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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 15, 1996
Commission file number 0-24976
CROWN PACIFIC PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
121 S.W. Morrison Street, Suite 1500 Portland, Oregon 97204
(Address of principal executive office, Zip Code)
(503) 274-2300
(Registrant's telephone number including area code)
Delaware 93-1161833
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On May 15, 1996, Crown Pacific Partners, L.P. (the "Partnership") through
its 99% owned subsidiary, Crown Pacific Limited Partnership (the "Operating
Partnership"), purchased approximately 207,000 acres of timberland containing an
estimated 1.5 billion board feet of merchantable timber in Oregon and Washington
(the "Purchase") for $205 million in cash from Cavenham Forest Industries
("Cavenham"), through an agreement with Willamette Industries, Inc. The
Purchase was financed with a bank credit facility (the "Acquisition Debt") from
a syndicate of financial institutions for which Bank of America National Trust
and Savings Association ("Bank of America") acts as agent.
The acquired timberlands consist of approximately 124,000 acres in central
and northeastern Oregon (the "Eastside Timberlands") and approximately 83,000
acres in the Olympic Peninsula of Washington State (the "Olympic Timberlands").
These new timberlands are being integrated with the Partnership's existing
operations in the respective states. The Partnership now owns or controls
approximately 724,000 acres of timberland containing an estimated 4.9 billion
board feet of merchantable timber.
The Partnership estimates the average annual harvest from the Purchase will
approximate 60 million board feet ("MMBF") (50 MMBF in 1996) from the Olympic
Timberlands and 25 MMBF from the Eastside Timberlands. The actual amount of the
harvest may vary depending on prevailing market conditions and other factors
beyond the control of the Partnership.
Harvest from the Olympic Timberlands is planned to be sold in both the
domestic and export markets. During first Quarter 1996, the Partnership's
Hamilton, Washington tree farm operation, which is in close proximity to the
Olympic Timberlands, received an average of $519/MBF and $729/MBF for the sale
of logs in the domestic and export markets, respectively. The Partnership
expects that the prices to be realized from the Olympic Timberlands will be
lower, on average, than prices received at the Hamilton tree farm primarily due
to the lower value specie mix on the Olympic Timberlands. Log prices depend
upon various factors including specie, grade, age, demand for finished wood
products, and exchange rates. Depending on market conditions, the Partnership
estimates that between 35% to 50% of the logs harvested from the Olympic
Timberlands will be sold into export markets.
Approximately 80% of the logs harvested from the Eastside Timberlands will
be processed by the Partnership's existing Oregon manufacturing facilities and
will be used to partially offset higher cost external log purchases, which is
anticipated to reduce the Partnership's overall production cost. During 1995,
the Oregon manufacturing facilities utilized 106 MMBF of external logs, which
had an average cost of $573/MBF.
The primary direct cash costs incurred in the harvesting of timber are
logging (cutting of the timber), hauling (transporting the timber to a
manufacturing facility), harvest taxes and road building. During 1995, these
direct cash costs averaged less than $200/MBF on the Partnership's existing
Oregon and Washington tree farms.
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The primary effect of the Purchase on the Partnership's balance sheet has
been the increase to timber and timberlands and long-term debt of approximately
$205 million, and a $5 million increase to other noncurrent assets for the
capitalization of the related financing costs.
As discussed above, the Purchase was financed with the Acquisition Debt
consisting of an acquisition term loan in the principal amount of $150 million
and a bridge term loan in the principal amount of $100 million. On the closing
of the Purchase, May 15, 1996, the Partnership borrowed $210 million for the
Purchase, including $5 million for closing and financing costs and an
additional $40 million to repay outstanding long-term bank borrowings under its
previously existing bank acquisition facility, which was terminated at closing.
The acquisition term loan requires principal payments in varying amounts
beginning on September 30, 1998, and matures on June 30, 2002. The bridge term
loan requires principal payments in the amount of $12.5 million each on December
31, 1996 and March 31, 1997 and $37.5 million each on June 30, 1997 and January
1, 1998. The Acquisition Debt agreements require that the Partnership raise at
least $100 million through the sale of additional Common Units, net of related
issuance costs, by no later than June 30, 1997, which must be used to first pay
the bridge term loan.
In addition to the Acquisition Debt, the Partnership renegotiated its
revolving working capital facility (the "Line of Credit"), which is now a 6 year
facility and allows the Partnership to borrow up to $40 million for working
capital and general corporate purposes. The Line of Credit is secured by the
inventory and receivables of the Operating Partnership and requires the
Operating Partnership to repay amounts drawn under the Line of Credit for 30
consecutive days not less often than once every twelve months. There were no
borrowings outstanding under this facility at the close of the Purchase.
Both the Acquisition Debt and the Line of Credit bear a floating rate of
interest at either (1) one, two, three or six months LIBOR, plus 2.5% or (ii)
the higher of Bank of America's reference rate or the federal funds rate plus
0.50%, plus in either case, 1.5%. If the Partnership has not raised at least
$125 million through the sale of additional Common Units by December 31, 1996,
the interest rate will increase by 1.0%.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
As discussed above, the Purchase represents approximately 207,000 acres of
timberland previously owned by Cavenham. The Purchase represented less than 12%
of Cavenham's total timberland holdings and did not include any of Cavenham's
manufacturing facilities. Management is currently integrating the Purchase with
its existing operations in Washington and Oregon and has added approximately 10
employees as a result of the Purchase. As a result of the foregoing, the
Purchase does not represent an acquisition of a business for financial reporting
purposes. Therefore, historical and proforma financial information related to
the acquired assets is not considered relevant and has not been provided.
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EXHIBITS FILED WITH THE FORM 8-K
EXHIBIT NO.
- - -----------
10.1 Amended Credit Agreement with respect to a Working Capital Facility and
Acquisition Credit Facility among Crown Pacific Limited Partnership and
certain banks in the amount up to $40 million and $250 million,
respectively.
10.13 Asset Sale, Purchase and Transfer Agreement between Crown Pacific Limited
Partnership and Willamette Industries, Inc.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
CROWN PACIFIC PARTNERS, L.P.
-----------------------------------
(Registrant)
By: Crown Pacific Management
Limited Partnership,
as Managing General Partner
By: Richard D. Snyder
--------------------------------
Richard D. Snyder
Vice President and Interim - Chief Financial
Officer and Treasurer
Date: May 30, 1996
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AMENDED AND RESTATED
FACILITY B CREDIT AGREEMENT
This AMENDED AND RESTATED FACILITY B CREDIT AGREEMENT is entered into as of
May 13, 1996, among Crown Pacific Limited Partnership, a Delaware limited
partnership (the "Company"), the several financial institutions from time to
time party to this Agreement (collectively, the "Banks"; individually, a
"Bank"), ABN AMRO Bank, N.V., as documentation agent for the Banks, and Bank
of America National Trust and Savings Association, as letter of credit
issuing bank and as agent for the Banks.
WHEREAS, the Company, the Existing Banks and BofA as letter of credit issuing
bank and as agent for the Existing Banks entered into a Facility B Credit
Agreement dated as of May 22, 1995 (the "Original Facility B Credit
Agreement");
WHEREAS, the Company, the Agent and the Existing Banks, except for the
Departing Bank, desire to enter into this Agreement to amend and restate the
Original Facility B Credit Agreement and the Documentation Agent and the
Banks desire to become parties to this Agreement upon the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the Company, the Agent and the Existing Banks,
except for the Departing Bank, hereby amend and restate the Original Facility
B Credit Agreement in its entirety and, together with the Documentation Agent
and the Banks that are not Existing Banks, hereby agree as follows:
ARTICLE I.
DEFINITIONS
1.1. Certain Defined Terms.
The following terms have the following meanings:
"Acquisition" means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (a) the acquisition
of all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition of in excess of 50% of the capital
stock, partnership interests or equity of any Person or otherwise causing any
Person, to become a Subsidiary, or (c) a merger or consolidation or any other
combination with another Person (other than a Person that is a Subsidiary)
provided that the Company or the Subsidiary is the surviving entity.
"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.
"Agent" means BofA in its capacity as agent for the Banks hereunder, and any
successor agent arising under Section 10.9.
"Agent-Related Persons" means BofA, BofA as agent under the Original Facility
B Credit Agreement, and any successor agent arising under Section 10.9 and
any successor letter of credit issuing bank or Swingline Bank hereunder,
together with their respective Affiliates (including, in the case of BofA,
the Arranger), and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
"Agent's Payment Office" means the address for payments set forth on Schedule
11.2 in relation to the Agent, or such other address as the Agent may from
time to time specify.
"Aggregate Commitment" means the combined Commitments of the Banks, as such
amount may be increased or reduced from time to time pursuant to this
Agreement.
"Agreement" means this Amended and Restated Facility B Credit Agreement.
"Annual Timber Increase" and "Annual Timber Decrease" have the meanings
specified in Section 8.4.
"Applicable Margin" means, in respect of all Loans outstanding on any date
(A) 2.5% for Offshore Rate Loans and 1.5% for Base Rate Loans from the
Closing Date through the earlier of (x)
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December 31, 1996, or (y) the receipt
by the Company of Equity Proceeds of at least $ 125,000,000 and repayment in
full of the Bridge Term Loan; and (B) thereafter, (x) if the Company has
received Equity Proceeds of at least $125,000,000 by December 31, 1996, 2.5%
for Offshore Rate Loans and 1.5% for Base Rate Syndicated Loans until the
repayment in full of the Bridge Term Loan, after which the Applicable Margin
shall be determined in accordance with the chart below based upon the Total
Debt to Cash Flow Ratio on a trailing four fiscal quarter basis as set forth
below; or (y) if the Company has not received Equity Proceeds of at least
$125,000,000 by December 31, 1996, 3.5% for Offshore Rate Loans and 2.5% for
Base Rate Loans until delivery of financial reports pursuant to subsections
6.1(a) or (b) and the certificate delivered pursuant to subsection 6.2(b)
with respect to a fiscal quarter as of which the Total Debt to Cash Flow
Ratio is equal to or less than 4.0 to 1.0, after which the Applicable Margin
shall be determined in accordance with the chart below based upon the Total
Debt to Cash Flow Ratio on a trailing four fiscal quarter basis as set forth
below.
Total Debt to Cash Flow Ratio at End of Fiscal Quarter
Applicable Margin
Offshore
Rate Loans
Base
Rate Loans
Less than or equal to 3.50 to 1.00
1.6250%
0.6250%
Greater than 3.50 to 1.00 but less
than or equal to 4.00 to 1.00
2.0000%
1.0000%
Greater than 4.00 to 1.00 but less
than or equal to 4.50 to 1.00
2.2500%
1.2500%
Greater than 4.50 to 1.00
2.5000%
1.5000%
For all periods that the Applicable Margin is based upon the foregoing
chart, the Applicable Margin for each fiscal quarter shall be calculated in
reliance on the financial reports delivered pursuant to
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subsections 7.1(a)
and (b) and the certificate delivered with respect thereto pursuant to
subsection 7.2(b) with respect to the fiscal quarter ending immediately
before the fiscal quarter in question (e.g., June 30 financials determine the
Applicable Margin for the fiscal quarter beginning July 1). As such
financial reports and certificate are not required to be delivered hereunder
until 60 days (or 90 days in the case of fiscal year-end financial reports)
after the end of the applicable fiscal quarter, the Applicable Margin for
each fiscal quarter that the Applicable Margin is based upon the foregoing
chart shall be assumed for interim calculation and collection purposes, until
delivery of such financial reports and certificate, to be the same as for the
immediately preceding fiscal quarter. If such financial reports and
certificate are delivered before the beginning of the next succeeding fiscal
quarter, then the Applicable Margin will be adjusted retroactively to the
beginning of the fiscal quarter in question. If the Company fails to deliver
such financial reports and certificate to the Agent for any fiscal quarter by
the beginning of the next 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 be
assumed for interim calculation and collection purposes, until delivery of
such financial reports and certificates, to be the Applicable Margin
applicable to the next higher Total Debt to Cash Flow Ratio; thus, if the
Applicable Margin had previously been 2.0% for Offshore Rate Loans and 1.0%
for the Base Rate Syndicated Loans and Swingline Loans, a failure to deliver
quarterly financials by the first day of the next fiscal quarter would cause
the Applicable Margin to be 2.25% and 1.25%, respectively, until such
delivery. Upon delivery of such delinquent financial reports and
certificate, the Applicable Margin will be adjusted retroactively to the
beginning of the immediately preceding fiscal quarter, with any payment
adjustments being made pursuant to Section 2.16. Whether or not the
Applicable Margin is based upon the foregoing chart, 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.
"Arranger" means BA Securities, Inc., a Delaware corporation.
"Assignee" has the meaning specified in subsection 11.8(a).
"Attorney Costs" means and includes all reasonable fees and disbursements of
any law firm or other external counsel, the reasonable allocated cost of
internal legal services and all disbursements of internal counsel.
"Available Cash" means, with respect to any fiscal quarter and without
duplication: (a) the sum of:
(i) all cash receipts of the Company during such fiscal quarter from all
sources;
(ii) any reduction with respect to such fiscal quarter in a cash reserve
(other than an SAU Reserve (as defined in the Master Partnership Agreement))
previously established pursuant to clause (b)(ii) below (either by reversal
or utilization) from the level of such reserve at the end of the prior fiscal
quarter; and
(iii) the amount available to be borrowed on the last day of such fiscal
quarter under this Agreement but only so long as the conditions relating to a
Borrowing set forth in subsections 5.2(b) and (c) would be satisfied or
waived on such date;
(b) less the sum of:
(i) all cash disbursements of the Company during such fiscal quarter,
including, without limitation, disbursements for operating expenses
(including, without limitation, the amounts described in the second sentence
of Section 8.7), taxes, if any, debt service (including, without limitation,
the payment of principal, premium and interest), redemption of Partnership
Interests (as defined in the Company Partnership Agreement), capital
expenditures and cash distributions to Partners (as defined in the Company
Partnership Agreement) (but only to the extent that such cash distributions
to Partners exceed Available Cash for the immediately preceding fiscal
quarter); and
(ii) any cash reserves established with respect to such fiscal quarter, and
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any increase with respect to such fiscal quarter in a cash reserve
established pursuant to this clause (b)(ii) from the level of such reserve at
the end of the prior fiscal quarter, in such amounts as the Managing General
Partner determines in its reasonable discretion to be necessary or
appropriate (A) to provide for the proper conduct of the business of the
Company (including, without limitation, reserves for future capital
expenditures and those established with respect to the Obligations hereunder,
the "Obligations" under and as defined in the Facility A Credit Agreement,
and the Senior Notes), provided that the reserves established during such
fiscal quarter pursuant to this clause (b)(ii) shall include an amount not
less than (x) 50% of the aggregate amount of all interest in respect of the
Senior Notes to be paid on the interest payment date immediately following
such fiscal quarter, (y) 100% of the aggregate amount of all accrued and
unpaid interest in respect of the Loans and Facility A Loans on the date of
determination, and (z) 25% of the aggregate amount of all principal in
respect of the Senior Notes scheduled to be paid during the nine calendar
month period immediately following such fiscal quarter, (B) to establish or
add to an SAU Reserve in accordance with the Master Partnership Agreement,
(C) to provide funds for distributions to the Partners in respect of any one
or more of the next four fiscal quarters or (D) because the distribution of
such amounts would be prohibited by applicable law or by any loan agreement,
security agreement, mortgage, debt instrument or other agreement or
obligation to which the Company is a party or by which it is bound or its
assets are subject.
Taxes paid by the Company on behalf of, or amounts withheld with respect to,
all or less than all of the Partners (as defined in the Company Partnership
Agreement) shall not be considered cash disbursements of the Company that
reduce Available Cash, but the payment or withholding thereof shall be deemed
to be a distribution of Available Cash to such Partners. Alternatively, in
the discretion of the Managing General Partner, such taxes (if pertaining to
all Partners) may be considered to be cash disbursements of the Company which
reduce Available Cash, but the payment or withholding thereof shall not be
deemed to be a distribution of Available Cash to such Partners.
"Bank" has the meaning specified in the introductory clause hereto.
References to the
"Banks" shall include BofA, including in its capacity as the Issuing Bank and
the Swingline 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 Issuing Bank or the Swingline Bank, its status as such
will be specifically referenced.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C.
Section 101, et seq.).
"Base Rate" means, for any day, the higher of: (a) 0.50% per annum above the
latest Federal Funds Rate; and (b) 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." (The "reference rate" 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.) 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 Syndicated Loan" means a Syndicated Loan or an L/C Advance that
bears interest based on the Base Rate.
"BofA" means Bank of America National Trust and Savings Association, a
national banking association.
"Borrowing" means a borrowing hereunder consisting of Syndicated 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
Syndicated Loans and Swingline Loans, having the same Interest Period.
"Borrowing Date" means any date on which a Borrowing occurs under Section 2.3
and
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2.10.
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks in Portland, Oregon, New York City or San Francisco
are authorized or required by law to close and, if the applicable Business
Day relates to any Offshore Rate Loan, means such a day on which dealings are
carried on in the applicable offshore dollar interbank market.
"Capital Additions and Improvements" means (a) additions or improvements to
the capital assets owned by the Company or any of its Subsidiaries or (b) the
acquisition of existing or the construction of new capital assets (including,
without limitation, timberlands and timber processing and manufacturing
facilities and related assets) made to increase the Operating Capacity of the
Company and its Subsidiaries, taken as a whole, from the Operating Capacity
of the Company and its Subsidiaries, taken as a whole, existing immediately
prior to such addition, improvement, acquisition or construction.
"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.
"Cash Collateralize" means to pledge and deposit with or deliver to the
Agent, for the benefit of (i) in the case of L/C Obligations, the Agent, the
Issuing Bank and the Banks, and (ii) in the case of Offshore Rate Loans, the
Agent and the Banks, in each case as collateral for the L/C Obligations or
the Offshore Rate Loans, as the case may be, cash or deposit account balances
pursuant to documentation in form and substance reasonably satisfactory to
the Agent and, if applicable, the Issuing Bank (which documents are hereby
consented to by the Banks). The Company hereby grants to the Agent, for the
benefit of (i) the Agent, the Issuing Bank and the Banks in the case of L/C
Obligations, and (ii) the Agent and the Banks in the case of the Offshore
Rate Loans, a security interest in all such cash and deposit account
balances. Derivatives of such term shall have corresponding meaning. Cash
collateral shall be maintained in blocked, non-interest bearing deposit
accounts at BofA.
"Cash Coverage Ratio" means the ratio of (a) EBITDA, plus the Net Proceeds
from the sale or other disposition of assets permitted under subsections
8.2(a), (b), (c), (d) or (f)(ii)(C) to the extent not otherwise included in
determining EBITDA, plus Permitted Inclusions, plus any decreases and minus
any increases to the reserves described in clauses (c)(i), (ii) and (iii) of
the definition of Cash Provided by Operating Activity, plus any decreases and
minus any increases in the amount available to be borrowed under the Working
Capital Facility at the end of the relevant period, minus capital
expenditures (excluding capital expenditures financed with Indebtedness
incurred for such purpose concurrently with or within 20 days after such
capital expenditures), to (b) cash distributions to partners, plus interest
expense, plus all payments of principal or Indebtedness other than the
Working Capital Facility. All such calculations shall be on a consolidated
basis for the Company and its Subsidiaries and shall be based upon the four
fiscal quarter period ending on the last day of the most recent fiscal
quarter for which financial reports pursuant to subsections 7.1(a) and (b)
and a certificate pursuant to subsection 7.2(b) have been delivered.
"Cash Flow" means, at any date of determination, the sum of the following
calculated for the Company and its Subsidiaries on a consolidated basis for
the four fiscal quarter period ending on the last day of the most recent
quarter for which financial reports pursuant to subsections 7.1(a) and (b)
and a certificate pursuant to subsection 7.2(b) have been delivered: (i)
EBITDA for such period; (ii) plus the Net Proceeds from the sale or other
disposition of assets permitted under subsections 8.2(a), (b), (c), (d) or
(f)(ii)(C) during such period, to the extent not otherwise included in
determining EBITDA, plus Permitted Inclusions; (iii) plus or minus, as
applicable, in connection with any timberlands acquired by the Company with
the proceeds of Indebtedness within such period, an amount equal to a good
faith estimate of such additional amounts that would be included in
determining EBITDA had such timberlands been owned by the Company for such
period, as certified (in a certificate containing such detail as the Required
Banks may reasonably request) by the Chief Financial
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Officer of the Company
based upon such Chief Financial Officer's good faith estimates of applicable
revenues and expenses arising from such timberlands and assuming aggregate
timber harvests in an amount that does not require proceeds to be placed in
an escrow account pursuant to Section 8.4.
"Cash Provided by Operating Activity" means, at any date of determination,
the sum of the following calculated for the Company and its Subsidiaries on a
consolidated basis for the four fiscal quarter period ending as of the last
day of the most recent fiscal quarter for which financial reports pursuant to
subsections 7.1(a) and (b) and a certificate pursuant to subsection 7.2(b)
have been delivered:
(a) the sum of all cash receipts of the Company and its Subsidiaries during
such period (excluding any cash proceeds from any Interim Capital
Transactions),
(b) less the sum of:
(i) all cash operating expenditures of the Company and its Subsidiaries
during such period, including, without limitation, taxes, if any, and amounts
owed to the Master Partnership for management services rendered to the
Company for which the Master Partnership is obligated to reimburse the
Managing General Partner or the Special General Partner pursuant to Section
6.4 of the Master Partnership Agreement,
(ii) all cash debt service payments of the Company and its Subsidiaries
during such period (other than payments or prepayments of principal and
premium (A) required by reason of loan agreements (including, without
limitation, covenants and default provisions therein) or by lenders, in each
case in connection with sales or other dispositions of assets or (B) made in
connection with refinancings or refundings of indebtedness with the proceeds
from new indebtedness or from the sale of equity interests, provided, that
any payment or prepayment of principal and premium, whether or not then due,
shall be deemed, at the election and in the discretion of the Managing
General Partner, to be refunded or refinanced by any indebtedness incurred or
to be incurred by the Company or any of its Subsidiaries simultaneously with
or within 180 days prior to or after such payment or prepayment to the extent
of the principal amount of such indebtedness so incurred), and
(iii) all cash capital expenditures of the Company and its Subsidiaries
during such period, including, without limitation, cash capital expenditures
made in respect of Maintenance Capital Expenditures, but excluding (A) cash
capital expenditures made in respect of Operating Capacity Acquisitions and
Capital Additions and Improvements and (B) cash expenditures made in payment
of transaction expenses relating to Interim Capital Transactions,
(c) less any additions and plus any reductions to the following reserves
during such period:
(i) any cash reserves of the Company and its Subsidiaries that the Managing
General Partner deems in its reasonable discretion to be necessary or
appropriate to provide for the future cash payment of items of the type
referred to in clauses (b)(i) through (iii) above including, without
limitation, those reserves established with respect to the Obligations
hereunder, the "Obligations" under and as defined in the Facility A Credit
Agreement, and the Senior Notes and as set forth in clause (b)(ii)(A) of the
definition of "Available Cash",
(ii) any amounts held in the SAU Reserve (as defined in the Master
Partnership Agreement), and
(iii) any other cash reserves of the Company and its Subsidiaries that the
Managing General Partner deems in its reasonable discretion to be necessary
or appropriate to provide funds for distributions with respect to Units (as
defined in the Master Partnership Agreement), any general partner interests
in the Master Partnership and any Partnership Interests in respect of any one
or more of the next four fiscal quarters, all as determined on a consolidated
basis with respect to the Company and its Subsidiaries and after taking into
account the Managing General Partner's interest therein attributable to its
general partner interest in the Company. Where cash capital expenditures are
made in part in respect of Operating
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Capacity Acquisitions or Capital
Additions and Improvements and in part for other purposes, the Managing
General Partner's good faith allocation thereof between the portion made for
Operating Capacity Acquisitions or Capital Additions and Improvements and the
portion made for other purposes shall be conclusive. Taxes paid by the
Company on behalf of, or amounts withheld with respect to, all or less than
all of the Partners shall not be considered cash operating expenditures of
the Company that reduce Cash Provided by Operating Activity, but the payment
or withholding thereof shall be deemed to be a distribution of Available Cash
to such Partners. Alternatively, in the discretion of the Managing General
Partner, such taxes (if pertaining to all Partners) may be considered to be
cash operating expenditures of the Company which reduce Cash Provided by
Operating Activity, but the payment or withholding thereof shall not be
deemed to be a distribution of Available Cash to such Partners.
"CERCLA" has the meaning specified in the definition of "Environmental Laws."
"Closing Date" means the date on which all conditions precedent set forth in
Section 5.1 are satisfied or waived by all Banks (or, in the case of
subsection 5.1(e), waived by the Person entitled to receive such payment).
"Code" means the Internal Revenue Code of 1986, and regulations promulgated
thereunder.
"Collateral" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by the Company in or upon which a
Lien now or hereafter exists in favor of the Banks, or the Agent on behalf of
the Banks, whether under this Agreement or under any other documents executed
by any such Person and delivered to the Agent or the Banks.
"Collateral Documents" means, collectively, the Security Agreement, and all
other security agreements, and other similar agreements between the Company
and the Banks or the Agent for the benefit of the Banks now or hereafter
delivered to the Banks or the Agent pursuant to or in connection with the
transactions contemplated hereby, and all financing statements (or comparable
documents now or hereafter filed in accordance with the UCC or comparable
law) against the Company as debtor in favor of the Banks or the Agent for the
benefit of the Banks as secured party.
"Commitment", as to each Bank, has the meaning specified in subsection 2.1.
"Commitment Fee Percentage" means a rate per annum equal to 0.50%.
"Company" has the meaning specified in the introductory clause hereto.
"Company's Knowledge" shall mean the actual knowledge of any Person holding
an office of divisional manager of the Company or any Person holding an
office senior to a divisional manager including, without limitation, any
senior executive or officer of the Company.
"Company Partnership Agreement" means the Amended and Restated Agreement of
Limited Partnership of the Company dated as of December 22, 1994, between the
Managing General Partner and the Master Partnership.
"Compliance Certificate" means a certificate substantially in the form of
Exhibit C.
"Contingent Obligation" means, as to any Person, any direct or indirect
liability of that Person, whether or not contingent, with or without
recourse, (a) with respect to any Indebtedness, lease, dividend, letter of
credit or other obligation (the "primary obligations") of another Person (the
"primary obligor"), including any obligation of that Person (i) to purchase,
repurchase or otherwise acquire such primary obligations or any security
therefor, (ii) to advance or provide funds for the payment or discharge of
any such primary obligation, or to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency or
any balance sheet item, level of income or financial condition of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation, or (iv)
otherwise to assure or hold harmless the holder of any such primary
obligation against loss in respect thereof (each, a "Guaranty Obligation");
(b) with respect to any Surety Instrument issued for the account of that
Person or as to which that Person is otherwise liable for reimbursement of
drawings or payments; (c) to purchase any materials, supplies or other
property from, or to obtain the services of, another Person if the relevant
<PAGE>
contract or other related document or obligation requires that payment for
such materials, supplies or other property, or for such services, shall be
made regardless of whether delivery of such materials, supplies or other
property is ever made or tendered, or such services are ever performed or
tendered, or (d) in respect of any Swap Contract. The amount of any
Contingent Obligation shall, in the case of Guaranty Obligations, be deemed
equal to the stated or determinable amount of the primary obligation in
respect of which such Guaranty Obligation is made or, if not stated or if
undeterminable, the maximum reasonably anticipated liability in respect
thereof, and in the case of other Contingent Obligations, shall be equal to
the maximum reasonably anticipated liability in respect thereof.
"Contractual Obligation" 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.
"Conversion/Continuation Date" means any date on which, under Section 2.4,
the Company (a) converts Syndicated Loans of one Type to another Type, or (b)
continues as Syndicated Loans of the same Type, but with a new Interest
Period, Syndicated Loans having Interest Periods expiring on such date.
"Conversion Facilities" means, collectively, those assets of the Company
consisting of six lumber mills in the States of Oregon, Idaho and Montana,
and the plywood facility and remanufacturing facility in the State of Oregon.
"CPI" means the Consumer Price Index For All Urban Consumers (CPI-U), All
Cities, (1982-84 equals 100), as published by the U.S. Department of Labor,
Bureau of Labor Statistics, or any successor publication. If the CPI should
hereafter be changed, then the new base shall be converted to the 1982-84
base and the base so converted shall be used.
"Credit Extension" means and includes (a) the making of any Syndicated Loans
or Swingline Loans hereunder, including any conversion or continuation
thereof, and (b) the Issuance of any Letters of Credit hereunder.
"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.
"Departing Bank" means AgAmerica, FCB.
"Designated Acres" means up to an aggregate during the term of this Agreement
of 50,000 acres owned by the Company which (based on the good faith
determination of, and as certified to the Agent and the Banks in writing by,
a Responsible Officer that such acres have at the time such determination is
made a higher value as recreational, commercial, residential, grazing or
agricultural property than for timber production) may reasonably be
designated by the Managing General Partner at the time of the sale thereof as
constituting Designated Acres.
"Documentation Agent" means ABN AMRO Bank, N.V., in its capacity as
documentation agent for the Banks.
"Dollars", "dollars" and "$" each mean lawful money of the United States.
"EBITDA" means, as measured quarterly on the last day of each fiscal quarter
for the four fiscal quarter period then ending, and determined in accordance
with GAAP for the Company and its Subsidiaries on a consolidated basis, an
amount equal to the sum of (i) consolidated net income (or net loss) for such
period, plus (ii) 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 consolidated net income (or loss), plus
(iii) all accrued taxes on or measured by income to the extent included in
the determination of such consolidated net income (or loss); provided,
however, that consolidated net income (or loss) shall be computed for these
purposes without giving effect to extraordinary losses or extraordinary gains.
"Effective Amount" means (i) with respect to any Syndicated Loans or
Swingline Loans on any date, the aggregate outstanding principal amount
thereof after giving effect to any Borrowing and
<PAGE>
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.
"Effective Date" has the meaning specified in Section 8.4.
"Eligible Assignee" means (i) a commercial bank organized under the laws of
the United States, or any state thereof, and having a combined capital and
surplus of at least $250,000,000; (ii) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any
such country, and having a combined capital and surplus of at least
$250,000,000, provided that such bank is acting through a branch or agency
located in the United States; and (iii) a Person that is primarily engaged in
the business of commercial banking and that is (A) a Subsidiary of a Bank,
(B) a Subsidiary of a Person of which a Bank is a Subsidiary, or (C) a Person
of which a Bank is a Subsidiary.
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for (i) violation of any Environmental Law, or (ii) release or
injury to the environment or threat to public health, personal injury
(including sickness, disease or death), property damage, natural resources
damage, or (iii) 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 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
the Company.
"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, natural resource and land use
matters; including 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, the Endangered Species
Act and similar state laws.
"Equity Issuance" means issuance of equity in consequence of a primary
offering by the Master Partnership.
"Equity Proceeds" means proceeds contributed to the Company by the Master
Partnership from an Equity Issuance calculated net of fees and expenses.
"ERISA" means the Employee Retirement Income Security Act of 1974, 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 Pension Plan;
(b) a withdrawal by the Company or any ERISA Affiliate from a Pension 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) or a
cessation of operations which is treated as such a withdrawal under Section
4062(e) of ERISA; (c) 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 Pension
Plan subject to Title IV of ERISA; (d) a failure by the Company or any ERISA
Affiliate to make required contributions to a Pension Plan or other Plan
subject to Section 412 of the Code; (e) an event or condition which might
reasonably be expected to constitute grounds under
<PAGE>
Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any
Pension Plan; (f) 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 (g) an application for a funding waiver or an extension
of any amortization period pursuant to Section 412 of the Code with respect
to any Pension Plan.
"Escrow Agreement" means an agreement or agreements entered into by the
Company pursuant to subsections 8.2(f) or 8.4, substantially in the form of
Exhibit G.
"Eurodollar Reserve Percentage" has the meaning specified in the definition
of "Offshore Rate".
"Event of Default" means any of the events or circumstances specified in
Section 8.1.
"Exchange Act" means the Securities and Exchange Act of 1934, and regulations
promulgated thereunder.
"Existing Banks" means, collectively, BofA, ABN AMRO Bank, N.V., Societe
Generale, Wells Fargo Bank, N.A., Banque Paribas, Union Bank of California,
N.A. (as successor to The Bank of California, N.A.), Key Bank of Washington
and AgAmerica, FCB.
"Existing Timberlands" has the meaning specified in Section 8.4.
"Facility A Credit Agreement" means the Amended and Restated Credit Agreement
dated as of the date hereof between the Company, the Banks, the Documentation
Agent and the Agent.
"Facility A Loan" means a "Loan" as defined in the Facility A Credit
Agreement.
"FDIC" means the Federal Deposit Insurance Corporation, and any Governmental
Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate set forth in the weekly
statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including any such
successor, "H.15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be
the arithmetic mean as determined by the Agent of the rates for the last
transaction in overnight Federal funds arranged prior to 9:00 a.m. (New York
City time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Agent.
"Fee Letters" means the letter agreement between the Company, the
Documentation Agent, the Arranger and the Agent, dated April 3, 1996, as
supplemented by a letter agreement between the Agent and the Company of even
date herewith, and the fee letter between the Company, the Arranger and the
Agent, dated April 3, 1996.
"FRB" means the Board of Governors of the Federal Reserve System, and any
Governmental Authority succeeding to any of its principal functions.
"Fremont" means Fremont Timber, Inc., a Delaware corporation.
"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 U.S.
accounting profession), which are applicable to the circumstances as of the
date of determination.
"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.
"Guaranty Obligation" has the meaning specified in the definition of
"Contingent Obligation."
"Hazardous Materials" means all those substances that are regulated by, or
which may form the basis of liability under, any Environmental Law, including
all substances identified under any
<PAGE>
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.
"Honor Date" has the meaning specified in subsection 3.3(b).
"HS Corp." means HS Corp. of Oregon, an Oregon corporation.
"Indebtedness" of any Person means, without duplication, (a) all indebtedness
for borrowed money; (b) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (other than trade payables
entered into in the ordinary course of business on ordinary terms); (c) all
non-contingent reimbursement or payment obligations with respect to Surety
Instruments; (d) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or businesses; (e) all
indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to
property acquired by the Person (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to
repossession or sale of such property); (f) all obligations with respect to
capital leases; (g) all indebtedness referred to in clauses (a) through (f)
above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon or
in property (including accounts and contracts rights) owned by such Person,
even though such Person has not assumed or become liable for the payment of
such Indebtedness; and (h) all Guaranty Obligations in respect of
indebtedness or obligations of others of the kinds referred to in clauses (a)
through (f) above.
"Indemnified Liabilities" has the meaning specified in Section 11.5.
"Indemnified Person" has the meaning specified in Section 11.5.
"Independent Auditor" has the meaning specified in subsection 7.1(a).
"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; undertaken under U.S. Federal, state or foreign law,
including the Bankruptcy Code.
"Interest Expense" means, at any date of determination, the sum of the
following calculated for the Company and its Subsidiaries on a consolidated
basis for the four fiscal quarter period ending on the last day of the most
recent quarter for which financial reports pursuant to subsection 7.1(a) and
a certificate pursuant to subsection 7.2(b) have been delivered: (a) the
interest expense of the Company and its Subsidiaries, plus (b) the additional
interest expense that would have accrued on the Indebtedness incurred to
acquire the timberlands described in clause (iii) of the definition of "Cash
Flow" had such Indebtedness been outstanding for the full four fiscal quarter
period, based upon the interest rate applicable on such date of determination
to such Indebtedness (unless a higher interest rate is scheduled to apply
during the next four fiscal quarters, in which case such higher interest rate
shall be employed for such portion of the prior four fiscal quarters as is
scheduled to apply during the next four fiscal quarters).
"Interest Payment Date" means, (a) with respect to any Offshore Rate Loan,
the last day of each Interest Period applicable to such Loan, (b) with
respect to any Base Rate Syndicated Loan, the last Business Day of each
calendar quarter and each date such Loan is converted into another Type of
Syndicated 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 thereof or, if
sooner, the Revolving Termination Date; provided, however, that if any
Interest Period for an Offshore Rate Loan exceeds three months, the date that
falls three months after the beginning of such Interest Period and after each
Interest Payment Date thereafter is also an Interest Payment Date.
"Interest Period" means, as to any Offshore Rate Loan, the period commencing
on the
<PAGE>
Borrowing Date of such Loan or on the Conversion/Continuation Date on
which the Loan is converted into or continued as an Offshore Rate Loan, and
ending on the date one, two, three or six months thereafter as selected by
the Company in the Notice of Borrowing or Notice of Conversion/Continuation;
provided that:
(i) if any Interest Period would otherwise end on a day that is not a
Business Day, that Interest Period shall be extended to the following
Business Day unless 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 preceding Business Day;
(ii) any Interest Period pertaining to an Offshore 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 Loan shall extend beyond the Revolving
Termination Date. "Interim Capital Transactions" means (a) borrowings,
refinancings or refundings of indebtedness 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, (b) sales
of equity interests by the Company, and (c) sales or other voluntary or
involuntary dispositions of any assets of the Company (other than (x) sales
or other dispositions of inventory, accounts receivable and other assets in
the ordinary course of business, including the exchange of timber or real
property for other timber or real property, to the extent that the timber or
real property received in exchange is of equal or greater value, or the sale
of timber or real property, to the extent the proceeds from which are
invested within 180 days in other timber or real property (including such
investments not consummated during such 180 days if a binding agreement for
such investment is completed within 90 days after the expiry of such 180 day
period), (y) sales or other dispositions of assets to the extent the proceeds
from which do not exceed cash expenditures by the Company for the purchase of
timber or real property during the preceding 90 days (excluding any purchase
to the extent financed by a Loan), and (z) sales or other dispositions of
assets as a part of normal retirements or replacements).
"Investment Policy" means the Investment Policy of the Company as attached
hereto as Schedule 1.1 (without giving effect to any later amendments thereto
unless such amendments are approved in writing by the Required Banks).
"IRS" means the Internal Revenue Service, and any Governmental Authority
succeeding to any of its principal functions.
"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 single-purpose corporation, partnership, joint
venture or other similar legal arrangement (whether created by contract or
conducted through a separate legal entity) now or hereafter formed by the
Company or any of its 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 Pro Rata Share.
"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 request.
"L/C Application" means an application form for issuances of standby letters
of credit as
<PAGE>
shall at any time be in use at the Issuing Bank, as the Issuing
Bank shall request.
"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 Syndicated Loans under subsection
3.3(c).
"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 the amount of $10,000,000, as the same shall be
reduced as a result of a reduction in the L/C Commitment pursuant to Section
2.7; provided that the L/C Commitment is a part of the Aggregate 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 any of the Issuing Bank's standard form documents for
letter of credit issuances.
"Lending Office" means, as to any Bank and the Swingline Bank, the office or
offices of such Bank and the Swingline Bank specified as its "Lending Office"
or "Domestic Lending Office" or
"Offshore Lending Office", as the case may be, on Schedule 11.2, or such
other office or offices as such Bank or the Swingline Bank may from time to
time notify the Company and the Agent.
"Letters of Credit" means any standby letters of credit Issued by the Issuing
Bank pursuant to Article III.
"Letter of Credit Rate" means (A) 2.5% from the Closing Date through the
earlier of (x) December 31, 1996, or (y) the receipt by the Company of Equity
Proceeds of at least $125,000,000 and repayment in full of the Bridge Term
Loan (as defined in the Facility A Credit Agreement); and (B) thereafter, (x)
if the Company has received Equity Proceeds of at least $125,000,000 by
December 31, 1996, 2.5% until the repayment in full of the Bridge Term Loan
(as defined in the Facility A Credit Agreement), after which the Letter of
Credit Rate shall be determined in accordance with the chart below based upon
the Total Debt to Cash Flow Ratio on a trailing four fiscal quarter basis as
set forth below; or (y) if the Company has not received Equity Proceeds of at
least $125,000,000 by December 31, 1996, 3.5% until delivery of financial
reports pursuant to subsections 6.1(a) or (b) and the certificate delivered
pursuant to subsection 6.2(b) with respect to a fiscal quarter as of which
the Total Debt to Cash Flow Ratio is equal to or less than 4.0 to 1.0, after
which the Letter of Credit Rate shall be determined in accordance with the
chart below based upon the Total Debt to Cash Flow Ratio on a trailing four
fiscal quarter basis as set forth below.
Total Debt to Cash Flow Ratio
at End of Fiscal Quarter
Letter of
Credit Rate
Less than or equal to 3.50 to 1.00
1.6250%
Greater than 3.50 to 1.00 but less
than or equal to 4.00 to 1.00
2.0000%
Greater than 4.00 to 1.00 but less
than or equal to 4.50 to 1.00
<PAGE>
2.2500%
Greater than 4.50 to 1.00
2.5000%
For all periods that the Letter of Credit Rate is based upon the foregoing
chart, the Letter of Credit Rate for each fiscal quarter shall be calculated
in reliance on the financial reports delivered pursuant to subsections 7.1(a)
and (b) and the certificate delivered with respect thereto pursuant to
subsection 7.2(b) with respect to the fiscal quarter ending immediately
before the fiscal quarter in question (e.g., June 30 financials determine the
Letter of Credit Rate for the fiscal quarter beginning July 1). As such
financial reports and certificate are not required to be delivered hereunder
until 60 days (or 90 days in the case of fiscal year-end financial reports)
after the end of the applicable fiscal quarter, the Letter of Credit Rate for
each fiscal quarter that the Letter of Credit Rate is based upon the
foregoing chart shall be assumed for interim calculation and collection
purposes, until delivery of such financial reports and certificate, to be the
same as for the immediately preceding fiscal quarter. If such financial
reports and certificate are delivered before the beginning of the next
succeeding fiscal quarter, then the Letter of Credit Rate will be adjusted
retroactively to the beginning of the fiscal quarter in question. If the
Company fails to deliver such financial reports and certificate to the Agent
for any fiscal quarter by the beginning of the next 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 be assumed for interim calculation purposes, until
delivery of such financial reports and certificate, to be the Letter of
Credit Rate applicable to the next higher Total Debt to Cash Flow Ratio; thus
if the Letter of Credit Rate had previously been 2.25%, a failure to deliver
quarterly financials by the first day of the next fiscal quarter would cause
the Letter of Credit Rate to be 2.50% until such delivery. Upon delivery of
such delinquent financial reports and certificate, the Letter of Credit Rate
will be adjusted retroactively to the beginning of the immediately preceding
fiscal quarter, with any payment adjustments being made pursuant to Section
2.16. Whether or not the Letter of Credit Rate is based upon the foregoing
chart, the Letter of Credit Rate shall be adjusted automatically as to all
Letters of Credit then outstanding as of the effective date of any change in
the Letter of Credit Rate.
"Lien" means any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising
under or evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under a capital lease, any financing
lease having substantially the same economic effect as any of the foregoing,
or the filing of any financing statement naming the owner of the asset to
which such lien relates as debtor, under the Uniform Commercial Code or any
comparable law) and any contingent or other agreement to provide any of the
foregoing, but not including the interest of a lessor under an operating
lease.
"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 in the form of a
Syndicated Loan, a Swingline Loan or L/C Advance.
"Loan Documents" means this Agreement, any Notes, the Collateral Documents,
the Fee Letters, the L/C-Related Documents, and all other documents delivered
to the Agent or any Bank in connection herewith or therewith; provided that,
Loan Documents shall not include the Facility A Credit Agreement and any
exhibits thereto that are not also exhibits to this Agreement.
"Maintenance Capital Expenditures" means cash capital expenditures made to
maintain, up to the level thereof that existed at the time of such
expenditure, the Operating Capacity of the capital assets of the Company and
its Subsidiaries, taken as a whole, as such assets existed at the time of
such
<PAGE>
expenditure and shall, therefore, not include cash capital expenditures
made in respect of Operating Capacity Acquisitions, and Capital Additions and
Improvements. Where cash capital expenditures are made in part to maintain
the Operating Capacity level referred to in the immediately preceding
sentence and in part for other purposes, the Managing General Partner's good
faith allocation thereof between the portion used to maintain such Operating
Capacity level and the portion used for other purposes shall be conclusive.
"Managing General Partner" means Crown Pacific Management Limited
Partnership, a Delaware limited partnership and (i) the sole general partner
of the Company and (ii) the sole managing general partner of the Master
Partnership, and any successor general partner of the Company or managing
general partner of the Master Partnership, as applicable.
"Margin Stock" means "margin stock" as such term is defined in Regulation G,
T, U or X of the FRB.
"Master Partnership" means Crown Pacific Partners, L.P., a Delaware limited
partnership.
"Master Partnership Agreement" means the Amended Restated Agreement of
Limited Partnership of the Master Partnership dated as of December 22, 1994,
between the Managing General Partner, the Special General Partner and the
limited partners party thereto.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) or prospects of the Company or the Company and its
Subsidiaries taken as a whole or the Master Partnership; (b) a material
impairment of the ability of the Company to perform under any Loan Document
and to avoid any Event of Default; or (c) a material adverse effect upon (i)
the legality, validity, binding effect or enforceability against the Company
of any Loan Document or (ii) the protection or priority of any Lien granted
under any of the Collateral Documents. .
"MGP General Partners" means, collectively, Fremont and HS Corp., the sole
general partners of the Managing General Partner, and any successor general
partner of the Managing General Partner.
"MGP Partnership Agreement" means the Amended and Restated Agreement of
Limited Partnership of the Managing General Partner dated as of December 1,
1994, between the MGP General Partners and the limited partners party thereto.
"Net Proceeds" means, as to any disposition of assets by a Person, proceeds
in cash, checks or other cash equivalent financial instruments as and when
received by such Person, net of: (a) the direct costs relating to such
disposition excluding amounts payable to such Person or any Affiliate of such
person, (b) sale, use or other transaction taxes paid or payable by such
Person as a direct result thereof, and (c) amounts required to be applied to
repay principal, interest and prepayment premiums and penalties on
Indebtedness secured by a Permitted Lien on the asset which is the subject of
such disposition.
"1995 Facility A Credit Agreement" means the Amended and Restated Credit
Agreement among the Company, the Existing Banks and BofA as agent for the
Existing Banks, dated as of May 22, 1995.
"1994 Senior Notes" means those certain senior promissory notes in the
aggregate principal amount of $275,000,000 issued and sold pursuant to the
1994 Senior Note Agreement.
"1995 Senior Notes" means those certain senior promissory notes in the
aggregate principal amount of $25,000,000 issued and sold pursuant to the
1995 Senior Note Agreement.
"1994 Senior Note Agreement" means the Note Agreement dated as of December 1,
1994, providing for the issuance and sale by the Company of the 1994 Senior
Notes to the purchasers listed in the schedule of purchasers attached thereto
as Schedule I.
"1995 Senior Note Agreement" means the Note Agreement dated as of March 15,
1995, providing for the issuance and sale by the Company of the 1995 Senior
Notes to the purchasers listed in the schedule of purchasers attached thereto
as Schedule I.
<PAGE>
"Note" means the promissory note executed by the Company in favor of a Bank
pursuant to subsection 2.2(b), in substantially the form of Exhibit F.
"Notice of Borrowing" means a notice in substantially the form of Exhibit A.
"Notice of Conversion/Continuation" means a notice in substantially the form
of Exhibit B.
"Obligations" means all advances, debts, liabilities, obligations, covenants
and duties arising under any Loan Document, owing by the Company to any Bank,
the Documentation Agent, the Agent, the Issuing Bank, the Swingline Bank, or
any Indemnified Person, whether direct or indirect (including those acquired
by assignment), absolute or contingent, due or to become due, now existing or
hereafter arising.
"Offshore Rate" means, for any Interest Period with respect to Offshore Rate
Loans comprising part of the same Borrowing, the rate of interest per annum
(rounded upward to the next 1/16th of 1%) determined by the Agent as follows:
Offshore Rate = LIBO Rate
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day for any Interest Period the
maximum reserve percentage (expressed as a decimal, rounded upward to the
next 1/100th of 1%) in effect on such day (whether or not applicable to any
Bank) under regulations issued from time to time by the FRB 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") having a term
comparable to such Interest Period; and "LIBO Rate" for any Interest Period,
with respect to an Offshore Rate Loan, means:
(i) the rate of interest per annum determined by the Agent to be the
arithmetic mean of the rates of interest per annum appearing on Telerate Page
3750 (or any successor publication) for Dollar deposits in the approximate
amount of the Offshore Rate Loan to be made, continued or converted by BofA,
and having a maturity comparable to such Interest Period, at approximately
11:00 a.m. (London time) two Business Days prior to the commencement of such
Interest Period, subject to clause (ii) below; or
(ii) if for any reason rates are not available as provided in the preceding
clause (i) of this definition, the "LIBO Rate" instead means the rate of
interest per annum determined by the Agent to be the arithmetic mean (rounded
upward to the nearest 1/16th of 1%) of the rates of interest per annum
notified to the Agent by BofA as the rate of interest at which Dollar
deposits in the approximate amount of the Offshore Rate Loan to be made,
continued or converted by BofA, and having a maturity comparable to such
Interest Period, would be offered to major banks in the London interbank
market at their request at approximately 11:00 a.m. (London time) two
Business Days prior to the commencement of such Interest Period.
The Offshore Rate shall be adjusted automatically as to all Offshore Rate
Loans then outstanding as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Offshore Rate Loan" means a Syndicated Loan that bears interest based on the
Offshore Rate.
"Operating Capacity" means the operating capacity and resources (including,
without limitation, the capacity to grow timber or process logs) of the
Company and its Subsidiaries, taken as a whole.
"Operating Capacity Acquisition" means any transaction in which the Company
or any Subsidiary acquires (through an asset acquisition, merger, stock
acquisition or other form of investment) control over all or a portion of the
assets, properties or business of another Person for the purpose of
<PAGE>
increasing the Operating Capacity of the Company and its Subsidiaries, taken
as a whole, from the Operating Capacity of the Company and its Subsidiaries,
taken as a whole, existing immediately prior to such transaction.
"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;
and, (ii) for any limited partnership, the certificate of limited
partnership, the limited partnership agreement, all applicable partnership
resolutions, and all other agreements among the general or limited partners
(or any of them) of such partnership relating thereto (but not including
agreements solely between the limited partners of the Master Partnership).
"Original Credit Agreement" means the Credit Agreement dated as of December
13, 1994 among the Company, the financial institutions party thereto, and
BofA, as agent, as amended by the Amendment to Credit Agreement dated as of
February 21, 1995.
"Other Taxes" means 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.
"Participant" has the meaning specified in subsection 11.8(d).
"Partner Entities" means the Managing General Partner, the MGP General
Partners and the Master Partnership.
"PBGC" means the Pension Benefit Guaranty Corporation, or any Governmental
Authority succeeding to any of its principal functions under ERISA.
"Pension Plan" means a pension plan (as defined in Section 3(2) of ERISA)
subject to Title IV of ERISA which the Company or 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 five (5) plan years.
"Permitted Business" means any business engaged in by the Company on the
Closing Date, and any business substantially similar or related to any such
business, which shall not include pulp or paper manufacturing.
"Permitted Inclusions" means the aggregate Net Proceeds from the sale or
other disposition of assets permitted under subsection 7.2(f)(ii)(A) or (B)
to the extent that such Net Proceeds (a) in any four fiscal quarters do not
exceed (i) 2.5% of the wholesale value of the inventory of standing timber
owned by the Company and its Subsidiaries as determined for purposes of
calculating the Asset Coverage Ratio under Section 8.4 at the end of the most
recent calendar year for which a Compliance Certificate has been delivered
calculating such Asset Coverage Ratio or (ii) $25,000,000 before the delivery
of the first such Compliance Certificate, and (b) are not otherwise included
in determining EBITDA.
<PAGE>
"Permitted Liens" has the meaning specified in Section 8.1.
"Permitted Swap Obligations" means all obligations (contingent or otherwise)
of the Company or any Subsidiary existing or arising under Swap Contracts,
provided that each of the following criteria is satisfied: (a) such
obligations are (or were) entered into by such Person in the ordinary course
of business for the purpose of directly mitigating risks associated with
liabilities, commitments or assets held by such Person, or changes in the
value of securities issues by such Person in conjunction with a securities
repurchase program not otherwise prohibited hereunder, and not for purposes
of speculation or taking a "market view;" (b) such Swap Contracts do not
contain any provision ("walk-away" provision) exonerating the non-defaulting
party from its obligation to make payments on outstanding transactions to the
defaulting party.
"Person" means an individual, partnership, corporation, business trust, joint
stock
<PAGE>
company, trust, unincorporated association, joint venture 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 makes, is making, or is obligated to make contributions and
includes any Pension Plan.
"Planned Volume" has the meaning specified in Section 8.4.
"Pro Forma Consolidated Cash Flow" means, at any date of determination, the
sum of the following calculated on a pro forma basis for the Company and its
Subsidiaries on a consolidated basis for the four fiscal quarter period
ending on the last day of the most recent quarter for which financial reports
pursuant to subsections 7.1(a) and (b) and a certificate pursuant to
subsection 7.2(b) having been delivered:
(i) Cash Provided by Operating Activity;
(ii) plus all cash debt service payments of the Company and it Subsidiaries
during such period to the extent subtracted in determining Cash Provided by
Operating Activity;
(iii) plus all cash capital expenditures of the Company and its Subsidiaries
during such period, except those relating to Operating Capacity Acquisitions,
Capital Additions and Improvements and Interim Capital Transactions, to the
extent subtracted in determining Cash Provided by Operating Activity;
(iv) minus any additions and plus any reductions during such period to any
cash reserves of the Company and its Subsidiaries established to provide
funds for the future cash payment of items of the type referred to in clauses
(ii) and (iii) above, to the extent added or subtracted in determining Cash
Provided by Operating Activity;
(v) plus any additions and minus any reductions during such period to the
SAU Reserve (as defined in the Master Partnership Agreement) and any other
cash reserves of the Company and its Subsidiaries established to provide
funds for distributions with respect to Units (as defined in the Master
Partnership Agreement), any general partner interests in the Master
Partnership and any Partnership Interests, to the extent subtracted or added
in determining Cash Provided by Operating Activity; and
(vi) plus and minus, as applicable, in connection with any timberlands to be
acquired by the Company with the proceeds of a Facility A Loan or previously
acquired within such four fiscal quarters, an amount equal to a good faith
estimate of such additional amounts that would be included in clauses (i),
(ii), (iii) and (iv) above had such timberlands been owned by the Company for
such four fiscal quarters, as certified (in a certificate containing such
detail as the Required Banks may reasonably request) by the Chief Financial
Officer of the Company based upon such Chief Financial Officer's good faith
estimates of applicable revenues and expenses arising from such timberlands
and assuming aggregate timber harvests in an amount that does not require
proceeds to be placed in an escrow or cash collateral account pursuant to
Section 8.4.
"Pro Forma Interest Expense" means, at any date of determination, the sum of
the following calculated for the Company and its Subsidiaries on a
consolidated basis for the four fiscal quarter period ending on the last day
of the most recent quarter for which financial reports pursuant to
subsections 7.1(a) and (b) and a certificate pursuant to subsection 7.2(b)
have been delivered:
(a) interest expense payable during such four fiscal quarter period on all
Indebtedness of the Company and its Subsidiaries; plus
(b) interest expense that would have been payable during such four fiscal
quarter period in respect of (i) any Indebtedness proposed to be incurred on
such date of determination, including any Loan requested hereunder or other
Senior Debt, and (ii) Indebtedness incurred after the end of such four fiscal
quarter period and before such date of determination, in each case based upon
the interest rate applicable on such date of determination to such
Indebtedness and giving effect as of the beginning of such four fiscal
quarter period (y) to the incurrence of all such Indebtedness described in
clauses (i) and (ii), and (z) to the application of any such Indebtedness to
the substantially concurrent
<PAGE>
repayment of any other Indebtedness outstanding
during such four fiscal quarter period.
"Pro Forma Maximum Debt Service" means, as of any date of determination, the
sum of (a) the highest amount that will be payable by the Company and its
Subsidiaries on a consolidated basis, during any consecutive four fiscal
quarters, commencing with the fiscal quarter during which such determination
occurs and ending on December 31, 2009, in respect of scheduled principal and
interest (including payments under capital leases) with respect to all
Indebtedness of the Company and its Subsidiaries outstanding on the date of
determination other than Loans hereunder, after giving effect to any such
Indebtedness proposed to be incurred on such date and to the substantially
concurrent repayment of any other Indebtedness, (i) assuming, in the case of
such Indebtedness having a variable interest rate, that the rate in effect on
the date of determination will remain in effect throughout such period, (ii)
treating the principal amount of such Indebtedness outstanding as of such
date under a revolving credit or similar agreement (other than Loans) as
maturing and becoming due and payable on the scheduled maturity date or dates
thereof (including the maturity of any payment required by any commitment
reduction or similar amortization provision), without regard to any provision
permitting such maturity date to be extended, and (iii) treating the
principal amount of any Indebtedness that is payable upon demand as maturing
and becoming due and payable at the end of any such four fiscal quarters for
which such determination may be made and treating the principal amount of any
Indebtedness that is otherwise callable during any four fiscal quarters as
maturing and becoming due and payable on the last date for such call during
those four fiscal quarters; plus (b) interest expense accrued on Facility A
Loans during the most recent four fiscal quarters with respect to which
financial reports pursuant to subsections 7.1(a) and (b) and the certificates
pursuant to subsection 7.2(b) have been delivered.
"Property" has the meaning specified in Section 7.11.
"Pro Rata Share" means, as to any Bank (a) at any time prior to the Revolving
Termination Date, or after the Revolving Termination Date if no Syndicated
Loans are then outstanding, the percentage equivalent (expressed as a
decimal, rounded to the ninth decimal place) at such time of such Bank's
Commitment divided by the Aggregate Commitment, and (b) otherwise, the
percentage equivalent (expressed as a decimal, rounded to the ninth decimal
place) at such time of the then aggregate unpaid principal amount of such
Bank's Loans divided by the then aggregate unpaid principal amount of all
Loans.
"Purchase Agreement" has the meaning specified in subsection 5.1(g).
"Reportable Event" means any of the events set forth in Section 4043(b) 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.
"Required Banks" means (a) if no Syndicated Loans are outstanding, one or
more Banks then having at least 66-2/3% of the Aggregate Commitment, and (b)
otherwise, one or more Banks then holding at least 66-2/3% of the then
aggregate unpaid principal amount of the Loans.
"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, as to the Company, the chief executive officer,
the president, the chief financial officer or the Person serving as the
secretary and general counsel of the Company, or any other officer having
substantially the same authority and responsibility; or, with respect to
compliance with financial covenants, the chief financial officer or the
treasurer of the Company, or any other officer having substantially the same
authority and responsibility. With respect to a partnership, a Responsible
Officer of a general partner shall constitute a Responsible Officer of such
Partnership.
"Restricted Payment" has the meaning specified in Section 8.11.
"Revolving Termination Date" means the earlier to occur of:
(a) June 30, 2002; and
(b) the date on which the Aggregate Commitment terminates in accordance
with the
<PAGE>
provisions of this Agreement.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Security Agreement" means the Amended and Restated Security Agreement dated
as of the date hereof between the Company and the Agent.
