be a plan
      proponent of the MRC/Marathon Plan.

            
	
              Releases
      and Covenants Not to Sue

            	
              Effective
      upon the later to occur of (i) approval of the Settlement Motion and (ii)
      the effective date of the MRC/Marathon Plan, each of the Palco Debtors on
      behalf of themselves, their respective estates, their predecessors,
      successors, and assigns, fully and completely releases MRC, Marathon, the
      MAXXAM Entities, and each of the other Palco Debtors, and each of the
      foregoing’s respective officers, directors and professionals from
      liability and covenants not to sue regarding (i) any and all Released
      Claims that the Palco Debtors may have or claim as of the date hereof and
      (ii) any and all Released Claims relating to any of the Debtors or their
      respective bankruptcy cases that may arise at any time in the future;
      provided however,
      that nothing herein shall release any claims or obligations arising under
      this Agreement; (specific language to be this broad or as broad as the
      court will allow).

            
	
              Concessions by MRC and
    Marathon

            
	
              Amended
      Plan

            	
              File
      amended plan not later than 3:00 p.m. on May 2, 2008.

            
	
              Lumber
      Purchases

            	
              Mirada
      shall, as soon as practical, but in no event later than six weeks from the
      date hereof, choose to require Newco or MRC to purchase the lumber listed
      on the attached Exhibit B (the “Mirada Lumber”) at the MFP lumber price;
      provided,
      however, that nothing herein shall restrict Mirada’s ability to
      sell any portion of the Mirada Lumber to other entities at any
      time.

              On
      the effective date of the MRC/Marathon Plan, MRC shall (i) with
      respect to any lumber not sold within six weeks, pay the difference
      between the Mirada price and the MFP price set forth on Exhibit B, and
      (ii) with respect to any portion of the Mirada Lumber that was sold,
      pay Mirada an amount equal to the difference between such sale proceeds or
      MFP lumber price set forth on Exhibit B, whichever is higher, and the
      Mirada price set forth on Exhibit B.

            
	
              Palco
      Retirement Plan

            	
              Upon
      the effective date of the MRC/Marathon Plan, and pursuant to Article 6.5
      of the MRC/Marathon Plan, Newco will assume the Palco Retirement
      Plan;  provided, however, that
      in the event that the MRC/Marathon Plan becomes effective and is
      subsequently overturned and unwound on appeal, this provision will have no
      effect.

            
	
              Cash
      Payment

            	
              MRC
      shall pay MAXXAM $2.25 million in cash upon approval by the Court of a
      settlement based on the terms herein pursuant to a final non-appealable
      order and upon effectiveness of the MRC/Marathon Plan and refundable in
      the event that such plan becomes effective and is overturned and unwound
      on appeal.

            
	
              Professional
      Fees

            	
              Subject
      to the occurrence of the effective date of the MRC/Marathon Plan, MRC and
      Marathon represent that, with respect to professionals fees incurred by
      the Palco Debtors to-date, they have reviewed such fees, have no
      objections to any such fees, and have no intent to object to future
      reasonable fees incurred by the Palco Debtors that are consistent with
      this Agreement.

            
	
              Release
      and Covenant Not to Sue with Respect to MAXXAM

            	
              Release by MRC

               

              Effective
      immediately, MRC on behalf of itself, its predecessors, successors, and
      assigns, fully and completely releases the MAXXAM Entities and each of
      their respective officers, directors and professionals from liability and
      covenants not to sue regarding (i) any and all Released Claims that MRC
      may have or claim as of the date hereof and (ii) any and all Released
      Claims relating to any of the Debtors or their respective bankruptcy cases
      that may arise at any time in the future; provided however, that
      nothing herein shall release any claims or obligations arising under this
      Agreement.

