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  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

10/09/01  Plum Creek Timber Co Inc          8-K{2,4,5,710/06/01   12:293                                    Merrill Corp/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                      HTML    176K 
 2: EX-3.1      Articles of Incorporation/Organization or By-Laws   HTML     74K 
 3: EX-3.2      Articles of Incorporation/Organization or By-Laws   HTML     18K 
 4: EX-3.3      Articles of Incorporation/Organization or By-Laws   HTML     81K 
 5: EX-4.1      Instrument Defining the Rights of Security Holders  HTML    766K 
 6: EX-4.2      Instrument Defining the Rights of Security Holders  HTML  1,033K 
 7: EX-16.1     Letter re: Change of Certifying Accountant          HTML      8K 
 8: EX-23.1     Consent of Experts or Counsel                       HTML      8K 
 9: EX-99.1     Miscellaneous Exhibit                               HTML     16K 
10: EX-99.2     Miscellaneous Exhibit                               HTML    216K 
11: EX-99.3     Miscellaneous Exhibit                               HTML     55K 
12: EX-99.4     Miscellaneous Exhibit                               HTML    145K 

   
EXHIBIT 4.2

CREDIT AGREEMENT

Dated as of October 3, 2001

among

PLUM CREEK TIMBERLANDS, L.P.,

BANK OF AMERICA, N.A.,
as Administrative Agent,

FIRST UNION NATIONAL BANK

and

THE BANK OF TOKYO-MITSUBISHI, LTD.,
PORTLAND BRANCH,
as Syndication Agents,

SUNTRUST BANK,

SCOTIABANC INC.,

and

NORTHWEST FARM CREDIT SERVICES, PCA,
as Documentation Agents,

and

THE OTHER FINANCIAL INSTITUTIONS PARTY
HERETO

BANC OF AMERICA SECURITIES LLC

and

FIRST UNION SECURITIES, INC.,
as Arrangers

   
TABLE OF CONTENTS

i

ii

iii

iv

v

   
TABLE OF SCHEDULES AND EXHIBITS

Schedules

Schedule 1.1—Corporate Investment Policy

Schedule 1.2—Existing Letters of Credit

Schedule 2.1—Commitments

Schedule 6.7—Plans

Schedule 6.12—Environmental Matters

Schedule 6.18—Subsidiaries

Schedule 6.23—Changes, Etc.

Schedule 8.1—Permitted Liens

Schedule 8.4—Permitted Investments

Schedule 11.2—Addresses for Notices

Exhibits

Exhibit A—Notice of Borrowing

Exhibit B—Notice of Conversion/Continuation

Exhibit C—Legal Opinion of Counsel for the Company

Exhibit D—Compliance Certificate

Exhibit E—Form of Cash Collateral Account Agreement

Exhibit F—Form of Assignment and Assumption Agreement

Exhibit G—Form of Term Credit Promissory Note

Exhibit H—Form of Revolving Credit Promissory Note

Exhibit I—Form of Conditions Precedent Letter from Purchasers of 2001 Notes

vi

   
CREDIT AGREEMENT

    This Credit Agreement is dated as of October 3, 2001, and entered into among PLUM CREEK TIMBERLANDS, L.P., a Delaware limited partnership (the "Company"), the several financial institutions from time to time party to this Agreement (collectively, the "Banks"; individually, a "Bank"), FIRST UNION NATIONAL BANK and THE BANK OF TOKYO-MITSUBISHI, LTD., PORTLAND BRANCH, as syndication agents for the Banks (collectively, the "Syndication Agents"; individually, a "Syndication Agent"), SUNTRUST BANK, SCOTIABANC INC. AND NORTHWEST FARM CREDIT SERVICES, PCA, as documentation agents for the Banks (collectively, the "Documentation Agents"; individually, a "Documentation Agent"), and BANK OF AMERICA, N.A., as a letter of credit issuing bank, as a swingline bank, and as administrative agent for the Banks.

    WHEREAS, the Banks have agreed to make available to the Company a revolving credit facility with a letter of credit subfacility and a swingline loan subfacility, and a term credit facility, all of the foregoing upon the terms and conditions set forth in this Agreement;

    NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties hereby agree as follows:

   
ARTICLE I
DEFINITIONS

    1.1 Defined Terms

    In addition to the terms defined elsewhere in this Agreement, the following terms have the following meanings:

    "Acquisition Documents" means, collectively, the Separation Documents, the Merger Documents, the Asset Transfer Documents, the Tax Matters Agreement, and the Tax Opinion Insurance Policy.

    "Acquisition Transactions" means, collectively, the Redemption Transaction, the Separation Transaction, the Merger and the Asset Transfer Transaction.

    "Administrative Agent" means BofA in its capacity as administrative agent for the Banks hereunder, and any successor administrative agent.

    "Administrative Agent's Payment Office" means the address for payments set forth on Schedule 11.2 in relation to the Administrative Agent or such other address as the Administrative Agent may from time to time specify to the Company and the Banks in accordance with Section 11.2.

    "Administrative Agent-Related Persons" means BofA, BofA Securities, and any successor administrative agent arising under Section 10.9 and any successor to BofA as letter of credit issuing bank or swingline bank hereunder, together with their respective Affiliates, and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates.

    "Affiliate" means, as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. A Person shall be deemed to control another Person if the controlling Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the other Person, whether through the ownership of voting securities, by contract or otherwise. Without limitation, any director, executive officer or beneficial owner of 5% or more of the equity of a Person shall for the purposes of this Agreement, be deemed to control the other Person. Notwithstanding the foregoing, no Bank shall be deemed an "Affiliate" of the Company or of any Subsidiary of the Company.

    "Aggregate Commitment Percentage" means, at any time, with respect to each Bank, the percentage (carried out to the ninth decimal place) equivalent of (a) an amount equal to the sum of (i) the aggregate amount of such Bank's Revolving Credit Commitment at such time (or, if such Bank's

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Revolving Credit Commitment shall have terminated, the aggregate Effective Amount of such Bank's Revolving Loans at such time) plus (ii) the aggregate amount of such Bank's Term Credit Commitment at such time (or, if such Bank's Term Credit Commitment shall have terminated, the aggregate Effective Amount of such Bank's Term Loans at such time) divided by (b) the Aggregate Commitments.

    "Aggregate Commitments" means, at any time, an amount equal to the sum of (a) the Aggregate Revolving Credit Commitment in effect at such time (or, if the Aggregate Revolving Credit Commitment shall have terminated, the aggregate Effective Amount of the Revolving Loans at such time) plus (b) the Aggregate Term Credit Commitment in effect at such time (or, if the Aggregate Term Credit Commitment shall have terminated, the aggregate Effective Amount of the Term Loans at such time).

    "Aggregate Revolving Credit Commitment" means the combined Revolving Credit Commitments of the Revolving Credit Banks, in the initial amount of six hundred million Dollars ($600,000,000), as such amount may be terminated or reduced from time to time pursuant to this Agreement.

    "Aggregate Term Credit Commitment" means the combined Term Credit Commitments of the Term Credit Banks, in the amount of one hundred million Dollars ($100,000,000), as such amount shall be terminated pursuant to this Agreement.

    "Agreement" means this Credit Agreement, as amended from time to time in accordance with the terms hereof.

    "Applicable Margin" means, in respect of all Loans outstanding on any date (A) for the period from the Closing Date through March 31, 2002, 1.175% for Eurodollar Rate Loans and 0.1750% for Base Rate Loans, and (B) from April 1, 2002, the percentage specified below opposite the Pricing Leverage Ratio (which ratio shall be calculated on a four quarter rolling basis for the relevant fiscal quarter) calculated for the periods described below.

    The Applicable Margin for each fiscal quarter commencing on and after April 1, 2002 shall be calculated in reliance on the financial reports delivered pursuant to subsections 7.1(a) and 7.1(c) and the certificate delivered pursuant to subsection 7.2(b) with respect to the fiscal quarter ending one fiscal quarter before the fiscal quarter in question (e.g., June 30 financials determine the Applicable Margin for the fiscal quarter beginning October 1). If the Company fails to deliver such financial reports and certificate to the Administrative Agent for any fiscal quarter by the beginning of the second succeeding fiscal quarter (e.g., by October 1 for the fiscal quarter ending June 30), then the Applicable Margin for the following fiscal quarter (e.g., October 1 through December 31) shall equal the next higher Applicable Margin as set forth in the chart above immediately above the previously effective Applicable Margin; thus, for example, if the Applicable Margin had previously been 1.0000% for Eurodollar Rate Loans and 0.0000% for Base Rate Loans, a failure to deliver quarterly financials by the first day of the next fiscal quarter would cause the Applicable Margin to be 1.1750% and 0.1750%, respectively, for the duration of that quarter. In addition, if such financial reports and certificate when delivered indicate that the Applicable Margin for such period should have been higher than the Applicable Margin provided for in the previous sentence, then the Company shall pay on the date of

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delivery of such financial reports and certificate an amount equal to the positive difference, if any, between the interest that the Company should have paid hereunder had the financial reports and certificate been delivered on a timely basis over what the Company actually paid. The Applicable Margin shall be adjusted automatically as to all Loans then outstanding (without regard to the timing of Interest Periods) as of the effective date of any change in the Applicable Margin.

    "Approved Fund" has the meaning specified in Section 11.8(g).

    "Arrangers" means, collectively, Banc of America Securities LLC, and First Union Securities, Inc.; and individually, an "Arranger".

    "Assessment Rate" has the meaning specified in Section 4.3(a).

    "Asset Transfer Date" means the date on which the Asset Transfer Transaction shall have been fully consummated in accordance with the Asset Transfer Documents.

    "Asset Transfer Documents" means, collectively, the REIT Contribution Agreements and the Real Property Deeds.

    "Asset Transfer Transaction" means the transfer by the REIT to the Company (or, in the case of certain Spinco Assets constituting real property, to a Restricted Subsidiary) of all the REIT's right, title and interest in and to the Spinco Assets as specified in, and in accordance with, the applicable REIT Contribution Agreements.

    "Assignment and Assumption Agreement" means an Assignment and Assumption Agreement substantially in the form of Exhibit F.

    "Attorney Costs" means and includes all fees and disbursements of any law firm or other external counsel, the allocated cost of internal legal services and all disbursements of internal counsel.

    "Available Cash" means, with respect to any calendar quarter, (i) the sum of:

    (a) the Company's net income (or net loss) (excluding gain on the sale of any Capital Asset) for such quarter,

    (b) the amount of depletion, depreciation, amortization and other noncash charges utilized in determining net income of the Company for such quarter,

    (c) the amount of any reduction in reserves of the Company of the types referred to in clause (ii)(d) below,

    (d) proceeds received by the Company from the sale of Designated Acres,

    (e) any Cash from Capital Transactions received by the Company during such quarter in specific contemplation that such Cash from Capital Transactions will be used to refund or refinance any payment of Indebtedness of the type specified in clause (ii)(a) below which was made in either of the two immediately preceding quarters, and

    (f)  with respect to the fiscal quarter ending September 30, 2001 only, $140,000,000;

less (ii) the sum of:

    (a) all payments of principal on Indebtedness made by the Company in such quarter (excluding any payments of principal on Indebtedness made with Cash from Capital Transactions received by the Company during such quarter or, to the extent such Cash from Capital Transactions remains available, received by the Company during the four immediately preceding quarters),

    (b) capital expenditures made by the Company during such quarter (excluding any capital expenditures for such quarter made with Cash from Capital Transactions received by the Company

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during such quarter or, to the extent such Cash from Capital Transactions remains available, received by the Company during the four immediately preceding quarters, and capital expenditures which the General Partner reasonably anticipates will be financed with Cash from Capital Transactions within 90 days from the end of such quarter),

    (c) the amount of any capital expenditures made by the Company in a prior quarter which was anticipated would be financed from Cash from Capital Transactions but which have not been financed from such source within 90 days from the end of such quarter,

    (d) the amount of any reserves of the Company established during such quarter which are necessary or appropriate (1) to provide funds for the future payment of items of the types specified in clauses (ii)(a) and (ii)(b) above, (2) to provide additional working capital, (3) to provide funds for cash distributions with respect to any one or more of the next four quarters, or (4) to provide funds for the future payment of interest in an amount equal to the interest to be accrued in the next quarter,

    (e) the amount of any noncash items of income utilized in determining net income of the Company for such quarter,

    (f)  the amount of any Investments (other than guarantees, contingent liabilities or endorsements, except to the extent payments are actually made under such guarantees, contingent liabilities or endorsements) made by the Company during such quarter pursuant to subsections 8.4(a), (h) or (i) (or in the case of any Subsidiary, Investments (other than guarantees, contingent liabilities or endorsements, except to the extent payments are actually made under such guarantees, contingent liabilities or endorsements) of similar type) to the extent not included in capital expenditures or payments on principal on Indebtedness made by the Company during such quarter (excluding (A) any such Investments for such quarter made with Cash from Capital Transactions received by the Company during such quarter or, to the extent such Cash from Capital Transactions remains available, received by the Company during the four immediately preceding quarters, and Investments which the General Partner reasonably anticipates will be financed with Cash from Capital Transactions within 90 days from the end of such quarter and (B) the Investments made pursuant to the Merger-Related Contributions), and

    (g) the amount of any Investments (other than guarantees, contingent liabilities or endorsements, except to the extent payments are actually made under such guarantees, contingent liabilities or endorsements) made by the Company in a prior quarter pursuant to subsections 8.4(a), (h) or (i) (or in the case of any Subsidiary, Investments (other than guarantees, contingent liabilities or endorsements, except to the extent payments are actually made under such guarantees, contingent liabilities or endorsements) of similar type) to the extent not included in capital expenditures made by the Company during such quarter which was anticipated would be financed from Cash from Capital Transactions but which have not been financed from such source within 90 days from the end of such quarter, other than any Investments made pursuant to the Merger-Related Contributions.

    Notwithstanding the foregoing, "Available Cash" shall not take into account any reductions in reserves or disbursements made or reserves established after commencement of the dissolution and liquidation of the Company. In determining "Available Cash," (i) all items under clauses (i)(a), (b), (c), (d), (e) and (f) above and all items under clauses (ii)(a), (b), (c), (d), (e), (f) and (g) above shall be calculated on a consolidated basis with any Subsidiary of the Company whose income is accounted for on a consolidated basis with the Company and, in accordance therewith, "Available Cash" shall include a percentage of each such item of each such Subsidiary equal to the Company's percentage ownership interest in such Subsidiary, provided, however, that the items under clauses (i)(a), (b), (c), (d), (e) and (f) above shall only be included in Available Cash to the extent that the General Partner determines such amount to be legally available for dividends or distributions to the Company by such Subsidiary;

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(ii) the amount of net income and the amount of depletion, depreciation, amortization and other noncash charges utilized in determining net income shall be determined, with respect to the Company, by the General Partner in accordance with generally accepted accounting principals and, with respect to any Subsidiary, by its Board of Directors (or by such other body or person which has the ultimate management authority of such Subsidiary) in accordance with generally accepted accounting principles; (iii) the net income of any Subsidiary shall be determined on an after-tax basis; (iv) the amount of any reductions in, or additions to, reserves for purposes of clauses (i)(c) and (ii)(d) above shall be determined, with respect to the Company, by the General Partner in its reasonable good faith judgment and, with respect to any Subsidiary, by its Board of Directors (or by such other body or person which has the ultimate management authority of such Subsidiary) in its reasonable good faith judgment; and (v) any determination of whether any capital expenditures or Investments are financed, or anticipated to be financed, with Cash from Capital Transactions for purposes of clause (ii)(b) or (ii)(f) above shall be made, with respect to the Company, by the General Partner in its reasonable good faith judgment and, with respect to any Subsidiary, by its Board of Directors (or by such other body or person which has the ultimate management authority of such Subsidiary) in its reasonable good faith judgment.

    "Bank" has the meaning specified in the introductory clause hereto. References to the "Banks" shall include BofA in its capacity as the Swingline Bank and the Issuing Bank, for purposes of clarification only, to the extent that BofA may have any rights or obligations in addition to those of the Banks due to its status as the Swingline Bank or the Issuing Bank, its status as such will be specifically referenced.

    "Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C. § 101, et seq.).

    "Base Rate" means, for any day, the higher of:

    (a) the rate of interest in effect for such day as publicly announced from time to time by BofA in San Francisco, California, as its "reference rate". It is a rate set by BofA based upon various factors including BofA's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate; and

    (b) 0.50% per annum above the latest Federal Funds Rate.

Any change in the reference rate announced by BofA shall take effect at the opening of business on the day specified in the public announcement of such change.

    "Base Rate Loan" means a Loan or an L/C Advance that bears interest based on the Base Rate.

    "Base Rate Revolving Loan" mean a Revolving Loan or a L/C Advance that bears interest based on the Base Rate.

    "Board Foot" means a unit of measurement one foot square and one inch thick.

    "BofA" means Bank of America, N.A., a national banking association.

    "BofA Fee Letter" means the letter agreement dated July 30, 2001 among BofA, BofA Securities and the Company.

    "BofA Securities" means Banc of America Securities LLC.

    "Borrowing" means a borrowing hereunder consisting of Loans of the same Type made to the Company on the same day by the Banks, or a Swingline Loan or Loans made to the Company on the same day by the Swingline Bank, in each case pursuant to Article II, and, other than in the case of Base Rate Loans, having the same Interest Period.

    "Business Day" means any day other than a Saturday, Sunday or other day on which commercial banks in New York City or San Francisco are authorized or required by law to close and, if the

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applicable Business Day relates to any Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

    "Capital Adequacy Regulation" means any guideline, request or directive of any central bank or other Governmental Authority, or any other law, rule or regulation, whether or not having the force of law, in each case, regarding capital adequacy of any bank or of any corporation controlling a bank.

    "Capital Asset" means any asset on the Company's or any Subsidiary's balance sheet, as the case may be, other than inventory, accounts receivable or any other current asset and assets disposed of in connection with normal retirements or replacements.

    "Capital Expenditure Tranche" has the meaning specified in Section 2.16.

    "Capital Expenditure Tranche Loan" means a Loan allocated by the Company to the Capital Expenditure Tranche as provided in Section 2.16.

    "Capital Lease" has the meaning specified in the definition of "Capital Lease Obligations".

    "Capital Lease Obligations" means all monetary obligations of the Company or any of its Subsidiaries under any leasing or similar arrangement which, in accordance with GAAP, is classified as a capital lease ("Capital Lease").

    "Capital Stock" means any and all shares, interests, participations, units or other equivalents (however designated) of capital stock of a corporation, and any and all equivalent ownership interests in a Person other than a corporation.

    "Capital Transaction" means (i) borrowings and sales of debt securities (other than for working capital purposes and other than for items purchased on open account in the ordinary course of business) by the Company, (ii) sales of equity interests by the REIT the proceeds of which are contributed to the Company, and (iii) sales or other voluntary or involuntary dispositions of any assets of the Company (other than (x) sales or other dispositions of inventory in the ordinary course of business, (y) sales or other dispositions of other current assets including receivables and accounts and (z) sales or other dispositions of assets as a part of normal retirements or replacements), in each case prior to the commencement of the dissolution and liquidation of the Company, provided that in determining Cash from Capital Transactions, items (i), (ii) and (iii) above shall include, with respect to each Subsidiary of the Company whose income is accounted for on a consolidated basis with the Company, a percentage of each such item of such Subsidiary equal to the Company's percentage ownership interest in such Subsidiary.

    "Cash Collateral Account Agreement" means an agreement or agreements entered into between the Company and the Administrative Agent substantially in the form of Exhibit E.

    "Cash Collateralize" means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of (i) in the case of L/C Obligations, the Administrative Agent, the Issuing Bank and the Banks, (ii) in the case of Eurodollar Rate Loans, the Administrative Agent and the Banks, and (iii) in the case of Swingline Loans, the Administrative Agent, the Swingline Bank and the Banks, in each case as collateral for the L/C Obligations, the Loans or the Swingline Loans, as the case may be, cash or deposit account balances pursuant to a Cash Collateral Account Agreement. Derivatives of such term shall have corresponding meaning.

    "Cash from Capital Transactions" means at any date, such amounts of cash as are determined by the General Partner to be cash made available to the Company from or by reason of a Capital Transaction.

    "CERCLA" has the meaning specified in the definition of "Environmental Laws".

    "Certificates of Merger" has the meaning specified in the definition of "Merger Documents".

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      "Change of Control" means, with respect to any Person, an event or series of events by which:

    (a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person r its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have "beneficial ownership" of all Capital Stock that such person or group has the right to acquire (such right, an "option right"), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 30% or more of the Capital Stock of such Person entitled to vote for members of the board of directors or equivalent governing body of such Person on a partially-diluted basis (i.e., taking into account all such securities that such person or group has the right to acquire pursuant to any option right); or

    (b) during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of such Person cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body.

    "Closing Date" means the date on which all conditions precedent set forth in Section 5.1 are satisfied or waived by all Banks.

    "Code" means the Internal Revenue Code of 1986, as amended from time, and regulations promulgated thereunder.

    "Commitment" means, as to each Bank, such Bank's Revolving Credit Commitment or Term Credit Commitment, or both of them, as applicable.

    "Company's Knowledge" or "Knowledge of the Company" shall mean the actual knowledge of any person holding any of the following offices as of the date of determination: (i) President, Chief Executive Officer, any Executive Vice President, Chief Financial Officer, General Counsel, Secretary, Vice President-Human Resources, and Environmental Engineer, and any successor to those offices, such persons being the principal persons employed by the Company ultimately responsible for environmental operations and compliance, ERISA and legal matters relating to the Company or (ii) the Treasurer or any other person having the primary responsibility for the day-to-day administration of, and dealings with the Administrative Agent and the Banks in connection with, this Agreement.

    "Contractual Obligations" means, as to any Person, any provision of any security issued by such Person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument, document or agreement to which such Person is a party or by which it or any of its property is bound.

    "Controlled Group" means the Company and all Persons (whether or not incorporated) under common control or treated as a single employer with the Company pursuant to Section 414(b), (c), (m) or (o) of the Code.

    "Conversion/Continuation Date" means any date on which, under Section 2.4, the Company (a) converts Loans of one Type to another Type, or (b) continues as Loans of the same Type, but with a new Interest Period, Loans having Interest Periods expiring on such date.

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    "Credit Extension" means and includes (a) the making of any Loan hereunder, including any conversion or continuation thereof, and (b) the Issuance of any Letter of Credit hereunder.

    "Cunit" means 100 cubic feet of wood.

    "Debt Issuance" means any issuance or sale or other incurrence of any Indebtedness for borrowed money by the Company or any of its Subsidiaries.

    "Debt Proceeds" means the proceeds of Indebtedness permitted by subsection 8.5(i), net of customary expenses payable to Persons that are not Affiliates of the Company.

    "Default" means any event or circumstance which, with the giving of notice, the lapse of time, or both, would (if not cured or otherwise remedied during such time) constitute an Event of Default.

    "Defaulting Bank" means any Bank who has failed to fund any portion of its Commitments, participations in L/C Obligations or participations in Swingline Loans required to be funded by it hereunder, during such failure.

    "Designated Acres" means up to an aggregate of 400,000 acres owned by the Company which (based on the good faith determination of the Responsible Representatives that such acres have at the time such determination is made a higher value as recreational, residential, grazing or agricultural property than for timber production) may be reasonably designated by the General Partner at the time of the sale thereof as constituting Designated Acres (such aggregate number of acres to be determined over the term of existence of the 1989 Senior Note Agreement).

    "Designated Immaterial Subsidiary" means any entity which would otherwise be a Restricted Subsidiary and which at any time is designated by the Company as a Designated Immaterial Subsidiary, provided that no such designation of any entity as a Designated Immaterial Subsidiary shall be effective unless (i) at the time of such designation, such entity does not own any shares of stock or Indebtedness of any Restricted Subsidiary which is not simultaneously being designated as a Designated Immaterial Subsidiary, (ii) immediately after giving effect to such designation, (a) the Company could incur at least $1 of additional Funded Debt pursuant to subsection 8.5(i), and (b) no condition or event shall exist which constitutes an Event of Default or Material Default, (iii) the Company is permitted to make the Investment in such entity resulting from such designation pursuant to, and within the limitations specified in, subsection 8.4(i), treating the aggregate book value (including equity in retained earnings) of the Investments of the Company and its Subsidiaries in such entity immediately prior to such designation as the cost of such Investment, and provided, further, that if at any time all Designated Immaterial Subsidiaries on a consolidated basis would be a "significant subsidiary" (assuming the Company is the registrant) within the meaning of Regulation S-X (17 C.F.R. Part 210) the Company shall designate one or more Designated Immaterial Subsidiaries which are directly owned by the Company and its Restricted Subsidiaries as Restricted Subsidiaries such that the condition in this proviso is no longer applicable and the entities so designated shall no longer be Designated Immaterial Subsidiaries. Any entity which has been designated a Designated Immaterial Subsidiary shall not thereafter become a Restricted Subsidiary except pursuant to a designation required by the last proviso in the preceding sentence, and any Designated Immaterial Subsidiary which has been designated a Restricted Subsidiary pursuant to the last proviso of the preceding sentence shall not thereafter be redesignated as a Designated Immaterial Subsidiary.

    "Documentation Agent" or "Documentation Agents" has the meaning specified in the introductory paragraph of this Agreement.

    "Dollars," "dollars" and "$" each mean lawful money of the United States.

    "Domestic Lending Office" means, with respect to each Bank and the Swingline Bank, the office of that Bank and the Swingline Bank designated as such in Schedule 11.2 or such other office of the Bank

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and the Swingline Bank as it may from time to time specify to the Company and the Administrative Agent.

    "EBITDA" means, for any period, for the Company and its Subsidiaries on a consolidated basis, determined in accordance with GAAP, the sum of (a) the net income (or net loss) for such period, plus (b) all amounts treated as expenses for depreciation, depletion and interest and the amortization of intangibles of any kind to the extent included in the determination of such net income (or loss), plus (c) the cost basis for Designated Acres disposed of during such period to the extent such aggregate cost basis, when added to the net income for such period arising from the sale of Designated Acres, does not exceed $80,000,000 for the four quarters then ending, plus (d) all accrued taxes on or measured by income to the extent included in the determination of such net income (or loss), plus or minus, as applicable, (e) in connection with any Timber previously acquired within such period, an amount equal to a good faith estimate of such additional amounts as would be included in clauses (a), (b), (c), or (d) above had such Timber been owned by the Company or one of its Subsidiaries for the entirety of such period, as certified (in a certificate containing such detail as the Administrative Agent or the Majority Banks may reasonably request) by a Responsible Officer based upon such Responsible Officer's good faith estimates of applicable revenues and expenses arising from such Timber and assuming aggregate timber harvests in an amount that does not require application of the proceeds thereof to the purchase of Timber or the repayment of Qualified Debt under Section 8.3; provided, however, that net income (or loss) shall be computed for purposes of computing EBITDA without giving effect to extraordinary losses or extraordinary gains.