"Senior 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, this Agreement
(including L/C Obligations) and the Facility A Credit Agreement, but not
including any subordinated Indebtedness.
"Senior Notes" means the 1994 Senior Notes and the 1995 Senior Notes.
"Senior Note Agreements" means the 1994 Senior Note Agreement and the 1995
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 (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 California
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 of 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.
"Special General Partner" means Crown Pacific, Ltd., an Oregon corporation
and a special general partner of the Master Partnership, and any successor
special general partner.
"Subsidiary" of a Person means any corporation, association, partnership,
joint venture or other business entity of which such Person or any Subsidiary
of such Person either (i) in respect of a corporation, more than 50% of the
voting stock is owned or controlled directly or indirectly by the Person, or
one or more of the Subsidiaries of the Person, or a combination thereof or
(ii) in respect of an association, partnership, joint venture or other
business entity, is the general partner or is entitled to share in more than
50% of the profit, however determined.
"Surety Instruments" means all letters of credit (including standby and
commercial), banker's acceptances, bank guaranties, shipside bonds, surety
bonds and similar instruments.
"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.
"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
<PAGE>
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 reasonably
determined by the Required 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.
"Swingline Borrowing" means a Borrowing hereunder consisting of one or more
Swingline Loans made to the Company on the same day by the Swingline Bank.
"Swingline Clean-Up Day" has the meaning specified in subsection 2.7(a)(iv).
"Swingline Commitment" has the meaning specified in Section 2.10.
"Swingline Loan" has the meaning specified in Section 2.10.
"Syndicated Loan" has the meaning specified in Section 2.1, and may be a Base
Rate Syndicated Loan or an Offshore Rate Loan (each a "Type" of Syndicated
Loan).
"Taxes" means 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 Agent, such taxes
(including income taxes or franchise taxes) as are imposed on or measured by
each Bank's net income by the jurisdiction (or any political subdivision
thereof) under the laws of which such Bank or the Agent, as the case may be,
is organized or maintains a lending office.
"Total Debt" means, as of any date of determination, the sum of the
interest-bearing Indebtedness of the Company and its Subsidiaries on a
consolidated basis, including all obligations with respect to capitalized
leases and all L/C Obligations and the entire undrawn face amount of letters
of credit other than Letters of Credit with respect to which the Company or
any of its Subsidiaries are liable for reimbursement obligations, except that
Total Debt shall not include obligations that are entirely Contingent
Obligations (other than L/C Obligations and such obligations with respect to
letters of credit other than L/C Obligations).
"Total Debt to Cash Flow Ratio" means, for any fiscal quarter, the ratio of
(i) Total Debt outstanding at the end of such quarter to (ii) Cash Flow for
the four fiscal quarter period ending on the last day of such quarter.
"Type" has the meaning specified in the definition of "Syndicated Loan."
"UCC" means the Uniform Commercial Code as in effect in the State of
California, except to the extent that the validity or perfection of the
security interests hereunder or under any Collateral Documents, or remedies
hereunder or under any Collateral Documents in respect of any particular
Collateral are governed by the laws of a jurisdiction other than the State of
California, in which case "UCC" shall mean the Uniform Commercial Code as in
effect in such state.
"UCP" has the meaning specified in Section 3.9.
"Unfunded Pension Liability" means the excess of a Pension Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of
that Pension Plan's assets, determined in accordance with the assumptions
used for funding the Pension 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.
1.2. Other Interpretive Provisions.
(a) The meanings of defined terms are equally applicable to the singular
and plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar words 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) (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."
<PAGE>
(iii) 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."
(iv) The term "property" includes any kind of property or asset, real,
personal or mixed, tangible or intangible.
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) 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, (ii) references to defined
terms and cross-references to particular sections of the Company Partnership
Agreement or the Master Partnership Agreement shall be deemed references to
such terms and such sections in their current form without giving effect to
any future amendments or modifications thereto unless such amendments or
modifications shall have been approved in writing by the Required Banks, and
(iii) 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.
(e) The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.
(f) This Agreement and the other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters.
All such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the
Company and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Banks, the Documentation
Agent, the Issuing Bank, the Swingline Bank or the Agent merely because of
the Agent's, the Issuing Bank's, the Swingline Bank's, the Documentation
Agent's or the Banks' involvement in their preparation.
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.
(b) References herein to "fiscal year" and "fiscal quarter" refer to such
fiscal periods of the Company.
ARTICLE II. THE CREDITS
2.1. Amounts and Terms of Commitments.
(a) Each Bank severally agrees, on the terms and conditions set forth
herein, to make loans to the Company (each such loan, a "Syndicated Loan")
from time to time on any Business Day during the period from the Closing Date
to the Revolving Termination Date, in an aggregate amount not to exceed at
any time outstanding the amount set forth on Schedule 2.1 under the heading
"Commitment" (such amount, as the same may be reduced under Sections 2.5 or
2.7 or as a result of one or more assignments under Section 11.8, the Bank's
"Commitment"); provided, however, that, after giving effect to any Borrowing
of Syndicated Loans, the Effective Amount of all outstanding Syndicated Loans
and Swingline Loans and the Effective Amount of all L/C Obligations shall not
at any time exceed the Aggregate Commitment; and provided further, that the
Effective Amount of the Syndicated Loans of any Bank plus such Bank's
participation in the Effective Amount of all Swingline Loans, if any, and all
L/C Obligations shall not at any time exceed such Bank's Commitment. Within
the limits of each Bank's Commitment, and subject to the other terms and
conditions hereof, the Company may borrow under this Section 2.1, prepay
under Section 2.6 and reborrow under this Section 2.1.
<PAGE>
(b) Application of Loans. The Agent is authorized and directed to apply
the proceeds of the Loans on the Closing Date directly to the repayment of
amounts outstanding under the Original Facility B Credit Agreement to the
full extent necessary to effect such repayment.
2.2. Loan Accounts.
(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 accounts or records maintained by such Bank, Swingline Bank or Issuing
Bank, as the case may be, in the ordinary course of business. The accounts
or records maintained by the Agent, the Swingline Bank, the Issuing Bank and
each 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) Upon the request of any Bank or the Swingline Bank made through the
Agent, the Loans made by such Bank or the Swingline Bank may be evidenced by
one or more Notes, instead of loan accounts. Each such Bank shall endorse on
the schedules annexed to its Note(s) the date, amount and maturity of each
Loan made by it and the amount of each payment of principal made by the
Company with respect thereto. Each such Bank is irrevocably authorized by
the Company to endorse its Note(s) and each Bank's record shall be conclusive
absent manifest error; provided, however, that the failure of a Bank to make,
or an error in making, a notation thereon with respect to any Loan shall not
limit or otherwise affect the obligations of the Company hereunder or under
any such Note to such Bank.
2.3. Procedure for Borrowing.
(a) Each Borrowing of Syndicated Loans shall be made upon the Company's
irrevocable written notice (which notice may be delivered telephonically and
confirmed in writing on the same day) delivered to the Agent in the form of a
Notice of Borrowing which notice must be received by the Agent (i) prior to
10:00 a.m. (San Francisco time) at least three Business Days prior to the
requested Borrowing Date, in the case of Offshore Rate Loans; and (ii) prior
to 8:00 a.m. (San Francisco time) on the requested Borrowing Date, in the
case of Base Rate Syndicated Loans, specifying:
(A) the amount of the Borrowing, which shall be in an aggregate minimum
amount of $3,000,000 or any integral multiple of $500,000 in excess thereof;
(B) the requested Borrowing Date, which shall be a Business Day;
(C) the Type of Syndicated Loans comprising the Borrowing; and
(D) the duration of the Interest Period applicable to such Syndicated Loans
included in such notice. If the Notice of Borrowing fails to specify the
duration of the Interest Period for any Borrowing comprised of Offshore Rate
Loans, such Interest Period shall be three months; provided, however, that
with respect to any Borrowing to be made on the Closing Date, the Notice of
Borrowing shall be delivered to the Agent not later than (i) 10:00 a.m. (San
Francisco time) three Business Days before the Closing Date, in the case of
Offshore Rate Loans, and (ii) 8:00 a.m. (San Francisco time) on the Closing
Date, in the case of Base Rate Syndicated Loans; further provided that the
Borrowing to be made on the Closing Date may consist of Offshore Rate Loans
only if this Agreement has been fully executed before the giving of such
notice or the Notice of Borrowing is accompanied by an indemnity letter
signed by the Company and acceptable to the Agent and the Banks.
(b) The Agent will promptly notify each Bank of its receipt of any Notice
of Borrowing and of the amount of such Bank's Pro Rata Share of that
Borrowing.
(c) Each Bank will make the amount of its Pro Rata Share of each Borrowing
available to the Agent for the account of the Company at the Agent's Payment
Office by 11:00 a.m.
<PAGE>
(San Francisco time) on the Borrowing Date requested by
the Company in funds immediately available to the Agent. The proceeds of all
such Syndicated Loans will then be made available to the Company by the Agent
at such office by crediting the account of the Company on the books of BofA
with the aggregate of the amounts made available to the Agent by the Banks
and in like funds as received by the 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 Required Banks shall otherwise agree, during the existence
of a Default or Event of Default, the Company may not elect to have a
Syndicated Loan be made as, or converted into or continued as, an Offshore
Rate Loan.
(e) After giving effect to any Borrowing, there may not be more than five
different Interest Periods in effect with respect to all Syndicated Loans
together then outstanding.
2.4. Conversion and Continuation Elections.
(a) The Company may, upon irrevocable written notice to the Agent in
accordance with subsection 2.4(b):
(i) elect as of any Business Day, in the case of Base Rate Syndicated
Loans, or as of the last day of the applicable Interest Period, in the case
of Offshore Rate Loans, to convert any such Syndicated Loans (or any part
thereof in an aggregate minimum amount of $3,000,000, or any integral
multiple of $500,000 in excess thereof) into Syndicated Loans of any other
Type; or
(ii) elect as of the last day of the applicable Interest Period, to continue
any Syndicated Loans having Interest Periods expiring on such day (or any
part thereof in an aggregate minimum amount of $3,000,000, or any integral
multiple of $500,000 in excess thereof); provided, that if at any time the
aggregate amount of Offshore Rate Loans in respect of any Borrowing is
reduced, by payment, prepayment, or conversion of part thereof to be less
than $500,000, such Offshore Rate Loans shall automatically convert into Base
Rate Syndicated Loans, and on and after such date the right of the Company to
continue such Loans as, and convert such Loans into, Offshore Rate Loans
shall terminate.
(b) The Company shall deliver a Notice of Conversion/Continuation (which
notice may be delivered telephonically and confirmed in writing on the same
day) to be received by the Agent
(i) not later than 10:00 a.m. (San Francisco time) at least three Business
Days in advance of the Conversion/ Continuation Date, if the Syndicated Loans
are to be converted into or continued as Offshore Rate Loans; and (ii) not
later than 10:00 a.m. (San Francisco time) at least one Business Day in
advance of the Conversion/ Continuation Date, if the Loans are to be
converted into Base Rate Syndicated Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Syndicated Loans to be converted or renewed;
(C) the Type of Syndicated Loans resulting from the proposed conversion or
continuation; and
(D) other than in the case of conversions into Base Rate Syndicated Loans,
the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to Offshore
Rate Loans, the Company has failed to select timely a new Interest Period to
be applicable to such Offshore Rate Loans, or if any Default or Event of
Default then exists or if the Company has not delivered to the Agent a notice
of prepayment with respect thereto, the Company shall be deemed to have
elected to convert such Offshore Rate Loans into Base Rate Syndicated Loans
effective as of the expiration date of such Interest Period.
<PAGE>
(d) The Agent will promptly notify each Bank of its receipt of a Notice of
Conversion/Continuation, or, if no timely notice is provided by the Company,
the Agent will promptly notify each Bank of the details of any automatic
conversion. All conversions and continuations shall be made ratably
according to the respective outstanding principal amounts of the Syndicated
Loans with respect to which the notice was given held by each Bank.
(e) Unless the Required Banks otherwise agree, during the existence of a
Default or Event of Default, the Company may not elect to have a Syndicated
Loan converted into or continued as an Offshore Rate Loan.
(f) After giving effect to any conversion or continuation of Syndicated
Loans, there may not be more than five different Interest Periods in effect
in respect of all Syndicated Loans together then outstanding.
2.5. Voluntary Termination or Reduction of Commitments. The Company may,
upon not less than five Business Days' prior notice to the Agent, terminate
the Commitments, or permanently reduce the Commitments by an aggregate
minimum amount of $5,000,000 or any integral multiple of $5,000,000 in excess
thereof, unless, after giving effect thereto and to any prepayments of Loans
made on the effective date thereof, (a) the Effective Amount of all
Syndicated Loans, Swingline Loans and L/C Obligations together would exceed
the amount of the Aggregate Commitment then in effect, or (b) the Effective
Amount of all L/C Obligations then outstanding would exceed the L/C
Commitment. Once reduced in accordance with this Section, the Commitments
may not be increased. Any reduction of the Aggregate Commitment shall be
applied to each Bank according to its Pro Rata Share. All accrued commitment
fees and letter of credit fees to, but not including, the effective date of
any reduction or termination of the Aggregate 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, upon irrevocable notice (which notice may be
delivered telephonically and confirmed in writing on the same day) delivered
to the Agent not later than 10:00 a.m. (San Francisco time) at least three
Business Days prior to such prepayment in the case of Offshore Rate Loans and
not later than 8:00 a.m. (San Francisco) time on the date of such prepayment
in the case of Base Rate Syndicated Loans and Swingline Loans,
(i) ratably prepay Syndicated Loans in whole or in part, in minimum amounts
of $3,000,000 or any integral multiple of $500,000 in excess thereof, and
(ii) prepay in whole or in part Swingline Loans, in minimum principal amounts
of $250,000 or any integral multiple of $100,000 in excess thereof. Such
notice of prepayment shall specify (i) the date and amount of such
prepayment, and (ii) whether such prepayment is of Offshore Rate Loans, Base
Rate Syndicated Loans or Swingline Loans, or any combination thereof. The
Agent will promptly notify each Bank of its receipt of any such notice, and
of such Bank's Pro Rata Share 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) If the Company or any of its Subsidiaries shall at any time or from
time to time make or agree to make a sale of properties permitted by
subsection 8.2(f), or harvest excess timber permitted by Section 8.4, then
(A) the Net Proceeds of such sale shall either be paid by the Company as a
prepayment of such Senior Debt as the Company may elect to so prepay or
reinvested as required by subsection 8.2(f), and (B) the net proceeds of such
excess harvest shall either be paid by the Company as a prepayment of such
Senior Debt as the Company may elect to so prepay or reinvested as required
by Section 8.4; provided that, in each case, the Company may not prepay
Senior Debt other than the Loans and the Facility A Loans pursuant to this
subsection 2.7(a)(i) unless the Company shall also prepay the Loans and
<PAGE>
the Facility A Loans in an aggregate amount as shall be necessary to cause the
Banks together with the "Banks" as defined in the Facility A Credit Agreement
to share such prepayment with the other Senior Debt at least pro rata.
Prepayments to be made with respect to the Loans and the Facility A Loans
pursuant to this subsection 2.7(a)(i) shall be applied first to any Facility
A Loans then outstanding in accordance with Section 2.6(a) of the Facility A
Credit Agreement, second, to any Base Rate Syndicated Loans, third, to prepay
Swingline Loans, and fourth, at the Company's option, to Cash Collateralize
(which cash collateral shall be applied on the maturity date of their
Interest Periods to prepay then outstanding Offshore Rate Loans in the order
of their maturities) or to prepay any Offshore Rate Loans then outstanding
(in the order of the maturity of their Interest Periods).
(ii) 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 maximum amount then
available to be drawn under the Letters of Credit over the aggregate L/C
Commitment.
(iii) Subject to payment of any amounts owing under Section 4.4, if the
Effective Amount of all Syndicated Loans and Swingline Loans then outstanding
plus the Effective Amount of all L/C Obligations (excluding the Effective
Amount of L/C Obligations to the extent Cash Collateralized pursuant to the
preceding clause (ii)) exceeds the Aggregate Commitment, the Company shall
immediately, and without notice or demand, prepay the outstanding principal
amount of the Syndicated Loans, Swingline Loans and L/C Advances by an amount
equal to the applicable excess. Any such prepayment shall be applied first
to any Base Rate Syndicated Loans then outstanding, second, to prepay
Swingline Loans, and third, at the Company's option, to Cash Collateralize
(which cash collateral shall be applied on the maturity date of their
Interest Periods to prepay then outstanding Offshore Rate Loans in the order
of their maturity) or to prepay Offshore Rate Loans (in the order of the
maturity of their Interest Periods).
(iv) 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 aggregate outstanding principal amount of Swingline Loans would
exceed the Swingline Commitment as reduced, the Company shall prepay without
notice or demand on the reduction date of the Swingline Commitment the
outstanding principal amount of the Swingline Loans in an amount equal to the
excess of the Swingline Loans over the Swingline Commitment, 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 without notice or demand 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).
(v) The Company shall prepay in full the outstanding Syndicated Loans and
Swingline Loans, and shall not borrow Syndicated Loans or Swingline Loans, so
as to cause there always to have been a period of 30 consecutive days during
the 12 calendar months immediately preceding the date of such determination
(including periods before the Closing Date) during which the Effective Amount
of Syndicated Loans and Swingline Loans was $0.
(b) Mandatory Commitment Reductions.
(i) The Aggregate Commitment shall be permanently reduced from time to time
by the amount of any mandatory prepayment of Loans required by subsection
2.7(a)(i); provided that to the extent such sale of assets or harvest of
excess timber shall not result in any prepayment pursuant to subsection
2.7(a)(i) because the Senior Debt has been repaid in full, the Aggregate
Commitment shall be permanently reduced in an amount equal to the amount that
would otherwise be applied to a prepayment of the Facility A Loans by
operation of subsection 2.7(a)(i) of the Facility A Credit Agreement and the
Loans by operation of
<PAGE>
subsection 2.7(a)(i) hereof, as the case may be. Such
permanent reduction shall take effect upon the date such mandatory prepayment
is required by subsection 2.7(a)(i) or, in the case of funds actually
deposited as cash collateral under that subsection, upon the application of
such cash collateral to the Loans. Upon any such permanent reduction in the
Aggregate Commitment, the Commitment of each Bank shall automatically be
reduced by an amount equal to such Bank's ratable share of the reduction,
effective as of the earlier of the date that any corresponding prepayment is
made or the date by which such prepayment is due and payable hereunder. All
accrued commitment fees to, but not including the effective date of any
reduction or termination of the Commitments, shall be paid on the effective
date of such reduction or termination.
(ii) No reduction in the Aggregate Commitment pursuant to Section 2.5 or
subsection 2.7(b)(i) shall reduce the L/C Commitment unless and until the
Aggregate Commitment has been reduced to $10,000,000; thereafter, any
reduction in the Aggregate Commitment pursuant to Section 2.5 shall equally
reduce the L/C Commitment.
(iii) At no time shall the Swingline Commitment exceed the Aggregate
Commitment, and any reduction of the Aggregate Commitment which reduces the
Aggregate Commitment below the then current amount of the Swingline
Commitment shall result in an automatic corresponding reduction of the
Swingline Commitment to the amount of the Aggregate Commitment, as so
reduced, without any action on the part of the Swingline Bank.
(c) General. 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 3.4.
2.8. Repayment.
(a) Syndicated Loans. The Company shall repay to the Banks in full on the
Revolving Termination Date the aggregate principal amount of the Syndicated
Loans outstanding on such date.
(b) Swingline. The Company shall repay to the Swingline Bank in full on
the Revolving Termination Date the aggregate principal amount of the
Swingline Loans outstanding on the Revolving Termination Date.
2.9. Interest.
(a) Subject to subsection 2.9(c), (i) each Syndicated Loan shall bear
interest on the outstanding principal amount thereof from the applicable
Borrowing Date at a rate per annum equal to the Offshore Rate or the Base
Rate, as the case may be (and subject to the Company's right to convert to
other Types of Loans under Section 2.4), 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 of per annum equal to the
Base Rate plus the Applicable Margin.
(b) The Company shall pay interest on each Loan in arrears on each Interest
Payment Date. Interest shall also be paid on the date of any prepayment of
Loans under Section 2.6 or
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 Agent at the request or with
the consent of the Required Banks.
(c) Notwithstanding subsection (a) of this Section, 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 outstanding Obligations, at a rate per annum
which is determined by adding 2% per annum to the Applicable Margin then in
effect for such Loans and, in the case of Obligations not subject to an
Applicable Margin, at a rate per annum equal to the Base Rate plus 2%;
provided, however, that, on and after the expiration of any Interest Period
applicable to any Offshore Rate Loan outstanding on the date of occurrence of
such Event of Default or acceleration, the principal amount of such Loan
shall, during the continuance of such Event of Default or after acceleration,
bear interest at a rate per annum equal to the Base Rate, plus the Applicable
Margin for Base Rate Syndicated Loans, plus 2%.
<PAGE>
(d) Anything herein to the contrary notwithstanding, the obligations of the
Company to any Bank 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 such Bank would be contrary to
the provisions of any law applicable to such Bank limiting the highest rate
of interest that 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 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 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 $10,000,000,
notwithstanding the fact that such Swingline Loans, when aggregated with the
Swingline Bank's outstanding Syndicated Loans and its Pro Rata Share of the
L/C Obligations, may exceed the Swingline Bank's 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 sum of the Effective Amount of all Swingline Loans plus the Effective
Amount of all Syndicated Loans plus the Effective Amount of all L/C
Obligations exceed the Aggregate 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 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 Agent prior to 12:00 noon (San Francisco time) on the
requested Borrowing date) specifying (i) the amount to be borrowed, and (ii)
the requested Borrowing date, which must be a Business Day. Upon receipt of
the Notice of Borrowing, the Swingline Bank will immediately confirm with the
Agent (by telephone or in writing) that the Agent has received a copy of the
Notice of Borrowing from the Company and, if not, the Swingline Bank will
provide the Agent with a copy thereof. Unless the Swingline Bank has
received notice prior to 2:00 p.m. (San Francisco time) on such Borrowing
date from the 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 applicable 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 of Borrowing, make the amount of its Swingline
Loan available to the Agent for the account of the Company at the Agent's
Payment Office in funds immediately available to the Agent. The proceeds of
such Swingline Loan will then be made available to the Company by the Agent
crediting the account of the Company on the books of BofA with the aggregate
of the amounts made available to the Agent by the Swingline Bank and in like
funds as received by the Agent. Each Borrowing pursuant to this Section
shall be in an aggregate principal amount equal to $250,000 or an integral
multiple of $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 Agent shall have received
neither (A) a Notice of Borrowing delivered pursuant to Section 2.3
requesting that Syndicated Loans be made pursuant to Section 2.1 on the
Swingline Clean
<PAGE>
- - -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 Agent
that the Swingline Bank desires that such Swingline Loans be converted into
Syndicated Loans, then the Agent shall be deemed to have received a Notice of
Borrowing from the Company pursuant to Section 2.3 requesting that Base Rate
Syndicated Loans be made pursuant to Section 2.1 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 Syndicated Loans; provided, that such Base
Rate Syndicated 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 Syndicated Loans becomes legally impracticable and if so
required by the Swingline Bank at the time such Syndicated Loans are required
to be made by the Banks in accordance with this subsection 2.10(c), each Bank
agrees that in lieu of making Syndicated Loans as described in this
subsection 2.10(c), such Bank shall purchase a participation from the
Swingline Bank in the applicable Swingline Loans in an amount equal to such
Bank's Pro Rata Share of such Swingline Loans, and the procedures set forth
in subsections 2.3(b) and 2.3(c) shall be followed in connection with the
purchases of such participations. Upon such purchases of participations, the
prepayment requirements of subsection 2.7(a)(iv) shall be deemed waived with
respect to such Swingline Loans. The proceeds of such Base Rate Syndicated
Loans, or participations purchased, shall be applied to repay such Swingline
Loans. A copy of each notice given by the Agent to the Banks pursuant to
this subsection 2.10(c) with respect to the making of Syndicated Loans, or
the purchases of participations, shall be promptly delivered by the Agent to
the Company. Each Bank's obligation in accordance with this Agreement to
make the Syndicated 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 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) Agency Fees. The Company shall pay the Agent administrative agency
fees in the amounts and at the times set forth in the Fee Letters.
(b) Syndication, Underwriting Fees. The Company shall pay the Agent, the
Arranger and the Documentation Agent syndication fees, commitment fees and
underwriting fees in the amounts and at the times set forth in the Fee
Letters.
(c) Commitment Fees. The Company shall pay to the Agent for the account of
each Bank a commitment fee on the average daily unused portion of such Bank's
Commitment, computed on a quarterly basis in arrears on the last Business Day
of each calendar quarter based upon the daily utilization for that quarter as
calculated by the Agent, equal to the Commitment Fee Percentage. For
purposes of calculating utilization under this subsection, (i) the Aggregate
Commitment shall be deemed used to the extent of the Effective Amount of
Syndicated Loans then outstanding plus the Effective Amount of L/C
Obligations then outstanding, and (ii) with respect to the Commitment of the
Swingline Bank, the making of any Swingline Loan shall not be considered a
use of a portion of such Swingline Bank's Commitment. Such commitment fee
shall accrue from the Closing Date to the Revolving Termination Date and
shall be due and payable quarterly in arrears on the last Business Day of
each calendar quarter commencing on the first such day after this Agreement
is executed by the Company through the Revolving Termination Date, with the
final payment to be made on the Revolving
<PAGE>
Termination Date; provided that, in
connection with any reduction or termination of Commitments under Section 2.5
or Section 2.7, the accrued commitment fee calculated for the period ending
on such date shall also be paid on the date of such reduction or termination,
with the following quarterly payment being calculated on the basis of the
period from such reduction or termination date to such quarterly payment
date. The commitment fees provided in this subsection shall accrue at all
times after the above-mentioned commencement date, including at any time
during which one or more conditions in Article IV are not met.
2.12. Computation of Fees and Interest.
(a) All computations of interest for Base Rate Syndicated Loans and
Swingline Loans when 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 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.
(b) Each determination of an interest rate, commitment fee or letter of
credit fee by the Agent shall be conclusive and binding on the Company and
the Banks in the absence of manifest error. The Agent will, at the request
of the Company or any Bank, deliver to the Company or such Bank, as the case
may be, a statement showing the quotations used by the Agent in determining
any interest rate and the resulting interest rate.
2.13. Payments by the Company.
(a) All payments to be made by the Company shall be made without set-off,
recoupment or counterclaim. Except as otherwise expressly provided herein,
all payments by the Company shall be made to the Agent for the account of the
Banks at the Agent's Payment Office, and shall be made in dollars and in
immediately available funds, no later than 11:00 a.m. (San Francisco time) on
the date specified herein. The Agent will promptly distribute to each Bank
its Pro Rata Share (or other applicable share as expressly provided herein)
of such payment in like funds as received. Any payment received by the Agent
later than 11:00 a.m. (San Francisco time) shall be deemed to have been
received on the following Business Day and any applicable interest or fee
shall continue to accrue.
(b) Subject to the provisions set forth in the definition of "Interest
Period" herein, whenever any payment is due on a day other than a Business
Day, such payment shall be made on the following 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.
(c) Unless the Agent receives notice from the Company prior to the date on
which any payment is due to the Banks that the Company will not make such
payment in full as and when required, the Agent may assume that the Company
has made such payment in full to the Agent on such date in immediately
available funds and the Agent may (but shall not be so required), in reliance
upon such assumption, distribute to each Bank on such due date an amount
equal to the amount then due such Bank. If and to the extent the Company has
not made such payment in full to the Agent, each Bank shall repay to the
Agent on demand such amount distributed to such Bank, together with interest
thereon at the Federal Funds Rate for each day from the date such amount is
distributed to such Bank until the date repaid.
2.14. Payments by the Banks to the Agent.
(a) Unless the Agent receives notice from a Bank on or prior to the Closing
Date or, with respect to any Borrowing after the Closing Date, at least one
Business Day prior to the date of such Borrowing, that such Bank will not
make available as and when required hereunder to the Agent for the account of
the Company the amount of that Bank's Pro Rata Share of the Borrowing, the
Agent may assume that each Bank has made such amount available to the Agent
in immediately available funds on the Borrowing Date and the 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
<PAGE>
any Bank shall not have made its full amount available to the Agent in
immediately available funds and the Agent in such circumstances has made
available to the Company such amount, that Bank shall on the Business Day
following such Borrowing Date make such amount available to the Agent,
together with interest at the Federal Funds Rate for each day during such
period. A notice of the Agent submitted to any Bank with respect to amounts
owing under this subsection (a) shall constitute prima facie evidence of the
accuracy of the information contained therein. If such amount is so made
available, such payment to the Agent shall constitute such Bank's Loan on the
date of Borrowing for all purposes of this Agreement. If such amount is not
made available to the Agent on the Business Day following the Borrowing Date,
the Agent will notify the Company of such failure to fund and, upon demand by
the Agent, the Company shall pay such amount to the Agent for the 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 Syndicated Borrowing
Date shall not relieve any other Bank of any obligation hereunder to make a
Syndicated Loan on such Borrowing Date, but no Bank shall be responsible for
the failure of any other Bank to make the Syndicated Loan to be made by such
other Bank on any Borrowing Date.
2.15. Sharing of Payments, Etc.
If, other than as expressly provided elsewhere herein, any Bank shall obtain
on account of the Syndicated Loans made by it any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) in
excess of its Pro Rata Share, such Bank shall immediately (a) notify the
Agent of such fact, and (b) purchase from the other Banks such participations
in the Syndicated Loans made by them as shall be necessary to cause such
purchasing Bank to share the excess payment pro rata 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 ratable 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 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 Agent will keep records
(which shall be conclusive and binding in the absence of manifest error) of
participations purchased under this Section and will in each case notify the
Banks following any such purchases or repayments. Any Bank or Swingline Bank
having outstanding both Syndicated Loans and Swingline Loans at any time a
right of set-off is exercised by such Bank or Swingline Bank shall apply the
proceeds of such set-off first to such Bank's Syndicated Loans, until its
Syndicated Loans are reduced to zero, thereafter to its Swingline Loans.
2.16. Quarterly Adjustments.
(a) If the financial reports delivered pursuant to subsections 7.1(a) and
(b) and the certificate delivered pursuant to subsection 7.2(b) when
delivered with respect to any fiscal quarter indicate that the Applicable
Margin, Commitment Fee Percentage or Letter of Credit Rate for any such
period should have been higher than the Applicable Margin, Commitment Fee
Percentage or Letter of Credit Rate assumed for such period pursuant to the
definitions of such terms, and the interest or fee that would have been
collected hereunder based upon the actual Applicable Margin, Commitment Fee
Percentage or Letter of Credit Rate exceeds the interest or fee actually
collected hereunder, then the Company shall pay on or before the third
Business Day after delivery of such financial reports and certificate an
amount equal to such excess.
(b) If (i) the financial reports delivered pursuant to subsections 7.1(a)
and (b) and the certificate delivered pursuant to subsection 7.2(b) when
delivered with respect to any fiscal quarter
<PAGE>
indicate that the Applicable
Margin, Commitment Fee Percentage or Letter of Credit Rate for any such
period should have been lower than the Applicable Margin, Commitment Fee
Percentage or Letter of Credit Rate assumed for such period pursuant to the
definitions of such terms, and (ii) the interest or fee actually collected
hereunder exceeds the interest or fee that would have been collected
hereunder based upon the actual Applicable Margin, Commitment Fee Percentage
or Letter of Credit Rate, then the Agent shall credit such excess to interest
and fees owing hereunder (including any interest owing under subsection
2.9(c)) during the calendar quarter when such financial reports and
certificate were received and, if all such excess is not credited by the end
of such calendar quarter, upon request of the Company, each Bank, severally,
if no Default or Event of Default exists, shall refund to the Agent for
distribution to the Company the amount of such excess actually received and
retained by such Bank.
2.17. Security.
All Obligations of the Company under this Agreement and all other Loan
Documents shall be secured in accordance with the Collateral Documents.
ARTICLE III. THE LETTERS OF CREDIT
3.1. The Letter of Credit Subfacility.
(a) On 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 to the Revolving Termination Date to issue Letters of Credit for the
account of the Company, 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;
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 Effective
Amount of all L/C Obligations plus the Effective Amount of all Syndicated
Loans and Swingline Loans exceeds the Aggregate Commitment,
(2) the participation of any Bank in the Effective Amount of all L/C
Obligations plus the Effective Amount of the Syndicated Loans of such Bank
plus the participation of such Bank, if any, in the Effective Amount of all
Swingline Loans exceeds such Bank's 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.
(b) The Issuing Bank is under no obligation to Issue (and, in the case of
clause (ii) and (iii) below, shall not 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 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;
<PAGE>
(iii) the expiry date of any requested Letter of Credit is (A) more than two
years after the date of Issuance, unless the Required Banks have approved
such expiry date in writing, or (B) less than 30 days prior to the Revolving
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 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 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 to
the transactions contemplated by 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 $250,000 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 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 matters as the Issuing Bank may reasonably require.
(b) At least three Business Days prior to the Issuance of any Letter of
Credit, the Issuing Bank will confirm with the Agent (by telephone or in
writing) that the 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 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 a requested Letter of Credit from the Agent (A)
directing the Issuing Bank not to issue such Letter of Credit because such
issuance 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 applicable 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 account of the Company 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 Termination Date, the Issuing Bank will, upon the written
request of the Company received by the Issuing Bank (with a copy sent by the
Company to the 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
<PAGE>
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 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. In addition, the Issuing Bank shall not
amend any Letter of Credit if the Issuing Bank would be prohibited at such
time from issuing such Letter of Credit in its amended form under subsection
3.1(b). The 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 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 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 automatic renewal of any
Letter of Credit issued by it; provided that no such automatic renewal shall
extend the expiry date of such Letter of Credit beyond the expiry dates set
forth in subsection 3.1(b)(iii). 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 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. In addition, the Issuing Bank shall not
renew any Letter of Credit if the Issuing Bank would be prohibited at such
time from issuing such Letter of Credit in its renewed form under subsection
3.1(b). 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 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) The Issuing Bank may, at its election (or as required by the Agent at
the direction of the Required 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 30 days prior to the Revolving 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).
<PAGE>
(g) The Issuing Bank will also deliver to the 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.
3.3. Risk Participations, Drawings and Reimbursements.
(a) Immediately upon the Issuance of each Letter of Credit, each Bank shall
be deemed to, and hereby irrevocably and unconditionally agrees to, purchase
from the Issuing Bank a participation in such Letter of Credit and each
drawing thereunder in an amount equal to the product of
(i) the Pro Rata Share of such 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 Commitment of each 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 will promptly notify
the Company. The Company shall reimburse the Issuing Bank, directly or with
the proceeds of a Syndicated 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. In the event 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, the Issuing Bank will
promptly notify the Agent and the Agent will promptly notify each Bank
thereof, and the Company shall be deemed to have requested that Base Rate
Syndicated Loans be made by the Banks to be disbursed on the Honor Date under
such Letter of Credit, subject to the amount of the unutilized portion of the
Aggregate Commitment and subject to the conditions set forth in Section 5.2.
Any notice given by the Issuing Bank or the 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 Agent for the account of the relevant Issuing Bank an amount
in Dollars and in immediately available funds equal to its Pro Rata Share of
the amount of the drawing, whereupon the participating Banks shall (subject
to subsection 3.3(d)) each be deemed to have made a Loan consisting of a Base
Rate Syndicated Loan to the Company in that amount. If any Bank so notified
fails to make available to the Agent for the account of the Issuing Bank the
amount of such Bank's Pro Rata Share 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 Bank's obligation to make such payment, from the Honor Date to
the date such 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 Agent
will promptly give notice of the occurrence of the Honor Date, but failure of
the Agent to give any such notice on the Honor Date or in sufficient time to
enable any Bank to effect such payment on such date shall not relieve such
Bank from its obligations under this Section 3.3.
(d) With respect to any unreimbursed drawing that is not converted into
Loans consisting of Base Rate Syndicated 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's reimbursement liability
with respect thereto shall constitute an L/C Borrowing from the Issuing Bank
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 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 Bank in satisfaction of its participation obligation
under this Section 3.3.
(e) Each Bank's obligation in accordance with this Agreement to make the
Syndicated 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
<PAGE>
shall not be
affected by any circumstance, including (i) any set-off, counterclaim,
recoupment, defense or other right which such 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 Bank's obligation to make Syndicated 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 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 Bank has paid the Agent for the account of
the Issuing Bank for such Bank's participation in the Letter of Credit
pursuant to Section 3.3 or (ii) in payment of interest thereon, the Agent
will pay to each Bank, in the same funds as those received by the Agent for
the account of the Issuing Bank, the amount of such Bank's Pro Rata Share of
such funds, and the Issuing Bank shall receive the amount of the Pro Rata
Share of such funds of any Bank that did not so pay the Agent for the account
of the Issuing Bank.
(b) If the 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 Agent for the account of the Issuing Bank pursuant to
subsection 3.4(a) in reimbursement of a payment made under the Letter of
Credit or interest or fee thereon, each Bank shall, on demand of the Agent,
forthwith return to the Agent or the Issuing Bank the amount of its Pro Rata
Share of any amounts so returned by the Agent or the Issuing Bank plus
interest thereon from the date such demand is made to the date such amounts
are returned by such Bank to the 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 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 Agent-Related Person nor any of the respective correspondents,
participants or assignees of the Issuing Bank shall be liable to any Bank
for: (i) any action taken or omitted in connection herewith at the request or
with the approval of the Banks (including the Required Banks, as applicable);
(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 Agent-Related Person, 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 (but in no event
an offset to the Company's obligations to the Banks and 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 the Issuing
Bank's willful misconduct or gross negligence or the Issuing Bank's willful
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
<PAGE>
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 Syndicated 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;
(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 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
Termination Date, any Letters of Credit may for any reason remain outstanding
and partially or wholly undrawn, or (ii) the occurrence of the circumstances
described in subsection 2.7 requiring the Company to Cash Collateralize
Letters of Credit, then, the Company shall immediately Cash Collateralize the
L/C Obligations in an amount equal to the L/C Obligations. The Company
hereby grants to the Agent, for the benefit of the Agent, the Issuing Bank
and the Banks, a security interest in all such 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 Agent for the account of each of the Banks a
<PAGE>
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 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, commencing on the first such quarterly date to occur after the
Closing Date, through the Revolving 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 Termination Date (or such later expiration date).
(b) The Company shall pay to the Issuing Bank a letter of credit fronting
fee for each Letter of Credit Issued by the Issuing Bank equal to 0.125% of
the face amount (or increased face amount, as the case may be) of such Letter
of Credit. Such Letter of Credit fronting fee shall be due and payable on
each date of Issuance of a Letter of Credit.
(c) The Company shall pay to the Issuing Bank from time to time on demand
the normal issuance, presentation, amendment and other processing fees, and
other standard costs and charges, of the Issuing Bank relating to letters of
credit as from time to time in effect.
3.9. Uniform Customs and Practice.
The Uniform Customs and Practice for Documentary Credits as published by the
International Chamber of Commerce ("UCP") most recently at the time of
issuance of any Letter of Credit shall (unless otherwise expressly provided
in the Letters of Credit) apply to the Letters of Credit.
ARTICLE IV. TAXES, YIELD PROTECTION AND ILLEGALITY
4.1. Taxes.
(a) Any and all payments by the Company to each Bank or the Agent under
this Agreement and any other Loan Document shall be made free and clear of,
and without deduction or withholding for any Taxes. In addition, the Company
shall pay all Other Taxes.
(b) The Company agrees to indemnify and hold harmless each Bank and the
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) paid by the Bank or the 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 after the date the Bank or the Agent makes written demand therefor.
(c) 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 Agent, then:
(i) the sum payable shall be increased as necessary so that after making
all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section) such
Bank or the Agent, as the case may be, receives an amount equal to the sum it
would have received had no such deductions or withholdings been made;
(ii) the Company shall make such deductions and withholdings;
(iii) the Company shall pay the full amount deducted or withheld to the
relevant taxing authority or other authority in accordance with applicable
law; and
(iv) the Company shall also pay to each Bank or the Agent for the account of
such Bank, at the time interest is paid, all additional amounts which the
respective Bank specifies as necessary to preserve the after-tax yield the
Bank would have received if such Taxes or Other Taxes had not been imposed.
(d) Within 30 days after the date of any payment by the Company of Taxes or
Other Taxes, the Company shall furnish the Agent the original or a certified
copy of a receipt evidencing
<PAGE>
payment thereof, or other evidence of payment
satisfactory to the Agent.
(e) If the Company is required to pay additional amounts to any Bank or the
Agent pursuant to subsection (c) of this Section, then such Bank shall use
reasonable 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 determines that the introduction of any Requirement of Law,
or any change in any Requirement of Law, or in the interpretation or
administration of any Requirement of Law, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is
unlawful, for any Bank or its applicable Lending Office to make Offshore Rate
Loans, then, on notice thereof by the Bank to the Company through the Agent,
any obligation of that Bank to make Offshore Rate Loans shall be suspended
until the Bank notifies the Agent and the Company that the circumstances
giving rise to such determination no longer exist.
(b) If a Bank determines that it is unlawful to maintain any Offshore Rate
Loan, the Company shall, upon receipt of notice of such fact and demand from
such Bank (with a copy to the Agent), prepay in full such Offshore Rate Loans
of that Bank then outstanding, together with interest accrued thereon and
amounts required under Section 4.4, either on the last day of the Interest
Period thereof, if the Bank may lawfully continue to maintain such Offshore
Rate Loans to such day, or immediately, if the Bank may not lawfully continue
to maintain such Offshore Rate Loan. If the Company is required to so prepay
any Offshore Rate Loan, then concurrently with such prepayment, the Company
shall borrow from the affected Bank, in the amount of such repayment, a Base
Rate Syndicated Loan.
(c) If the obligation of any Bank to make or maintain Offshore Rate Loans
has been so terminated or suspended, the Company may elect, by giving notice
to the Bank through the Agent that all Loans which would otherwise be made by
the Bank as Offshore Rate Loans shall be instead Base Rate Syndicated Loans.
(d) Before giving any notice to the Agent under this Section, the affected
Bank shall designate a different Lending Office with respect to its Offshore
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 determines that, due to either (i) the introduction of or
any change (other than any change by way of imposition of or increase in
reserve requirements included in the calculation of the Offshore Rate) in or
in the interpretation of any law or regulation or (ii) the compliance by that
Bank 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 Offshore 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 (with a copy of such demand to be sent
to the Agent), pay to the 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, (ii) any change in any Capital Adequacy
Regulation, (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, 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
<PAGE>
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 to the
Company through the Agent, the Company shall 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 shall reimburse each Bank and 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 on a timely basis any payment of
principal of any Offshore Rate Loan;
(b) the failure of the Company to borrow, continue or convert a Loan after
the Company has given (or are deemed to have given) a Notice of Borrowing or
a Notice of Conversion/Continuation;
(c) the failure of the Company to make any prepayment in accordance with
any notice delivered under Section 2.6;
(d) the prepayment (including pursuant to Sections 2.6 and 2.7) or other
payment (including after acceleration thereof) of an Offshore Rate Loan on a
day that is not the last day of the relevant Interest Period; or
(e) the automatic conversion under Section 2.4 of any Offshore Rate Loan to
a Base Rate Syndicated Loan on a day that is not the last day of the relevant
Interest Period; including any such loss or expense arising from the
liquidation or reemployment of funds obtained by it to maintain its Offshore
Rate Loans or from fees payable to terminate the deposits from which such
funds were obtained. For purposes of calculating amounts payable by the
Company to the Banks under this Section and under subsection 4.3(a), (i) each
Offshore Rate Loan made by a Bank (and each related reserve, special deposit
or similar requirement) shall be conclusively deemed to have been funded at
the LIBO Rate used in determining the Offshore Rate for such Offshore Rate
Loan by a matching deposit or other borrowing in the interbank eurodollar
market for a comparable amount and for a comparable period, whether or not
such Offshore Rate Loan is in fact so funded.
4.5. Inability to Determine Rates.
If the Required Banks determine that for any reason adequate and reasonable
means do not exist for determining the Offshore Rate for any requested
Interest Period with respect to a proposed Offshore Rate Loan, or that the
Offshore Rate applicable pursuant to subsection 2.9(a) for any requested
Interest Period with respect to a proposed Offshore Rate Loan does not
adequately and fairly reflect the cost to such Banks of funding such Loan,
the Agent will promptly so notify the Company and each Bank. Thereafter, the
obligation of the Banks to make or maintain Offshore Rate Loans, as the case
may be, hereunder shall be suspended until the Agent upon the instruction of
the Required 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 Syndicated Loans instead of Offshore Rate Loans, as the case may be.
4.6. Certificates of Banks.
Any Bank claiming reimbursement or compensation under this Article IV shall
deliver to the Company (with a copy to the Agent) a certificate setting forth
in reasonable detail the amount payable to the Bank hereunder and such
certificate shall be conclusive and binding on the Company in the absence of
manifest error.
4.7. Survival.
The agreements and obligations of the Company in Sections 4.1, 4.2, 4.3, 4.4
and 4.5 shall
<PAGE>
survive the payment of all other Obligations and any assignment
and delegation by a Bank.
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 condition that the Agent have received on or before the
Closing Date all of the following, in form and substance satisfactory to the
Agent and each Bank, and in sufficient copies for each Bank:
(a) Credit Agreement. This Agreement executed by each party thereto;
(b) Resolutions; Incumbency.
(i) Copies of the resolutions of the board of directors of each MGP General
Partner, as general partners of the Managing General Partner, as general
partner of the Company, and the executive committee of the Board of Control
of the Managing General Partner, in each case approving and authorizing the
execution, delivery and performance by the Managing General Partner on behalf
of the Company of this Agreement and the other Loan Documents and the
transactions contemplated hereby and thereby, certified as of the Closing
Date by the Secretary or an Assistant Secretary of such MGP General Partner
and the Managing General Partner, as the case may be; and
(ii) A certificate of the Secretary or Assistant Secretary of the Managing
General Partner certifying the names and true signatures of the officers of
the Managing 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;
(c) Organization Documents; Good Standing. Each of the following documents:
(i) the partnership certificate of the Company, the Managing General
Partner and the Master Partnership as in effect on the Closing Date,
certified by the Secretary of State (or similar, applicable Governmental
Authority) of the state of formation of such entities as of a recent date and
by the Secretary or Assistant Secretary of the Managing General Partner as of
the Closing Date, and each of the Company Partnership Agreement, the MGP
Partnership Agreement and the Master Partnership Agreement as in effect on
the Closing date, certified by the Secretary or Assistant Secretary of the
Managing General Partner as of the Closing Date;
(ii) the articles or certificate of incorporation of each MGP General
Partner as in effect on the Closing Date, certified by the Secretary of State
(or similar applicable Governmental Authority) of the state of incorporation
of such MGP General Partner as of a recent date and by the Secretary or
Assistant Secretary of such MGP General Partner as of the Closing Date, and
the bylaws of each MGP General Partner as in effect on the Closing Date,
certified by the Secretary or Assistant Secretary of such MGP General Partner
as of the Closing Date; and
(iii) a good standing certificate for the Company, the Managing General
Partner, the MGP General Partners and the Master Partnership from the
Secretary of State (or similar, applicable Governmental Authority) of its
state of incorporation or formation, as applicable, and each state where the
Company and the Partner Entities are qualified to do business as a foreign
corporation or limited partnership, as applicable, as of a recent date,
together with a bring-down certificate by facsimile, dated the Closing Date;
(d) Legal Opinion. An opinion of Ball, Janik & Novack as counsel to the
Company and the Partner Entities and addressed to the Agent and the Banks,
substantially in the form of Exhibit D;
(e) Payment of Fees. Payment by the Company of all accrued and unpaid
fees, costs and expenses to the extent then due and payable on the Closing
Date, together with Attorney
<PAGE>
Costs of BofA to the extent invoiced prior to or
on the Closing Date, plus such additional amounts of Attorney Costs as shall
constitute BofA's reasonable estimate of Attorney Costs incurred or to be
incurred by it 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 and 11.4;
(f) Certificate. A certificate signed by a Responsible Officer, dated as
of the Closing Date, stating that:
(i) the representations and warranties contained in Article VI are true and
correct on and as of such date, as though made on and as of such date;
(ii) no Default or Event of Default exists or would result from the initial
Credit Extension; and
(iii) there has occurred since December 31, 1995, no event or circumstance
that has resulted or could reasonably be expected to result in a Material
Adverse Effect;
(g) Purchase Agreement. A certified copy of the Asset Sale, Purchase and
Transfer Agreement between Willamette Industries, Inc., an Oregon
corporation, and the Company (the "Purchase Agreement"), evidencing an
aggregate purchase price of the Property not to exceed $205,000,000;
(h) Facility A Credit Agreement. All conditions precedent to the initial
extension of credit set forth in Section 4.1 of the Facility A Credit
Agreement shall have occurred prior to or simultaneously with the closing
hereunder;
(i) Collateral Documents. The Collateral Documents, executed by the
Company, in appropriate form for recording, where necessary, together with:
(i) acknowledgment copies of all UCC-1 financing statements filed,
registered or recorded to perfect the security interests of the Agent for the
benefit of the Banks, or other evidence satisfactory to the Agent that there
has been filed, registered or recorded all financing statements and other
filings, registrations and recordings necessary and advisable to perfect the
Liens of the Agent for the benefit of the Banks in accordance with applicable
law;
(ii) written advice relating to such Lien and judgment searches as the Agent
shall have requested, and such termination statements or other documents as
may be necessary to confirm that the Collateral is subject to no other Liens
in favor of any Persons (other than Permitted Liens);
(iii) funds sufficient to pay any filing or recording tax or fee in
connection with any and all UCC-1 financing statements;
(iv) such consents, estoppels, subordination agreements and other documents
and instruments executed by any Persons party to material contracts relating
to any Collateral as to which the Agent shall be granted a Lien for the
benefit of the Banks, as requested by the Agent or any Bank; and
(v) all other actions necessary or, in the opinion of the Agent or the
Banks, desirable to perfect and protect the first priority Lien created by
the Collateral Documents, and to enhance the Agent's ability to preserve and
protect its interests in and access to the Collateral, shall have been taken;
(j) Insurance Policies. A certificate of a reputable insurance broker
setting forth the nature and extent of all insurance maintained by the
Company in accordance with Section 4.4 of the Security Agreement;
(k) Other Documents. Such other approvals, opinions, documents or
materials as the Agent or any Bank may reasonably request;
(l) Repayment of Loans Outstanding. Evidence that all "Loans" as defined
in the 1995 Amended and Restated Credit Agreement (as defined in the Facility
A Credit Agreement), including any loss or expense sustained or incurred as a
consequence of such prepayment pursuant to Section 3.4 thereof and interest
accrued thereunder, and all "Loans" as defined in the Original Facility B
<PAGE>
Credit Agreement, including any loss or expense sustained or incurred as a
consequence of such prepayment pursuant to Section 4.4 thereof and interest
accrued thereunder, shall have been repaid in full or shall immediately be
repaid in full with the proceeds from the Loans and the Facility A Loans; and
(k) Consent to Amendment and Restatement. The consent to this amendment
and restatement of the Original Facility B Credit Agreement executed by the
Departing Bank.
5.2. Conditions to All Credit Extensions.
The obligation of each Bank and the Swingline Bank to make any Syndicated
Loan and Swingline Loan to be made by it (including its initial Loan) or to
continue or convert any Syndicated Loan under 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 Borrowing Date, Conversion/Continuation Date or
Issuance Date, as applicable:
(a) Notice, Application. As to any Syndicated Loan or Swingline Loan, the
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 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 in Article VI shall be true and correct on and as of such
Borrowing Date or Conversion/Continuation Date with the same effect as if
made on and as of such Borrowing Date or Conversion/Continuation Date (except
to the extent such representations and warranties expressly refer to an
earlier date, in which case they shall be true and correct as of such earlier
date);
(c) No Existing Default. No Default or Event of Default shall exist or
shall result from such Borrowing or continuation or conversion; and
(d) No Further Advance Notice. Neither the Agent nor any Bank shall have
received from the Company any notice that any Collateral Document will no
longer secure on a first priority basis future advances or future Loans to be
made or extended under this Agreement. 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 and as
of each Borrowing Date, 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 Agent and each Bank that:
6.1. Existence and Power.
The Company and each Partner Entity:
(a) is a limited partnership (or in the case of each MGP General Partner, a
corporation) duly organized, validly existing and in good standing under the
laws of the jurisdiction of its formation;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its
business and to execute, deliver, and perform its obligations under the Loan
Documents;
(c) is duly qualified as a foreign limited partnership and is 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
(d) is in compliance with all Requirements of Law; except, in each case
referred to in clause (c) or clause (d), to the extent that the failure to do
so could not reasonably be expected to have a Material Adverse Effect.
6.2. Authorization; No Contravention.
<PAGE>
The execution, delivery and performance by the Company of this Agreement and
each other Loan Document to which the Company is a party, have been duly
authorized by all necessary partnership and corporate action, and do not and
will not:
(a) contravene the terms of any Organization Documents of the Company or
the 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 the Company or any of the Partner Entities are 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.
6.3. Governmental Authorization.
No approval, consent, exemption, authorization, or other action by, or notice
to, or filing with, any Governmental Authority (except for recordings or
filings in connection with the Liens granted to the Agent under the
Collateral Documents) is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Company or
any Partner Entity of this Agreement or any other Loan Document.
6.4. Binding Effect.
This Agreement and each other Loan Document to which the Company is a party
constitute the legal, valid and binding obligations of the Company (to the
extent it is a party thereto), enforceable against the Company in accordance
with their respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws affecting the enforcement
of creditors' rights generally or by equitable principles relating to
enforceability.
6.5. Litigation.
Except as specifically disclosed in Schedule 6.5, there are no actions,
suits, proceedings, claims or disputes pending, or to the Company's
Knowledge, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, against the Company or 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 the Equity Issuance, this Agreement or
any other Loan Document, or any of the transactions contemplated hereby or
thereby; or
(b) have a reasonable probability of success on the merits and which, if
determined adversely to such Person or its 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 or any other Loan Document, or
directing that the transactions provided for herein or therein 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 or from the grant or perfection of the Liens
of the Agent and the Banks on the Collateral. As of the Closing Date, none
of the Company, the Partner Entities, or 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, could
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(f).
6.7. ERISA Compliance.
(a) Schedule 6.7 lists all Plans. All written descriptions thereof
provided to the Agent are true and complete in all material respects.
(b) Except as specifically disclosed in Schedule 6.7, each Plan is in
compliance with the applicable provisions of ERISA, the Code and other
federal or state law, except for such non-compliance which would not
reasonably be expected to have a Material Adverse Effect. Each Plan which is
intended to qualify under Section 401(a) of the Code has received a favorable
determination
<PAGE>
letter from the IRS or an application for such a determination
letter will be submitted no later than the expiration of the remedial
amendment period for effecting amendments required by reason of Section 1140
of the Tax Reform Act of 1986, as amended, and to the Company's Knowledge,
nothing has occurred which would cause the loss of such qualification.
(c) There are no pending, or to the Company's Knowledge, threatened claims,
actions or lawsuits, or action by any Governmental Authority, with respect to
any Plan which has resulted or could reasonably be expected to result in a
Material Adverse Effect. There has been no prohibited transaction or other
violation of the fiduciary responsibility rule with respect to any Plan which
could reasonably result in a Material Adverse Effect.
(d) Except as specifically disclosed in Schedule 6.7, no ERISA Event has
occurred or is reasonably expected to occur with respect to any Pension Plan.
(e) Except as specifically disclosed in Schedule 6.7, no Pension Plan
(other than multiemployer plans within the meaning of Section 3(38) of ERISA)
has any Unfunded Pension Liability.
(f) Except as specifically disclosed in Schedule 6.7, neither the Company
nor any ERISA Affiliate has incurred, nor does it reasonably expect to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of ERISA).
(g) Except as specifically disclosed in Schedule 6.7, neither the Company
nor any ERISA Affiliate has transferred any Unfunded Pension Liability to any
Person or otherwise engaged in a transaction that could be subject to Section
4069 of ERISA.
6.8. Use of Proceeds; Margin Regulations.
The proceeds of the Loans are to be used solely for the purposes set forth in
and permitted by Section 7.11 and Section 8.8. None of the Company, 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 could not, individually or in the
aggregate, 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 Partner Entity, and 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. There is no
proposed tax assessment against the Company, the Partner Entities or any of
their Subsidiaries that would, if made, have a Material Adverse Effect.
6.11. Financial Condition.
(a) The audited consolidated financial statements of the Company and its
Subsidiaries dated December 31, 1995, and the related consolidated statements
of income or operations, partners' capital and 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, material commitments and Contingent
Obligations.
<PAGE>
(b) Since December 31, 1995, there has been no Material Adverse Effect.
6.12. Environmental Matters.
(a) Except as specifically disclosed in Schedule 6.12, the on-going
operations of the Company and each of its Subsidiaries comply in all respects
with all Environmental Laws, except such non-compliance which would not (if
enforced in accordance with applicable law) reasonably be expected to result
in liability in excess of $10,000,000 in the aggregate.
(b) Except as specifically disclosed in Schedule 6.12, the Company and each
of its Subsidiaries have obtained all material 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 and each of its Subsidiaries are in compliance with all material
terms and conditions of such Environmental Permits.
(c) Except as specifically disclosed in Schedule 6.12, none of the Company
or its Subsidiaries, any Partner Entity or any of its 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.
(d) To the Company's Knowledge, except as specifically disclosed in
Schedule 6.12, there are no Hazardous Materials or other conditions or
circumstances existing with respect to any property of the Company or any of
its 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 $10,000,000 in the aggregate for any such
condition, circumstance or property. In addition,
(i) to the Company's Knowledge, neither the Company nor any of its
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, and (ii) to the extent required
under any Requirement of Law, the Company and its 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 the Emergency Planning and Community Right-to-Know Act,
and all other Environmental Laws.
(e) Except as specifically disclosed in Schedule 6.12, there are no
disputes, litigation, investigations, or proceedings to which the Company,
the Partner Entities or any of their respective Subsidiaries are a party
relating to any Environmental Law or environmental condition that could
reasonably be expected to have a Material Adverse Effect, and, to the
Company's Knowledge, there are no other disputes, litigation, investigations,
or proceedings and no rulemaking or legislation pending relating to any
Environmental Law or environmental condition that could reasonably be
expected to have a Material Adverse Effect.
6.13. Regulated Entities.
None of the Company, the Partner Entities, any Person controlling such
Person, or any Subsidiary, is (a) an "Investment Company" within the meaning
of the Investment Company Act of 1940; or (b) is 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 its Subsidiaries is a party to or bound by any
Contractual Obligation, or subject to any restriction in any Organization
Document, or any Requirement of Law, which could reasonably be expected to
have a Material Adverse Effect.
6.15. 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, 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
<PAGE>
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. Except as specifically disclosed in Schedule 6.5,
no claim or litigation regarding any of the foregoing is pending or
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, could reasonably be
expected to have a Material Adverse Effect.
6.16. Subsidiaries.
As of the Closing Date, the Company has no Subsidiaries other than those
specifically disclosed in part (a) of Schedule 6.16 hereto and has no equity
investments in any other corporation or entity other than those specifically
disclosed in part (b) of Schedule 6.16.