            	
              Release by Marathon

               

              Effective
      immediately, Marathon on behalf of itself, its predecessors, successors,
      and assigns, fully and completely releases each of the MAXXAM Entities and
      each of their respective officers, directors and professionals from
      liability and covenants not to sue regarding (i) any and all Released
      Claims that Marathon may have or claim as of the date hereof and (ii) any
      and all Released Claims relating to any of the Debtors or their respective
      bankruptcy cases that may arise at any time in the future; provided however, that
      nothing herein shall release any claims or obligations arising under this
      Agreement; provided,
      further, that such releases and covenants by and on behalf of
      Marathon shall not apply to any cause of action for any fraud, gross
      negligence or willful misconduct perpetrated against Marathon; provided, further that
      Marathon represents and warrants that it is not aware of and has no reason
      to believe that there is any basis for, and has no intention to assert,
      any cause of action for any such fraud, gross negligence or willful
      misconduct; provided
      further that Marathon covenants not to assign or otherwise transfer
      any claim against any of the MAXXAM Entities that is not released by this
      Agreement.

            
	
              Release
      and Covenant Not to Sue with Respect to Palco Debtors

            	
              Release by MRC

               

              Effective
      upon the later to occur of (i) approval of the Settlement Motion and (ii)
      the effective date of the MRC/Marathon Plan, MRC on behalf of itself, its
      predecessors, successors, and assigns, fully and completely releases the
      Palco Debtors, and each of their respective officers, directors and
      professionals from liability and covenants not to sue regarding (i) any
      and all Released Claims that MRC may have or claim as of the date hereof
      and (ii) any and all Released Claims relating to any of the Debtors or
      their respective bankruptcy cases that may arise at any time in the
      future; provided
      however, that nothing herein shall release any claims or
      obligations arising under this Agreement.

            	
              Release by Marathon

               

              Effective
      upon the later to occur of (i) approval of the Settlement Motion and (ii)
      the effective date of the MRC/Marathon Plan, Marathon on behalf of itself,
      its predecessors, successors, and assigns, fully and completely releases
      each of the Palco Debtors, and each of their respective officers,
      directors and professionals from liability and covenants not to sue
      regarding (i) any and all Released Claims that Marathon may have or claim
      as of the date hereof and (ii) any and all Released Claims relating to any
      of the Debtors or their respective bankruptcy cases that may arise at any
      time in the future; provided however, that
      nothing herein shall release any claims or obligations arising under this
      Agreement;  provided, further, that
      such releases and covenants by and on behalf of Marathon shall not apply
      to any cause of action for any fraud, gross negligence or willful
      misconduct perpetrated against Marathon; provided further that
      Marathon represents and warrants that it is not aware of and has no reason
      to believe that there is any basis for, and has no intention to assert,
      any cause of action for any such fraud, gross negligence or willful
      misconduct; provided
      further that Marathon covenants not to assign or otherwise transfer
      any claim against any of the Palco Debtors that is not released by this
      Agreement.

            
	
              Approval by the Bankruptcy
      Court

            
	
              Settlement
      Motion

            	
              As
      soon as practical, the parties to this Agreement shall file a joint motion
      pursuant to Fed. R. Bankr. P. 9019 seeking bankruptcy court approval of
      the concessions made by the Palco Debtors in this Agreement (the
      “Settlement Motion”).

            
	
              Timing

            	
              The
      parties shall seek to have the Settlement Motion heard and approved on a
      parallel track with the MRC/Marathon Plan such that an order approving the
      Settlement Motion is entered contemporaneously with an order confirming
      the MRC/Marathon Plan.

            
	
              Support

            	
              MRC
      and Marathon agree to use their best efforts to support the Settlement
      Motion and to have the Settlement Motion approved on the timeline
      described above.

            
	
              Miscellaneous Provisions

            
	
              Cooperation:

            	
              The
      MAXXAM Entities and the Palco Debtors agree to fully cooperate with MRC
      and Marathon in connection with matters arising during the bankruptcy
      cases.