    "Effective Amount" means (i) with respect to any Loans or Swingline Loans, as the case may be, on any date, the aggregate outstanding principal amount thereof after giving effect to any Borrowings and prepayments or repayments thereof occurring on such date; and (ii) with respect to any outstanding L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any Issuances of Letters of Credit occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements of outstanding unpaid drawings under any Letters of Credit or any reductions in the maximum amount available for drawing under Letters of Credit taking effect on such date.

    "Eligible Assignee" has the meaning specified in Section 11.8(g).

    "Environmental Claims" means all claims, however asserted, by any Governmental Authority or other Person alleging potential liability or responsibility for violation of any Environmental Law, or for release or injury to the environment or threat to public health, personal injury (including sickness, disease or death), property damage, natural resources damage, or otherwise alleging liability or responsibility for damages (punitive or otherwise), cleanup, removal, remedial or response costs, restitution, civil or criminal penalties, injunctive relief, or other type of relief, resulting from or based upon (a) the presence, placement, discharge, emission or release (including intentional and unintentional, negligent and non-negligent, sudden or non-sudden, accidental or non-accidental placement, spills, leaks, discharges, emissions or releases) of any Hazardous Material at, in, or from Property, whether or not owned by such person, or (b) any other circumstances forming the basis of any violation, or alleged violation, of any Environmental Law.

    "Environmental Laws" means all federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authorities, in each case relating to environmental, health, safety, land use, conservation, and timber harvesting matters; including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), the Clean Air Act, the Federal Water Pollution Control Act of 1972, the Solid Waste Disposal Act, the Federal Resource Conservation and Recovery Act, the Toxic Substances Control Act, the Emergency Planning and Community Right-to-Know Act.

9

    "Equity Issuance" means any issuance or sale by the REIT, the Company or any of their respective Subsidiaries of any of their respective Capital Stock, as the case may be.

    "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and regulations promulgated thereunder.

    "ERISA Affiliate" means any trade or business (whether or not incorporated) under common control with the Company within the meaning of Section 414(b) or 414(c) of the Code.

    "ERISA Event" means (a) a Reportable Event with respect to a Qualified Plan or a Multiemployer Plan; (b) a withdrawal by the Company or any ERISA Affiliate from a Qualified Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA); (c) a complete or partial withdrawal by the Company or any ERISA Affiliate from a Multiemployer Plan; (d) the filing of a notice of intent to terminate, the treatment of a plan amendment as a termination under Section 4041 or 4041A of ERISA or the commencement of proceedings by the PBGC to terminate a Qualified Plan or Multiemployer Plan subject to Title IV of ERISA; (e) a failure by the Company or any ERISA Affiliate to make required contributions to a Qualified Plan or Multiemployer Plan; (f) an event or condition which might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Qualified Plan or Multiemployer Plan; (g) the imposition of any liability under Title IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Company or any ERISA Affiliate; (h) an application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code with respect to any Plan; (i) a non-exempt prohibited transaction occurs with respect to any Plan for which the Company may be directly or indirectly liable; or (j) a violation of the applicable requirements of Section 404 or 405 of ERISA or the exclusive benefit rule under Section 401(a) of the Code by any fiduciary or disqualified person with respect to any Plan for which the Company may be directly or indirectly liable.

    "Eurocurrency Liabilities" has the meaning specified in the definition of "Eurodollar Rate".

    "Eurodollar Rate" means for any Interest Period with respect to any Eurodollar Rate Loan, a rate per annum determined by the Administrative Agent pursuant to the following formula:

    Where,

    "Eurodollar Base Rate" means, for such Interest Period:

    (a) the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate that appears on the page of the Telerate screen (or any successor thereto) that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or

    (b) if the rate referenced in the preceding subsection (a) does not appear on such page or service or such page or service shall cease to be available, the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate on such other page or other service that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or

10

    (c) if the rates referenced in the preceding subsections (a) and (b) are not available, the rate per annum determined by the Administrative Agent as the rate of interest (rounded upward to the next 1/100^th of 1%) at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by BofA and with a term equivalent to such Interest Period would be offered by Bank of America's London branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period;

    and where,

    "Eurodollar Reserve Percentage" means, for any day during any Interest Period, the reserve percentage (expressed as a decimal, rounded unpaid to the next 1/100^th of 1%) in effect on such day, whether or not applicable to any Bank, under regulations issued from time to time by the Board of Governors of the Federal Reserve System of the U.S. for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as "Eurocurrency Liabilities"). The Eurodollar Rate for each outstanding Eurodollar Rate Loan shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage.

    "Eurodollar Base Rate" has the meaning specified in the definition of "Eurodollar Rate".

    "Eurodollar Lending Office" means, with respect to each Bank, the office of such Bank designated as such in Schedule 11.2 or such other office of such Bank as such Bank may from time to time specify to the Company and the Administrative Agent.

    "Eurodollar Rate Loan" means any Loan that bears interest based on the Eurodollar Rate.

    "Eurodollar Reserve Percentage" has the meaning specified in the definition of "Eurodollar Rate".

    "Event of Default" means any of the events or circumstances specified in Section 9.1.

    "Exchange Act" means the Securities and Exchange Act of 1934, as amended from time to time, and regulations promulgated thereunder.

    "Existing Credit Agreement" means the Amended and Restated Revolving Credit Agreement dated as of December 13, 1996 among the Plum Creek Acquisition Partners, L.P. (successor to Plum Creek Timber Company, L.P.), the financials institutions from time to time party thereto, ABN AMRO Bank N.V. and U.S. Bank National Association, as senior co-agents, and Bank of America National Trust and Savings Association, as a letter of credit issuing bank and as agent, as amended by the Consent and First Amendment To Amended and Restated Revolving Credit Agreement dated as of April 2, 1999.

    "Existing Letters of Credit" means those letters of credit described in Schedule 1.2.

    "Facilities Operating Subsidiaries" means, collectively, Plum Creek Marketing, Inc., a Delaware corporation, Holding, and the New Subsidiaries and a "Facilities Operating Subsidiary" shall mean any one of them.

    "Facilities Subsidiary" means, collectively, Plum Creek Manufacturing, L.P., a Delaware limited partnership, Plum Creek Marketing, Inc., a Delaware corporation, Holding, the New Subsidiaries, and any other Subsidiary of Plum Creek Manufacturing, L.P. satisfying the requirements of clause (ii) of the definition of Wholly-Owned Subsidiary

    "Facilities Subsidiary's Facility" means any facility pursuant to which Plum Creek Manufacturing, L.P. may incur Indebtedness for purposes of making capital improvements, additions to, or expansions of, property, plant and equipment of the Facilities Subsidiary or its Subsidiaries which are Restricted Subsidiaries.

11

    "Facilities Subsidiary's Revolving Credit Facility" means any facility pursuant to which Plum Creek Manufacturing, L.P. or any of its Subsidiaries which is a Restricted Subsidiary may obtain revolving credit, take-down credit, the issuance of standby and payment letters of credit and backup for the issuance of commercial paper.

    "Facility Fee" has the meaning specified in Section 2.11(b).

    "Facility Fee Percentage" means (A) for the period from the Closing Date through March 31, 2002, 0.3250% and (B) from April 1, 2002, the percentage specified below opposite the Pricing Leverage Ratio (which ratio shall be calculated on a rolling four quarter basis for the relevant fiscal quarter) calculated for the periods described below.

    The Facility Fee Percentage for each fiscal quarter commencing on and after April 1, 2002 shall be calculated in reliance on the financial reports delivered pursuant to subsections 7.1(a) and 7.1(c) and the certificate delivered pursuant to subsection 7.2(b) with respect to the fiscal quarter before the fiscal quarter in question (e.g., June 30 financials determine the Facility Fee Percentage for the fiscal quarter beginning October 1). If the Company fails to deliver such financial reports and certificate to the Administrative Agent for any fiscal quarter by the beginning of the second succeeding fiscal quarter (e.g., by October 1 for the fiscal quarter ending June 30), then the Facility Fee Percentage for the following fiscal quarter (e.g., October 1 through December 31) shall equal the next higher Facility Fee Percentage as set forth in the chart above immediately above the previously effective Facility Fee Percentage; thus, for example, if the Facility Fee Percentage had previously been 0.2000%, a failure to deliver quarterly financials by the first day of the next fiscal quarter would cause the Facility Fee Percentage to be 0.2500% for the duration of that quarter. In addition, if such financial reports and certificate when delivered indicate that the Facility Fee Percentage for such period should have been higher than the Facility Fee Percentage provided for in the previous sentence, then the Company shall pay on the date of delivery of such financial reports and certificate an amount equal to the positive difference, if any, between the interest that the Company should have paid hereunder had the financial reports and certificate been delivered on a timely basis over what the Company actually paid.

    "FDIC" means the Federal Deposit Insurance Corporation, or any entity succeeding to any of its principal functions.

    "Federal Funds Rate" means, for any period, the rate set forth in the weekly statistical release designated as H.15(519), or any successor publication, published by the Federal Reserve Board (including any such successor, "H.15(519)") for such day opposite the caption "Federal Funds (Effective)". If on any relevant day such rate is not yet published in H.15(519), the rate for such day will be the rate set forth in the daily statistical release designated as the Composite 3:30 p.m. Quotations for U.S. Government Securities, or any successor publication, published by the Federal Reserve Bank of New York (including any such successor, the "Composite 3:30 p.m. Quotation") for such day under the caption "Federal Funds Effective Rate". If on any relevant day the appropriate rate for such previous day is not yet published in either H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such day will be the arithmetic mean as determined by the Administrative Agent of the rates for the last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New York time) on that day by each of three leading brokers of Federal funds transactions in New York City selected by the Administrative Agent.

    "Federal Reserve Board" means the Board of Governors of the Federal Reserve System, or any entity succeeding to any of its principal functions.

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      "First Union Fee Letter" means the letter agreement dated July 30, 2001 among First Union National Bank, First Union Securities, Inc., and the Company.

    "Foreign Bank" means, with respect to a Bank, such a Person that is not a "United States person" within the meaning of Section 7701(a)(30) of the Code.

    "Form W-8" has the meaning specified in subsection 4.1(g)(i)(A).

    "Form W-8BEN" has the meaning specified in subsection 4.1(g)(i)(B).

    "Form W-8ECI" has the meaning specified in subsection 4.1(g)(i)(A).

    "Fund" has the meaning specified in Section 11.8(g).

    "Funded Debt" means, without duplication, any Indebtedness, whether current or long-term, for borrowed money (including Obligations hereunder) and which Indebtedness bears interest.

    "GAAP" means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the accounting profession), or in such other statements by such other entity as may be in general use by significant segments of the U.S. accounting profession, which are applicable to the circumstances as of the date of determination.

    "General Partner" means Plum Creek Timber I, L.L.C., a limited liability company organized and existing under the laws of the State of Delaware, and any successor managing general partner of the Company.

    "Georgia Pacific" means Georgia-Pacific Corporation, a Georgia corporation.

    "Georgia Pacific SEC Filings" has the meaning specified in the Merger Agreement.

    "Governmental Authority" means any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

    "Guarantee" means the guarantee in paragraph 7 of the Mortgage Note Agreement.

    "Hazardous Materials" means all those substances which are regulated by, or which may form the basis of liability under, any Environmental Law, including all substances identified under any Environmental Law as a pollutant, contaminant, hazardous waste, hazardous constituent, special waste, hazardous substance, hazardous material, or toxic substance, or petroleum or petroleum derived substance or waste.

    "Holding" shall mean Plum Creek Manufacturing Holding Company, Inc., a Delaware corporation.

    "Honor Date" has the meaning specified in subsection 3.3(b).

    "ICC" has the meaning specified in Section 3.9.

    "Indebtedness" of any Person means, as of any date of determination, without duplication, (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services, (b) all amounts owed by such Person to banks or other Persons in respect of reimbursement obligations under letters of credit, surety bonds, banker's acceptances and other similar instruments guaranteeing payment or other performance of obligations by such Person, (c) all indebtedness for borrowed money or for the deferred purchase price of property or services secured by any Lien on any

13

property owned by such Person, to the extent attributable to such Person's interest in such property, even though such Person has not assumed or become liable for the payment thereof, (d) lease obligations of such Person which, in accordance with GAAP, should be capitalized, (e) Synthetic Lease Obligations, (f) obligations payable out of the proceeds of production from property of such Person, even though such Person has not assumed or become liable for the payment thereof, (g) the Swap Termination Value with respect to Swap Contracts, and (h) any obligations of any other Person of the type described in the above clauses (a) through (g), inclusive, which are guaranteed or in effect guaranteed by such Person through any agreement (contingent or otherwise) to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise), or to maintain the solvency or any balance sheet or other financial condition of the obligor of such obligation, or to make payment for any property, securities, products, materials or supplies or for any transportation or services regardless of the non-delivery or nonfurnishing thereof, in any such case if the purpose or intent of such agreement is to provide assurance that such obligation will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such obligation will be protected against loss in respect thereof or to otherwise assure or hold harmless the holder of any primary obligation against loss in respect thereof. The amount of any obligations of the type described in clause (h) of this definition shall be deemed equal to the stated or determinable amount of the primary obligation in respect of which such obligation is made or, if not stated or if not determinable, the maximum reasonably anticipated liability in respect thereof.

    "Indemnified Person" has the meaning specified in subsection 11.5.

    "Indemnified Liabilities" has the meaning specified in subsection 11.5.

    "Independent Auditor" has the meaning specified in subsection 7.1(a).

    "Ineligible Securities" has the meaning specified in Section 8.7(b).

    "Insolvency Proceeding" means (a) any case, action or proceeding before any court or other Governmental Authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, or (b) any general assignment for the benefit of creditors, composition, marshalling of assets for creditors, or other, similar arrangement in respect of its creditors generally or any substantial portion of its creditors; in each case (a) and (b) undertaken under U.S. Federal, State or foreign law, including the Bankruptcy Code.

    "Interest Coverage Ratio" means, as measured quarterly on the last day of each fiscal quarter for the four fiscal quarter period then ending, the ratio of

(i)

EBITDA;

to

(ii)

the consolidated interest expense (including capitalized interest) of the Company and its Subsidiaries for the four fiscal quarter period then ending calculated in accordance with GAAP, plus interest expense that would have been payable during such four fiscal quarters had any Indebtedness incurred during such period for the purpose of acquiring Timber and related assets been incurred at the beginning of such period, based upon the interest rate applicable to such Indebtedness at the end of such period.

    "Interest Payment Date" means, (a) with respect to any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Loan, (b) with respect to any Base Rate Loan, the last Business Day of each calendar quarter and each date a Base Rate Loan is converted into another Type of Loan, and (c) with respect to any Swingline Loan, the Business Day agreed upon by the Company and the Swingline Bank, which will not be later than the fourteenth Business Day following the Borrowing date

14

thereof or, if sooner, the Revolving Credit Termination Date; provided, however, that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the date which falls three months after the beginning of such Interest Period and after each Interest Payment Date thereafter shall also be an Interest Payment Date.

    "Interest Period" means, with respect to any Eurodollar Rate Loan, the period commencing on the Business Day the Loan is disbursed or on the Conversion/Continuation Date on which the Loan is converted into or continued as a Eurodollar Rate Loan, and ending on the date that is one week or one, two, three or six months thereafter, as selected by the Company in its Notice of Borrowing or Notice of Conversion/Continuation, as the case may be; provided that:

(i)

if any Interest Period would otherwise end on a day which is not a Business Day, that Interest Period shall be extended to the next succeeding Business Day unless, in the case of a Eurodollar Rate Loan, the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the immediately preceding Business Day;



(ii)

any Interest Period pertaining to a Eurodollar Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and



(iii)

no Interest Period for any Revolving Loan shall extend beyond the Revolving Credit Termination Date.

    "Investment Policy" means the Corporate Investment Policy of the Company, as it existed on April 5, 1993 and as attached hereto as Schedule 1.1 (without giving effect to any later amendments thereto).

    "Investments" has the meaning specified in Section 8.4.

    "Issuance Date" has the meaning specified in subsection 3.1(a).

    "Issue" means, with respect to any Letter of Credit, to issue or to extend the expiry of, or to renew or increase the amount of, such Letter of Credit; and the terms "Issued," "Issuing" and "Issuance" have corresponding meanings.

    "Issuing Bank" means BofA in its capacity as issuer of one or more Letters of Credit hereunder, together with any replacement letter of credit issuer arising under subsection 10.1(b) or Section 10.9.

    "Joint Venture" means a partnership, joint venture or other similar legal arrangement (whether created pursuant to contract or conducted through a separate legal entity) now or hereafter formed by the Company or any of its Restricted Subsidiaries with another Person in order to conduct a common venture or enterprise with such Person.

    "L/C Advance" means each Bank's participation in any L/C Borrowing in accordance with its Revolving Credit Commitment Percentage.

    "L/C Amendment Application" means an application form for amendment of outstanding standby letters of credit as shall at any time be in use at the Issuing Bank, as the Issuing Bank shall require.

    "L/C Application" means an application form for issuances of standby letters of credit as shall at any time be in use at the Issuing Bank, as the Issuing Bank shall require.

    "L/C Borrowing" means an extension of credit resulting from a drawing under any Letter of Credit which shall not have been reimbursed on the date when made nor converted into a Borrowing of Revolving Loans under subsection 3.3(c).

15

    "L/C Commitment" means the commitment of the Issuing Bank to Issue, and the commitment of the Banks severally to participate in, Letters of Credit from time to time Issued or outstanding under Article III, in an aggregate amount not to exceed on any date fifty million Dollars ($50,000,000), as the same shall be reduced as a result of a reduction in the L/C Commitment pursuant to Section 2.5; provided that the L/C Commitment is a part of the Aggregate Revolving Credit Commitment, rather than a separate, independent commitment.

    "L/C Obligations" means at any time the sum of (a) the aggregate undrawn amount of all Letters of Credit then outstanding, plus (b) the amount of all unreimbursed drawings under all Letters of Credit, including all outstanding L/C Borrowings.

    "L/C-Related Documents" means the Letters of Credit, the L/C Applications, the L/C Amendment Applications and any other document relating to any Letter of Credit, including the Issuing Bank's standard form documents for letter of credit issuances.

    "Lending Office" means, with respect to any Bank and the Swingline Bank, the office or offices of the Bank and the Swingline Bank specified as its "Lending Office" or "Domestic Lending Office" or "Eurodollar Lending Office," as the case may be, opposite its name on Schedule 11.2, or such other office or offices of the Bank and the Swingline Bank as it may from time to time notify the Company and the Administrative Agent.

    "Letters of Credit" means any standby letters of credit Issued by the Issuing Bank pursuant to Article III and shall include the Existing Letters of Credit.

    "Letter of Credit Rate" means, for any period, a rate per annum equal to (A) for the period from the Closing Date through March 31, 2002, 1.1750% and (B) from April 1, 2002 the percentage specified below opposite the Pricing Leverage Ratio (which ratio shall be calculated on a rolling four quarter basis for the relevant fiscal quarter) calculated for the periods described below.

    The Letter of Credit Rate for each fiscal quarter commencing on and after April 1, 2002 shall be calculated in reliance on the financial reports delivered pursuant to subsections 7.1(a) and 7.1(c) and the certificate delivered pursuant to subsection 7.2(b) with respect to the fiscal quarter before the fiscal quarter in question (e.g., June 30 financials determine the Letter of Credit Rate for the fiscal quarter beginning October 1). If the Company fails to deliver such financial reports and certificate to the Administrative Agent for any fiscal quarter by the beginning of the second succeeding fiscal quarter (e.g., by October 1 for the fiscal quarter ending June 30), then the Letter of Credit Rate for the following fiscal quarter (e.g., October 1 through December 31) shall equal the next higher Letter of Credit Rate as set forth in the chart above immediately above the previously effective Letter of Credit Rate; thus, for example, if the Letter of Credit Rate had previously been 0.8000%, a failure to deliver quarterly financials by the first day of the next fiscal quarter would cause the Letter of Credit Rate to be 1.0000% for the duration of that quarter. In addition, if such financial reports and certificate when delivered indicate that the Letter of Credit Rate for such period should have been higher than the Letter of Credit Rate provided for in the previous sentence, then the Company shall pay on the date of delivery of such financial reports and certificate an amount equal to the positive difference, if any, between the interest that the Company should have paid hereunder had the financial reports and certificate been delivered on a timely basis over what the Company actually paid.

16

    "Lien" means any mortgage, pledge, security interest, encumbrance, lien, preference or priority or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any lease in the nature thereof, and the filing of or agreement to give any financing statement under the Uniform Commercial Code of any jurisdiction).

    "Loan" means an extension of credit by a Bank or the Swingline Bank, as the case may be, to the Company under Article II or Article III, and may be a Revolving Loan, a Term Loan, a Swingline Loan or an L/C Advance.

    "Loan Documents" means, collectively, this Agreement, the L/C-Related Documents, the Subsidiary Assumption Agreements, the REIT Undertaking Agreement, any Notes issued pursuant hereto, and all other documents delivered to the Administrative Agent in connection herewith and therewith.

    "Loan Parties" means, collectively, the Company, the REIT, and each of the Company's Subsidiaries which is a party to any Loan Document; and each, a "Loan Party".

    "Majority Banks" means, at any time, Non-Defaulting Banks holding 66²/3% of the Aggregate Commitments at such time; provided, however, that for purposes of this definition, the Aggregate Commitments shall be recomputed without regard to each Defaulting Bank's Commitments and/or Loans held by it.

    "Manufacturing Entities" has the meaning specified in Section 8.14.

    "Margin Stock" means "margin stock" as such term is defined in Regulation T, U or X of the Federal Reserve Board.

    "Material Adverse Effect" means (a) a material adverse change in, or a material adverse effect upon, any of the operations, business, properties, condition (financial or otherwise) or prospects of the Company or the Company and its Subsidiaries taken as a whole; (b) a material impairment of the ability of the Company or any other Loan Party to perform under any Loan Document and avoid any Event of Default; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability of any Loan Document.

    "Material Default" means any continuing Default as to which a written notice of such Default (which notice has not been rescinded) shall have been received by the Company, the General Partner or the REIT from the Administrative Agent or any Bank, or any continuing Event of Default.

    "Maximum Leverage Ratio" has the meaning specified in Section 8.19.

    "Maximum Pro Forma Annual Interest Charges" means, as of any date, the highest total amount payable during any period of four consecutive fiscal quarters, commencing with the fiscal quarter in which such date occurs and ending with the fiscal quarter in which the Revolving Credit Termination Date occurs, by the Company and its Restricted Subsidiaries on a consolidated basis, after eliminating all intercompany transactions, in respect of interest charges ((a) including amortization of debt discount and expense and imputed interest on Capital Lease Obligations and on other obligations included in Indebtedness which do not have stated interest, (b) assuming, in the case of fluctuating interest rates which cannot be determined in advance, that the rate in effect on such date will remain in effect throughout such period, and (c) treating the principal amount of all Indebtedness outstanding as of such date under a revolving credit or similar agreement as maturing and becoming due and payable on the scheduled maturity date thereof, without regard to any provision permitting such maturity date to be extended) on all Indebtedness of the Company and its Restricted Subsidiaries outstanding on such date (excluding the Guarantee and the guarantees of the Facilities Subsidiary's Facility and the Facilities Subsidiary's Revolving Credit Facility but including, to the extent not already included, all other Indebtedness outstanding on such date which is guaranteed or in effect guaranteed by the

17

Company or any Restricted Subsidiaries), after giving effect to any Indebtedness proposed to be created on such date and to the concurrent retirement of any other Indebtedness.

    "MCCF" means one thousand Cunits.

    "Measurement Period" has the meaning specified in the definition of "Pro Forma Free Cash Flow".

    "Member" has the meaning specified in the Tax Matters Agreement.

    "Merger" means, collectively, the merger of each Spinco with and into the REIT as provided in the Merger Agreement.

    "Merger Agreement" means the Agreement and Plan of Merger dated as of July 18, 2000, among Georgia-Pacific, each of the Spincos, and the REIT, as amended by Amendment No. 1 to Agreement and Plan of Merger, dated as of June 12, 2001.

    "Merger Date" means the date on which the Merger shall have been consummated and effective in accordance with the Merger Documents.

    "Merger Documents" means, collectively, (i) the Merger Agreement and (ii) the six certificates of Merger to be filed or filed, as the case may be, with the Secretary of State of the State of Delaware in connection with the Merger (collectively, the "Certificates of Merger").

    "Merger-Related Contributions" means, collectively, (a) the contributions by the Company to a Facilities Subsidiary of (i) the stock of Plum Creek Investment Company (prior to the Merger such Person was known as Georgia-Pacific Investment Company) and the stock of Highland Resources Inc. and (ii) all harvesting-related personal property of the Spincos (including certain contracts, machinery and equipment but excluding any and all real property), as provided in, and in accordance with, the applicable REIT Contribution Agreement, and (b) the contributions by the Company to Plum Creek Southern and Plum Creek South Central of certain timberlands, which shall not exceed 1.1 million acres in the aggregate, as provided in, and in accordance with, the applicable REIT Contribution Agreements.

    "MMBF" means one million Board Feet.

    "Mortgage Note Agreement" means the Mortgage Note Agreement, dated as of May 31, 1989, providing for the issuance and sale by Plum Creek Manufacturing, L.P. of its 11¹/8% First Mortgage Notes to the purchasers listed in the schedule of purchasers attached thereto, as amended by (a) the Mortgage Note Agreement Amendment, Consent and Waiver dated as of January 1, 1991, (b) the letter agreement dated April 22, 1993, (c) the Mortgage Note Agreement Amendment dated as of September 1, 1993, (d) the Mortgage Note Agreement Amendment dated as of May 20, 1994, (e) the Amendment to Mortgage Note Agreement dated as of June 15, 1995, (f) the Mortgage Note Agreements Amendment dated as of May 31, 1996, (g) the Mortgage Note Agreements Amendment dated as of April 15, 1997, (h) the Mortgage Note Agreements Amendment dated as of January 15, 1999, and (i) the Mortgage Note Agreements Amendment dated as of October 5, 2001.