6.17. 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.
6.18. Labor Relations.
There are no material 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, and no
significant unfair labor practice complaint is pending against the Company or
any of its Subsidiaries or, to the Company's Knowledge, threatened against
any of them before any Government Authority.
6.19. Partnership Interests.
As of the Closing Date, the only general partner of the Company is the
Managing General Partner. As of the Closing Date, the only general partners
of the Managing General Partner are Fremont and HS Corp.
6.20. Full Disclosure.
None of the representations or warranties made by the Company, any Partner
Entity or any of their 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 any exhibit, report, statement or certificate
furnished by or on behalf of the Company or any of its Subsidiaries in
connection with the Loan Documents (including the offering and disclosure
materials delivered by or on behalf of the Company to the Banks prior to the
Closing Date), contains any untrue statement of a material fact or omits any
material fact required to be stated therein or 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.
6.21. Solvency.
The Company and each of the Partner Entities is Solvent.
6.22. Swap Obligations.
Neither the Company nor any of its Subsidiaries has incurred any outstanding
obligations under any Swap Contracts, other than Permitted Swap Obligations.
The Company has undertaken its own independent assessment of its consolidated
assets, liabilities and commitments and has considered appropriate means of
mitigating and managing risks associated with such matters and has not relied
on any swap counterparty or any Affiliate of any swap counterparty in
determining whether to enter into any Swap Contract.
6.23. Collateral Documents.
(a) The provisions of each of the Collateral Documents are effective to
create in favor of the Agent for the benefit of the Banks, a legal, valid and
enforceable first priority security interest in all right, title and interest
of the Company in the collateral described therein; and financing statements
executed by the Company to be filed in the offices in all of the
jurisdictions listed in the schedule to the Security Agreement have been
delivered to the Agent.
(b) All representations and warranties of the Company contained in the
Collateral
<PAGE>
Documents are true and correct.
ARTICLE VII.
AFFIRMATIVE COVENANTS
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 Required Banks waive compliance in writing:
7.1. Financial Statements.
The Company shall deliver to the Agent, in form and detail satisfactory to
the Agent and the Required Banks, with sufficient copies for each Bank:
(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
and its Subsidiaries as at the end of such year and the related consolidated
statements of income or operations, partners' equity and cash flows for such
year, setting forth in each case in comparative form the figures for the
previous fiscal year, identifying any material change in accounting policies
or financial reporting practices by the Company or any of its consolidated
Subsidiaries, and accompanied by the opinion of Price Waterhouse 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 the Independent Auditor of any material
portion of the Company's or any Subsidiary's records and shall be delivered
to the Agent pursuant to a reliance agreement between the Agent and Banks and
such Independent Auditor in form and substance satisfactory to the Required
Banks;
(b) as soon as available, but not later than 60 days after the end of each
of the first three fiscal quarters of each fiscal year, a copy of the
unaudited consolidated balance sheet of the Company and its Subsidiaries as
of the end of such quarter and the related consolidated statements of income,
partners' equity and cash flows for the period commencing on the first day
and ending on the last day of such quarter, identifying any material change
in accounting policies or financial reporting practices by the Company or any
of its consolidated Subsidiaries, and certified by a Responsible Officer as
fairly presenting, in accordance with GAAP (subject to ordinary, good faith
year-end audit adjustments), the financial position and the results of
operations of the Company and its Subsidiaries;
(c) as soon as available, but not later than 90 days after the end of each
fiscal year, a copy of an unaudited consolidating balance sheet of the
Company and its Subsidiaries as at the end of such year and the related
consolidating statement of income for such year, certified by a Responsible
Officer as having been developed and used in connection with the preparation
of the financial statements referred to in subsection 7.1(a);
(d) as soon as available, but not later than 60 days after the end of each
of the first three fiscal quarters of each fiscal year, a copy of the
unaudited consolidating balance sheets of the Company and its Subsidiaries,
and the related consolidating statements of income for such quarter, all
certified by a Responsible Officer as having been developed and used in
connection with the preparation of the financial statements referred to in
subsection 7.1(b);
(e) 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 Master
Partnership and its Subsidiaries as at the end of such year and the related
consolidated statements of income or operations, partners' equity and cash
flows for such year, setting forth in each case in comparative form the
figures for the previous fiscal year, and accompanied by the opinion of the
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 the Independent Auditor of any
<PAGE>
material portion of the Master
Partnership's or any Subsidiary's records and shall be delivered to the Agent
pursuant to a reliance agreement between the Agent and Banks and such
Independent Auditor in form and substance satisfactory to the Required Banks;
(f) as soon as available, but not later than 60 days after the end of each
of the first three fiscal quarters of each fiscal year, a copy of the
unaudited consolidated balance sheet of the Master Partnership and its
Subsidiaries as of the end of such quarter and the related consolidated
statements of income, partners' equity and cash flows for the period
commencing on the first day and ending on the last day of such quarter, and
certified by a Responsible Officer as fairly presenting, in accordance with
GAAP (subject to ordinary, good faith year-end audit adjustments), the
financial position and the results of operations of the Master Partnership
and its Subsidiaries;
(g) as soon as available, but not later than January 31 of each year, a
business plan which shall include (i) pro-forma financial projections of the
consolidated balance sheet of the Company and its Subsidiaries and the
related consolidated statements of income or operations, partners' equity and
cash flows, (x) in 1996, for the calendar year 1997, and (y) in every year
thereafter, for the five-year period beginning January 1 of the year of
delivery of such business plan, and (ii) timber inventories, timber harvests,
lumber and other wood product shipments, projected average prices for logs
and lumber by species and type, a timber log flow report and an outside
timber harvest/log procurement contract summary; which projections shall be
accompanied by appropriate assumptions and sufficient supporting details on
which such projections are based, certified by a Responsible Officer as
fairly presenting management's good faith projection of probable results for
such period;
(h) as soon as available, but no later than 30 days after the end of each
month, a copy of the monthly operating summary in form substantially similar
to that currently provided to management;
(i) as soon as available, but in any event within 90 days after the end of
each calendar year, the report entitled "Fair Market Value of Timber Cut,
determined for Section 631(a) of the Internal Revenue Code, Capital Gains
Treatment" prepared with respect to the prior calendar year by Mason, Bruce
and Girard, or another nationally recognized timber appraiser reasonably
acceptable to the Required Banks.
7.2. Certificates; Other Information.
The Company shall furnish to the Agent, with sufficient copies for each Bank:
(a) concurrently with the delivery of the financial statements referred to
in subsection 7.1(a), 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 under Sections 8.13, 8.16, 8.17 and 8.18 except
as specified in such certificate;
(b) concurrently with the delivery of the financial statements referred to
in subsections 7.1(a) and (b), a Compliance Certificate executed by a
Responsible Officer;
(c) promptly, copies of all financial statements and reports that the
Company or the Master Partnership sends to its limited partners, and, if
applicable, promptly, within 15 days of any such filing, copies of all
financial statements and regular, periodical or special reports (including
Forms 10K, 10Q and 8K) and registration statements that the Company or any
Subsidiary or the Master Partnership may make to, or file with, the SEC; and
(d) promptly, such additional information regarding the business, financial
or corporate affairs of the Company or any of its Subsidiaries or the Master
Partnership as the Agent, at the request of any Bank, may from time to time
reasonably request.
7.3. Notices.
The Company shall promptly notify the Agent and each Bank:
(a) of the occurrence of any Default or Event of Default, and of the
occurrence or existence of any event or circumstance that foreseeably will
become a Default or Event of Default;
(b) of any matter that has resulted or if adversely determined would
reasonably be expected to result in a Material Adverse Effect, including (i)
breach or non-performance of, or any
<PAGE>
default under, a Contractual Obligation
of any of the Company, the Partner Entities or any of their Subsidiaries;
(ii) any dispute, litigation, investigation, proceeding or suspension which
may exist at any time between the Company, the Partner Entities or any of
their Subsidiaries and any Governmental Authority; or (iii) the commencement
of, or any material development in, any litigation or proceeding affecting
the Company, the Partner Entities or any of their Subsidiaries, including
pursuant to any applicable Environmental Laws;
(c) of any of the following events affecting the Company or any ERISA
Affiliate, together with 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;
(ii) if any of the representations and warranties in Section 6.7 ceases to
be true and correct;
(iii) the adoption by the Company or any of its Subsidiaries or, upon the
Company's Knowledge thereof, by any other ERISA Affiliate of any new Pension
Plan or other Plan subject to Section 412 of the Code;
(iv) the adoption of any amendment to a Pension Plan or other Plan subject
to Section 412 of the Code by the Company or any of its Subsidiaries or, upon
the Company's Knowledge thereof, by any other ERISA Affiliate, if such
amendment results in a material increase in either contributions by the
Company or any of its Subsidiaries or Unfunded Pension Liability; or
(v) the commencement of contributions by the Company or any of its
Subsidiaries or, upon the Company's Knowledge thereof, by any other ERISA
Affiliate to any Pension Plan or other Plan subject to Section 412 of the
Code;
(d) 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);
(e) 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, the Partner Entities or any of their
Subsidiaries; or
(f) of any assertion or determination by any Governmental Authority that
the Company shall no longer be classified as a partnership not taxable as a
corporation under the Code.
Each notice under 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 or any affected Subsidiary
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 (or
foreseeably will be) breached or violated.
7.4. Preservation of Partnership Existence, Etc.
The Company shall, except as permitted by Section 8.3, and shall cause each
of its Subsidiaries and each of the Partner Entities to:
(a) preserve and maintain in full force and effect its partnership 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 governmental rights,
privileges, qualifications, permits, licenses and franchises necessary or
desirable in the normal conduct of its business except in connection with
transactions permitted by Section 8.3 and sales of assets permitted by
Section 8.2;
(c) use reasonable efforts, in the ordinary course of business, to preserve
its business organization and goodwill; and
(d) preserve or renew all of its registered patents, trademarks, trade
names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect;
<PAGE>
provided that the Company shall
not be obligated to preserve its status as a partnership not taxable as a
corporation if (i) the Company's failure to preserve such status shall be the
result of an amendment to the tax laws enacted by the Congress of the United
States and (ii) after giving effect to the loss of such status, the ratio of
Pro Forma Consolidated Cash Flow to Pro Forma Maximum Debt Service,
determined as of the end of the fiscal quarter immediately preceding the loss
of such status, would be greater than 1.1 to 1.0, assuming for the purposes
of the computation of Pro Forma Consolidated Cash Flow, that Pro Forma
Consolidated Cash Flow would be reduced by taxes at the applicable tax rate
of the Company for such period had the Company been taxable as a corporation.
7.5. Maintenance of Property.
The Company shall maintain, and shall cause each Subsidiary 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 and make all
necessary repairs thereto and renewals and replacements thereof except where
the failure to do so could not reasonably be expected to have a Material
Adverse Effect or except as permitted by Section 8.2.
7.6. Insurance.
The Company shall maintain, and shall cause each Subsidiary 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; including public liability and
property and casualty insurance.
7.7. Payment of Obligations.
The Company shall, and shall cause each Subsidiary 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;
(b) all lawful claims which, if unpaid, would by law become a Lien upon its
property, 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
(c) all trade payables owing to Persons that are not Affiliates of the
Company in the ordinary course of business, unless the same are contested in
good faith by appropriate proceedings and adequate reserves in accordance
with GAAP are being maintained by the Company or such Subsidiary.
7.8. Compliance with Laws.
The Company shall comply, and shall cause each of its Subsidiaries to comply,
in all material respects with all Requirements of Law of any Governmental
Authority having jurisdiction over it or its business (including the Federal
Fair Labor Standards Act), 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 Subsidiary. The Company shall permit, and shall cause each
Subsidiary to permit, representatives and independent contractors of the
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 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.
<PAGE>
7.10. Environmental Laws.
(a) The Company shall, and shall cause each Subsidiary to, conduct its
operations and keep and maintain its property in material 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 Agent or any Bank, the Company shall
submit and cause each of its Subsidiaries to submit, to the Agent 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(b),
that could, individually or in the aggregate, reasonably be expected to
result in liability in excess of $10,000,000.
7.11. Use of Proceeds.
The Company shall use the proceeds of the Loans (i) to repay on the Closing
Date "Loans" under and as defined in the Original Facility B Credit
Agreement, (ii) for the cost (including related fees, commissions and
expenses) of the acquisition of certain timberlands, standing timber, and
related assets located on such timberlands previously owned by Cavenham
Forest Industries, a division of Hanson Natural Resources Company, to be sold
to the Company indirectly through Willamette Industries, Inc., pursuant to
the Purchase Agreement a certified copy of which is delivered to the Banks
pursuant to subsection 5.1(g) (the "Property") and (iii) for working capital
(including standby letters of credit) and other general partnership purposes,
in all cases not in contravention of any Requirement of Law or of any Loan
Document.
7.12. Further Assurances.
(a) The Company shall ensure that all written information, exhibits and
reports furnished to the Agent or the Banks do not and will not contain any
untrue statement of a material fact and do not and will not omit to state any
material fact or any fact necessary to make the statements contained therein
not misleading in light of the circumstances in which made, and will promptly
disclose to the Agent and the Banks and correct any defect or error that may
be discovered therein or in any Loan Document or in the execution,
acknowledgment or recordation thereof.
(b) Promptly upon request by the Agent or the Required Banks, the Company
shall do, execute, acknowledge, deliver, record, re-record, file, re-file,
register and re-register, any and all such further acts, deeds, conveyances,
security agreements, mortgages, assignments, estoppel certificates, financing
statements and continuations thereof, termination statements, notices of
assignment, transfers, certificates, assurances and other instruments the
Agent or such Banks, as the case may be, may reasonably require from time to
time in order (i) to carry out more effectively the purposes of this
Agreement or any other Loan Document, (ii) to subject to the Liens created by
any of the Collateral Documents any of the properties, rights or interests
covered by any of the Collateral Documents, (iii) to perfect and maintain the
validity, effectiveness and priority of any of the Collateral Documents and
the Liens intended to be created thereby, and (iv) to better assure, convey,
grant, assign, transfer, preserve, protect and confirm to the Agent and Banks
the rights granted or now or hereafter intended to be granted to the Banks
under any Loan Document or under any other document executed in connection
therewith.
ARTICLE VIII.
NEGATIVE COVENANTS
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 Required Banks waive compliance in writing:
8.1. Limitation on Liens. The Company shall not, and shall not suffer or
permit any of its Subsidiaries to, directly or indirectly, make, create,
incur, assume or suffer to exist any Lien upon or with respect to any part of
its
<PAGE>
property, whether now owned or hereafter acquired, other than the
following ("Permitted Liens"):
(a) any Lien existing on property of such Person on the Closing Date and
set forth in Schedule 7.1 securing Indebtedness outstanding on such date;
(b) any Lien created under any Loan Document;
(c) 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, provided that no notice of
lien has been filed or recorded under the Code;
(d) 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 which are being
contested in good faith and by appropriate proceedings, which proceedings
have the effect of preventing the forfeiture or sale of the property subject
thereto;
(e) Liens (other than any Lien imposed by ERISA) consisting of pledges or
deposits required in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other social security
legislation;
(f) Liens on the property of such Person securing (i) the non-delinquent
performance of bids, trade contracts (other than for borrowed money), leases,
statutory obligations,
(ii) contingent obligations on surety and appeal bonds, and (iii) other
non-delinquent obligations of a like nature; in each case, incurred in the
ordinary course of business, provided all such Liens in the aggregate would
not (even if enforced) cause a Material Adverse Effect;
(g) Liens consisting of judgment or judicial attachment liens, provided
that the enforcement of such Liens is effectively stayed and all such liens
in the aggregate at any time outstanding for the Company and its Subsidiaries
do not exceed $5,000,000;
(h) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which do not impose material
financial obligations on the Company or any of its Subsidiaries, and which do
not in any case materially detract from the value of a material asset subject
thereto or interfere with the ordinary conduct of the businesses of such
Person;
(i) purchase money security interests on any property acquired or held by
such Person in the ordinary course of business, securing Indebtedness
incurred or assumed for the purpose of financing all or any part of the cost
of acquiring such property; provided that (i) any such Lien attaches to such
property concurrently with or within 20 days after the acquisition thereof,
(ii) such Lien attaches solely to the property so acquired in such
transaction, (iii) the principal amount of the debt secured thereby does not
exceed 85% (or 100% in the case of capital leases) of the cost of such
property, and (iv) the aggregate outstanding principal amount of the
Indebtedness secured by any and all such purchase money security interests
shall not at any time exceed $25,000,000;
(j) Liens securing obligations in respect of capital leases on assets
subject to such leases, provided that such capital leases are otherwise
permitted hereunder;
(k) Liens arising solely by virtue of any statutory or common law provision
relating to banker's liens, rights of set-off or similar rights and remedies
as to deposit accounts or other funds maintained with a creditor depository
institution; provided that (i) such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against access by the
Company in excess of those set forth by regulations promulgated by the FRB,
and (ii) such deposit account is not intended by the Company or any of its
Subsidiaries to provide collateral to the depository institution;
(l) Liens securing Contingent Obligations permitted under subsection
8.9(d); and
(m) other Liens that secure claims or Indebtedness of less than $1,000,000
in the aggregate and that exist no more than 10 days before being released or
terminated.
8.2. Asset Dispositions.
The Company will not, and will not permit any of its Subsidiaries to, sell,
transfer, lease, contribute or otherwise convey, or grant options, warrants
or other rights with respect to, all or any part of its assets (including
accounts receivable and capital stock of Subsidiaries) to any Person, other
than:
(a) sales of timber, logs, lumber and other inventory in the ordinary
course of business for fair market value;
(b) sales for fair market value of equipment, which is surplus, worn-out or
obsolete or no longer useful in the ordinary course of business;
(c) sales of assets other than standing timber for fair market value, the
gross sale proceeds of which, together with the gross sale proceeds of all
other assets sold, transferred, leased, contributed, or conveyed pursuant to
this clause by the Company or any of its Subsidiaries does not exceed in the
aggregate an amount (the "Annual Sales Amount") equal to (i) in calendar year
1996, $10,000,000 and (ii) in each calendar year thereafter, the sum of (A)
the Annual Sales Amount for the preceding calendar year plus (B) an increase
equal to the percentage increase, if any, in the CPI for such preceding
calendar year, multiplied by such Annual Sales Amount; provided that the
cumulative amount of such sales during the term of this Agreement shall not
exceed an amount (the "Cumulative Sales Amount") equal to (y) $51,500,000
plus (z) an increase equal to the percentage increase, if any, in the CPI
from January 1, 1996 to the date of determination, multiplied by such
Cumulative Sales Amount;
(d) sales of Designated Acres for the fair market value thereof;
(e) exchanges of timberland for other timberland in the ordinary course of
business with Persons who are not Affiliates of the Company, if:
(i) the aggregate fair market value of all timberland so exchanged by the
Company and any of its Subsidiaries, collectively, does not exceed on a
cumulative basis $400,000,000 during the term of this Agreement;
(ii) the timberland to be received in exchange is of at least an equivalent
fair market value to the timberland to be exchanged or, if such timberland is
not of at least an equivalent fair market value, the amount of any shortfall
shall constitute a permitted disposition under subsection 8.2(c) or (f);
(iii) the timberland to be received in exchange is located in the United
States, Canada, Mexico or New Zealand, provided that the aggregate fair
market value of such timberlands received in such exchanges and located in
Canada, Mexico or New Zealand does not exceed in the aggregate, together with
the Net Proceeds invested in productive assets in such foreign countries
pursuant to subsection 8.2(f)(ii) and the net proceeds of harvesting used to
purchase timber or timberlands in such foreign countries pursuant to Section
8.4, $50,000,000 during the term of this Agreement; and
(iv) at the time of such exchange, no Default or Event of Default exists or
shall result from such exchange; provided, however, that any exchange
permitted by this subsection 8.2(e) may be in the form of a tax deferred
exchange so long as such tax deferred exchange is completed within 180 days;
and
(f) dispositions for fair market value thereof of assets not otherwise
permitted hereunder to Persons who are not Affiliates of the Company if:
(i) at the time of such disposition no Default or Event of Default exists
or shall result from such disposition; and
(ii) the Net Proceeds of such disposition (A) are applied within 180 days of
such disposition to the purchase of productive assets in a Permitted Business
(including purchases not consummated during such 180 days if a binding
agreement for such purchase is entered into during such period and such
purchase is completed within 90 days after the expiry of such 180 day period)
located in the United States, Canada, Mexico and New Zealand, provided that
the aggregate Net Proceeds applied to such purchases of such assets located
in Canada, Mexico and New Zealand do not exceed, together with the fair
market value of assets in such foreign countries obtained in an exchange
pursuant to subsection 8.2(e) and the net proceeds of harvesting used to
purchase timber or timberlands in such foreign countries pursuant to Section
8.4, $50,000,000 during the term of this Agreement, (B) do not exceed cash
expenditures by the Company for the purchase of productive assets in a
Permitted
<PAGE>
Business during the preceding 90 days (excluding any purchase to
the extent financed by a Facility A Loan) or (C) are applied within 180 days
of such disposition to the repayment of such Senior Debt as the Company may
elect to so prepay provided that (x) at any time the Company shall elect to
repay Senior Debt other than the Loans and the Facility A Loans, the Company
shall also repay Loans and Facility A Loans by at least a pro rata amount
(based on the then outstanding principal of amount of all Senior Debt), (y) a
Responsible Officer shall have notified the Agent promptly after its
determination to so apply the Net Proceeds and shall have certified the
receipt of fair market value for such assets and the proper application of
such Net Proceeds in accordance with this subsection 8.2(f), and (z) if,
during the aforementioned periods, the Net Proceeds of all such dispositions
which have not been applied to the purchase of productive assets in a
Permitted Business or distributed to the holders of Senior Debt for
application to the repayment of such Senior Debt exceeds $25,000,000 in the
aggregate at any time, all such net proceeds in excess of $25,000,000 shall
be placed immediately upon receipt thereof in an escrow account, pursuant to
an Escrow Agreement, for the purpose of application in accordance with
clauses (A) and (C) above. The Company shall apply any Net Proceeds
withdrawn from escrow pursuant to an Escrow Agreement to the applications
required by clauses (A) or (C) above within three Business Days after such
withdrawal.
8.3. Consolidations and Mergers.
The Company shall not, and shall not suffer or permit any Subsidiary to,
merge, consolidate with or into, or convey, transfer, lease or otherwise
dispose of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to
or in favor of any Person, except:
(a) any Subsidiary of the Company may merge with the Company, provided that
the Company (i) shall be the continuing or surviving partnership and (ii)
shall have a consolidated net worth immediately following such merger equal
to or greater than the consolidated net worth of the Company immediately
preceding such merger;
(b) any Subsidiary of the Company may sell all or substantially all of its
assets (upon voluntary liquidation or otherwise), to the Company; or
(c) any Subsidiary of the Company may merge with any other Subsidiary of
the Company, provided that the surviving Subsidiary shall have a consolidated
net worth immediately following such merger equal to or greater than the
consolidated net worth of the surviving Subsidiary immediately preceding such
merger; provided, however, in each case (i) no Default or Event of Default
exists or shall result from such merger or sale and (ii) immediately after
such merger or sale, the ratio of (A) Pro Forma Consolidated Cash Flow to Pro
Forma Interest Expense is greater than 2.50 to 1.00, and (B) Pro Forma
Consolidated Cash Flow to Pro Forma Maximum Debt Service is greater than 1.25
to 1.00.
8.4. Harvesting Restrictions.
The Company shall not, and shall not suffer or permit any of its Subsidiaries
to, in any calendar year, commencing with 1996, harvest timber or sell
standing timber on (i) the timberlands owned by the Company or any of its
Subsidiaries on the Closing Date, including the Property ("Existing
Timberlands"), (ii) timberlands owned as a result of a permitted exchange of
Existing Timberlands pursuant to subsection 8.2(e), (iii) timberlands
purchased pursuant to clause (z) below, or (iv) other timberlands acquired by
the Company or any of its Subsidiaries after the Closing Date other than as
described in clauses (ii) and (iii) above, in excess of:
(a) in any one such calendar year, 150% of the Planned Volume for that
calendar year;
(b) in any two such consecutive calendar years, 140% of the Planned Volume
for such calendar years;
(c) in any three such consecutive calendar years, 130% of the Planned
Volume for such calendar years; and
<PAGE>
(d) in any four such consecutive calendar years, 120% of the Planned Volume
for such calendar years; unless the net proceeds from such excess harvest
(which shall be determined based upon the average prices received on the sale
of all timber harvested during such period and a reasonable allocation of
direct cash expenses incurred in connection with the harvesting and sale of
timber during such period), are, within ten Business Days after the end of
such period, placed in an escrow account, pursuant to an Escrow Agreement, to
be applied within 180 days after the end of such period (y) to the repayment
of such Senior Debt as the Company may elect to so prepay provided that at
any time the Company shall elect to repay Senior Debt other than the Loans
and the Facility A Loans, the Company shall also repay Loans and Facility A
Loans by at least a pro rata amount (based on the outstanding principal of
all Senior Debt), or (z) to purchase or commit to purchase timber or
timberlands located in the United States, Canada, Mexico or New Zealand
(including purchases not consummated during such 180 days if a binding
agreement for such purchase is entered into during such period and such
purchase is completed within 90 days after the expiry of such 180 day period)
for not more than fair market value (in the good faith judgment of the
Responsible Officer as certified in writing to the Agent and the Banks),
provided that the aggregate of such net proceeds used to purchase timber or
timberlands located in Canada, Mexico and New Zealand shall not exceed,
together with the fair market value of assets in such foreign countries
obtained in an exchange pursuant to subsection 8.2(e) and the Net Proceeds
invested in productive assets in such foreign countries pursuant to
subsection 8.2(f)(ii), $50,000,000 during the term of this Agreement, and
provided, further that the Company shall have notified the Agent promptly
after its determination to so apply the net proceeds. The Company shall
apply any such net proceeds withdrawn from the escrow account pursuant to an
Escrow Agreement to the applications required by clauses (y) or (z) above
within three Business Days after such withdrawal.
"Planned Volume" shall mean for each calendar year 250,000,000 board feet of
timber, and shall be increased for any Annual Timber Increase, from the
Effective Date for such Annual Timber Increase, by increasing such per annum
amount by an amount equal to 15% of such Annual Timber Increase per annum for
a period of 6 and 2/3rds years from such Effective Date. In addition, such
per annum amounts for any year after 1996 shall be decreased by 20%
(calculated after giving effect to any Annual Timber Increases) for the
entirety of such calendar year if the Asset Coverage Ratio at the end of the
prior calendar year is less than 2.0 : 1.0, until the Asset Coverage Ratio
returns to 2.0 : 1.0 at the end of a calendar year, at which time the per
annum amount for the next calendar year shall be restored to 250,000,000
board feet of timber plus any otherwise applicable increases. For example,
an Asset Coverage Ratio of 1.75 : 1.0 at the end of 1996 and a 1996 Annual
Timber Increase of 100,000,000 board feet would cause the Planned Volume for
1997 to be 212,000,000 board feet (250,000,000 plus 15% of 100,000,000 less
20%). The same Asset Coverage Ratio at the end of 1997 (assuming no
additional Annual Timber Increases) would cause the Planned Volume for 1998
to be 169,600,000 board feet (212,000,000 less 20%); while an Asset Coverage
Ratio of 2.0 : 1.0 at the end of 1997 (assuming no additional Annual Timber
Increases) would cause the Planned Volume for 1998 to be 265,000,000 board
feet (250,000,000 plus 15% of 100,000,000). For purposes of the foregoing:
"Annual Timber Increase" shall mean, for any calendar year, the amount, in
board feet, by which the number of board feet of timber acquired by the
Company and its Subsidiaries during such calendar year (excluding timber
acquired with the net proceeds of an excess harvest pursuant to Section 8.4)
shall exceed the number of board feet of timber sold by the Company and its
Subsidiaries during such calendar year.
"Effective Date" for any Annual Timber Increase shall be July 1 of the
calendar year for which such Annual Timber Increase occurs.
"Asset Coverage Ratio" shall mean, for any calendar year, the ratio of (a)
the wholesale value of the inventory of standing timber owned by the Company
and its Subsidiaries at the end of such calendar year to (b) Indebtedness of
the Company and its Subsidiaries at the end of such calendar year. For
purposes of this definition, the inventory of standing timber owned by
<PAGE>
the Company and its Subsidiaries at the end of any calendar year shall be equal
to (1) the inventory of standing timber owned by the Company and its
Subsidiaries at the end of the prior calendar year, plus (2) the Annual
Timber Increase for the calendar year in question, plus (3) the growth during
such calendar year of standing timber owned by the Company and its
Subsidiaries at the end of such calendar year, minus (4) the volume of
standing timber owned by the Company and its Subsidiaries and harvested
during such calendar year, and minus (5) the inventory of standing timber
disposed of by the Company and its Subsidiares during such calendar year.
For purposes of this definition, the wholesale value of the inventory of
standing timber owned by the Company and its Subsidiaries at the end of any
calendar year shall be equal to 60% of its retail value, which shall be based
upon the volume of each species of standing timber so owned by the Company
and its Subsidiaries and the retail prices for each such species as of the
end of such calendar year. The calculations referred to herein shall be
based upon the good faith estimates of a Responsible Officer contained in the
Compliance Certificate delivered with respect to each annual financial
statement and shall be consistent with the report delivered pursuant to
subsection 7.1(i) with respect to that calendar year.
8.5. Loans and Investments.
The Company shall not purchase or acquire, or suffer or permit any of its
Subsidiaries to purchase or acquire, or make any commitment therefor, any
capital stock, equity interest, or any obligations or other securities of, or
any interest in, any Person, or make or commit to make any Acquisitions, or
make or commit to make any advance, loan, extension of credit or capital
contribution to or any other investment in, any Person including any
Affiliate of the Company, except for:
(a) investments of the type specified in, and in accordance with the
requirements and limitations of, the Investment Policy;
(b) the loans existing on the Closing Date and set forth on Schedule 8.5;
(c) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the
ordinary course of business or from sale of assets sold in compliance with
Section 8.2;
(d) extensions of credit by the Company to any of its Subsidiaries or by
any of its Subsidiaries to another of its Subsidiaries;
(e) advances or deposits in the ordinary course of business to owners of
timber or timberlands to acquire the right to harvest timber;
(f) investments not otherwise permitted hereunder in a Person as long as
(x) such Person is domiciled in, and substantially all of its assets are
located in, the United States, Canada, Mexico or New Zealand and its only
material activities consist of Permitted Businesses, (y) such investments do
not exceed in the aggregate an amount (the "Annual Investment Amount") equal
to (i) in calendar year 1996, $10,000,000 and (ii) in each calendar year
thereafter, the sum of (A) the Annual Investment Amount for the preceding
calendar year plus (B) an increase equal to the percentage increase, if any,
in the CPI for such preceding calendar year, multiplied by such Annual
Investment Amount, and (z) the cumulative amount of such investments during
the term of this Agreement shall not exceed an amount (the "Cumulative
Investment Amount") equal to (i) $51,500,000 plus (ii) an increase equal to
the percentage increase, if any, in the CPI from January 1, 1996 to the date
of determination, multiplied by such Cumulative Investment Amount; and
(g) Investments constituting Permitted Swap Obligations or payments or
advances under Swap Contracts relating to Permitted Swap Obligations.
8.6. Limitation on Indebtedness.
The Company shall not, and shall not suffer or permit any of its Subsidiaries
to, create, incur, assume, suffer to exist, or otherwise become or remain
directly or indirectly liable with respect to, any Indebtedness, except:
(a) Indebtedness incurred pursuant to the Senior Notes and any refunding or
refinancing thereof so long as (i) the first principal repayment date under
such refunding or refinancing
<PAGE>
shall not be earlier than the first principal
repayment date under the Senior Notes as originally issued, and (ii) the
average life of the Indebtedness incurred under such refunding or refinancing
shall not be shorter than the average life of the Senior Notes as originally
issued;
(b) Indebtedness consisting of Contingent Obligations permitted pursuant to
Section 8.9;
(c) Indebtedness existing on the Closing Date and set forth in Schedule 8.6;
(d) Indebtedness secured by Liens permitted by subsection 8.1(i);
(e) Indebtedness of any Subsidiary owing to the Company;
(f) Indebtedness incurred by the Company pursuant to this Agreement;
(g) other unsecured Indebtedness incurred in the ordinary course of
business, provided, that the aggregate outstanding principal amount of such
Indebtedness shall not at any time exceed $10,000,000 and provided further
that such Indebtedness is expressly subordinate to the Obligations hereunder
by subordination provisions acceptable to the Agent and the Required Banks;
and
(h) Facility A Loans.
8.7. Transactions with Affiliates.
The Company shall not, and shall not suffer or permit any of its Subsidiaries
to, enter into any transaction with any Affiliate of the Company, except upon
fair and reasonable terms no less favorable to the Company or such Subsidiary
than would obtain in a comparable arm's-length transaction with a Person not
an Affiliate of the Company or such Subsidiary. The Company shall be
entitled to reimburse the Managing General Partner for (i) all direct and
indirect expenses it incurs or payments it makes on behalf of the Company
(including without limitation salary, bonus, incentive compensation, and
other amounts paid to any Person to perform services for the Company or for
the Managing General Partner in the discharge of its duties to the Company),
and (ii) all other necessary or appropriate expenses reasonably allocable to
the Company or otherwise reasonably incurred by the Managing General Partner
in connection with operating the Company's business (including expenses
allocated to the Managing General Partner by its Affiliates and, for so long
as Fremont Group, Inc., owns an interest in the Managing General Partner, an
annual fee of $100,000, payable semi-annually in arrears, in consideration of
management services).
8.8. Use of Proceeds.
(a) The Company shall not, and shall not suffer or permit any of its
Subsidiaries to, use any portion of the proceeds of the Loans or any Letter
of Credit, directly or indirectly, (i) to purchase or carry Margin Stock,
(ii) to repay or otherwise refinance indebtedness of the Company or others
incurred to purchase or carry Margin Stock, (iii) to extend credit for the
purpose of purchasing or carrying any Margin Stock, or (iv) to acquire any
security in any transaction that is subject to Section 13 or 14 of the
Exchange Act.
(b) The Company shall not and shall not suffer or permit any of its
Subsidiaries to use any portion of the proceeds of the Loans or any Letter of
Credit, directly or indirectly, (i) knowingly to purchase Ineligible
Securities from a Section 20 Subsidiary during any period in which such
Section 20 Subsidiary makes a market in such Ineligible Securities, (ii)
knowingly to purchase during the underwriting or placement period Ineligible
Securities being underwritten or privately placed by a Section 20 Subsidiary,
or (iii) to make payments of principal or interest on Ineligible Securities
underwritten or privately placed by a Section 20 Subsidiary and issued by or
for the benefit of the Company or any Affiliate of the Company. As used in
this Section, "Section 20 Subsidiary" means the Subsidiary of the bank
holding company controlling any Bank, which Subsidiary has been granted
authority by the Federal Reserve Board to underwrite and deal in certain
Ineligible Securities; and
"Ineligible Securities" means securities which may not be underwritten or
dealt in by member banks of the Federal Reserve System under Section 16 of
the Banking Act of 1933 (as 12 U.S.C. Section 24, Seventh), as amended.
8.9. Contingent Obligations.
<PAGE>
The Company shall not, and shall not suffer or permit any of its Subsidiaries
to, create, incur, assume or suffer to exist any Contingent Obligations
except:
(a) endorsements for collection or deposit in the ordinary course of
business;
(b) Permitted Swap Obligations;
(c) Contingent Obligations of the Company and its Subsidiaries existing as
of the Closing Date and listed in Schedule 8.9; and
(d) Contingent Obligations of the Company under timber harvest and log
procurement contracts to acquire timber from private and government owners in
the ordinary course of business and reimbursement obligations with respect to
bonds issued to secure the Company's performance thereunder.
8.10. Joint Ventures.
The Company shall not, and shall not suffer or permit any of its Subsidiaries
to enter into any Joint Venture, other than Joint Ventures in Permitted
Businesses and so long as any such Joint Ventures are not entered into for
the purpose of evading any covenant or restriction in any Loan Document.
8.11. Restricted Payments.
The Company shall not, and shall not suffer or permit any Subsidiary to,
declare or make any limited partner or general partner distribution or
dividend payment or other distribution of assets, properties, cash, rights,
obligations or securities on account of any, limited or general partnership
interest or shares of any class of capital stock, or purchase, redeem or
otherwise acquire for value any partnership interest or shares of capital
stock or any warrants, rights or options to acquire such partnership interest
or shares, now or hereafter outstanding (each a "Restricted Payment"); except
that:
(a) the Company may declare and make distributions payable solely in general
or limited partnership interests or units; and (b) if no Default or Event of
Default exists or would result from such action, the Company may make during
each fiscal quarter one or more Restricted Payments if such Restricted
Payments in an aggregate amount do not exceed Available Cash for the
immediately preceding fiscal quarter.
8.12. Change in Business.
The Company shall not, and shall not suffer or permit any of its Subsidiaries
to, engage in any material line of business other than a Permitted Business.
The Company shall not suffer or permit the Managing General Partner to engage
in any business other than being the general partner of the Company, the
managing general partner of the Master Partnership or the general partner in
any other Subsidiary of the Master Partnership.
8.13. Fiscal Year Changes.
The Company shall not, and shall not suffer or permit any of its Subsidiaries
to change the fiscal year of the Company or of any of its Subsidiaries.
8.14. Amendments to Agreements.
The Company shall not, and shall not suffer or permit any of its Subsidiaries
to amend, modify, supplement, waive or otherwise modify any of the terms and
provisions contained in the Company Partnership Agreement, the Master
Partnership Agreement (or any document executed or delivered in connection
with such Partnership Agreements), or the partnership certificate of the
Company or the Master Partnership, if such amendment, supplement or other
modification shall impair the Company's ability to perform its obligations
under the Loan Documents or increase any of its financial obligations to any
of its general or limited partners or to any Affiliate.
8.15. Limitation on Voluntary Payments of Senior Notes, Etc.
The Company shall not, and shall not permit any of its Subsidiaries to make
any voluntary or optional payment or prepayment on or redemption or
acquisition for value of (including, without limitation, by way of depositing
with respect thereto money or securities before due for the purpose of paying
when due) the Senior Notes other than (i) the refunding or refinancing in
full of the Senior Notes permitted by subsection 8.6(a) and (ii) pro rata
prepayments thereof with the Loans and the Facility A Loans as permitted by
subsection 2.7(a)(i).
<PAGE>
8.16. Cash Flow to Interest Expense Ratio.
The Company shall not permit the ratio of Cash Flow to Interest Expense to be
less than (a) 1.5 to 1.0 at the end of any fiscal quarter ending on or before
December 31, 1996, (b) 2.0 to 1.0 at the end of any fiscal quarter ending
after December 31, 1996 and on or before December 31, 1997, and (c) 2.25 to
1.0 at the end of any fiscal quarter ending thereafter.
8.17. Total Debt to Cash Flow Ratio.
(a) With respect to each fiscal quarter ending before receipt by the
Company of Equity Proceeds, the Company shall not permit the Total Debt to
Cash Flow Ratio to be greater than (i) 5.75 to 1.0 at the end of any such
fiscal quarter ending on or before September 30, 1996, (ii) 5.5 to 1.0 at the
end of any such fiscal quarter ending on or before June 30, 1997, (iii) 4.5
to 1.0 at the end of any such fiscal quarter ending on or before December 31,
1997, and (iv) 4.25 to 1.0 at the end of any such fiscal quarter thereafter.
(b) With respect to each fiscal quarter ending after receipt by the Company
of Equity Proceeds, the Company shall not permit the Total Debt to Cash Flow
Ratio to be greater than (i) 4.5 to 1.0 at the end of any such fiscal quarter
ending on or before December 31, 1997, and (ii) 4.0 to 1.0 at the end of any
such fiscal quarter thereafter. 8.18. Cash Coverage Ratio. The Company shall
not permit the Cash Coverage Ratio at the end of any fiscal quarter to be
less than 1.0 to 1.0.
ARTICLE IX.
EVENTS OF DEFAULT
9.1. Event of Default.
Any of the following shall constitute an "Event of Default":
(a) Non-Payment. The Company fails to pay, (i) when and as required to be
paid herein, any amount of principal of any Loan or of any L/C Obligation, or
(ii) within 5 days after the same becomes due, any interest, fee or any other
amount payable hereunder or under any other Loan Document; or
(b) Representation or Warranty. Any representation or warranty by the
Company, any Partner Entity or any of its Subsidiaries made or deemed made
herein, in the Original Facility B Credit Agreement, in any other Loan
Document, or which is contained in any certificate, document or financial or
other statement by such Person, or any Responsible Officer, furnished at any
time under this Agreement, in or under any other Loan Document, or in or
under the Original Facility B Credit Agreement is incorrect in any material
respect on or as of the date made or deemed made; or
(c) Specific Defaults. The Company fails to perform or observe any term,
covenant or agreement contained in any of Section 7.3 or 7.9 or in Article
VIII; or
(d) Other Defaults. The Company fails to perform or observe any other term
or covenant contained in this Agreement or any other Loan Document, and such
default shall continue unremedied for a period of 20 days after the earlier
of (i) the date upon which a Responsible Officer knew or reasonably should
have known of such failure or (ii) the date upon which written notice thereof
is given to the Company by the Agent or any Bank shall exist; or
(e) Facility A Credit Agreement Cross-Default. An "Event of Default" shall
exist as that term is defined in the Facility A Credit Agreement.
(f) Cross-Default. The Company or any of its Subsidiaries (i) fails to
make any payment in respect of any Indebtedness or Contingent Obligation
(other than in respect of Swap Contracts) having an aggregate principal
amount (including undrawn committed or available amounts and including
amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $5,000,000 when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) and such failure
continues after the applicable grace or notice period, if any, specified in
the relevant document on the date of such failure; or (ii) fails to perform
or observe any
<PAGE>
other condition or covenant, or any other event shall occur or
condition exist, under any agreement or instrument relating to any such
Indebtedness or Contingent Obligation, if the effect of such failure, event
or condition described in clause (ii) is to cause, or to permit the holder or
holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause such Indebtedness to be declared to be
due and payable prior to its stated maturity, or such Contingent Obligation
to become payable or cash collateral in respect thereof to be demanded; or
(iii) there occurs under any Swap Contract an Early Termination Date (as
defined in such Swap Contract) resulting from (1) any event of default under
such Swap Contract as to which the Company or any Subsidiary is the
Defaulting Party (as defined in such Swap Contract) or (2) any Termination
Event (as so defined) as to which the Company or any Subsidiary is an
Affected Party (as so defined), and, in either event, the Swap Termination
Value owed by the Company or such Subsidiary as a result thereof is greater
than $5,000,000; or
(g) Insolvency; Voluntary Proceedings. The Company, any Partner Entity, or
any of their Subsidiaries (i) ceases or fails to be Solvent, or generally
fails to pay, or admits in writing its inability to pay, its debts as they
become due, subject to applicable grace periods, if any, whether at stated
maturity or otherwise; (ii) voluntarily ceases to conduct its business in the
ordinary course; (iii) commences any Insolvency Proceeding with respect to
itself; or (iv) takes any action to effectuate or authorize any of the
foregoing; or
(h) Involuntary Proceedings. (i) Any involuntary Insolvency Proceeding is
commenced or filed against the Company, any Partner Entity or any of their
Subsidiaries, or any writ, judgment, warrant of attachment, execution or
similar process, is issued or levied against a substantial part of such
Person's properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or
similar process shall not be released, vacated or fully bonded within 60 days
after commencement, filing or levy; (ii) the Company, any Partner Entity or
any of their Subsidiaries admits the material allegations of a petition
against it in any Insolvency Proceeding, or an order for relief (or similar
order under non-U.S. law) is ordered in any Insolvency Proceeding; or (iii)
the Company, any Partner Entity or any of their Subsidiaries acquiesces in
the appointment of a receiver, trustee, custodian, conservator, liquidator,
mortgagee in possession (or agent therefor), or other similar Person for
itself or a substantial portion of its property or business; or
(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan which
has resulted or could reasonably be expected to result in liability of either
Company under Title IV of ERISA to the Pension Plan or the PBGC in an
aggregate amount in excess of $5,000,000; or (ii) the commencement or
increase of contributions to, or the adoption of or the amendment of a
Pension Plan by the Company or any ERISA Affiliate which has resulted or
could reasonably be expected to result in an increase in Unfunded Pension
Liability among all Pension Plans in an aggregate amount in excess of
$5,000,000; or
(j) Monetary Judgments. One or more non-interlocutory judgments,
non-interlocutory orders, decrees or arbitration awards is entered against
the Company or any of its Subsidiaries involving in the aggregate a liability
(to the extent not covered by independent third-party insurance as to which
the insurer does not dispute coverage) as to any single or related series of
transactions, incidents or conditions, of $5,000,000 or more, and the same
shall remain unsatisfied, unvacated and unstayed pending appeal for a period
of 30 consecutive days after the entry thereof; or
(k) Non-Monetary Judgments. Any non-monetary judgment, order or decree is
entered against the Company or any of its Subsidiaries which does or would
reasonably be expected to have a Material Adverse Effect, and there shall be
any period of 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect; or
(l) Change of Control. Without the prior written consent of the Required
Banks, Peter W. Stott shall cease to be the Chief Executive Officer or the
Chairman of the Managing General Partner or the Master Partnership shall
cease to be the sole limited partner of the Company; or
<PAGE>
(m) Adverse Change. There occurs a Material Adverse Effect; or
(n) Auditors. The Agent or any Bank shall receive notice from the
Independent Auditor that the Agent and the Banks should no longer use or rely
upon any audit report or other financial data provided by the Independent
Auditor; or
(o) Collateral.
(i) any provision of any Collateral Document shall for any reason cease to
be valid and binding on or enforceable against the Company or the Company
shall so state in writing or bring an action to limit its obligations or
liabilities thereunder; or
(ii) any Collateral Document shall for any reason (other than pursuant to
the terms thereof) cease to create a valid security interest in any material
portion of the Collateral purported to be covered thereby or such security
interest in any material portion of the Collateral shall for any reason cease
to be a perfected and first priority security interest subject only to
Permitted Liens; or
(p) Equity Issuance. The Company shall fail, on or before June 30, 1997,
to have received and applied in repayment of the Loans pursuant to subsection
2.6(b) Equity Proceeds in the amount of at least $100,000,000.
9.2. Remedies.
If any Event of Default occurs, the Agent shall, at the request of, or may,
with the consent of, the Required Banks,
(a) declare the Commitment of each Bank and the Swingline Commitment of the
Swingline Bank to make Loans and any obligation of the Issuing Bank to Issue
Letters of Credit to be terminated, whereupon such Commitment and obligation
shall be terminated;
(b) declare an amount equal to the maximum aggregate amount that is or at
any time thereafter may become available for drawing under any outstanding
Letters of Credit (whether or not any beneficiary shall have presented, or
shall be entitled at such time to present, the drafts or other documents
required to draw under such Letters of Credit) to be immediately due and
payable, and declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or
payable hereunder or under any other Loan Document to be immediately due and
payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Company; and
(c) exercise on behalf of itself and the Banks all rights and remedies
available to it and the Banks under the Loan Documents or applicable law;
provided, however, that upon the occurrence of any event specified in
subsection (g) or (h) of Section 9.1 (in the case of clause (i) of subsection
(h) upon the expiration of the 60-day period mentioned therein), the
obligation of each Bank and the Swingline Bank to make Loans and any
obligation of the Issuing Bank to Issue Letters of Credit shall automatically
terminate and the unpaid principal amount of all outstanding Loans and all
interest and other amounts as aforesaid shall automatically become due and
payable without further act of the Agent, the Issuing Bank, the Swingline
Bank, or any Bank.
9.3. Rights Not Exclusive.
The rights provided for in this Agreement and the other Loan Documents are
cumulative and are not exclusive of any other rights, powers, privileges or
remedies provided by law or in equity, or under any other instrument,
document or agreement now existing or hereafter arising.
ARTICLE X.
THE AGENT
10.1. Appointment and Authorization.
(a) Each Bank hereby irrevocably appoints, designates and authorizes the
Agent to take such action on its behalf under the provisions of this
Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of
<PAGE>
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the
Agent shall not have any duties or responsibilities, except those expressly
set forth herein, nor shall the Agent have or be deemed to have any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
The Company acknowledges that the Agent has made no assertions of implied
authority to act for the Banks and that the Agent has only the authority
expressly granted herein. Without limiting the generality of the foregoing
sentence, the use of the term "agent" in this Agreement with reference to the
Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law. Instead,
such term is used merely as a matter of market custom, and is intended to
create or reflect only an administrative relationship between independent
contracting parties.
(b) The Issuing Bank shall act on behalf of the Banks with respect to any
Letters of Credit Issued by it and the documents associated therewith until
such time and except for so long as the Agent may agree at the request of the
Required Banks to act for such Issuing Bank with respect thereto; provided,
however, that the Issuing Bank shall have all of the benefits and immunities
(i) provided to the Agent in this Article X with respect to any acts taken or
omissions suffered by the Issuing Bank in connection with Letters of Credit
Issued by it or proposed to be Issued by it and the application and
agreements for letters of credit pertaining to the Letters of Credit as fully
as if the term "Agent", as used in this Article X, included the Issuing Bank
with respect to such acts or omissions, and (ii) as additionally provided in
this Agreement with respect to the Issuing Bank.
10.2. Delegation of Duties.
The Agent may execute any of its duties under this Agreement or any other
Loan Document by or through agents, employees or attorneys-in-fact and shall
be entitled to advice of counsel concerning all matters pertaining to such
duties. The Agent shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects with reasonable care.
10.3. Liability of Agent.
None of the Agent-Related Persons shall (i) be liable for any action taken or
omitted to be taken by any of them under or in connection with this Agreement
or any other Loan Document or the transactions contemplated hereby (except
for its own gross negligence or willful misconduct), or (ii) be responsible
in any manner to any of the Banks for any recital, statement, representation
or warranty made by the Company or any of its Subsidiaries or Affiliate of
the Company, or any officer thereof, contained in this Agreement or in any
other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document, or for the value
of or title to any Collateral, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document,
or for any failure of the Company or any other party to any Loan Document to
perform its obligations hereunder or thereunder. No Agent-Related Person
shall be under any obligation to any Bank to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of the Company or any of its Subsidiaries or
Affiliates.
10.4. Reliance by Agent.
(a) The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate,
affidavit, letter, telegram, facsimile, telex or telephone message, statement
or other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons, and
upon advice and statements of legal counsel (including counsel to the
Company), independent accountants and other experts selected by the Agent.
The Agent shall be fully justified in failing or refusing to take any action
under this
<PAGE>
Agreement or any other Loan Document unless it shall first receive
such advice or concurrence of the Required Banks as it deems appropriate and,
if it so requests, it shall first be indemnified to its satisfaction by the
Banks against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action. The Agent shall
in all cases be fully protected in acting, or in refraining from acting,
under this Agreement or any other Loan Document in accordance with a request
or consent of the Required Banks and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions specified in
Section 5.1, each Bank that has executed this Agreement shall be deemed to
have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Agent to such Bank for consent,
approval, acceptance or satisfaction, or required thereunder to be consented
to or approved by or acceptable or satisfactory to the Bank.
10.5. Notice of Default.
The Agent shall not be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default, except with respect to defaults in the
payment of principal, interest and fees required to be paid to the Agent for
the account of the Banks, unless the Agent shall have received written notice
from a Bank or the Company referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default". The Agent will notify the Banks of its receipt of any such notice.
The Agent shall take such action with respect to such Default or Event of
Default as may be requested by the Required Banks in accordance with Article
IX; provided, however, that unless and until the Agent has received any such
request, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Banks.
10.6. Credit Decision.
Each Bank acknowledges that none of the Agent-Related Persons has made any
representation or warranty to it, and that no act by the Agent hereinafter
taken, including any review of the affairs of the Company and its
Subsidiaries, shall be deemed to constitute any representation or warranty by
any Agent-Related Person to any Bank. Each Bank represents to the Agent that
it has, independently and without reliance upon any Agent-Related Person and
based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of
the Company and its Subsidiaries, the value of and title to any Collateral,
and all applicable bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement
and to extend credit to the Company hereunder. Each Bank also represents
that it will, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the
other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property,
financial and other condition and creditworthiness of the Company. Except
for notices, reports and other documents expressly herein required to be
furnished to the Banks by the Agent, the Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Company which may come into the
possession of any of the Agent-Related Persons.
10.7. Indemnification.
Whether or not the transactions contemplated hereby are consummated, the
Banks shall indemnify upon demand the Agent-Related Persons (to the extent
not reimbursed by or on behalf of the Company and without limiting the
obligation of the Company to do so), pro rata, from and against any and all
Indemnified Liabilities; provided, however, that no Bank shall be liable for
the payment to the Agent-Related Persons of any portion of such Indemnified
Liabilities resulting from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Bank shall reimburse the
<PAGE>
Agent upon demand for its ratable share of any costs or out-of-pocket
expenses (including Attorney Costs) incurred by the Agent in connection with
the preparation, execution, delivery, administration, modification, amendment
or enforcement (whether through negotiations, legal proceedings or otherwise)
of, or legal advice in respect of rights or responsibilities under, this
Agreement, the Original Facility B Credit Agreement, any other Loan Document,
or any document contemplated by or referred to herein, to the extent that the
Agent is not reimbursed for such expenses by or on behalf of the Company.
The undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of the Agent.
10.8. Agent in Individual Capacity.
BofA and its Affiliates may make loans to, issue letters of credit for the
account of, enter Swap Contracts with, accept deposits from, acquire equity
interests in and generally engage in any kind of banking, trust, financial
advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though BofA were not the Agent, the Swingline
Bank or the Issuing Bank hereunder and without notice to or consent of the
Banks. The Banks acknowledge that, pursuant to such activities, BofA or its
Affiliates may receive information regarding the Company or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of the Company or such Subsidiary) and acknowledge that the Agent shall
be under no obligation to provide such information to them. With respect to
its Loans, BofA shall have the same rights and powers under this Agreement as
any other Bank and may exercise the same as though it were not the Agent or
the Issuing Bank and the terms "Bank" and "Banks" include BofA in its
individual capacity.
10.9. Successor Agent.
The Agent may, and at the request of the Required Banks shall, resign as
Agent upon 30 days' notice to the Banks. If the Agent resigns under this
Agreement, the Required Banks shall appoint from among the Banks a successor
agent for the Banks. If no successor agent is appointed prior to the
effective date of the resignation of the Agent, the Agent may appoint, after
consulting with the Banks and the Company, a successor agent from among the
Banks. Upon the acceptance of its appointment as successor agent hereunder,
such successor agent shall succeed to all the rights, powers and duties of
the retiring Agent and the term "Agent" shall mean such successor agent and
the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article X and Sections 11.4 and 11.5 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement. If no successor agent has accepted appointment
as Agent by the date which is 30 days following a retiring Agent's notice of
resignation, the retiring Agent's resignation shall nevertheless thereupon
become effective and the Banks shall perform all of the duties of the Agent
hereunder until such time, if any, as the Required Banks appoint a successor
agent as provided for above. Notwithstanding the foregoing, however, BofA
may not be removed as the Agent at the request of the Required Banks unless
BofA shall also simultaneously be replaced as "Issuing Bank" hereunder
pursuant to documentation in form and substance reasonably satisfactory to
BofA.
10.10. Collateral Matters.
(a) The Agent is authorized on behalf of all the Banks, without the
necessity of any notice to or further consent from the Banks, from time to
time to take any action with respect to any Collateral or the Collateral
Documents which may be necessary to perfect and maintain perfected the Liens
upon the Collateral granted pursuant to the Collateral Documents. Each of
the Banks authorizes and directs the Agent to execute the Security Agreement.
(b) The Banks irrevocably authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon termination of the Commitments and payment and
performance in full of all Loans and all other Obligations then due and
payable under this Agreement and under any other Loan Document and the
expiration or termination of all Letters of Credit; (ii) constituting
property sold or to be sold or disposed of as part of or in connection with
any disposition permitted hereunder; or (iii) if approved, authorized or
ratified in writing
<PAGE>
by the Required Banks or all the Banks, as the case may
be, as provided in subsection 11.1(f). Upon request by the Agent at any
time, the Required Banks will confirm in writing the Agent's authority to
release particular types of items of Collateral pursuant to this clause (b)
of this Section 10.10.
(c) Each Bank agrees with and in favor of each other (which agreement shall
not be for the benefit of the Company) that the Company's obligation to such
Bank under this Agreement and the other Loan Documents is not and shall not
be secured by any real property collateral now or hereafter acquired by each
Bank.
10.11. Withholding Tax.
(a) If any Bank is a "foreign corporation, partnership or trust" within the
meaning of the Code and such Bank claims exemption from, or a reduction of,
U.S. withholding tax under Sections 1441 or 1442 of the Code, such Bank
agrees with and in favor of the Agent, to deliver to the Agent:
(i) if such Bank claims an exemption from, or a reduction of, withholding
tax under a United States tax treaty, properly completed IRS Forms 1001 and
W-8 before the payment of any interest in the first calendar year and before
the payment of any interest in each third succeeding calendar year during
which interest may be paid under this Agreement;
(ii) if such Bank claims that interest paid under this Agreement is exempt
from United States withholding tax because it is effectively connected with a
United States trade or business of such Bank, two properly completed and
executed copies of IRS Form 4224 before the payment of any interest is due in
the first taxable year of such Bank and in each succeeding taxable year of
such Bank during which interest may be paid under this Agreement, and IRS
Form W-9; and
(iii) such other form or forms as may be required under the Code or other
laws of the United States as a condition to exemption from, or reduction of,
United States withholding tax. Such Bank agrees to promptly notify the Agent
of any change in circumstances which would modify or render invalid any
claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of, withholding tax
under a United States tax treaty by providing IRS Form 1001 and such Bank
sells, assigns, grants a participation in, or otherwise transfers all or part
of the Obligations of the Company to such Bank, such Bank agrees to notify
the Agent of the percentage amount in which it is no longer the beneficial
owner of Obligations of the Company to such Bank. To the extent of such
percentage amount, the Agent will treat such Bank's IRS Form 1001 as no
longer valid.
(c) If any Bank claiming exemption from United States withholding tax by
filing IRS Form 4224 with the Agent sells, assigns, grants a participation
in, or otherwise transfers all or part of the Obligations of the Company to
such Bank, such Bank agrees to undertake sole responsibility for complying
with the withholding tax requirements imposed by Sections 1441 and 1442 of
the Code.
(d) If any Bank is entitled to a reduction in the applicable withholding
tax, the Agent may withhold from any interest payment to such Bank an amount
equivalent to the applicable withholding tax after taking into account such
reduction. If the forms or other documentation required by subsection (a) of
this Section are not delivered to the Agent, then the Agent may withhold from
any interest payment to such Bank not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the United States or
other jurisdiction asserts a claim that the Agent did not properly withhold
tax from amounts paid to or for the account of any Bank (because the
appropriate form was not delivered, was not properly executed, or because
such Bank failed to notify the Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any other reason) such Bank shall indemnify the Agent fully for all
amounts paid, directly or indirectly, by the Agent as tax or otherwise,
including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to the Agent under this Section, together
with all costs and expenses (including Attorney
<PAGE>
Costs). The obligation of
the Banks under this subsection shall survive the payment of all Obligations
and the resignation or replacement of the Agent.