            
	
              Waiver
      of California Civil Code § 1542 and Similar Laws.

            	
              The
      parties hereto, and each of them, understand and acknowledge that there
      are laws which may invalidate releases of claims which are unknown to
      them.  Each of the parties hereto expressly acknowledges and
      agrees that they are hereby waiving and relinquishing any and all rights
      which they have or might have against the parties released by them
      pursuant to this Agreement; including but not limited to (and without
      acknowledging that the California Civil Code is applicable to this
      Agreement) any and all rights under § 1542 of the California Civil
      Code.  That statute reads as follows:

              A
      GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW
      OF OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE
      RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR
      HER SETTLEMENT WITH THE DEBTOR.

              In
      connection with such waiver and relinquishment, the parties hereto, and
      each of them, hereby acknowledge that they are aware that they may later
      discover facts in addition to or different from those which they currently
      know or believe to be true with respect to the subject matters of this
      Agreement, but that it is the intention of each of them to hereby fully,
      finally, and forever release all of the matters and claims identified in
      the release contained herein which now exist, may exist, or previously
      existed between them, or any of them, and each and any of the parties
      released by this Agreement, whether known or unknown, suspected or
      unsuspected.  In furtherance of such intent, the release in this
      Agreement shall be and remain in effect as a full and complete release,
      notwithstanding the discovery or existence of such additional or different
      facts by the parties, or any of them, or by any person acting on any of
      their respective behalves.

            
	
              Effective
      Date

            	
              Unless
      otherwise expressly provided in this Agreement, all terms and provisions
      herein shall be effective upon execution.

            
	
              Advice
      of Counsel

            	
              The
      parties acknowledge that they have read and considered this Agreement
      carefully, that it was negotiated by their attorneys with their express
      approval, that they have discussed it in detail with their attorneys, that
      they have been given a reasonable period of time (as long as they deemed
      necessary) to consider this Agreement before signing, that they fully
      understand the extent and impact of its provisions, and that they have
      executed it knowingly and voluntarily and without any coercion, undue
      influence, threat, or intimidation of any kind
  whatsoever.

            
	
              No
      Presumption Against Drafter

            	
              This
      Agreement has been drafted through a cooperative effort of all parties,
      and no party shall be considered the drafter of this Agreement so as to
      give rise to any presumption or convention regarding construction of this
      document.  The parties further acknowledge that they have had
      input into the drafting of this Agreement and that any construction this
      Agreement shall not be construed for or against any party, but rather
      shall be given a fair and reasonable interpretation, based on the plain
      language of the Agreement and the expressed intent of the
      parties.  The parties expressly waive the benefits of any rule
      of construction, statutory or otherwise, that in cases of uncertainty the
      language of a contract should be interpreted most strongly against its
      drafter.

            
	
              Counterparts
      and Signatures

            	
              This
      Agreement may be executed in one or more counterparts for the convenience
      of the parties hereto, all of which together shall constitute one and the
      same instrument.  Facsimile signatures, or signatures
      transferred in pdf format, shall be treated as original signatures for all
      purposes.

            
	
              Revocation

            	
              The
      parties acknowledge that this Agreement may not be
  revoked.

            
	
              Jurisdiction

            	
              The
      Bankruptcy Court shall retain exclusive jurisdiction over the subject
      matter of this Agreement to resolve all disputes relating thereto and to
      enforce the terms set forth herein, absent an agreement of the parties to
      the contrary.  In addition, the parties agree that venue with
      respect to releases and the tax indemnity agreement shall be at some other
      mutually agreeable venue.

            
	
              Choice
      of Law

            	
              This
      Agreement shall, in all respects, be governed by and interpreted in
      accordance with the laws of the state of New York.