    "Mortgage Notes" means the 11¹/8% First Mortgage Notes of the Plum Creek Manufacturing, L.P. issued and sold pursuant to the Mortgage Note Agreement.

    "Multiemployer Plan" means a "multiemployer plan" (within the meaning of Section 4001(a)(3) of ERISA) and to which the Company or any ERISA Affiliate makes, is making, or is obligated to make contributions or, during the preceding three calendar years, has made, or been obligated to make, contributions.

    "NATC Credit Agreement" means the Credit Agreement (Timber Disposition Bridge Facility), dated as of November 3, 2000, among North American Timber Corp., the lenders party thereto, Bank of America, N.A., as agent, and Merrill Lynch Capital Corporation and Morgan Stanley Senior Funding Inc., as co-syndication agents, as amended by (a) the First Amendment To Credit Agreement dated as of May 25, 2001, and (b) the Second Amendment To Credit Agreement dated as of October 1, 2001.

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      "Net Proceeds" means proceeds in cash as and when received by the Person making a sale of Property, net of: (a) the direct costs relating to such sale excluding amounts payable to the Company or any Affiliate of the Company, (b) sale, use or other transaction taxes paid or payable as a result thereof, and (c) amounts required to be applied to repay principal, interest and prepayment premiums and penalties on Indebtedness secured by a Lien on the asset which is the subject of such disposition.

    "New Subsidiaries" shall mean Plum Creek Northwest Lumber, Inc., a Delaware corporation, Plum Creek Northwest Plywood, Inc., a Delaware corporation, Plum Creek MDF, Inc., a Delaware corporation, and Plum Creek Southern Lumber, Inc., a Delaware corporation, and "New Subsidiary" shall mean any one of them.

    "1989 Notes" means the senior promissory notes in the aggregate principal amount of $165,000,000 issued and sold pursuant to the 1989 Senior Note Agreement.

    "1989 Senior Note Agreement" means the Senior Note Agreement dated as of May 31, 1989, providing for the issuance and sale by the Company of the 1989 Notes to the purchasers listed in the schedule of purchasers attached thereto, as amended by (a) the Senior Note Agreement Amendment, Consent and Waiver dated as of January 1, 1991, (b) the letter agreement dated April 22, 1993, (c) the Senior Note Agreement Amendment dated as of September 1, 1993 (d) the Senior Note Agreement Amendment dated as of May 20, 1994, (e) the Senior Note Agreements Amendment dated as of May 31, 1996, (f) the Senior Note Agreements Amendment dated as of April 15, 1997, (g) the Senior Note Agreements Amendment dated as of January 15, 1999, and (h) the Senior Note Agreement Amendment dated as of October 5, 2001.

    "1994 Notes" means the 8.73% Senior Notes due August 1, 2009 in the aggregate principal amount of $150,000,000 issued and sold pursuant to the 1994 Senior Note Agreement.

    "1994 Senior Note Agreement" means the Senior Note Agreement dated as of August 1, 1994 providing for the issuance and sale by the Company of the 1994 Notes to the purchasers listed in the schedule of purchasers attached thereto, as amended by (a) the Senior Note Agreement Amendment dated as of October 15, 1995, (b) the Senior Note Agreements Amendment dated as of May 31, 1996, (c) the Senior Note Agreements Amendment dated as of April 15, 1997, (d) the Senior Note Agreements Amendment dated as of January 15, 1999, and (e) the Senior Note Agreement Amendment dated as of October 5, 2001.

    "1996 Notes" means the senior promissory notes in the aggregate principal amount of $200,000,000 issued and sold pursuant to the 1996 Senior Note Agreement.

    "1996 Senior Note Agreement" means the Senior Note Agreement dated as of November 13, 1996, providing for the issuance and sale by the Company of the 1996 Notes to the purchasers listed in the schedule of purchasers attached thereto, as amended by (i) the Senior Note Agreements Amendment dated as of January 15, 1999 and (ii) the Senior Note Agreement Amendment dated as of October 5, 2001.

    "1998 Notes" means the senior promissory notes in the aggregate principal amount of $171,375,000 issued and sold pursuant to the 1998 Senior Note Agreement.

    "1998 Senior Note Agreement" means the Senior Note Agreement dated as of November 12, 1998, providing for the issuance and sale by the Company of the 1998 Notes to SDW Timber 1, L.L.C., as amended by (i) the Senior Note Agreement dated as of April 1, 1999 and (ii) the Senior Note Agreement Amendment dated as of October 5, 2001.

    "Non-Defaulting Bank" means and includes each Bank other than a Defaulting Bank.

    "Note" means a Term Credit Promissory Note or a Revolving Credit Promissory Note.

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    "Notice of Borrowing" means a notice given by the Company to the Administrative Agent pursuant to Sections 2.3, or 2.10, as the case may be, in substantially the form of Exhibit A.

    "Notice of Conversion/Continuation" means a notice given by the Company to the Administrative Agent pursuant to Section 2.4, in substantially the form of Exhibit B.

    "Notice of Lien" means any "notice of lien" or similar document intended to be filed or recorded with any court, registry, recorder's office, central filing office or other Governmental Authority for the purpose of evidencing, creating, perfecting or preserving the priority of a Lien securing obligations owing to a Governmental Authority.

    "Notice of Redemption" means the Notice of Redemption sent by Georgia-Pacific on or about August 15, 2001, to the holders of the "Timber Group Common Stock" (as defined in the Merger Agreement) regarding the Redemption Transaction, as supplemented by the Supplement to Notice of Redemption dated September 19, 2001.

    "Obligations" means all Loans, and other Indebtedness, advances, debts, liabilities, obligations, covenants and duties owing by the Company or any other Loan Party to any Bank, the Administrative Agent, the Syndication Agents, the Documentation Agents, the Arrangers, the Issuing Bank, the Swingline Bank, or any other Person required to be indemnified, that arises under any Loan Document, whether or not for the payment of money, whether arising by reason of an extension of credit, loan, guaranty, indemnification or in any other manner, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired. The term "Obligations" includes all interest, charges, expenses, fees, attorneys' fees and disbursements and any other sums chargeable to the Company or any other Loan Party under or in connection with this Agreement or any other Loan Document.

    "Operating Lease" means, as applied to any Person, any lease of Property which is not a Capital Lease.

    "Ordinary Course of Business" means, in respect of any transaction involving the Company or any Subsidiary of the Company, the ordinary course of such Person's business, as conducted by any such Person in accordance with past practice and undertaken by such Person in good faith and not for purposes of evading any covenant or restriction in any Loan Document.

    "Organization Documents" means, (i) for any corporation, the certificate or articles of incorporation, the bylaws, any certificate of determination or instrument relating to the rights of preferred shareholders of such corporation, any shareholder rights agreement, and all applicable resolutions of the board of directors (or any committee thereof) of such corporation; (ii) for any limited partnership, the certificate of limited partnership, the limited partnership agreement, and all applicable partnership resolutions; and (iii) for any limited liability company, the certificate of formation or articles of organization, the operating agreement or comparable document, and all other documents evidencing the authority and validity of actions taken by the limited liability company.

    "Other Senior Notes" means the Senior Notes other than the Mortgage Notes.

    "Other Taxes" has the meaning specified in subsection 4.1(b).

    "Participant" has the meaning specified in Section 11.8(c).

    "Partnership Agreement" means the Agreement of Limited Partnership of the Company, as in effect at the time of and after giving effect to the Merger, and as the same may, from time to time, be amended, modified or supplemented in accordance with the terms thereof.

    "Partner Entities" means, collectively, the REIT and the General Partner.

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    "PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding to any of its principal functions under ERISA.

    "Permitted Business" means any business engaged in by the Company or the Facilities Subsidiary on the Closing Date, pulp and paper manufacturing, acquiring, selling and managing timberlands and related assets for a fee for third Persons, and any business substantially similar or related to any such business.

    "Permitted Liens" has the meaning specified in Section 8.1.

    "Person" means an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, limited liability company, or Governmental Authority.

    "Plan" means an employee benefit plan (as defined in Section 3(3) of ERISA) which the Company or any ERISA Affiliate sponsors or maintains or to which the Company or any ERISA Affiliate makes, is making or is obligated to make contributions, and includes any Multiemployer Plan or Qualified Plan.

    "Plum Creek SEC Filings" has the meaning specified in the Merger Agreement.

    "Plum Creek South Central" means Plum Creek South Central Timberlands, L.L.C., a Delaware limited liability company.

    "Plum Creek South Central Assumption Agreement" means the Plum Creek South Central Timberlands, L.L.C. Assumption Agreement dated as of the date hereof and executed and delivered by Plum Creek South Central.

    "Plum Creek Southern" means Plum Creek Southern Timber, L.L.C., a Delaware limited liability company.

    "Plum Creek Southern Timber Assumption Agreement"  means the Amended and Restated Plum Creek Southern Timber, L.L.C. Assumption Agreement dated as of the date hereof and executed and delivered by Plum Creek Southern.

    "Plum Creek Timber I" means Plum Creek Timber I, L.L.C., a limited liability company organized and existing under the laws of the State of Delaware.

    "Portfolio Interest Exemption Certificate" has the meaning specified in Section 4.1(g)(i)(B).

    "Pricing Leverage Ratio" means, as measured quarterly on the last day of each fiscal quarter, the ratio of (a) an amount equal to (i) all Funded Debt of the Company and its Subsidiaries on a consolidated basis as of such day less (ii) the amount, if any, by which (A) the sum of the Company's and its Subsidiaries' cash balances and cash equivalents on a consolidated basis as of such date exceeds (B) $75,000,000 to (b) EBITDA for the period of four fiscal quarters ending on such day. The Pricing Leverage Ratio shall be computed without giving effect to any write-up or write-down of the Funded Debt, or corresponding adjustments to interest expense in connection with such write-up or write-down, required under GAAP by virtue of the Merger.

    "Principal Repayment Proviso" means that for any period of calculation, the aggregate amount of scheduled principal repayment on Indebtedness (x) shall not include voluntary prepayments of Indebtedness except to the extent such voluntary prepayments includes any amounts that would have been scheduled principal repayments during such period, and (y) shall not include the amount of any scheduled principal repayment to the extent the Company refinanced or rescheduled such scheduled repayments and the scheduled principal repayments due before the Revolving Credit Termination Date under the refinancing or rescheduling have been or will be included in the calculation of the aggregate amount of scheduled principal repayments for the periods in which they are due.

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    "Pro Forma Free Cash Flow" as of any date means (i) net income of the Company and its Restricted Subsidiaries on a pro forma consolidated basis (excluding (a) gain on the sale of any Capital Asset, (b) noncash items of income, and (c) any distributions or other income received from, or equity of the Company or any Restricted Subsidiary in the earnings of, any entity which is not a Restricted Subsidiary) for the period of four consecutive fiscal quarters immediately prior to such date (such period of four consecutive fiscal quarters being the "Measurement Period"), determined in accordance with GAAP plus depreciation, depletion, amortization and other noncash charges, interest expense on Indebtedness and provision for income taxes and up to $80,000,000 in net cash proceeds received during the Measurement Period by the Company and its Restricted Subsidiaries from the sale of Designated Acres, minus (ii) capital expenditures made by the Company and its Restricted Subsidiaries during the Measurement Period, to maintain their respective operations; provided, however, if (A) the Company or a Restricted Subsidiary is acquiring a Restricted Subsidiary or assets and (B) Pro Forma Free Cash Flow is being determined in connection therewith, such Restricted Subsidiary shall be considered to have been a Restricted Subsidiary during the entire Measurement Period and such assets shall be considered to have been owned by the Company during the entire Measurement Period if net income attributable to such Restricted Subsidiary or such assets (as the case may be) for the entire Measurement Period is readily determinable and confirmed pursuant to an audit or a certification prepared in good faith by the Company's chief financial officer; further provided, however, that portion of Pro Forma Free Cash Flow allocable to such Restricted Subsidiary or assets shall be reduced on a pro rata basis to the extent Timber has been harvested by such Restricted Subsidiary or from such assets during the Measurement Period at a rate greater than the rate at which the Company has harvested Timber from its Timberlands during the Measurement Period, as certified in good faith by the chief financial officer of the Company; and finally provided, however, if Pro Forma Free Cash Flow is being determined for any Measurement Period and a Restricted Subsidiary or assets have been sold or otherwise disposed of at any time during such Measurement Period by the Company or any Restricted Subsidiary, such Restricted Subsidiary shall not be considered to have been a Restricted Subsidiary during any part of such Measurement Period and such assets shall not be considered to have been owned by the Company during any part of such Measurement Period, and the net income that otherwise would have been attributable to such Restricted Subsidiary or asset during such Measurement Period shall be certified in good faith by the chief financial officer of the Company.

    "Property" means any estate or interest in any kind of property or asset, whether real, personal or mixed, and whether tangible or intangible.

    "Proxy Statement/Prospectus" means the REIT's Joint Proxy Statement/Prospectus dated July 13, 2000 as filed with the SEC on October 11, 2000 on Form S-4 under the Securities Act of 1933, as amended, Registration No. 333-47708, as amended by Amendment No. 1 filed with the SEC on June 21, 2001, and as further amended by Amendment No. 2 filed with the SEC on July 13, 2001.

    "Qualified Debt" means, as to the Company, as of any date of determination, without duplication, all outstanding indebtedness of the Company for borrowed money, including Indebtedness represented by the Senior Notes and this Agreement (including L/C Borrowings and Loans used to repay L/C Borrowings, but excluding L/C Obligations with respect to undrawn Letters of Credit).

    "Qualified Plan" means a pension plan (as defined in Section 3(2) of ERISA) intended to be tax-qualified under Section 401(a) of the Code and which any ERISA Affiliate sponsors, maintains, or to which it makes, is making or is obligated to make contributions, or in the case of a multiple employer plan (as described in Section 4064(a) of ERISA) has made contributions at any time during the immediately preceding period covering at least five (5) plan years, but excluding any Multiemployer Plan.

    "Real Property Deeds" means, with respect to each Spinco Asset constituting real property, collectively, each deed conveying all the right, title and interest of the REIT (as successor to the

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related Spinco as a result of the Merger) in and to such Spinco Asset to the Company or a Restricted Subsidiary as specified in, and in accordance with, the applicable REIT Contribution Agreement.

    "Redemption Transaction" means the redemption of the "Timber Group Common Stock" (as defined in the Merger Agreement) in exchange for units representing interests in the common stock of each of the Spincos as provided in the Separation Documents.

    "Register" has the meaning specified in Section 11.8(b).

    "REIT" means Plum Creek Timber Company, Inc., a Delaware corporation.

    "REIT Contribution Agreements"  means, collectively, (a) the Assignment and Contribution and Assumption Agreement, dated as of October 6, 2001, among the REIT, the General Partner and the Company; (b) the Assignment and Contribution and Assumption Agreement, dated as of October 6, 2001, among the REIT, the General Partner, the Company and Plum Creek South Central; (c) the Assignment and Contribution and Assumption Agreement, dated as of October 6, 2001, among the REIT, the General Partner, the Company and Plum Creek Southern; and (d) the Assignment and Contribution and Assumption Agreement, dated as of October 6, 2001, among the REIT, the General Partner, the Company, Plum Creek II, L.L.C, Plum Creek Manufacturing, L.P., and Holding.

    "REIT Undertaking Agreement" has the meaning specified in Section 5.1(a)(x).

    "Reportable Event" means, as to any Plan, (a) any of the events set forth in Section 4043(c) of ERISA or the regulations thereunder, other than any such event for which the 30-day notice requirement under ERISA has been waived in regulations issued by the PBGC, (b) a withdrawal from a Plan described in Section 4063 of ERISA, or (c) a cessation of operations described in Section 4062(e) of ERISA.

    "Requirement of Law" means, as to any Person, any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or of a Governmental Authority, in each case applicable to or binding upon the Person or any of its property or to which the Person or any of its property is subject.

    "Responsible Officer" means the chief executive officer, the president or any vice president of the REIT acting in its capacity as the sole member of the General Partner, as general partner of the Company, or any other officer thereof having substantially the same authority and responsibility; or, with respect to compliance with financial covenants, the chief financial officer or the treasurer of the REIT acting in its capacity as the sole member of the General Partner, as general partner of the Company, or any other officer having substantially the same authority and responsibility.

    "Responsible Representatives" means (a) in the case of any transaction in which the value of any assets disposed of or received have a value of less than $25,000,000 or in which payments made are less than $25,000,000, the chief executive officer, chief financial officer or chief operating officer of the REIT acting in its capacity as the sole member of the General Partner, as general partner of the Company, and (b) in the case of any other transaction, the Board of Directors of the REIT acting in its capacity as the sole member of the General Partner, as general partner of the Company.

    "Restricted Payment" means (a) any dividend or other distribution, direct or indirect, on account of any shares of any class of stock of or other ownership interests in the Company, now or hereafter outstanding, except a dividend payable solely in shares of stock of or ownership interests in the Company, and (b) any redemption, retirement, purchase or other acquisition, direct or indirect, of any shares of any class of stock of or other ownership interests in the Company, now or hereafter outstanding, or of any warrants, rights or options to acquire any such shares or interests, except to the extent that the consideration therefor consists of shares of stock of or other ownership interests in the Company.

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    "Restricted Subsidiary" means any Wholly-Owned Subsidiary other than any Designated Immaterial Subsidiary.

    "Revolving Credit Bank" means each Bank with a Revolving Credit Commitment or with outstanding Revolving Loans.

    "Revolving Credit Commitment" means, with respect to each Revolving Credit Bank at any time, the amount set forth opposite such Revolving Credit Bank's name on Schedule 2.1 under the heading "Revolving Credit Commitment" or, if such Revolving Credit Bank has entered into one or more Assignment and Assumption Agreements, set forth for such Revolving Credit Bank in the Register maintained by the Administrative Agent pursuant to Section 11.8(b), as such amount may be terminated or reduced at or prior to such time pursuant to Section 2.5, 2.7 or 9.2.

    "Revolving Credit Commitment Percentage" means, as to any Revolving Credit Bank, the percentage equivalent of the aggregate of such Bank's Revolving Credit Commitment divided by the Aggregate Revolving Credit Commitment.

    "Revolving Credit Promissory Note" means a promissory note of the Company payable to the order of any Revolving Credit Bank, in substantially the form of Exhibit H, evidencing the aggregate indebtedness of the Company to such Revolving Credit Bank resulting from the Revolving Loans made by such Revolving Credit Bank.

    "Revolving Credit Pro Rata Share" means, as to any Revolving Credit Bank, with respect to the payment of principal or interest on account of Revolving Loans or L/C Advances, each Revolving Credit Bank's pro rata share of the outstanding principal balance of the Revolving Loans or L/C Advances with respect to which such payment is being made.

    "Revolving Credit Termination Date" means the earlier to occur of:

    (a) September 30, 2005; and

    (b) the date on which the Aggregate Revolving Credit Commitment shall terminate in accordance with the provisions of this Agreement.

    "Revolving Facility Tranche" has the meaning specified in Section 2.16.

    "Revolving Facility Tranche Loan" means a Loan allocated by the Company to the Revolving Facility Tranche as provided in Section 2.16.

    "Revolving Loan" has the meaning specified in Section 2.1, and may be a Eurodollar Rate Loan or a Base Rate Loan.

    "SEC" means the Securities and Exchange Commission, or any entity succeeding to any of its principal functions.

    "Section 20 Subsidiary" has the meaning specified in Section 8.7(b).

    "Senior Notes" means, collectively, the 2001 Notes, the 1998 Notes, the 1996 Notes, the 1994 Notes, the 1989 Notes, and the Mortgage Notes.

    "Senior Notes Agreements" means, collectively, the 2001 Senior Note Agreement, the 1998 Senior Note Agreement, the 1996 Senior Note Agreement, the 1994 Senior Note Agreement, the 1989 Senior Note Agreement, and the Mortgage Note Agreement.

    "Separation Agreement" means the Amended and Restated Separation Agreement, dated as of July 18, 2000, as amended and restated on June 12, 2001, among Georgia-Pacific and the Spincos, as the same shall, subject to Section 8.16, be amended and supplemented and in effect from time to time.

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    "Separation Documents" means, collectively, the Separation Agreement and the Notice of Redemption.

    "Separation Transaction" means the "Separation" (as defined in the Merger Agreement) as provided in the Separation Agreement.

    "Series D Notes" means those 8.05% Senior Notes due November 13, 2016, Series D, in the original aggregate principal amount of $25,000,000 issued and sold pursuant to the 1996 Senior Note Agreement.

    "Solvent" means, as to any Person at any time, that (a) (i) in the case of a Person that is not a partnership, the fair value of the Property of such Person is greater than the amount of such Person's liabilities (including disputed, contingent and unliquidated liabilities), and (ii) in the case of a Person that is a partnership, the sum of (A) the fair value of the Property of such Person plus (B) the sum of the excess of the fair value of each general partner's non-partnership Property over such partner's non-partnership debts (together, the "Applicable Property") is greater than the amount of such Person's liabilities (including disputed, contingent and unliquidated liabilities), as such value for purposes of both clauses (i) and (ii) is established and liabilities evaluated for purposes of Section 101(31) of the Bankruptcy Code and, in the alternative, for purposes of the Uniform Fraudulent Transfer Act; (b) the present fair saleable value of the Property of such Person (or, in the case of a partnership, the Applicable Property for such Person) is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured; (c) such Person is able to realize upon its Property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business; (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature; and (e) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's Property would constitute unreasonably small capital.

    "Specified Taxes"  means any tax liabilities specified in Section 4(a)(ii) of the Tax Matters Agreement.

    "Spinco Assets" means all of the assets and properties of the Spincos, which assets and properties the REIT acquired as a result of the Merger.

    "Spincos" has the meaning specified in the Merger Agreement; and each a "Spinco".

    "Standing Inventory" has the meaning specified in Section 8.3.

    "State Timberlands" has the meaning specified in Section 7.13.

    "Subsidiary" of a Person means any corporation, partnership, limited liability company or other entity a majority of (i) the total combined voting power of all classes of Voting Stock of which or (ii) the outstanding equity interests of which shall, at the time of which any determination is being made, be owned by the Company either directly or through Subsidiaries.

    "Subsidiary Assumption Agreements" means, collectively, the Plum Creek Southern Timber Assumption Agreement and the Plum Creek South Central Assumption Agreement.

    "Swap Contract" means any agreement, whether or not in writing, relating to any transaction that is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap or option, bond, note or bill option, interest rate option, forward foreign exchange transaction, cap, collar or floor transaction, currency swap, cross-currency rate swap, swaption, currency option or any other, similar transaction (including any option to enter into any of the foregoing) or any combination of the foregoing, and, unless the context otherwise clearly requires, any master agreement relating to or governing any or all of the foregoing.

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    "Swap Termination Value" means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a) the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined by the Company (or, for purposes of subsection 9.1(e), by the Majority Banks) based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include any Bank).

    "Swingline Bank" means BofA or its assignee under Section 11.8.

    "Swingline Clean-Up Day" has the meaning specified in subsection 2.7(a)(v).

    "Swingline Commitment" has the meaning specified in Section 2.10.

    "Swingline Loan" has the meaning specified in Section 2.10.

    "Syndication Agent" or "Syndication Agents" has the meaning specified in the introduction paragraph of this Agreement.

    "Synthetic Lease Obligations" means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

    "Tangible Assets" means assets that are considered to be tangible under GAAP.

    "Tax Authority" has the meaning specified in the Tax Matters Agreement.

    "Tax Claim" has the meaning specified in the Tax Matters Agreement.

    "Tax Matters Agreement" means the Tax Matters Agreement, dated as of June 12, 2001, among Georgia-Pacific, the REIT and the Spincos.

    "Taxes" has the meaning specified in subsection 4.1(a).

    "Tax Opinion Insurance Policy" means the "Insurance Binder" (as such term is defined in the Merger Agreement).

    "Term Credit Bank" means each Bank with a Term Credit Commitment or with outstanding Term Loans.

    "Term Credit Commitment" means, with respect to each Term Credit Bank, the amount set forth opposite such Term Credit Bank's name on Schedule 2.1 under the heading "Term Credit Commitment", as such Term Credit Commitment shall be terminated pursuant to Section 2.7(a)(iv) or Section 9.2.

    "Term Credit Commitment Percentage" means as to any Term Credit Bank, the percentage equivalent of the aggregate of such Term Credit Bank's Term Credit Commitment divided by the Aggregate Term Credit Commitment.

    "Term Credit Maturity Date" means the earlier to occur of:

    (a) September 30, 2002; and

    (b) the date on which the Term Loans become due and payable pursuant to Section 9.2.

    "Term Credit Promissory Note" means a promissory note of the Company payable to the order of any Term Credit Bank, in substantially the form of Exhibit G, evidencing the aggregate indebtedness of

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the Company to such Term Credit Bank resulting from the Term Loans made by such Term Credit Bank.

    "Term Credit Pro Rata Share" means as to any Term Credit Bank at any time, with respect to the payment of principal or interest on account of the Term Loans, the percentage equivalent (expressed as a decimal, rounded to the ninth decimal place) at such time of the Effective Amount of such Term Credit Bank's Term Loans divided by the Effective Amount of all Term Loans at such time.

    "Term Loan" has the meaning specified in Section 2.1(a).

    "Timber" means standing trees not yet harvested.

    "Timberlands" means the timberlands owned by the Company as of the Closing Date and any timberlands acquired by the Company or any Subsidiary after the Closing Date.

    "Timber Proceeds" has the meaning specified in Section 8.14.

    "Timber Properties" has the meaning specified in Section 8.14.

    "Ton" means 2,000 pounds of green saw logs and pulpwood.

    "Transactions" means, collectively, the transactions contemplated by the Loan Documents and the Acquisition Transactions.

    "Transferee" has the meaning specified in subsection 11.9.

    "2001 Notes" means the senior promissory notes in the aggregate principal amount of $500,000,000 issued and sold pursuant to the 2001 Senior Note Agreement.

    "2001 Senior Note Agreement" means the Senior Note Agreement, to be dated as of October 9, 2001, providing for the issuance and sale by the Company of the 2001 Notes.

    "Type" means either a Eurodollar Rate Loan or a Base Rate Loan.

    "UCC" means the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction.

    "UCP" has the meaning specified in the Section 3.9.

    "Unfunded Pension Liabilities" means the excess of a Plan's benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Plan's assets, determined in accordance with the assumptions used by the Plan's actuaries for funding the Plan pursuant to Section 412 of the Code for the applicable plan year.

    "United States" and "U.S." each means the United States of America.