10.12. Documentation Agent.
The Documentation Agent shall have no right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to
all Banks as such, excepting only its rights under subsection 2.11(b).
Without limiting the foregoing, the Documentation Agent shall not have or be
deemed to have any fiduciary relationship with any Bank. Each Bank
acknowledges that it has not relied, and will not rely, on the Documentation
Agent in deciding to enter into this Agreement or in taking or not taking
action hereunder.
ARTICLE XI.
MISCELLANEOUS
11.1. Amendments and Waivers.
No amendment or waiver of any provision of this Agreement or any other Loan
Document, and no consent with respect to any departure by the Company
therefrom, shall be effective unless the same shall be in writing and signed
by the Required Banks (or by the Agent at the written request of the Required
Banks) and the Company, and acknowledged by the Agent, and then any such
waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that no such waiver,
amendment, or consent shall, unless in writing and signed by all the Banks
and the Company and acknowledged by the Agent, do any of the following:
(a) increase or extend the Commitment of any Bank or the Swingline
Commitment of the Swingline Bank (or reinstate any such Commitment terminated
pursuant to subsection 9.2(a));
(b) postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees or other amounts due to
the Banks (or any of them) hereunder or under any other Loan Document;
(c) reduce the principal of, or the rate of interest specified herein on
any Loan, or (subject to clause (iii) below) any fees or other amounts
payable hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans which is required for the Banks or any of them
to take any action hereunder;
(e) amend this Section, or Section 2.15, or any provision herein providing
for consent or other action by all Banks; or
(f) release any Collateral except as otherwise may be provided by the Loan
Documents or except where the consent of the Required Banks only is
specifically provided for; and, provided further, that (i) no amendment,
waiver or consent shall, unless in writing and signed by the Issuing Bank in
addition to the Required Banks or all the Banks, as the case may be, affect
the rights or duties of the Issuing Bank under this Agreement or any
L/C-Related Document relating to any Letter of Credit Issued or to be Issued
by it, (ii) no amendment, waiver or consent shall, unless in writing and
signed by the Agent in addition to the Required Banks or all the Banks, as
the case may be, affect the rights or duties of the Agent under this
Agreement or any other Loan Document, (iii) no amendment, waiver or consent
shall, unless in writing and signed by the Swingline Bank in addition to the
Required Banks or all the Banks, as the case may be, affect the rights or
duties of the Swingline Bank under this Agreement or any other Loan Document,
and (iv) the Fee Letters may be amended, or rights or privileges thereunder
waived, in a writing executed by the parties thereto.
11.2. Notices.
(a) All notices, requests and other communications shall be in writing
(including, unless the context expressly otherwise provides, by facsimile
transmission, provided that any matter transmitted by the Company by
facsimile (i) shall be immediately confirmed by a telephone call to the
recipient at the number specified on Schedule 11.2, and (ii) shall be
followed promptly by delivery of a hard copy original thereof) and mailed,
faxed or delivered, to the address or facsimile number specified
<PAGE>
for notices
on Schedule 11.2; or, as directed to the Company or the Agent, to such other
address as shall be designated by such party in a written notice to the other
parties, and as directed to any other party, at such other address as shall
be designated by such party in a written notice to the Company and the Agent.
(b) All such notices, requests and communications shall, when transmitted
by overnight delivery, or faxed, be effective when delivered for overnight
(next-day) delivery, or transmitted in legible form by facsimile machine,
respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery; except that
notices pursuant to Article II, III or X shall not be effective until
actually received by the Agent, and notices pursuant to Article III to the
Issuing Bank shall not be effective until actually received by the Issuing
Bank at the address specified for the "Issuing Bank" on Schedule 11.2.
(c) Any agreement of the Agent and the Banks herein to receive certain
notices by telephone or facsimile is solely for the convenience and at the
request of the Company. The Agent and the Banks shall be entitled to rely on
the authority of any Person purporting to be a Person authorized by the
Company to give such notice and the Agent and the Banks shall not have any
liability to the Company or other Person on account of any action taken or
not taken by the Agent or the Banks in reliance upon such telephonic or
facsimile notice. The obligation of the Company to repay the Loans and L/C
Obligations shall not be affected in any way or to any extent by any failure
by the Agent and the Banks to receive written confirmation of any telephonic
or facsimile notice or the receipt by the Agent and the Banks of a
confirmation which is at variance with the terms understood by the Agent and
the Banks to be contained in the telephonic or facsimile notice.
11.3. No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of the Agent
or any Bank, any right, remedy, power or privilege hereunder, shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege.
11.4. Costs and Expenses.
The Company shall:
(a) whether or not the transactions contemplated hereby are consummated,
pay or reimburse the Arranger and BofA (including in its capacity as Agent
and Issuing Bank) within five Business Days after demand (subject to
subsection 5.1(e)) for all reasonable costs and expenses incurred by the
Arranger and BofA (including in its capacity as Agent and Issuing Bank) in
connection with the development, preparation, delivery, administration and
execution of, and any amendment, supplement, waiver or modification to (in
each case, whether or not consummated), this Agreement, the Original Facility
B Credit Agreement, any Loan Document and any other documents prepared in
connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including reasonable Attorney Costs incurred
by BofA (including in its capacity as Agent and Issuing Bank) with respect
thereto;
(b) pay or reimburse the Agent, the Arranger and each Bank within five
Business Days after demand (subject to subsection 5.1(e)) for all costs and
expenses (including Attorney Costs) incurred by them in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or any other Loan Document during the existence of an
Event of Default or after acceleration of the Loans (including in connection
with any "workout" or restructuring regarding the Loans, and including in any
Insolvency Proceeding or appellate proceeding); and
(c) pay or reimburse BofA (including in its capacity as Agent) within five
Business Days after demand (subject to subsection 5.1(e)) for all appraisal
(including the allocated cost of internal appraisal services), audit,
environmental inspection and review (including the allocated cost of such
internal services), search and filing costs, fees and expenses, incurred or
sustained by BofA (including in its capacity as Agent) in connection with the
matters referred to under subsections (a) and (b) of this Section.
<PAGE>
11.5. Indemnity.
(a) Whether or not the transactions contemplated hereby are consummated,
the Company shall indemnify, defend and hold the Agent-Related Persons, and
each Bank and each of its respective officers, directors, employees, counsel,
agents and attorneys-in-fact (each, an "Indemnified Person") harmless from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses and disbursements
(including Attorney Costs) of any kind or nature whatsoever which may at any
time (including at any time following repayment of the Loans, the termination
of the Letters of Credit and the termination, resignation or replacement of
the Agent or replacement of any Bank) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this
Agreement, the Original Facility B Credit Agreement or any document
contemplated by or referred to herein or therein, or the transactions
contemplated hereby, or any action taken or omitted by any such Person under
or in connection with any of the foregoing, including with respect to any
investigation, litigation or proceeding (including any Insolvency Proceeding
or appellate proceeding) related to or arising out of this Agreement, the
Original Facility B Credit Agreement or the Loans or Letters of Credit or the
use of the proceeds thereof, whether or not any Indemnified Person is a party
thereto (all the foregoing, collectively, the "Indemnified Liabilities");
provided, that the Company shall not have any obligation hereunder to any
Indemnified Person with respect to Indemnified Liabilities resulting from the
gross negligence or willful misconduct of such Indemnified Person.
(b) The obligations in this Section shall survive payment of all other
Obligations and any assignment and delegation by a Bank. At the election of
any Indemnified Person, the Company shall defend such Indemnified Person
using legal counsel satisfactory to such Indemnified Person in such Person's
sole discretion, at the sole cost and expense of the Company. All amounts
owing under this Section shall be paid within 30 days after demand.
11.6. Marshalling; Payments Set Aside.
Neither the Agent nor the Banks shall be under any obligation to marshall any
assets in favor of the Company or any other Person or against or in payment
of any or all of the Obligations. To the extent that the Company makes a
payment to the Agent or the Banks, or the Agent or the Banks exercise their
right of set-off, and such payment or the proceeds of such set-off or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Agent or such Bank in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any Insolvency
Proceeding or otherwise, then
(a) to the extent of such recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and
effect as if such payment had not been made or such set-off had not occurred,
and (b) each Bank severally agrees to pay to the Agent upon demand its Pro
Rata Share of any amount so recovered from or repaid by the Agent.
11.7. Successors and Assigns.
The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
except that the Company may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of the
Agent and each Bank.
11.8. Assignments, Participations, Etc.
(a) Any Bank may, with the written consent of the Company at all times
other than during the existence of an Event of Default and of the Agent, the
Issuing Bank and the Swingline Bank all of which consents shall not be
unreasonably withheld, at any time assign and delegate to one or more
Eligible Assignees (provided that no written consent of the Company or the
Agent shall be required in connection with any assignment and delegation by a
Bank to an Eligible Assignee that is an Affiliate of such Bank or to any
other Bank unless at the time of such assignment and delegation the Company's
obligations under Article IV would be increased as a result thereof in which
case the Company's consent will be required and such increase in obligations
will be deemed a reasonable basis for the
<PAGE>
Company to withhold consent
thereto) (each an "Assignee") all, or any ratable part of all, of the Loans,
the Commitments, the L/C Obligations and the other rights and obligations of
such Bank hereunder; provided, however, that (i) no assignment hereunder
shall in any event be less than $10,000,000 of the combined Commitments of
the assigning Bank under this Agreement and under and as defined in the
Facility A Credit Agreement unless as a result of such assignment the
assigning Bank's rights and obligations hereunder shall be reduced to zero;
(ii) if a Bank assigns less than all of its rights and obligations hereunder,
such Bank's remaining Commitment plus such Bank's Commitment under and as
defined in the Facility A Credit Agreement, after giving effect to such
assignment, shall not be less than $10,000,000; (iii) the Company and the
Agent may continue to deal solely and directly with such Bank in connection
with the interest so assigned to an Assignee until (A) written notice of such
assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the
Company and the Agent by such Bank and the Assignee, (B) such Bank and its
Assignee shall have delivered to the Company and the Agent an Assignment and
Acceptance substantially in the form of Exhibit E ("Assignment and
Acceptance"), and (C) the assignor Bank or Assignee has paid to the Agent a
processing fee in the amount of $2,500.00; and (iv) no assignment of Loans
shall be effective, and shall instead be void and of no effect, unless
performed simultaneously with an assignment of an identical percentage of the
rights and obligations of the assigning Bank in Loans under and as defined in
the Facility A Credit Agreement. In connection with any assignment by BofA,
its Swingline Commitment may be in whole but not in part included as part of
the assignment transaction, and the Assignment and Acceptance may be
appropriately modified to include an assignment and delegation of its
Swingline Commitment and any outstanding Swingline Loans.
(b) From and after the date that the Agent notifies the assignor Bank that
it has received (and provided its consent with respect to) an executed
Assignment and Acceptance and payment of the above-referenced processing fee,
(i) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a Bank
under the Loan Documents, and (ii) the assignor Bank shall, to the extent
that rights and obligations hereunder and under the other Loan Documents have
been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under the Loan Documents. To
the extent the Loans and Commitments of any assignor Bank or the Swingline
Loans and Swingline Commitments of the Swingline Bank are evidenced by a Note
instead of a loan account, within 5 Business Days after an assignment, the
Company shall execute and deliver to the Agent (for delivery to the Assignee)
new Notes evidencing such Assignee's assigned portion of the assignor Bank's
Loans and such Commitments and, if the assignor Bank has retained a portion
of the Loans and such Commitment, replacement Notes in a principal amount of
the Loans and such Commitments retained by the assignor Bank. Each such Note
shall be dated the date of the predecessor Note. The assignor Bank shall
mark the predecessor Note "exchanged" and deliver it to the Company.
(c) Immediately upon each Assignee's making its processing fee payment
under the Assignment and Acceptance, this Agreement shall be deemed to be
amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Aggregate
Commitment arising therefrom. The Commitment allocated to each Assignee
shall reduce the Commitment of the assigning Bank pro tanto.
(d) Any Bank may at any time sell to one or more commercial banks,
federally chartered instrumentalities of the United States or other Persons
not Affiliates of the Company (a "Participant") participating interests in
any Loans, the Commitment of that Bank and the other interests of that Bank
(the "originating Bank") hereunder and under the other Loan Documents;
provided, however, that (i) the originating Bank's obligations under this
Agreement shall remain unchanged, (ii) the originating Bank shall remain
solely responsible for the performance of such obligations, (iii) the
Company, the Issuing Bank and the Agent shall continue to deal solely and
directly with the originating Bank in connection with the originating Bank's
rights and obligations under this Agreement and the other
<PAGE>
Loan Documents,
(iv) no Bank shall transfer or grant any participating interest under which
the Participant has rights to approve any amendment to, or any consent or
waiver with respect to, this Agreement or any other Loan Document, except to
the extent such amendment, consent or waiver would require unanimous consent
of the Banks as described in the first proviso to Section 11.1. In the case
of any such participation, the Participant shall be entitled to the benefit
of Sections 4.1, 4.3, 4.4 and 11.5 as though it were also a Bank hereunder,
and if amounts outstanding under this Agreement are due and unpaid, or shall
have been declared or shall have become due and payable upon the occurrence
of an Event of Default, each Participant shall be deemed subject to Section
11.9, to have the right of set-off in respect of its participating interest
in amounts owing under this Agreement to the same extent as if the amount of
its participating interest were owing directly to it as a Bank under this
Agreement.
(e) Each Bank agrees to take normal and reasonable precautions and exercise
due care to maintain the confidentiality of all information identified as
"confidential" or "secret" by the Company and provided to it by the Company
or any of its Subsidiaries, or by the Agent on the Company's or Subsidiary's
behalf, under this Agreement or any other Loan Document, and neither it nor
any of its Affiliates shall use any such information other than in connection
with or in enforcement of this Agreement and the other Loan Documents; except
to the extent such information (i) was or becomes generally available to the
public other than as a result of disclosure by the Bank, or (ii) was or
becomes available on a non-confidential basis from a source other than the
Company, provided that such source is not bound by a confidentiality
agreement with the Company known to the Bank; provided, however, that any
Bank may disclose such information (A) at the request or pursuant to any
requirement of any Governmental Authority to which the Bank is subject or in
connection with an examination of such Bank by any such authority; (B)
pursuant to subpoena or other court process; (C) when required to do so in
accordance with the provisions of any applicable Requirement of Law; (D) to
the extent reasonably required in connection with any litigation or
proceeding to which the Agent, any Bank or their respective Affiliates may be
party; (E) to the extent reasonably required in connection with the exercise
of any remedy hereunder or under any other Loan Document; (F) to such Bank's
independent auditors and other professional advisors; (G) to any Affiliate of
such Bank, or to any Participant or Assignee, actual or potential, provided
that such Affiliate, Participant or Assignee agrees to keep such information
confidential to the same extent required of the Banks hereunder, and (H) as
to any Bank, as expressly permitted under the terms of any other document or
agreement regarding confidentiality to which the Company is party or is
deemed a party with such Bank.
(f) Notwithstanding any other provision in this Agreement, any Bank may at
any time create a security interest in, or pledge, all or any portion of its
rights under and interest in this Agreement in favor of any Federal Reserve
Bank in accordance with Regulation A of the FRB or U.S. Treasury Regulation
31 s or any CFR Section 203.14, and such Federal Reserve Bank may enforce such
pledge or security interest in any manner permitted under applicable law.
11.9. Set-off.
In addition to any rights and remedies of the Banks provided by law, if an
Event of Default exists or the Loans have been accelerated, each Bank is
authorized at any time and from time to time, without prior notice to the
Company, any such notice being waived by the Company to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Bank to or for the credit or the
account of the Company against any and all Obligations owing to such Bank,
now or hereafter existing, irrespective of whether or not the Agent or such
Bank shall have made demand under this Agreement or any Loan Document and
although such Obligations may be contingent or unmatured. Each Bank agrees
promptly to notify the Company and the Agent after any such set-off and
application made by such Bank; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application.
11.10. Automatic Debits of Fees.
<PAGE>
With respect to any commitment fee, arrangement fee, letter of credit fee or
other fee, or any other cost or expense (including Attorney Costs) due and
payable to the Agent, the Issuing Bank, BofA or the Arranger under the Loan
Documents, the Company hereby irrevocably authorizes BofA to debit any
deposit account of the Company with BofA in an amount such that the aggregate
amount debited from all such deposit accounts does not exceed such fee or
other cost or expense. If there are insufficient funds in such deposit
accounts to cover the amount of the fee or other cost or expense then due,
such debits will be reversed (in whole or in part, in BofA's sole discretion)
and such amount not debited shall be deemed to be unpaid. No such debit
under this Section shall be deemed a set-off.
11.11. Notification of Addresses, Lending Offices, Etc.
Each Bank shall notify the Agent in writing of any changes in the address to
which notices to the Bank should be directed, of addresses of any Lending
Office, of payment instructions in respect of all payments to be made to it
hereunder and of such other administrative information as the Agent shall
reasonably request. 11.12. Counterparts. This Agreement may be executed in
any number of separate counterparts, each of which, when so executed, shall
be deemed an original, and all of said counterparts taken together shall be
deemed to constitute but one and the same instrument.
11.13. Severability.
The illegality or unenforceability of any provision of this Agreement or any
instrument or agreement required hereunder shall not in any way affect or
impair the legality or enforceability of the remaining provisions of this
Agreement or any instrument or agreement required hereunder.
11.14. No Third Parties Benefited.
This Agreement is made and entered into for the sole protection and legal
benefit of the Company, the Banks, the Issuing Bank, the Swingline Bank, the
Agent and the Agent-Related Persons, and their permitted successors and
assigns, and no other Person shall be a direct or indirect legal beneficiary
of, or have any direct or indirect cause of action or claim in connection
with, this Agreement or any of the other Loan Documents.
11.15. Governing Law and Jurisdiction.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF CALIFORNIA; PROVIDED, HOWEVER, THAT THE AGENT AND THE
BANKS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, THE
ORIGINAL FACILITY B CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA OR OF THE UNITED STATES FOR
THE NORTHERN DISTRICT OF CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF THE COMPANY, THE AGENT AND THE BANKS CONSENTS, FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE
COURTS. THE COMPANY, THE AGENT AND THE BANKS EACH IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT, THE ORIGINAL FACILITY B CREDIT AGREEMENT OR ANY DOCUMENT RELATED
HERETO OR THERETO. THE COMPANY, THE AGENT AND THE BANKS EACH WAIVE PERSONAL
SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY
OTHER MEANS PERMITTED BY CALIFORNIA LAW.
11.16. Waiver of Jury Trial.
THE COMPANY, THE BANKS AND THE AGENT EACH WAIVE THEIR
<PAGE>
RESPECTIVE RIGHTS TO A
TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR
RELATED TO THIS AGREEMENT, THE ORIGINAL FACILITY B CREDIT AGREEMENT, THE
OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN
ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR
ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
THE COMPANY, THE BANKS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE
OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING
THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A
TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT, THE ORIGINAL
FACILITY B CREDIT AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
11.17. Recourse.
Except as otherwise expressly provided in the proviso to this Section,
nothing contained herein or in the other Loan Documents shall be construed as
creating any liability of any past or present shareholder, limited partner or
general partner of the Company or the Partner Entities or any of their
respective officers or directors to pay any deficiency or other amount owing
on account of the Obligations or to perform any covenant either express or
implied of the Company contained herein or in any other Loan Document;
provided, however, that nothing in this Section 11.17 shall be construed (i)
to relieve any Person from liability for fraud, concealment, or other
intentional wrongdoing for which such Person would otherwise be liable under
any applicable law, either directly or on behalf of the Company, (ii) to
restrict the joinder in any action of any necessary party in order to seek
enforcement of rights against the Company or any other party to any Loan
Document or to restrict injunctive relief against any Person to the extent
necessary to obtain performance by the Company of its Obligations or by any
other party to one or more of the Loan Documents, or (iii) to relieve any
Person from liability for distributions, payments, or other transfers made to
such Person in violation of the Loan Documents, or in violation of or
otherwise recoverable under any applicable law.
11.18. Entire Agreement.
This Agreement, together with the other Loan Documents, embodies the entire
agreement and understanding among the Company, the Banks, the Documentation
Agent and the Agent, and supersedes all prior or contemporaneous agreements
and understandings of such Persons, verbal or written, relating to the
subject matter hereof and thereof; provided, however, that (a) the Fee
Letters (b) any prior arrangements made with respect to the payment by the
Company of (or any indemnification for) any fees, costs or expenses payable
to or incurred (or to be incurred) by or on behalf of the Agent or the
Existing Banks, and (c) the representations and warranties (as of the dates
made and deemed made) and the indemnities of the Company set forth in the
Original Facility B Credit Agreement and the "Loan Documents" (as defined
therein) shall, in each case, survive the execution and delivery of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered in San Francisco, California, by their proper and duly
authorized officers as of the day and year first above written.
CROWN PACIFIC LIMITED PARTNERSHIP, a Delaware limited partnership
<PAGE>
By: CROWN PACIFIC MANAGEMENT
LIMITED PARTNERSHIP, a Delaware limited
partnership,
its general partner
By:
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By:
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Bank, as the
Swingline Bank and as the Issuing Bank
By:
Title:
ABN AMRO BANK N.V., as Documentation Agent
By ABN AMRO NORTH AMERICA, INC.,
as agent
By:
Title:
By:
Title:
<PAGE>
ABN AMRO BANK N.V., as a Bank
By ABN AMRO NORTH AMERICA, INC.,
as agent
By:
Title:
By:
Title:
SOCIETE GENERALE
By:
Title:
NORTHWEST FARM CREDIT SERVICES, ACA
By:
Title:
BANK OF MONTREAL
By:
Title:
THE BANK OF NOVA SCOTIA
By:
<PAGE>
Title:
BANQUE PARIBAS
By:
Title:
By:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:
Title:
KEY BANK OF WASHINGTON
By:
Title:
WELLS FARGO BANK, N.A.
By:
Title:
SCHEDULE 2.1
COMMITMENTS
AND PRO RATA SHARES
<PAGE>
Bank
Commitment
Pro Rata Share
Bank of America National Trust
and Savings Association
$5,517,241.38
13.79310345%
ABN AMRO Bank, N.V.
$4,827,586.20
12.06896552%
Societe Generale
$4,827,586.20
12.06896552%
Northwest Farm Credit Services,
ACA
$3,793,103.45
9.48275862%
Bank of Montreal
$3,793,103.45
9.48275862%
The Bank of Nova Scotia
$3,793,103.45
9.48275862%
Banque Paribas
$3,793,103.45
9.48275862%
Key Bank
$3,793,103.45
9.48275862%
Union Bank of California, N.A.
$3,793,103.45
9.48275862%
Wells Fargo Bank, N.A
$2,068,965.52
5.17241379%
<PAGE>
_____________
$40,000,000.00
______________
100.0%
SCHEDULE 11.2
OFFSHORE AND DOMESTIC LENDING OFFICES,
ADDRESSES FOR NOTICES
CROWN PACIFIC LIMITED PARTNERSHIP
Address for notices:
Crown Pacific Limited Partnership
c/o Crown Pacific Management
Limited Partnership
Bank of America Financial Center
Suite 1500
121 S.W. Morrison Street
Portland, Oregon 97204
Attention: Roger L. Krage
General Counsel and Secretary
Telephone: (503) 274-2300
Facsimile: (503) 228-4875
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
Address for notices:
Bank of America National Trust
and Savings Association
Agency Management Services #5596
1455 Market Street, 12th Floor
San Francisco, California 94103
Attention: Ivo Bakovic
Vice President
Telephone: (415) 436-2789
Facsimile: (415) 436-2700
Address for borrowings/payments to Agent:
Bank of America National Trust
and Savings Association
ABA #1210-0035-8
<PAGE>
Attn.: Agency Management Services #5596
For credit to A/C No. 12337-14313
Ref.: Crown Pacific Limited Partnership
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as a Bank
Addresses for notices:
(a) Credit notices:
Bank of America National Trust and Savings Association
Credit Products #3838
555 California St., 41st Floor
San Francisco, California 94104
Attention: Michael J. Balok
Managing Director
Telephone: (415) 622-2018
Facsimile: (415) 622-4585
(b) Operations notices:
Bank of America National Trust and Savings Association
1850 Gateway Boulevard, 4th Floor
Concord, California 94520
Attention: Theresa A. Peach
Senior Customer Services Specialist
Telephone: 510-675-7350
Facsimile: 510-675-7531
Payment Instructions:
Bank of America National Trust and Savings Association
For credit to A/C No. 12331-83980
Ref.: Crown Pacific Limited Partnership
Attention: Theresa A. Peach,
Senior Customer Services Specialist
Domestic and Offshore Landing Office:
same as address for operations notices
ABN AMRO BANK, N.V.
as Documentation Agent
Address for notices:
ABN AMRO Bank, N.V.
600 University Street
<PAGE>
Suite 2323
Seattle, WA 98101
Attention: David McGinnis, Vice President and Director
Telephone: (206) 587-0342
Facsimile: (206) 682-5641
Address for payment to Documentation Agent:
ABN AMRO Bank, N.V., New York
ABA 026009580
for credit to ABN AMRO Bank Seattle Branch
Account No. 651001085541
Ref.: Crown Pacific Limited Partnership
ABN AMRO BANK, N.V.
as a Bank
Addresses for notices:
(a) Credit notices:
ABN AMRO Bank, N.V.
600 University Street
Suite 2323
Seattle, WA 98101
Attention: David McGinnis, Vice President and Director
Telephone: (206) 587-0342
Facsimile: (206) 682-5641
(b) Operations notices:
ABN AMRO Bank, N.V.
(same address as above)
Attention: Suzanne Smith
Loan Administration Specialist
Telephone: (206) 587-0281
Facsimile: (206) 682-5641
Payment Instructions:
ABN AMRO Bank, N.V., New York
ABA 026009580
for credit to ABN AMRO Bank Seattle Branch
Account No. 651001085541
Ref.: Crown Pacific Limited Partnership
Domestic and Offshore Lending Office:
same as notice address
<PAGE>
SOCIETE GENERALE
as a Bank
Addresses for notices:
(a) Credit Notices:
Societe Generale
One Montgomery Street, Suite 3220
San Francisco, CA 94104
Attention: Alec Neville
Vice President
Telephone: (415) 433-8400
Facsimile: (415) 989-9922
(b) Operations Notices:
Societe Generale
2029 Century Park East, Suite 2900
Los Angeles, CA 90067
Attention: Doris Yun
Telephone: (310) 788-7117
Facsimile: (310) 203-0539
Payment Instructions:
Societe Generale New York
ABA 0260042206
for account of Crown Pacific Limited Partnership
NY LSA 9026096
Domestic and Offshore Lending Office:
same as Operations notice address
WELLS FARGO BANK, N.A.
as a Bank
Addresses for notices:
(a) Credit notices:
Wells Fargo Bank, N.A.
555 Montgomery Street, 17th Floor
San Francisco, CA 94111
Attention: Dave Neumann, Vice President
<PAGE>
Telephone: (415) 396-4067
Facsimile: (415) 362-5081
(b) Operations notices:
Wells Fargo Bank, N.A.
420 Montgomery Street, 9th Floor
San Francisco, CA 94104
Attention: Marilyn Jones, B.S.O.
Telephone: (415) 396-2691
Facsimile: (415) 989-4319
Payment instructions:
Wells Fargo Bank, N.A.
ABA 121000248
BNF=Corporate Loan Operations/AC-2712507201
OBI=Ref: Crown Pacific Limited Partnership
Attention: Corporate Loans SG371
Domestic and Offshore Lending Office:
same as Operations notice address
BANQUE PARIBAS
as a Bank
Addresses for notices:
(a) Credit notices:
Banque Paribas
101 California Street, Suite 3150
San Francisco, CA 94111
Attention: Robert Pinkerton, Vice President
Telephone: (415) 398-6811
Facsimile: (415) 398-4240
(b) Operations notices:
Banque Paribas
2029 Century Park East, Suite 3900
Los Angeles, CA 90067
Attention: Shirley Williams,
Vice President, Operations Dept.
Telephone: (310) 551-7360
Facsimile: (310) 553-1504
Payment instructions:
<PAGE>
Bank of America, San Francisco
ABA 1210-0035-8
Account No. 62902-10150
Account Name: Banque Paribas, Los Angeles Agency
Ref.: Crown Pacific Limited Partnership
Domestic and Offshore Lending Office:
same as Operations notice address
UNION BANK OF CALIFORNIA, N.A.
as a Bank
Addresses for notices:
(a) Credit notices:
Union Bank of California, N.A.
400 California Street, 17th Floor
San Francisco, CA 94104
Attention: Kevin Sullivan, Vice President
Telephone: (415) 765-3148
Facsimile: (415) 765-3146
(b) Operations notices:
Union Bank of California, N.A.
(same address as above)
Attention: Norma Sarto
Telephone: (415) 765-2722
Facsimile: (415) 765-3146
Payment Instructions:
Union Bank of California, N.A.
ABA 121000015
Account No. 001-060235
Account Name: Corporate Banking Note Dept.
Ref.: Crown Pacific Limited Partnership
Domestic and Offshore Lending Office:
same as Credit notice address
KEY BANK OF WASHINGTON
as a Bank
Addresses for Notices:
(a) Credit notices:
<PAGE>
Key Bank of Washington
700 Fifth Avenue, 48th Floor
Seattle, WA 98104
Attention: John H. Brock, Vice President
Telephone: (206) 684-6031
Facsimile: (206) 684-6035
(b) Operations notices:
Key Bank of Washington, N.W. Region Specialty Services
17900 Pacific Highway South, Suite 301
Seattle, WA 98188
Attention: Mary Pease/Vicky Heineck
Telephone: 1(800) 297-5518
Facsimile: 1(800) 297-5495
Payment Instructions:
Key Bank of Washington
ABA 125000574
Account Name: Crown Pacific Limited Partnership
Ref.: N.W. Region Specialty Services
Attn.: Mary Pease/Vicky Heineck
Domestic and Offshore Lending Office:
same as Operations notice address
NORTHWEST FARM CREDIT SERVICES, ACA
as a Bank
Addresses for Notices:
(a) Credit notices:
AgAmerica, FCB
601 West First Avenue
Spokane, WA 99204
Attention: Alfred Compton, Vice President
Telephone: (509) 838-9280
Facsimile: (509) 838-9445
(b) Operations notices:
Northwest Farm Credit Services, ACA
601 West First Avenue
P.O.Box TAF-C-5
Spokane, WA 99220
Attention: Kyle Hexom
Telephone: (509) 838-9337
<PAGE>
Facsimile: (509) 838-9364
Payment Instructions:
AgAmerica, FCB
ABA 1251-0829-8
AGAMER FCB SPOK
Ref.: Crown Pacific Participation
Please notify Kyle Hexom upon receipt of funds
Domestic and Offshore Lending Office:
same as Operations notice address
BANK OF MONTREAL
as a Bank
Address for notices:
(a) Credit notices:
Bank of Montreal
115 S. LaSalle Street
Chicago, IL 60603
Attention: Susan Blackburn, Director
Telephone: (312) 750-3887
Facsimile: (312) 750-3808
(b) Operations notices:
Bank of Montreal
(same address as above)
Attention: Debra Sandt
Int. Officer - Client Services
Telephone: (312) 750-4312
Facsimile: (312) 750-4344
Payment Instructions:
Harris Bank & Trust
ABA 071000288
Account No.134856-6
Account Name: Bank of Montreal
Ref.: Crown Pacific Limited Partnership
Domestic and Offshore Lending Office:
same as notice addresses
<PAGE>
THE BANK OF NOVA SCOTIA
as a Bank
Address for Notices:
(a) Credit notices:
The Bank of Nova Scotia
888 S.W. Fifth Avenue
Suite 750
Portland, OR 97204
Attention: Daryl Hogge
Relationship Manager
Telephone: (503) 222-4169
Facsimile: (503) 222-5502
(b) Operations notices:
The Bank of Nova Scotia
600 Peachtree Street, N.E.
Suite 2700
Atlanta, GA 30308
Attention: Craig Subryan
Telephone: (404) 877-1563
Facsimile: (404) 888-8998
Payment Instructions:
The Bank of Nova Scotia
ABA 026 002 532
Account No. 6102-32
Account Name: BNS-Portland Loan Servicing
Ref.: Crown Pacific Limited Partnership
Domestic and Offshore Lending Office:
same as Credit notice address
AMENDED AND RESTATED
FACILITY B
CREDIT AGREEMENT
Dated as of May 13, 1996
among
<PAGE>
CROWN PACIFIC LIMITED
PARTNERSHIP
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
as Agent,
Issuing Bank and Swingline Bank
ABN AMRO BANK, N.V.
as Documentation Agent
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
Arranged By
BA SECURITIES, INC.
TABLE OF CONTENTS Page
ARTICLE I. DEFINITIONS 1
1.1. Certain Defined Terms. 1
1.2. Other Interpretive Provisions. 29
1.3. Accounting Principles. 30
ARTICLE II. THE CREDITS 30
2.1. Amounts and Terms of Commitments. 30
2.2. Loan Accounts. 31
2.3. Procedure for Borrowing. 31
2.4. Conversion and Continuation Elections 33
2.5. Voluntary Termination or Reduction of Commitments 34
2.6. Optional Prepayments. 34
2.7. Mandatory Prepayments of Loans; Mandatory Commitment Reductions 35
2.8. Repayment 37
2.9. Interest............................................................37
2.10. Swingline Loans....................................................38
<PAGE>
2.11. Fees...............................................................40
2.12. Computation of Fees and Interest...................................41
2.13. Payments by the Company............................................41
2.14. Payments by the Banks to the Agent.................................42
2.15. Sharing of Payments, Etc...........................................42
2.16. Quarterly Adjustments..............................................43
2.17. Security...........................................................43
ARTICLE III. THE LETTERS OF CREDIT.......................................44
3.1. The Letter of Credit Subfacility....................................44
3.2. Issuance, Amendment and Renewal of Letters of Credit................45
3.3. Risk Participations, Drawings and Reimbursements....................47
3.4. Repayment of Participations.........................................49
3.5. Role of the Issuing Bank............................................49
3.6. Obligations Absolute................................................50
3.7. Cash Collateral Pledge..............................................51
3.8. Letter of Credit Fees...............................................51
3.9. Uniform Customs and Practice........................................52
ARTICLE IV. TAXES, YIELD PROTECTION AND ILLEGALITY.......................52
4.1. Taxes...............................................................52
4.2. Illegality..........................................................53
4.3. Increased Costs and Reduction of Return.............................54
4.4. Funding Losses......................................................54
4.5. Inability to Determine Rates........................................55
4.6. Certificates of Banks...............................................55
4.7. Survival............................................................55
ARTICLE V. CONDITIONS PRECEDENT..........................................56
5.1. Conditions of Initial Credit Extensions.............................56
5.2. Conditions to All Credit Extensions.................................59
ARTICLE VI. REPRESENTATIONS AND WARRANTIES...............................59
6.1. Existence and Power.................................................60
6.2. Authorization; No Contravention.....................................60
6.3. Governmental Authorization..........................................60
6.4. Binding Effect......................................................61
6.5. Litigation..........................................................61
6.6. No Default..........................................................61
6.7. ERISA Compliance....................................................61
6.8. Use of Proceeds; Margin Regulations.................................62
6.9. Title to Properties.................................................62
6.10. Taxes..............................................................63
6.11. Financial Condition................................................63
6.12. Environmental Matters..............................................63
6.13. Regulated Entities.................................................64
6.14. No Burdensome Restrictions.........................................64
6.15. Copyrights, Patents, Trademarks and Licenses, Etc..................64
6.16. Subsidiaries.......................................................65
6.17. Insurance..........................................................65
6.18. Labor Relations....................................................65
6.19. Partnership Interests..............................................65
6.20. Full Disclosure....................................................65
6.21. Solvency...........................................................66
<PAGE>
6.22. Swap Obligations...................................................66
6.23. Collateral Documents...............................................66
ARTICLE VII. AFFIRMATIVE COVENANTS.......................................66
7.1. Financial Statements................................................66
7.2. Certificates; Other Information.....................................68
7.3. Notices.............................................................69
7.4. Preservation of Partnership Existence, Etc..........................70
7.5. Maintenance of Property.............................................71
7.6. Insurance...........................................................71
7.7. Payment of Obligations..............................................71
7.8. Compliance with Laws................................................71
7.9. Inspection of Property and Books and Records........................72
7.10. Environmental Laws.................................................72
7.11. Use of Proceeds....................................................72
7.12. Further Assurances.................................................73
ARTICLE VIII. NEGATIVE COVENANTS.........................................73
8.1. Limitation on Liens.................................................73
8.2. Asset Dispositions..................................................75
8.3. Consolidations and Mergers..........................................77
8.4. Harvesting Restrictions.............................................77
8.5. Loans and Investments...............................................79
8.6. Limitation on Indebtedness..........................................80
8.7. Transactions with Affiliates........................................81
8.8. Use of Proceeds.....................................................81
8.9. Contingent Obligations..............................................82
8.10. Joint Ventures.....................................................82
8.11. Restricted Payments................................................82
8.12. Change in Business.................................................83
8.13. Fiscal Year Changes................................................83
8.14. Amendments to Agreements...........................................83
8.15. Limitation on Voluntary Payments of Senior Notes, Etc..............83
8.16. Cash Flow to Interest Expense Ratio................................83
8.17. Total Debt to Cash Flow Ratio......................................84
8.18. Cash Coverage Ratio................................................84
ARTICLE IX. EVENTS OF DEFAULT............................................84
9.1. Event of Default....................................................84
9.2. Remedies............................................................87
9.3. Rights Not Exclusive................................................87
ARTICLE X. THE AGENT.....................................................88
10.1. Appointment and Authorization......................................88
10.2. Delegation of Duties...............................................88
10.3. Liability of Agent.................................................88
10.4. Reliance by Agent..................................................89
10.5. Notice of Default..................................................89
10.6. Credit Decision....................................................90
10.7. Indemnification....................................................90
10.8. Agent in Individual Capacity.......................................91
10.9. Successor Agent....................................................91
10.10. Collateral Matters................................................91
10.11. Withholding Tax...................................................92
<PAGE>
10.12. Documentation Agent...............................................93
ARTICLE XI. MISCELLANEOUS................................................94
11.1. Amendments and Waivers.............................................94
11.2. Notices............................................................95
11.3. No Waiver; Cumulative Remedies.....................................95
11.4. Costs and Expenses.................................................96
11.5. Indemnity..........................................................96
11.6. Marshalling; Payments Set Aside....................................97
11.7. Successors and Assigns.............................................97
11.8. Assignments, Participations, Etc...................................97
11.9. Set-off...........................................................100
11.10. Automatic Debits of Fees.........................................100
11.11. Notification of Addresses, Lending Offices, Etc..................100
11.12. Counterparts.....................................................100
11.13. Severability.....................................................101
11.14. No Third Parties Benefited.......................................101
11.15. Governing Law and Jurisdiction...................................101
11.16. Waiver of Jury Trial.............................................101
11.17. Recourse.........................................................102
11.18. Entire Agreement.................................................102
SCHEDULES
Schedule 1.1 Investment Policy
Schedule 2.1 Commitments
Schedule 5.5 Litigation
Schedule 5.7 ERISA
Schedule 5.12 Environmental Matters
Schedule 5.16 Subsidiaries and Minority Interests
Schedule 7.1 Permitted Liens
Schedule 7.5 Permitted Loans and Investments
Schedule 7.6 Permitted Indebtedness
Schedule 7.9 Contingent Obligations
Schedule 10.2 Lending Offices; Addresses for Notices
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D Form of Legal Opinion of Company's Counsel
Exhibit E Form of Assignment and Acceptance
Exhibit F Form of Note
Exhibit G Form of Escrow Agreement
<PAGE>
AMENDED AND RESTATED
CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of May 13,
1996, among Crown Pacific Limited Partnership, a Delaware limited partnership
(the "Company"), the several financial institutions from time to time party
to this Agreement (collectively, the "Banks"; individually, a "Bank"), ABN
AMRO Bank, N.V., as documentation agent for the Banks, and Bank of America
National Trust and Savings Association, as agent for the Banks.
WHEREAS, the Company, the Original Banks and BofA as agent for the Original
Banks entered into a Credit Agreement dated as of December 13, 1994 (as
amended by the Amendment to Credit Agreement dated as of February 21, 1995,
the "Original Credit Agreement");
WHEREAS, the Company, the Existing Banks and BofA as agent for the Existing
Banks entered into an Amended and Restated Credit Agreement dated as of May
22, 1995 (the "1995 Amended and Restated Credit Agreement");
WHEREAS, the Company, the Agent and the Existing Banks, except for the
Departing Bank, desire to enter into this Agreement to amend and restate the
1995 Amended and Restated Credit Agreement and the Documentation Agent and
the Banks desire to become parties to this Agreement upon the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the Company, the Agent and the Existing Banks,
except for the Departing Bank, hereby amend and restate the 1995 Amended and
Restated Credit Agreement in its entirety and, together with the
Documentation Agent and the Banks that are not Existing Banks, hereby agree
as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. The following terms have the following meanings:
"Acquisition" means any transaction or series of related transactions for the
purpose of or resulting, directly or indirectly, in (a) the acquisition of
all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition of in excess of 50% of the capital
stock, partnership interests or equity of any Person or otherwise causing any
Person, to become a Subsidiary, or (c) a merger or consolidation or any other
combination with another Person (other than a Person that is a Subsidiary)
provided that the Company or the Subsidiary is the surviving entity.
"Acquisition Term Loan" has the meaning specified in subsection 2.1(b).
"Acquisition Term Loan Commitment" has the meaning specified in subsection
2.1(b).
"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.
"Agent" means BofA in its capacity as agent for the Banks hereunder, and any
successor agent arising under Section 9.9.
"Agent-Related Persons" means BofA, BofA as agent under Original Credit
Agreement and the 1995 Amended and Restated Credit Agreement, and any
successor agent arising under Section 9.9, together with their respective
Affiliates (including, in the case of BofA, the Arranger), and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
<PAGE>
"Agent's Payment Office" means the address for payments set forth on Schedule
10.2 in relation to the Agent, or such other address as the Agent may from
time to time specify.
"Agreement" means this Amended and Restated Credit Agreement.
"Amended and Restated Facility B Credit Agreement" means the Amended and
Restated Facility B Credit Agreement dated as of the date hereof between the
Company, the Banks and the Agent.
"Annual Timber Increase" and "Annual Timber Decrease" have the meanings
specified in Section 7.4.
"Applicable Margin" means, in respect of all Loans outstanding on any date
(A) 2.5% for Offshore Rate Loans and 1.5% for Base Rate Loans from the
Closing Date through the earlier of (x) December 31, 1996, or (y) the receipt
by the Company of Equity Proceeds of at least $ 125,000,000 and repayment in
full of the Bridge Term Loan; and (B) thereafter, (x) if the Company has
received Equity Proceeds of at least $125,000,000 by December 31, 1996, 2.5%
for Offshore Rate Loans and 1.5% for Base Rate Loans until the repayment in
full of the Bridge Term Loan, after which the Applicable Margin shall be
determined in accordance with the chart below based upon the Total Debt to
Cash Flow Ratio on a trailing four fiscal quarter basis as set forth below;
or (y) if the Company has not received Equity Proceeds of at least
$125,000,000 by December 31, 1996, 3.5% for Offshore Rate Loans and 2.5% for
Base Rate Loans until delivery of financial reports pursuant to subsections
6.1(a) or (b) and the certificate delivered pursuant to subsection 6.2(b)
with respect to a fiscal quarter as of which the Total Debt to Cash Flow
Ratio is equal to or less than 4.0 to 1.0, after which the Applicable Margin
shall be determined in accordance with the chart below based upon the Total
Debt to Cash Flow Ratio on a trailing four fiscal quarter basis as set forth
below. Total Debt to Cash Flow Ratio at End of Fiscal Quarter Applicable
Margin
Offshore
Rate Loans
Base
Rate Loans
Less than or equal to 3.50 to 1.00
1.6250%
0.6250%
Greater than 3.50 to 1.00 but less
than or equal to 4.00 to 1.00
2.0000%
1.0000%
Greater than 4.00 to 1.00 but less
than or equal to 4.50 to 1.00
2.2500%
<PAGE>
1.2500%
Greater than 4.50 to 1.00
2.5000%
1.5000%
For all periods that the Applicable Margin is based upon the foregoing chart,
the Applicable Margin for each fiscal quarter shall be calculated in reliance
on the financial reports delivered pursuant to subsections 6.1(a) and (b) and
the certificate delivered with respect thereto pursuant to subsection 6.2(b)
with respect to the fiscal quarter ending immediately before the fiscal
quarter in question (e.g., June 30 financials determine the Applicable Margin
for the fiscal quarter beginning July 1). As such financial reports and
certificate are not required to be delivered hereunder until 60 days (or 90
days in the case of fiscal year-end financial reports) after the end of the
applicable fiscal quarter, the Applicable Margin for each fiscal quarter that
the Applicable Margin is based upon the foregoing chart shall be assumed for
interim calculation and collection purposes, until delivery of such financial
reports and certificate, to be the same as for the immediately preceding
fiscal quarter. If such financial reports and certificate are delivered
before the beginning of the next succeeding fiscal quarter, then the
Applicable Margin will be adjusted retroactively to the beginning of the
fiscal quarter in question. If the Company fails to deliver such financial
reports and certificate to the Agent for any fiscal quarter by the beginning
of the next 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 be assumed for interim
calculation and collection purposes, until delivery of such financial reports
and certificates, to be the Applicable Margin applicable to the next higher
Total Debt to Cash Flow Ratio; thus, if the Applicable Margin had previously
been 2.0% for Offshore Rate Loans and 1.0% for the 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 2.25% and 1.25%, respectively, until
such delivery. Upon delivery of such delinquent financial reports and
certificate, the Applicable Margin will be adjusted retroactively to the
beginning of the immediately preceding fiscal quarter, with any payment
adjustments being made pursuant to Section 2.14. Whether or not the
Applicable Margin is based upon the foregoing chart, 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.
"Arranger" means BA Securities, Inc., a Delaware corporation.
"Assignee" has the meaning specified in subsection 10.8(a).
"Attorney Costs" means and includes all reasonable fees and disbursements of
any law firm or other external counsel, the reasonable allocated cost of
internal legal services and all disbursements of internal counsel.
"Available Cash" means, with respect to any fiscal quarter and without
duplication:
(a) the sum of:
(i) all cash receipts of the Company during such fiscal quarter from all
sources;
(ii) any reduction with respect to such fiscal quarter in a cash reserve
(other than an SAU Reserve (as defined in the Master Partnership Agreement))
previously established pursuant to clause (b)(ii) below (either by reversal
or utilization) from the level of such reserve at the end of the prior fiscal
quarter; and
(iii) the amount available to be borrowed on the last day of such fiscal
<PAGE>
quarter under the Working Capital Facility but only so long as the conditions
relating to a "Borrowing" set forth in subsections 5.2(b) and (c) of and as
defined in the Facility B Credit Agreement would be satisfied or waived on
such date (or, if the Working Capital Facility is other than the Facility B
Credit Agreement, the conditions to borrowing under such Working Capital
Facility would be satisfied or waived on such date);
(b) less the sum of:
(i) all cash disbursements of the Company during such fiscal quarter,
including, without limitation, disbursements for operating expenses
(including, without limitation, the amounts described in the second sentence
of Section 7.7), taxes, if any, debt service (including, without limitation,
the payment of principal, premium and interest), redemption of Partnership
Interests (as defined in the Company Partnership Agreement), capital
expenditures and cash distributions to Partners (as defined in the Company
Partnership Agreement) (but only to the extent that such cash distributions
to Partners exceed Available Cash for the immediately preceding fiscal
quarter); and
(ii) any cash reserves established with respect to such fiscal quarter, and
any increase with respect to such fiscal quarter in a cash reserve
established pursuant to this clause (b)(ii) from the level of such reserve at
the end of the prior fiscal quarter, in such amounts as the Managing General
Partner determines in its reasonable discretion to be necessary or
appropriate (A) to provide for the proper conduct of the business of the
Company (including, without limitation, reserves for future capital
expenditures and those established with respect to the Obligations hereunder,
the "Obligations" under and as defined in the Amended and Restated Facility B
Credit Agreement, and the Senior Notes), provided that the reserves
established during such fiscal quarter pursuant to this clause (b)(ii) shall
include an amount not less than (x) 50% of the aggregate amount of all
interest in respect of the Senior Notes to be paid on the interest payment
date immediately following such fiscal quarter, (y) 100% of the aggregate
amount of all accrued and unpaid interest in respect of the Loans and the
Facility B Loans on the date of determination, and (z) 25% of the aggregate
amount of all principal in respect of the Senior Notes scheduled to be paid
during the nine calendar month period immediately following such fiscal
quarter, (B) to establish or add to an SAU Reserve in accordance with the
Master Partnership Agreement, (C) to provide funds for distributions to the
Partners in respect of any one or more of the next four fiscal quarters or
(D) because the distribution of such amounts would be prohibited by
applicable law or by any loan agreement, security agreement, mortgage, debt
instrument or other agreement or obligation to which the Company is a party
or by which it is bound or its assets are subject. Taxes paid by the Company
on behalf of, or amounts withheld with respect to, all or less than all of
the Partners (as defined in the Company Partnership Agreement) shall not be
considered cash disbursements of the Company that reduce Available Cash, but
the payment or withholding thereof shall be deemed to be a distribution of
Available Cash to such Partners. Alternatively, in the discretion of the
Managing General Partner, such taxes (if pertaining to all Partners) may be
considered to be cash disbursements of the Company which reduce Available
Cash, but the payment or withholding thereof shall not be deemed to be a
distribution of Available Cash to such Partners.
"Bank" has the meaning specified in the introductory clause hereto.
"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) 0.50% per annum above the
latest Federal Funds Rate; and (b) 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." (The "reference rate" is a rate set by
BofA based upon various factors including BofA's costs and desired return,
<PAGE>
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.) 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 that bears interest based on the Base Rate.
"Bridge Term Loan" has the meaning specified in subsection 2.1(a).
"Bridge Term Loan Commitment" has the meaning specified in subsection 2.1(a).
"BofA" means Bank of America National Trust and Savings Association, a
national banking association.
"Borrowing" means a borrowing hereunder consisting of Loans of the same Type
made to the Company on the same day by the Banks 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 Portland, Oregon, New York City or San Francisco
are authorized or required by law to close and, if the applicable Business
Day relates to any Offshore Rate Loan, means such a day on which dealings are
carried on in the applicable offshore dollar interbank market.
"Capital Additions and Improvements" means (a) additions or improvements to
the capital assets owned by the Company or any of its Subsidiaries or (b) the
acquisition of existing or the construction of new capital assets (including,
without limitation, timberlands and timber processing and manufacturing
facilities and related assets) made to increase the Operating Capacity of the
Company and its Subsidiaries, taken as a whole, from the Operating Capacity
of the Company and its Subsidiaries, taken as a whole, existing immediately
prior to such addition, improvement, acquisition or construction.
"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.
"Cash Collateralize" means to pledge and deposit with or deliver to the
Agent, for the benefit of the Agent and the Banks, as collateral for the
Offshore Rate Loans, cash or deposit account balances pursuant to
documentation in form and substance reasonably satisfactory to the Agent
(which documents are hereby consented to by the Banks). The Company hereby
grants to the Agent, for the benefit of the Agent and the Banks, a security
interest in all such cash and deposit account balances. Derivatives of such
term shall have corresponding meaning. Cash collateral shall be maintained
in blocked, non-interest bearing deposit accounts at BofA.
"Cash Coverage Ratio" means the ratio of (a) EBITDA, plus the Net Proceeds
from the sale or other disposition of assets permitted under subsections
7.2(a), (b), (c), (d), or (f)(ii)(C), to the extent not otherwise included in
determining EBITDA, plus Permitted Inclusions, plus any decreases and minus
any increases to the reserves described in clauses (c)(i), (ii) and (iii) of
the definition of Cash Provided by Operating Activity, plus any decreases and
minus any increases in the amount available to be borrowed under the Working
Capital Facility at the end of the relevant period, minus capital
expenditures (excluding capital expenditures financed with Indebtedness
incurred for such purpose concurrently with or within 20 days after such
capital expenditures), to (b) cash distributions to partners, plus interest
expense, plus all payments of principal or Indebtedness other than the
Working Capital Facility. All such calculations shall be on a consolidated
basis for the Company and its Subsidiaries and shall be based upon the four
fiscal quarter period ending on the last day of the most recent fiscal
quarter for which financial reports pursuant to subsections 6.1(a) and (b)
and a certificate pursuant to subsection 6.2(b) have been delivered.
"Cash Flow" means, at any date of determination, the sum of the following
<PAGE>
calculated for the Company and its Subsidiaries on a consolidated basis for
the four fiscal quarter period ending on the last day of the most recent
quarter for which financial reports pursuant to subsections 6.1(a) and (b)
and a certificate pursuant to subsection 6.2(b) have been delivered: (i)
EBITDA for such period; (ii) plus the Net Proceeds from the sale or other
disposition of assets permitted under subsections 7.2(a), (b), (c), (d) or
(f)(ii)(C) during such period, to the extent not otherwise included in
determining EBITDA, plus Permitted Inclusions; (iii) plus or minus, as
applicable, in connection with any timberland acquired by the Company with
the proceeds of Indebtedness within such period, an amount equal to a good
faith estimate of such additional amounts that would be included in
determining EBITDA had such timberlands been owned by the Company for such
period, as certified (in a certificate containing such detail as the Required
Banks may reasonably request) by the Chief Financial Officer of the Company
based upon such Chief Financial Officer's good faith estimates of applicable
revenues and expenses arising from such timberlands and assuming aggregate
timber harvests in an amount that does not require proceeds to be placed in
an escrow account pursuant to Section 7.4.
"Cash Provided by Operating Activity" means, at any date of determination,
the sum of the following calculated for the Company and its Subsidiaries on a
consolidated basis for the four fiscal quarter period ending as of the last
day of the most recent fiscal quarter for which financial reports pursuant to
subsections 6.1(a) and (b) and a certificate pursuant to subsection 6.2(b)
have been delivered:
(a) the sum of all cash receipts of the Company and its Subsidiaries during
such period (excluding any cash proceeds from any Interim Capital
Transactions),
(b) less the sum of:
(i) all cash operating expenditures of the Company and its Subsidiaries
during such period, including, without limitation, taxes, if any, and amounts
owed to the Master Partnership for management services rendered to the
Company for which the Master Partnership is obligated to reimburse the
Managing General Partner or the Special General Partner pursuant to Section
6.4 of the Master Partnership Agreement,
(ii) all cash debt service payments of the Company and its Subsidiaries
during such period (other than payments or prepayments of principal and
premium (A) required by reason of loan agreements (including, without
limitation, covenants and default provisions therein) or by lenders, in each
case in connection with sales or other dispositions of assets or (B) made in
connection with refinancings or refundings of indebtedness with the proceeds
from new indebtedness or from the sale of equity interests, provided, that
any payment or prepayment of principal and premium, whether or not then due,
shall be deemed, at the election and in the discretion of the Managing
General Partner, to be refunded or refinanced by any indebtedness incurred or
to be incurred by the Company or any of its Subsidiaries simultaneously with
or within 180 days prior to or after such payment or prepayment to the extent
of the principal amount of such indebtedness so incurred), and
(iii) all cash capital expenditures of the Company and its Subsidiaries
during such period, including, without limitation, cash capital expenditures
made in respect of Maintenance Capital Expenditures, but excluding (A) cash
capital expenditures made in respect of Operating Capacity Acquisitions and
Capital Additions and Improvements and (B) cash expenditures made in payment
of transaction expenses relating to Interim Capital Transactions,
(c) less any additions and plus any reductions to the following reserves
during such period:
(i) any cash reserves of the Company and its Subsidiaries that the Managing
General Partner deems in its reasonable discretion to be necessary or
appropriate to provide for the future cash payment of items of the type
referred to in
<PAGE>
clauses (b)(i) through (iii) above including, without limitation, those
reserves established with respect to the Obligations hereunder, the
"Obligations" under and as defined in the Amended and Restated Facility B
Credit Agreement, and the Senior Notes and as set forth in clause (b)(ii)(A)
of the definition of "Available Cash",
(ii) any amounts held in the SAU Reserve (as defined in the Master
Partnership Agreement), and
(iii) any other cash reserves of the Company and its Subsidiaries that the
Managing General Partner deems in its reasonable discretion to be necessary
or appropriate to provide funds for distributions with respect to Units (as
defined in the Master Partnership Agreement), any general partner interests
in the Master Partnership and any Partnership Interests in respect of any one
or more of the next four fiscal quarters, all as determined on a consolidated
basis with respect to the Company and its Subsidiaries and after taking into
account the Managing General Partner's interest therein attributable to its
general partner interest in the Company. Where cash capital expenditures are
made in part in respect of Operating Capacity Acquisitions or Capital
Additions and Improvements and in part for other purposes, the Managing
General Partner's good faith allocation thereof between the portion made for
Operating Capacity Acquisitions or Capital Additions and Improvements and the
portion made for other purposes shall be conclusive. Taxes paid by the
Company on behalf of, or amounts withheld with respect to, all or less than
all of the Partners shall not be considered cash operating expenditures of
the Company that reduce Cash Provided by Operating Activity, but the payment
or withholding thereof shall be deemed to be a distribution of Available Cash
to such Partners. Alternatively, in the discretion of the Managing General
Partner, such taxes (if pertaining to all Partners) may be considered to be
cash operating expenditures of the Company which reduce Cash Provided by
Operating Activity, but the payment or withholding thereof shall not be
deemed to be a distribution of Available Cash to such Partners.
"CERCLA" has the meaning specified in the definition of "Environmental Laws."
"Closing Date" means the date on which all conditions precedent set forth in
Section 4.1 are satisfied or waived by all Banks (or, in the case of
subsection 4.1(e), waived by the Person entitled to receive such payment).
"Code" means the Internal Revenue Code of 1986, and regulations promulgated
thereunder.
"Commitment", as to each Bank, has the meaning specified in subsection 2.1.
"Company" has the meaning specified in the introductory clause hereto.
"Company's Knowledge" shall mean the actual knowledge of any Person holding
an office of divisional manager of the Company or any Person holding an
office senior to a divisional manager including, without limitation, any
senior executive or officer of the Company.
"Company Partnership Agreement" means the Amended and Restated Agreement of
Limited Partnership of the Company dated as of December 22, 1994, between the
Managing General Partner and the Master Partnership.
"Compliance Certificate" means a certificate substantially in the form of
Exhibit C.