            
	
              No
      Admission of Liability

               

            	
              It
      is understood and agreed by the parties that this Agreement represents a
      settlement and compromise of disputed claims and neither this Agreement
      itself, any of the payments or covenants described herein, nor anything
      else connected with this Agreement is to be construed as an admission of
      liability, but is entered into to buy the peace of the
      parties.  Neither this
      Agreement nor anything contained within it shall be admissible in any
      proceeding as evidence of liability or wrongdoing on the part of either
      party.  However, this Agreement may be introduced in any
      proceeding instituted to enforce its terms.

            
	
              Subsequent
      Documentation

            	
              Parties
      agree to use their reasonable best efforts to further set forth this
      Agreement in definitive documentation mutually acceptable to the Parties
      by May 30, 2008.  Notwithstanding the forgoing, this Agreement
      is binding on the Parties.

            

    

    

    [Signatures
on Following Page]

    
      
         

      

      
        
          

        

      

       

    

    IN
WITNESS WHEREOF, the parties hereto have caused this agreement to be duly
executed as of the day and year first above written.

     

    
      	
              Marathon
      Structured Finance Fund L.P.

               

              By:  /s/ Louis
      Hanover                                                                

              Name:  Louis
      Hanover                                                                

              Title:  CIO                                                                

            	
              Mendocino
      Redwood Company, LLC

               

              By:  /s/ Alexander L. Dean Jr.

              Name:  Alexander L. Dean
      Jr.                                                                

              Title:  Chairman of the Board

            
	
              MAXXAM
      Inc.

               

               

              By:  /s/ M. Emily
      Madison                                                                

              Name:  M. Emily
      Madison                                                                

              Title:  Vice President,
      Finance                                                                

            	
              The
      Pacific Lumber Company

              Debtor
      in Possession

               

              By:  /s/ George A. O’Brien

              Name:                                                      

              Title:                                                                

            
	
              MAXXAM
      Group Holdings, Inc.

              Debtor
      in Possession

               

               

              By:  /s/ M. Emily
      Madison                                                                

              Name:  M. Emily
      Madison                                                                

              Title:                                                                

            	
              Britt
      Lumber Company

              Debtor
      in Possession

               

               

              By:  /s/ George A. O’Brien

              Name:                                                      

              Title:                                                                

            
	
              MAXXAM
      Group Inc.

              Debtor
      in Possession

               

               

              By:  /s/ M. Emily
      Madison                                                                

              Name:  M. Emily
      Madison                                                                

              Title:                                                                

            	
              Salmon
      Creek LLC

              Debtor
      in Possession

               

               

              By:  /s/ George A. O’Brien

              Name:                                                      

              Title:                                                                

            
	
              Scotia
      Development LLC

              Debtor
      in Possession

               

               

              By:  /s/ George A. O’Brien

              Name:                                                      

              Title:                                                                

            	
              Scotia
      Inn Inc.

              Debtor
      in Possession

               

               

              By:  /s/ George A. O’Brien

              Name:                                                      

              Title:                                                                

            

    

    
      
         

      

      
        
          

        

      

       

    

    Exhibit
A

    

     

    
      	
              ·  

            	
              Elimination
      of the New Timber Notes;

            

    

     

     

    
      	
              ·  

            	
              Amend
      treatment for Holders of Scopac Timber Note Secured Claims to provide for
      cash payment of not less than $520 million on the effective date of the
      MRC/Marathon Plan;

            

    

     

     

    
      	
              ·  

            	
              Modify
      existing “New Timber Note Adjustment” to reflect elimination of New Timber
      Notes and to remove the Tax Claims portion of such remaining
      adjustment;

            

    

     

     

    
      	
              ·  

            	
              Pursuant
      to Article 6.5 of the Plan, Newco will assume the Palco Retirement Plan
      under the MRC/Marathon Plan; and

            

    

     

     

    
      	
              ·  

            	
              On
      the effective date of the MRC/Marathon Plan, Newco will receive an equity
      capital contribution of not less than $200
  million.

            

    

     

    
      
        
          DAL02:513628.4

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