    "Voting Stock" means, with respect to any corporation or other entity, any shares of capital stock or other ownership interests of such corporation or entity whose holders are entitled under ordinary circumstances to vote for the election of directors of such corporation or to manage any such other entity (irrespective of whether at the time stock or ownership interests of any other class or classes shall have or might have voting power by reason of the happening of any contingency).

    "Wholly-Owned Subsidiary" means any Subsidiary organized under the laws of any state of the United States which conducts the major portion of its business in the United States and (i) in the case of any Subsidiary, all of the stock or other ownership interests of which are owned by the Company either directly or through Wholly-Owned Subsidiaries (other than Plum Creek Manufacturing, L.P. or one or any of its Subsidiaries) and (ii) at such time as the Mortgage Notes shall have been paid in full and retired, (x) Plum Creek Manufacturing, L.P. provided that all the stock and other ownership interests thereof are owned by the Company either directly or indirectly through Wholly-Owned Subsidiaries (other than a Subsidiary of Plum Creek Manufacturing, L.P.), (y) Holding provided that

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(1) Holding shall engage in no business except the ownership of its Subsidiaries and (2) all the outstanding stock and ownership interests thereof are owned by the Company either directly or indirectly through Plum Creek Manufacturing, L.P., and (z) any other Subsidiary of Plum Creek Manufacturing, L.P., provided that all the outstanding stock and ownership interests thereof are owned by the Company (either directly or indirectly through Wholly-Owned Subsidiaries of the type described in clause (i) above).

    "Withdrawal Liabilities" means, as of any determination date, the aggregate amount of the liabilities, if any, pursuant to Section 4201 of ERISA if the Company and all ERISA Affiliates made a complete withdrawal from all Multiemployer Plans and any increase in contributions pursuant to Section 4243 of ERISA.

    1.2 Other Interpretive Provisions  

    (a) Defined Terms. Unless otherwise specified herein or therein, all terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto. The meaning of defined terms shall be equally applicable to the singular and plural forms of the defined terms. Terms (including uncapitalized terms) not otherwise defined herein and that are defined in the UCC as in effect from time to time in the State of New York shall have the meanings therein described.

    (b) The Agreement. The words "hereof," "herein," "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; and subsection, section, schedule and exhibit references are to this Agreement unless otherwise specified.

    (c) Certain Common Terms.

     (i) The term "documents" includes any and all instruments, documents, agreements, certificates, indentures, notices and other writings, however evidenced.

    (ii) The term "including" is not limiting and means "including without limitation."

    (d) Performance; Time. Whenever any performance obligation hereunder (other than a payment obligation) shall be stated to be due or required to be satisfied on a day other than a Business Day, such performance shall be made or satisfied on the next succeeding Business Day. In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including"; the words "to" and "until" each mean "to but excluding," and the word "through" means "to and including". If any provision of this Agreement refers to any action taken or to be taken by any Person, or which such Person is prohibited from taking, such provision shall be interpreted to encompass any and all means, direct or indirect, of taking, or not taking, such action.

    (e) Contracts. Unless otherwise expressly provided herein, references to agreements and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent such amendments and other modifications are not prohibited by the terms of any Loan Document.

    (f)  Laws. References to any statute or regulation are to be construed as including all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting the statute or regulation.

    (g) Captions. The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.

    (h) Independence of Provisions. The parties acknowledge that this Agreement and other Loan Documents may use several different limitations, tests or measurements to regulate the same or

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similar matters, and that such limitations, tests and measurements are cumulative and must each be performed, except as expressly stated to the contrary in this Agreement.

    (i)  Interpretation. This Agreement is the result of negotiations among and has been reviewed by counsel to the Administrative Agent, the Company and other parties, and is the product of all parties hereto. Accordingly, this Agreement and the other Loan Documents shall not be construed against the Banks, the Syndication Agents, the Documentation Agents, the Arrangers or the Administrative Agent merely because of the Administrative Agent's, the Syndication Agents', the Documentation Agents', the Arrangers' or Banks' involvement in the preparation of such documents and agreements.

    1.3 Accounting Principles  

    (a) Unless the context otherwise clearly requires, all accounting terms not expressly defined herein shall be construed, and all financial computations required under this Agreement shall be made, in accordance with GAAP, consistently applied.

    (b) References herein to "fiscal year" and "fiscal quarter" refer to such fiscal periods of the Company.

    (c) In preparing the financial statements, computations, and reports provided for herein, the Facilities Subsidiary and its Subsidiaries shall be considered as consolidated subsidiary entities of the Company (and not accounted for on the equity method of accounting or as an investment) notwithstanding that the Voting Stock thereof shall not be owned by the Company, either directly or indirectly, and without regard to whether they would be considered as such subsidiary entities under GAAP.

   
ARTICLE II
THE CREDITS

    2.1 Amounts and Terms of Commitments  

    (a) The Term Credit. Each Term Credit Bank severally agrees, on the terms and conditions set forth herein, to make a loan to the Company (each such loan, a "Term Loan") on the Closing Date, in the amount of such Term Credit Bank's Term Credit Commitment. Amounts borrowed as Term Loans which are repaid or prepaid by the Company may not be reborrowed.

    (b) The Revolving Credit. Each Revolving Credit Bank severally agrees, on the terms and conditions hereinafter set forth, to make loans to the Company (each such loan, a "Revolving Loan") from time to time on any Business Day from the Closing Date to the Revolving Credit Termination Date, in an aggregate amount not to exceed at any time outstanding the amount of such Revolving Credit Bank's Revolving Credit Commitment; provided, however, that, after giving effect to any Borrowings of Revolving Loans, the Effective Amount of all outstanding Revolving Loans, Swingline Loans, and L/C Obligations shall not at any time exceed the Aggregate Revolving Credit Commitment; and provided, further, that the Effective Amount of the Revolving Loans of such Revolving Credit Bank plus such Revolving Credit Bank's Revolving Credit Commitment Percentage of the Effective Amount of all L/C Obligations and Swingline Loans shall not at any time exceed such Revolving Credit Bank's Revolving Credit Commitment. Within the limits of each such Revolving Credit Bank's Revolving Credit Commitment, and subject to the other terms and conditions hereof, until the Revolving Credit Termination Date, the Company may borrow under this Section 2.1(b), prepay pursuant to Section 2.6 and reborrow pursuant to this Section 2.1(b).

    (c) Automatic Termination of Commitments. If the initial Credit Extension has not occurred by 1:00 p.m. (San Francisco time) on October 29, 2001, then the Commitments of all the Banks shall automatically terminate on such date.

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    2.2 Evidence of Indebtedness  

    (a) The Loans made by each Bank (including the Swingline Bank) and the Letters of Credit Issued by the Issuing Bank shall be evidenced by one or more loan accounts maintained by such Bank the Issuing Bank, as the case may be, in the ordinary course of business. The loan accounts or records maintained by the Administrative Agent, the Swingline Bank, the Issuing Bank and each such Bank shall be conclusive absent manifest error of the amount of the Loans made by the Banks to the Company and the Letters of Credit issued for the account of the Company, and the interest and payments thereon. Any failure so to record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Company hereunder to pay any amount owing with respect to the Loans or any Letter of Credit.

    (b) Notwithstanding the foregoing, if any Bank shall so request, the obligation to repay the Loans shall also be evidenced by a Term Credit Promissory Note or a Revolving Credit Promissory Note, or both, as the case may be.

    2.3 Procedure for Borrowing  

    (a) Each Borrowing of the Term Loans or the Revolving Loans shall be made upon the Company's irrevocable written notice delivered to the Administrative Agent in accordance with Section 11.2 in the form of a Notice of Borrowing (which notice must be received by the Administrative Agent prior to 9:00 a.m. (San Francisco time)) (i) three Business Days prior to the requested Borrowing date, in the case of Eurodollar Rate Loans; and (ii) on the requested Borrowing date, in the case of Base Rate Loans, specifying:

    (A) that the Borrowing comprises the Term Loans or Revolving Loans;

    (B) in the case of a Borrowing comprising Revolving Loans, the amount of the Borrowing, which shall be in an aggregate minimum principal amount of five million Dollars ($5,000,000) except in the case of Eurodollar Rate Loans with a proposed Interest Period of one week, in which case the aggregate minimum principal amount shall be twenty million Dollars ($20,000,000) or, in either case, any multiple of five hundred thousand Dollars ($500,000) in excess thereof;

    (C) the requested Borrowing date, which shall be a Business Day;

    (D) whether the Borrowing is to comprise Eurodollar Rate Loans or Base Rate Loans;

    (E) the duration of the Interest Period applicable to the Borrowing described in such notice. If the Notice of Borrowing shall fail to specify the duration of the Interest Period for any Borrowing comprising Eurodollar Rate Loans, such Interest Period shall be 90 days or three months, respectively; and

    (F) with respect to any Borrowing of Revolving Loans after the date the Company gives the notice regarding allocation of such Revolving Loans pursuant to Section 2.16, whether the Borrowing shall be allocated to the Revolving Facility Tranche or the Capital Expenditure Tranche.

    (b) Upon receipt of the Notice of Borrowing, the Administrative Agent will promptly notify each Bank thereof and of the amount of such Bank's Revolving Credit Commitment Percentage or Term Credit Commitment Percentage, or both of them, as the case may be, of that Borrowing.

    (c) Each Bank will make the amount of its Revolving Credit Commitment Percentage or Term Credit Commitment Percentage, or both of them, as the case may be, of the Borrowing available to the Administrative Agent for the account of the Company at the Administrative Agent's Payment Office by 12:00 noon (San Francisco time) on the Borrowing date requested by the Company in funds immediately available to the Administrative Agent. The proceeds of all such Loans will then be made available to the Company by the Administrative Agent at such office by

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crediting the account of the Company on the books of BofA with the aggregate of the amounts made available to the Administrative Agent by the Banks and in like funds as received by the Administrative Agent, unless on the date of the Borrowing all or any portion of the proceeds thereof shall then be required to be applied to the repayment of any outstanding Swingline Loans pursuant to Section 2.10 or the reimbursement of any outstanding drawings under Letters of Credit pursuant to Section 3.3, in which case such proceeds or portion thereof shall be applied to the repayment of such Swingline Loans or the reimbursement of such Letter of Credit drawings, as the case may be.

    (d) Unless the Majority Banks shall otherwise agree, the Company may not elect to have a Loan made as a Eurodollar Rate Loan during the existence of a Default or an Event of Default.

    (e) After giving effect to any Borrowing, there shall not be more than six different Interest Periods in effect in respect of all Eurodollar Rate Loans (other than Swingline Loans) then outstanding.

    2.4 Conversion and Continuation Elections for Borrowings  

    (a) The Company may upon irrevocable written notice to the Administrative Agent in accordance with subsection 2.4(b):

     (i) elect to convert on any Business Day, any Base Rate Loans other than Swingline Loans (or any part thereof in an amount not less than $5,000,000 except in the case of a conversion into a Eurodollar Rate Loan with a proposed Interest Period of one week, which shall be in an amount not less than $20,000,000, or that is in an integral multiple of $500,000 in excess thereof) into Eurodollar Rate Loans;

    (ii) elect to convert on the last day of the applicable Interest Period any Eurodollar Rate Loans having Interest Periods maturing on such day (or any part thereof in an amount not less than $5,000,000, or that is in an integral multiple of $500,000 in excess thereof) into Base Rate Loans;

    (iii) elect to continue on the last day of the applicable Interest Period any Eurodollar Rate Loans having Interest Periods maturing on such day (or any part thereof in an amount not less than $5,000,000 except in the case of a continuation of a Eurodollar Rate Loans with a proposed Interest Period of one week, which shall be in an amount not less than $20,000,000, or that is in an integral multiple of $500,000 in excess thereof);

provided, that if the aggregate amount of Eurodollar Rate Loans in respect of any Borrowing shall have been reduced, by payment, prepayment, or conversion of part thereof to be less than $500,000, such Eurodollar Rate Loans shall automatically convert into Base Rate Loans, and on and after such date the right of the Company to continue such Loans as, and convert such Loans into, Eurodollar Rate Loans shall terminate.

    (b) The Company shall deliver a Notice of Conversion/Continuation in accordance with Section 11.2 to be received by the Administrative Agent not later than 9:00 a.m. (San Francisco time) (i) at least three Business Days in advance of the Conversion/Continuation Date, if the Loans are to be converted into or continued as Eurodollar Rate Loans; and (ii) on the Conversion/Continuation Date, if the Loans are to be converted into Base Rate Loans, specifying:

    (A) the proposed Conversion/Continuation Date;

    (B) the aggregate amount of Loans to be converted or continued;

    (C) the nature of the proposed conversion or continuation; and

    (D) other than in the case of Base Rate Loans, the duration of the requested Interest Period.

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    (c) If upon the expiration of any Interest Period applicable to Eurodollar Rate Loans, the Company has failed to select timely a new Interest Period to be applicable to such Eurodollar Rate Loans or if any Default or Event of Default shall then exist, the Company shall be deemed to have elected to convert such Eurodollar Rate Loans into Base Rate Loans effective as of the expiration date of such current Interest Period.

    (d) Upon receipt of a Notice of Conversion/Continuation, the Administrative Agent will promptly notify each Bank thereof, or, if no timely notice is provided by the Company, the Administrative Agent will promptly notify each Bank of the details of any automatic conversion. All conversions and continuations shall be made pro rata according to the respective outstanding principal amounts of the Loans with respect to which the notice was given held by each Bank.

    (e) Unless the Majority Banks shall otherwise agree, during the existence of a Default or Event of Default, the Company may not elect to have a Loan converted into or continued at the end of the applicable Interest Period as a Eurodollar Rate Loan.

    (f)  Notwithstanding any other provision contained in this Agreement, after giving effect to any conversion or continuation of any Loans, there shall not be more than six different Interest Periods in effect in respect of all Eurodollar Rate Loans (other than Swingline Loans) then outstanding.

2.5 Voluntary Termination or Reduction of Commitments

    The Company may, upon not less than five Business Days prior notice to the Administrative Agent, terminate or permanently reduce the Aggregate Revolving Credit Commitment (and, to the extent provided in subsection 2.7(b), the L/C Commitment and the Swingline Commitment) by an aggregate minimum amount of $5,000,000 or any multiple of $5,000,000 in excess thereof; provided that no such reduction or termination shall be permitted if, after giving effect thereto and to any prepayments of the Loans made on the effective date thereof, the aggregate Effective Amount of all Revolving Loans, Swingline Loans and L/C Obligations would exceed the Aggregate Revolving Credit Commitment then in effect. Once reduced in accordance with this Section 2.5, neither the Aggregate Revolving Credit Commitment, the L/C Commitment nor the Swingline Commitment may be increased. Any reduction of the Aggregate Revolving Credit Commitment shall be applied to each Revolving Credit Bank's Revolving Credit Commitment in accordance with such Revolving Credit Bank's Revolving Credit Commitment Percentage. All accrued commitment fees or Facility Fees to the effective date of any reduction or termination of the Aggregate Revolving Credit Commitment shall be paid on the effective date of such reduction or termination.

2.6 Optional Prepayments

    Subject to Section 4.4, the Company may, at any time or from time to time, by written notice delivered to the Administrative Agent at least three Business Days prior to the proposed prepayment date in the case of Eurodollar Rate Loans, on the proposed prepayment date in the case of Base Rate Loans, and on the proposed prepayment date in the case of Swingline Loans (in each case with respect to each of the foregoing notices, such written notice must be received by the Administrative Agent not later than 9:00 a.m. (San Francisco time)), (i) ratably prepay Revolving Loans or the Term Loans, or both, in whole or in part, in minimum principal amounts of $5,000,000 or any multiple of $1,000,000 in excess thereof, and (ii) prepay in whole or in part Swingline Loans in minimum principal amounts of $250,000 or any multiple of $100,000 in excess thereof, or in such other amounts with the consent of the Swingline Bank. Such notice of prepayment shall specify (i) the date and amount of such prepayment, (ii) whether such prepayment is of Base Rate Loans or Eurodollar Rate Loans, or any combination thereof, and whether such Loans constitute Swingline Loans, Revolving Loans or Term Loans, and (iii) if applicable, whether such prepayment is of a Revolving Facility Tranche Loan or a

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Capital Expenditure Tranche Loan, or both. Such notice shall not thereafter be revocable by the Company and the Administrative Agent will promptly notify (i) in the case of Revolving Loans, each Revolving Credit Bank thereof and of such Revolving Credit Bank's Revolving Credit Pro Rata Share of such prepayment, (ii) in the case of Term Loans, each Term Credit Bank thereof and of such Term Credit Bank's Term Credit Pro Rata Share of such prepayment, and (iii) in the case of Swingline Loans, the Swingline Bank thereof and of the amount of such prepayment. If such notice is given by the Company, the Company shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein, together with accrued interest to each such date on the amount prepaid and any amounts required pursuant to Section 4.4.

2.7 Mandatory Prepayments of Loans; Mandatory Commitment Reductions

    (a) Mandatory Prepayments.

    (i)  Asset Dispositions. If the Company or any of its Restricted Subsidiaries shall at any time or from time to time make a sale of Properties permitted by subsection 8.2(i), then the Net Proceeds of such sale shall either be paid by the Company as a prepayment of the Qualified Debt in accordance with the immediately following sentence or be reinvested in accordance with subsection 8.2(i). Prepayments under this subsection 2.7(a)(i) shall be applied as follows: first, to repay the outstanding Term Loans and the 1989 Notes pro rata such that (A) there shall be applied to the 1989 Notes (until the 1989 Notes are repaid in full) an amount equal to the total amount of the prepayment multiplied by a fraction, the numerator of which is the outstanding balance of principal and interest on the 1989 Notes immediately preceding the prepayment, and the denominator of which is the total amount of Indebtedness of the Company immediately preceding the prepayment and (B) the balance of such prepayment shall be applied to the Term Loans until the Term Loans are repaid in full, and second, to repay any other outstanding Qualified Debt selected by the Company.

    (ii) Excess Harvesting. If the Company or any of its Restricted Subsidiaries shall at any time or from time to time harvest excess Timber permitted by Section 8.3, then the Net Proceeds from such excess harvest shall either be paid by the Company as a prepayment of the Qualified Debt in accordance with the immediately following sentence or be reinvested in accordance with Section 8.3. Prepayments under this subsection 2.7(a)(ii) shall be applied as follows: first, to repay the outstanding Term Loans and the 1989 Notes pro rata such that (A) there shall be applied to the 1989 Notes (until the 1989 Notes are repaid in full) an amount equal to the total amount of the prepayment multiplied by a fraction, the numerator of which is the outstanding balance of principal and interest on the 1989 Notes immediately preceding the prepayment, and the denominator of which is the total amount of Indebtedness of the Company immediately preceding the prepayment and (B) the balance of such prepayment shall be applied to the Term Loans until the Term Loans are repaid in full, and second, to repay any other outstanding Qualified Debt selected by the Company.

    (iii) Debt or Equity Issuance. Upon receipt by the Company or any of its Subsidiaries, the Company shall prepay the Term Loans in an amount equal to 100% of the cash proceeds (net of underwriting discounts and commissions or underwriting or placement fees, investment banking fees, legal fees, accounting fees, and other customary fees, commissions, expenses and costs associated therewith) of Debt Issuance by the Company or any of its Subsidiaries under subsection 8.5(i) or of any Equity Issuance by the REIT, the Company or any of their respective Subsidiaries; provided, however, that no such prepayment shall be required with respect to (A) any net cash proceeds received from any Capital Stock issued by the REIT pursuant to the employee stock or equity option plans of the REIT (including options assumed by the REIT pursuant to the Merger Agreement), (B) any net cash proceeds received from the Debt Issuance constituting the 2001 Notes, Indebtedness hereunder, or

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Indebtedness permitted under Section 8.5(h), and (C) any net cash proceeds from a Debt Issuance by the Company or any of its Subsidiaries or an Equity Issuance by the REIT, the Company or any of their respective Subsidiaries that are used by the Company for the acquisition of assets for use in the Company's or any Subsidiary's business, provided, that (1) such assets are owned by the Company or, if the Debt Issuance is by a Subsidiary of the Company, by the Company or such Subsidiary and (2) such acquisition is consummated within 60 days following receipt of such net proceeds. Such prepayment shall be applied to the Term Loans until the Term Loans are repaid in full.

    (iv) L/C Obligations. If on any date the Effective Amount of L/C Obligations exceeds the L/C Commitment, the Company shall Cash Collateralize on such date the outstanding Letters of Credit in an amount equal to the excess of the Effective Amount of L/C Obligations over the L/C Commitment. Subject to Section 4.4, if on any date after giving effect to any Cash Collateralization made on such date pursuant to the preceding sentence, the aggregate Effective Amount of all Revolving Loans, Swingline Loans, and L/C Obligations exceeds the Aggregate Revolving Credit Commitment, the Company shall immediately, and without notice or demand, prepay the outstanding principal amount of the Revolving Loans, Swingline Loans and L/C Advances by an amount equal to the applicable excess.

    (v) Swingline Loans. The Company shall be required to prepay Swingline Loans (A) if following any reduction of the Swingline Commitment pursuant to subsection 2.7(b) the Effective Amount of Swingline Loans would exceed the Swingline Commitment as reduced, the Company shall prepay on the reduction date the Swingline Loans in an amount equal to the amount of such excess, and (B) so that for one Business Day during each successive two calendar week period the aggregate principal amount of Swingline Loans shall be $0 (a "Swingline Clean-Up Day"), the Company shall prepay on the Swingline Clean-Up Day the outstanding principal amount of the Swingline Loans (which Swingline Loans may not be reborrowed until such Swingline Clean-Up Day has ended).

    (vi) Revolving Facility Tranche Loans. If the Company has given a notice pursuant to Section 2.16 allocating all or a portion of the Loans to the Revolving Facility Tranche, the Company shall cause, for a period of at least 45 consecutive days during the 12 calendar month period after the effective date of such notice and during each successive 12 calendar month period prior to the Revolving Credit Termination Date, no L/C Obligations to be outstanding and the aggregate principal amount of Revolving Facility Tranche Loans to be $0.

    (b) Mandatory Commitment Reductions.

    (i)  The Aggregate Revolving Credit Commitment shall be reduced from time to time by the amount of any prepayment of Revolving Loans undertaken by the Company pursuant to subsection 2.7(a)(i) or (a)(ii). Such reduction shall be applied pro rata among the respective Revolving Credit Commitments and shall be effective upon such prepayment. All accrued commitment fees or Facility Fees to the effective date of any reduction or termination of the Aggregate Revolving Credit Commitment shall be paid on the effective date of such reduction or termination.

    (ii) Any reduction in the Aggregate Revolving Credit Commitment which reduces the Aggregate Revolving Credit Commitment below the then current amount of the L/C Commitment shall result in an automatic corresponding reduction of the L/C Commitment to the amount of the Aggregate Revolving Credit Commitment as so reduced, without any action on the part of the Issuing Bank.

    (iii) Any reduction of the Aggregate Revolving Credit Commitment which reduces the Aggregate Revolving Commitment below the then current amount of the Swingline Commitment shall result in an automatic corresponding reduction of the Swingline

34

Commitment to the amount of the Aggregate Revolving Credit Commitment, as so reduced, without any action on the part of the Swingline Bank.

    (iv) The Term Credit Commitments of all the Banks shall be automatically terminated on the Closing Date upon the Borrowing of the Term Loans on such date.

    (v) Once reduced in accordance with this Section 2.7(b), neither the Aggregate Revolving Credit Commitment, the L/C Commitment nor the Swingline Commitment may be increased.

    (c) General.

    (i)  Any prepayments of Term Loans pursuant to subsection 2.7(a) shall be applied first to any Base Rate Loans then outstanding and then to Eurodollar Rate Loans then outstanding.

    (ii) Any prepayments of any Loans (other than Term Loans) pursuant to subsection 2.7(a) shall be applied first to any Base Rate Loan then outstanding, second to Cash Collateralize or to prepay Swingline Loans as directed by the Swingline Bank in its sole discretion, and third, at the Company's option, to Cash Collateralize or to prepay in the inverse order of their stated maturity Eurodollar Rate Loans. Subject to the immediately preceding sentence and so long as no default or Event of Default shall then exist, if applicable, any such prepayments of any Loans (other than Term Loans) shall be applied to Revolving Facility Tranche Loans and Capital Expenditure Tranche Loans as directed by the Company.

    (iii) The Company shall pay, together with each prepayment under this Section 2.7, accrued interest on the amount prepaid and any amounts required pursuant to Section 4.4.

    (iv) No prepayment under Section 2.6 or 2.7 shall in any way affect the obligations of the Company or any of its Subsidiaries under any Swap Contract; unless otherwise provided in such Swap Contract.

2.8 Repayment

    (a) The Company hereby promises to pay, and shall repay, to the Term Credit Banks in full on the Term Credit Maturity Date the Effective Amount of all Term Loans, together with all accrued and unpaid interest thereon and all other amounts owed hereunder with respect to such Term Loans.

    (b) The Company hereby promises to pay, and shall repay, to the Revolving Credit Banks in full on the Revolving Credit Termination Date the Effective Amount of all Loans (other than the Term Loans), together with all accrued and unpaid interest thereon and all other amounts owed hereunder with respect to such Loans.

    (c) The Company hereby promises to pay, and shall repay, to the Swingline Bank in full on the Revolving Credit Termination Date the Effective Amount of all Swingline Loans, together with all accrued and unpaid interest thereon and all other amounts owed hereunder with respect to such Swingline Loans.

2.9 Interest

    (a) Subject to subsection 2.9(c): (i) each Loan (other than any Swingline Loan) shall bear interest on the outstanding principal amount thereof from the date when made until it becomes due at a rate per annum equal to the Eurodollar Rate or the Base Rate, as the case may be, plus the Applicable Margin; and (ii) each Swingline Loan shall bear interest on the principal amount thereof from the date when made until it becomes due at a rate per annum equal to the Base

35

Rate plus the Applicable Margin or any other rate agreed to between the Company and the Swingline Bank.

    (b) Interest on each Loan shall be paid in arrears on each Interest Payment Date and in the case of a Swingline Loan bearing an interest rate other than the Base Rate, on the date agreed to by the Swingline Bank in its sole discretion. Interest shall also be paid on the date of any prepayment of Loans pursuant to Section 2.6 and 2.7 for the portion of the Loans so prepaid and upon payment (including prepayment) in full thereof and, during the existence of any Event of Default, interest shall be paid on demand of the Administrative Agent at the request or with the consent of the Majority Banks.