"Contingent Obligation" means, as to any Person, any direct or indirect
liability of that Person, whether or not contingent, with or without
recourse, (a) with respect to any Indebtedness, lease, dividend, letter of
credit or other obligation (the "primary obligations") of another Person (the
"primary obligor"), including any obligation of that Person (i) to purchase,
repurchase or otherwise acquire such primary obligations or any security
therefor, (ii) to advance or provide funds for the payment or discharge of
any such primary obligation, or to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency or
any balance sheet item, level of income or financial condition of the primary
obligor,
<PAGE>
(iii) to purchase property, securities or services primarily for the purpose
of assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation, or (iv) otherwise
to assure or hold harmless the holder of any such primary obligation against
loss in respect thereof (each, a "Guaranty Obligation"); (b) with respect to
any Surety Instrument issued for the account of that Person or as to which
that Person is otherwise liable for reimbursement of drawings or payments;
(c) to purchase any materials, supplies or other property from, or to obtain
the services of, another Person if the relevant contract or other related
document or obligation requires that payment for such materials, supplies or
other property, or for such services, shall be made regardless of whether
delivery of such materials, supplies or other property is ever made or
tendered, or such services are ever performed or tendered, or (d) in respect
of any Swap Contract. The amount of any Contingent Obligation shall, in the
case of Guaranty Obligations, be deemed equal to the stated or determinable
amount of the primary obligation in respect of which such Guaranty Obligation
is made or, if not stated or if undeterminable, the maximum reasonably
anticipated liability in respect thereof, and in the case of other Contingent
Obligations, shall be equal to the maximum reasonably anticipated liability
in respect thereof.
"Contractual Obligation" 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.
"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.
"Conversion Facilities" means, collectively, those assets of the Company
consisting of six lumber mills in the States of Oregon, Idaho and Montana,
and the plywood facility and remanufacturing facility in the State of Oregon.
"CPI" means the Consumer Price Index For All Urban Consumers (CPI-U), All
Cities, (1982-84 equals 100), as published by the U.S. Department of Labor,
Bureau of Labor Statistics, or any successor publication. If the CPI should
hereafter be changed, then the new base shall be converted to the 1982-84
base and the base so converted shall be used.
"Credit Extension" means the making of any Loans hereunder, including any
conversion or continuation thereof.
"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.
"Departing Bank" means AgAmerica, FCB.
"Designated Acres" means up to an aggregate during the term of this Agreement
of 50,000 acres owned by the Company which (based on the good faith
determination of, and as certified to the Agent and the Banks in writing by,
a Responsible Officer that such acres have at the time such determination is
made a higher value as recreational, commercial, residential, grazing or
agricultural property than for timber production) may reasonably be
designated by the Managing General Partner at the time of the sale thereof as
constituting Designated Acres.
"Documentation Agent" means ABN AMRO Bank N.V., in its capacity as
documentation agent for the Banks.
"Dollars", "dollars" and "$" each mean lawful money of the United States.
"EBITDA" means, as measured quarterly on the last day of each fiscal quarter
for the four fiscal quarter period then ending, and determined in accordance
with GAAP for the Company and its Subsidiaries on a consolidated basis, an
amount equal to the sum of (i) consolidated net income (or net loss) for such
period, plus (ii) all amounts treated as expenses for depreciation, depletion
and interest and the amortization of intangibles of any kind to the
<PAGE>
extent included in the determination of such consolidated net income (or
loss), plus (iii) all accrued taxes on or measured by income to the extent
included in the determination of such consolidated net income (or loss);
provided, however, that consolidated net income (or loss) shall be computed
for these purposes without giving effect to extraordinary losses or
extraordinary gains.
"Effective Date" has the meaning specified in Section 7.4.
"Eligible Assignee" means (i) a commercial bank organized under the laws of
the United States, or any state thereof, and having a combined capital and
surplus of at least $250,000,000; (ii) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any
such country, and having a combined capital and surplus of at least
$250,000,000, provided that such bank is acting through a branch or agency
located in the United States; and (iii) a Person that is primarily engaged in
the business of commercial banking and that is (A) a Subsidiary of a Bank,
(B) a Subsidiary of a Person of which a Bank is a Subsidiary, or (C) a Person
of which a Bank is a Subsidiary.
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for (i) violation of any Environmental Law, or (ii) release or
injury to the environment or threat to public health, personal injury
(including sickness, disease or death), property damage, natural resources
damage, or (iii) 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 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
the Company.
"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, natural resource and land use
matters; including 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, the Endangered Species
Act and similar state laws.
"Equity Issuance" means issuance of equity in consequence of a primary
offering by the Master Partnership.
"Equity Proceeds" means proceeds contributed to the Company by the Master
Partnership from an Equity Issuance calculated net of fees and expenses.
"ERISA" means the Employee Retirement Income Security Act of 1974, 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 Pension Plan;
(b) a withdrawal by the Company or any ERISA Affiliate from a Pension 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) or a
cessation of operations which is treated as such a withdrawal under Section
4062(e) of ERISA; (c) 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 Pension
Plan subject to Title IV of ERISA;
<PAGE>
(d) a failure by the Company or any ERISA Affiliate to make required
contributions to a Pension Plan or other Plan subject to Section 412 of the
Code; (e) 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 Pension Plan; (f) 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 (g) an
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code with respect to any Pension Plan.
"Escrow Agreement" means an agreement or agreements entered into by the
Company pursuant to subsections 7.2(f) or 7.4, substantially in the form of
Exhibit G.
"Eurodollar Reserve Percentage" has the meaning specified in the definition
of
"Offshore Rate".
"Event of Default" means any of the events or circumstances specified in
Section 8.1.
"Exchange Act" means the Securities and Exchange Act of 1934, and regulations
promulgated thereunder.
"Existing Banks" means, collectively, BofA, ABN AMRO Bank, N.V., Societe
Generale, Wells Fargo Bank, N.A., Banque Paribas, Union Bank of California,
N.A. (as successor to The Bank of California, N.A.), Key Bank of Washington
and AgAmerica, FCB.
"Existing Timberlands" has the meaning specified in Section 7.4.
"Facility B Loan" means a "Loan" as defined in the Amended and Restated
Facility B Credit Agreement or a "Loan" as defined in the Original Facility B
Credit Agreement (as defined in the Amended and Restated Facility B Credit
Agreement).
"FDIC" means the Federal Deposit Insurance Corporation, and any Governmental
Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate set forth in the weekly
statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including any such
successor, "H.15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be
the arithmetic mean as determined by the Agent of the rates for the last
transaction in overnight Federal funds arranged prior to 9:00 a.m. (New York
City time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Agent.
"Fee Letters" means the letter agreement between the Company, the
Documentation Agent, the Arranger and the Agent, dated April 3, 1996, as
supplemented by a letter agreement between the Agent and the Company of even
date herewith, and the fee letter between the Company, the Arranger and the
Agent, dated April 3, 1996.
"FRB" means the Board of Governors of the Federal Reserve System, and any
Governmental Authority succeeding to any of its principal functions.
"Fremont" means Fremont Timber, Inc., a Delaware corporation.
"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 U.S.
accounting profession), which are applicable to the circumstances as of the
date of determination.
"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
<PAGE>
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"Guaranty Obligation" has the meaning specified in the definition of
"Contingent Obligation."
"Hazardous Materials" means all those substances that 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.
"HS Corp." means HS Corp. of Oregon, an Oregon corporation.
"Indebtedness" of any Person means, without duplication, (a) all indebtedness
for borrowed money; (b) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (other than trade payables
entered into in the ordinary course of business on ordinary terms); (c) all
non-contingent reimbursement or payment obligations with respect to Surety
Instruments; (d) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or businesses; (e) all
indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to
property acquired by the Person (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to
repossession or sale of such property); (f) all obligations with respect to
capital leases; (g) all indebtedness referred to in clauses (a) through (f)
above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon or
in property (including accounts and contracts rights) owned by such Person,
even though such Person has not assumed or become liable for the payment of
such Indebtedness; and (h) all Guaranty Obligations in respect of
indebtedness or obligations of others of the kinds referred to in clauses (a)
through (f) above.
"Indemnified Liabilities" has the meaning specified in Section 10.5.
"Indemnified Person" has the meaning specified in Section 10.5.
"Independent Auditor" has the meaning specified in subsection 6.1(a).
"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; undertaken under U.S. Federal, state or foreign law,
including the Bankruptcy Code. "Interest Expense" means, at any date of
determination, the sum of the following calculated for the Company and its
Subsidiaries on a consolidated basis for the four fiscal quarter period
ending on the last day of the most recent quarter for which financial reports
pursuant to subsection 6.1(a) and a certificate pursuant to subsection 6.2(b)
have been delivered: (a) the interest expense of the Company and its
Subsidiaries, plus (b) the additional interest expense that would have
accrued on the Indebtedness incurred to acquire the timberlands described in
clause (iii) of the definition of "Cash Flow" had such Indebtedness been
outstanding for the full four fiscal quarter period, based upon the interest
rate applicable on such date of determination to such Indebtedness (unless a
higher interest rate is scheduled to apply during the next four fiscal
quarters, in which case such higher interest rate shall be employed for such
portion of the prior four fiscal quarters as is scheduled to apply during the
next four fiscal quarters). "Interest Payment Date" means, (a) with respect
to any Offshore Rate Loan, the last day of each Interest Period applicable to
such Loan, and (b) with respect to any Base Rate Loan, the last Business Day
of each calendar quarter and each date such Loan is converted into another
Type of Loan; provided, however, that if any Interest Period for an Offshore
Rate Loan
<PAGE>
exceeds three months, the date that falls three months after the beginning of
such Interest Period and after each Interest Payment Date thereafter is also
an Interest Payment Date.
"Interest Period" means, as to any Offshore Rate Loan, the period commencing
on the Closing Date or on the Conversion/Continuation Date on which the Loan
is converted into or continued as an Offshore Rate Loan, and ending on the
date one, two, three or six months thereafter as selected by the Company in
the Notice of Borrowing or Notice of Conversion/Continuation; provided that:
(i) if any Interest Period would otherwise end on a day that is not a
Business Day, that Interest Period shall be extended to the following
Business Day unless 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 preceding Business Day;
(ii) any Interest Period pertaining to an Offshore 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 applicable to any Loan shall extend beyond any date
upon which any scheduled principal payment is due pursuant to subsections 2.7
(a) or (b) unless the aggregate principal amount of Loans represented by Base
Rate Loans or Offshore Rate Loans having Interest Periods that will expire on
or before such date equals or exceeds the amount of such principal payment.
"Interim Capital Transactions" means (a) borrowings, refinancings or
refundings of indebtedness 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, (b) sales of equity
interests by the Company, and (c) sales or other voluntary or involuntary
dispositions of any assets of the Company (other than (x) sales or other
dispositions of inventory, accounts receivable and other assets in the
ordinary course of business, including the exchange of timber or real
property for other timber or real property, to the extent that the timber or
real property received in exchange is of equal or greater value, or the sale
of timber or real property, to the extent the proceeds from which are
invested within 180 days in other timber or real property (including such
investments not consummated during such 180 days if a binding agreement for
such investment is completed within 90 days after the expiry of such 180 day
period), (y) sales or other dispositions of assets to the extent the proceeds
from which do not exceed cash expenditures by the Company for the purchase of
timber or real property during the preceding 90 days (excluding any purchase
to the extent financed by a Loan), and (z) sales or other dispositions of
assets as a part of normal retirements or replacements).
"Investment Policy" means the Investment Policy of the Company as attached
hereto as Schedule 1.1 (without giving effect to any later amendments thereto
unless such amendments are approved in writing by the Required Banks).
"IRS" means the Internal Revenue Service, and any Governmental Authority
succeeding to any of its principal functions.
"Joint Venture" means a single-purpose corporation, partnership, joint
venture or other similar legal arrangement (whether created by contract or
conducted through a separate legal entity) now or hereafter formed by the
Company or any of its Subsidiaries with another Person in order to conduct a
common venture or enterprise with such Person.
"Lending Office" means, as to any Bank, the office or offices of such Bank
specified as its "Lending Office" or "Domestic Lending Office" or "Offshore
Lending Office", as the case may be, on Schedule 10.2, or such other office
or offices as such Bank may from time to time notify the Company and the
Agent.
"Lien" means any security interest, mortgage, deed of trust, pledge,
<PAGE>
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising
under or evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under a capital lease, any financing
lease having substantially the same economic effect as any of the foregoing,
or the filing of any financing statement naming the owner of the asset to
which such lien relates as debtor, under the Uniform Commercial Code or any
comparable law) and any contingent or other agreement to provide any of the
foregoing, but not including the interest of a lessor under an operating
lease.
"Loan" has the meaning specified in subsection 2.2(a) and may be a Base Rate
Loan or an Offshore Rate Loan (each a "Type" of Loan).
"Loan Documents" means this Agreement, any Notes, the Fee Letters, and all
other documents delivered to the Agent or any Bank in connection herewith or
therewith; provided that, Loan Documents shall not include the Amended and
Restated Facility B Credit Agreement and any exhibits thereto that are not
also exhibits to this Agreement.
"Maintenance Capital Expenditures" means cash capital expenditures made to
maintain, up to the level thereof that existed at the time of such
expenditure, the Operating Capacity of the capital assets of the Company and
its Subsidiaries, taken as a whole, as such assets existed at the time of
such expenditure and shall, therefore, not include cash capital expenditures
made in respect of Operating Capacity Acquisitions, and Capital Additions and
Improvements. Where cash capital expenditures are made in part to maintain
the Operating Capacity level referred to in the immediately preceding
sentence and in part for other purposes, the Managing General Partner's good
faith allocation thereof between the portion used to maintain such Operating
Capacity level and the portion used for other purposes shall be conclusive.
"Managing General Partner" means Crown Pacific Management Limited
Partnership, a Delaware limited partnership and (i) the sole general partner
of the Company and (ii) the sole managing general partner of the Master
Partnership, and any successor general partner of the Company or managing
general partner of the Master Partnership, as applicable.
"Margin Stock" means "margin stock" as such term is defined in Regulation G,
T, U or X of the FRB.
"Master Partnership" means Crown Pacific Partners, L.P., a Delaware limited
partnership.
"Master Partnership Agreement" means the Amended Restated Agreement of
Limited Partnership of the Master Partnership dated as of December 22, 1994,
between the Managing General Partner, the Special General Partner and the
limited partners party thereto.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) or prospects of the Company or the Company and its
Subsidiaries taken as a whole or the Master Partnership; (b) a material
impairment of the ability of the Company to perform under any Loan Document
and to avoid any Event of Default; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against the Company of
any Loan Document.
"MGP General Partners" means, collectively, Fremont and HS Corp., the sole
general partners of the Managing General Partner, and any successor general
partner of the Managing General Partner.
"MGP Partnership Agreement" means the Amended and Restated Agreement of
Limited Partnership of the Managing General Partner dated as of December 1,
1994, between the MGP General Partners and the limited partners party thereto.
"Net Proceeds" means, as to any disposition of assets by a Person, proceeds
in cash, checks or other cash equivalent financial instruments as and when
received by such Person, net of: (a) the direct costs relating to such
disposition excluding amounts payable to such Person
<PAGE>
or any Affiliate of such person, (b) sale, use or other transaction taxes
paid or payable by such Person as a direct result thereof, and (c) amounts
required to be applied to repay principal, interest and prepayment premiums
and penalties on Indebtedness secured by a Permitted Lien on the asset which
is the subject of such disposition.
"1995 Amended and Restated Credit Agreement" has the meaning specified in the
recitals.
"1994 Senior Notes" means those certain senior promissory notes in the
aggregate principal amount of $275,000,000 issued and sold pursuant to the
1994 Senior Note Agreement.
"1995 Senior Notes" means those certain senior promissory notes in the
aggregate principal amount of $25,000,000 issued and sold pursuant to the
1995 Senior Note Agreement.
"1994 Senior Note Agreement" means the Note Agreement dated as of December 1,
1994, providing for the issuance and sale by the Company of the 1994 Senior
Notes to the purchasers listed in the schedule of purchasers attached thereto
as Schedule I.
"1995 Senior Note Agreement" means the Note Agreement dated as of March 15,
1995, providing for the issuance and sale by the Company of the 1995 Senior
Notes to the purchasers listed in the schedule of purchasers attached thereto
as Schedule I.
"Note" means the promissory note executed by the Company in favor of a Bank
pursuant to subsection 2.2(b), in substantially the form of Exhibit F.
"Notice of Borrowing" means a notice in substantially the form of Exhibit A.
"Notice of Conversion/Continuation" means a notice in substantially the form
of Exhibit B.
"Obligations" means all advances, debts, liabilities, obligations, covenants
and duties arising under any Loan Document, owing by the Company to any Bank,
the Documentation Agent, the Agent or any Indemnified Person, whether direct
or indirect (including those acquired by assignment), absolute or contingent,
due or to become due, now existing or hereafter arising.
"Offshore Rate" means, for any Interest Period with respect to Offshore Rate
Loans, the rate of interest per annum (rounded upward to the next 1/16th of
1%) determined by the Agent as follows:
Offshore Rate = LIBO Rate
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day for any Interest Period the
maximum reserve percentage (expressed as a decimal, rounded upward to the
next 1/100th of 1%) in effect on such day (whether or not applicable to any
Bank) under regulations issued from time to time by the FRB 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") having a term comparable to such Interest Period;
and
"LIBO Rate" for any Interest Period, with respect to an Offshore Rate Loan,
means:
(i) the rate of interest per annum determined by the Agent to be the
arithmetic mean of the rates of interest per annum appearing on Telerate Page
3750 (or any successor publication) for Dollar deposits in the approximate
amount of the Offshore Rate Loan to be made, continued or converted by BofA,
and having a maturity comparable to such Interest Period, at approximately
11:00 a.m. (London time) two Business Days prior to the commencement of such
Interest Period, subject to clause (ii) below; or
(ii) if for any reason rates are not available as provided in the preceding
clause (i) of this definition, the "LIBO Rate" instead means the rate of
interest
<PAGE>
per annum determined by the Agent to be the arithmetic mean (rounded upward
to the nearest 1/16th of 1%) of the rates of interest per annum notified to
the Agent by BofA as the rate of interest at which Dollar deposits in the
approximate amount of the Offshore Rate Loan to be made, continued or
converted by BofA, and having a maturity comparable to such Interest Period,
would be offered to major banks in the London interbank market at their
request at approximately 11:00 a.m. (London time) two Business Days prior to
the commencement of such Interest Period. The Offshore Rate shall be adjusted
automatically as to all Offshore Rate Loans then outstanding as of the
effective date of any change in the Eurodollar Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears interest based on the Offshore
Rate.
"Operating Capacity" means the operating capacity and resources (including,
without limitation, the capacity to grow timber or process logs) of the
Company and its Subsidiaries, taken as a whole.
"Operating Capacity Acquisition" means any transaction in which the Company
or any Subsidiary acquires (through an asset acquisition, merger, stock
acquisition or other form of investment) control over all or a portion of the
assets, properties or business of another Person for the purpose of
increasing the Operating Capacity of the Company and its Subsidiaries, taken
as a whole, from the Operating Capacity of the Company and its Subsidiaries,
taken as a whole, existing immediately prior to such transaction.
"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;
and, (ii) for any limited partnership, the certificate of limited
partnership, the limited partnership agreement, all applicable partnership
resolutions, and all other agreements among the general or limited partners
(or any of them) of such partnership relating thereto (but not including
agreements solely between the limited partners of the Master Partnership).
"Original Banks" means, collectively, BofA, ABN AMRO Bank N.V. and Societe
Generale.
"Original Credit Agreement" has the meaning specified in the Recitals hereto.
"Other Taxes" means 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.
"Participant" has the meaning specified in subsection 10.8(d).
"Partner Entities" means the Managing General Partner, the MGP General
Partners and the Master Partnership.
"PBGC" means the Pension Benefit Guaranty Corporation, or any Governmental
Authority succeeding to any of its principal functions under ERISA.
"Pension Plan" means a pension plan (as defined in Section 3(2) of ERISA)
subject to Title IV of ERISA which the Company or 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 five (5) plan years.
"Permitted Business" means any business engaged in by the Company on the
Closing Date, and any business substantially similar or related to any such
business, which shall not include pulp or paper manufacturing.
"Permitted Inclusions" means the aggregate Net Proceeds from the sale or
other disposition of assets permitted under subsection 7.2(f)(ii)(A) or (B)
to the extent that such Net
<PAGE>
Proceeds (a) in any four fiscal quarters do not exceed (i) 2.5% of the
wholesale value of the inventory of standing timber owned by the Company and
its Subsidiaries as determined for purposes of calculating the Asset Coverage
Ratio under Section 7.4 at the end of the most recent calendar year for which
a Compliance Certificate has been delivered calculating such Asset Coverage
Ratio or (ii) $25,000,000 before the delivery of the first such Compliance
Certificate, and (b) are not otherwise included in determining EBITDA.
"Permitted Liens" has the meaning specified in Section 7.1.
"Permitted Swap Obligations" means all obligations (contingent or otherwise)
of the Company or any Subsidiary existing or arising under Swap Contracts,
provided that each of the following criteria is satisfied: (a) such
obligations are (or were) entered into by such Person in the ordinary course
of business for the purpose of directly mitigating risks associated with
liabilities, commitments or assets held by such Person, or changes in the
value of securities issues by such Person in conjunction with a securities
repurchase program not otherwise prohibited hereunder, and not for purposes
of speculation or taking a "market view;" (b) such Swap Contracts do not
contain any provision ("walk-away" provision) exonerating the non-defaulting
party from its obligation to make payments on outstanding transactions to the
defaulting party.
"Person" means an individual, partnership, corporation, business trust, joint
stock company, trust, unincorporated association, joint venture 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 makes, is making, or is obligated to make contributions and
includes any Pension Plan.
"Planned Volume" has the meaning specified in Section 7.4.
"Pro Forma Consolidated Cash Flow" means, at any date of determination, the
sum of the following calculated on a pro forma basis for the Company and its
Subsidiaries on a consolidated basis for the four fiscal quarter period
ending on the last day of the most recent quarter for which financial reports
pursuant to subsections 6.1(a) and (b) and a certificate pursuant to
subsection 6.2(b) have been delivered:
(i) Cash Provided by Operating Activity;
(ii) plus all cash debt service payments of the Company and its Subsidiaries
during such period to the extent subtracted in determining Cash Provided by
Operating Activity;
(iii) plus all cash capital expenditures of the Company and its Subsidiaries
during such period, except those relating to Operating Capacity Acquisitions,
Capital Additions and Improvements and Interim Capital Transactions, to the
extent subtracted in determining Cash Provided by Operating Activity;
(iv) minus any additions and plus any reductions during such period to any
cash reserves of the Company and its Subsidiaries established to provide
funds for the future cash payment of items of the type referred to in clauses
(ii) and (iii) above, to the extent added or subtracted in determining Cash
Provided by Operating Activity;
(v) plus any additions and minus any reductions during such period to the SAU
Reserve (as defined in the Master Partnership Agreement) and any other cash
reserves of the Company and its Subsidiaries established to provide funds for
distributions with respect to Units (as defined in the Master Partnership
Agreement), any general partner interests in the Master Partnership and any
Partnership Interests, to the extent subtracted or added in determining Cash
Provided by Operating Activity; and
(vi) plus and minus, as applicable, in connection with any timberland to be
acquired by the Company with the proceeds of a Loan or previously acquired
within such four fiscal quarters, an amount equal to a good faith estimate of
such additional amounts that would be included in clauses (i), (ii), (iii)
and (iv) above had such
<PAGE>
timberlands been owned by the Company for such four fiscal quarters, as
certified (in a certificate containing such detail as the Required Banks may
reasonably request) by the Chief Financial Officer of the Company based upon
such Chief Financial Officer's good faith estimates of applicable revenues
and expenses arising from such timberlands and assuming aggregate timber
harvests in an amount that does not require proceeds to be placed in an
escrow or cash collateral account pursuant to Section 7.4.
"Pro Forma Interest Expense" means, at any date of determination, the sum of
the following calculated for the Company and its Subsidiaries on a
consolidated basis for the four fiscal quarter period ending on the last day
of the most recent quarter for which financial reports pursuant to
subsections 6.1(a) and (b) and a certificate pursuant to subsection 6.2(b)
have been delivered:
(a) interest expense payable during such four fiscal quarter period on all
Indebtedness of the Company and its Subsidiaries; plus
(b) interest expense that would have been payable during such four fiscal
quarter period in respect of (i) any Indebtedness proposed to be incurred on
such date of determination, including any Loan requested hereunder or other
Senior Debt, and (ii) Indebtedness incurred after the end of such four fiscal
quarter period and before such date of determination, in each case based upon
the interest rate applicable on such date of determination to such
Indebtedness and giving effect as of the beginning of such four fiscal
quarter period (y) to the incurrence of all such Indebtedness described in
clauses (i) and (ii), and (z) to the application of any such Indebtedness to
the substantially concurrent repayment of any other Indebtedness outstanding
during such four fiscal quarter period.
"Pro Forma Maximum Debt Service" means, as of any date of determination, the
sum of (a) the highest amount that will be payable by the Company and its
Subsidiaries on a consolidated basis, during any consecutive four fiscal
quarters, commencing with the fiscal quarter during which such determination
occurs and ending on December 31, 2009, in respect of scheduled principal and
interest (including payments under capital leases) with respect to all
Indebtedness of the Company and its Subsidiaries outstanding on the date of
determination other than Loans hereunder, after giving effect to any such
Indebtedness proposed to be incurred on such date and to the substantially
concurrent repayment of any other Indebtedness, (i) assuming, in the case of
such Indebtedness having a variable interest rate, that the rate in effect on
the date of determination will remain in effect throughout such period, (ii)
treating the principal amount of such Indebtedness outstanding as of such
date under a revolving credit or similar agreement (other than Facility B
Loans) as maturing and becoming due and payable on the scheduled maturity
date or dates thereof (including the maturity of any payment required by any
commitment reduction or similar amortization provision), without regard to
any provision permitting such maturity date to be extended, and (iii)
treating the principal amount of any Indebtedness that is payable on demand
as maturing and becoming due and payable at the end of any such four fiscal
quarters for which such determination may be made and treating the principal
amount of any Indebtedness that is otherwise callable during any four fiscal
quarters as maturing and becoming due and payable on the last date for such
call during those four fiscal quarters; plus (b) interest expense accrued on
Facility B Loans during the most recent four fiscal quarters with respect to
which financial reports pursuant to subsections 6.1(a) and (b) and the
certificates pursuant to subsection 6.2(b) have been delivered.
"Property" has the meaning specified in Section 6.11.
"Pro Rata Share" means, as to any Bank, (a) prior to the Borrowing on the
Closing Date, the percentage set forth on Schedule 2.1 for such Bank and (b)
thereafter the percentage equivalent (expressed as a decimal, rounded to the
ninth decimal place) at such time of the then aggregate unpaid principal
amount of such Bank's Loans divided by the then aggregate unpaid principal
amount of all Loans.
<PAGE>
"Purchase Agreement" has the meaning specified in subsection 4.1(g).
"Reportable Event" means any of the events set forth in Section 4043(b) 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.
"Required Banks" means one or more Banks then holding at least 66-2/3% of the
then aggregate unpaid principal amount of the Loans.
"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, as to the Company, the chief executive officer,
the president, the chief financial officer or the Person serving as the
secretary and general counsel of the Company, or any other officer having
substantially the same authority and responsibility; or, with respect to
compliance with financial covenants, the chief financial officer or the
treasurer of the Company, or any other officer having substantially the same
authority and responsibility. With respect to a partnership, a Responsible
Officer of a general partner shall constitute a Responsible Officer of such
Partnership.
"Restricted Payment" has the meaning specified in Section 7.11.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Senior 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, this Agreement
and the Amended and Restated Facility B Credit Agreement (including "L/C
Obligations" as defined therein), but not including any subordinated
Indebtedness.
"Senior Notes" means the 1994 Senior Notes and the 1995 Senior Notes.
"Senior Note Agreements" means the 1994 Senior Note Agreement and the 1995
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 (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 California
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 of 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.
"Special General Partner" means Crown Pacific, Ltd., an Oregon corporation
and a special general partner of the Master Partnership, and any successor
special general partner.
"Subsidiary" of a Person means any corporation, association, partnership,
joint
<PAGE>
venture or other business entity of which such Person or any Subsidiary of
such Person either (i) in respect of a corporation, more than 50% of the
voting stock is owned or controlled directly or indirectly by the Person, or
one or more of the Subsidiaries of the Person, or a combination thereof or
(ii) in respect of an association, partnership, joint venture or other
business entity, is the general partner or is entitled to share in more than
50% of the profit, however determined. "Surety Instruments" means all letters
of credit (including standby and commercial), banker's acceptances, bank
guaranties, shipside bonds, surety bonds and similar instruments.
"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.
"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 reasonably
determined by the Required 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).
"Taxes" means 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 Agent, such taxes
(including income taxes or franchise taxes) as are imposed on or measured by
each Bank's net income by the jurisdiction (or any political subdivision
thereof) under the laws of which such Bank or the Agent, as the case may be,
is organized or maintains a lending office.
"Total Debt" means, as of any date of determination, the sum of the
interest-bearing Indebtedness of the Company and its Subsidiaries on a
consolidated basis, including all obligations with respect to capitalized
leases and all "L/C Obligations" as defined in the Amended and Restated
Facility B Credit Agreement and the entire undrawn face amount of letters of
credit other than "Letters of Credit" as defined in the Amended and Restated
Facility B Credit Agreement with respect to which the Company or any of its
Subsidiaries are liable for reimbursement obligations, except that Total Debt
shall not include obligations that are entirely Contingent Obligations (other
than "L/C Obligations" as defined in the Amended and Restated Facility B
Credit Agreement and such obligations with respect to letters of credit other
than "L/C Obligations").
"Total Debt to Cash Flow Ratio" means, for any fiscal quarter, the ratio of
(i) Total Debt outstanding at the end of such quarter to (ii) Cash Flow for
the four fiscal quarter period ending on the last day of such quarter.
"Type" has the meaning specified in the definition of "Loan."
"Unfunded Pension Liability" means the excess of a Pension Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of
that Pension Plan's assets, determined in accordance with the assumptions
used for funding the Pension 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.
"Working Capital Facility" means (a) until the "Revolving Termination Date" as
<PAGE>
defined therein, the Amended and Restated Facility B Credit Agreement, and
(b) thereafter, any facility pursuant to which the Company may obtain
revolving credit for working capital and general partnership purposes,
take-down credit for working capital and general partnership purposes, the
issuance of standby and payment letters of credit and back-up for the
issuance of commercial paper.
1.2 Other Interpretive Provisions.
(a) The meanings of defined terms are equally applicable to the singular and
plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar words 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) (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."
(iii) 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."
(iv) The term "property" includes any kind of property or asset, real,
personal or mixed, tangible or intangible.
(d) Unless otherwise expressly provided herein, (i) references to agreements
(including this Agreement) 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, (ii) references to defined terms and
cross-references to particular sections of the Company Partnership Agreement
or the Master Partnership Agreement shall be deemed references to such terms
and such sections in their current form without giving effect to any future
amendments or modifications thereto unless such amendments or modifications
shall have been approved in writing by the Required Banks, and (iii)
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.
(e) The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.
(f) This Agreement and the other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters.
All such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the
Company and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Banks, the Documentation
Agent or the Agent merely because of the Agent's, the Documentation Agent's
or the Banks' involvement in their preparation.
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.
(b) References herein to "fiscal year" and "fiscal quarter" refer to such
fiscal periods of the Company.
ARTICLE II
<PAGE>
THE CREDITS
2.1 Amounts and Terms of Commitments.
(a) Bridge Term Loan. Each Bank severally agrees, on the terms and
conditions set forth herein, to make a single loan to the Company (each such
loan, a "Bridge Term Loan") on the Closing Date in an amount not to exceed
the amount set forth on Schedule 2.1 under the heading "Bridge Term Loan
Commitment" (such amount, as the same may be reduced as a result of one or
more assignments under Section 10.8, the Bank's "Bridge Term Loan
Commitment"). Amounts borrowed as Bridge Term Loans which are repaid or
prepaid by the Company may not be reborrowed.
(b) Acquisition Term Loan. Each Bank severally agrees, on the terms and
conditions set forth herein, to make a single loan to the Company (each such
loan, an "Acquisition Term Loan") on the Closing Date in an amount not to
exceed the amount set forth in Schedule 2.1 under the heading "Acquisition
Term Loan Commitment" (such amount, as the same may be reduced as a result of
one or more assignments under Section 10.8, the Bank's "Acquisition Term Loan
Commitment"). Amounts borrowed as Acquisition Term Loans which are repaid or
prepaid by the Company may not be reborrowed. No portion of the Acquisition
Term Loan may be borrowed unless the entire Bridge Term Loan Commitment is
being simultaneously borrowed on the Closing Date.
(c) Application of Loans. The Agent is authorized and directed to apply the
proceeds of the Loans on the Closing Date directly to the repayment in full
of amounts outstanding under the 1995 Amended and Restated Credit Agreement
to the full extent necessary to effect such repayment and, to the extent
directed by the Company, to the repayment of amounts outstanding under the
Original Facility B Credit Agreement. The Agent will then make available to
the Company the aggregate of the amounts made available to the Agent by the
Banks representing the remaining proceeds of all Loans by crediting the
account of the Company on the books of BofA, or as otherwise directed by the
Company, in like funds as received by the Agent.
2.2 Loan Accounts.
(a) The Loans made by each Bank shall be evidenced by one or more accounts or
records maintained by such Bank in the ordinary course of business. The
accounts or records maintained by the Agent and each Bank shall be conclusive
absent manifest error of the amount of the Bridge Term Loans and Acquisition
Term Loans (collectively, the "Loans", and each a "Loan") made by the Banks
to 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.
(b) Upon the request of any Bank made through the Agent, the Loans made by
such Bank may be evidenced by one or more Notes, instead of loan accounts.
Each such Bank shall endorse on the schedules annexed to its Note(s) the
date, amount and maturity of each Loan made by it and the amount of each
payment of principal made by the Company with respect thereto. Each such
Bank is irrevocably authorized by the Company to endorse its Note(s) and each
Bank's record shall be conclusive absent manifest error; provided, however,
that the failure of a Bank to make, or an error in making, a notation thereon
with respect to any Loan shall not limit or otherwise affect the obligations
of the Company hereunder or under any such Note to such Bank.
2.3 Procedure for Borrowing on the Closing Date.
(a) The Borrowing on the Closing Date shall be made upon the Company's
irrevocable written notice (which notice may be delivered telephonically and
confirmed in writing on the same day) delivered to the Agent in the form of a
Notice of Borrowing which notice must be received by the Agent (i) prior to
10:00 a.m. (San Francisco time) at least three Business Days prior to the
Closing Date, in the case of Offshore Rate Loans; and (ii) prior to 8:00 a.m.
(San Francisco time) on the Closing Date, in the case of Base Rate Loans,
specifying:
<PAGE>
(A) the amount of the Borrowing, which shall be in an aggregate minimum
amount of $3,000,000 or any integral multiple of $500,000 in excess thereof;
(B) the requested Borrowing Date, which shall be a Business Day;
(C) the Type of Loans comprising the Borrowing; and
(D) the duration of the Interest Period applicable to such Loans included in
such notice. If the Notice of Borrowing fails to specify the duration of the
Interest Period if the Borrowing comprises Offshore Rate Loans, such Interest
Period shall be three months; provided that the Borrowing may comprise
Offshore Rate Loans only if this Agreement has been fully executed before the
giving of such notice or the Notice of Borrowing is accompanied by an
indemnity letter signed by the Company and acceptable to the Agent and the
Banks.
(b) The Agent will promptly notify each Bank of its receipt of the Notice of
Borrowing and of the amount of such Bank's Pro Rata Share of that Borrowing.
(c) Each Bank will make the amount of its Pro Rata Share of the Borrowing
available to the Agent for the account of the Company at the Agent's Payment
Office by 11:00 a.m. (San Francisco time) on the Closing Date in funds
immediately available to the Agent.
(d) Unless the Required Banks shall otherwise agree, during the existence of
a Default or Event of Default, the Company may not elect to have a Loan be
made as, or converted into or continued as, an Offshore Rate Loan.
(e) After giving effect to the Borrowing, there may not be more than five
different Interest Periods in effect with respect to all Loans together.
2.4 Conversion and Continuation Elections.
(a) The Company may, upon irrevocable written notice to the Agent in
accordance with subsection 2.4(b):
(i) elect as of any Business Day, in the case of Base Rate Loans, or as of
the last day of the applicable Interest Period, in the case of Offshore Rate
Loans, to convert any such Loans (or any part thereof in an aggregate minimum
amount of $3,000,000, or any integral multiple of $500,000 in excess thereof)
into Loans of any other Type; or
(ii) elect as of the last day of the applicable Interest Period, to continue
any Loans having Interest Periods expiring on such day (or any part thereof
in an aggregate minimum amount of $3,000,000, or any integral multiple of
$500,000 in excess thereof); provided, that if at any time the aggregate
amount of Offshore Rate Loans made on the same day and having the same
Interest Period is reduced, by payment, prepayment, or conversion of part
thereof to be less than $500,000, such Offshore 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,
Offshore Rate Loans shall terminate.
(b) The Company shall deliver a Notice of Conversion/Continuation (which
notice may be delivered telephonically and confirmed in writing on the same
day) to be received by the Agent (i) not later than 10:00 a.m. (San Francisco
time) at least three Business Days in advance of the Conversion/ Continuation
Date, if the Loans are to be converted into or continued as Offshore Rate
Loans; and (ii) not later than 10:00 a.m. (San Francisco time) at least one
Business Day in advance of 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 renewed;
(C) the Type of Loans resulting from the proposed conversion or
continuation; and
<PAGE>
(D) other than in the case of conversions into Base Rate Loans, the
duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to Offshore Rate
Loans, the Company has failed to select timely a new Interest Period to be
applicable to such Offshore Rate Loans, or if any Default or Event of Default
then exists or if the Company has not delivered to the Agent a notice of
prepayment with respect thereto, the Company shall be deemed to have elected
to convert such Offshore Rate Loans into Base Rate Loans effective as of the
expiration date of such Interest Period.
(d) The Agent will promptly notify each Bank of its receipt of a Notice of
Conversion/Continuation, or, if no timely notice is provided by the Company,
the Agent will promptly notify each Bank of the details of any automatic
conversion. All conversions and continuations shall be made ratably
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 Required Banks 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 as an Offshore Rate Loan.
(f) After giving effect to any conversion or continuation of Loans, there may
not be more than five different Interest Periods in effect in respect of all
Loans together then outstanding.
2.5 Optional Prepayments. Subject to Section 3.4, the Company may, at any
time or from time to time, upon irrevocable notice (which notice may be
delivered telephonically and confirmed in writing on the same day) delivered
to the Agent not later than 10:00 a.m. (San Francisco time) at least three
Business Days prior to such prepayment in the case of Offshore Rate Loans and
not later than 8:00 a.m. (San Francisco) time on the date of such prepayment
in the case of Base Rate Loans, ratably prepay Loans, in whole or in part, in
minimum amounts of $3,000,000 or any integral multiple of $500,000 in excess
thereof. Such notice of prepayment shall specify (i) the date and amount of
such prepayment, and (ii) whether such prepayment is of Offshore Rate Loans
or Base Rate Loans, or any combination thereof. The Agent will promptly
notify each Bank of its receipt of any such notice, and of such Bank's Pro
Rata Share 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 3.4.
2.6 Mandatory Prepayments of Loans.
(a) If the Company or any of its Subsidiaries shall at any time or from time
to time make or agree to make a sale of properties permitted by subsection
7.2(f), or harvest excess timber permitted by Section 7.4, then (A) the Net
Proceeds of such sale shall either be paid by the Company as a prepayment of
such Senior Debt as the Company may elect to so prepay or reinvested as
required by subsection 7.2(f), and (B) the net proceeds of such excess
harvest shall either be paid by the Company as a prepayment of such Senior
Debt as the Company may elect to so prepay or reinvested as required by
Section 7.4; provided that, in each case, the Company may not prepay Senior
Debt other than the Loans and the Facility B Loans pursuant to this
subsection 2.6(a) unless the Company shall also prepay the Loans and the
Facility B Loans in an aggregate amount as shall be necessary to cause the
Banks together with the "Banks" as defined in the Amended and Restated
Facility B Credit Agreement to share such prepayment with the other Senior
Debt at least pro rata. Prepayments to be made with respect to the Loans and
the Facility B Loans pursuant to this subsection 2.6(a) shall be applied
first to the Bridge Term Loans, and second to the Acquisition Term Loans, in
each case first to any Base Rate Loans then outstanding, second, at the
Company's option, to Cash Collateralize (which cash collateral shall be
applied on the maturity date of their Interest Periods to prepay then
outstanding Offshore Rate
<PAGE>
Loans in the order of their maturities) or to prepay any Offshore Rate Loans
then outstanding (in the order of the maturity of their Interest Periods),
and third to Facility B Loans in accordance with Section 2.7(a)(i) of the
Amended and Restated Facility B Credit Agreement.
(b) Subject to payment of any amounts owing under Section 3.4, if the Company
shall incur additional Senior Debt permitted by subsection 7.6(h) in excess
of $1,000,000 (but not including Facility B Loans), the Company shall prepay
on the date the Company receives the net proceeds of such Senior Debt, the
outstanding principal amount of the Loans in an amount equal to such excess.
In addition, the Company shall prepay the Loans by the amount of any Equity
Proceeds upon its receipt thereof. Any prepayment under this subsection
2.6(b) shall be applied first to any Bridge Term Loans then outstanding, and
second to the Acquisition Term Loans, in each case first to any Base Rate
Loans then outstanding, and second at the Company's option, to Cash
Collateralize (which cash collateral shall be applied to prepay then
outstanding Offshore Rate Loans in the order of their maturity) or to prepay
Offshore Rate Loans (in the order of the maturity of their Interest Periods).
2.7 Scheduled Repayment.
(a) Bridge Term Loans. The Company shall repay the Bridge Term Loans on
each date as follows until repaid in full:
December 31, 1996 $12,500,000.00
March 31, 1997 $12,500,000.00
June 30, 1997 $37,500,000.00
January 1, 1998 $37,500,000.00
(b) Acquisition Term Loans. The Company shall repay the Acquisition Term
Loans in quarterly installments on each date as follows until repaid in full:
September 30, 1998 $5,000,000.00
December 31, 1998 $5,000,000.00
March 31, 1999 $10,000,000.00
June 30, 1999 $10,000,000.00
September 30, 1999 $10,000,000.00
December 31, 1999 $10,000,000.00
March 31, 2000 $10,000,000.00
June 30, 2000 $10,000,000.00
September 30, 2000 $10,000,000.00
December 31, 2000 $10,000,000.00
March 31, 2001 $11,250,000.00
June 30, 2001 $11,250,000.00
September 30, 2001 $11,250,000.00
December 31, 2001 $11,250,000.00
March 31, 2002 $7,500,000.00
June 30, 2002 $7,500,000.00
(c) Application to Future Installments. All prepayments of the Bridge Term
Loan or the Acquisition Term Loan under Sections 2.5 or 2.6 shall be applied
to future installments of such Bridge Term Loan or Acquisition Term Loan
under this Section 2.7 in the inverse order of their maturity.
2.8 Interest.
(a) Each Loan shall bear interest on the outstanding principal amount thereof
from the Closing Date at a rate per annum equal to the Offshore Rate or the
Base Rate, as the case may be (and subject to the Company's right to convert
to other Types of Loans under Section 2.4), plus the Applicable Margin.
(b) The Company shall pay interest on each Loan in arrears on each Interest
Payment Date. Interest shall also be paid on the date of any prepayment of
Loans under
<PAGE>
Section 2.5 or 2.6 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 Agent at the
request or with the consent of the Required Banks.
(c) Notwithstanding subsection (a) of this Section, 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 outstanding Obligations, at a rate per annum
which is determined by adding 2% per annum to the Applicable Margin then in
effect for such Loans and, in the case of Obligations not subject to an
Applicable Margin, at a rate per annum equal to the Base Rate plus 2%;
provided, however, that, on and after the expiration of any Interest Period
applicable to any Offshore Rate Loan outstanding on the date of occurrence of
such Event of Default or acceleration, the principal amount of such Loan
shall, during the continuance of such Event of Default or after acceleration,
bear interest at a rate per annum equal to the Base Rate, plus the Applicable
Margin for Base Rate Loans, plus 2%.
(d) Anything herein to the contrary notwithstanding, the obligations of the
Company to any Bank 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 such Bank would be contrary to
the provisions of any law applicable to such Bank limiting the highest rate
of interest that 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.
2.9 Fees.
(a) Agency Fees. The Company shall pay the Agent administrative agency fees
in the amounts and at the times set forth in the Fee Letters.
(b) Syndication, Underwriting Fees. The Company shall pay the Agent, the
Arranger and the Documentation Agent syndication fees, commitment fees and
underwriting fees in the amounts and at the times set forth in the Fee
Letters.
2.10 Computation of Fees and Interest.
(a) All computations of interest for Base Rate Loans when 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 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.
(b) Each determination of an interest rate by the Agent shall be conclusive
and binding on the Company and the Banks in the absence of manifest error.
The Agent will, at the request of the Company or any Bank, deliver to the
Company or such Bank, as the case may be, a statement showing the quotations
used by the Agent in determining any interest rate and the resulting interest
rate.
2.11 Payments by the Company.
(a) All payments to be made by the Company shall be made without set-off,
recoupment or counterclaim. Except as otherwise expressly provided herein,
all payments by the Company shall be made to the Agent for the account of the
Banks at the Agent's Payment Office, and shall be made in dollars and in
immediately available funds, no later than 11:00 a.m. (San Francisco time) on
the date specified herein. The Agent will promptly distribute to each Bank
its Pro Rata Share (or other applicable share as expressly provided herein)
of such payment in like funds as received. Any payment received by the Agent
later than 11:00 a.m. (San Francisco time) shall be deemed to have been
received on the following Business Day and any applicable interest or fee
shall continue to accrue.
<PAGE>
(b) Subject to the provisions set forth in the definition of "Interest
Period" herein, whenever any payment is due on a day other than a Business
Day, such payment shall be made on the following 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.
(c) Unless the Agent receives notice from the Company prior to the date on
which any payment is due to the Banks that the Company will not make such
payment in full as and when required, the Agent may assume that the Company
has made such payment in full to the Agent on such date in immediately
available funds and the Agent may (but shall not be so required), in reliance
upon such assumption, distribute to each Bank on such due date an amount
equal to the amount then due such Bank. If and to the extent the Company has
not made such payment in full to the Agent, each Bank shall repay to the
Agent on demand such amount distributed to such Bank, together with interest
thereon at the Federal Funds Rate for each day from the date such amount is
distributed to such Bank until the date repaid.
2.12 Payments by the Banks to the Agent.
(a) Unless the Agent receives notice from a Bank on or prior to the Closing
Date that such Bank will not make available as and when required hereunder to
the Agent for the account of the Company the amount of that Bank's Pro Rata
Share of the Loans, the Agent may assume that each Bank has made such amount
available to the Agent in immediately available funds on the Closing Date and
the Agent may (but shall not be so required), in reliance upon such
assumption, make available to the Company a corresponding amount. If and to
the extent any Bank shall not have made its full amount available to the
Agent in immediately available funds and the Agent in such circumstances has
made available to the Company such amount, that Bank shall on the Business
Day following the Closing Date make such amount available to the Agent,
together with interest at the Federal Funds Rate for each day during such
period. A notice of the Agent submitted to any Bank with respect to amounts
owing under this subsection (a) shall constitute prima facie evidence of the
accuracy of the information contained therein. If such amount is so made
available, such payment to the Agent shall constitute such Bank's Loan on the
Closing Date for all purposes of this Agreement. If such amount is not made
available to the Agent on the Closing Date, the Agent will notify the Company
of such failure to fund and, upon demand by the Agent, the Company shall pay
such amount to the Agent for the Agent's account, together with interest
thereon for each day elapsed since the Closing Date, at a rate per annum
equal to the interest rate applicable at the time to the Loans.
(b) The failure of any Bank to make any Loan on the Closing Date shall not
relieve any other Bank of any obligation hereunder to make a Loan on the
Closing Date, but no Bank shall be responsible for the failure of any other
Bank to make the Loan to be made by such other Bank.
2.13 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 Pro Rata Share, such Bank
shall immediately (a) notify the Agent of such fact, and (b) purchase from
the other Banks such participations in the Loans made by them as shall be
necessary to cause such purchasing Bank to share the excess payment pro rata
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 ratable 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 may, to the fullest extent permitted by law, exercise all
its rights of payment (including the right of set-off,
<PAGE>
but subject to Section 10.9) 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 Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under
this Section and will in each case notify the Banks following any such
purchases or repayments.
2.14 Quarterly Adjustments.
(a) If the financial reports delivered pursuant to subsections 6.1(a) and (b)
and the certificate delivered pursuant to subsection 6.2(b) when delivered
with respect to any fiscal quarter indicate that the Applicable Margin for
any such period should have been higher than the Applicable Margin for such
period pursuant to the definitions of such terms, and the interest or fee
that would have been collected hereunder based upon the actual Applicable
Margin exceeds the interest actually collected hereunder, then the Company
shall pay on or before the third Business Day after delivery of such
financial reports and certificate an amount equal to such excess.
(b) If (i) the financial reports delivered pursuant to subsections 6.1(a) and
(b) and the certificate delivered pursuant to subsection 6.2(b) when
delivered with respect to any fiscal quarter indicate that the Applicable
Margin for any such period should have been lower than the Applicable Margin
assumed for such period pursuant to the definitions of such terms, and (ii)
the interest actually collected hereunder exceeds the interest that would
have been collected hereunder based upon the actual Applicable Margin, then
the Agent shall credit such excess to interest and fees owing hereunder
(including any interest owing under subsection 2.8(c)) during the calendar
quarter when such financial reports and certificate were received and, if all
such excess is not credited by the end of such calendar quarter, upon request
of the Company, each Bank, severally, if no Default or Event of Default
exists, shall refund to the Agent for distribution to the Company the amount
of such excess actually received and retained by such Bank.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1 Taxes.
(a) Any and all payments by the Company to each Bank or the Agent under this
Agreement and any other Loan Document shall be made free and clear of, and
without deduction or withholding for any Taxes. In addition, the Company
shall pay all Other Taxes.
(b) The Company agrees to indemnify and hold harmless each Bank and the 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) paid
by the Bank or the 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 after the
date the Bank or the Agent makes written demand therefor.
(c) 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 Agent, then:
(i) the sum payable shall be increased as necessary so that after making all
required deductions and withholdings (including deductions and withholdings
applicable to additional sums payable under this Section) such Bank or the
Agent, as the case may be, receives an amount equal to the sum it would have
received had no such deductions or withholdings been made;
(ii) the Company shall make such deductions and withholdings;
(iii) the Company shall pay the full amount deducted or withheld to the
relevant taxing authority or other authority in accordance with applicable
law; and
<PAGE>
(iv) the Company shall also pay to each Bank or the Agent for the account of
such Bank, at the time interest is paid, all additional amounts which the
respective Bank specifies as necessary to preserve the after-tax yield the
Bank would have received if such Taxes or Other Taxes had not been imposed.
(d) Within 30 days after the date of any payment by the Company of Taxes or
Other Taxes, the Company shall furnish the Agent the original or a certified
copy of a receipt evidencing payment thereof, or other evidence of payment
satisfactory to the Agent.
(e) If the Company is required to pay additional amounts to any Bank or the
Agent pursuant to subsection (c) of this Section, then such Bank shall use
reasonable 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.
3.2 Illegality.
(a) If any Bank determines that the introduction of any Requirement of Law,
or any change in any Requirement of Law, or in the interpretation or
administration of any Requirement of Law, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is
unlawful, for any Bank or its applicable Lending Office to make Offshore Rate
Loans, then, on notice thereof by the Bank to the Company through the Agent,
any obligation of that Bank to make Offshore Rate Loans shall be suspended
until the Bank notifies the Agent and the Company that the circumstances
giving rise to such determination no longer exist.
(b) If a Bank determines that it is unlawful to maintain any Offshore Rate
Loan, the Company shall, upon receipt of notice of such fact and demand from
such Bank (with a copy to the Agent), prepay in full such Offshore Rate Loans
of that Bank then outstanding, together with interest accrued thereon and
amounts required under Section 3.4, either on the last day of the Interest
Period thereof, if the Bank may lawfully continue to maintain such Offshore
Rate Loans to such day, or immediately, if the Bank may not lawfully continue
to maintain such Offshore Rate Loan. If the Company is required to so prepay
any Offshore Rate Loan, then concurrently with such prepayment, the Company
shall 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 Offshore Rate Loans has
been so terminated or suspended, the Company may elect, by giving notice to
the Bank through the Agent that all Loans which would otherwise be made by
the Bank as Offshore Rate Loans shall be instead Base Rate Loans.
(d) Before giving any notice to the Agent under this Section, the affected
Bank shall designate a different Lending Office with respect to its Offshore
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.
3.3 Increased Costs and Reduction of Return.
(a) If any Bank determines that, due to either (i) the introduction of or any
change (other than any change by way of imposition of or increase in reserve
requirements included in the calculation of the Offshore Rate) in or in the
interpretation of any law or regulation or (ii) the compliance by that Bank
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 Offshore Rate Loans, then the Company shall be liable for,
and shall from time to time, upon demand (with a copy of such demand to be
sent to the Agent), pay to the 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
<PAGE>
Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation,
(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, 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 to the
Company through the Agent, the Company shall pay to the Bank, from time to
time as specified by the Bank, additional amounts sufficient to compensate
the Bank for such increase.
3.4 Funding Losses. The Company shall reimburse each Bank and 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 on a timely basis any payment of
principal of any Offshore Rate Loan;
(b) the failure of the Company to continue or convert a Loan after the
Company has given (or are deemed to have given) a Notice of
Conversion/Continuation;
(c) the failure of the Company to make any prepayment in accordance with any
notice delivered under Section 2.5;
(d) the prepayment (including pursuant to Sections 2.5 and 2.6) or other
payment (including after acceleration thereof) of an Offshore Rate Loan on a
day that is not the last day of the relevant Interest Period; or
(e) the automatic conversion under Section 2.4 of any Offshore Rate Loan to a
Base Rate Loan on a day that is not the last day of the relevant Interest
Period; including any such loss or expense arising from the liquidation or
reemployment of funds obtained by it to maintain its Offshore Rate Loans or
from fees payable to terminate the deposits from which such funds were
obtained. For purposes of calculating amounts payable by the Company to the
Banks under this Section and under subsection 3.3(a), (i) each Offshore Rate
Loan made by a Bank (and each related reserve, special deposit or similar
requirement) shall be conclusively deemed to have been funded at the LIBO
Rate used in determining the Offshore Rate for such Offshore Rate Loan by a
matching deposit or other borrowing in the interbank eurodollar market for a
comparable amount and for a comparable period, whether or not such Offshore
Rate Loan is in fact so funded.
3.5 Inability to Determine Rates. If the Required Banks determine that for
any reason adequate and reasonable means do not exist for determining the
Offshore Rate for any requested Interest Period with respect to a proposed
Offshore Rate Loan, or that the Offshore Rate applicable pursuant to
subsection 2.8(a) for any requested Interest Period with respect to a
proposed Offshore Rate Loan does not adequately and fairly reflect the cost
to such Banks of funding such Loan, the Agent will promptly so notify the
Company and each Bank. Thereafter, the obligation of the Banks to make or
maintain Offshore Rate Loans, as the case may be, hereunder shall be
suspended until the Agent upon the instruction of the Required Banks revokes
such notice in writing. Upon receipt of such notice, the Company may revoke
any 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 Offshore Rate Loans.
3.6 Certificates of Banks. Any Bank claiming reimbursement or compensation
under this Article III shall deliver to the Company (with a copy to the
Agent) a certificate setting forth in reasonable detail the amount payable to
the Bank hereunder and such certificate shall be
<PAGE>
conclusive and binding on the Company in the absence of manifest error.
3.7 Survival. The agreements and obligations of the Company in Sections 3.1,
3.2, 3.3, 3.4 and 3.5 shall survive the payment of all other Obligations and
any assignment and delegation by a Bank.
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Conditions of Closing. The obligation of each Bank to make its Loans
hereunder is subject to the condition that the Agent have received on or
before the Closing Date all of the following, in form and substance
satisfactory to the Agent and each Bank, and in sufficient copies for each
Bank:
(a) Credit Agreement. This Agreement executed by each party thereto;
(b) Resolutions; Incumbency.
(i) Copies of the resolutions of the board of directors of each MGP General
Partner, as general partners of the Managing General Partner, as general
partner of the Company, and the executive committee of the Board of Control
of the Managing General Partner, in each case approving and authorizing the
execution, delivery and performance by the Managing General Partner on behalf
of the Company of this Agreement and the other Loan Documents and the
transactions contemplated hereby and thereby, certified as of the Closing
Date by the Secretary or an Assistant Secretary of such MGP General Partner
and the Managing General Partner, as the case may be; and
(ii) A certificate of the Secretary or Assistant Secretary of the Managing
General Partner certifying the names and true signatures of the officers of
the Managing 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;
(c) Organization Documents; Good Standing. Each of the following documents:
(i) the partnership certificate of the Company, the Managing General Partner
and the Master Partnership as in effect on the Closing Date, certified by the
Secretary of State (or similar, applicable Governmental Authority) of the
state of formation of such entities as of a recent date and by the Secretary
or Assistant Secretary of the Managing General Partner as of the Closing
Date, and each of the Company Partnership Agreement, the MGP Partnership
Agreement and the Master Partnership Agreement as in effect on the Closing
date, certified by the Secretary or Assistant Secretary of the Managing
General Partner as of the Closing Date;
(ii) the articles or certificate of incorporation of each MGP General Partner
as in effect on the Closing Date, certified by the Secretary of State (or
similar applicable Governmental Authority) of the state of incorporation of
such MGP General Partner as of a recent date and by the Secretary or
Assistant Secretary of such MGP General Partner as of the Closing Date, and
the bylaws of each MGP General Partner as in effect on the Closing Date,
certified by the Secretary or Assistant Secretary of such MGP General Partner
as of the Closing Date; and
(iii) a good standing certificate for the Company, the Managing General
Partner, the MGP General Partners and the Master Partnership from the
Secretary of State (or similar, applicable Governmental Authority) of its
state of incorporation or formation, as applicable, and each state where the
Company and the Partner Entities are qualified to do business as a foreign
corporation or limited partnership, as applicable, as of a recent date,
together with a bring-down certificate by facsimile, dated the Closing Date;
(d) Legal Opinion. An opinion of Ball, Janik & Novack as counsel to the
<PAGE>
Company and the Partner Entities and addressed to the Agent and the Banks,
substantially in the form of Exhibit D;
(e) Payment of Fees. Payment by the Company of 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, plus such additional amounts of Attorney Costs as shall
constitute BofA's reasonable estimate of Attorney Costs incurred or to be
incurred by it 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 2.9 and 10.4;
(f) Certificate. A certificate signed by a Responsible Officer, dated as of
the Closing Date, stating that:
(i) the representations and warranties contained in Article V are true and
correct on and as of such date, as though made on and as of such date;
(ii) no Default or Event of Default exists or would result from the initial
Credit Extension; and
(iii) there has occurred since December 31, 1995, no event or circumstance
that has resulted or could reasonably be expected to result in a Material
Adverse Effect;
(g) Purchase Agreement. A certified copy of the Asset Sale, Purchase and
Transfer Agreement between Willamette Industries, Inc., an Oregon
corporation, and the Company ( the "Purchase Agreement"), evidencing an
aggregate purchase price of the Property not to exceed $205,000,000;
(h) Amended and Restated Facility B Credit Agreement. All conditions
precedent to the initial extension of credit set forth in Section 5.1 of the
Amended and Restated Facility B Credit Agreement shall have occurred prior to
or simultaneously with the closing hereunder;
(i) Other Documents. Such other approvals, opinions, documents or materials
as the Agent or any Bank may reasonably request;
(j) Repayment of Loans Outstanding. Evidence that all "Loans" as defined in
the 1995 Amended and Restated Credit Agreement, including any loss or expense
sustained or incurred as a consequence of such prepayment pursuant to Section
3.4 thereof and interest accrued thereunder, and all "Loans" as defined in
the Original Facility B Credit Agreement (as defined in the Amended and
Restated Facility B Credit Agreement), including any loss or expense
sustained or incurred as a consequence of such prepayment pursuant to Section
4.4 thereof and interest accrued thereunder, shall have been repaid in full
or shall immediately be repaid in full with the proceeds from the Loans and
the Facility B Loans; and
(k) Consent to Amendment and Restatement. The consent to this amendment and
restatement of the 1995 Amended and Restated Credit Agreement executed by the
Departing Bank.