    (c) While any Event of Default exists or after acceleration, the Company shall pay interest (after as well as before entry of judgment thereon to the extent permitted by law) on the principal amount of all Obligations due and unpaid, at a rate per annum that is determined, in the case of Loans other than Base Rate Loans, by adding 2% per annum to the Applicable Margin then in effect for such Loans and, in the case of other Obligations, at a rate equal to the Base Rate plus 2% per annum.

    (d) Anything herein to the contrary notwithstanding, the obligations of the Company hereunder shall be subject to the limitation that payments of interest shall not be required, for any period for which interest is computed hereunder, to the extent (but only to the extent) that contracting for or receiving such payment by the respective Bank would be contrary to the provisions of any law applicable to such Bank limiting the highest rate of interest which may be lawfully contracted for, charged or received by such Bank, and in such event the Company shall pay such Bank interest at the highest rate permitted by applicable law.

2.10 Swingline Loans

    (a) Subject to the terms and conditions hereof, the Swingline Bank severally agrees to make a portion of the Aggregate Revolving Credit Commitment available to the Company by making swingline loans (individually, a "Swingline Loan"; collectively, the "Swingline Loans") to the Company on any Business Day during the period from the Closing Date to the Revolving Credit Termination Date in accordance with the procedures set forth in this Section in an aggregate principal amount at any one time outstanding not to exceed $25,000,000, notwithstanding the fact that such Swingline Loans, when aggregated with the Swingline Bank's outstanding Loans, may exceed the Swingline Bank's Revolving Credit Commitment (the amount of such commitment of the Swingline Bank to make Swingline Loans to the Company pursuant to this subsection 2.10(a), as the same shall be reduced pursuant to subsection 2.7(b) or as a result of any assignment pursuant to Section 11.8, the Swingline Bank's "Swingline Commitment"); provided, that at no time shall (i) the aggregate Effective Amount of all Revolving Loans, Swingline Loans and L/C Obligations exceed the Aggregate Revolving Credit Commitment, or (ii) the Effective Amount of all Swingline Loans exceed the Swingline Commitment. Additionally, no more than four Swingline Loans may be outstanding at any one time. Within the foregoing limits, and subject to the other terms and conditions hereof, the Company may borrow under this subsection 2.10(a), prepay pursuant to subsection 2.6 and reborrow pursuant to this subsection 2.10(a).

    (b) The Company shall provide the Administrative Agent (with a copy to the Swingline Bank) irrevocable written notice (including notice via facsimile confirmed immediately by a telephone call) in the form of a Notice of Borrowing of any Swingline Loan requested hereunder (which notice must be received by the Swingline Bank and the Administrative Agent prior to 12:00 noon (San Francisco time) on the requested Borrowing date) specifying (i) the amount to be borrowed, (ii) the requested Borrowing date, which must be a Business Day, and (iii) with respect to any requested Swingline Loan after the date the Company gives the notice regarding allocation of

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Loans pursuant to Section 2.16, whether the requested Swingline Loan shall be allocated to the Revolving Facility Tranche or the Capital Expenditure Tranche. Upon receipt of the Notice of Borrowing, the Swingline Bank will immediately confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of the Notice of Borrowing from the Company and, if not, the Swingline Bank will provide the Administrative Agent with a copy thereof. Unless the Swingline Bank has received notice prior to 2:00 p.m. on such Borrowing date from the Administrative Agent (A) directing the Swingline Bank not to make the requested Swingline Loan as a result of the limitations set forth in the proviso set forth in the first sentence of subsection 2.10(a); or (B) that one or more conditions specified in Article V are not then satisfied; then, subject to the terms and conditions hereof, the Swingline Bank will, not later than 3:00 p.m. (San Francisco time) on the Borrowing date specified in such Notice, make the amount of its Swingline Loan available to the Administrative Agent for the account of the Company at the Administrative Agent's Payment Office in funds immediately available to the Administrative Agent. The proceeds of such Swingline Loan will then promptly be made available to the Company by the Administrative Agent crediting the account of the Company on the books of BofA with the aggregate of the amounts made available to the Administrative Agent by the Swingline Bank and in like funds as received by the Administrative Agent. Each Borrowing pursuant to this Section shall be in an aggregate principal amount equal to two hundred fifty thousand dollars ($250,000) or an integral multiple of one hundred thousand dollars ($100,000) in excess thereof, unless otherwise agreed by the Swingline Bank.

    (c) If (i) any Swingline Loans shall remain outstanding at 9:00 a.m. (San Francisco time) on the Business Day immediately prior to a Swingline Clean-Up Day and by such time on such Business Day the Administrative Agent shall have received neither (A) a Notice of Borrowing delivered pursuant to Section 2.3 requesting that Revolving Loans be made pursuant to Section 2.1 on the Swingline Clean-Up Day in an amount at least equal to the aggregate principal amount of such Swingline Loans, nor (B) any other notice indicating the Company's intent to repay such Swingline Loans with funds obtained from other sources, or (ii) any Swingline Loans shall remain outstanding during the existence of a Default or Event of Default and the Swingline Bank shall in its sole discretion notify the Administrative Agent that the Swingline Bank desires that such Swingline Loans be converted into Revolving Loans, then the Administrative Agent shall be deemed to have received a Notice of Borrowing from the Company pursuant to Section 2.3 requesting that Base Rate Revolving Loans be made pursuant to Section 2.1(b) on such Swingline Clean-Up Day (in the case of the circumstances described in clause (i) above) or on the first Business Day subsequent to the date of such notice from the Swingline Bank (in the case of the circumstances described in clause (ii) above) in an amount equal to the aggregate amount of such Swingline Loans, and the procedures set forth in subsections 2.3(b) and 2.3(c) shall be followed in making such Base Rate Revolving Loans; provided, that such Base Rate Revolving Loans shall be made notwithstanding the Company's failure to comply with subsections 5.2(b) and 5.2(c); and provided, further, that if a Borrowing of Revolving Loans becomes legally impracticable and if so required by the Swingline Bank at the time such Revolving Loans are required to be made by the Banks in accordance with this subsection 2.10(c), each Revolving Credit Bank agrees that in lieu of making Revolving Loans as described in this subsection 2.10(c), such Revolving Credit Bank shall purchase a participation from the Swingline Bank in the applicable Swingline Loans in an amount equal to such Revolving Credit Bank's Revolving Credit Commitment Percentage of such Swingline Loans, and the procedures set forth in subsections 11.8 shall be followed in connection with the purchases of such participations. Upon such purchases of participations, the prepayment requirements of subsection 2.7(a)(v) shall be deemed waived with respect to such Swingline Loans. The proceeds of such Base Rate Revolving Loans shall be applied to repay such Swingline Loans, and the proceeds of participations purchased shall be retained by the Swingline Bank as payment of the purchase price for such participations. A copy of each notice given by the Administrative

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Agent to the Revolving Credit Banks pursuant to this subsection 2.10(c) with respect to the making of Revolving Loans, or the purchases of participations, shall be promptly delivered by the Administrative Agent to the Company. Each Revolving Credit Bank's obligation in accordance with this Agreement to make the Revolving Loans, or purchase the participations, as contemplated by this subsection 2.10(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (1) any set-off, counterclaim, recoupment, defense or other right which such Revolving Credit Bank may have against the Swingline Bank, the Company or any other Person for any reason whatsoever; (2) the occurrence or continuance of a Default, an Event of Default or a Material Adverse Effect; or (3) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

2.11 Fees

    In addition to certain fees described in Section 3.8:

    (a) Administrative Agent Fees. The Company shall pay to the Administrative Agent for the Administrative Agent's account administrative agent fees, as required by the BofA Fee Letter in the amounts and at the times set forth in the BofA Fee Letter. The foregoing fees shall be non-refundable for any reason whatsoever.

    (b) Facility Fee. The Company shall pay to the Administrative Agent for the account of each Bank in accordance with such Bank's Aggregate Commitment Percentage, a facility fee (the "Facility Fee") equal to the Facility Fee Percentage times the actual daily amount of the Aggregate Commitments, regardless of usage. The Facility Fee shall accrue at all times from the Closing Date until the Revolving Credit Termination Date and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the Revolving Credit Termination Date. The Facility Fee shall be calculated quarterly in arrears, and if there is any change in the Facility Fee Percentage during any quarter, the actual daily amount shall be computed and multiplied by the Facility Fee Percentage separately for each period during such quarter that such Facility Fee Percentage was in effect. The Facility Fee shall accrue at all times, including at any time during which one or more of the conditions in Article V is not met.

    (c) Banks' Upfront Fee. On the Closing Date, the Company shall pay to each Bank an upfront fee in the amounts as agreed to between the Company and each Bank. Each upfront fee paid to each Bank is solely for such Bank's own account and is nonrefundable for any reason whatsoever.

    (d) Structuring Fees. The Company shall pay to (i) BofA for its account an arrangement, structuring and syndication fee in the amounts and at the times specified in the BofA Fee Letter and (ii) First Union Securities, Inc. for its account or arrangement, structuring and syndication fee in the amounts and at the times specified in the First Union Fee Letter. Such fees shall be fully earned when paid and shall be nonrefundable for any reason whatsoever.

2.12 Computation of Fees and Interest

    (a) All computations of interest payable in respect of Base Rate Loans at all times that the Base Rate is determined by BofA's "reference rate" shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest under this Agreement shall be made on the basis of a 360-day year and actual days elapsed, which results in more interest being paid than if computed on the basis of a 365-day year. Interest and fees shall accrue during each period during which interest or such fees are computed from the first day thereof to the last day thereof.

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    (b) The Administrative Agent will, with reasonable promptness, notify the Company and the Banks of each determination of a Eurodollar Rate; provided that any failure to do so shall not relieve the Company of any liability hereunder or provide the basis for any claim against the Administrative Agent. Any change in the interest rate on a Loan resulting from a change in the Applicable Margin, Eurodollar Reserve Percentage, or the Assessment Rate shall become effective as of the opening of business on the day on which such change in the Applicable Margin, Eurodollar Reserve Percentage, or the Assessment Rate becomes effective. The Administrative Agent will with reasonable promptness notify the Company and the Banks of the effective date and the amount of each such change, provided that any failure to do so shall not relieve the Company of any liability hereunder or provide the basis for any claim against the Administrative Agent.

    (c) Each determination of an interest rate by the Administrative Agent pursuant hereto shall be conclusive and binding on the Company and the Banks in the absence of manifest error.

2.13 Payments by the Company

    (a) All payments (including prepayments) to be made by the Company on account of principal, interest, fees and other amounts required hereunder shall be made without set-off, recoupment or counterclaim; shall, except as otherwise expressly provided herein, be made to the Administrative Agent for the ratable account of the Banks at the Administrative Agent's Payment Office, and shall be made in dollars and in immediately available funds, no later than 10:00 a.m. (San Francisco time) on the date specified herein. The Administrative Agent will promptly distribute to each Bank its Revolving Credit Pro Rata Share or Term Credit Pro Rata Share, as applicable, (or other applicable share as expressly provided herein) of such principal, interest, fees or other amounts, in like funds as received. Any payment which is received by the Administrative Agent later than 10:00 a.m. (San Francisco time) shall be deemed to have been received on the immediately succeeding Business Day and any applicable interest or fee shall continue to accrue.

    (b) Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of interest or fees, as the case may be; subject to the provisions set forth in the definition of "Interest Period" herein.

    (c) Unless the Administrative Agent shall have received notice from the Company prior to the date on which any payment is due to the Banks hereunder that the Company will not make such payment in full as and when required hereunder, the Administrative Agent may assume that the Company has made such payment in full to the Administrative Agent on such date in immediately available funds and the Administrative Agent may (but shall not be so required), in reliance upon such assumption, cause to be distributed to each Bank on such due date an amount equal to the amount then due such Bank. If and to the extent the Company shall not have made such payment in full to the Administrative Agent, each Bank shall repay to the Administrative Agent on demand such amount distributed to such Bank, together with interest thereon for each day from the date such amount is distributed to such Bank until the date such Bank repays such amount to the Administrative Agent, at the Federal Funds Rate as in effect for each such day.

2.14 Payments by the Banks to the Administrative Agent

    (a) Unless the Administrative Agent shall have received notice from a Bank on the Closing Date or, with respect to each Borrowing after the Closing Date, at least one Business Day prior to the date of any proposed Borrowing, that such Bank will not make available to the Administrative Agent as and when required hereunder for the account of the Company the amount of that Bank's Revolving Credit Commitment Percentage or Term Credit Commitment Percentage, as applicable,

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of the Borrowing, the Administrative Agent may assume that each Bank has made such amount available to the Administrative Agent in immediately available funds on the Borrowing date and the Administrative Agent may (but shall not be so required), in reliance upon such assumption, make available to the Company on such date a corresponding amount. If and to the extent any Bank shall not have made its full amount available to the Administrative Agent in immediately available funds and the Administrative Agent in such circumstances has made available to the Company such amount, that Bank shall on the next Business Day following the date of such Borrowing make such amount available to the Administrative Agent, together with interest at the Federal Funds Rate for and determined as of each day during such period. A notice of the Administrative Agent submitted to any Bank with respect to amounts owing under this subsection 2.14(a) shall be conclusive, absent manifest error. If such amount is so made available, such payment to the Administrative Agent shall constitute such Bank's Loan on the date of such Borrowing for all purposes of this Agreement. If such amount is not made available to the Administrative Agent on the next Business Day following the date of such Borrowing, the Administrative Agent shall notify the Company of such failure to fund and, upon demand by the Administrative Agent, the Company shall pay such amount to the Administrative Agent for the Administrative Agent's account, together with interest thereon for each day elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate applicable at the time to the Loans comprising such Borrowing.

    (b) The failure of any Bank to make any Loan on any date of borrowing shall not relieve any other Bank of any obligation hereunder to make a Loan on the date of such borrowing, but no Bank shall be responsible for the failure of any other Bank to make the Loan to be made by such other Bank on the date of any Borrowing.

2.15 Sharing of Payments, Etc.

    If, other than as expressly provided elsewhere herein, any Bank shall obtain on account of the Loans made by it any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) in excess of its ratable share (or other share contemplated hereunder) thereof, such Bank shall forthwith (a) notify the Administrative Agent of such fact (and the Administrative Agent shall, promptly after receipt thereof, send a copy of such notice to the Banks), and (b) purchase from the other Banks such participations in the Loans made by them and/or such subparticipations in the participations in L/C Obligations of Swingline Loans held by them, as the case may be, as shall be necessary to cause such purchasing Bank to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from the purchasing Bank, such purchase shall to that extent be rescinded and each other Bank shall repay to the purchasing Bank the purchase price paid therefor, together with an amount equal to such paying Bank's proportionate share (according to the proportion of (i) the amount of such paying Bank's required repayment to (ii) the total amount so recovered from the purchasing Bank) of any interest or other amount paid or payable by the purchasing Bank in respect of the total amount so recovered. The Company agrees that any Bank so purchasing a participation from another Bank pursuant to this Section 2.15 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off, but subject to Section 11.9) with respect to such participation as fully as if such Bank were the direct creditor of the Company in the amount of such participation. The Administrative Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased pursuant to this Section 2.15 and will in each case notify the Banks following any such purchases or repayments.

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2.16 Loan Tranches

    The Company may, at any time and from time to time, upon at least five Business Days notice to the Administrative Agent, allocate all or a portion of Borrowings constituting Revolving Loans, including with respect to Swingline Loans and L/C Obligations, to a revolving credit facility tranche (the "Revolving Facility Tranche") or a capital expenditure tranche (the "Capital Expenditure Tranche"), or both; provided that:

    (i)  at no time shall the Effective Amount of all Revolving Loans and Swingline Loans allocated to the Revolving Facility Tranche plus the Effective Amount of all L/C Obligations exceed $50,000,000;

    (ii) at no time shall the Effective Amount of all Revolving Loans and Swingline Loans allocated to the Capital Expenditure Tranche exceed $50,000,000;

    (iii) upon allocation to the Revolving Facility Tranche or the Capital Expenditure Tranche, as case may be, Loans shall remain so allocated notwithstanding any conversion or continuation of Loans pursuant to Section 2.3;

    (iv) the Company and each of the Banks agree that the establishment of the Revolving Facility Tranche and the Capital Expenditure Tranche is intended to assist the Company in its compliance with Section 8.5 and the corresponding provisions of the applicable Senior Notes Agreements. Accordingly, neither the failure by the Company to comply in any respect with this Section 2.16 nor the failure by the Administrative Agent or any Bank to identify or remedy such noncompliance shall give rise to any liability against the Administrative Agent or any Bank or any defense to compliance by the Company with Section 8.5; and

    (v) if the Company fails to so allocate the L/C Obligations, the L/C Obligations shall be deemed allocated to the Revolving Facility Tranche.

    Such notice of allocation shall specify (i) the effective date of such allocation which shall not be a date earlier than the date of such notice, (ii) the aggregate principal amount of Loans (other than Term Loans) (identified by Type of Loan) and L/C Obligations to be allocated to the Revolving Facility Tranche, the Capital Expenditure Tranche, or both, as the case may be, and (iii) in the case of allocations to the Capital Expenditure Tranche, the Company shall represent and warrant that the proceeds of all Loans (other than Term Loans) allocated thereto have been used solely to finance capital improvements, expansions and additions to the Company's property (including Timberlands), plant and equipment. The Administrative Agent will promptly notify the Banks of such notice of allocation of Loans (other than Term Loans) and L/C Obligations.

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ARTICLE III
THE LETTERS OF CREDIT

    3.1 The Letter of Credit Facility  

    (a) Subject to the terms and conditions set forth herein, (i) the Issuing Bank agrees, (A) from time to time on any Business Day during the period from the Closing Date until 30 days before the Revolving Credit Termination Date to issue Letters of Credit for the account of the Company (it being understood that such Letter of Credit may be for the benefit of any of its Subsidiaries), and to amend or renew Letters of Credit previously issued by it, in accordance with subsections 3.2(c) and 3.2(d), and (B) to honor drafts under the Letters of Credit; and (ii) the Banks severally agree to participate in Letters of Credit Issued for the account of the Company (it being understood that such Letter of Credit may be for the benefit of any of its Subsidiaries); provided, that the Issuing Bank shall not be obligated to Issue, and no Bank shall be obligated to participate in, any Letter of Credit if as of the date of Issuance of such Letter of Credit (the "Issuance Date") (1) the aggregate Effective Amount of all Revolving Loans, Swingline Loans, and L/C Obligations exceeds the Aggregate Revolving Credit Commitment, (2) the Effective Amount of all Revolving Loans of such Bank plus the participation of such Bank, if any, in the aggregate Effective Amount of all Swingline Loans and L/C Obligations exceeds such Bank's Revolving Credit Commitment, or (3) the Effective Amount of L/C Obligations exceeds the L/C Commitment. Within the foregoing limits, and subject to the other terms and conditions hereof, the Company's ability to obtain Letters of Credit shall be fully revolving, and, accordingly, the Company may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit which have expired or which have been drawn upon and reimbursed. Upon the initial Credit Extension, all Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after such Credit Extension shall be subject to and governed by the terms and conditions hereof.

    (b) The Issuing Bank is under no obligation to Issue any Letter of Credit if:

     (i) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Issuing Bank from Issuing such Letter of Credit, or any Requirement of Law applicable to the Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Issuing Bank shall prohibit, or request that the Issuing Bank refrain from, the Issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Issuing Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the Issuing Bank is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the Issuing Bank any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the Issuing Bank in good faith deems material to it;

    (ii) the Issuing Bank has received written notice from any Bank, the Administrative Agent or the Company, on or prior to the Business Day prior to the requested date of Issuance of such Letter of Credit, that one or more of the applicable conditions contained in Article V is not then satisfied;

    (iii) the expiry date of any requested Letter of Credit is (A) more than one year after the date of Issuance, unless the Majority Banks have approved such expiry date in writing, or (B) after the Revolving Credit Termination Date, unless all of the Banks have approved such expiry date in writing;

    (iv) the expiry date of any requested Letter of Credit is prior to the maturity date of any financial obligation to be supported by the requested Letter of Credit, unless such Letter of

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Credit is issued in connection with worker's compensation or to secure self-insurance deductibles or certain payments required in connection with export log yards, or all of the Banks have approved such expiry date in writing;

    (v) any requested Letter of Credit does not provide for drafts, or is not otherwise in form and substance reasonably acceptable to the Issuing Bank, or the Issuance of a Letter of Credit may violate any policies of the Issuing Bank applicable to customers and credits of a type similar to the Company and the transactions contemplated in this Agreement;

    (vi) any standby Letter of Credit is for the purpose of supporting the issuance of any letter of credit by any other Person;

   (vii) such Letter of Credit is in a face amount less than $100,000 or to be denominated in a currency other than Dollars; or

   (viii) the requested Letter of Credit provides for payment thereunder sooner than the Business Day following the presentation to the Issuing Bank of the documentation required thereunder.

    3.2 Issuance, Amendment and Renewal of Letters of Credit  

    (a) Each Letter of Credit shall be issued upon the irrevocable written request of the Company received by the Issuing Bank (with a copy sent by the Company to the Administrative Agent) at least five days (or such shorter time as the Issuing Bank may agree in a particular instance in its sole discretion) prior to the proposed date of issuance. Each such request for issuance of a Letter of Credit shall be made by an original writing or by facsimile, confirmed immediately in an original writing, in the form of an L/C Application, and shall specify in form and detail satisfactory to the Issuing Bank:

     (i) the proposed date of issuance of the Letter of Credit (which shall be a Business Day);

    (ii) the face amount of the Letter of Credit;

    (iii) the expiry date of the Letter of Credit;

    (iv) the name and address of the beneficiary thereof;

    (v) the documents to be presented by the beneficiary of the Letter of Credit in case of any drawing thereunder;

    (vi) the full text of any certificate to be presented by the beneficiary in case of any drawing thereunder; and

   (vii) such other usual and customary matters as the Issuing Bank may require.

    (b) At least three Business Days prior to the Issuance of any Letter of Credit or any amendment or renewal of a Letter of Credit, the Issuing Bank issuing such Letter of Credit will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of the L/C Application or L/C Amendment Application from the Company and, if not, the Issuing Bank will provide the Administrative Agent with a copy thereof. Unless the Issuing Bank has received notice on or before the Business Day immediately preceding the date the Issuing Bank is to issue, amend or renew a requested Letter of Credit from the Administrative Agent (A) directing the Issuing Bank not to issue, amend or renew such Letter of Credit because such issuance amendment or renewal is not then permitted under subsection 3.1(a) as a result of the limitations set forth in clauses (1) through (3) thereof or subsection 3.1(b)(ii); or (B) that one or more conditions specified in Article V are not then satisfied; then, subject to the terms and conditions hereof, the Issuing Bank shall, on the requested date, issue a Letter of Credit for the

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account of the Company (it being understood that such Letter of Credit may be for the benefit of any of its Subsidiaries) or amend or renew a Letter of Credit, as the case may be, in accordance with the Issuing Bank's usual and customary business practices.

    (c) From time to time while a Letter of Credit is outstanding and prior to the Revolving Credit Termination Date, the Issuing Bank shall, upon the written request of the Company received by the Issuing Bank (with a copy sent by the Company to the Administrative Agent) at least five days (or such shorter time as the Issuing Bank may agree in a particular instance in its sole discretion) prior to the proposed date of amendment, amend any Letter of Credit issued by it. Each such request for amendment of a Letter of Credit shall be made by an original writing or by facsimile, confirmed immediately in an original writing, made in the form of an L/C Amendment Application and shall specify in form and detail satisfactory to the Issuing Bank:

     (i) the Letter of Credit to be amended;

    (ii) the proposed date of amendment of the Letter of Credit (which shall be a Business Day);

    (iii) the nature of the proposed amendment; and

    (iv) such other usual and customary matters as the Issuing Bank may require.

    The Issuing Bank shall be under no obligation to amend any Letter of Credit if: (A) the Issuing Bank would have no obligation at such time to issue such Letter of Credit in its amended form under the terms of this Agreement; or (B) the beneficiary of any such letter of Credit does not accept the proposed amendment to the Letter of Credit. The Administrative Agent will promptly notify the Banks of the receipt by it of any L/C Application or L/C Amendment Application.

    (d) The Issuing Bank and the Banks agree that, while a Letter of Credit is outstanding and prior to the Revolving Credit Termination Date, at the option of the Company and upon the written request of the Company received by the Issuing Bank (with a copy sent by the Company to the Administrative Agent) at least five days (or such shorter time as the Issuing Bank may agree in a particular instance in its sole discretion) prior to the proposed date of notification of renewal, the Issuing Bank shall be entitled to authorize the renewal of any Letter of Credit issued by it. Each such request for renewal of a Letter of Credit shall be made by an original writing or by facsimile, confirmed immediately in an original writing, in the form of an L/C Amendment Application, and shall specify in form and detail satisfactory to the Issuing Bank:

     (i) the Letter of Credit to be renewed;

    (ii) the proposed date of notification of renewal of the Letter of Credit (which shall be a Business Day);

    (iii) the revised expiry date of the Letter of Credit; and

    (iv) such other usual and customary matters as the Issuing Bank may require.

    The Issuing Bank shall be under no obligation so to renew any Letter of Credit if: (A) the Issuing Bank would have no obligation at such time to issue or amend such Letter of Credit in its renewed form under the terms of this Agreement; or (B) the beneficiary of any such Letter of Credit does not accept the proposed renewal of the Letter of Credit. If any outstanding Letter of Credit shall provide that it shall be automatically renewed unless the beneficiary thereof receives notice from the Issuing Bank that such Letter of Credit shall not be renewed, and if at the time of renewal the Issuing Bank would be entitled to authorize the automatic renewal of such Letter of Credit in accordance with this subsection 3.2(d) upon the request of the Company but the Issuing Bank shall not have received any L/C Amendment Application from the Company with respect to

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such renewal or other written direction by the Company with respect thereto, the Issuing Bank shall nonetheless be permitted to allow such Letter of Credit to renew, and the Company and the Banks hereby authorize such renewal, and, accordingly, the Issuing Bank shall be deemed to have received an L/C Amendment Application from the Company requesting such renewal.

    (e) In connection with Letters of Credit that automatically renew or extend their expiry date, the Issuing Bank may, at its election (or as required by the Administrative Agent at the direction of the Majority Banks), deliver any notices of termination or other communications to any Letter of Credit beneficiary or transferee, and take any other action as necessary or appropriate, at any time and from time to time, in order to cause the expiry date of such Letter of Credit to be a date not later than the Revolving Credit Termination Date.

    (f)  This Agreement shall control in the event of any conflict with any L/C-Related Document (other than any Letter of Credit).

    (g) The Issuing Bank will also deliver to the Administrative Agent, concurrently or promptly following its delivery of a Letter of Credit, or amendment to or renewal of a Letter of Credit, to an advising bank or a beneficiary, a true and complete copy of each such Letter of Credit or amendment to or renewal of a Letter of Credit.

    (h) The Issuing Bank shall deliver to the Administrative Agent such reports with respect to the Letters of Credit as the Administrative Agent may reasonably request from time to time.

    3.3 Risk Participations, Drawings and Reimbursements  

    (a) Immediately upon the Issuance of each Letter of Credit, each Revolving Credit Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank issuing such Letter of Credit a participation in such Letter of Credit and each drawing thereunder in an amount equal to the product of (i) the Revolving Credit Commitment Percentage of such Revolving Credit Bank, times (ii) the maximum amount available to be drawn under such Letter of Credit and the amount of such drawing, respectively. For purposes of Section 2.1, each Issuance of a Letter of Credit shall be deemed to utilize the Revolving Credit Commitment of each Revolving Credit Bank by an amount equal to the amount of such participation.

    (b) In the event of any request for a drawing under a Letter of Credit by the beneficiary or transferee thereof, the Issuing Bank which issued such Letter of Credit will promptly notify the Company. The Company shall reimburse the Issuing Bank, directly or with the proceeds of a Revolving Loan, prior to 10:00 a.m. (San Francisco time), on each date that any amount is paid by the Issuing Bank under any Letter of Credit (each such date, an "Honor Date"), in an amount equal to the amount so paid by the Issuing Bank. If the Company fails to reimburse the Issuing Bank for the full amount of any drawing under any Letter of Credit by 10:00 a.m. (San Francisco time) on the Honor Date, such Issuing Bank will promptly notify the Administrative Agent and the Administrative Agent will promptly notify each Revolving Credit Bank thereof, and the Company shall be deemed to have requested that Base Rate Revolving Loans be made by the Revolving Credit Banks to be disbursed on the Honor Date under such Letter of Credit, subject to the aggregate amount of the un-utilized portion of the Aggregate Revolving Credit Commitment and subject to the conditions set forth in Section 5.2. Any notice given by the Issuing Bank or the Administrative Agent pursuant to this subsection 3.3(b) may be oral if immediately confirmed in writing (including by facsimile); provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

    (c) Each Bank shall upon any notice pursuant to subsection 3.3(b) make available to the Administrative Agent for the account of the Issuing Bank an amount in Dollars and in immediately available funds equal to its Revolving Credit Commitment Percentage of the amount

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of the drawing, whereupon the participating Revolving Credit Banks shall (subject to subsection 3.3(d)) each be deemed to have made a Revolving Loan consisting of a Base Rate Revolving Loan to the Company in that amount. If any Revolving Credit Bank so notified fails to make available to the Administrative Agent for the account of the Issuing Bank the amount of such Revolving Credit Bank's Revolving Credit Commitment Percentage of the amount of the drawing by no later than 12:00 noon (San Francisco time) on the Honor Date, then interest shall accrue on such Revolving Credit Bank's obligation to make such payment, from the Honor Date to the date such Revolving Credit Bank makes such payment, at a rate per annum equal to the Federal Funds Rate in effect from time to time during such period. The Administrative Agent will promptly give notice of the occurrence of the Honor Date, but failure of the Administrative Agent to give any such notice on the Honor Date or in sufficient time to enable any Revolving Credit Bank to effect such payment on such date shall not relieve such Revolving Credit Bank from its obligations under this Section 3.3.

    (d) With respect to any unreimbursed drawing that is not converted into Revolving Loans consisting of Base Rate Revolving Loans to the Company in whole or in part, because of the Company's failure to satisfy the conditions set forth in Section 5.2 or for any other reason, the Company shall be deemed to have incurred from the Issuing Bank an L/C Borrowing in the amount of such drawing, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at a rate per annum equal to the Base Rate plus 2% per annum, and each Revolving Credit Bank's payment to the Issuing Bank pursuant to subsection 3.3(c) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Revolving Credit Bank in satisfaction of its participation obligation under this Section 3.3.

    (e) Each Revolving Credit Bank's obligation in accordance with this Agreement to make the Revolving Loans or L/C Advances, as contemplated by this Section 3.3, as a result of a drawing under a Letter of Credit, shall be absolute and unconditional and without recourse to the Issuing Bank and shall not be affected by any circumstance, including (i) any set-off, counterclaim, recoupment, defense or other right which such Revolving Credit Bank may have against the Issuing Bank, the Company or any other Person for any reason whatsoever; (ii) the occurrence or continuance of a Default, an Event of Default or a Material Adverse Effect; or (iii) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing; provided, however, that each Revolving Credit Bank's obligation to make Revolving Loans under this Section 3.3 is subject to the conditions set forth in Section 5.2.

    3.4 Repayment of Participations  

    (a) Upon (and only upon) receipt by the Administrative Agent for the account of the Issuing Bank of immediately available funds from the Company (i) in reimbursement of any payment made by the Issuing Bank under the Letter of Credit with respect to which any Revolving Credit Bank has paid the Administrative Agent for the account of the Issuing Bank for such Revolving Credit Bank's participation in the Letter of Credit pursuant to Section 3.3 or (ii) in payment of interest thereon, the Administrative Agent will pay to each Revolving Credit Bank, in the same funds as those received by the Administrative Agent for the account of the Issuing Bank, the amount of such Revolving Credit Bank's Revolving Credit Commitment Percentage of such funds, and the Issuing Bank shall receive the amount of the Revolving Credit Commitment Percentage of such funds of any Revolving Credit Bank that did not so pay the Administrative Agent for the account of the Issuing Bank.

    (b) If the Administrative Agent or the Issuing Bank is required at any time to return to the Company, or to a trustee, receiver, liquidator, custodian, or any official in any Insolvency Proceeding, any portion of the payments made by the Company to the Administrative Agent for the account of the Issuing Bank pursuant to subsection 3.4(a) in reimbursement of a payment

46

made under the Letter of Credit or interest or fee thereon, each Revolving Credit Bank shall, on demand of the Administrative Agent, forthwith return to the Administrative Agent or the Issuing Bank the amount of such Revolving Credit Bank's Revolving Credit Commitment Percentage of any amounts so returned by the Administrative Agent or the Issuing Bank plus interest thereon from the date such demand is made to the date such amounts are returned by such Revolving Credit Bank to the Administrative Agent or the Issuing Bank, at a rate per annum equal to the Federal Funds Rate in effect from time to time.

    3.5 Role of the Issuing Bank  

    (a) Each Revolving Credit Bank and the Company agree that, in paying any drawing under a Letter of Credit, the Issuing Bank shall not have any responsibility to obtain any document (other than any sight draft and certificates expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document.

    (b) No Administrative Agent-Related Person, nor any Syndication Agent, nor any Documentation Agent, nor any Arranger, nor any of the respective correspondents, participants or assignees of the Issuing Bank shall be liable to any Revolving Credit Bank for: (i) any action taken or omitted in connection herewith at the request or with the approval of the Majority Banks); (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any L/C-Related Document.

    (c) The Company hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude the Company's pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. No Administrative Agent-Related Person, nor any Syndication Agent, nor any Documentation Agent, nor any Arranger, nor any of the respective correspondents, participants or assignees of the Issuing Bank, shall be liable or responsible for any of the matters described in clauses (i) through (vii) of Section 3.6; provided, however, anything in such clauses to the contrary notwithstanding, that the Company may have a claim against the Issuing Bank, and the Issuing Bank may be liable to the Company, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Company which the Company proves were caused by such Issuing Bank's willful misconduct or gross negligence or the Issuing Bank's willful or grossly negligent failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing: (i) the Issuing Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary; and (ii) the Issuing Bank shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

    3.6 Obligations Absolute  

    The obligations of the Company under this Agreement and any L/C-Related Document to reimburse the Issuing Bank for a drawing under a Letter of Credit, and to repay any L/C Borrowing and any drawing under a Letter of Credit converted into Revolving Loans shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement and each such other L/C-Related Document under all circumstances, including the following:

     (i) any lack of validity or enforceability of this Agreement or any L/C-Related Document;

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    (ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the obligations of the Company in respect of any Letter of Credit or any other amendment or waiver of or any consent to departure from all or any of the L/C-Related Documents;

    (iii) the existence of any claim, set-off, defense or other right that the Company may have at any time against any beneficiary or any transferee of any Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the Issuing Bank or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by the L/C-Related Documents or any unrelated transaction;

    (iv) any draft, demand, certificate or other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit;

    (v) any payment by the Issuing Bank under any Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of any Letter of Credit; or any payment made by the Issuing Bank under any Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of any Letter of Credit, including any arising in connection with any Insolvency Proceeding;

    (vi) any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any other guarantee, for all or any of the obligations of the Company in respect of any Letter of Credit; or

   (vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Company or a guarantor.

    3.7 Cash Collateral Pledge  

    Upon (i) the request of the Administrative Agent, (A) if the Issuing Bank has honored any full or partial drawing request on any Letter of Credit and such drawing has resulted in an L/C Borrowing hereunder, or (B) if, as of the Revolving Credit Termination Date, any Letters of Credit may for any reason remain outstanding and partially or wholly undrawn, (ii) the occurrence of the circumstances described in subsection 2.7(a) requiring the Company to Cash Collateralize Letters of Credit or (iii) the occurrence of the circumstances described in Section 9.2(c) or in the proviso in Section 9.2 (with respect to the obligation of the Company to Cash Collateralize) requiring the Company to Cash Collateralize Letters of Credit, then, the Company shall immediately Cash Collateralize the Effective Amount of all L/C Obligations in an amount equal to such Effective Amount of such L/C Obligations. The Company hereby grants to the Administrative Agent, for the benefit of the Administrative Agent, the Issuing Bank and the Revolving Credit Banks, a security interest in all cash and deposit account balances used to Cash Collateralize the Company's obligations hereunder.

    3.8 Letter of Credit Fees  

    (a) The Company shall pay to the Administrative Agent for the account of each of the Revolving Credit Banks a letter of credit fee with respect to the Letters of Credit on the average daily maximum amount available to be drawn of the outstanding Letters of Credit, computed on a quarterly basis in arrears on the last Business Day of each calendar quarter based upon Letters of Credit outstanding for that quarter as calculated by the Administrative Agent, equal to the Letter of Credit Rate. Such letter of credit fees shall be due and payable quarterly in arrears on the last Business Day of each calendar quarter during which Letters of Credit are outstanding,

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commencing on the first such quarterly date to occur after the Closing Date, through the Revolving Credit Termination Date (or such later date upon which the outstanding Letters of Credit shall expire), with the final payment to be made on the Revolving Credit Termination Date (or such later expiration date).

    (b) The Company shall pay to the Administrative Agent for the account of the Issuing Bank a letter of credit fronting fee per annum with respect to the outstanding Letters of Credit issued by the Issuing Bank equal to 0.125% per annum of the average daily maximum amount available to be drawn under such outstanding Letters of Credit, computed on a quarterly basis in arrears on the last day of each calendar quarter based upon Letters of Credit issued by the Issuing Bank outstanding for that quarter as calculated by the Administrative Agent. Such fronting fees shall be calculated on the basis of a 360-day year and actual days elapsed and shall be due and payable quarterly in arrears on the last day of each calendar quarter (or if such day is not a Business Day, then the immediately preceding Business Day) during which Letters of Credit are outstanding, commencing on the first such quarterly date to occur after the Closing Date, through the Revolving Credit Termination Date (or such later date upon which the outstanding Letters of Credit shall expire), with the final payment to be made on the Revolving Credit Termination Date (or such later expiration date).

    (c) The Company shall pay to the Issuing Bank from time to time on demand upon each issuance or extension of a Letter of Credit a fee in the amount of $1,500 or such greater amount as the Issuing Bank may charge account parties of the Issuing Bank generally relating to letters of credit as from time to time in effect.

    3.9 Applicability of ISP98 and UCP  

    When a Letter of Credit is issued (including any such agreement applicable to Existing Letters of Credit), the rules of the "International Standby Practices 1998" published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to such Letter of Credit, unless the Issuing Bank and the Company agree that the rules of the Uniform Customs and Practice for Documentary Credits ("UCP"), as most recently published by the International Chamber of Commerce (the "ICC") at the time of issuance (including the ICC decision published by the Common on Banking Technique and Practice on April 6, 1998 regarding the European single currency (euro)) apply to such Letter of Credit, in which case the UCP shall apply to such Letter of Credit.

   
ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY

    4.1 Taxes  

    (a) Subject to subsection 4.1(h), any and all payments by the Company to each Bank or the Administrative Agent under this Agreement shall be made free and clear of, and without deduction or withholding for, any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Bank and the Administrative Agent, such taxes (including income taxes or franchise taxes) as are imposed on or measured by the Administrative Agent's or each Bank's, as the case may be, net income by the jurisdiction under the laws of which such Bank or the Administrative Agent, as the case may be, is organized or maintains a Lending Office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "Taxes").

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    (b) In addition, the Company shall pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or any other Loan Documents (hereinafter referred to as "Other Taxes").

    (c) If the Company shall be required to deduct or pay any Taxes or Other Taxes from or in respect of any sum payable under any Loan Document to the Administrative Agent or any Bank, the Company shall also pay to the Administrative Agent (for the account of such Bank) or to such Bank, at the time interest is paid, such additional amount that the Administrative Agent or such Bank, as the case may be, specifies is necessary to preserve the after-tax yield (after factoring in all taxes, including taxes imposed on or measured by net income) such Bank would have received if such Taxes or Other Taxes had not been imposed.

    (d) Subject to subsection 4.1(h), the Company shall indemnify and hold harmless each Bank and the Administrative Agent for the full amount of Taxes or Other Taxes (including any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 4.1) paid by the Bank or the Administrative Agent and any liability (including penalties, interest, additions to tax and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. Payment under this indemnification shall be made within 30 days from the date the Bank or the Administrative Agent makes written demand therefor. Each Bank and the Administrative Agent, severally with respect to the amounts received by it from the Company as indemnification under this subsection 4.1(d), agrees upon the request of the Company and at the Company's expense, to use commercially reasonable efforts to obtain a refund of any Taxes or Other Taxes for which it received indemnification hereunder if such Taxes or Other Taxes were incorrectly or illegally asserted.

    (e) If the Company shall be required by law to deduct or withhold any Taxes or Other Taxes from or in respect of any sum payable hereunder to any Bank or the Administrative Agent, then, subject to subsection 4.1(h):

     (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 4.1) such Bank or the Administrative Agent, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made;

    (ii) the Company shall make such deductions; and

    (iii) the Company shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.

    (f)  Within 30 days after the date of any payment by the Company of Taxes or Other Taxes, the Company shall furnish to the Administrative Agent and such Bank the original or a certified copy of a receipt evidencing payment thereof, or other evidence of payment satisfactory to the Administrative Agent and such Bank.

    (g) Each Bank which is not a "United States person" (as defined in the Code) hereby agrees that:

     (i) such Bank shall, no later than the Closing Date (or, in the case of a Bank which becomes a party hereto pursuant to Section 11.8 after the Closing Date, the date upon which the Bank becomes a party hereto) deliver to the Company through the Administrative Agent (two originals):

    (A) if its Lending Office is located in the United States of America, accurate and complete signed originals of Internal Revenue Service Form W-8ECI or any successor thereto ("Form W-8ECI") or other version of Internal Revenue Service Form W-8, as appropriate, or any successor thereto ("Form W-8"), and/or

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    (B) if its Lending Office is located outside the United States of America, accurate and complete signed originals of Internal Revenue Service Form W-8BEN or any successor thereto ("Form W-8BEN") or other appropriate Form W-8, and, in the case of a Bank claiming exemption from U.S. Federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of "portfolio interest", a certificate representing that such Bank is not a bank for purposes of Section 881(c) of the Code, is not a 10% shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the Company and is not a controlled foreign corporation related to the Company (within the meaning of Section 864(d)(4) of the Code) ("Portfolio Interest Exemption Certificate");

in each case indicating that such Bank is on the date of delivery thereof entitled to receive payments of principal, interest and fees for the account of such Lending Office or Offices under this Agreement free from withholding of United States Federal income tax;

    (ii) if at any time such Bank makes any changes necessitating a new Form W-8ECI, W-8BEN or other appropriate Form W-8, it shall with reasonable promptness deliver to the Company through the Administrative Agent in replacement for, or in addition to, the forms previously delivered by it hereunder, two accurate and complete signed originals of Form W-8ECI, W-8BEN or other appropriate, Form W-8, as appropriate, and, if appropriate a Portfolio Interest Exemption Certificate, in each case indicating that such Bank is on the date of delivery thereof entitled to receive payments of principal, interest and fees under this Agreement free from withholding of United States Federal income tax;

    (iii) such Bank shall, before or promptly after the occurrence of any event (including the passing of time but excluding any event mentioned in (ii) above) requiring a change in or renewal of the most recent Form W-8ECI, W-8BEN or other appropriate Form W-8, previously delivered by such Bank, deliver to the Company through the Administrative Agent two accurate and complete original signed copies of Form W-8ECI, W-8BEN or other appropriate Form W-8 in replacement for the forms previously delivered by such Bank; and

    (iv) such Bank shall, promptly upon the Company's or the Administrative Agent's reasonable request to that effect, deliver to the Company or the Administrative Agent (as the case may be) such other forms or similar documentation as may be required from time to time by any applicable law, treaty, rule or regulation in order to establish such Bank's tax status for withholding purposes.

    (h) The Company will not be required to pay any additional amounts in respect of United States Federal income tax pursuant to subsection 4.1(a), subsection 4.1(c), subsection 4.1(d) or subsection 4.1(e) to any Bank for the account of any Lending Office of such Bank:

     (i) if the obligation to pay such additional amounts would not have arisen but for a failure by such Bank to comply with its obligations under subsection 4.1(g) in respect of such Lending Office;

    (ii) if such Bank shall have delivered to the Company a Form W-8ECI or other appropriate Form W-8 in respect of such Lending Office pursuant to subsection 4.1(g), and such Bank shall not at any time be entitled to exemption from deduction or withholding of United States Federal income tax in respect of payments by the Company hereunder for the account of such Lending Office for any reason other than a change in United States law or regulations or applicable tax treaty or regulations or in the official interpretation of such law, treaty or regulations by any governmental authority charged with the interpretation or administration thereof (whether or not having the force of law) after the date of delivery of such Form W-8ECI or other appropriate Form W-8; or

    (iii) if the Bank shall have delivered to the Company a Form W-8BEN or other appropriate Form W-8 in respect of such Lending Office pursuant to subsection 4.1(g), and

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such Bank shall not at any time be entitled to exemption from deduction or withholding of United States Federal income tax in respect of payments by the Company hereunder for the account of such Lending Office for any reason other than a change in United States law or regulations or any applicable tax treaty or regulations or in the official interpretation of any such law, treaty or regulations by any Governmental Authority charged with the interpretation or administration thereof (whether or not having the force of law) after the date of delivery of such Form W-8BEN or other appropriate Form W-8.

    (i)  If, at any time, the Company requests any Bank to deliver any forms or other documentation pursuant to subsection 4.1(g)(iv), then the Company shall, on demand of such Bank through the Administrative Agent, reimburse such Bank for any costs and expenses (including Attorney Costs) reasonably incurred by such Bank in the preparation or delivery of such forms or other documentation.

    (j)  If the Company is required to pay additional amounts to any Bank or the Administrative Agent pursuant to subsection 4.1(e), then such Bank shall use its reasonable best efforts (consistent with legal and regulatory restrictions) to change the jurisdiction of its Lending Office so as to eliminate any such additional payment by the Company which may thereafter accrue if such change in the judgment of such Bank is not otherwise disadvantageous to such Bank.

4.2 Illegality

    (a) If any Bank shall determine that the introduction of any Requirement of Law, or any change in any Requirement of Law or in the interpretation or administration thereof, has made it unlawful, or that any central bank or other Governmental Authority has asserted that it is unlawful, for any Bank or its Lending Office to make Eurodollar Rate Loans, then, on notice thereof by the Bank to the Company through the Administrative Agent, the obligation of that Bank to make Eurodollar Rate Loans shall be suspended until the Bank shall have notified the Administrative Agent and the Company that the circumstances giving rise to such determination no longer exist.

    (b) If a Bank shall determine that it is unlawful to maintain any Eurodollar Rate Loan, the Company shall prepay in full all Eurodollar Rate Loans of that Bank then outstanding, together with interest accrued thereon, either on the last day of the Interest Period thereof if the Bank may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if the Bank may not lawfully continue to maintain such Eurodollar Rate Loans, together with any amounts required to be paid in connection therewith pursuant to Section 4.4. If the Company is required to so prepay any Eurodollar Rate Loan, then concurrently with such prepayment, the Company may borrow from the affected Bank, in the amount of such repayment, a Base Rate Loan.

    (c) If the obligation of any Bank to make or maintain Eurodollar Rate Loans has been so terminated or suspended, the Company may elect, by giving notice to the Bank through the Administrative Agent that all Loans which would otherwise be made by the Bank as Eurodollar Rate Loans shall be instead Base Rate Loans.

    (d) Before giving any notice to the Administrative Agent under this Section, the affected Bank shall designate a different Lending Office with respect to its Eurodollar Rate Loans if such designation will avoid the need for giving such notice or making such demand and will not, in the judgment of the Bank, be illegal or otherwise disadvantageous to the Bank.

4.3 Increased Costs and Reduction of Return

    (a) If any Bank shall determine that, due to either (i) the introduction of or any change after the date hereof (other than any change by way of imposition of or increase in reserve requirements included in the calculation of the Eurodollar Rate or in respect of the assessment

52

rate (the "Assessment Rate") payable by any Bank to the FDIC for insuring U.S. deposits) in or in the interpretation of any law or regulation or (ii) the compliance with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be any increase in the cost to such Bank of agreeing to make or making, funding or maintaining any Eurodollar Rate Loans or participating in Letters of Credit, or, in the case of the Issuing Bank, any increase in the cost to the Issuing Bank of agreeing to issue, issuing or maintaining any Letter of Credit or of agreeing to make or making, funding or maintaining any unpaid drawing under any Letter of Credit, then the Company shall be liable for, and shall from time to time, upon demand therefor by such Bank (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Bank, additional amounts as are sufficient to compensate such Bank for such increased costs.

    (b) If any Bank shall have determined that (i) the introduction of any Capital Adequacy Regulation after the date hereof, (ii) any change in any Capital Adequacy Regulation after the date hereof, (iii) any change in the interpretation or administration of any Capital Adequacy Regulation by any central bank or other Governmental Authority charged with the interpretation or administration thereof after the date hereof, or (iv) compliance by the Bank (or its Lending Office) or any corporation controlling the Bank, with any Capital Adequacy Regulation, affects or would affect the amount of capital required or expected to be maintained by the Bank or any corporation controlling the Bank and (taking into consideration such Bank's or such corporation's policies with respect to capital adequacy and such Bank's desired return on capital) determines that the amount of such capital is increased as a consequence of its Commitment, loans, credits or obligations under this Agreement, then, upon demand of such Bank (with a copy to the Administrative Agent), the Company shall upon demand pay to the Bank, from time to time as specified by the Bank, additional amounts sufficient to compensate the Bank for such increase.

4.4 Funding Losses

    The Company agrees to reimburse each Bank and to hold each Bank harmless from any loss or expense which the Bank may sustain or incur as a consequence of:

    (a) the failure of the Company to make any payment or mandatory prepayment of principal of any Eurodollar Rate Loan (including payments made after any acceleration thereof);

    (b) the failure of the Company to borrow, continue or convert a Loan after the Company has given (or is deemed to have given) a Notice of Borrowing or a Notice of Conversion/Continuation;

    (c) the failure of the Company to make any prepayment of any Loan after the Company has given a notice in accordance with Section 2.6;

    (d) the prepayment (including pursuant to Section 2.6 or 2.7) of a Eurodollar Rate Loan on a day which is not the last day of the Interest Period with respect thereto; or

    (e) the conversion pursuant to Section 2.4 of any Eurodollar Rate Loan to a Base Rate Loan on a day that is not the last day of the respective Interest Period;

including any such loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain its Eurodollar Rate Loans hereunder or from fees payable to terminate the deposits from which such funds were obtained.

4.5 Inability to Determine Rates

    If the Majority Banks shall have determined that for any reason adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan or that the Eurodollar Rate applicable pursuant to subsection 2.9(a) for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Banks of funding such Loan, the Administrative Agent

53

will forthwith give notice of such determination to the Company and each Bank. Thereafter, the obligation of the Banks to make or maintain Eurodollar Rate Loans, as the case may be, hereunder shall be suspended until the Administrative Agent upon the instruction of the Majority Banks revokes such notice in writing. Upon receipt of such notice, the Company may revoke any Notice of Borrowing or Notice of Conversion/Continuation then submitted by it. If the Company does not revoke such notice, the Banks shall make, convert or continue the Loans, as proposed by the Company, in the amount specified in the applicable notice submitted by the Company, but such Loans shall be made, converted or continued as Base Rate Loans instead of Eurodollar Rate Loans.

4.6 Certificate of Bank

    Each Bank, if claiming reimbursement or compensation pursuant to this Article IV, shall deliver to the Company, a certificate setting forth in reasonable detail the amount payable to such Bank hereunder and such certificate shall be conclusive and binding on the Company in the absence of manifest error.

4.7 Survival

    The covenants, agreements and obligations of the Company in this Article IV shall survive the payment of all other Obligations and the termination of this Agreement and the Commitments.

   
ARTICLE V
CONDITIONS PRECEDENT

5.1 Conditions of Initial Credit Extensions

    The obligation of each Bank to make its initial Credit Extension hereunder is subject to the following conditions:

    (a) the Administrative Agent shall have received on or before the Closing Date all of the following, in form and substance satisfactory to the Administrative Agent and, as to the items referenced in subsection 5.1(a)(xiv), the Majority Banks, and in sufficient copies for each Bank:

     (i) Credit Agreement. This Agreement executed by the Company, the Administrative Agent, each of the Syndication Agents, each of the Documentation Agents, and each of the Banks;

    (ii) Resolutions; Incumbency.

    (A) Resolutions.