4.2 Conditions to Continuation/Conversion. The obligation of each Bank to
make any Loan or to continue or convert any Loan under Section 2.4 is subject
to the satisfaction of the following conditions precedent on the Closing Date
or relevant Conversion/Continuation Date, as applicable:
(a) Notice. The Agent shall have received (with, in the case of the initial
Loan only, a copy for each Bank) a Notice of Conversion/Continuation;
(b) Continuation of Representations and Warranties. The representations and
warranties in Article V shall be true and correct on and as of such Closing
Date or Conversion/Continuation Date with the same effect as if made on and
as of such Closing Date or Conversion/Continuation Date (except to the extent
such representations and warranties expressly refer to an earlier date, in
which case they shall be true and correct as of such earlier
<PAGE>
date; and
(c) No Existing Default. No Default or Event of Default shall exist or shall
result from such Borrowing or continuation or conversion. Each Notice of
Borrowing and Notices of Conversion/Continuation submitted by the Company
hereunder shall constitute a representation and warranty by the Company
hereunder, as of the date of each such notice and as of each
Conversion/Continuation Date as applicable, that the conditions in Section
4.2 are satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Bank that:
5.1 Existence and Power. The Company and each Partner Entity:
(a) is a limited partnership (or in the case of each MGP General Partner, a
corporation) duly organized, validly existing and in good standing under the
laws of the jurisdiction of its formation;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its
business and to execute, deliver, and perform its obligations under the Loan
Documents;
(c) is duly qualified as a foreign limited partnership and is 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
(d) is in compliance with all Requirements of Law; except, in each case
referred to in clause (c) or clause (d), to the extent that the failure to do
so could not reasonably be expected to have a Material Adverse Effect.
5.2 Authorization; No Contravention. The execution, delivery and performance
by the Company of this Agreement and each other Loan Document to which the
Company is a party, have been duly authorized by all necessary partnership
and corporate action, and do not and will not:
(a) contravene the terms of any Organization Documents of the Company or the
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 the Company or any of the Partner Entities are 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.
5.3 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Company or
any Partner Entity of this Agreement or any other Loan Document.
5.4 Binding Effect. This Agreement and each other Loan Document to which the
Company is a party constitute the legal, valid and binding obligations of the
Company (to the extent it is a party thereto), enforceable against the
Company in accordance with their respective terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws
affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability.
5.5 Litigation. Except as specifically disclosed in Schedule 5.5, there are
no actions, suits, proceedings, claims or disputes pending, or to the
Company's Knowledge, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against the Company or any
of the Partner Entities, or any of their respective Subsidiaries or any of
their respective properties which:
<PAGE>
(a) purport to affect or pertain to the Equity Issuance, this Agreement or
any other Loan Document, or any of the transactions contemplated hereby or
thereby; or
(b) have a reasonable probability of success on the merits and which, if
determined adversely to such Person or its 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 or any other Loan Document, or
directing that the transactions provided for herein or therein not be
consummated as herein or therein provided.
5.6 No Default. No Default or Event of Default exists or would result from
the incurring of any Obligations by the Company. As of the Closing Date,
none of the Company, the Partner Entities, or 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, could 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 8.1(f).
5.7 ERISA Compliance.
(a) Schedule 5.7 lists all Plans. All written descriptions thereof provided
to the Agent are true and complete in all material respects.
(b) Except as specifically disclosed in Schedule 5.7, each Plan is in
compliance with the applicable provisions of ERISA, the Code and other
federal or state law, except for such non-compliance which would not
reasonably be expected to have a Material Adverse Effect. Each Plan which is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a determination
letter will be submitted no later than the expiration of the remedial
amendment period for effecting amendments required by reason of Section 1140
of the Tax Reform Act of 1986, as amended, and to the Company's Knowledge,
nothing has occurred which would cause the loss of such qualification.
(c) There are no pending, or to the Company's Knowledge, threatened claims,
actions or lawsuits, or action by any Governmental Authority, with respect to
any Plan which has resulted or could reasonably be expected to result in a
Material Adverse Effect. There has been no prohibited transaction or other
violation of the fiduciary responsibility rule with respect to any Plan which
could reasonably result in a Material Adverse Effect.
(d) Except as specifically disclosed in Schedule 5.7, no ERISA Event has
occurred or is reasonably expected to occur with respect to any Pension Plan.
(e) Except as specifically disclosed in Schedule 5.7, no Pension Plan (other
than multiemployer plans within the meaning of Section 3(38) of ERISA) has
any Unfunded Pension Liability.
(f) Except as specifically disclosed in Schedule 5.7, neither the Company nor
any ERISA Affiliate has incurred, nor does it reasonably expect to incur, any
liability under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of ERISA).
(g) Except as specifically disclosed in Schedule 5.7, neither the Company nor
any ERISA Affiliate has transferred any Unfunded Pension Liability to any
Person or otherwise engaged in a transaction that could be subject to Section
4069 of ERISA.
5.8 Use of Proceeds; Margin Regulations. The proceeds of the Loans are to be
used solely for the purposes set forth in and permitted by Section 6.11 and
Section 7.8. None of the Company, 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.
5.9 Title to Properties. The Company and each of its Subsidiaries have good
record
<PAGE>
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 could not, individually or in
the aggregate, 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.
5.10 Taxes. The Company, each Partner Entity, and 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. There is no proposed tax assessment against the Company, the
Partner Entities or any of their Subsidiaries that would, if made, have a
Material Adverse Effect.
5.11 Financial Condition.
(a) The audited consolidated financial statements of the Company and its
Subsidiaries dated December 31, 1995, and the related consolidated statements
of income or operations, partners' capital and 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 respective consolidated Subsidiaries as of
the date thereof, including liabilities for taxes, material commitments and
Contingent Obligations.
(b) Since December 31, 1995, there has been no Material Adverse Effect.
5.12 Environmental Matters.
(a) Except as specifically disclosed in Schedule 5.12, the on-going
operations of the Company and each of its Subsidiaries comply in all respects
with all Environmental Laws, except such non-compliance which would not (if
enforced in accordance with applicable law) reasonably be expected to result
in liability in excess of $10,000,000 in the aggregate.
(b) Except as specifically disclosed in Schedule 5.12, the Company and each
of its Subsidiaries have obtained all material 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 and each of its Subsidiaries are in compliance with all material
terms and conditions of such Environmental Permits.
(c) Except as specifically disclosed in Schedule 5.12, none of the Company or
its Subsidiaries, any Partner Entity or any of its 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.
(d) To the Company's Knowledge, except as specifically disclosed in Schedule
5.12, there are no Hazardous Materials or other conditions or circumstances
existing with respect to any property of the Company or any of its
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 $10,000,000 in the aggregate for any such condition, circumstance
or property. In addition, (i) to the Company's Knowledge, neither the
Company nor any of its 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
<PAGE>
Materials, and (ii) to the extent required under any Requirement of Law, the
Company and its 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 the Emergency
Planning and Community Right-to-Know Act, and all other Environmental Laws.
(e) Except as specifically disclosed in Schedule 5.12, there are no disputes,
litigation, investigations, or proceedings to which the Company, the Partner
Entities, or any of their respective Subsidiaries are a party relating to any
Environmental Law or environmental condition that could reasonably be
expected to have a Material Adverse Effect, and, to the Company's Knowledge,
there are no other disputes, litigation, investigations, or proceedings and
no rulemaking or legislation pending relating to any Environmental Law or
environmental condition that could reasonably be expected to have a Material
Adverse Effect.
5.13 Regulated Entities. None of the Company, the Partner Entities, any
Person controlling such Person, or any Subsidiary, is (a) an "Investment
Company" within the meaning of the Investment Company Act of 1940; or (b) is
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.
5.14 No Burdensome Restrictions. Neither the Company nor any of its
Subsidiaries is a party to or bound by any Contractual Obligation, or subject
to any restriction in any Organization Document, or any Requirement of Law,
which could reasonably be expected to have a Material Adverse Effect.
5.15 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, 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.
Except as specifically disclosed in Schedule 5.5, no claim or litigation
regarding any of the foregoing is pending or 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, could reasonably be expected to have a
Material Adverse Effect.
5.16 Subsidiaries. As of the Closing Date, the Company has no Subsidiaries
other than those specifically disclosed in part (a) of Schedule 5.16 hereto
and has no equity investments in any other corporation or entity other than
those specifically disclosed in part (b) of Schedule 5.16.
5.17 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.
5.18 Labor Relations. There are no material 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, and no significant unfair labor practice complaint is pending
against the Company or any of its Subsidiaries or, to the Company's
Knowledge, threatened against any of them before any Government Authority.
5.19 Partnership Interests. As of the Closing Date, the only general partner
of the Company is the Managing General Partner. As of the Closing Date, the
only general partners of the Managing General Partner are Fremont and HS Corp.
<PAGE>
5.20 Full Disclosure. None of the representations or warranties made by the
Company, any Partner Entity or any of their 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 any exhibit, report,
statement or certificate furnished by or on behalf of the Company or any of
its Subsidiaries in connection with the Loan Documents (including the
offering and disclosure materials delivered by or on behalf of the Company to
the Banks prior to the Closing Date), contains any untrue statement of a
material fact or omits any material fact required to be stated therein or
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.
5.21 Solvency. The Company and each of the Partner Entities is Solvent.
5.22 Swap Obligations. Neither the Company nor any of its Subsidiaries has
incurred any outstanding obligations under any Swap Contracts, other than
Permitted Swap Obligations. The Company has undertaken its own independent
assessment of its consolidated assets, liabilities and commitments and has
considered appropriate means of mitigating and managing risks associated with
such matters and has not relied on any swap counterparty or any Affiliate of
any swap counterparty in determining whether to enter into any Swap Contract.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Loan or other Obligation shall remain unpaid or unsatisfied,
unless the Required Banks waive compliance in writing:
6.1 Financial Statements. The Company shall deliver to the Agent, in form
and detail satisfactory to the Agent and the Required Banks, with sufficient
copies for each Bank:
(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
and its Subsidiaries as at the end of such year and the related consolidated
statements of income or operations, partners' equity and cash flows for such
year, setting forth in each case in comparative form the figures for the
previous fiscal year, identifying any material change in accounting policies
or financial reporting practices by the Company or any of its consolidated
Subsidiaries, and accompanied by the opinion of Price Waterhouse 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 the Independent Auditor of any material
portion of the Company's or any Subsidiary's records and shall be delivered
to the Agent pursuant to a reliance agreement between the Agent and Banks and
such Independent Auditor in form and substance satisfactory to the Required
Banks;
(b) as soon as available, but not later than 60 days after the end of each of
the first three fiscal quarters of each fiscal year, a copy of the unaudited
consolidated balance sheet of the Company and its Subsidiaries as of the end
of such quarter and the related consolidated statements of income, partners'
equity and cash flows for the period commencing on the first day and ending
on the last day of such quarter, identifying any material change in
accounting policies or financial reporting practices by the Company or any of
its consolidated Subsidiaries, and certified by a Responsible Officer as
fairly presenting, in accordance with GAAP (subject to ordinary, good faith
year-end audit adjustments), the financial position and the results of
operations of the Company and its Subsidiaries;
(c) as soon as available, but not later than 90 days after the end of each
fiscal year, a copy of an unaudited consolidating balance sheet of the
Company and its Subsidiaries as at the end of such year and the related
consolidating statement of income for such year, certified by a Responsible
Officer as having been developed and used in connection with the preparation
<PAGE>
of the financial statements referred to in subsection 6.1(a);
(d) as soon as available, but not later than 60 days after the end of each of
the first three fiscal quarters of each fiscal year, a copy of the unaudited
consolidating balance sheets of the Company and its Subsidiaries, and the
related consolidating statements of income for such quarter, all certified by
a Responsible Officer as having been developed and used in connection with
the preparation of the financial statements referred to in subsection 6.1(b);
(e) 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 Master
Partnership and its Subsidiaries as at the end of such year and the related
consolidated statements of income or operations, partners' equity and cash
flows for such year, setting forth in each case in comparative form the
figures for the previous fiscal year, and accompanied by the opinion of the
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 the Independent Auditor of any material portion of the Master
Partnership's or any Subsidiary's records and shall be delivered to the Agent
pursuant to a reliance agreement between the Agent and Banks and such
Independent Auditor in form and substance satisfactory to the Required Banks;
(f) as soon as available, but not later than 60 days after the end of each of
the first three fiscal quarters of each fiscal year, a copy of the unaudited
consolidated balance sheet of the Master Partnership and its Subsidiaries as
of the end of such quarter and the related consolidated statements of income,
partners' equity and cash flows for the period commencing on the first day
and ending on the last day of such quarter, and certified by a Responsible
Officer as fairly presenting, in accordance with GAAP (subject to ordinary,
good faith year-end audit adjustments), the financial position and the
results of operations of the Master Partnership and its Subsidiaries;
(g) as soon as available, but not later than January 31 of each year, a
business plan which shall include (i) pro-forma financial projections of the
consolidated balance sheet of the Company and its Subsidiaries and the
related consolidated statements of income or operations, partners' equity and
cash flows, (x) in 1996, for the calendar year 1997, and (y) in every year
thereafter, for the five-year period beginning January 1 of the year of
delivery of such business plan, and (ii) timber inventories, timber harvests,
lumber and other wood product shipments, projected average prices for logs
and lumber by species and type, a timber log flow report and an outside
timber harvest/log procurement contract summary; which projections shall be
accompanied by appropriate assumptions and sufficient supporting details on
which such projections are based, certified by a Responsible Officer as
fairly presenting management's good faith projection of probable results for
such period;
(h) as soon as available, but no later than 30 days after the end of each
month, a copy of the monthly operating summary in form substantially similar
to that currently provided to management;
(i) as soon as available, but in any event within 90 days after the end of
each calendar year, the report entitled "Fair Market Value of Timber Cut,
determined for Section 631(a) of the Internal Revenue Code, Capital Gains
Treatment" prepared with respect to the prior calendar year by Mason, Bruce
and Girard, or another nationally recognized timber appraiser reasonably
acceptable to the Required Banks.
6.2 Certificates; Other Information. The Company shall furnish to the Agent,
with sufficient copies for each Bank:
(a) concurrently with the delivery of the financial statements referred to in
subsection 6.1(a), 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 under
<PAGE>
Sections 7.13, 7.16, 7.17 and 7.18 except as specified in such certificate;
(b) concurrently with the delivery of the financial statements referred to in
subsections 6.1(a) and (b), a Compliance Certificate executed by a
Responsible Officer;
(c) promptly, copies of all financial statements and reports that the Company
or the Master Partnership sends to its limited partners, and, if applicable,
promptly, within 15 days of any such filing, copies of all financial
statements and regular, periodical or special reports (including Forms 10K,
10Q and 8K) and registration statements that the Company or any Subsidiary or
the Master Partnership may make to, or file with, the SEC; and
(d) promptly, such additional information regarding the business, financial
or corporate affairs of the Company or any of its Subsidiaries or the Master
Partnership as the Agent, at the request of any Bank, may from time to time
reasonably request.
6.3 Notices. The Company shall promptly notify the Agent and each Bank:
(a) of the occurrence of any Default or Event of Default, and of the
occurrence or existence of any event or circumstance that foreseeably will
become a Default or Event of Default;
(b) of any matter that has resulted or if adversely determined would
reasonably be expected to result in a Material Adverse Effect, including (i)
breach or non-performance of, or any default under, a Contractual Obligation
of any of the Company, the Partner Entities or any of their Subsidiaries;
(ii) any dispute, litigation, investigation, proceeding or suspension which
may exist at any time between the Company, the Partner Entities or any of
their Subsidiaries and any Governmental Authority; or (iii) the commencement
of, or any material development in, any litigation or proceeding affecting
the Company, the Partner Entities or any of their Subsidiaries, including
pursuant to any applicable Environmental Laws;
(c) of any of the following events affecting the Company or any ERISA
Affiliate, together with 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;
(ii) if any of the representations and warranties in Section 5.7 ceases to
be true and correct;
(iii) the adoption by the Company or any of its Subsidiaries or, upon the
Company's Knowledge thereof, by any other ERISA Affiliate of any new Pension
Plan or other Plan subject to Section 412 of the Code;
(iv) the adoption of any amendment to a Pension Plan or other Plan subject to
Section 412 of the Code by the Company or any of its Subsidiaries or, upon
the Company's Knowledge thereof, by any other ERISA Affiliate, if such
amendment results in a material increase in either contributions by the
Company or any of its Subsidiaries or Unfunded Pension Liability; or
(v) the commencement of contributions by the Company or any of its
Subsidiaries or, upon the Company's Knowledge thereof, by any other ERISA
Affiliate to any Pension Plan or other Plan subject to Section 412 of the
Code;
(d) 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 6.1(a);
(e) 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, the Partner Entities or any of their
Subsidiaries; or
(f) of any assertion or determination by any Governmental Authority that the
Company shall no longer be classified as a partnership not taxable as a
corporation under the Code.
<PAGE>
Each notice under 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 or any affected Subsidiary
proposes to take with respect thereto and at what time. Each notice under
subsection 6.3(a) shall describe with particularity any and all clauses or
provisions of this Agreement or other Loan Document that have been (or
foreseeably will be) breached or violated.
6.4 Preservation of Partnership Existence, Etc. The Company shall, except as
permitted by Section 7.3, and shall cause each of its Subsidiaries and each
of the Partner Entities to:
(a) preserve and maintain in full force and effect its partnership 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 governmental rights,
privileges, qualifications, permits, licenses and franchises necessary or
desirable in the normal conduct of its business except in connection with
transactions permitted by Section 7.3 and sales of assets permitted by
Section 7.2;
(c) use reasonable efforts, in the ordinary course of business, to preserve
its business organization and goodwill; and
(d) preserve or renew all of its registered patents, trademarks, trade names
and service marks, the non-preservation of which could reasonably be expected
to have a Material Adverse Effect; provided that the Company shall not be
obligated to preserve its status as a partnership not taxable as a
corporation if (i) the Company's failure to preserve such status shall be the
result of an amendment to the tax laws enacted by the Congress of the United
States and (ii) after giving effect to the loss of such status, the ratio of
Pro Forma Consolidated Cash Flow to Pro Forma Maximum Debt Service,
determined as of the end of the fiscal quarter immediately preceding the loss
of such status, would be greater than 1.1 to 1.0, assuming for the purposes
of the computation of Pro Forma Consolidated Cash Flow, that Pro Forma
Consolidated Cash Flow would be reduced by taxes at the applicable tax rate
of the Company for such period had the Company been taxable as a corporation.
6.5 Maintenance of Property. The Company shall maintain, and shall cause
each Subsidiary 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 and make all necessary repairs thereto and renewals and
replacements thereof except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect or except as permitted by
Section 7.2.
6.6 Insurance. The Company shall maintain, and shall cause each Subsidiary
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; including public
liability and property and casualty insurance.
6.7 Payment of Obligations. The Company shall, and shall cause each
Subsidiary 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;
(b) all lawful claims which, if unpaid, would by law become a Lien upon its
property, unless the same are being contested in good faith by appropriate
proceedings and
<PAGE>
adequate reserves in accordance with GAAP are being maintained by the Company
or such Subsidiary; and
(c) all trade payables owing to Persons that are not Affiliates of the
Company in the ordinary course of business, unless the same are contested in
good faith by appropriate proceedings and adequate reserves in accordance
with GAAP are being maintained by the Company or such Subsidiary.
6.8 Compliance with Laws. The Company shall comply, and shall cause each of
its Subsidiaries to comply, in all material respects with all Requirements of
Law of any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may exist.
6.9 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 Subsidiary. The
Company shall permit, and shall cause each Subsidiary to permit,
representatives and independent contractors of the 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 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.
6.10 Environmental Laws.
(a) The Company shall, and shall cause each Subsidiary to, conduct its
operations and keep and maintain its property in material 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 Agent or any Bank, the Company shall
submit and cause each of its Subsidiaries to submit, to the Agent 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 6.3(b),
that could, individually or in the aggregate, reasonably be expected to
result in liability in excess of $10,000,000.
6.11 Use of Proceeds. The Company shall use the proceeds of the Loans (i) to
repay in full on the Closing Date "Facility A Loans" under and as defined in
the 1995 Amended and Restated Credit Agreement and "Loans" under and as
defined in the Original Facility B Credit Agreement (as defined in the
Amended and Restated Facility B Credit Agreement), if any, and (ii) for the
cost (including related fees, commissions and expenses) of the acquisition of
certain timberlands, standing timber, and related assets located on such
timberlands previously owned by Cavenham Forest Industries, a division of
Hanson Natural Resources Company, to be sold to the Company indirectly
through Willamette Industries, Inc., pursuant to the Purchase Agreement a
certified copy of which is delivered to the Banks pursuant to subsection
4.1(g) (the "Property"), in all cases not in contravention of any Requirement
of Law or of any Loan Document.
6.12 Further Assurances. The Company shall ensure that all written
information, exhibits and reports furnished to the Agent or the Banks do not
and will not contain any untrue statement of a material fact and do not and
will not omit to state any material fact or any fact necessary to make the
statements contained therein not misleading in light of the circumstances
<PAGE>
in which made, and will promptly disclose to the Agent and the Banks and
correct any defect or error that may be discovered therein or in any Loan
Document or in the execution, acknowledgment or recordation thereof.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or any Loan or other
Obligation shall remain unpaid or unsatisfied, unless the Required Banks
waive compliance in writing:
7.1 Limitation on Liens. The Company shall not, and shall not suffer or
permit any of its 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) any Lien existing on property of such Person on the Closing Date and set
forth in Schedule 7.1 securing Indebtedness outstanding on such date;
(b) 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 Uniform
Commercial Code in any applicable jurisdiction) thereof securing the
obligations of the Company under the Working Capital Facility (and any
extension, renewal, refunding or refinancing thereof) permitted to be
incurred pursuant to subsection 7.6(g);
(c) 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 6.7, provided that no notice of
lien has been filed or recorded under the Code;
(d) 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 which are being
contested in good faith and by appropriate proceedings, which proceedings
have the effect of preventing the forfeiture or sale of the property subject
thereto;
(e) Liens (other than any Lien imposed by ERISA) consisting of pledges or
deposits required in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other social security
legislation;
(f) Liens on the property of such Person securing (i) the non-delinquent
performance of bids, trade contracts (other than for borrowed money), leases,
statutory obligations, (ii) contingent obligations on surety and appeal
bonds, and (iii) other non-delinquent obligations of a like nature; in each
case, incurred in the ordinary course of business, provided all such Liens in
the aggregate would not (even if enforced) cause a Material Adverse Effect;
(g) Liens consisting of judgment or judicial attachment liens, provided that
the enforcement of such Liens is effectively stayed and all such liens in the
aggregate at any time outstanding for the Company and its Subsidiaries do not
exceed $5,000,000;
(h) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which do not impose material
financial obligations on the Company or any of its Subsidiaries, and which do
not in any case materially detract from the value of a material asset subject
thereto or interfere with the ordinary conduct of the businesses of such
Person;
(i) purchase money security interests on any property acquired or held by
such Person in the ordinary course of business, securing Indebtedness
incurred or assumed for the purpose of financing all or any part of the cost
of acquiring such property; provided that (i) any such Lien attaches to such
property concurrently with or within 20 days after the
<PAGE>
acquisition thereof, (ii) such Lien attaches solely to the property so
acquired in such transaction, (iii) the principal amount of the debt secured
thereby does not exceed 85% (or 100% in the case of capital leases) of the
cost of such property, and (iv) the aggregate outstanding principal amount of
the Indebtedness secured by any and all such purchase money security
interests shall not at any time exceed $25,000,000;
(j) Liens securing obligations in respect of capital leases on assets subject
to such leases, provided that such capital leases are otherwise permitted
hereunder;
(k) Liens arising solely by virtue of any statutory or common law provision
relating to banker's liens, rights of set-off or similar rights and remedies
as to deposit accounts or other funds maintained with a creditor depository
institution; provided that (i) such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against access by the
Company in excess of those set forth by regulations promulgated by the FRB,
and (ii) such deposit account is not intended by the Company or any of its
Subsidiaries to provide collateral to the depository institution;
(l) Liens securing Contingent Obligations permitted under subsection 7.9(d);
and
(m) other Liens that secure claims or Indebtedness of less than $1,000,000 in
the aggregate and that exist no more than 10 days before being released or
terminated.
7.2 Asset Dispositions. The Company will not, and will not permit any of its
Subsidiaries to, sell, transfer, lease, contribute or otherwise convey, or
grant options, warrants or other rights with respect to, all or any part of
its assets (including accounts receivable and capital stock of Subsidiaries)
to any Person, other than:
(a) sales of timber, logs, lumber and other inventory in the ordinary course
of business for fair market value;
(b) sales for fair market value of equipment, which is surplus, worn-out or
obsolete or no longer useful in the ordinary course of business;
(c) sales of assets other than standing timber for fair market value, the
gross sale proceeds of which, together with the gross sale proceeds of all
other assets sold, transferred, leased, contributed, or conveyed pursuant to
this clause by the Company or any of its Subsidiaries does not exceed in the
aggregate an amount (the "Annual Sales Amount") equal to (i) in calendar year
1996, $10,000,000 and (ii) in each calendar year thereafter, the sum of (A)
the Annual Sales Amount for the preceding calendar year plus (B) an increase
equal to the percentage increase, if any, in the CPI for such preceding
calendar year, multiplied by such Annual Sales Amount; provided that the
cumulative amount of such sales during the term of this Agreement shall not
exceed an amount (the "Cumulative Sales Amount") equal to (y) $51,500,000
plus (z) an increase equal to the percentage increase, if any, in the CPI
from January 1, 1996 to the date of determination, multiplied by such
Cumulative Sales Amount;
(d) sales of Designated Acres for the fair market value thereof;
(e) exchanges of timberland for other timberland in the ordinary course of
business with Persons who are not Affiliates of the Company, if:
(i) the aggregate fair market value of all timberland so exchanged by the
Company and any of its Subsidiaries, collectively, does not exceed on a
cumulative basis $400,000,000 during the term of this Agreement;
(ii) the timberland to be received in exchange is of at least an equivalent
fair market value to the timberland to be exchanged or, if such timberland is
not of at least an equivalent fair market value, the amount of any shortfall
shall constitute a permitted disposition under subsection 7.2(c) or (f);
(iii) the timberland to be received in exchange is located in the United
States, Canada, Mexico or New Zealand, provided that the aggregate fair
market value of such timberlands received in such exchanges and located in
Canada, Mexico or New
<PAGE>
Zealand does not exceed in the aggregate, together with the Net Proceeds
invested in productive assets in such foreign countries pursuant to
subsection 7.2(f)(ii) and the net proceeds of harvesting used to purchase
timber or timberlands in such foreign countries pursuant to Section 7.4,
$50,000,000 during the term of this Agreement; and
(iv) at the time of such exchange, no Default or Event of Default exists or
shall result from such exchange; provided, however, that any exchange
permitted by this subsection 7.2(e) may be in the form of a tax deferred
exchange so long as such tax deferred exchange is completed within 180 days;
and
(f) dispositions for fair market value thereof of assets not otherwise
permitted hereunder to Persons who are not Affiliates of the Company if:
(i) at the time of such disposition no Default or Event of Default exists or
shall result from such disposition; and
(ii) the Net Proceeds of such disposition (A) are applied within 180 days of
such disposition to the purchase of productive assets in a Permitted Business
(including purchases not consummated during such 180 days if a binding
agreement for such purchase is entered into during such period and such
purchase is completed within 90 days after the expiry of such 180 day period)
located in the United States, Canada, Mexico and New Zealand, provided that
the aggregate Net Proceeds applied to such purchases of such assets located
in Canada, Mexico and New Zealand do not exceed, together with the fair
market value of assets in such foreign countries obtained in an exchange
pursuant to subsection 7.2(e) and the net proceeds of harvesting used to
purchase timber or timberlands in such foreign countries pursuant to Section
7.4, $50,000,000 during the term of this Agreement, (B) do not exceed cash
expenditures by the Company for the purchase of productive assets in a
Permitted Business during the preceding 90 days (excluding any purchase to
the extent financed by a Loan) or (C) are applied within 180 days of such
disposition to the repayment of such Senior Debt as the Company may elect to
so prepay provided that (x) at any time the Company shall elect to repay
Senior Debt other than the Loans and the Facility B Loans, the Company shall
also repay Loans and Facility B Loans by at least a pro rata amount (based on
the then outstanding principal of amount of all Senior Debt), (y) a
Responsible Officer shall have notified the Agent promptly after its
determination to so apply the Net Proceeds and shall have certified the
receipt of fair market value for such assets and the proper application of
such Net Proceeds in accordance with this subsection 7.2(f), and (z) if,
during the aforementioned periods, the Net Proceeds of all such dispositions
which have not been applied to the purchase of productive assets in a
Permitted Business or distributed to the holders of Senior Debt for
application to the repayment of such Senior Debt exceeds $25,000,000 in the
aggregate at any time, all such net proceeds in excess of $25,000,000 shall
be placed immediately upon receipt thereof in an escrow account, pursuant to
an Escrow Agreement, for the purpose of application in accordance with
clauses (A) and (C) above. The Company shall apply any Net Proceeds
withdrawn from escrow pursuant to an Escrow Agreement to the applications
required by clauses (A) or (C) above within three Business Days after such
withdrawal.
7.3 Consolidations and Mergers. The Company shall not, and shall not suffer
or permit any Subsidiary to, merge, consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except:
(a) any Subsidiary of the Company may merge with the Company, provided that
the Company (i) shall be the continuing or surviving partnership and (ii)
shall have a consolidated net worth immediately following such merger equal
to or greater than the consolidated net worth of the Company immediately
preceding such merger;
<PAGE>
(b) any Subsidiary of the Company may sell all or substantially all of its
assets (upon voluntary liquidation or otherwise), to the Company; or
(c) any Subsidiary of the Company may merge with any other Subsidiary of the
Company, provided that the surviving Subsidiary shall have a consolidated net
worth immediately following such merger equal to or greater than the
consolidated net worth of the surviving Subsidiary immediately preceding such
merger; provided, however, in each case (i) no Default or Event of Default
exists or shall result from such merger or sale and (ii) immediately after
such merger or sale, the ratio of (A) Pro Forma Consolidated Cash Flow to Pro
Forma Interest Expense is greater than 2.50 to 1.00, and (B) Pro Forma
Consolidated Cash Flow to Pro Forma Maximum Debt Service is greater than 1.25
to 1.00.
7.4 Harvesting Restrictions. The Company shall not, and shall not suffer or
permit any of its Subsidiaries to, in any calendar year commencing with 1996,
harvest timber or sell standing timber on (i) the timberlands owned by the
Company or any of its Subsidiaries on the Closing Date, including the
Property ("Existing Timberlands"), (ii) timberlands owned as a result of a
permitted exchange of Existing Timberlands pursuant to subsection 7.2(e),
(iii) timberlands purchased pursuant to clause (z) below, or (iv) other
timberlands acquired by the Company or any of its Subsidiaries after the
Closing Date other than as described in clauses (ii) and (iii) above, in
excess of:
(a) in any one such calendar year, 150% of the Planned Volume for that
calendar year;
(b) in any two such consecutive calendar years, 140% of the Planned Volume
for such calendar years;
(c) in any three such consecutive calendar years, 130% of the Planned Volume
for such calendar years; and
(d) in any four such consecutive calendar years, 120% of the Planned Volume
for such calendar years;
unless the net proceeds from such excess harvest (which shall be determined
based upon the average prices received on the sale of all timber harvested
during such period and a reasonable allocation of direct cash expenses
incurred in connection with the harvesting and sale of timber during such
period), are, within ten Business Days after the end of such period, placed
in an escrow account, pursuant to an Escrow Agreement, to be applied within
180 days after the end of such period (y) to the repayment of such Senior
Debt as the Company may elect to so prepay provided that at any time the
Company shall elect to repay Senior Debt other than the Loans and the
Facility B Loans, the Company shall also repay Loans and Facility B Loans by
at least a pro rata amount (based on the outstanding principal of all Senior
Debt), or (z) to purchase or commit to purchase timber or timberlands located
in the United States, Canada, Mexico or New Zealand (including purchases not
consummated during such 180 days if a binding agreement for such purchase is
entered into during such period and such purchase is completed within 90 days
after the expiry of such 180 day period) for not more than fair market value
(in the good faith judgment of the Responsible Officer as certified in
writing to the Agent and the Banks), provided that the aggregate of such net
proceeds used to purchase timber or timberlands located in Canada, Mexico and
New Zealand shall not exceed, together with the fair market value of assets
in such foreign countries obtained in an exchange pursuant to subsection
7.2(e) and the Net Proceeds invested in productive assets in such foreign
countries pursuant to subsection 7.2(f)(ii), $50,000,000 during the term of
this Agreement, and provided, further that the Company shall have notified
the Agent promptly after its determination to so apply the net proceeds. The
Company shall apply any such net proceeds withdrawn from the escrow account
pursuant to an Escrow Agreement to the applications required by clauses (y)
or (z) above within three Business Days after such withdrawal.
<PAGE>
"Planned Volume" shall mean for each calendar year 250,000,000 board feet of
timber, and shall be increased for any Annual Timber Increase, from the
Effective Date for such Annual Timber Increase, by increasing such per annum
amount by an amount equal to 15% of such Annual Timber Increase per annum for
a period of 6 and 2/3rds years from such Effective Date. In addition, such
per annum amounts for any year after 1996 shall be decreased by 20%
(calculated after giving effect to any Annual Timber Increases) for the
entirety of such calendar year if the Asset Coverage Ratio at the end of the
prior calendar year is less than 2.0 : 1.0, until the Asset Coverage Ratio
returns to 2.0 : 1.0 at the end of a calendar year, at which time the per
annum amount for the next calendar year shall be restored to 250,000,000
board feet of timber plus any otherwise applicable increases. For example,
an Asset Coverage Ratio of 1.75 : 1.0 at the end of 1996 and a 1996 Annual
Timber Increase of 100,000,000 board feet would cause the Planned Volume for
1997 to be 212,000,000 board feet (250,000,000 plus 15% of 100,000,000 less
20%). The same Asset Coverage Ratio at the end of 1997 (assuming no
additional Annual Timber Increases) would cause the Planned Volume for 1998
to be 169,600,000 board feet (212,000,000 less 20%); while an Asset Coverage
Ratio of 2.0 : 1.0 at the end of 1997 (assuming no additional Annual Timber
Increases) would cause the Planned Volume for 1998 to be 265,000,000 board
feet (250,000,000 plus 15% of 100,000,000). For purposes of the foregoing:
"Annual Timber Increase" shall mean, for any calendar year, the amount, in
board feet, by which the number of board feet of timber acquired by the
Company and its Subsidiaries during such calendar year (excluding timber
acquired with the net proceeds of an excess harvest pursuant to Section 7.4)
shall exceed the number of board feet of timber sold by the Company and its
Subsidiaries during such calendar year. "Effective Date" for any Annual
Timber Increase shall be July 1 of the calendar year for which such Annual
Timber Increase occurs.
"Asset Coverage Ratio" shall mean, for any calendar year, the ratio of (a)
the wholesale value of the inventory of standing timber owned by the Company
and its Subsidiaries at the end of such calendar year to (b) Indebtedness of
the Company and its Subsidiaries at the end of such calendar year. For
purposes of this definition, the inventory of standing timber owned by the
Company and its Subsidiaries at the end of any calendar year shall be equal
to (1) the inventory of standing timber owned by the Company and its
Subsidiaries at the end of the prior calendar year, plus (2) the Annual
Timber Increase for the calendar year in question, plus (3) the growth during
such calendar year of standing timber owned by the Company and its
Subsidiaries at the end of such calendar year, minus (4) the volume of
standing timber owned by the Company and its Subsidiaries and harvested
during such calendar year, and minus (5) the inventory of standing timber
disposed of by the Company and its Subsidiares during such calendar year.
For purposes of this definition, the wholesale value of the inventory of
standing timber owned by the Company and its Subsidiaries at the end of any
calendar year shall be equal to 60% of its retail value, which shall be based
upon the volume of each species of standing timber so owned by the Company
and its Subsidiaries and the retail prices for each such species as of the
end of such calendar year. The calculations referred to herein shall be
based upon the good faith estimates of a Responsible Officer contained in the
Compliance Certificate delivered with respect to each annual financial
statement and shall be consistent with the report delivered pursuant to
subsection 6.1(i) with respect to that calendar year.
7.5 Loans and Investments. The Company shall not purchase or acquire, or
suffer or permit any of its Subsidiaries to purchase or acquire, or make any
commitment therefor, any capital stock, equity interest, or any obligations
or other securities of, or any interest in, any Person, or make or commit to
make any Acquisitions, or make or commit to make any advance, loan, extension
of credit or capital contribution to or any other investment in, any Person
<PAGE>
including any Affiliate of the Company, except for:
(a) investments of the type specified in, and in accordance with the
requirements and limitations of, the Investment Policy;
(b) the loans existing on the Closing Date and set forth on Schedule 7.5;
(c) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the
ordinary course of business or from sale of assets sold in compliance with
Section 7.2;
(d) extensions of credit by the Company to any of its Subsidiaries or by any
of its Subsidiaries to another of its Subsidiaries;
(e) advances or deposits in the ordinary course of business to owners of
timber or timberlands to acquire the right to harvest timber;
(f) investments not otherwise permitted hereunder in a Person as long as (x)
such Person is domiciled in, and substantially all of its assets are located
in, the United States, Canada, Mexico or New Zealand and its only material
activities consist of Permitted Businesses, (y) such investments do not
exceed in the aggregate an amount (the "Annual Investment Amount") equal to
(i) in calendar year 1996, $10,000,000 and (ii) in each calendar year
thereafter, the sum of (A) the Annual Investment Amount for the preceding
calendar year plus (B) an increase equal to the percentage increase, if any,
in the CPI for such preceding calendar year, multiplied by such Annual
Investment Amount, and (z) the cumulative amount of such investments during
the term of this Agreement shall not exceed an amount (the "Cumulative
Investment Amount") equal to (i) $51,500,000 plus (ii) an increase equal to
the percentage increase, if any, in the CPI from January 1, 1996 to the date
of determination, multiplied by such Cumulative Investment Amount; and
(g) Investments constituting Permitted Swap Obligations or payments or
advances under Swap Contracts relating to Permitted Swap Obligations.
7.6 Limitation on Indebtedness. The Company shall not, and shall not suffer
or permit any of its Subsidiaries to, create, incur, assume, suffer to exist,
or otherwise become or remain directly or indirectly liable with respect to,
any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness incurred pursuant to the Senior Notes and any refunding or
refinancing thereof so long as (i) the first principal repayment date under
such refunding or refinancing shall not be earlier than the first principal
repayment date under the Senior Notes as originally issued, and (ii) the
average life of the Indebtedness incurred under such refunding or refinancing
shall not be shorter than the average life of the Senior Notes as originally
issued;
(c) Indebtedness consisting of Contingent Obligations permitted pursuant to
Section 7.9;
(d) Indebtedness existing on the Closing Date and set forth in Schedule 7.6;
(e) Indebtedness secured by Liens permitted by subsection 7.1(i);
(f) Indebtedness of any Subsidiary owing to the Company;
(g) Indebtedness incurred by the Company pursuant to the Working Capital
Facility not in excess of an aggregate principal amount of $40,000,000 at any
time outstanding, provided that the Company shall not suffer to exist any
Indebtedness (other than such Indebtedness relating to letters of credit)
permitted by this subsection (g) on any day unless there shall have been a
period of 30 consecutive days within the 12 calendar months immediately
preceding such day during which the Company shall have been free from all
Indebtedness permitted by this subsection (g); and
(h) other unsecured Indebtedness incurred in the ordinary course of business,
provided, that the aggregate outstanding principal amount of such
Indebtedness shall not at any time exceed $10,000,000 and provided further
that such Indebtedness is expressly subordinate to the Obligations hereunder
by subordination provisions acceptable to the Agent and the Required
<PAGE>
Banks.
7.7 Transactions with Affiliates. The Company shall not, and shall not
suffer or permit any of its Subsidiaries to, enter into any transaction with
any Affiliate of the Company, except upon fair and reasonable terms no less
favorable to the Company or such Subsidiary than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate of the Company or
such Subsidiary. The Company shall be entitled to reimburse the Managing
General Partner for (i) all direct and indirect expenses it incurs or
payments it makes on behalf of the Company (including without limitation
salary, bonus, incentive compensation, and other amounts paid to any Person
to perform services for the Company or for the Managing General Partner in
the discharge of its duties to the Company), and (ii) all other necessary or
appropriate expenses reasonably allocable to the Company or otherwise
reasonably incurred by the Managing General Partner in connection with
operating the Company's business (including expenses allocated to the
Managing General Partner by its Affiliates and, for so long as Fremont Group,
Inc., owns an interest in the Managing General Partner, an annual fee of
$100,000, payable semi-annually in arrears, in consideration of management
services).
7.8 Use of Proceeds.
(a) The Company shall not, and shall not suffer or permit any of its
Subsidiaries to, use any portion of the proceeds of the Loans, directly or
indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of the Company or others incurred to purchase or carry
Margin Stock, (iii) to extend credit for the purpose of purchasing or
carrying any Margin Stock, or (iv) to acquire any security in any transaction
that is subject to Section 13 or 14 of the Exchange Act.
(b) The Company shall not and shall not suffer or permit any of its
Subsidiaries to use any portion of the proceeds of the Loans, directly or
indirectly, (i) knowingly to purchase Ineligible Securities from a Section 20
Subsidiary during any period in which such Section 20 Subsidiary makes a
market in such Ineligible Securities, (ii) knowingly to purchase during the
underwriting or placement period Ineligible Securities being underwritten or
privately placed by a Section 20 Subsidiary, or (iii) to make payments of
principal or interest on Ineligible Securities underwritten or privately
placed by a Section 20 Subsidiary and issued by or for the benefit of the
Company or any Affiliate of the Company. As used in this Section, "Section
20 Subsidiary" means the Subsidiary of the bank holding company controlling
any Bank, which Subsidiary has been granted authority by the Federal Reserve
Board to underwrite and deal in certain Ineligible Securities; and
"Ineligible Securities" means securities which may not be underwritten or
dealt in by member banks of the Federal Reserve System under Section 16 of
the Banking Act of 1933 (as 12 U.S.C. 24, Seventh), as amended.
7.9 Contingent Obligations. The Company shall not, and shall not suffer or
permit any of its Subsidiaries to, create, incur, assume or suffer to exist
any Contingent Obligations except:
(a) endorsements for collection or deposit in the ordinary course of business;
(b) Permitted Swap Obligations;
(c) Contingent Obligations of the Company and its Subsidiaries existing as of
the Closing Date and listed in Schedule 7.9; and
(d) Contingent Obligations of the Company under timber harvest and log
procurement contracts to acquire timber from private and government owners in
the ordinary course of business and reimbursement obligations with respect to
bonds issued to secure the Company's performance thereunder.
7.10 Joint Ventures. The Company shall not, and shall not suffer or permit
any of its Subsidiaries to enter into any Joint Venture, other than Joint
Ventures in Permitted Businesses and so long as any such Joint Ventures are
not entered into for the purpose of evading any covenant or restriction in
any Loan Document.
<PAGE>
7.11 Restricted Payments. The Company shall not, and shall not suffer or
permit any Subsidiary to, declare or make any limited partner or general
partner distribution or dividend payment or other distribution of assets,
properties, cash, rights, obligations or securities on account of any,
limited or general partnership interest or shares of any class of capital
stock, or purchase, redeem or otherwise acquire for value any partnership
interest or shares of capital stock or any warrants, rights or options to
acquire such partnership interest or shares, now or hereafter outstanding
(each a "Restricted Payment"); except that: (a) the Company may declare and
make distributions payable solely in general or limited partnership interests
or units; and (b) if no Default or Event of Default exists or would result
from such action, the Company may make during each fiscal quarter one or more
Restricted Payments if such Restricted Payments in an aggregate amount do not
exceed Available Cash for the immediately preceding fiscal quarter.
7.12 Change in Business. The Company shall not, and shall not suffer or
permit any of its Subsidiaries to, engage in any material line of business
other than a Permitted Business. The Company shall not suffer or permit the
Managing General Partner to engage in any business other than being the
general partner of the Company, the managing general partner of the Master
Partnership or the general partner in any other Subsidiary of the Master
Partnership.
7.13 Fiscal Year Changes. The Company shall not, and shall not suffer or
permit any of its Subsidiaries to change the fiscal year of the Company or of
any of its Subsidiaries.
7.14 Amendments to Agreements. The Company shall not, and shall not suffer
or permit any of its Subsidiaries to amend, modify, supplement, waive or
otherwise modify any of the terms and provisions contained in the Company
Partnership Agreement, the Master Partnership Agreement (or any document
executed or delivered in connection with such Partnership Agreements), or the
partnership certificate of the Company or the Master Partnership, if such
amendment, supplement or other modification shall impair the Company's
ability to perform its obligations under the Loan Documents or increase any
of its financial obligations to any of its general or limited partners or to
any Affiliate.
7.15 Limitation on Voluntary Payments of Senior Notes, Etc. The Company
shall not, and shall not permit any of its Subsidiaries to make any voluntary
or optional payment or prepayment on or redemption or acquisition for value
of (including, without limitation, by way of depositing with respect thereto
money or securities before due for the purpose of paying when due) the Senior
Notes other than (i) the refunding or refinancing in full of the Senior Notes
permitted by subsection 7.6(a) and (ii) pro rata prepayments thereof with the
Loans and the Facility B Loans as permitted by subsection 2.6(a).
7.16 Cash Flow to Interest Expense Ratio. The Company shall not permit the
ratio of Cash Flow to Interest Expense to be less than (a) 1.5 to 1.0 at the
end of any fiscal quarter ending on or before December 31, 1996, (b) 2.0 to
1.0 at the end of any fiscal quarter ending after December 31, 1996 and on or
before December 31, 1997, and (c) 2.25 to 1.0 at the end of any fiscal
quarter ending thereafter.
7.17 Total Debt to Cash Flow Ratio.
(a) With respect to each fiscal quarter ending before receipt by the Company
of Equity Proceeds, the Company shall not permit the Total Debt to Cash Flow
Ratio to be greater than (i) 5.75 to 1.0 at the end of any such fiscal
quarter ending on or before September 30, 1996, (ii) 5.5 to 1.0 at the end of
any such fiscal quarter ending on or before June 30, 1997, (iii) 4.5 to 1.0
at the end of any such fiscal quarter ending on or before December 31, 1997,
and (iv) 4.25 to 1.0 at the end of any such fiscal quarter thereafter.
(b) With respect to each fiscal quarter ending after receipt by the Company
of Equity Proceeds, the Company shall not permit the Total Debt to Cash Flow
Ratio to be greater than (i) 4.5 to 1.0 at the end of any such fiscal quarter
ending on or before December 31, 1997, and (ii) 4.0 to 1.0 at the end of any
such fiscal quarter thereafter.
7.18 Cash Coverage Ratio. The Company shall not permit the Cash Coverage
Ratio at
<PAGE>
the end of any fiscal quarter to be less than 1.0 to 1.0.
ARTICLE VIII
EVENTS OF DEFAULT
8.1 Event of Default. Any of the following shall constitute an "Event of
Default":
(a) Non-Payment. The Company fails to pay, (i) when and as required to be
paid herein, any amount of principal of any Loan, or (ii) within 5 days after
the same becomes due, any interest, fee or any other amount payable hereunder
or under any other Loan Document; or
(b) Representation or Warranty. Any representation or warranty by the
Company, any Partner Entity or any of its Subsidiaries made or deemed made
herein, in any other Loan Document, in the Original Credit Agreement or in
the 1995 Amended and Restated Credit Agreement, or which is contained in any
certificate, document or financial or other statement by such Person, or any
Responsible Officer, furnished at any time under this Agreement, in or under
any other Loan Document, or in or under the Original Credit Agreement or the
1995 Amended and Restated Credit Agreement is incorrect in any material
respect on or as of the date made or deemed made; or
(c) Specific Defaults. The Company fails to perform or observe any term,
covenant or agreement contained in any of Section 6.3 or 6.9 or in Article
VII; or
(d) Other Defaults. The Company fails to perform or observe any other term
or covenant contained in this Agreement or any other Loan Document, and such
default shall continue unremedied for a period of 20 days after the earlier
of (i) the date upon which a Responsible Officer knew or reasonably should
have known of such failure or (ii) the date upon which written notice thereof
is given to the Company by the Agent or any Bank shall exist; or
(e) Amended and Restated Facility B Credit Agreement Cross-Default. An
"Event of Default" shall exist as that term is defined in the Amended and
Restated Facility B Credit Agreement; or
(f) Cross-Default. The Company or any of its Subsidiaries (i) fails to make
any payment in respect of any Indebtedness or Contingent Obligation (other
than in respect of Swap Contracts) having an aggregate principal amount
(including undrawn committed or available amounts and including amounts owing
to all creditors under any combined or syndicated credit arrangement) of more
than $5,000,000 when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) and such failure continues after the
applicable grace or notice period, if any, specified in the relevant document
on the date of such failure; or (ii) fails to perform or observe any other
condition or covenant, or any other event shall occur or condition exist,
under any agreement or instrument relating to any such Indebtedness or
Contingent Obligation, if the effect of such failure, event or condition
described in clause (ii) is to cause, or to permit the holder or holders of
such Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause such Indebtedness to be declared to be due and
payable prior to its stated maturity, or such Contingent Obligation to become
payable or cash collateral in respect thereof to be demanded; or (iii) there
occurs under any Swap Contract an Early Termination Date (as defined in such
Swap Contract) resulting from (1) any event of default under such Swap
Contract as to which the Company or any Subsidiary is the Defaulting Party
(as defined in such Swap Contract) or (2) any Termination Event (as so
defined) as to which the Company or any Subsidiary is an Affected Party (as
so defined), and, in either event, the Swap Termination Value owed by the
Company or such Subsidiary as a result thereof is greater than $5,000,000; or
(g) Insolvency; Voluntary Proceedings. The Company, any Partner Entity, or
any of their Subsidiaries (i) ceases or fails to be Solvent, or generally
fails to pay, or admits in
<PAGE>
writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or otherwise;
(ii) voluntarily ceases to conduct its business in the ordinary course; (iii)
commences any Insolvency Proceeding with respect to itself; or (iv) takes any
action to effectuate or authorize any of the foregoing; or
(h) Involuntary Proceedings. (i) Any involuntary Insolvency Proceeding is
commenced or filed against the Company, any Partner Entity or any of their
Subsidiaries, or any writ, judgment, warrant of attachment, execution or
similar process, is issued or levied against a substantial part of such
Person's properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or
similar process shall not be released, vacated or fully bonded within 60 days
after commencement, filing or levy; (ii) the Company, any Partner Entity or
any of their Subsidiaries admits the material allegations of a petition
against it in any Insolvency Proceeding, or an order for relief (or similar
order under non-U.S. law) is ordered in any Insolvency Proceeding; or (iii)
the Company, any Partner Entity or any of their Subsidiaries acquiesces in
the appointment of a receiver, trustee, custodian, conservator, liquidator,
mortgagee in possession (or agent therefor), or other similar Person for
itself or a substantial portion of its property or business; or
(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan which
has resulted or could reasonably be expected to result in liability of either
Company under Title IV of ERISA to the Pension Plan or the PBGC in an
aggregate amount in excess of $5,000,000; or (ii) the commencement or
increase of contributions to, or the adoption of or the amendment of a
Pension Plan by the Company or any ERISA Affiliate which has resulted or
could reasonably be expected to result in an increase in Unfunded Pension
Liability among all Pension Plans in an aggregate amount in excess of
$5,000,000; or
(j) Monetary Judgments. One or more non-interlocutory judgments,
non-interlocutory orders, decrees or arbitration awards is entered against
the Company or any of its Subsidiaries involving in the aggregate a liability
(to the extent not covered by independent third-party insurance as to which
the insurer does not dispute coverage) as to any single or related series of
transactions, incidents or conditions, of $5,000,000 or more, and the same
shall remain unsatisfied, unvacated and unstayed pending appeal for a period
of 30 consecutive days after the entry thereof; or
(k) Non-Monetary Judgments. Any non-monetary judgment, order or decree is
entered against the Company or any of its Subsidiaries which does or would
reasonably be expected to have a Material Adverse Effect, and there shall be
any period of 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect; or
(l) Change of Control. Without the prior written consent of the Required
Banks, Peter W. Stott shall cease to be the Chief Executive Officer or the
Chairman of the Managing General Partner or the Master Partnership shall
cease to be the sole limited partner of the Company; or
(m) Adverse Change. There occurs a Material Adverse Effect; or
(n) Auditors. The Agent or any Bank shall receive notice from the
Independent Auditor that the Agent and the Banks should no longer use or rely
upon any audit report or other financial data provided by the Independent
Auditor; or
(o) Equity Issuance. The Company shall fail, on or before June 30, 1997, to
have received and applied in repayment of the Loans pursuant to subsection
2.6(b) Equity Proceeds in the amount of at least $100,000,000.
8.2 Remedies. If any Event of Default occurs, the Agent shall, at the
request of, or may, with the consent of, the Required Banks,
(a) declare the Commitment of each Bank to be terminated, whereupon such
Commitment shall be terminated;
<PAGE>
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived by the Company; and
(c) exercise on behalf of itself and the Banks all rights and remedies
available to it and the Banks under the Loan Documents or applicable law;
provided, however, that upon the occurrence of any event specified in
subsection (g) or (h) of Section 8.1 (in the case of clause (i) of subsection
(h) upon the expiration of the 60-day period mentioned therein), the
obligation of each Bank to make Loans shall automatically terminate and the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable without
further act of the Agent or any Bank.
8.3 Rights Not Exclusive. The rights provided for in this Agreement and the
other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
ARTICLE IX
THE AGENT
9.1 Appointment and Authorization. Each Bank hereby irrevocably appoints,
designates and authorizes the Agent to take such action on its behalf under
the provisions of this Agreement and each other Loan Document and to exercise
such powers and perform such duties as are expressly delegated to it by the
terms of this Agreement or any other Loan Document, together with such powers
as are reasonably incidental thereto. Notwithstanding any provision to the
contrary contained elsewhere in this Agreement or in any other Loan Document,
the Agent shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall the Agent have or be deemed to have any
fiduciary relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
The Company acknowledges that the Agent has made no assertions of implied
authority to act for the Banks and that the Agent has only the authority
expressly granted herein. Without limiting the generality of the foregoing
sentence, the use of the term "agent" in this Agreement with reference to the
Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law. Instead,
such term is used merely as a matter of market custom, and is intended to
create or reflect only an administrative relationship between independent
contracting parties.
9.2 Delegation of Duties. The Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for
the negligence or misconduct of any agent or attorney-in-fact that it selects
with reasonable care.
9.3 Liability of Agent. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any of the Banks for any
recital, statement, representation or warranty made by the Company or any of
its Subsidiaries or Affiliate of the Company, or any officer thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for
in, or received by the Agent under or in connection with, this Agreement or
any other Loan Document, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this
<PAGE>
Agreement or any other Loan Document, or for any failure of the Company or
any other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any
Bank to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other
Loan Document, or to inspect the properties, books or records of the Company
or any of its Subsidiaries or Affiliates.
9.4 Reliance by Agent.
(a) The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate,
affidavit, letter, telegram, facsimile, telex or telephone message, statement
or other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons, and
upon advice and statements of legal counsel (including counsel to the
Company), independent accountants and other experts selected by the Agent.
The Agent shall be fully justified in failing or refusing to take any action
under this Agreement or any other Loan Document unless it shall first receive
such advice or concurrence of the Required Banks as it deems appropriate and,
if it so requests, it shall first be indemnified to its satisfaction by the
Banks against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action. The Agent shall
in all cases be fully protected in acting, or in refraining from acting,
under this Agreement or any other Loan Document in accordance with a request
or consent of the Required Banks and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions specified in
Section 4.1, each Bank that has executed this Agreement shall be deemed to
have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Agent to such Bank for consent,
approval, acceptance or satisfaction, or required thereunder to be consented
to or approved by or acceptable or satisfactory to the Bank.
9.5 Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, except with
respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the Banks, unless the Agent shall
have received written notice from a Bank or the Company referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". The Agent will notify the Banks of its
receipt of any such notice. The Agent shall take such action with respect to
such Default or Event of Default as may be requested by the Required Banks in
accordance with Article VII; provided, however, that unless and until the
Agent has received any such request, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable or in
the best interest of the Banks.
9.6 Credit Decision. Each Bank acknowledges that none of the Agent-Related
Persons has made any representation or warranty to it, and that no act by the
Agent hereinafter taken, including any review of the affairs of the Company
and its Subsidiaries, shall be deemed to constitute any representation or
warranty by any Agent-Related Person to any Bank. Each Bank represents to
the Agent that it has, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Company and its Subsidiaries, and all applicable bank
regulatory laws relating to the transactions contemplated hereby, and made
its own decision to enter into this Agreement and to extend credit to the
Company hereunder. Each Bank also represents that it will, independently and
without reliance upon any Agent-Related Person and based on such documents
and information as it shall deem appropriate at the time, continue to make
its own credit analysis, appraisals and decisions in taking or not taking
action
<PAGE>
under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Company. Except for notices, reports and other
documents expressly herein required to be furnished to the Banks by the
Agent, the Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of
the Company which may come into the possession of any of the Agent-Related
Persons.
9.7 Indemnification. Whether or not the transactions contemplated hereby are
consummated, the Banks shall indemnify upon demand the Agent-Related Persons
(to the extent not reimbursed by or on behalf of the Company and without
limiting the obligation of the Company to do so), pro rata, from and against
any and all Indemnified Liabilities; provided, however, that no Bank shall be
liable for the payment to the Agent-Related Persons of any portion of such
Indemnified Liabilities resulting from such Person's gross negligence or
willful misconduct. Without limitation of the foregoing, each Bank shall
reimburse the Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, the Original
Credit Agreement, or the 1995 Amended and Restated Credit Agreement, or any
document contemplated by or referred to herein, to the extent that the Agent
is not reimbursed for such expenses by or on behalf of the Company. The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of the Agent.