    (1) Copies of the resolutions of the board of directors of the REIT, as the sole member of the General Partner, as general partner of the Company, approving and authorizing the execution, delivery and performance by such entities on behalf of the Company of this Agreement and the other Loan Documents to which the Company is a party to be delivered hereunder, and authorizing the borrowing of the Loans, certified as of the Closing Date by the Secretary or an Assistant Secretary of the REIT;

    (2) Copies of the resolutions of the board of directors of the REIT approving and authorizing the execution, delivery and performance by the REIT of the Loan Documents to which it is a party to be delivered hereunder, certified as of the Closing Date by the Secretary or Assistant Secretary of the REIT;

    (3) Copies of the resolutions of the board of directors of the REIT, as the sole member of the General Partner, as general partner of the Company, as the sole member of Plum Creek Southern approving and authorizing the execution, delivery and performance by such entities on behalf of Plum Creek Southern of the Plum Creek Southern Timber Assumption Agreement to be delivered hereunder, certified as of the Closing Date by the Secretary or Assistant Secretary of the REIT; and

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    (4) Copies of the resolutions of the board of directors of the REIT, as the sole member of the General Partner, as general partner of the Company, as the sole member of Plum Creek South Central approving and authorizing the execution, delivery and performance by such entities on behalf of Plum Creek South Central of the Plum Creek South Central Assumption Agreement to be delivered hereunder, certified as of the Closing Date by the Secretary or Assistant Secretary of the REIT;

    (B) Incumbency.

    (1) A certificate of the Secretary or Assistant Secretary of the REIT certifying the names and true signatures of the duly authorized officers of the REIT, as the sole member of the General Partner, as general partner of the Company, authorized to execute, deliver and perform, as applicable, this Agreement on behalf of the Company, and all other Loan Documents to be delivered hereunder;

    (2) A certificate of the Secretary or Assistant Secretary of the REIT certifying the names and true signature of the duly authorized officers of the REIT, in its individual capacity, authorized to execute, deliver and perform the REIT Undertaking Agreement;

    (3) A certificate of the Secretary or Assistant Secretary of the REIT certifying the names and true signatures of the duly authorized officers of the REIT, as the sole member of the General Partner, as general partner of the Company, as the sole member of Plum Creek Southern authorized to execute, deliver and perform the Southern Timber Assumption Agreement to be delivered hereunder;

    (4) A certificate of the Secretary or Assistant Secretary of the REIT certifying the names and true signatures of the duly authorized officers of the REIT, as the sole member of the General Partner, as general partner of the Company, as the sole member of Plum Creek South Central authorized to execute, deliver and perform the Plum Creek South Central Assumption Agreement to be delivered hereunder;

    (iii) Articles of Incorporation; By-laws; Partnership Documents and Good Standing. Each of the following documents:

    (A) the certificate of limited partnership of the Company, the certificate of formation of the General Partner, and the certificate of incorporation of the REIT, in each case as in effect on the Closing Date, certified by the Secretary of State or similar, applicable Governmental Authority of the state of formation, organization or incorporation, as the case may be, of such Persons as of a recent date, and by the Secretary or Assistant Secretary of the REIT, and a certificate of the Secretary or Assistant Secretary of the REIT attaching copies of the Organizational Documents of each of the Company, the General Partner and the REIT and certifying that such Organizational Documents are true, correct, and complete as of the Closing Date;

    (B) the certificate of formation of Plum Creek Southern as in effect on the Closing Date, certified by the Secretary of State (or similar applicable Governmental Authority) of the state of organization of Plum Creek Southern as of a recent date, and by the Assistant Secretary or Secretary of the REIT, and a certificate of the Assistant Secretary or Secretary of the REIT attaching copies of the Organizational Documents of Plum Creek Southern and certifying that such Organizational Documents are true, correct and complete as of the Closing Date;

    (C) the certificate of formation of Plum Creek South Central as in effect on the Closing Date, certified by the Secretary of State (or similar applicable Governmental Authority) of the state of organization of Plum Creek South Central as of a recent date, and by the Assistant Secretary or Secretary of the REIT and a certificate of the Assistant Secretary or Secretary of the REIT, attaching copies of the Organizational Documents of Plum Creek South Central

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and certifying that such Organizational Documents are true, correct and complete as of the Closing Date;

    (D) a good standing certificate for each Loan Party and each Partner Entity from the Secretary of State (or similar, applicable Governmental Authority) of its state of incorporation, formation or organization, as the case may be, as of a recent date;

    (iv) Legal Opinion. An opinion of James A. Kraft, Vice President, General Counsel and Secretary of the REIT and the General Partner and counsel to the Loan Parties, dated as of the Closing Date and addressed to the Administrative Agent and the Banks and substantially in the form of Exhibit C;

    (v) Certificate. A certificate signed by a Responsible Officer, dated as of the Closing Date, stating that:

    (A) the representations and warranties contained in Article VI are true and correct on and as of such date and as of the date hereof, in each case both before and after giving effect to the Merger, the Asset Transfer Transactions and the initial Credit Extension hereunder, as though made on and as of such date;

    (B) no Default or Event of Default exists as of such date and as of the date hereof, in each case both before and after giving effect to the Merger and the Asset Transfer Transactions, or would result from the initial Credit Extension; and

    (C) except as described in the Plum Creek SEC Filings filed on or before June 21, 2001, and the Georgia-Pacific SEC Filings (in so far as they relate to the Spincos and the "Timber Group" (as defined in the Merger Agreement)) filed on or before June 21, 2001, there has occurred since December 31, 2000, no event or circumstance that has resulted or would reasonably be expected to result in a material adverse change in, or a material adverse effect upon, the business, assets, liabilities (actual or contingent), operations, properties, condition (financial otherwise) or prospects of, or information regarding, the REIT, the Company and their respective Subsidiaries (taken as whole), and the Spincos;

    (D) there exists no action, suit, investigation, litigation or proceeding pending or threatened in any court or before any arbitrator or Governmental Authority that (i) could reasonably be expected to (A) have a material adverse effect on the operations, business, properties, condition (financial or otherwise) or prospects of the Company or the Company and its Subsidiaries, taken as a whole, (B) adversely affect the ability of any Loan Party to perform its obligations under the Loan Documents to which such Loan Party is a party or (C) adversely affect the rights and remedies of the Administrative Agent and the Banks under the Loan Documents, or (ii) materially and adversely affects any aspect of the Acquisition Transactions, or (iii) adversely affects any aspect of the transactions contemplated hereby; and

    (E) all governmental and third party consents and approvals necessary in connection with each aspect of the Acquisition Transactions and the credit facilities contemplated herein have been obtained and shall remain in effect; all applicable waiting periods shall have expired without any adverse action being taken by any competent authority; and no applicable law or regulation and no judgment, injunction, order or decree, shall, in each case, be applicable that prohibits, restrains, prevents, or imposes (i) material adverse conditions upon any aspect of the Acquisition Transactions or (ii) adverse conditions upon such credit facilities.

    (vi) Senior Notes Agreements. A certificate signed by a Responsible Officer attaching a true, correct, and complete copy of each of the Senior Notes Agreements, and certifying that such agreements are true, correct, and complete as of the Closing Date;

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   (vii) Repayment of Existing Loans.

    (A) evidence satisfactory to the Administrative Agent that: all principal of and interest on the extensions of credits outstanding under, and all other amounts owing under, the Existing Credit Agreement shall have been (or shall be simultaneously) paid in full, or the Company shall have irrevocably directed the Administrative Agent to apply the proceeds from the initial Credit Extension hereunder toward such repayment in full, and that any commitments to extend credit under the Existing Credit Agreement shall have been (or shall be simultaneously) canceled or terminated and that all guarantees in respect of, and all Liens securing, such Indebtedness shall have been released (or arrangements for such release reasonably satisfactory to the Administrative Agent shall have been made); and

    (B) an irrevocable written notice from the Company directing BofA to withdraw funds out of the account of the Company maintained with BofA into which proceeds from the 2001 Notes are to be deposited and pay to BofA, as administrative agent under the NATC Credit Agreement, such funds, and an irrevocable written instruction from the Company to the Administrative Agent directing the Administrative Agent to pay to BofA, as administrative agent under the NATC Credit Agreement, a portion of the initial Credit Extension to be made hereunder, such that such funds in such account together with such portion of such initial Credit Extension will payoff in full all the principal of and interest on the extensions of credit outstanding under, and all other amounts owing under, the NATC Credit Agreement;

   (viii) Consummation of the Acquisition Transactions. A certificate signed by a Responsible Officer, dated as of the Closing Date, certifying that:

    (A) the Acquisition Transactions (other than the recording or filing of the Real Property Deeds in the recording or filing offices in the applicable jurisdictions) have been consummated and become effective in all respects in accordance with (1) the terms of the Acquisition Documents (and none of the material terms or conditions of any of the Acquisition Documents shall have been amended, modified, supplemented or waived except with the prior written consent of the Administrative Agent and all the initial Banks) and (2) all applicable Requirements of Law of any Governmental Authority;

    (B) attached to such certificate are true and correct copies of:

    (1) copies of each of the Certificates of Merger filed with, and certified by, the Secretary of State of the State of Delaware and all of which evidence that the Merger has been consummated and is effective; and

    (2) the Acquisition Documents and any other documents delivered in connection with the closing of the Acquisition Transactions pursuant to the Acquisition Documents; and

    (ix) Tax Legal Opinions. A copy of the tax legal opinions issued by the REIT's special tax counsel, Skadden, Arps, Slate, Meagher & Flom LLP and by Georgia-Pacific's special tax counsel, McDermott, Will & Emery, in each case in connection with the Separation Transaction, the Redemption Transaction and the Merger;

    (x) REIT Undertaking Agreement. The Undertaking Agreement dated as of the Closing Date, executed by the REIT, the Administrative Agent and the Company, in the form and substance satisfactory to the Administrative Agent and the Banks (as hereafter amended, modified or supplemented from time to time, the "REIT Undertaking Agreement");

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    (xi) Subsidiary Assumption Agreements.

    (A) The Plum Creek Southern Timber Assumption Agreement duly executed by Plum Creek Southern, in form and substance satisfactory to the Administrative Agent and the Banks; and

    (B) The Plum Creek South Central Assumption Agreement duly executed by Plum Creek South Central, in form and substance satisfactory to the Administrative Agent and the Banks;

   (xii) Senior Note Purchasers Letter. A certificate signed by a Responsible Officer attaching a copy of the letter from the purchasers of the 2001 Notes, in form of Exhibit I, duly executed by all the purchasers of the 2001 Notes, and certifying that such letter is a true, correct, and complete copy thereof;

   (xiii) Georgia-Pacific Certificate. A certificate of a senior officer of Georgia-Pacific certifying that each of the Redemption Transaction and the Separation Transaction has occurred and been fully consummated in accordance with the terms of the Separation Documents; and

   (xiv) Other Documents. Such other approvals, opinions, documents or materials as the Administrative Agent or the Majority Banks may reasonably request.

    (b)  2001 Notes.  Gross cash proceeds of not less than $500,000,000 from the 2001 Notes will be disbursed to or at the direction of the Company at the Closing Date.

    (c)  Payment of Fees.  The Company shall have paid all accrued and unpaid fees, costs and expenses to the extent then due and payable on the Closing Date, together with Attorney Costs of BofA to the extent invoiced prior to or on the Closing Date, together with such additional amounts of Attorney Costs as shall constitute BofA's reasonable estimate of Attorney Costs incurred or to be incurred through the closing proceedings, provided that such estimate shall not thereafter preclude final settling of accounts between the Company and BofA; including any such costs, fees and expenses arising under or referenced in Sections 2.11, 4.1 and 11.4.

    (d)  Borrowing of Term Loans.  A Borrowing of the Term Loans in an amount equal to the Aggregate Term Credit Commitment shall have been requested by the Company to be made on the Closing Date.

    (e)  Notes.  If so requested by any Bank by October 4, 2001, the Company shall have delivered to such Bank the applicable Notes in respect of such Bank.

5.2 Conditions to All Credit Extensions

    The obligation of each Bank and the Swingline Bank to make any Loans to be made by it (including its initial Loan) or to continue or convert any Loan pursuant to Section 2.4, and the obligation of the Issuing Bank to Issue any Letter of Credit (including the initial Letter of Credit) is subject to the satisfaction of the following conditions precedent on the relevant date of Borrowing, Conversion/Continuation Date or Issuance Date:

    (a)  Notice, Application.  As to any Loan, the Administrative Agent shall have received (with, in the case of the initial Loan only, a copy for each Bank) a Notice of Borrowing or a Notice of Conversion/Continuation, as applicable, or in the case of any Issuance of any Letter of Credit, the Issuing Bank and the Administrative Agent shall have received an L/C Application or L/C Amendment Application, as required under Section 3.2;

    (b)  Continuation of Representations and Warranties.  The representations and warranties made by the Company contained in Article VI shall be true and correct on and as of such date of Borrowing or Conversion/Continuation Date with the same effect as if made on and as of such date of Borrowing or Conversion/Continuation Date (except to the extent such representations and

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warranties specifically relate to an earlier date, in which case they shall be true and correct as of such earlier date); and

    (c)  No Existing Default.  No Default or Event of Default shall exist or shall result from such Credit Extension.

    Each Notice of Borrowing, Notice of Conversion/Continuation and L/C Application or L/C Amendment Application submitted by the Company hereunder shall constitute a representation and warranty by the Company hereunder, as of the date of each such notice, request or application and as of the date of each Borrowing, each Conversion/Continuation Date, or Issuance Date, as applicable, that the conditions in Section 5.2 are satisfied.

   
ARTICLE VI
REPRESENTATIONS AND WARRANTIES

    The Company represents and warrants to the Administrative Agent and each Bank that both before and after giving effect to the Merger, the Asset Transfer Transactions and the other Transactions:

6.1 Corporate Existence and Power

    (a) The Company, each of its Subsidiaries, and each of the Partner Entities:

     (i) is a limited partnership, limited liability company, or corporation, duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation;

    (ii) is duly qualified as a foreign partnership, limited liability company, or corporation, as applicable, and licensed and in good standing, under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification or license; and

    (iii) is in compliance with all Requirements of Law except where failure to so comply would not reasonably be expected to have a Material Adverse Effect.

    (b) The Company, each of its Subsidiaries and each of the Partner Entities has the power and authority and all governmental licenses, authorizations, consents and approvals to own its assets and carry on its business; each Loan Party and each of the other Partner Entities has the power and authority and all governmental licenses, authorizations, consents and approvals to execute, deliver, and perform its obligations under, the Loan Documents and the Acquisition Documents to which it is a party.

6.2 Authorization; No Contravention

    The execution, delivery and performance by each Loan Party of each of the Loan Documents to which such Person is party, and each Acquisition Document to which each of the Company, each of the Partner Entities and each of their respective Subsidiaries is a party and the consummation of the Transactions have been duly authorized by all necessary corporate, limited liability company and/or partnership action, as the case may be, by such Person, and do not and will not:

    (a) contravene the terms of the Organization Documents of any of the Company, any other Loan Party or any of the other Partner Entities;

    (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, any document evidencing any Contractual Obligation to which such Person is a party or any order, injunction, writ or decree of any Governmental Authority to which such Person or its Property is subject; or

    (c) violate any Requirement of Law.

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6.3 Governmental and Third Party Authorization

    Except as has been obtained by the Company prior to the date of this Agreement, no approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, the Company, any of the Partner Entities, or any of their respective Subsidiaries of the Agreement, any other Loan Document or any Acquisition Document to which it is a party, or for the consummation of the Transactions.

6.4 Binding Effect

    This Agreement, each other Loan Document to which any Loan Party is a party and each Acquisition Document to which any of the Company, any Partner Entity or any of their respective Subsidiaries is a party constitute the legal, valid and binding obligations of each such Person party thereto, enforceable against each such Person in accordance with their respective terms except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditor's rights generally or by equitable principles relating to enforceability.

6.5 Litigation

    There are no actions, suits, proceedings, claims or disputes pending, or to the Company's Knowledge and the knowledge of each of the Partner Entities, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, against the Company, any of the Partner Entities or any of their respective Subsidiaries or any of their respective Properties which:

    (a) purport to affect or pertain to this Agreement, any other Loan Document or any Acquisition Document, or any of the Transactions; or

    (b) have a reasonable probability of success on the merits and which, if determined adversely to the Company, any of the Partner Entities, or any of their respective Subsidiaries, would reasonably be expected to have a Material Adverse Effect. No injunction, writ, temporary restraining order or any order of any nature has been issued by any court or other Governmental Authority purporting to enjoin or restrain the execution, delivery or performance of this Agreement, any other Loan Document or any Acquisition Document, or directing that the Transactions not be consummated as herein or therein provided.

6.6 No Default

    No Default or Event of Default exists or would result from the incurring of any Obligations by the Company. Neither the Company, nor any of the Partner Entities, nor any of their respective Subsidiaries is in default under or with respect to any Contractual Obligation in any respect which, individually or together with all such defaults, would reasonably be expected to have a Material Adverse Effect or that would, if such default had occurred after the Closing Date, create an Event of Default under subsection 9.1(e).

6.7 ERISA Compliance

    (a) Schedule 6.7 lists all Plans as of the Closing Date and separately identifies Plans intended to be Qualified Plans and Multiemployer Plans.

    (b) Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or state law, including all requirements under the Code or ERISA for filing reports (which are true and correct in all material respects as of the date filed), and benefits have been paid in accordance with the provisions of the Plan.

    (c) Except as specifically disclosed in Schedule 6.7, each Qualified Plan has been determined by the IRS to qualify under Section 401 of the Code, and the trusts created thereunder have been determined to be exempt from tax under the provisions of Section 501 of the Code, and to the

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Company's Knowledge nothing has occurred which would cause the loss of such qualification or tax-exempt status.

    (d) Except as specifically disclosed in Schedule 6.7, there is no outstanding liability under Title IV of ERISA (other than premiums due but not delinquent under Section 4007 of ERISA) with respect to any Plan maintained or sponsored by the Company or any ERISA Affiliate, nor with respect to any Plan to which the Company or any ERISA Affiliate contributes or is obligated to contribute, and which liability would reasonably be expected to have a Material Adverse Effect.

    (e) Except as specifically disclosed in Schedule 6.7, no Plan subject to Title IV of ERISA has any Unfunded Pension Liability which would reasonably be expected to have a Material Adverse Effect.

    (f)  Except as specifically disclosed in Schedule 6.7, the Company and its ERISA Affiliates have not ever represented, promised or contracted (whether in oral or written form) to any current or former employee (either individually or to employees as a group) that such current or former employee(s) would be provided, at any cost to the Company or its ERISA Affiliates, with life insurance or employee welfare plan benefits (within the meaning of section 3(1) of ERISA) following retirement or termination of employment, other than benefits mandated by applicable law, including but not limited to, continuation coverage required to be provided under Section 4980B of the Code or Title I, Subtitle B, Part 6 of ERISA, and which cost would reasonably be expected to have a Material Adverse Effect. To the extent that the Company or its ERISA Affiliates have made any such representation, promise or contract, they have expressly reserved the right to amend or terminate such life insurance or employee welfare plan benefits with respect to claims not yet incurred.

    (g) The Company and its ERISA Affiliates have complied in all material respects with the notice and continuation coverage requirements of Section 4980B of the Code.

    (h) Except as specifically disclosed in Schedule 6.7, no ERISA Event has occurred or, to the Company's Knowledge is reasonably expected to occur with respect to any Plan which would reasonably be expected to have a Material Adverse Effect.

    (i)  There are no pending or, to the Company's Knowledge, threatened claims, actions or lawsuits, other than routine claims for benefits in the usual and ordinary course, asserted or instituted against (i) any Plan maintained or sponsored by the Company or its assets, (ii) the Company or its ERISA Affiliates with respect to any Qualified Plan, or (iii) any fiduciary with respect to any Plan for which the Company or its ERISA Affiliates may be directly or indirectly liable, through indemnification obligations or otherwise and which claim, action or lawsuit would reasonably be expected to have a Material Adverse Effect.

    (j)  Except as specifically disclosed in Schedule 6.7, neither the Company nor any ERISA Affiliate has incurred nor, to the Company's Knowledge, reasonably expects to incur (i) any liability (and, to the Company's knowledge, no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan or (ii) any liability under Title IV of ERISA (other than premiums due and not delinquent under Section 4007 of ERISA) with respect to a Plan, and which liability would reasonably be expected to have a Material Adverse Effect.

    (k) Except as specifically disclosed in Schedule 6.7, neither the Company nor any ERISA Affiliate has transferred any Unfunded Pension Liability to a Person other than the Company or an ERISA Affiliate or otherwise engaged in a transaction that is subject to Section 4069 or 4212(c) of ERISA.

    (l)  The Company has not engaged, directly or indirectly, in a non-exempt prohibited transaction (as defined in Section 4975 of the Code or Section 406 of ERISA) in connection with any Plan which would reasonably be expected to have a Material Adverse Effect.

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6.8 Use of Proceeds; Margin Regulations

    The proceeds of the Loans are intended to be and shall be used solely for the purposes set forth in and permitted by Section 7.11, and are intended to be and shall be used in compliance with Section 8.7. Neither the Company, nor any of the Partner Entities, nor any of their respective Subsidiaries is generally engaged in the business of purchasing or selling Margin Stock or extending credit for the purpose of purchasing or carrying Margin Stock.

6.9 Title to Properties

    The Company and each of its Subsidiaries have good record and marketable title in fee simple to, or valid leasehold interests in, all real Property necessary or used in the ordinary conduct of their respective businesses, except for such defects in title as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. As of the Closing Date, the Property of the Company and its Subsidiaries is subject to no Liens, other than Permitted Liens.

6.10 Taxes

    The Company, each of the Partner Entities and each of their respective Subsidiaries have filed all Federal and other material tax returns and reports required to be filed, and have paid all Federal and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their Properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with GAAP and no Notice of Lien has been filed or recorded. There is no proposed tax assessment against the Company, any of the Partner Entities or any of their respective Subsidiaries which would, if the assessment were made, have a Material Adverse Effect.

6.11 Financial Condition

    (a) The audited consolidated financial statements of financial condition of the Company and its Subsidiaries dated December 31, 2000, and the related consolidated statements of income and consolidated statement of cash flows for the fiscal year ended on that date:

     (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein;

    (ii) fairly present the financial condition of the Company and its Subsidiaries as of the date thereof and results of operations for the period covered thereby; and

    (iii) show all material Indebtedness and other liabilities, direct or contingent of the Company and its consolidated Subsidiaries as of the date thereof, including liabilities for taxes and material commitments.

    (b) Since December 31, 2000, there has been no Material Adverse Effect.

    (c) The Company has delivered to the Administrative Agent a complete and correct copy of the Proxy Statement/Prospectus. The unaudited pro forma condensed consolidated financial statements of the REIT contained in the Proxy Statement/Prospectus (the "Pro Forma Statements") comply as to form in all material respects with the applicable accounting requirements of the Securities Act of 1933 and the Securities Exchange Act of 1934 and the published rules and regulations thereunder and the assumptions on which the pro forma adjustments reflected in the Pro Forma Statements are based provide a reasonable basis for presenting the significant effects of the transactions contemplated by the Pro Forma Statements and such pro forma adjustments give appropriate effect to such assumptions and are properly applied in the Pro Forma Statements. As of the Closing Date after giving effect to the Transactions, the Pro Forma Statements substantially reflect the pro forma position of the Company and its Subsidiaries.

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6.12 Environmental Matters

    (a) Except as specifically disclosed in Schedule 6.12, the on-going operations of the Company, each of the Partner Entities, and each of their respective Subsidiaries comply in all respects with all Environmental Laws, except such non-compliance which would not (if enforced in accordance with applicable law) result in liability in excess of $25,000,000 in the aggregate.

    (b) Except as specifically disclosed in Schedule 6.12, the Company, each of the Partner Entities, and each of their respective Subsidiaries have obtained all licenses, permits, authorizations and registrations required under any Environmental Law ("Environmental Permits") and necessary for their respective ordinary course operations, all such Environmental Permits are in good standing, and the Company, each of the Partner Entities, and each of their respective Subsidiaries are in compliance with all terms and conditions of such Environmental Permits except where the failure to obtain, maintain in good standing or comply with such Environmental Permits would not reasonably be expected to have a Material Adverse Effect.

    (c) Except as specifically disclosed in Schedule 6.12, none of the Company, the Partner Entities, any of their respective Subsidiaries or any of their respective present Property or operations, is subject to any outstanding written order from or agreement with any Governmental Authority, nor subject to any judicial or docketed administrative proceeding, respecting any Environmental Law, Environmental Claim or Hazardous Material arising out of a violation or alleged violation of any Environmental Law.

    (d) Except as specifically disclosed in Schedule 6.12, there are no Hazardous Materials or other conditions or circumstances existing with respect to any Property, or arising from operations prior to the Closing Date, of the Company, each of the Partner Entities, or any of their respective Subsidiaries that would reasonably be expected to give rise to Environmental Claims with a potential liability of the Company and its Subsidiaries in excess of $25,000,000 in the aggregate for any such condition, circumstance or Property. In addition, except as specifically disclosed in Schedule 6.12 (i), neither the Company nor any of the Partner Entities nor any of their respective Subsidiaries has any underground storage tanks (x) that are not properly registered or permitted under applicable Environmental Laws, or (y) that are leaking or disposing of Hazardous Materials off-site, and (ii) the Company, the Partner Entities and their respective Subsidiaries have notified all of their employees of the existence, if any, of any health hazard arising from the conditions of their employment and have met all notification requirements under Title III of CERCLA and all other Environmental Laws.

6.13 Regulated Entities

    None of the Company, any of the Partner Entities, any Person controlling the Company or any of the Partner Entities, or any Subsidiary of the Company or any of the Partner Entities, is (a) an "Investment Company" within the meaning of the Investment Company Act of 1940; or (b) subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, any state public utilities code, or any other Federal or state statute or regulation limiting its ability to incur Indebtedness.

6.14 No Burdensome Restrictions

    Neither the Company, nor any of the Partner Entities nor any of their respective Subsidiaries is a party to or bound by any Contractual Obligation, or subject to any charter or corporate restriction, or any Requirement of Law, which would reasonably be expected to have a Material Adverse Effect.

6.15 Solvency

    The Company, the REIT, the General Partner, the Facilities Subsidiary, and the Restricted Subsidiaries are each Solvent.

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6.16 Labor Relations

    There are no strikes, lockouts or other labor disputes against the Company or any of its Subsidiaries, or, to the Company's Knowledge, threatened against or affecting the Company or any of its Subsidiaries which could reasonably be expected to, either individually or in the aggregate, have a Material Adverse Effect. There are no unfair labor practice complaints pending against the Company or any of its Subsidiaries or, to the Company's Knowledge, threatened against any of them before any Governmental Authority which have a reasonable probability of success on the merits and which, if determined adversely to the Company or any of its Subsidiaries, could reasonably be expected to, either individually or in the aggregate, have a Material Adverse Effect.

6.17 Copyrights, Patents, Trademarks and Licenses, Etc.

    The Company or its Subsidiaries own or are licensed or otherwise have the right to use all of the patents, trademarks, service marks, trade names, copyrights, other intellectual property, contractual franchises, authorizations and other rights that are reasonably necessary for the operation of their respective businesses, without conflict with the rights of any other Person. To the Company's Knowledge, no slogan or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by the Company or any of its Subsidiaries infringes upon any rights held by any other Person; no claim or litigation regarding any of the foregoing is pending or, to the Company's Knowledge, threatened, and no patent, invention, device, application, principle or any statute, law, rule, regulation, standard or code is pending or, to the Company's Knowledge, proposed, which, in either case, would reasonably be expected to have a Material Adverse Effect.

6.18 Subsidiaries

    As of the Closing Date, the Company has no Subsidiaries other than those specifically disclosed in part (a) of Schedule 6.18 and has no equity investments in any other corporation or entity other than those specifically disclosed in part (b) of Schedule 6.18. Except as disclosed in part (a) of Schedule 6.18, the Company owns 100% of the ownership interests of its Subsidiaries. The Facilities Subsidiary has issued no rights, warrants or options to acquire or instruments convertible into or exchangeable for any equity interest in the Facilities Subsidiary.

6.19 Partnership Interest

    The only general partner of the Company is the General Partner, which as of the Closing Date will own a 1% general partnership interest in the Company.

6.20 Insurance

    The Properties of the Company and its Subsidiaries are insured with financially sound and reputable insurance companies not Affiliates of the Company, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar Properties in localities where the Company or such Subsidiary operates.

6.21 Full Disclosure

    (a) None of the representations or warranties made by the Company, the REIT, the General Partner, or any of their respective Subsidiaries in the Loan Documents as of the date such representations and warranties are made or deemed made, and none of the statements contained in each exhibit, report, written statement or certificate furnished by or on behalf of the REIT, the Company, or any of their respective Subsidiaries in connection with the Loan Documents, contains any untrue statement of a material fact or omits any material fact required to be stated therein or

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necessary to make the statements made therein, in light of the circumstances under which they are made, not misleading as of the time when made or delivered.

    (b) The Proxy Statement/Prospectus fairly describes, in all material respects, the general nature of the business and principal properties of the Company and its Subsidiaries. Neither this Agreement, nor any other document, certificate or statement furnished to the Administrative Agent or Banks by or on behalf of the Company in connection herewith contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein and therein not misleading. There is no fact peculiar to the Company, any of the Partner Entities or any of their respective Subsidiaries which has or may have (so far as the Company can now reasonably foresee) a Material Adverse Effect and which has not been set forth in this Agreement, or in the Proxy Statement/Prospectus.

6.22 Acquisition Documents

    Each Acquisition Document to which each of the REIT, the Company and any of their respective Subsidiaries is a party has been duly executed and delivered by such Person, and, to the Company's Knowledge, each Acquisition Document has been duly executed and delivered by the parties thereto other than the REIT, the Company and any of their respective Subsidiaries. Each Acquisition Document is in full force and effect. The representations and warranties of each of the REIT and/or the Company contained in each Acquisition Document to which each of the REIT and the Company is a party are true and correct in all material respects on the date hereof and will be true and correct in all material respects on the Closing Date, the Merger Date and the Asset Transfer Date, respectively, as if made on each of such dates, and the Administrative Agent and each Bank shall be entitled to rely upon such representations and warranties with the same force and effect as if they were incorporated in this Agreement and made to the Administrative Agent and each Bank directly as of the date hereof and of the Closing Date, the Merger Date and the Asset Transfer Date, respectively.

6.23 Changes, etc.

    From December 31, 2000 to the Closing Date, except as disclosed in Schedule 6.23 or the Proxy Statement/Prospectus, (a) the Company and its Subsidiaries have not incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions not in the ordinary course of business, and (b) there has not been any Restricted Payment of any kind declared, paid or made by the Company, other than regular quarterly declarations and payments to the REIT in accordance with Section 8.13 for distribution to the REIT's shareholders.

6.24 Tax Matters Agreement; Tax Opinion Insurance Policy

    (a) Except as permitted by Section 8.20, the Company has not directly or indirectly assumed the obligations of the REIT under the Tax Matters Agreement or otherwise agreed to reimburse or indemnify the REIT for any of its obligations thereunder.

    (b) The Tax Opinion Insurance Policy is in full force and effect and is not subject to cancellation for failure to pay the applicable premium.

   
ARTICLE VII
AFFIRMATIVE COVENANTS

    The Company covenants and agrees that, so long as any Bank shall have any Commitment hereunder, or the Swingline Bank shall have any Swingline Commitment hereunder, or any Loan or

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other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit remains outstanding, unless the Majority Banks waive compliance in writing:

7.1 Financial Statements

    The Company shall deliver to the Administrative Agent and each Bank in form and detail satisfactory to the Administrative Agent and the Majority Banks:

    (a) as soon as available, but not later than 90 days after the end of each fiscal year, a copy of the audited consolidated balance sheet of the Company as at the end of such year and the related consolidated statements of income and statements of cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, and accompanied by the opinion of PricewaterhouseCoopers LLP, or another nationally-recognized independent public accounting firm ("Independent Auditor") which report shall state that such consolidated financial statements present fairly the financial position for the periods indicated in conformity with GAAP applied on a basis consistent with prior years. Such opinion shall not be qualified or limited because of a restricted or limited examination by Independent Auditor of any material portion of the Company's or any Subsidiary's records and shall be delivered to the Administrative Agent pursuant to a reliance agreement in favor of the Administrative Agent and Banks by such Independent Auditor in form and substance satisfactory to the Administrative Agent and the Majority Banks;

    (b) as soon as available, but not later than 120 days after the end of each fiscal year, a copy of an audited consolidating balance sheet of the Company and each of its Subsidiaries as at the end of such fiscal year and the related consolidating statements of income and statement of cash flows for such fiscal year, all in reasonable detail certified by an appropriate Responsible Officer as having been used in connection with the preparation of the financial statements referred to in subsection (a) of this Section 7.1;

    (c) as soon as available, but not later than 45 days after the end of each of the first three fiscal quarters of each year, a copy of the unaudited consolidated balance sheet of the Company and its consolidated Subsidiaries as of the end of such quarter and the related consolidated statements of income and statement of cash flows for the period commencing on the first day and ending on the last day of such quarter, and certified by an appropriate Responsible Officer as being complete and correct and fairly presenting, in accordance with GAAP, the financial position and the results of operations of the Company and the Subsidiaries;

    (d) as soon as available, but not later than 45 days after the end of each of the first three fiscal quarters of each year, a copy of the unaudited consolidating balance sheets of the Company and each of its Subsidiaries, and the related consolidating statements of income and statement of cash flows for such quarter, all certified by an appropriate Responsible Officer as having been used in connection with the preparation of the financial statements referred to in subsection (c) of this Section 7.1;

    (e) as soon as available, but not later than September 30 of each year, a business plan which shall include consolidated five year pro-forma projections of the Company's balance sheet, income statement and statement of cash flows, accompanied by appropriate assumptions on which such projections are based; and

    (f)  to the extent not delivered pursuant to any other clause of this Section 7.1, promptly upon transmission thereof, copies of all such financial statements, proxy statements, notices and reports as the Company or the REIT sends to its public security holders and copies of all registration statements (without exhibits) and all reports which either the Company or the REIT files with the SEC.

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7.2 Certificates; Other Information

    The Company shall furnish to the Administrative Agent and each Bank:

    (a) concurrently with the delivery of the financial statements referred to in subsection 7.1(a) above, a certificate of the Independent Auditor stating that in making the examination necessary therefor no knowledge was obtained of any Default or Event of Default, except as specified in such certificate;

    (b) concurrently with the delivery of the financial statements referred to in subsections 7.1(a) through (d) above, a certificate of a Responsible Officer substantially in the form of Exhibit D (i) stating that, to the best of such officer's knowledge, each of the Company and each of the other Loan Parties, during such period, has observed and performed all of its covenants and other agreements, and satisfied every term and condition contained in this Agreement and the other Loan Documents to be observed, performed or satisfied by it, and that such officer has obtained no knowledge of any Default or Event of Default except as specified (by applicable subsection reference) in such certificate, (ii) stating the Applicable Margin to be in effect for the immediately following fiscal quarter, and (iii) showing in detail the calculations supporting such statement in respect of subsection 8.2(h), Section 8.3, subsection 8.4(i), Section 8.5, Section 8.13, Section 8.17, Section 8.18 and Section 8.19, and supporting the computation of the Pricing Leverage Ratio;

    (c) promptly after the same are sent, copies of all financial statements and reports which the Company sends to its limited partners (excluding the Form K-1s); and promptly after the same are filed, copies of all financial statements and regular, periodical or special reports which the REIT or the Company may make to, or file with, the SEC or any successor or similar Governmental Authority; and

    (d) promptly, such additional business, financial, corporate affairs and other information as the Administrative Agent, at the request of any Bank, may from time to time reasonably request.

    (e) Notwithstanding Sections 7.1 and 7.2 to the contrary, reports required to be delivered pursuant to Section 7.1 or Section 7.2 shall be deemed to have been delivered to the Administrative Agent and the Banks on the date on which the Company posts such reports either (i) on the Company's website on the Internet at the website address listed on Schedule 11.2 hereof or (ii) when such report is posted electronically on IntraLinks/IntraAgency or other relevant third-party commercial website (if any) on the Company's behalf; provided that (A) the Company shall deliver paper copies of such reports to the Administrative Agent and each Bank, (B) the Company shall notify by facsimile the Administrative Agent and each Bank of the posting of any such reports, and (C) in every instance the Company shall provide paper copies of the Compliance Certificate required by Section 7.2(b) to the Administrative Agent and each of the Banks. Except for such Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the reports referred to above.

7.3 Notices

    The Company shall promptly upon becoming aware thereof notify the Administrative Agent and each Bank:

    (a) (i) of the occurrence of any Default or Event of Default, (ii) of the occurrence or existence of any event or circumstance that foreseeably will become a Default or Event of Default, and (iii) of the occurrence or existence of any event or circumstance that would cause the condition to Credit Extension set forth in subsection 5.2(b) not to be satisfied if a Credit Extension were requested on or after the date of such event or circumstance;

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    (b) of (i) any breach or non-performance of, or any default under, any Contractual Obligation of the Company, any of the Partner Entities, or any of their respective Subsidiaries which could result in a Material Adverse Effect; and (ii) any dispute, litigation, investigation, proceeding or suspension which may exist at any time between the Company, any of the Partner Entities, or any of their respective Subsidiaries and any Governmental Authority which could reasonably be expected to result in a Material Adverse Effect;

    (c) of the commencement of, or any material development in, any litigation or proceeding affecting the Company, any of the Partner Entities or any of their respective Subsidiaries (i) which could reasonably be expected to have a Material Adverse Effect, or (ii) in which the relief sought is an injunction or other stay of the performance of this Agreement or any Loan Document;

    (d) upon, but in no event later than 10 days after, becoming aware of (i) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against the Company, any of the Partner Entities or any of their respective Subsidiaries or any of their respective Properties pursuant to any applicable Environmental Laws where, if adversely determined, the potential liability or expense relating thereto could exceed $25,000,000 or the potential remedy with respect thereto would otherwise reasonably be expected to have a Material Adverse Effect, (ii) all other Environmental Claims which allege liability in excess of $25,000,000 or have the possibility of remedies that would, if adversely determined, otherwise reasonably be expected to constitute a Material Adverse Effect, and (iii) any environmental or similar condition on any real property adjoining or in the vicinity of the property of the Company, any of the Partner Entities or any of their respective Subsidiaries that would reasonably be anticipated to cause such property or any part thereof to be subject to any restrictions on the ownership, occupancy, transferability or use of such property under any Environmental Laws where the net book value of such property exceeds $25,000,000;

    (e) of any other litigation or proceeding affecting the Company, any of the Partner Entities or any of their respective Subsidiaries which the REIT or the Company would be required to report to the SEC pursuant to the Exchange Act, within four days after reporting the same to the SEC;

    (f)  of any of the following ERISA Events affecting the Company or any ERISA Affiliate (but in no event more than 20 days after such event or, in the case of an event relating to a Multiemployer Plan, no more than 30 days after the Company obtains knowledge of the occurrence of such an event), together with (except in the case of a Multiemployer Plan) a copy of any notice with respect to such event that may be required to be filed with a Governmental Authority and any notice delivered by a Governmental Authority to the Company or any ERISA Affiliate with respect to such event:

     (i) an ERISA Event which would reasonably be expected to have a Material Adverse Effect;

    (ii) the adoption of any new Qualified Plan that is subject to Title IV of ERISA or section 412 of the Code that would reasonably be expected to generate annual liabilities in excess of $10,000,000 by the Company or an ERISA Affiliate;

    (iii) the adoption of any amendment to a Qualified Plan that is subject to Title IV of ERISA or section 412 of the Code that would reasonably be expected to generate annual liabilities in excess of $10,000,000, if such amendment results in a material increase in benefits or unfunded liabilities; or

    (iv) the commencement of contributions by the Company or an ERISA Affiliate to any Plan that is subject to Title IV of ERISA or section 412 of the Code that would reasonably be expected to generate annual liabilities in excess of $10,000,000;

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    (g) any Material Adverse Effect subsequent to the date of the most recent audited financial statements of the Company delivered to the Banks pursuant to subsection 7.1(a); and

    (h) of any material labor controversy resulting in or threatening to result in any strike, work stoppage, boycott, shutdown or other labor disruption against or involving the Company or any of its Subsidiaries.

    Each notice pursuant to this Section shall be accompanied by a written statement by a Responsible Officer setting forth details of the occurrence referred to therein, and stating what action the Company proposes to take with respect thereto and at what time. Each notice under subsection 7.3(a) shall describe with particularity any and all clauses or provisions of this Agreement or other Loan Document that have been breached or violated.

7.4 Preservation of Partnership Existence, Etc.

    The Company shall, except as permitted by Section 8.2, and shall cause each of its Restricted Subsidiaries to:

    (a) preserve and maintain in full force and effect its partnership, limited liability company, or corporate existence and good standing under the laws of its state or jurisdiction of formation or incorporation;

    (b) preserve and maintain in full force and effect all rights, privileges, qualifications, permits, licenses and franchises necessary in the normal conduct of its business;

    (c) use its reasonable efforts, in the Ordinary Course of Business, to preserve its business organization and preserve the goodwill and business of the customers, suppliers and others having material business relations with it; and

    (d) preserve or renew all of its registered trademarks, trade names and service marks, and other intellectual property, the non-preservation of which would reasonably be expected to have a Material Adverse Effect.

7.5 Maintenance of Property

    The Company shall maintain, and shall cause each of its Subsidiaries to maintain, and preserve all its Property which is used or useful in its business in good working order and condition, ordinary wear and tear excepted.

7.6 Insurance

    The Company shall maintain, and shall cause each of its Subsidiaries to maintain, with financially sound and reputable independent insurers, insurance with respect to its Properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons.

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7.7 Payment of Obligations

    The Company shall, and shall cause its Subsidiaries to, pay and discharge as the same shall become due and payable, all their respective obligations and liabilities, including:

    (a) all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings and adequate reserves in accordance with GAAP are being maintained by the Company or such Subsidiary; and

    (b) all Indebtedness, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness.

7.8 Compliance with Laws

    The Company shall comply, and shall cause each of its Subsidiaries to comply with all Requirements of Law of any Governmental Authority having jurisdiction over it or its business (including the Federal Fair Labor Standards Act) the non-compliance with which would reasonably be expected to have a Material Adverse Effect, except such as may be contested in good faith or as to which a bona fide dispute may exist.

7.9 Inspection of Property and Books and Records

    The Company shall maintain and shall cause each of its Subsidiaries to maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of the Company and such Subsidiaries. The Company shall permit, and shall cause each of its Subsidiaries to permit, representatives and independent contractors of the Administrative Agent or any Bank to visit and inspect any of their respective Properties, to examine their respective corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss their respective affairs, finances and accounts with their respective directors, officers, and independent public accountants, all at the expense of the Company and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Company; provided, however, when an Event of Default exists the Administrative Agent or any Bank may do any of the foregoing at the expense of the Company at any time during normal business hours and without advance notice.

7.10 Environmental Laws

    (a) The Company shall, and shall cause each of its Subsidiaries to, conduct its operations and keep and maintain its Property in compliance with all Environmental Laws, the non-compliance with which would reasonably be expected to have a Material Adverse Effect.

    (b) Upon the written request of the Administrative Agent or any Bank, the Company shall submit and cause each of its Subsidiaries to submit, to the Administrative Agent and with sufficient copies for each Bank, at the Company's sole cost and expense, at reasonable intervals, a report providing an update of the status of any environmental, health or safety compliance, hazard or liability issue identified in any notice or report required pursuant to subsection 7.3(d), that could, individually or in the aggregate, result in liability in excess of $25,000,000.

7.11 Use of Proceeds

    The Company shall use the proceeds of the Loans solely as follows: (a) to partially finance the Acquisition Transactions, (b) to pay fees and expenses related to the Acquisition Transactions, (c) to refinance existing Indebtedness (including paying in full the Indebtedness and other amounts owing

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under the Existing Credit Agreement), and (d) to finance working capital, capital expenditures, and other lawful general partnership purposes, including acquisitions, not in contravention of any Requirement of Law or of any Loan Document.

7.12 Solvency

    The Company shall at all times be, and shall cause each of its Restricted Subsidiaries to be, Solvent.

7.13 Notices and Information Relating to Specified Tax Liabilities and Tax Claims

    (a) The Company shall promptly upon becoming aware thereof or promptly after receipt by the REIT or any of its Subsidiaries thereof, notify the Administrative Agent and each Bank if (A) the REIT receives any notice from Georgia-Pacific pursuant to Section 6(a) of the Tax Matters Agreement of a Tax Claim against Georgia-Pacific or any Member with respect to Specified Taxes, or (B) any Tax Claim is made by any Tax Authority against the REIT with respect to Specified Taxes.

    (b) If the Administrative Agent and the Banks receive notification from the Company pursuant to subsection 7.13(a), the Company shall, and shall cause the REIT to, provide the Administrative Agent and each Bank on a monthly basis after such notification has been made, or as the Administrative Agent may request from time to time, a report, in form and substance satisfactory to the Administrative Agent, setting forth in detail (A) the progress and current status of any Tax Claim described in subsection 7.13(a) in a manner consistent with the requirements of Sections 6(b) and (c) of the Tax Matters Agreement, (B) what actions Georgia-Pacific, the REIT, the Company and/or any of their respective Subsidiaries propose to take with respect to such Tax Claim, and (C) such other information as the Administrative Agent may request in connection therewith.

   
ARTICLE VIII
NEGATIVE COVENANTS

    The Company hereby covenants and agrees that, so long as any Bank shall have any Commitment hereunder, or the Swingline Bank shall have any Swingline Commitment hereunder, or any Loan or other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, unless the Majority Banks waive compliance in writing:

8.1 Limitation on Liens

    The Company shall not, and shall not suffer or permit any of its Restricted Subsidiaries to, directly or indirectly, make, create, incur, assume or suffer to exist any Lien upon or with respect to any part of its Property, whether now owned or hereafter acquired, other than the following ("Permitted Liens"):

    (a) Liens for taxes, fees, assessments or other governmental charges which are not delinquent or remain payable without penalty, or to the extent that non-payment thereof is permitted by Section 7.7;

    (b) carriers', warehousemen's, mechanics', landlords', materialmen's, repairmen's or other similar Liens arising in the Ordinary Course of Business which are not delinquent or remain payable without penalty or unless such lien is being contested in good faith by appropriate proceedings promptly instituted and diligently conducted and if such accrual or other appropriate provision, if any, as shall be required by GAAP shall have been made therefor;

    (c) Liens (other than any Lien imposed by ERISA) incurred or deposits made incidental to the conduct of its business or the ownership of its Property including (i) pledges or deposits in

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connection with worker's compensation, unemployment insurance and other social security legislation, (ii) deposits to secure insurance, the performance of bids, tenders, contracts, leases, licenses, franchises and statutory obligations, each in the Ordinary Course of Business, and (iii) other obligations which were not incurred or made in connection with the borrowing of money, the obtaining of advances or credit or the payment of the deferred purchase price of property and which do not in the aggregate materially detract from the value of its Property or materially impair the use of such Property in the operation of its business;

    (d) any attachment or judgment Lien, unless the judgment it secures shall not, within 45 days after the entry thereof, have been discharged or execution thereof stayed pending appeal, or shall not have been discharged within 45 days after expiration of any such stay;

    (e) easements, rights-of-way, restrictions, leases, sub-leases and other similar charges or encumbrances incurred in the Ordinary Course of Business which, in each case, and in the aggregate, do not materially interfere with the ordinary conduct of the business of the Company or any Restricted Subsidiary;

    (f)  Liens on Property of any Restricted Subsidiary securing obligations of such Restricted Subsidiary owing to the Company or another Restricted Subsidiary;

    (g) any Lien existing prior to the time of acquisition upon any Property acquired by the Company or any Restricted Subsidiary after the Closing Date through purchase, merger or consolidation or otherwise, whether or not assumed by the Company or such Subsidiary, or placed upon Property at (or within 30 days after) the later of the time of acquisition or the completion of construction by the Company or any Restricted Subsidiary to secure all or a portion of (or to secure Indebtedness incurred to pay all or a portion of) the purchase price thereof, provided that (i) any such Lien does not encumber any other property of the Company or such Restricted Subsidiary, (ii) the Indebtedness secured by such Lien is not prohibited by the provisions of Section 8.5, (iii) the aggregate principal amount (without duplication) of the Indebtedness secured by such Lien at no time exceeds 80% of the cost to the Company and its Restricted Subsidiaries of the Property subject to such Lien, and (iv) the aggregate outstanding principal amount of the Indebtedness secured by all purchase money Liens permitted by this subsection 8.1(g) does not exceed five percent (5%) of the aggregate book value of the Tangible Assets of the Company and its Restricted Subsidiaries as of the end of the most recently ended fiscal quarter of the Company;

    (h) Liens on the accounts, rights to payment for goods sold or services rendered that are evidenced by chattel paper or instruments, and rights against persons who guarantee payment or collection of the foregoing, and on the Company's inventory and on the proceeds (as defined in the UCC in any applicable jurisdiction) thereof securing the obligations of the Company permitted by subsection 8.5(d) and any extension, renewal, refunding or refinancing thereof;

    (i)  from and after the time the Facilities Subsidiary becomes a Restricted Subsidiary, Liens on (x) the accounts, rights to payment for goods sold or services rendered that are evidenced by chattel paper or instruments (and rights against persons who guarantee payment or collection of the foregoing) of Plum Creek Manufacturing, L.P. and its Subsidiaries which are Restricted Subsidiaries, (y) the inventory of Plum Creek Manufacturing, L.P. and its Subsidiaries which are Restricted Subsidiaries and (z) the proceeds (as defined in the UCC in any applicable jurisdiction) thereof, in each case securing the obligations of Plum Creek Manufacturing, L.P. and such Restricted Subsidiaries under the Facility Subsidiary's Revolving Credit Facility (and any extension, renewal, refunding or refinancing thereof);

    (j)  any Lien renewing, extending, refunding or refinancing any Lien permitted by subsection (i) of this Section, provided that the principal amount secured is not increased and the Lien is not extended to other Property and further provided that the maturity of the Lien is not extended

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beyond the maturity date of the Indebtedness which, at the time the Lien was initially placed upon the Property secured thereby, Responsible Representatives declare would have been the maturity date of Indebtedness customary for the type of Property being financed;

    (k) Liens, other than those set forth above, that secure amounts that in the aggregate do not exceed $1,000,000;

    (l)  with respect to the Spinco Assets transferred to the Company, Plum Creek Southern or Plum Creek South Central pursuant to, and in accordance with, the applicable REIT Contribution Agreement in connection with the Asset Transfer Transaction, Liens on such Spinco Assets existing at the time of the consummation of the Merger that do not materially impair the value of all the Spinco Assets and do not materially interfere with the ordinary conduct of the business of the Company or any Restricted Subsidiary;

    (m) Liens existing as of the Closing Date as described on Schedule 8.1; and

    (n) Liens created pursuant to the Loan Documents.

8.2 Merger; Disposition of Assets

    The Company shall not, and shall not suffer or permit any of its Restricted Subsidiaries to, merge or consolidate with any Person or, directly or indirectly, sell, lease or transfer or otherwise dispose of (whether in one or a series of transactions) any Property (including accounts and notes receivable, with or without recourse) or enter into any agreement to do any of the foregoing, except that:

    (a) any Restricted Subsidiary of the Company may merge with the Company (provided that the Company shall be the continuing or surviving corporation) or with any one or more other Restricted Subsidiaries;

    (b) any Restricted Subsidiary may sell, lease, transfer or otherwise dispose of any of its assets to the Company; and any Restricted Subsidiary other than Plum Creek Southern and Plum Creek South Central may sell, lease, transfer or otherwise dispose of its assets to another Restricted Subsidiary;

    (c) any Restricted Subsidiary may merge or consolidate with any other entity, provided that, immediately after giving effect to such merger or consolidation (i) the continuing or surviving entity of such merger or consolidation shall constitute a Restricted Subsidiary, (ii) no Event of Default or Material Default shall exist, and (iii) the continuing or surviving entity is not engaged in any business other than a Permitted Business and, after giving effect on a pro forma basis to such merger or consolidation, the gross revenue contribution of pulp and paper manufacturing activities of the Company and its Subsidiaries on a consolidated basis for the 12 months preceding such merger or consolidation does not exceed 33% of the total revenues of the Company and its Subsidiaries on a consolidated basis;

    (d) the Company may merge or consolidate with any other entity, provided that (i) the Company shall be the continuing or surviving entity and (ii) immediately after such merger or consolidation, (A) no Event of Default or Material Event of Default shall exist, (B) the Company could incur at least $1 of additional Funded Debt pursuant to subsection 8.5(i), and (C) the Company is not engaged in any business other than a Permitted Business and, after giving effect on a pro forma basis to such merger or consolidation, the gross revenue contribution of pulp and paper manufacturing activities of the merged or consolidated entity and its Subsidiaries on a consolidated basis for the 12 months preceding such merger or consolidation does not exceed 33% of total revenues of such merged or consolidated entity and its Subsidiaries on a consolidated basis;