9.8 Agent in Individual Capacity. BofA and its Affiliates may make loans to,
issue letters of credit for the account of, enter Swap Contracts with, accept
deposits from, acquire equity interests in and generally engage in any kind
of banking, trust, financial advisory, underwriting or other business with
the Company and its Subsidiaries and Affiliates as though BofA were not the
Agent hereunder and without notice to or consent of the Banks. The Banks
acknowledge that, pursuant to such activities, BofA or its Affiliates may
receive information regarding the Company or its Affiliates (including
information that may be subject to confidentiality obligations in favor of
the Company or such Subsidiary) and acknowledge that the Agent shall be under
no obligation to provide such information to them. With respect to its
Loans, BofA shall have the same rights and powers under this Agreement as any
other Bank and may exercise the same as though it were not the Agent and the
terms "Bank" and "Banks" include BofA in its individual capacity.
9.9 Successor Agent. The Agent may, and at the request of the Required Banks
shall, resign as Agent upon 30 days' notice to the Banks. If the Agent
resigns under this Agreement, the Required Banks shall appoint from among the
Banks a successor agent for the Banks. If no successor agent is appointed
prior to the effective date of the resignation of the Agent, the Agent may
appoint, after consulting with the Banks and the Company, a successor agent
from among the Banks. Upon the acceptance of its appointment as successor
agent hereunder, such successor agent shall succeed to all the rights, powers
and duties of the retiring Agent and the term "Agent" shall mean such
successor agent and the retiring Agent's appointment, powers and duties as
Agent shall be terminated. After any retiring Agent's resignation hereunder
as Agent, the provisions of this Article IX and Sections 10.4 and 10.5 shall
inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement. If no successor agent has accepted
appointment as Agent by the date which is 30 days following a retiring
Agent's notice of resignation, the retiring Agent's resignation shall
nevertheless thereupon become effective and the Banks shall perform all of
the duties of the Agent hereunder until such
<PAGE>
time, if any, as the Required Banks appoint a successor agent as provided for
above.
9.10 Withholding Tax.
(a) If any Bank is a "foreign corporation, partnership or trust" within the
meaning of the Code and such Bank claims exemption from, or a reduction of,
U.S. withholding tax under Sections 1441 or 1442 of the Code, such Bank
agrees with and in favor of the Agent, to deliver to the Agent:
(i) if such Bank claims an exemption from, or a reduction of, withholding tax
under a United States tax treaty, properly completed IRS Forms 1001 and W-8
before the payment of any interest in the first calendar year and before the
payment of any interest in each third succeeding calendar year during which
interest may be paid under this Agreement;
(ii) if such Bank claims that interest paid under this Agreement is exempt
from United States withholding tax because it is effectively connected with a
United States trade or business of such Bank, two properly completed and
executed copies of IRS Form 4224 before the payment of any interest is due in
the first taxable year of such Bank and in each succeeding taxable year of
such Bank during which interest may be paid under this Agreement, and IRS
Form W-9; and
(iii) such other form or forms as may be required under the Code or other
laws of the United States as a condition to exemption from, or reduction of,
United States withholding tax. Such Bank agrees to promptly notify the Agent
of any change in circumstances which would modify or render invalid any
claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of, withholding tax under
a United States tax treaty by providing IRS Form 1001 and such Bank sells,
assigns, grants a participation in, or otherwise transfers all or part of the
Obligations of the Company to such Bank, such Bank agrees to notify the Agent
of the percentage amount in which it is no longer the beneficial owner of
Obligations of the Company to such Bank. To the extent of such percentage
amount, the Agent will treat such Bank's IRS Form 1001 as no longer valid.
(c) If any Bank claiming exemption from United States withholding tax by
filing IRS Form 4224 with the Agent sells, assigns, grants a participation
in, or otherwise transfers all or part of the Obligations of the Company to
such Bank, such Bank agrees to undertake sole responsibility for complying
with the withholding tax requirements imposed by Sections 1441 and 1442 of
the Code.
(d) If any Bank is entitled to a reduction in the applicable withholding tax,
the Agent may withhold from any interest payment to such Bank an amount
equivalent to the applicable withholding tax after taking into account such
reduction. If the forms or other documentation required by subsection (a) of
this Section are not delivered to the Agent, then the Agent may withhold from
any interest payment to such Bank not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the United States or
other jurisdiction asserts a claim that the Agent did not properly withhold
tax from amounts paid to or for the account of any Bank (because the
appropriate form was not delivered, was not properly executed, or because
such Bank failed to notify the Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any other reason) such Bank shall indemnify the Agent fully for all
amounts paid, directly or indirectly, by the Agent as tax or otherwise,
including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to the Agent under this Section, together
with all costs and expenses (including Attorney Costs). The obligation of
the Banks under this subsection shall survive the payment of all Obligations
and the resignation or replacement of the Agent.
<PAGE>
9.11 Documentation Agent. The Documentation Agent shall have no right,
power, obligation, liability, responsibility or duty under this Agreement
other than those applicable to all Banks as such, excepting only its rights
under subsection 2.9(b) . Without limiting the foregoing, the Documentation
Agent shall not have or be deemed to have any fiduciary relationship with any
Bank. Each Bank acknowledges that it has not relied, and will not rely, on
the Documentation Agent in deciding to enter into this Agreement or in taking
or not taking action hereunder.
ARTICLE X
MISCELLANEOUS
10.1 Amendments and Waivers. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent with respect to any
departure by the Company therefrom, shall be effective unless the same shall
be in writing and signed by the Required Banks (or by the Agent at the
written request of the Required Banks) and the Company, and acknowledged by
the Agent, and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no such waiver, amendment, or consent shall, unless in writing
and signed by all the Banks and the Company and acknowledged by the Agent, do
any of the following:
(a) increase or extend the Commitment of any Bank (or reinstate any such
Commitment terminated pursuant to subsection 8.2(a));
(b) postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees or other amounts due to
the Banks (or any of them) hereunder or under any other Loan Document;
(c) reduce the principal of, or the rate of interest specified herein on any
Loan, or (subject to clause (iii) below) any fees or other amounts payable
hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans which is required for the Banks or any of them
to take any action hereunder; or
(e) amend this Section, or Section 2.13, or any provision herein providing
for consent or other action by all Banks; and, provided further, that (i) no
amendment, waiver or consent shall, unless in writing and signed by the Agent
in addition to the Required Banks or all the Banks, as the case may be,
affect the rights or duties of the Agent under this Agreement or any other
Loan Document, and (ii) the Fee Letters may be amended, or rights or
privileges thereunder waived, in a writing executed by the parties thereto.
10.2 Notices.
(a) All notices, requests and other communications shall be in writing
(including, unless the context expressly otherwise provides, by facsimile
transmission, provided that any matter transmitted by the Company by
facsimile (i) shall be immediately confirmed by a telephone call to the
recipient at the number specified on Schedule 10.2, and (ii) shall be
followed promptly by delivery of a hard copy original thereof) and mailed,
faxed or delivered, to the address or facsimile number specified for notices
on Schedule 10.2; or, as directed to the Company or the Agent, to such other
address as shall be designated by such party in a written notice to the other
parties, and as directed to any other party, at such other address as shall
be designated by such party in a written notice to the Company and the Agent.
(b) All such notices, requests and communications shall, when transmitted by
overnight delivery, or faxed, be effective when delivered for overnight
(next-day) delivery, or transmitted in legible form by facsimile machine,
respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery; except
<PAGE>
that notices pursuant to Article II or IX shall not be effective until
actually received by the Agent.
(c) Any agreement of the Agent and the Banks herein to receive certain
notices by telephone or facsimile is solely for the convenience and at the
request of the Company. The Agent and the Banks shall be entitled to rely on
the authority of any Person purporting to be a Person authorized by the
Company to give such notice and the Agent and the Banks shall not have any
liability to the Company or other Person on account of any action taken or
not taken by the Agent or the Banks in reliance upon such telephonic or
facsimile notice. The obligation of the Company to repay the Loans shall not
be affected in any way or to any extent by any failure by the Agent and the
Banks to receive written confirmation of any telephonic or facsimile notice
or the receipt by the Agent and the Banks of a confirmation which is at
variance with the terms understood by the Agent and the Banks to be contained
in the telephonic or facsimile notice.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Agent or any Bank, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.
10.4 Costs and Expenses. The Company shall:
(a) whether or not the transactions contemplated hereby are consummated, pay
or reimburse the Arranger and BofA (including in its capacity as Agent)
within five Business Days after demand (subject to subsection 4.1(e)) for all
reasonable costs and expenses incurred by the Arranger and BofA (including in
its capacity as Agent) in connection with the development, preparation,
delivery, administration and execution of, and any amendment, supplement,
waiver or modification to (in each case, whether or not consummated), this
Agreement, the 1995 Amended and Restated Credit Agreement, the Original
Credit Agreement, any Loan Document and any other documents prepared in
connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including reasonable Attorney Costs incurred
by BofA (including in its capacity as Agent) with respect thereto;
(b) pay or reimburse the Agent, the Arranger and each Bank within five
Business Days after demand (subject to subsection 4.1(e)) for all costs and
expenses (including Attorney Costs) incurred by them in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or any other Loan Document during the existence of an
Event of Default or after acceleration of the Loans (including in connection
with any "workout" or restructuring regarding the Loans, and including in any
Insolvency Proceeding or appellate proceeding); and
(c) pay or reimburse BofA (including in its capacity as Agent) within five
Business Days after demand (subject to subsection 4.1(e)) for all appraisal
(including the allocated cost of internal appraisal services), audit,
environmental inspection and review (including the allocated cost of such
internal services), search and filing costs, fees and expenses, incurred or
sustained by BofA (including in its capacity as Agent) in connection with the
matters referred to under subsections (a) and (b) of this Section.
10.5 Indemnity.
(a) Whether or not the transactions contemplated hereby are consummated, the
Company shall indemnify, defend and hold the Agent-Related Persons, and each
Bank and each of its respective officers, directors, employees, counsel,
agents and attorneys-in-fact (each, an "Indemnified Person") harmless from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses and disbursements
(including Attorney Costs) of any kind or nature whatsoever which may at any
time (including at any time following repayment of the Loans and the
termination, resignation or replacement of the Agent or replacement of any
Bank) be imposed on, incurred by or asserted against any such
<PAGE>
Person in any way relating to or arising out of this Agreement, the 1995
Amended and Restated Credit Agreement, the Original Credit Agreement or any
document contemplated by or referred to herein or therein, or the
transactions contemplated hereby or thereby, or any action taken or omitted
by any such Person under or in connection with any of the foregoing,
including with respect to any investigation, litigation or proceeding
(including any Insolvency Proceeding or appellate proceeding) related to or
arising out of this Agreement, the Original Credit Agreement, the 1995
Amended and Restated Credit Agreement or the Loans or the use of the proceeds
thereof, whether or not any Indemnified Person is a party thereto (all the
foregoing, collectively, the "Indemnified Liabilities"); provided, that the
Company shall not have any obligation hereunder to any Indemnified Person
with respect to Indemnified Liabilities resulting from the gross negligence
or willful misconduct of such Indemnified Person.
(b) The obligations in this Section shall survive payment of all other
Obligations and any assignment and delegation by a Bank. At the election of
any Indemnified Person, the Company shall defend such Indemnified Person
using legal counsel satisfactory to such Indemnified Person in such Person's
sole discretion, at the sole cost and expense of the Company. All amounts
owing under this Section shall be paid within 30 days after demand.
10.6 Payments Set Aside. To the extent that the Company makes a payment to
the Agent or the Banks, or the Agent or the Banks exercise their right of
set-off, and such payment or the proceeds of such set-off or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by the
Agent or such Bank in its discretion) to be repaid to a trustee, receiver or
any other party, in connection with any Insolvency Proceeding or otherwise,
then (a) to the extent of such recovery the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full
force and effect as if such payment had not been made or such set-off had not
occurred, and (b) each Bank severally agrees to pay to the Agent upon demand
its Pro Rata Share of any amount so recovered from or repaid by the Agent.
10.7 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Company may not assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of the Agent and each Bank.
10.8 Assignments, Participations, Etc. (a) Any Bank may, with the written
consent of the Company at all times other than during the existence of an
Event of Default and of the Agent, which consents shall not be unreasonably
withheld, at any time assign and delegate to one or more Eligible Assignees
(provided that no written consent of the Company or the Agent shall be
required in connection with any assignment and delegation by a Bank to an
Eligible Assignee that is an Affiliate of such Bank or to any other Bank
unless at the time of such assignment and delegation the Company's
obligations under Article III would be increased as a result thereof in which
case the Company's consent will be required and such increase in obligations
will be deemed a reasonable basis for the Company to withhold consent
thereto) (each an "Assignee") all, or any ratable part of all, of the Loans
and the other rights and obligations of such Bank hereunder; provided,
however, that (i) no assignment hereunder shall in any event be less than
$10,000,000 of the outstanding Loans and the Commitment of the assigning Bank
under this Agreement and under and as defined in the Amended and Restated
Facility B Credit Agreement unless as a result of such assignment the
assigning Bank's rights and obligations hereunder shall be reduced to zero;
(ii) if a Bank assigns less than all of its rights and obligations hereunder,
such Bank's outstanding Loans plus such Bank's Commitment under and as
defined in the Amended and Restated Facility B Credit Agreement, after giving
effect to such assignment, shall not be less than $10,000,000; (iii) the
Company and the Agent may continue to deal solely and directly with such Bank
in connection with the interest so assigned to an Assignee until (A) written
notice of such assignment, together
<PAGE>
with payment instructions, addresses and related information with respect to
the Assignee, shall have been given to the Company and the Agent by such Bank
and the Assignee, (B) such Bank and its Assignee shall have delivered to the
Company and the Agent an Assignment and Acceptance substantially in the form
of Exhibit E ("Assignment and Acceptance"), and (C) the assignor Bank or
Assignee has paid to the Agent a processing fee in the amount of $2,500.00;
and (iv) no assignment of Loans shall be effective, and shall instead be void
and of no effect, unless performed simultaneously with an assignment of an
identical percentage of the rights and obligations of the assigning Bank in
Syndicated Loans under and as defined in the Amended and Restated Facility B
Credit Agreement.
(b) From and after the date that the Agent notifies the assignor Bank that it
has received (and provided its consent with respect to) an executed
Assignment and Acceptance and payment of the above-referenced processing fee,
(i) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a Bank
under the Loan Documents, and (ii) the assignor Bank shall, to the extent
that rights and obligations hereunder and under the other Loan Documents have
been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under the Loan Documents. To
the extent the Loans of any assignor Bank are evidenced by a Note instead of
a loan account, within 5 Business Days after an assignment, the Company shall
execute and deliver to the Agent (for delivery to the Assignee) new Notes
evidencing such Assignee's assigned portion of the assignor Bank's Loans and,
if the assignor Bank has retained a portion of the Loans, replacement Notes
in a principal amount of the Loans retained by the assignor Bank. Each such
Note shall be dated the date of the predecessor Note. The assignor Bank
shall mark the predecessor Note "exchanged" and deliver it to the Company.
(c) Immediately upon each Assignee's making its processing fee payment under
the Assignment and Acceptance, this Agreement shall be deemed to be amended
to the extent, but only to the extent, necessary to reflect the addition of
the Assignee.
(d) Any Bank may at any time sell to one or more commercial banks, federally
chartered instrumentalities of the United States or other Persons not
Affiliates of the Company (a "Participant") participating interests in any
Loans and the other interests of that Bank (the "originating Bank") hereunder
and under the other Loan Documents; provided, however, that (i) the
originating Bank's obligations under this Agreement shall remain unchanged,
(ii) the originating Bank shall remain solely responsible for the performance
of such obligations, (iii) the Company and the Agent shall continue to deal
solely and directly with the originating Bank in connection with the
originating Bank's rights and obligations under this Agreement and the other
Loan Documents, and (iv) no Bank shall transfer or grant any participating
interest under which the Participant has rights to approve any amendment to,
or any consent or waiver with respect to, this Agreement or any other Loan
Document, except to the extent such amendment, consent or waiver would
require unanimous consent of the Banks as described in the first proviso to
Section 10.1. In the case of any such participation, the Participant shall
be entitled to the benefit of Sections 3.1, 3.3, 3.4 and 10.5 as though it
were also a Bank hereunder, and if amounts outstanding under this Agreement
are due and unpaid, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each Participant shall be
deemed subject to Section 10.9, to have the right of set-off in respect of
its participating interest in amounts owing under this Agreement to the same
extent as if the amount of its participating interest were owing directly to
it as a Bank under this Agreement.
(e) Each Bank agrees to take normal and reasonable precautions and exercise
due care to maintain the confidentiality of all information identified as
"confidential" or "secret" by the Company and provided to it by the Company
or any of its Subsidiaries, or by the Agent on
<PAGE>
the Company's or Subsidiary's behalf, under this Agreement or any other Loan
Document, and neither it nor any of its Affiliates shall use any such
information other than in connection with or in enforcement of this Agreement
and the other Loan Documents; except to the extent such information (i) was
or becomes generally available to the public other than as a result of
disclosure by the Bank, or (ii) was or becomes available on a
non-confidential basis from a source other than the Company, provided that
such source is not bound by a confidentiality agreement with the Company
known to the Bank; provided, however, that any Bank may disclose such
information (A) at the request or pursuant to any requirement of any
Governmental Authority to which the Bank is subject or in connection with an
examination of such Bank by any such authority; (B) pursuant to subpoena or
other court process; (C) when required to do so in accordance with the
provisions of any applicable Requirement of Law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which the Agent,
any Bank or their respective Affiliates may be party; (E) to the extent
reasonably required in connection with the exercise of any remedy hereunder
or under any other Loan Document; (F) to such Bank's independent auditors and
other professional advisors; (G) to any Affiliate of such Bank, or to any
Participant or Assignee, actual or potential, provided that such Affiliate,
Participant or Assignee agrees to keep such information confidential to the
same extent required of the Banks hereunder, and (H) as to any Bank, as
expressly permitted under the terms of any other document or agreement
regarding confidentiality to which the Company is party or is deemed a party
with such Bank.
(f) Notwithstanding any other provision in this Agreement, any Bank may at
any time create a security interest in, or pledge, all or any portion of its
rights under and interest in this Agreement in favor of any Federal Reserve
Bank in accordance with Regulation A of the FRB or U.S. Treasury Regulation
31 s or any CFR 203.14, and such Federal Reserve Bank may enforce such
pledge or security interest in any manner permitted under applicable law.
10.9 Set-off. In addition to any rights and remedies of the Banks provided
by law, if an Event of Default exists or the Loans have been accelerated,
each Bank is authorized at any time and from time to time, without prior
notice to the Company, any such notice being waived by the Company to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held
by, and other indebtedness at any time owing by, such Bank to or for the
credit or the account of the Company against any and all Obligations owing to
such Bank, now or hereafter existing, irrespective of whether or not the
Agent or such Bank shall have made demand under this Agreement or any Loan
Document and although such Obligations may be contingent or unmatured. Each
Bank agrees promptly to notify the Company and the Agent after any such
set-off and application made by such Bank; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application.
10.10 Automatic Debits of Fees. With respect to any arrangement fee or other
fee, or any other cost or expense (including Attorney Costs) due and payable
to the Agent, BofA or the Arranger under the Loan Documents, the Company
hereby irrevocably authorizes BofA to debit any deposit account of the
Company with BofA in an amount such that the aggregate amount debited from
all such deposit accounts does not exceed such fee or other cost or expense.
If there are insufficient funds in such deposit accounts to cover the amount
of the fee or other cost or expense then due, such debits will be reversed
(in whole or in part, in BofA's sole discretion) and such amount not debited
shall be deemed to be unpaid. No such debit under this Section shall be
deemed a set-off.
10.11 Notification of Addresses, Lending Offices, Etc. Each Bank shall
notify the Agent in writing of any changes in the address to which notices to
the Bank should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of
such other administrative information as the Agent shall reasonably
<PAGE>
request.
10.12 Counterparts. This Agreement may be executed in any number of separate
counterparts, each of which, when so executed, shall be deemed an original,
and all of said counterparts taken together shall be deemed to constitute but
one and the same instrument.
10.13 Severability. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required
hereunder.
10.14 No Third Parties Benefited. This Agreement is made and entered into
for the sole protection and legal benefit of the Company, the Banks, the
Agent and the Agent-Related Persons, and their permitted successors and
assigns, and no other Person shall be a direct or indirect legal beneficiary
of, or have any direct or indirect cause of action or claim in connection
with, this Agreement or any of the other Loan Documents.
10.15 Governing Law and Jurisdiction.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF CALIFORNIA; PROVIDED, HOWEVER, THAT THE AGENT AND THE
BANKS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, THE
ORIGINAL CREDIT AGREEMENT, THE 1995 AMENDED AND RESTATED CREDIT AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF
CALIFORNIA OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF CALIFORNIA,
AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE
AGENT AND THE BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO
THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE COMPANY, THE AGENT AND
THE BANKS EACH IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO
THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT, THE ORIGINAL CREDIT AGREEMENT, THE
1995 AMENDED AND RESTATED CREDIT AGREEMENT OR ANY DOCUMENT RELATED HERETO OR
THERETO. THE COMPANY, THE AGENT AND THE BANKS EACH WAIVE PERSONAL SERVICE OF
ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY CALIFORNIA LAW. 10.16 Waiver of Jury Trial. THE COMPANY, THE
BANKS AND THE AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE ORIGINAL CREDIT AGREEMENT, THE 1995 AMENDED AND RESTATED
CREDIT AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED
PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS,
TORT CLAIMS, OR OTHERWISE. THE COMPANY, THE BANKS AND THE AGENT EACH AGREE
THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL
WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE
THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS
SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN
WHOLE OR IN PART,
<PAGE>
TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT, THE ORIGINAL
CREDIT AGREEMENT, THE 1995 AMENDED AND RESTATED CREDIT AGREEMENT OR THE OTHER
LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
10.17 Recourse. Except as otherwise expressly provided in the proviso to
this Section, nothing contained herein or in the other Loan Documents shall
be construed as creating any liability of any past or present shareholder,
limited partner or general partner of the Company or the Partner Entities or
any of their respective officers or directors to pay any deficiency or other
amount owing on account of the Obligations or to perform any covenant either
express or implied of the Company contained herein or in any other Loan
Document; provided, however, that nothing in this Section 10.17 shall be
construed (i) to relieve any Person from liability for fraud, concealment, or
other intentional wrongdoing for which such Person would otherwise be liable
under any applicable law, either directly or on behalf of the Company, (ii)
to restrict the joinder in any action of any necessary party in order to seek
enforcement of rights against the Company or any other party to any Loan
Document or to restrict injunctive relief against any Person to the extent
necessary to obtain performance by the Company of its Obligations or by any
other party to one or more of the Loan Documents, or (iii) to relieve any
Person from liability for distributions, payments, or other transfers made to
such Person in violation of the Loan Documents, or in violation of or
otherwise recoverable under any applicable law.
10.18 Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Company,
the Banks, the Documentation Agent and the Agent, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof; provided,
however, that (a) the Fee Letters (b) any prior arrangements made with
respect to the payment by the Company of (or any indemnification for) any
fees, costs or expenses payable to or incurred (or to be incurred) by or on
behalf of the Agent or the Existing Banks, and (c) the representations and
warranties (as of the dates made and deemed made) and the indemnities of the
Company set forth in the Original Credit Agreement, the 1995 Amended and
Restated Credit Agreement and the "Loan Documents" (as defined therein)
shall, in each case, survive the execution and delivery of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered in San Francisco, California, by their proper and duly
authorized officers as of the day and year first above written.
CROWN PACIFIC LIMITED PARTNERSHIP, a
Delaware limited partnership
By: CROWN PACIFIC MANAGEMENT
LIMITED PARTNERSHIP, a Delaware
limited partnership,
its general partner
By:
Title:
<PAGE>
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By:
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Bank
By:
Title:
ABN AMRO BANK N.V., as Documentation
Agent
By ABN AMRO NORTH AMERICA, INC.,
as agent
By:
Title:
By:
Title:
ABN AMRO BANK N.V., as a Bank
By ABN AMRO NORTH AMERICA, INC.,
as agent
By:
Title:
By:
<PAGE>
Title:
SOCIETE GENERALE
By:
Title:
NORTHWEST FARM CREDIT SERVICES, ACA
By:
Title:
BANK OF MONTREAL
By:
Title:
THE BANK OF NOVA SCOTIA
By:
Title:
BANQUE PARIBAS
By:
Title:
By:
<PAGE>
Title:
UNION BANK OF CALIFORNIA, N.A.
By:
Title:
KEY BANK OF WASHINGTON
By:
Title:
WELLS FARGO BANK, N.A.
By:
Title:
SCHEDULE 2.1
COMMITMENTS
AND PRO RATA SHARES
Bank
Acquisition Term
Loan Commitment
Bridge Term
Loan Commitment
Pro Rata Share
Bank of America National Trust
and Savings Association
$ 20,689,655.17
<PAGE>
$ 13,793,103.45
13.79310345%
ABN AMRO Bank, N.V.
$ 18,103,448.28
$ 12,068,965.52
12.06896552%
Societe Generale
$ 18,103,448.28
$ 12,068,965.52
12.06896552%
Northwest Farm Credit Services,
ACA
$ 14,224,137.93
$ 9,482,758.62
9.48275862%
Bank of Montreal
$ 14,224,137.93
$ 9,482,758.62
9.48275862%
The Bank of Nova Scotia
$ 14,224,137.93
$ 9,482,758.62
9.48275862%
Banque Paribas
$ 14,224,137.93
$ 9,482,758.62
9.48275862%
Key Bank
$ 14,224,137.93
$ 9,482,758.62
9.48275862%
Union Bank of California, N.A.
$ 14,224,137.93
$ 9,482,758.62
9.48275862%
Wells Fargo Bank, N.A.
$ 7,758,620.69
_______________
$ 5,172,413.79
_______________
<PAGE>
5.17241379%
______________
TOTAL
$150,000,000.00
$100,000,000.00
100%
SCHEDULE 10.2
OFFSHORE AND DOMESTIC LENDING OFFICES,
ADDRESSES FOR NOTICES
CROWN PACIFIC LIMITED PARTNERSHIP
Address for notices:
Crown Pacific Limited Partnership
c/o Crown Pacific Management
Limited Partnership
Bank of America Financial Center
Suite 1500
121 S.W. Morrison Street
Portland, Oregon 97204
Attention: Roger L. Krage
General Counsel and Secretary
Telephone: (503) 274-2300
Facsimile: (503) 228-4875
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
Address for notices:
Bank of America National Trust
and Savings Association
Agency Management Services #5596
1455 Market Street, 12th Floor
San Francisco, California 94103
Attention: Ivo Bakovic
Vice President
Telephone: (415) 436-2789
Facsimile: (415) 436-2700
Address for borrowings/payments to Agent:
<PAGE>
Bank of America National Trust
and Savings Association
ABA #1210-0035-8
Attn.: Agency Management Services #5596
For credit to A/C No. 12337-14313
Ref.: Crown Pacific Limited Partnership
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as a Bank
Addresses for notices:
(a) Credit notices:
Bank of America National Trust and Savings Association
Credit Products #3838
555 California St., 41st Floor
San Francisco, California 94104
Attention: Michael J. Balok
Managing Director
Telephone: (415) 622-2018
Facsimile: (415) 622-4585
(b) Operations notices:
Bank of America National Trust and Savings Association
1850 Gateway Boulevard, 4th Floor
Concord, California 94520
Attention: Theresa A. Peach
Senior Customer Services Specialist
Telephone: 510-675-7350
Facsimile: 510-675-7531
Payment Instructions:
Bank of America National Trust and Savings Association
For credit to A/C No. 12331-83980
Ref.: Crown Pacific Limited Partnership
Attention: Theresa A. Peach,
Senior Customer Services Specialist
Domestic and Offshore Landing Office:
same as address for operations notices
ABN AMRO BANK, N.V.
as Documentation Agent
Address for notices:
<PAGE>
ABN AMRO Bank, N.V.
600 University Street
Suite 2323
Seattle, WA 98101
Attention: David McGinnis, Vice President and Director
Telephone: (206) 587-0342
Facsimile: (206) 682-5641
Address for payment to Documentation Agent:
ABN AMRO Bank, N.V., New York
ABA 026009580
for credit to ABN AMRO Bank Seattle Branch
Account No. 651001085541
Ref.: Crown Pacific Limited Partnership
ABN AMRO BANK, N.V.
as a Bank
Addresses for notices:
(a) Credit notices:
ABN AMRO Bank, N.V.
600 University Street
Suite 2323
Seattle, WA 98101
Attention: David McGinnis, Vice President and Director
Telephone: (206) 587-0342
Facsimile: (206) 682-5641
(b) Operations notices:
ABN AMRO Bank, N.V.
(same address as above)
Attention: Suzanne Smith
Loan Administration Specialist
Telephone: (206) 587-0281
Facsimile: (206) 682-5641
Payment Instructions:
ABN AMRO Bank, N.V., New York
ABA 026009580
for credit to ABN AMRO Bank Seattle Branch
Account No. 651001085541
Ref.: Crown Pacific Limited Partnership
Domestic and Offshore Lending Office:
<PAGE>
same as Operations notice address
SOCIETE GENERALE
as a Bank
Addresses for notices:
(a) Credit Notices:
Societe Generale
One Montgomery Street, Suite 3220
San Francisco, CA 94104
Attention: Alec Neville
Vice President
Telephone: (415) 433-8400
Facsimile: (415) 989-9922
(b) Operations Notices:
Societe Generale
2029 Century Park East, Suite 2900
Los Angeles, CA 90067
Attention: Doris Yun
Telephone: (310) 788-7117
Facsimile: (310) 203-0539
Payment Instructions:
Societe Generale New York
ABA 0260042206
for account of Crown Pacific Limited Partnership
NY LSA 9026096
Domestic and Offshore Lending Office:
same as Operations notice address
WELLS FARGO BANK, N.A.
as a Bank
Addresses for notices:
(a) Credit notices:
Wells Fargo Bank, N.A.
555 Montgomery Street, 17th Floor
<PAGE>
San Francisco, CA 94111
Attention: Dave Neumann, Vice President
Telephone: (415) 396-4067
Facsimile: (415) 362-5081
(b) Operations notices:
Wells Fargo Bank, N.A.
420 Montgomery Street, 9th Floor
San Francisco, CA 94104
Attention: Marilyn Jones, B.S.O.
Telephone: (415) 396-2691
Facsimile: (415) 989-4319
Payment instructions:
Wells Fargo Bank, N.A.
ABA 121000248
BNF=Corporate Loan Operations/AC-2712507201
OBI=Ref: Crown Pacific Limited Partnership
Attention: Corporate Loans SG371
Domestic and Offshore Lending Office:
same as Operations notice address
BANQUE PARIBAS
as a Bank
Addresses for notices:
(a) Credit notices:
Banque Paribas
101 California Street, Suite 3150
San Francisco, CA 94111
Attention: Robert Pinkerton, Vice President
Telephone: (415) 398-6811
Facsimile: (415) 398-4240
(b) Operations notices:
Banque Paribas
2029 Century Park East, Suite 3900
Los Angeles, CA 90067
Attention: Shirley Williams,
Vice President, Operations Dept.
Telephone: (310) 551-7360
Facsimile: (310) 553-1504
<PAGE>
Payment instructions:
Bank of America, San Francisco
ABA 1210-0035-8
Account No. 62902-10150
Account Name: Banque Paribas, Los Angeles Agency
Ref.: Crown Pacific Limited Partnership
Domestic and Offshore Lending Office:
same as Operations notice address
UNION BANK OF CALIFORNIA, N.A.
as a Bank
Addresses for notices:
(a) Credit notices:
Union Bank of California, N.A.
400 California Street, 17th Floor
San Francisco, CA 94104
Attention: Kevin Sullivan, Vice President
Telephone: (415) 765-3148
Facsimile: (415) 765-3146
(b) Operations notices:
Union Bank of California, N.A.
(same address as above)
Attention: Norma Sarto
Telephone: (415) 765-2722
Facsimile: (415) 765-3146
Payment Instructions:
Union Bank of California, N.A.
ABA 121000015
Account No. 001-060235
Account Name: Corporate Banking Note Dept.
Ref.: Crown Pacific Limited Partnership
Domestic and Offshore Lending Office:
same as Credit notice address
KEY BANK OF WASHINGTON
as a Bank
Addresses for Notices:
<PAGE>
(a) Credit notices:
Key Bank of Washington
700 Fifth Avenue, 48th Floor
Seattle, WA 98104
Attention: John H. Brock, Vice President
Telephone: (206) 684-6031
Facsimile: (206) 684-6035
(b) Operations notices:
Key Bank of Washington, N.W. Region Specialty Services
17900 Pacific Highway South, Suite 301
Seattle, WA 98188
Attention: Mary Pease/Vicky Heineck
Telephone: 1(800) 297-5518
Facsimile: 1(800) 297-5495
Payment Instructions:
Key Bank of Washington
ABA 125000574
Account Name: Crown Pacific Limited Partnership
Ref.: N.W. Region Specialty Services
Attn.: Mary Pease/Vicky Heineck
Domestic and Offshore Lending Office:
same as Operations notice address
NORTHWEST FARM CREDIT SERVICES, ACA
as a Bank
Addresses for Notices:
(a) Credit notices:
AgAmerica, FCB
601 West First Avenue
Spokane, WA 99204
Attention: Alfred Compton, Vice President
Telephone: (509) 838-9280
Facsimile: (509) 838-9445
(b) Operations notices:
Northwest Farm Credit Services, ACA
601 West First Avenue
P.O.Box TAF-C-5
Spokane, WA 99220
<PAGE>
Attention: Kyle Hexom
Telephone: (509) 838-9337
Facsimile: (509) 838-9364
Payment Instructions:
AgAmerica, FCB
ABA 1251-0829-8
AGAMER FCB SPOK
Ref.: Crown Pacific Participation
Please notify Kyle Hexom upon receipt of funds
Domestic and Offshore Lending Office:
same as Operations notice address
BANK OF MONTREAL
as a Bank
Address for notices:
(a) Credit notices:
Bank of Montreal
115 S. LaSalle Street
Chicago, IL 60603
Attention: Susan Blackburn, Director
Telephone: (312) 750-3887
Facsimile: (312) 750-3808
(b) Operations notices:
Bank of Montreal
(same address as above)
Attention: Debra Sandt
Int. Officer - Client Services
Telephone: (312) 750-4312
Facsimile: (312) 750-4344
Payment Instructions:
Harris Bank & Trust
ABA 071000288
Account No.134856-6
Account Name: Bank of Montreal
Ref.: Crown Pacific Limited Partnership
Domestic and Offshore Lending Office:
same as Operations notice address
<PAGE>
THE BANK OF NOVA SCOTIA
as a Bank
Address for Notices:
(a) Credit notices:
The Bank of Nova Scotia
888 S.W. Fifth Avenue
Suite 750
Portland, OR 97204
Attention: Daryl Hogge
Relationship Manager
Telephone: (503) 222-4169
Facsimile: (503) 222-5502
(b) Operations notices:
The Bank of Nova Scotia
600 Peachtree Street, N.E.
Suite 2700
Atlanta, GA 30308
Attention: Craig Subryan
Telephone: (404) 877-1563
Facsimile: (404) 888-8998
Payment Instructions:
The Bank of Nova Scotia
ABA 026 002 532
Account No. 6102-32
Account Name: BNS-Portland Loan Servicing
Ref.: Crown Pacific Limited Partnership
Domestic and Offshore Lending Office:
same as Credit notice address
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of May 13, 1996
<PAGE>
among
CROWN PACIFIC LIMITED
PARTNERSHIP
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
as Agent
ABN AMRO BANK, N.V.
as Documentation Agent
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
Arranged By
BA SECURITIES, INC.
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS 1
1.1 Certain Defined Terms 1
1.2 Other Interpretive Provisions 26
1.3 Accounting Principles 27
ARTICLE II THE CREDITS 27
2.1 Amounts and Terms of Commitments 27
2.2 Loan Accounts 28
2.3 Procedure for Borrowing on the Closing Date 28
2.4 Conversion and Continuation Elections 29
2.5 Optional Prepayments 30
2.6 Mandatory Prepayments of Loans 31
2.7 Scheduled Repayment 32
2.8 Interest 33
2.9 Fees 33
2.10 Computation of Fees and Interest 34
2.11 Payments by the Company 34
2.12 Payments by the Banks to the Agent 35
2.13 Sharing of Payments, Etc 35
<PAGE>
2.14 Quarterly Adjustments 36
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY 36
3.1 Taxes 36
3.2 Illegality 37
3.3 Increased Costs and Reduction of Return 38
3.4 Funding Losses 38
3.5 Inability to Determine Rates 39
3.6 Certificates of Banks 39
3.7 Survival 40
ARTICLE IV CONDITIONS PRECEDENT 40
4.1 Conditions of Closing 40
4.2 Conditions to Continuation/Conversion 42
ARTICLE V REPRESENTATIONS AND WARRANTIES 43
5.1 Existence and Power 43
5.2 Authorization; No Contravention 43
5.3 Governmental Authorization 43
5.4 Binding Effect 44
5.5 Litigation 44
5.6 No Default 44
5.7 ERISA Compliance 44
5.8 Use of Proceeds; Margin Regulations 45
5.9 Title to Properties 45
5.10 Taxes 45
5.11 Financial Condition 45
5.12 Environmental Matters 46
5.13 Regulated Entities 47
5.14 No Burdensome Restrictions 47
5.15 Copyrights, Patents, Trademarks and Licenses, Etc 47
5.16 Subsidiaries 47
5.17 Insurance 47
5.18 Labor Relations 48
5.19 Partnership Interests 48
5.20 Full Disclosure 48
5.21 Solvency 48
5.22 Swap Obligations 48
ARTICLE VI AFFIRMATIVE COVENANTS 48
6.1 Financial Statements 49
6.2 Certificates; Other Information 50
6.3 Notices 51
6.4 Preservation of Partnership Existence, Etc 52
6.5 Maintenance of Property 53
6.6 Insurance 53
6.7 Payment of Obligations 53
6.8 Compliance with Laws 54
6.9 Inspection of Property and Books and Records 54
6.10 Environmental Laws 54
6.11 Use of Proceeds 54
6.13 Further Assurances 55
ARTICLE VII NEGATIVE COVENANTS 55
7.1 Limitation on Liens 55
<PAGE>
7.2 Asset Dispositions 57
7.3 Consolidations and Mergers 58
7.4 Harvesting Restrictions 59
7.5 Loans and Investments 61
7.6 Limitation on Indebtedness 62
7.7 Transactions with Affiliates 63
7.8 Use of Proceeds 63
7.9 Contingent Obligations 64
7.10 Joint Ventures 64
7.11 Restricted Payments 64
7.12 Change in Business 64
7.13 Fiscal Year Changes 64
7.14 Amendments to Agreements 65
7.15 Limitation on Voluntary Payments of Senior Notes, Etc 65
7.16 Cash Flow to Interest Expense Ratio 65
7.17 Total Debt to Cash Flow Ratio 65
7.18 Cash Coverage Ratio 65
ARTICLE VIII EVENTS OF DEFAULT 66
8.1 Event of Default 66
8.2 Remedies 68
8.3 Rights Not Exclusive 68
ARTICLE IX THE AGENT 69
9.1 Appointment and Authorization 69
9.2 Delegation of Duties 69
9.3 Liability of Agent 69
9.4 Reliance by Agent 70
9.5 Notice of Default 70
9.6 Credit Decision 70
9.7 Indemnification 71
9.8 Agent in Individual Capacity 71
9.9 Successor Agent 71
9.10 Withholding Tax 72
9.11 Documentation Agent 73
ARTICLE X MISCELLANEOUS 73
10.1 Amendments and Waivers 73
10.2 Notices 74
10.3 No Waiver; Cumulative Remedies 75
10.4 Costs and Expenses 75
10.5 Indemnity 76
10.6 Payments Set Aside 76
10.7 Successors and Assigns 76
10.8 Assignments, Participations, Etc 77
10.9 Set-off 79
10.10 Automatic Debits of Fees 79
10.11 Notification of Addresses, Lending Offices, Etc 79
10.12 Counterparts 80
10.13 Severability 80
10.14 No Third Parties Benefited 80
10.15 Governing Law and Jurisdiction 80
10.16 Waiver of Jury Trial 80
<PAGE>
10.17 Recourse 81
10.18 Entire Agreement 81
SCHEDULES
Schedule 1.1 Investment Policy
Schedule 2.1 Commitments
Schedule 5.5 Litigation
Schedule 5.7 ERISA
Schedule 5.12 Environmental Matters
Schedule 5.16 Subsidiaries and Minority Interests
Schedule 7.1 Permitted Liens
Schedule 7.5 Permitted Loans and Investments
Schedule 7.6 Permitted Indebtedness
Schedule 7.9 Contingent Obligations
Schedule 10.2 Lending Offices; Addresses for Notices
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D Form of Legal Opinion of Company's Counsel
Exhibit E Form of Assignment and Acceptance
Exhibit F Form of Note
Exhibit G Form of Escrow Agreement
80
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<PAGE>
EXHIBIT A
NOTICE OF BORROWING
Date: ___________________
To: Bank of America National Trust and Savings Association, as Agent for
the Banks parties to the Amended and Restated Credit Agreement dated as of
May 13, 1996 (as extended, renewed, amended or restated from time to time,
the "Credit Agreement") among Crown Pacific Limited Partnership (the
"Company"), certain Banks that are signatories thereto, ABN AMRO Bank, N.V.,
as Documentation Agent, and Bank of America National Trust and Savings
Association, as Agent.
Ladies and Gentlemen:
The undersigned, the Company, refers to the Credit Agreement, the terms
defined therein being used herein as therein defined, and hereby gives you
notice irrevocably, pursuant to Section 2.3 of the Credit Agreement, of the
Borrowing specified herein:
1. The aggregate amount of the proposed Borrowing is $_______________.
2. The Business Day of the proposed Borrowing is __________ ________.
3. The Borrowing is to be comprised of $_________ of [Offshore Rate Loans]
[Base Rate Loans].
4. [If applicable] The duration of the Interest Period for the Offshore Rate
Loans included in the Borrowing shall be [_________] months.
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the proposed Borrowing,
before and after giving effect thereto and to the application of the proceeds
therefrom:
(a) The representations and warranties of the Company contained in Article
V of the Credit Agreement are true and correct as though made on and as of
such date (except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true and
correct as of such earlier date);
(b) No Default or Event of Default exists; and
(c) The ratio of (i) Pro Forma Consolidated Cash Flow to Pro Forma Interest
Expense is greater than 2.50 to 1.00, and (ii) Pro Forma Consolidated Cash
Flow to Pro Forma Maximum Debt Service is greater than 1.25 to 1.00.
CROWN PACIFIC LIMITED PARTNERSHIP, a
Delaware limited partnership
By: CROWN PACIFIC MANAGEMENT
LIMITED PARTNERSHIP, a Delaware limited
partnership, its general partner
By:
Title:
<PAGE>
EXHIBIT B
NOTICE OF CONVERSION/CONTINUATION
Date: __________________
To: Bank of America National Trust and Savings Association, as Agent for
the Banks parties to the Amended and Restated Credit Agreement dated as of
May 13, 1996 (as extended, renewed, amended or restated from time to time,
the "Credit Agreement") among Crown Pacific Limited Partnership (the
"Company"), certain Banks which are signatories thereto, ABN AMRO Bank, N.V.,
as Documentation Agent, and Bank of America National Trust and Savings
Association, as Agent.
Ladies and Gentlemen:
The undersigned, the Company, refers to the Credit Agreement, the terms
defined therein being used herein as therein defined, and hereby gives you
notice irrevocably, pursuant to Section 2.4 of the Credit Agreement, of the
[conversion] [continuation] of the Loans specified herein, that:
1. The date of the [conversion] [continuation] is ______________________,
19__.
2. The aggregate amount of the Loans [converted] [continued] is
$______________.
3. The Loans are to be [converted into] [continued as] [Offshore Rate Loans]
[Base Rate Loans].
4. [If applicable:] The duration of the Interest Period for the Loans
included in the [conversion] [continuation] shall be [____] months. The
undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the date of the proposed [conversion]
[continuation], before and after giving effect thereto and to the application
of the proceeds therefrom:
(a) the representations and warranties of the Company contained in Article
V of the Credit Agreement are true and correct as though made on and as of
such date (except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true and
correct as of such earlier date); and
(b) no Default or Event of Default exists.
CROWN PACIFIC LIMITED PARTNERSHIP,
a Delaware limited partnership
By: CROWN PACIFIC MANAGEMENT LIMITED
PARTNERSHIP, a Delaware limited partnership, its
general partner
By:
Title:
<PAGE>
EXHIBIT G
ESCROW AGREEMENT
This ESCROW AGREEMENT ("Agreement") dated as of ______________, 199_ is
entered into by and between CROWN PACIFIC LIMITED PARTNERSHIP, a Delaware
limited partnership (the "Company"), and _________________________ (the
"Escrow Agent").
RECITALS
A. The Company has entered into (i) the Amended and Restated Credit
Agreement dated as of May 13, 1996 (as the same may from time to time be
amended, amended and restated, modified, supplemented or renewed, the
"Facility A Credit Agreement") with the several financial institutions from
time to time party thereto (the "Facility A Banks"), ABN AMRO Bank, N.V., as
documentation agent for the Banks (in such capacity, the "Documentation
Agent"), and Bank of America National Trust and Savings Association, as agent
for the Facility A Banks (together with its successors in such capacity, the
"Facility A Agent"), (ii) the Amended and Restated Facility B Credit
Agreement dated as of May 13, 1996 (as the same may from time to time be
amended, amended and restated, modified, supplemented or renewed, the
"Facility B Credit Agreement") with the several financial institutions from
time to time party thereto (the "Facility B Banks"), ABN AMRO Bank, N.V., as
documentation agent for the Banks (in such capacity, the "Documentation
Agent"), and Bank of America National Trust and Savings Association, as agent
for the Facility B Banks (together with its successors in such capacity, the
"Facility B Agent"), (iii) the Note Purchase Agreement dated as of December
1, 1994 (as the same may from time to time be amended, amended and restated,
modified, supplemented or renewed, the "1994 Senior Note Agreement") entered
into for the benefit of the holders from time to time of the notes issued
pursuant thereto (the "1994 Noteholders"), and (iv) the Note Purchase
Agreement dated as of March 15, 1995 (as the same may from time to time be
amended, amended and restated, modified, supplemented or renewed, the "1995
Senior Note Agreement") entered into for the benefit of the holders from time
to time of the notes issued pursuant thereto (the "1995 Noteholders").
B. Section 7.2(f) of the Facility A Credit Agreement, Section 8.2(f) of
the Facility B Credit Agreement and Section 4.10(a)(2) of each of the 1994
Senior Note Agreement and the 1995 Senior Note Agreement permit the Company
and its subsidiaries to dispose of assets under the circumstances described
therein so long as the net proceeds of such disposition are applied to the
purchase of productive assets in Permitted Businesses (as defined in the
Facility A Credit Agreement and the Facility B Credit Agreement) or to prepay
Senior Debt (as defined in the Facility A Credit Agreement and the Facility B
Credit Agreement). Any net proceeds of such disposition in excess of the
amounts specified in such Sections which have not been applied to purchase
productive assets in Permitted Businesses or distributed to the holders of
Senior Debt are to be placed immediately upon receipt thereof in an escrow or
other similar account for application in accordance with such Sections.
C. Section 7.4 of the Facility A Credit Agreement, Section 8.4 of the
Facility B Credit Agreement and Section 4.12 of each of the 1994 Senior Note
Agreement and the 1995 Senior Note Agreement permit the Company and its
subsidiaries to harvest timber from their timberlands in excess of the
limitations provided for in such Sections so long as the net proceeds of such
excess harvest are placed within the period specified in such Sections in an
escrow or other similar account and applied in accordance with such Sections
to purchase timber or timberlands or to prepay Senior Debt.
<PAGE>
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the Company and the Escrow Agent hereby agree as
follows:
1. Escrow Accounts.
(a) Establishment of Escrow Accounts and Delivery of Funds. The
Escrow Agent has established (i) a special and irrevocable escrow account
designated the "Asset Disposition Escrow Account" (together with all
subaccounts thereunder and any successor account(s) that may be established
from time to time with the Escrow Agent in replacement thereof, the "Asset
Disposition Escrow Account") and (ii) a special and irrevocable escrow
account designated the "Excess Harvest Escrow Account" (together with all
subaccounts thereunder and any successor account(s) that may be established
from time to time with the Escrow Agent in replacement thereof, the "Excess
Harvest Escrow Account", and collectively with the Asset Disposition Escrow
Account, the "Escrow Accounts" and each individually, an "Escrow Account").
The Escrow Agent shall keep the funds held in each Escrow Account separate
and apart from all other funds and money held by it and shall hold each
Escrow Account for the account and benefit of the persons as hereinafter set
forth. The Company may make deposits from time to time to the Asset
Disposition Escrow Account in the amount of net proceeds from the disposition
of assets that the Company intends to apply in the manner contemplated by
Section 7.2(f) of the Facility A Credit Agreement, Section 8.2(f) of the
Facility B Credit Agreement and Section 4.10(a)(2) of each of the 1994 Senior
Note Agreement and the 1995 Senior Note Agreement. The Company may make
deposits from time to time to the Excess Harvest Escrow Account in the amount
of net proceeds of excess timber harvest that the Company intends to apply in
the manner contemplated by Section 7.4 of the Facility A Credit Agreement,
Section 8.4 of the Facility B Credit Agreement and Section 4.12 of each of
the 1994 Senior Note Agreement and the 1995 Senior Note Agreement. Once
deposited, such funds shall be maintained and applied by the Escrow Agent in
accordance herewith. The Company agrees that upon the deposit of funds into
any Escrow Account by or at the direction of the Company, such deposit shall
become (except as expressly provided in Section 1(b) hereof) irrevocable and
the Company shall have no right to withdraw amounts contained therein or
interest or other income accrued thereon except as provided in Section 1(b)
hereof or upon the indefeasible payment in full of the all amounts remaining
unpaid under the Facility A Credit Agreement, the Facility B Credit
Agreement, the 1994 Senior Note Agreement and the 1995 Senior Note Agreement.
The Escrow Agent shall separately account for each deposit made to each
Escrow Account. Each deposit to an Escrow Account shall be maintained by the
Escrow Agent as a subaccount thereunder, numbered sequentially in
chronological order.
(b) Application of Funds.
(i) Subject to prior distribution in accordance with clause (iii)
below, the Escrow Agent shall release funds held in the Escrow Accounts,
including the interest and other income accrued thereon, to the Company if
and only if (y) the Company shall have delivered to the Escrow Agent, with a
copy to the Facility A Agent and the Facility B Agent, no later than five
Business Days (as defined in the Facility A Credit Agreement and Facility B
Credit Agreement) prior to the proposed date of such release, a certificate
of the chief executive officer, the president, the chief financial officer or
the person serving as the secretary and general counsel of the Company or the
general partner of the Company (each such officer, a "Responsible Officer"),
substantially in the form of Exhibit A hereto in the case of a release of
funds from the Asset Disposition Escrow Account, and substantially in the
form of Exhibit B hereto in the case of a release of funds from the Excess
Harvest Escrow Account, and (z) the Escrow Agent shall not have received from
any of the Facility A Agent, the Facility B Agent, or any person or entity
purporting to be a 1994 Noteholder or 1995 Noteholder written notice that a
Default or Event of Default (as such terms are defined in any of the Facility
A Credit Agreement, the Facility B Credit Agreement, the 1994 Senior Note
Agreement and the 1995 Senior
<PAGE>
Note Agreement) exists or will occur by virtue of such release of funds. In
releasing funds from any Escrow Account, the Escrow Agent shall release
deposits held in that Escrow Accounts pursuant to this clause (i) from the
subaccounts thereunder in the order in which such subaccounts were
established. For example, if the Company has delivered a certificate
sufficient under this clause (i) to authorize the Escrow Agent to release
$100 from the Asset Disposition Escrow Account, and if the Escrow Agent holds
three subaccounts under the Asset Disposition Escrow Account, number 1
(established on January 1 with $20), number 2 (established on February 1 with
$60), and number 3 (established on March 1 with $50), the Escrow Agent shall
satisfy such release of funds by first emptying subaccount number 1, second
emptying subaccount number 2, and third releasing an amount from subaccount
number 3 sufficient to bring the total release of funds (after giving effect
to interest released from subaccounts 1 and 2) to $100.
(ii) Subject to prior distribution by the Escrow Agent in
accordance with clause (i) above, the Escrow Agent shall hold the funds in
each subaccount under each Escrow Account and disburse such funds in
accordance with clause (iii) below upon the date identified to the Escrow
Agent in writing by a Responsible Officer at the time the Company makes the
deposit that establishes such subaccount as the "Disbursement Date" for such
deposit, which date shall be the 270th day after the date of the related
asset deposition in the case of a deposit to the Asset Disposition Escrow
Account, and, in the case of a deposit to the Excess Harvest Escrow Account,
the 270th day after the last day of the period in which such excess harvest
occurred (the "Disbursement Date").
(iii) If on the Disbursement Date with respect to any subaccount
under Escrow Account, any funds remain in such subaccount, the Escrow Agent
shall promptly distribute such funds, including interest and other income
accrued thereon, as follows: (i) so long as the Escrow Agent shall not have
received a notice of Default or Event of Default (as such terms are defined
in any of the Facility A Credit Agreement, the Facility B Credit Agreement,
the 1994 Senior Note Agreement and the 1995 Senior Note Agreement) from any
of the Facility A Agent, the Facility B Agent, or any person or entity
purporting to be a 1994 Noteholder or 1995 Noteholder, such funds shall be
distributed to the Facility A Agent, the Facility B Agent, the 1994
Noteholders or the 1995 Noteholders, or any combination thereof, in the
amounts and as directed by the Company in writing to the Escrow Agent, and
interest and other income accrued thereon shall be distributed to the
Company, and (ii) if the Escrow Agent shall have received such a notice of a
Default or Event of Default from any of the Facility A Agent, the Facility B
Agent, or any person or entity purporting to be a 1994 Noteholder or 1995
Noteholder, such funds, together with all interest and other income accrued
thereon, shall be distributed to the Facility A Agent, the Facility B Agent,
the 1994 Noteholders or the 1995 Noteholders, or any combination thereof, in
the amounts and as directed in written instructions to the Escrow Agent
executed by the Facility A Agent, the Facility B Agent, the Majority 1994
Noteholders and the Majority 1995 Noteholders (as such terms are defined
below). "Majority 1994 Noteholders" means one or more persons or entities
purporting to be 1994 Noteholders and certifying to the Escrow Agent that
they hold greater than 50% in aggregate principal amount of the outstanding
notes issued under the 1994 Senior Note Agreement, and "Majority 1995
Noteholders" means one or more persons or entities purporting to be 1995
Noteholders and certifying to the Escrow Agent that they hold greater than
50% in aggregate principal amount of the outstanding notes issued under the
1995 Senior Note Agreement. The Escrow Agent shall be entitled to rely
conclusively upon the certificates referred to in this Section as well as any
notice from any of the Facility A Agent, the Facility B Agent, or any person
or entity purporting to be a 1994 Noteholder or 1995 Noteholder of a Default
or an Event of Default without independent investigation.
<PAGE>
2. Investments.
(a) The Escrow Agent shall have no obligation to make any
investment or reinvestment of any moneys held in the Escrow Accounts at any
time except as expressly provided in this Agreement.
(b) Any amounts held by the Escrow Agent shall be invested by the
Escrow Agent from time to time as directed in writing by the Company (unless
the Escrow Agent shall have received from any of the Facility A Agent, the
Facility B Agent, or any person or entity purporting to be a 1994 Noteholder
or 1995 Noteholder a notice of Default or Event of Default, in which case
such amounts shall be invested solely in the investments described in clause
(iii) below and shall mature in less than 30 days after the date of such
investment), and the Escrow Agent agrees to comply with the Company's written
request to invest in any of the following investments (collectively,
"Permitted Investments"): (i) investments in commercial paper which, at the
time of acquisition by the Escrow Agent, is rated at least A-1 by Standard &
Poor's Rating Group ("S&P") or P-1 by Moody's Investors Service, Inc.
("Moody's") or, if such commercial paper is not rated by either S&P or
Moody's, the highest rating of another nationally recognized credit rating
agency of similar standing approved in writing by each of the Facility A
Agent, the Facility B Agent, the Majority 1994 Noteholders and the Majority
1995 Noteholders, (ii) investments in direct obligations of the United States
of America or any agency or instrumentality of the United States of America,
the payment or guarantee of which constitutes a full faith and credit
obligation of the United States of America, or (iii) investments in
certificates of deposit, issued by a bank or trust company organized under
the laws of the United States of America or any state thereof, having
capital, surplus and undivided profits aggregating at least $250,000,000 and
the unsecured long-term obligations of which are rated at least AA by S&P or
Aa by Moody's or, if such unsecured long-term obligations are not rated by
either S&P or Moody's, a comparable rating by another nationally recognized
credit rating agency of similar standing approved in writing by each of the
Facility A Agent, the Facility B Agent, the Majority 1994 Noteholders and the
Majority 1995 Noteholders; provided that all such investments shall be
denominated in United States dollars and shall mature in 180 days or less
after the date of investment. The Escrow Agent may sell any Permitted
Investment (without regard to maturity date) whenever necessary to make any
transfer required by Section 1.
(c) The Escrow Agent shall hold, invest and apply any income
realized as a result of any investment pursuant to this Section 2 as part of
the Asset Disposition Escrow Account and the Excess Harvest Escrow Account,
as the case may be, and within the same subaccount to which such interest is
attributable.
(d) With respect to the investment of funds on deposit in the
Escrow Accounts pursuant to this Section 2 and to the extent the Company is
permitted to direct such investment hereunder, the Escrow Agent shall be
entitled to rely upon the written instructions of those individuals whose
signatures appear in the spaces provided below, or such other individuals as
may hereafter be designated in writing by the Company:
_____________________________ Peter W. Stott
_____________________________ Richard D. Snyder
_____________________________ Roger L. Krage
3. Terms and Conditions. To the extent not inconsistent with this
Agreement, the Company agrees to be bound by the Escrow Agent's Standard
Terms and Conditions attached hereto
<PAGE>
as Exhibit D (as the same may from time to time be amended, modified or
supplemented, the "Standard Terms and Conditions") and they are hereby
incorporated by reference into and form a part of this Agreement with the
same effect as if they were set forth in full herein.
4. Compensation. The Escrow Agent shall be entitled to compensation
from the Company for the maintenance of, and investment of funds contained
in, the Escrow Accounts in accordance with Schedule 2 attached hereto. Such
compensation shall be payable as provided in Schedule 2. The fees of and the
costs incurred by the Escrow Agent shall not be a charge on and in no event
shall be deducted from the Escrow Accounts but shall be an additional
obligation of the Company which shall survive the termination of this
Agreement.
5. Reports. On the tenth Business Day of each month until the
termination of this Agreement, the Escrow Agent shall submit to the Company,
the Facility A Agent, and the Facility B Agent, a report covering all funds
it shall have received and all payments it shall have made or caused to be
made hereunder during the preceding calendar month. Each report shall also
list each deposit into each Escrow Account and the investment income related
thereto, all Permitted Investments and the amount of money accounted for in
each Escrow Account on the date preceding the date of such report.
6. Notices, Etc. Any notice or other communication herein required
or permitted to be given shall be in writing and may be delivered in person,
with receipt acknowledged, or sent by telex, telecopy or by United States
mail, registered or certified, return receipt requested, postage prepaid and
addressed as set forth on the signature pages to this Agreement in the case
of the parties hereto, and as set forth on Schedule I in the case of the
Facility A Agent and the Facility B Agent, or at such other address as may be
substituted by notice given as herein provided. The giving of any notice
required hereunder may be waived in writing by the party entitled to receive
such notice. All such notices and communications shall be effective upon
receipt. Failure or delay in delivering copies of any notice, demand,
request, consent, approval, declaration or other communication to the persons
designated above to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration
or other communication.
7. Termination. The Company may terminate this Agreement at any time
that the balance in each Escrow Account is zero upon three Business Days
prior written notice to the Escrow Agent with a copy to the Facility A Agent
and the Facility B Agent.
8. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Company and the Escrow Agent and their respective
successors and assigns, except that the Company shall not have the right to
assign its rights hereunder or any interest herein without the prior written
consent of the Escrow Agent, the Facility A Agent, the Facility B Agent and
the Majority 1994 Noteholders and the Majority 1995 Noteholders.
9. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of California
applicable to contracts made and performed in such state, without regard to
the principles thereof regarding conflict of laws, and any applicable laws of
the United States of America.
10. Entire Agreement. This Agreement constitutes and contains the
entire agreement among the parties and supersede any and all prior
agreements, negotiations, correspondence, understandings and communications
among the parties, whether written or oral, respecting the subject matter
hereof.
<PAGE>
11. Interpretation. Any reference to a "Section" shall refer to the
relevant Section to this Agreement, unless specifically indicated to the
contrary and the words "herein," "hereof" and "hereunder" and other words of
similar import shall refer to this Agreement as a whole, as the same may from
time to time be amended, amended and restated, modified or supplemented, and
not to any particular section, subsection or clause contained in this
Agreement.
12. Amendments; Waivers. No amendment, modification, discharge or
waiver of, or consent to any departure by the Company from, any provision of
this Agreement shall be effective unless the same shall be in writing and
signed by the Escrow Agent, the Facility A Agent, and the Facility B Agent,
and then such waiver shall be effective only in the specific instance and for
the specific purpose for which given.
13. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be valid, legal and
enforceable under the applicable law of any jurisdiction. Without limiting
the generality of the foregoing sentence, in case any provision of this
Agreement shall be invalid, illegal or unenforceable under the applicable law
of any jurisdiction, the validity, legality and enforceability of the
remaining provisions, or of such provision in any other jurisdiction, shall
not in any way be affected or impaired thereby.
14. Headings. Section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
15. No Third Parties Benefited. This Agreement is made and entered
into for the sole protection and legal benefit of the Company, the Escrow
Agent, the Documentation Agent, the Facility A Agent, the Facility A Banks,
the Facility B Agent, the Facility B Banks, the 1994 Noteholders, the 1995
Noteholders and each of their permitted successors and assigns, and no other
person shall be a direct or indirect legal beneficiary of, or have any direct
or indirect cause of action or claim in connection with this Agreement.
Except as set forth herein, the Escrow Agent shall have no obligation to any
person not a party to this Agreement.
16. Counterparts. This Agreement and any amendments, waivers,
consents or supplements hereto may be executed in any number of counterparts,
and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
CROWN PACIFIC LIMITED PARTNERSHIP,
a Delaware limited partnership
By: CROWN PACIFIC MANAGEMENT LIMITED PARTNERSHIP, a
Delaware limited partnership, its general partner
<PAGE>
By:
Title:
Notice to be sent to:
Crown Pacific Limited Partnership
c/o Crown Pacific Management Limited
Partnership
Bank of America Financial Center
Suite 1500
121 S.W. Morrison Street
Portland, Oregon 97204
Attention: Roger L. Krage
Facsimile: (503) 228-4875
Telephone: (503) 274-2300
______________________________
as Escrow Agent
By:
Title:
Notice to be sent to:
Attention:
Facsimile:
Telephone:
Schedule 1 to
Escrow Agreement
ADDRESSES FOR NOTICES
Item A. Facility A Agent Address for Notices
Bank of America National Trust and Savings Association
Agency Management Services #5596
1455 Market Street, 12th Floor
San Francisco, California 94103
Attention: Ivo Bakovic
Vice President
Telephone: 415/622-1158
Facsimile: 415/622-4894
Item B. Facility B Agent Address for Notices
<PAGE>
Bank of America National Trust and Savings Association
Agency Management Services #5596
1455 Market Street, 12th Floor
San Francisco, California 94103
Attention: Ivo Bakovic
Vice President
Telephone: 415/622-1158
Facsimile: 415/622-4894
<PAGE>
EXHIBIT E
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Agreement") dated as of
__________, ____ is made between ______________________________ (the
"Assignor") and __________________________ (the "Assignee").
RECITALS
WHEREAS, the Assignor is party to the Amended and Restated Credit Agreement
dated as of May 13, 1996 (as amended, amended and restated, modified,
supplemented or renewed, the "Credit Agreement") among Crown Pacific
Limited Partnership, a Delaware limited partnership (the "Company"), the
several financial institutions from time to time party thereto (including the
Assignor, the "Banks"), ABN AMRO Bank, N.V., as documentation agent for the
Banks, and Bank of America National Trust and Savings Association, as agent
for the Banks. Any terms defined in the Credit Agreement and not defined in
this Agreement are used herein as defined in the Credit Agreement;
WHEREAS, the Assignor has made Loans in the aggregate principal amount of
$___________ to the Company; and
WHEREAS, the Assignor wishes to assign to the Assignee [part of the] [all]
rights and obligations of the Assignor under the Credit Agreement in respect
of its outstanding Loans in an amount equal to $__________ (the "Assigned
Amount") on the terms and subject to the conditions set forth herein and the
Assignee wishes to accept assignment of such rights and to assume such
obligations from the Assignor on such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
1. Assignment and Acceptance.
(a) Subject to the terms and conditions of this Agreement, (i) the Assignor
hereby sells, transfers and assigns to the Assignee, and (ii) the Assignee
hereby purchases, assumes and undertakes from the Assignor, without recourse
and without representation or warranty (except as provided in this Agreement)
__% (the "Assignee's Percentage Share") of (A) [the Commitment] [or]
[the Loans] of the Assignor and (B) all related rights, benefits,
obligations, liabilities and indemnities of the Assignor under and in
connection with the Credit Agreement and the Loan Documents.
[If appropriate, add paragraph specifying payment to Assignor by Assignee of
outstanding principal of, accrued interest on, and fees with respect to Loans
assigned.]
(b) With effect on and after the Effective Date (as defined in Section 5),
the Assignee shall be a party to the Credit Agreement and succeed to all of
the rights and be obligated to perform all of the obligations of a Bank under
the Credit Agreement, including the requirements concerning
confidentiality[, with a Commitment in an amount equal to the Assigned Amount].
The Assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of the Credit Agreement are
required to be performed by it as a Bank. It is the intent of the parties
hereto that the Commitment of the Assignor shall, as of the Effective Date,
be reduced by an amount equal to the Assigned Amount and the Assignor shall
relinquish its rights and be released from its obligations under the Credit
Agreement to the extent such obligations have been assumed by the Assignee;
provided, however, that notwithstanding the assignment hereunder, the
Assignor and the Assignee shall both have the rights which the Assignor had
under Article III and Section 10.5 of the Credit Agreement.
(c) [After giving effect to the assignment and assumption, on the Effective
Date the Assignee's Commitment will be $__________.
(d) After giving effect to the assignment and assumption, on the Effective
Date the Assignor's Commitment will be $__________.]
2. Payments.
(a) As consideration for the sale, assignment and transfer contemplated in
Section 1, the Assignee shall pay to the Assignor on the Effective Date in
immediately available funds an
<PAGE>
amount equal to $__________, representing the
Assignee's Percentage Share of the principal amount of all Loans.
(b) The [Assignor] [Assignee] further agrees to pay to the Agent a processing
fee in the amount specified in subsection 10.8(a) of the Credit Agreement.
3. Reallocation of Payments.
Any interest, fees and other payments accrued to
the Effective Date with respect to the Loans shall be for the account of the
Assignor. Any interest, fees and other payments accrued on and after the
Effective Date with respect to the Assigned Amount shall be for the account
of the Assignee. Each of the Assignor and the Assignee agrees that it will
hold in trust for the other party any interest, fees and other amounts which
it may receive to which the other party is entitled pursuant to the preceding
sentence and pay to the other party any such amounts which it may receive
promptly upon receipt.
4. Independent Credit Decision.
The Assignee (a) acknowledges that it has
received a copy of the Credit Agreement and the Schedules and Exhibits
thereto, together with copies of the most recent financial statements
referred to in Section 6.1 of the Credit Agreement, and such other documents
and information as it has deemed appropriate to make its own credit and legal
analysis and decision to enter into this Agreement; and (b) agrees that it
will, independently and without reliance upon the Assignor, the Agent or any
other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit and legal decisions
in taking or not taking action under the Credit Agreement.
5. Effective Date; Notices.
(a) As between the Assignor and the Assignee, the effective date for this
Agreement shall be __________, ____ (the "Effective Date"); provided that the
following conditions precedent have been satisfied on or before the Effective
Date: (i) this Agreement shall be executed and delivered by the Assignor and
the Assignee; (ii) the consent of the Company (if applicable) and the Agent
required for an effective assignment of the Assigned Amount by the Assignor
to the Assignee under subsection 10.8(a) of the Credit Agreement shall have
been duly obtained and shall be in full force and effect as of the Effective
Date; (iii) the Assignee shall pay to the Assignor all amounts due to the
Assignor under this Agreement; (iv) the Assignee shall have complied with
subsection 9.10(a) of the Credit Agreement (if applicable); (v) the
processing fee referred to in Section 2(b) hereof and in subsection 10.8(a)
of the Credit Agreement shall have been paid to the Agent; and (vi) the
Assignor shall have assigned and the Assignee shall have assumed a percentage
equal to Assignee's Percentage Share of the rights and obligations of the
Assignor under, and of the Assignor's Syndicated Loans and L/C Obligations
under and as defined in the Facility B Credit Agreement.
(b) Promptly following the execution of this Agreement, the Assignor shall
deliver to the Company and the Agent for acknowledgement by the Agent, a
Notice of Assignment in the form attached hereto as Schedule 1.
6. Agent. [INCLUDE ONLY IF ASSIGNOR IS AGENT]
(a) The Assignee hereby appoints and authorizes the Assignor to take such
action as agent on its behalf and to exercise such powers under the Credit
Agreement as are delegated to the Agent by the Banks pursuant to the terms of
the Credit Agreement.
(b) The Assignee shall assume no duties or obligations held by
the Assignor in its capacity as Agent under the Credit Agreement.]
7. Withholding Tax.
<PAGE>
The Assignee agrees to comply with subsection 9.10(a) of
the Credit Agreement (if applicable).
8. Representations and Warranties.
(a) The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any lien, security interest or other adverse
claim; (ii) it is duly organized and existing and it has the full power and
authority to take, and has taken, all action necessary to execute and deliver
this Agreement and any other documents required or permitted to be executed
or delivered by it in connection with this Agreement and to fulfill its
obligations hereunder; (iii) no notices to, or consents, authorizations or
approvals of, any person are required (other than any already given or
obtained) for its due execution, delivery and performance of this Agreement,
and apart from any agreements or undertakings or filings required by the
Credit Agreement, no further action by, or notice to, or filing with, any
person is required of it for such execution, delivery or performance; and
(iv) this Agreement has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignor,
enforceable against the Assignor in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles.
(b) The Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Credit Agreement or any other instrument or document furnished pursuant
thereto. The Assignor makes no representation or warranty in connection
with, and assumes no responsibility with respect to, the solvency, financial
condition or statements of the Company, or the performance or observance by
the Company, of any of its respective obligations under the Credit Agreement
or any other instrument or document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly organized and
existing and it has full power and authority to take, and has taken, all
action necessary to execute and deliver this Agreement and any other
documents required or permitted to be executed or delivered by it in
connection with this Agreement, and to fulfill its obligations hereunder;
(ii) no notices to, or consents, authorizations or approvals of, any person
are required (other than any already given or obtained) for its due
execution, delivery and performance of this Agreement; and apart from any
agreements or undertakings or filings required by the Credit Agreement, no
further action by, or notice to, or filing with, any person is required of it
for such execution, delivery or performance; (iii) this Agreement has been
duly executed and delivered by it and constitutes the legal, valid and
binding obligation of the Assignee, enforceable against the Assignee in
accordance with the terms hereof, subject, as to enforcement, to bankruptcy,
insolvency, moratorium, reorganization and other laws of general application
relating to or affecting creditors' rights and to general equitable
principles; and (iv) it is an Eligible Assignee.
9. Further Assurances.
The Assignor and the Assignee each hereby agrees to execute and deliver such
other instruments, and take such other action, as either party may reasonably
request in connection with the transactions contemplated by this Agreement,
including the delivery of any notices or other documents or instruments to
the Company or the Agent, which may be required in connection with the
assignment and assumption contemplated hereby.
10. Miscellaneous.
(a) Any amendment or waiver of any provision of this
Agreement shall be in writing and signed by the parties hereto. No failure
or delay by either party hereto in exercising
<PAGE>
any right, power or privilege
hereunder shall operate as a waiver thereof and any waiver of any breach of
the provisions of this Agreement shall be without prejudice to any rights
with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any set-off or
counterclaim.
(c) The Assignor and the Assignee shall each pay its own costs and expenses
incurred in connection with the negotiation, preparation, execution and
performance of this Agreement.
(d) This Agreement may be executed in any number of counterparts and all of
such counterparts taken together shall be deemed to constitute one and the
same instrument.
(e) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAW OF THE STATE OF CALIFORNIA. The Assignor and the Assignee each
irrevocably submits to the non-exclusive jurisdiction of any State or Federal
court sitting in California over any suit, action or proceeding arising out
of or relating to this Agreement and irrevocably agrees that all claims in
respect of such action or proceeding may be heard and determined in such
California State or Federal court. Each party to this Agreement hereby
irrevocably waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or
proceeding.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH
THIS AGREEMENT, THE CREDIT AGREEMENT, ANY RELATED DOCUMENTS AND AGREEMENTS OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, OR STATEMENTS (WHETHER ORAL OR
WRITTEN). [Other provisions to be added as may be negotiated between the
Assignor and the Assignee, provided that such provisions are not inconsistent
with the Credit Agreement.]
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance Agreement to be executed and delivered by their
duly authorized officers as of the date first above written.
Assignor
By:
Title:
Address:
Assignee
By
Title:
Address:
<PAGE>
SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE
_____________________, 19__
Bank of America National Trust
and Savings Association, as Agent
Agency Management Services #5596
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attn: Ivo Bakovic
Crown Pacific Limited Partnership
Crown Pacific Management Limited Partnership
Bank of America Financial Center
Suite 1500
121 S.W. Morrison Street
Portland, OR 97204
Attn: Roger L. Krage
Ladies and Gentlemen:
We refer to the Amended and Restated Credit Agreement dated as of May 13,
1996 (the "Credit Agreement") among Crown Pacific Limited Partnership (the
"Company"), the Banks referred to therein, ABN AMRO Bank, N.V., as
Documentation Agent, and Bank of America National Trust and Savings
Association as Agent. Terms defined in the Credit Agreement are used herein
as therein defined.
1. We hereby give you notice of, and request your consent to, the assignment
by __________________ (the "Assignor") to _______________ (the "Assignee) of
_____% of the right, title and interest of the Assignor in and to the Credit
Agreement (including, without limitation, the right, title and interest of
the Assignor in and to all outstanding Loans made by the Assignor. Before
giving effect to such assignment the aggregate amount of its outstanding
Loans is $________________.
2. The Assignee agrees that, upon receiving the consent of the Agent and, if
applicable, the Company, to such assignment, the Assignee will be bound by
the terms of the Credit Agreement as fully and to the same extent as if the
Assignee were the Bank originally holding such interest in the Credit
Agreement.
3. The following administrative details apply to the Assignee:
(A) Notice Address:
Assignee name:
Address:
Attention:
Telephone:(___)
Telecopier:(___)
Telex (Answerback):
(B) Payment Instructions:
Account No.:
At:
Reference:
Attention:
(C) Domestic and Offshore Lending Office:
[same as notice address]
<PAGE>
[or]
Address:
Attention:
Telephone:(___)
Telecopier:(___)
Telex (Answerback):
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Notice of
Assignment and Acceptance to be executed by their respective duly authorized
officials, officers or agents as of the date first above mentioned.
Very truly yours,
[Name of Assignor]
By:
Title:
[Name of Assignee]
By:
Title:
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
CROWN PACIFIC LIMITED PARTNERSHIP,
a Delaware limited partnership
By: CROWN PACIFIC MANAGEMENT LIMITED
PARTNERSHIP, a Delaware limited
partnership, its general partner
By:
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By:
Its:
<PAGE>
EXHIBIT F
FORM OF PROMISSORY NOTE
San Francisco, California
U.S. $_____________ May __, 1996
FOR VALUE RECEIVED, Crown Pacific Limited Partnership, a Delaware limited
partnership (the "Company"), hereby promises to pay to the order of
____________________ (the "Bank") the principal amount of
_____________________ ($___________) at the times and in the amounts
specified in the Agreement described below. The Company promises to pay
interest on such unpaid principal amount at the times and at the rates
specified in the Agreement. This Note is one of the Notes referred to in, and
is issued under, the Amended and Restated Credit Agreement dated as of May
13, 1996 (as in effect from time to time, the "Agreement"), among the
Company, the Banks parties thereto, ABN AMRO Bank, N.V., as documentation
agent for the Banks (in such capacity, the "Documentation Agent"), and Bank
of America National Trust and Savings Association, as agent for the Banks (in
such capacity, the "Agent"). The holder of this Note is authorized to record
on the schedules annexed hereto the date, amount and maturity of each Loan
made by it, and the amount of each payment of principal made by the Company
with respect thereto. Any such recordation shall be conclusive absent
manifest error; provided, however, that the failure of the holder of this
Note to make, or an error in making, a notation thereon with respect to any
Loan shall not limit or otherwise affect the obligations of the Company
hereunder or under the Agreement. The holder of this Note shall be entitled
to the benefits provided for in the Agreement. Reference is made to the
Agreement for the provisions on (i) the obligation of the Bank to advance
funds under this Note, (ii) the manner in which interest is computed and
accrued, (iii) the Company's rights, if any, to prepay all or part of the
Loans, (iv) the events upon which the maturity of the principal of and
accrued interest on this Note may be accelerated or shall be automatically
accelerated, as the case may be, (v) the manner in which Loans may be
converted from one Type into another Type to the extent provided in the
Agreement, (vi) attorney's fees (including allocated costs of internal legal
services) and other fees and expenses incurred in any enforcement of this
Note, (vii) the Company's right to cure certain events of default, and (viii)
the Bank's rights to assign all or part of this Note to Assignees and/or to
sell participating interests in any Loans, as more fully set forth in the
Agreement. Terms defined in the Agreement shall have the same meanings
herein. Principal and interest are payable in lawful money of the United
States of America in immediately available funds to Bank of America National
Trust and Savings Association, as Agent for the Bank, at the Agent's Payment
Office described in the Agreement. The Company hereby waives presentment,
demand, protest or other notice of any kind. No failure to exercise, and no
delay in exercising, any rights hereunder on the part of the holder hereof
shall operate as a waiver of such rights.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF CALIFORNIA; PROVIDED, HOWEVER, THAT THE AGENT AND THE BANK SHALL
RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
IN WITNESS WHEREOF, the Company has caused this Note to be executed by its
officer thereunto duly authorized.
CROWN PACIFIC LIMITED PARTNERSHIP,
a Delaware limited partnership
By: CROWN PACIFIC MANAGEMENT LIMITED
PARTNERSHIP a Delaware limited partnership, its
general partner
<PAGE>
By:
Title:
SCHEDULE
Date Loan
Disbursed
Amount of Loan
Maturity Date
Principal Payment
Date
Principal Paid
<PAGE>
EXHIBIT G
ESCROW AGREEMENT
This ESCROW AGREEMENT ("Agreement") dated as of ______________, 199___
is entered into by and between CROWN PACIFIC LIMITED PARTNERSHIP, a Delaware
limited partnership (the "Company"), and _________________________________, a
_______________________ (the "Escrow Agent").
RECITALS
A. The Company has entered into (i) the Amended and Restated Credit
Agreement dated as of May 13, 1996 (as the same may from time to time be
amended, amended and restated, modified, supplemented or renewed, the
"Facility A Credit Agreement") with the several financial institutions from
time to time party thereto (the "Facility A Banks"), ABN AMRO Bank, N.V., as
documentation agent (in such capacity, the "Documentation Agent"), and Bank
of America National Trust and Savings Association, as agent for the Facility
A Banks (together with its successors in such capacity, the "Facility A
Agent"), (ii) the Facility B Credit Agreement dated as of May 13, 1996 (as
the same may from time to time be amended, amended and restated, modified,
supplemented or renewed, the "Facility B Credit Agreement") with the several
financial institutions from time to time party thereto (the "Facility B
Banks"), ABN AMRO Bank, N.V., as documentation agent ( in such capacity, the
"Documentation Agent") and Bank of America National Trust and Savings
Association, as agent for the Facility B Banks (together with its successors
in such capacity, the "Facility B Agent"), (iii) the Note Purchase Agreement
dated as of December 1, 1994 (as the same may from time to time be amended,
amended and restated, modified, supplemented or renewed, the "1994 Senior
Note Agreement") entered into for the benefit of the holders from time to
time of the notes issued pursuant thereto (the "1994 Noteholders"), and (iv)
the Note Purchase Agreement dated as of March 15, 1995 (as the same may from
time to time be amended, amended and restated, modified, supplemented or
renewed, the "1995 Senior Note Agreement") entered into for the benefit of
the holders from time to time of the notes issued pursuant thereto (the "1995
Noteholders").
B. Section 7.2(f) of the Facility A Credit Agreement, Section
8.2(f) of the Facility B Credit Agreement and Section 4.10(a)(2) of each of
the 1994 Senior Note Agreement and the 1995 Senior Note Agreement permit the
Company and its subsidiaries to dispose of assets under the circumstances
described therein so long as the net proceeds of such disposition are applied
to the purchase of productive assets in Permitted Businesses (as defined in the
Facility A Credit Agreement and the Facility B Credit Agreement) or to prepay
Senior Debt (as defined in the Facility A Credit Agreement and the Facility B
Credit Agreement). Any net proceeds of such disposition in excess of the
amounts specified in such Sections which have not been applied to purchase
productive assets in Permitted Businesses or distributed to the holders of
Senior Debt are to be placed immediately upon receipt thereof in an escrow or
other similar account for application in accordance with such Sections.
C. Section 7.4 of the Facility A Credit Agreement, Section 8.4 of
the Facility B Credit Agreement and Section 4.12 of each of the 1994 Senior Note
Agreement and the 1995 Senior Note Agreement permit the Company and its
subsidiaries to harvest timber from their timberlands in excess of the
limitations provided for in such Sections so long as the net proceeds
<PAGE>
of such excess harvest are placed within the period specified in such
Sections in an escrow or other similar account and applied in accordance with
such Sections to purchase timber or timberlands or to prepay Senior Debt.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the Company and the Escrow Agent hereby agree as
follows:
1. Escrow Accounts.
(a) Establishment of Escrow Accounts and Delivery of Funds. The
Escrow Agent has established (i) a special and irrevocable escrow account
designated the "Asset Disposition Escrow Account" (together with any
successor account(s) that may be established from time to time with the
Escrow Agent in replacement thereof, the "Asset Disposition Escrow Account")
and (ii) a special and irrevocable escrow account designated the "Excess
Harvest Escrow Account" (together with any successor account(s) that may be
established from time to time with the Escrow Agent in replacement thereof,
the "Excess Harvest Escrow Account", and collectively with the Asset
Disposition Escrow Account, the "Escrow Accounts" and each individually, an
"Escrow Account"). The Escrow Agent shall keep the funds held in each Escrow
Account separate and apart from all other funds and money held by it and
shall hold each Escrow Account for the account and benefit of the persons as
hereinafter set forth. The Company may make deposits from time to time to
the Asset Disposition Escrow Account in the amount of net proceeds from the
disposition of assets that the Company intends to apply in the manner
contemplated by Section 7.2(f) of the Facility A Credit Agreement, Section
8.2(f) of the Facility B Credit Agreement and Section 4.10(a)(2) of each of
the 1994 Senior Note Agreement and the 1995 Senior Note Agreement. The
Company may make deposits from time to time to the Excess Harvest Escrow
Account in the amount of net proceeds of excess timber harvest that the
Company intends to apply in the manner contemplated by Section 7.4 of the
Facility A Credit Agreement, Section 8.4 of the Facility B Credit Agreement
and Section 4.12 of each of the 1994 Senior Note Agreement and the 1995
Senior Note Agreement. Once deposited, such funds shall be maintained and
applied by the Escrow Agent in accordance herewith. The Company agrees that
upon the deposit of funds into any Escrow Account by or at the direction of
the Company, such deposit shall become (except as expressly provided in
Section 1(b) hereof) irrevocable and the Company shall have no right to
withdraw amounts contained therein or interest or other income accrued
thereon except as provided in Section 1(b) hereof or upon the indefeasible
payment in full of the all amounts remaining unpaid under the Facility A
Credit Agreement, the Facility B Credit Agreement, the 1994 Senior Note
Agreement and the 1995 Senior Note Agreement. The Escrow Agent shall
separately account for each deposit made to each Escrow Account.
(b) Application of Funds.
(i) Subject to prior distribution in accordance with clause (iii)
below, the Escrow Agent shall release funds held in the Escrow Accounts,
including the interest and other income accrued thereon, to the Company if
and only if (y) the Company shall have delivered to the Escrow Agent, with a
copy to the Facility A Agent and the Facility B Agent, no later than five
Business Days (as defined in the Facility A Credit Agreement and Facility B
Credit Agreement) prior to the proposed date of such release, a certificate
of the chief executive officer, the president, the chief financial officer or
the person serving as the secretary and general counsel of the Company or the
general partner of the Company (each such officer, a
<PAGE>
"Responsible Officer"), substantially in the form of Exhibit A hereto in the
case of a release of funds from the Asset Disposition Escrow Account, and
substantially in the form of Exhibit B hereto in the case of a release of
funds from the Excess Harvest Escrow Account, and (z) the Escrow Agent shall
not have received from any of the Facility A Agent, the Facility B Agent, or
any person or entity purporting to be a 1994 Noteholder or 1995 Noteholder
written notice that a Default or Event of Default (as such terms are defined
in any of the Facility A Credit Agreement, the Facility B Credit Agreement,
the 1994 Senior Note Agreement and the 1995 Senior Note Agreement) exists or
will occur by virtue of such release of funds. The Escrow Agent shall
release deposits held in the Escrow Accounts pursuant to this clause (i) on a
first-in, first-out basis.
(ii) Subject to prior distribution by the Escrow Agent in
accordance with clause (i) above, the Escrow Agent shall hold each deposit to
each Escrow Account and disburse such deposit in accordance with clause (iii)
below upon the date identified to the Escrow Agent in writing by a
Responsible Officer at the time the Company makes such deposit as the
"Disbursement Date" for such deposit, which date shall be the 270th day after
the date of the related asset deposition in the case of a deposit to the
Asset Disposition Escrow Account, and, in the case of a deposit to the Excess
Harvest Escrow Account, the 270th day after the last day of the period in
which such excess harvest occurred (the "Disbursement Date").
(iii) If on the Disbursement Date with respect to any deposit made
to either Escrow Account, any funds remain in such Escrow Account with
respect to such deposit, the Escrow Agent shall promptly distribute such
funds, including interest and other income accrued thereon, as follows: (i)
so long as the Escrow Agent shall not have received a notice of Default or
Event of Default (as such terms are defined in any of the Facility A Credit
Agreement, the Facility B Credit Agreement, the 1994 Senior Note Agreement
and the 1995 Senior Note Agreement) from any of the Facility A Agent, the
Facility B Agent, or any person or entity purporting to be a 1994 Noteholder
or 1995 Noteholder, such funds shall be distributed to the Facility A Agent,
the Facility B Agent, the 1994 Noteholders or the 1995 Noteholders, or any
combination thereof, in the amounts and as directed by the Company in writing
to the Escrow Agent, and interest and other income accrued thereon shall be
distributed to the Company, and (ii) if the Escrow Agent shall have received
such a notice of a Default or Event of Default from any of the Facility A
Agent, the Facility B Agent, or any person or entity purporting to be a 1994
Noteholder or 1995 Noteholder, such funds, together with all interest and
other income accrued thereon, shall be distributed to the Facility A Agent,
the Facility B Agent, the 1994 Noteholders or the 1995 Noteholders, or any
combination thereof, in the amounts and as directed in written instructions
to the Escrow Agent executed by the Facility A Agent, the Facility B Agent,
the Majority 1994 Noteholders and the Majority 1995 Noteholders (as such
terms are defined below). "Majority 1994 Noteholders" means one or more
persons or entities purporting to be 1994 Noteholders and certifying to the
Escrow Agent that they hold greater than 50% in aggregate principal amount of
the outstanding notes issued under the 1994 Senior Note Agreement, and
"Majority 1995 Noteholders" means one or more persons or entities purporting
to be 1995 Noteholders and certifying to the Escrow Agent that they hold
greater than 50% in aggregate principal amount of the outstanding notes
issued under the 1995 Senior Note Agreement. The Escrow Agent shall be
entitled to rely conclusively upon the certificates referred to in this
Section as well as any notice from any of the Facility A Agent, the Facility
B Agent, or any person or entity purporting to be a 1994 Noteholder or 1995
Noteholder of a Default or an Event of Default without independent
investigation.
2. Investments.
<PAGE>
(a) The Escrow Agent shall have no obligation to make any
investment or reinvestment of any moneys held in the Escrow Accounts at any
time except as expressly provided in this Agreement.
(b) Any amounts held by the Escrow Agent shall be invested by the
Escrow Agent from time to time as directed in writing by the Company (unless
the Escrow Agent shall have received from any of the Facility A Agent, the
Facility B Agent, or any person or entity purporting to be a 1994 Noteholder
or 1995 Noteholder a notice of Default or Event of Default, in which case
such amounts shall be invested solely in the investments described in clause
(iii) below and shall mature in less than 30 days after the date of such
investment), and the Escrow Agent agrees to comply with the Company's written
request to invest in any of the following investments (collectively,
"Permitted Investments"): (i) investments in commercial paper which, at the
time of acquisition by the Escrow Agent, is rated at least A-1 by Standard &
Poor's Rating Group ("S&P") or P-1 by Moody's Investors Service, Inc.
("Moody's") or, if such commercial paper is not rated by either S&P or
Moody's, the highest rating of another nationally recognized credit rating
agency of similar standing approved in writing by each of the Facility A
Agent, the Facility B Agent, the Majority 1994 Noteholders and the Majority
1995 Noteholders, (ii) investments in direct obligations of the United States
of America or any agency or instrumentality of the United States of America,
the payment or guarantee of which constitutes a full faith and credit
obligation of the United States of America, or (iii) investments in
certificates of deposit, issued by a bank or trust company organized under
the laws of the United States of America or any state thereof, having
capital, surplus and undivided profits aggregating at least $250,000,000 and
the unsecured long-term obligations of which are rated at least AA by S&P or
Aa by Moody's or, if such unsecured long-term obligations are not rated by
either S&P or Moody's, a comparable rating by another nationally recognized
credit rating agency of similar standing approved in writing by each of the
Facility A Agent, the Facility B Agent, the Majority 1994 Noteholders and the
Majority 1995 Noteholders; provided that all such investments shall be
denominated in United States dollars and shall mature in 180 days or less
after the date of investment. The Escrow Agent may sell any Permitted
Investment (without regard to maturity date) whenever necessary to make any
transfer required by Section 1.
(c) The Escrow Agent shall hold, invest and apply any income
realized as a result of any investment pursuant to this Section 2 as part of
the Asset Disposition Escrow Account and the Excess Harvest Escrow Account,
as the case may be.
(d) With respect to the investment of funds on deposit in the
Escrow Accounts pursuant to this Section 2 and to the extent the Company is
permitted to direct such investment hereunder, the Escrow Agent shall be
entitled to rely upon the written instructions of those individuals whose
signatures appear in the spaces provided below, or such other individuals as
may hereafter be designated in writing by the Company:
Peter W. Stott
Richard D. Snyder
<PAGE>
Roger L. Krage
3. Terms and Conditions. To the extent not inconsistent with this
Agreement, the Company agrees to be bound by the Escrow Agent's Standard
Terms and Conditions attached hereto as Exhibit D (as the same may from time
to time be amended, modified or supplemented, the "Standard Terms and
Conditions") and they are hereby incorporated by reference into and form a
part of this Agreement with the same effect as if they were set forth in full
herein.
4. Compensation. The Escrow Agent shall be entitled to
compensation from the Company for the maintenance of, and investment of funds
contained in, the Escrow Accounts in accordance with Schedule 2 attached hereto.
Such compensation shall be payable as provided in Schedule 2. The fees of and
the costs incurred by the Escrow Agent shall not be a charge on and in no event
shall be deducted from the Escrow Accounts but shall be an additional
obligation of the Company which shall survive the termination of this
Agreement.
5. Reports. On the tenth Business Day of each month until the
termination of this Agreement, the Escrow Agent shall submit to the Company,
the Facility A Agent, and the Facility B Agent, a report covering all funds
it shall have received and all payments it shall have made or caused to be
made hereunder during the preceding calendar month. Each report shall also
list each deposit into each Escrow Account and the investment income related
thereto, all Permitted Investments and the amount of money accounted for in
each Escrow Account on the date preceding the date of such report.
6. Notices, Etc. Any notice or other communication herein required
or permitted to be given shall be in writing and may be delivered in person,
with receipt acknowledged, or sent by telex, telecopy or by United States
mail, registered or certified, return receipt requested, postage prepaid and
addressed as set forth on the signature pages to this Agreement in the case
of the parties hereto, and as set forth on Schedule I in the case of the
Facility A Agent and the Facility B Agent, or at such other address as may be
substituted by notice given as herein provided. The giving of any notice
required hereunder may be waived in writing by the party entitled to receive
such notice. All such notices and communications shall be effective upon
receipt. Failure or delay in delivering copies of any notice, demand,
request, consent, approval, declaration or other communication to the persons
designated above to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration
or other communication.
7. Termination. The Company may terminate this Agreement at any time
that the balance in each Escrow Account is zero upon three Business Days
prior written notice to the Escrow Agent with a copy to the Facility A Agent
and the Facility B Agent.
8. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Company and the Escrow Agent and their respective
successors and assigns, except that the Company shall not have the right to
assign its rights hereunder or any interest herein without the prior written
consent of the Escrow Agent, the Facility A Agent, the Facility B Agent and
the Majority 1994 Noteholders and the Majority 1995 Noteholders.
9. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of California
applicable to contracts made and performed in such state, without regard to
the principles thereof regarding conflict of laws, and
<PAGE>
any applicable laws of the United States of America.
10. Entire Agreement. This Agreement constitutes and contains the
entire agreement among the parties and supersede any and all prior
agreements, negotiations, correspondence, understandings and communications
among the parties, whether written or oral, respecting the subject matter
hereof.
11. Interpretation. Any reference to a "Section" shall refer to the
relevant Section to this Agreement, unless specifically indicated to the
contrary and the words "herein," "hereof" and "hereunder" and other words of
similar import shall refer to this Agreement as a whole, as the same may from
time to time be amended, amended and restated, modified or supplemented, and
not to any particular section, subsection or clause contained in this
Agreement.
12. Amendments; Waivers. No amendment, modification, discharge or
waiver of, or consent to any departure by the Company from, any provision of
this Agreement shall be effective unless the same shall be in writing and
signed by the Escrow Agent, the Facility A Agent, and the Facility B Agent,
and then such waiver shall be effective only in the specific instance and for
the specific purpose for which given.
13. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be valid, legal and enforceable
under the applicable law of any jurisdiction. Without limiting the
generality of the foregoing sentence, in case any provision of this Agreement
shall be invalid, illegal or unenforceable under the applicable law of any
jurisdiction, the validity, legality and enforceability of the remaining
provisions, or of such provision in any other jurisdiction, shall not in any
way be affected or impaired thereby.
14. Headings. Section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
15. No Third Parties Benefited. This Agreement is made and entered
into for the sole protection and legal benefit of the Company, the Escrow
Agent, the Documentation Agent, the Facility A Agent, the Facility A Banks,
the Facility B Agent, the Facility B Banks, the 1994 Noteholders, the 1995
Noteholders and each of their permitted successors and assigns, and no other
person shall be a direct or indirect legal beneficiary of, or have any direct
or indirect cause of action or claim in connection with this Agreement.
Except as set forth herein, the Escrow Agent shall have no obligation to any
person not a party to this Agreement.
16. Counterparts. This Agreement and any amendments, waivers, consents
or supplements hereto may be executed in any number of counterparts, and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
CROWN PACIFIC LIMITED PARTNERSHIP,
a Delaware limited partnership
<PAGE>
By: CROWN PACIFIC MANAGEMENT LIMITED PARTNERSHIP,
a Delaware limited partnership, its general partner
By:
Title:
Notice to be sent to:
Crown Pacific Limited Partnership
c/o Crown Pacific Management Limited
Partnership
Bank of America Financial Center
Suite 1500
121 S.W. Morrison Street
Portland, Oregon 97204
Attention: Roger L. Krage
Facsimile: (503) 228-4875
Telephone: (503) 274-2300
[ ],
as Escrow Agent
By:
Title:
Notice to be sent to:
Attention:
Facsimile:
Telephone:
Schedule 1 to
Escrow Agreement
ADDRESSES FOR NOTICES
Item A. Facility A Agent Address for Notices
Bank of America National Trust and Savings Association
<PAGE>
Agency Management Services #5596
1455 Market Street, 12th Floor
San Francisco, California 94103
Attention: Ivo Bakovic
Vice President
Telephone: 415/622-1158
Facsimile: 415/622-4894
Item B. Facility B Agent Address for Notices
Bank of America National Trust and Savings Association
Agency Management Services #5596
1455 Market Street, 12th Floor
San Francisco, California 94103
Attention: Ivo Bakovic
Vice President
Telephone: 415/622-1158
Facsimile: 415/622-4894
<PAGE>
EXHIBIT E
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Agreement") dated as of
__________, ____ is made between ______________________________ (the
"Assignor") and __________________________ (the "Assignee").
RECITALS
WHEREAS, the Assignor is party to the Amended and Restated Facility B
Credit Agreement dated as of May 13, 1996 (as amended, amended and restated,
modified, supplemented or renewed, the Credit Agreement") among Crown Pacific
Limited Partnership, a Delaware limited partnership (the "Company"), the
several financial institutions from time to time party thereto (including the
Assignor, the "Banks"), ABN AMRO Bank, N.V., as documentation agent for the
Banks, and Bank of America National Trust and Savings Association, as letter
of credit issuing bank and as agent for the Banks. Any terms defined in the
Credit Agreement and not defined in this Agreement are used herein as defined
in the Credit Agreement;
WHEREAS, as provided under the Credit Agreement, the Assignor has
committed to making [(i)] Syndicated Loans to the Company in an aggregate
amount not to exceed $_______________ (the "Commitment")
[and (ii) Swingline Loans to the Company in an aggregate amount not to exceed
$___________ (the "Swingline Commitment")];
WHEREAS, [the Assignor has made Syndicated Loans in the aggregate
principal amount of $__________ [and Swingline Loans in the aggregate principal
amount of $_______________] to the Company] [no Syndicated Loans are
outstanding under the Credit Agreement] [no Swingline Loans are outstanding
under the Credit Agreement];
WHEREAS, [the Assignor has acquired a participation in the Issuing Bank's
liability under Letters of Credit in an aggregate principal amount of
$__________ (the "L/C Obligations")] [and a participation in the Swingline
Bank's liability under Swingline Loans in an aggregate principal amount of
$_____________] [no Letters of Credit are outstanding under the Credit
Agreement] [no Swingline Loans are outstanding under the Agreement]; and
WHEREAS, the Assignor wishes to assign to the Assignee [part of the] [all]
rights and obligations of the Assignor under the Credit Agreement in respect
of [(i)] its Commitment, [together with a corresponding portion of each of its
outstanding Syndicated Loans and L/C Obligations,] in an amount equal to
$__________ (the "Assigned Amount") [and (ii) the Swingline Commitment,
[together with its outstanding Swingline Loans,] in an amount equal to
$_______________, in each case on the terms and subject to the conditions set
forth herein and the Assignee wishes to accept assignment of such rights and
to assume such obligations from the Assignor on such terms and subject to such
conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. Assignment and Acceptance.
(a) Subject to the terms and conditions of this Agreement, (i) the
Assignor hereby sells, transfers and assigns to the Assignee, and (ii) the
Assignee hereby purchases, assumes and undertakes from the Assignor, without
recourse and without representation or warranty (except as provided in this
Agreement) __% (the "Assignee's Percentage Share") of (A) the Commitment
[and the Syndicated Loans and the L/C Obligations]
[the Swingline Commitment [and the Swingline Loans]] of the Assignor and (B)
all related rights, benefits, obligations, liabilities and indemnities of the
Assignor under and in connection with the Credit Agreement and the Loan
Documents.
<PAGE>
[If appropriate, add paragraph specifying payment to Assignor by
Assignee of outstanding principal of, accrued interest on, and fees with
respect to, Syndicated Loans, Swingline Loans and L/C Obligations assigned.]
(b) With effect on and after the Effective Date (as defined in
Section 5), the Assignee shall be a party to the Credit Agreement and succeed
to all of the rights and be obligated to perform all of the obligations of a
Bank [and the Swingline Bank] under the Credit Agreement, including the
requirements concerning confidentiality, with a Commitment in an amount equal
to the Assigned Amount [and the Swingline Commitment]. The Assignee agrees
that it will perform in accordance with their terms all of the obligations
which by the terms of the Credit Agreement are required to be performed by it
as a Bank [and the Swingline Bank]. It is the intent of the parties hereto
that the Commitment of the Assignor shall, as of the Effective Date, be
reduced by an amount equal to the Assigned Amount
[and the Swingline Commitment shall be entirely assumed by the Assignee,] and
the Assignor shall relinquish its rights and be released from its obligations
under the Credit Agreement to the extent such obligations have been assumed
by the Assignee; provided, however, that notwithstanding the assignment
hereunder, the Assignor and the Assignee shall both have the rights which the
Assignor had under Article IV in Section 11.5 of the Credit Agreement.
(c) After giving effect to the assignment and assumption, on the
Effective Date the Assignee's Commitment will be $__________,
[and Assignee's Swingline Commitment will be $_____________].
(d) After giving effect to the assignment and assumption, on the
Effective Date the Assignor's Commitment will be $__________,
[and Assignor's Swingline Commitment will be $0].
2. Payments.
(a) As consideration for the sale, assignment and transfer
contemplated in Section 1, the Assignee shall pay to the Assignor on the
Effective Date in immediately available funds an amount equal to $__________,
representing [the principal amount of the Swingline Loans and] the Assignee's
Percentage Share of the principal amount of all Syndicated Loans.
(b) The [Assignor] [Assignee] further agrees to pay to the Agent a
processing fee in the amount specified in subsection 11.8(a) of the Credit
Agreement.
3. Reallocation of Payments.
Any interest, fees and other payments accrued to the Effective Date with
respect to the Commitment, Syndicated Loans, [Swingline Loans] and L/C
Obligations shall be for the account of the Assignor. Any interest, fees and
other payments accrued on and after the Effective Date with respect to the
Assigned Amount [,the Swingline Commitment and Swingline Loans] shall be for
the account of the Assignee. Each of the Assignor and the Assignee agrees
that it will hold in trust for the other party any interest, fees and other
amounts which it may receive to which the other party is entitled pursuant to
the preceding sentence and pay to the other party any such amounts which it
may receive promptly upon receipt.
4. Independent Credit Decision.
The Assignee (a) acknowledges that it has received a copy of the Credit
Agreement and the Schedules and Exhibits thereto, together with copies of the
most recent financial statements referred to in Section 7.1 of the Credit
Agreement, and such other documents and information as it has deemed
appropriate to make its own credit and legal analysis and decision to enter
into this Agreement; and (b) agrees that it will, independently and without
reliance upon the Assignor, the Agent or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue
to make its own credit and legal decisions in taking or not taking action
under the Credit Agreement.
5. Effective Date; Notices.
<PAGE>
(a) As between the Assignor and the Assignee, the effective date for
this Agreement shall be __________, ____ (the "Effective Date"); provided that
the following conditions precedent have been satisfied on or before the
Effective Date:
(i) this Agreement shall be executed and delivered by the
Assignor and the Assignee;
(ii) the consent of the Company (if applicable), the Agent, the
Issuing Bank and the Swingline Bank required for an effective assignment of the
Assigned Amount [, the Swingline Commitment and Swingline Loans] by the Assignor
to the Assignee under subsection 11.8(a) of the Credit Agreement shall have been
duly obtained and shall be in full force and effect as of the Effective Date;
(iii) the Assignee shall pay to the Assignor all amounts due to
the Assignor under this Agreement;
(iv) the Assignee shall have complied with subsection 10.11(a)
of the Credit Agreement (if applicable);
(v) the processing fee referred to in Section 2(b) hereof and in
subsection 11.8(a) of the Credit Agreement shall have been paid to the Agent;
and
(vi) the Assignor shall have assigned and the Assignee shall
have assumed a percentage equal to the Assignee's Percentage Share of the rights
and obligations of the Assignor under, and of the Assignor's Loans under and as
defined in, the Facility A Credit Agreement.
(b) Promptly following the execution of this Agreement, the Assignor
shall deliver to the Company, the Agent, the Issuing Bank and the Swingline Bank
for acknowledgement by the Agent, a Notice of Assignment in the form attached
hereto as Schedule 1.
[6. Agent. [INCLUDE ONLY IF ASSIGNOR IS AGENT]
(a) The Assignee hereby appoints and authorizes the Assignor to take
such action as agent on its behalf and to exercise such powers under the Credit
Agreement as are delegated to the Agent by the Banks pursuant to the terms of
the Credit Agreement.
(b) The Assignee shall assume no duties or obligations held by the
Assignor in its capacity as Agent under the Credit Agreement.]
7. Withholding Tax.
The Assignee agrees to comply with Section 10.11(a) of the Credit Agreement
(if applicable).
8. Representations and Warranties.
(a) The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any lien, security interest or other adverse
claim; (ii) it is duly organized and existing and it has the full power and
authority to take, and has taken, all action necessary to execute and deliver
this Agreement and any other documents required or permitted to be executed or
delivered by it in connection with this Agreement and to fulfill its obligations
hereunder; (iii) no notices to, or consents, authorizations or approvals of, any
person are required (other than any already given or obtained) for its due
execution, delivery and performance of this Agreement, and apart from any
agreements or undertakings or filings required by the Credit Agreement, no
further action by, or notice to, or filing with, any person is required of it
for such execution, delivery or performance; and (iv) this Agreement has been
duly executed and delivered by it and constitutes the legal, valid and binding
obligation of the Assignor, enforceable against the Assignor in accordance with
the terms hereof, subject, as to enforcement, to bankruptcy, insolvency,
moratorium, reorganization and other laws of general application relating to or
affecting creditors' rights and to general equitable principles.
(b) The Assignor makes no representation or warranty and assumes no
<PAGE>
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto. The
Assignor makes no representation or warranty in connection with, and assumes no
responsibility with respect to, the solvency, financial condition or statements
of the Company, or the performance or observance by the Company, of any of its
respective obligations under the Credit Agreement or any other instrument or
document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly organized
and existing and it has full power and authority to take, and has taken, all
action necessary to execute and deliver this Agreement and any other documents
required or permitted to be executed or delivered by it in connection with this
Agreement, and to fulfill its obligations hereunder; (ii) no notices to, or
consents, authorizations or approvals of, any person are required (other than
any already given or obtained) for its due execution, delivery and performance
of this Agreement; and apart from any agreements or undertakings or filings
required by the Credit Agreement, no further action by, or notice to, or filing
with, any person is required of it for such execution, delivery or performance;
(iii) this Agreement has been duly executed and delivered by it and constitutes
the legal, valid and binding obligation of the Assignee, enforceable against the
Assignee in accordance with the terms hereof, subject, as to enforcement, to
bankruptcy, insolvency, moratorium, reorganization and other laws of general
application relating to or affecting creditors' rights and to general equitable
principles; and (iv) it is an Eligible Assignee.
9. Further Assurances.
The Assignor and the Assignee each hereby agrees to execute and deliver such
other instruments, and take such other action, as either party may reasonably
request in connection with the transactions contemplated by this Agreement,
including the delivery of any notices or other documents or instruments to the
Company or the Agent, which may be required in connection with the assignment
and assumption contemplated hereby.
10. Miscellaneous.
(a) Any amendment or waiver of any provision of this Agreement
shall be in writing and signed by the parties hereto. No failure or delay by
either party hereto in exercising any right, power or privilege hereunder shall
operate as a waiver thereof and any waiver of any breach of the provisions of
this Agreement shall be without prejudice to any rights with respect to any
other or further breach thereof.
(b) All payments made hereunder shall be made without any set-off or
counterclaim.
(c) The Assignor and the Assignee shall each pay its own costs and
expenses incurred in connection with the negotiation, preparation, execution
and performance of this Agreement.
(d) This Agreement may be executed in any number of counterparts
and all of such counterparts taken together shall be deemed to constitute one
and the same instrument.
(e) THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF CALIFORNIA.
The Assignor and the Assignee each irrevocably submits to the non-exclusive
jurisdiction of any State or Federal court sitting in California over any suit,
action or proceeding arising out of or relating to this Agreement and
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such California State or Federal court. Each party
to this Agreement hereby irrevocably waives, to the fullest extent it may
effectively do so, the defense of an inconvenient forum to the maintenance of
such action or proceeding.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY
<PAGE>
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS
AGREEMENT, THE CREDIT AGREEMENT, ANY RELATED DOCUMENTS AND
AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR
STATEMENTS (WHETHER ORAL OR WRITTEN).
[Other provisions to be added as may be negotiated between the Assignor and
the Assignee, provided that such provisions are not inconsistent with the Credit
Agreement.]
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Assignment
and Acceptance Agreement to be executed and delivered by their duly authorized
officers as of the date first above written.
Assignor
By:__________________________________
Title:________________________________
Address:_____________________________
Assignee
By: ________________________________
Title:_______________________________
Address:____________________________
SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE
_______________, 19__
Bank of America National Trust
and Savings Association, as Agent
Agency Management Services #5596
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attn: Ivo Bakovic
Bank of America National Trust
and Savings Association, as Issuing Bank
International Trade
Banking Division #2621
333 S. Beaudry Ave., 19th Floor
Los Angeles, CA 90017
Attn: Cybele Sierra
Bank of America National Trust
and Savings Association, as Swingline Bank
Credit Products #3838
<PAGE>
555 California St., 41st Floor
San Francisco, CA 94104
Attn: Michael J. Balok
Crown Pacific Limited Partnership
Crown Pacific Management Limited Partnership
Bank of America Financial Center
Suite 1500
121 S.W. Morrison Street
Portland, OR 97204
Attn: Roger L. Krage
Ladies and Gentlemen:
We refer to the Amended and Restated Facility B Credit Agreement dated as of
May 13, 1996 (the "Credit Agreement") among Crown Pacific Limited Partnership
(the "Company"), the Banks referred to therein, ABN AMRO Bank, N.V., as
Documentation Agent, and Bank of America National Trust and Savings Association,
as letter of credit issuing bank and as Agent. Terms defined in the Credit
Agreement are used herein as therein defined.
1. We hereby give you notice of, and request your consent to, the assignment
by __________________ (the "Assignor") to _______________ (the "Assignee") of
_____% of the right, title and interest of the Assignor in and to the Credit
Agreement (including, without limitation, the right, title and interest of the
Assignor in and to the Commitment [and the Swingline Commitment] of the
Assignor, all outstanding Syndicated Loans [and Swingline Loans] made by the
Assignor and the Assignor's participation in the Letters of Credit and Swingline
Loans). Before giving effect to such assignment the Assignor's (i) Commitment
is $_______________, and (ii) the aggregate amount of its outstanding Syndicated
Loans is $_____________, and its participation in L/C Obligations is
$_____________ and in Swingline Loans is $_____________.
2. The Assignee agrees that, upon receiving the consent of the Agent, the
Issuing Bank, the Swingline Bank and, if applicable, the Company, to such
assignment, the Assignee will be bound by the terms of the Credit Agreement
as fully and to the same extent as if the Assignee were the Bank originally
holding such interest in the Credit Agreement.
3. The following administrative details apply to the Assignee:
(A) Notice Address:
Assignee name:_______________________________
Address: _______________________________
_______________________________
_______________________________
Attention: _______________________________
Telecopier: (___) __________________________
Telex (Answerback): _________________________
(B) Payment Instructions:
Account No.: _______________________________
At: _______________________________
_______________________________
_______________________________
Reference: _______________________________
Attention: _______________________________
(C) Domestic and Offshore Lending Office:
<PAGE>
[same as notice address]
[or]
Address: _______________________________
_______________________________
_______________________________
Attention: _______________________________
Telephone: (___) __________________________
Telecopier: (___) __________________________
Telex (Answerback): _________________________
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Notice of
Assignment and Acceptance to be executed by their respective duly authorized
officials, officers or agents as of the date first above mentioned.
Very truly yours,
[Name of Assignor]
By ______________________________
Title: ______________________________
[Name of Assignee]
By: ______________________________
Title: ______________________________
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
CROWN PACIFIC LIMITED PARTNERSHIP,
a Delaware limited partnership
By: CROWN PACIFIC MANAGEMENT LIMITED
PARTNERSHIP, a Delaware limited
partnership, its general partner
By: _________________________________
Title: _________________________________
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By: _________________________________
Its: _________________________________
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Issuing Bank
By: _________________________________
<PAGE>
Its: _________________________________
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Swingline Bank
By: _________________________________
Its: _________________________________
<PAGE>
EXHIBIT A
NOTICE OF BORROWING
Date: __________________
To: Bank of America National Trust and Savings Association, as Agent for
the Banks parties to the Amended and Restated Facility B Credit Agreement
dated as of May 13, 1996 (as extended, renewed, amended or restated from time
to time, the "Credit Agreement") among Crown Pacific Limited Partnership (the
"Company"), certain Banks that are signatories thereto, ABN AMRO Bank, N.V.,
as Documentation Agent, and Bank of America National Trust and Savings
Association, as Agent and Issuing Bank.
[If applicable] With a copy to Bank of America National Trust and Savings
Association, as the Swingline Bank.
Ladies and Gentlemen:
The undersigned, the Company, refers to the Credit Agreement, the terms
defined therein being used herein as therein defined, and hereby gives you
notice irrevocably, pursuant to Section [2.3] [2.10(b)] of the Credit
Agreement, of the Borrowing specified herein:
1. The aggregate amount of the proposed Borrowing is $_______________.
2. The Business Day of the proposed Borrowing is __________ __, ____.
[3. The Borrowing is to be comprised of $_______ of [Offshore Rate Loans]
[Base Rate Syndicated Loans].]or
[3. The Borrowing is to be comprised of a Swingline Loan.]
4. [If applicable]
The duration of the Interest Period for the Offshore Rate Loans included in
the Borrowing shall be [_________] months. The undersigned hereby certifies
that the following statements are true on the date hereof, and will be true
on the date of the proposed Borrowing, before and after giving effect thereto
and to the application of the proceeds therefrom:
(a) the representations and warranties of the Company contained in Article
VI of the Credit Agreement are true and correct as though made on and as of
such date (except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true and
correct as of such earlier date);
(b) no Default or Event of Default exists; and (c) the proposed Borrowing
will not cause (i) the Effective Amount of all Syndicated Loans and Swingline
Loans plus the Effective Amount of all L/C Obligations to exceed the
Aggregate Commitment, or (ii) the Effective Amount of all Swingline Loans to
exceed the Swingline Commitment. CROWN PACIFIC LIMITED PARTNERSHIP, a
Delaware limited partnership
By: CROWN PACIFIC MANAGEMENT
<PAGE>
LIMITED PARTNERSHIP, a Delaware limited
partnership, its general partner
By: ____________________________
Title: ___________________________
<PAGE>
EXHIBIT F
FORM OF PROMISSORY NOTE
San Francisco, California
U.S. $_____________ May __, 1996
FOR VALUE RECEIVED, Crown Pacific Limited Partnership, a Delaware
limited partnership (the "Company") hereby promises to pay to the order of
____________________ (the "Bank") the principal amount of
_____________________ ($___________) or, if less, the aggregate unpaid
principal amount of all Loans made by the Bank from time to time to the
Company pursuant to the Agreement described below and the Bank's Pro Rata
Share of the L/C Obligations under the Agreement, at the times and in the
amounts specified in the Agreement. The Company promises to pay interest on
such unpaid principal amount at the times and at the rates specified in the
Agreement.
This Note is one of the Notes referred to in, and is issued under, the
Amended and Restated Facility B Credit Agreement dated as of May 13, 1996 (as
in effect from time to time, the "Agreement"), among the Company, the Banks
parties thereto, ABN AMRO Bank, N.V., as documentation agent for the Banks,
and Bank of America National Trust and Savings Association, as agent for the
Banks (in such capacity, the "Agent") and as letter of credit issuing bank.
The holder of this Note is authorized to record on the schedules
annexed hereto the date, amount and maturity of each Loan made by it and its
Pro Rata Share of each L/C Obligation, and the amount of each payment of
principal made by the Company with respect thereto. Any such recordation
shall be conclusive absent manifest error; provided, however, that the
failure of the holder of this Note to make, or an error in making, a notation
thereon with respect to any Loan shall not limit or otherwise affect the
obligations of the Company hereunder or under the Agreement.
The holder of this Note shall be entitled to the benefits provided for
in the Agreement. Reference is made to the Agreement for the provisions on
(i) the obligation of the Bank to advance funds under this Note, (ii) the
manner in which interest is computed and accrued, (iii) the Company's rights,
if any, to prepay all or part of the Loans, (iv) the events upon which the
maturity of the principal of and accrued interest on this Note may be
accelerated or shall be automatically accelerated, as the case may be, (v)
the manner in which Loans may be converted from one Type into another Type to
the extent provided in the Agreement, (vi) attorney's fees (including
allocated costs of internal legal services) and other fees and expenses
incurred in any enforcement of this Note, (vii) the Company's right to cure
certain events of default, and (viii) the Bank's rights to assign all or part
of this Note to Assignees and/or to sell participating interests in any Loans
or L/C Obligations, as more fully set forth in the Agreement. Terms defined
in the Agreement shall have the same meanings herein.
Principal and interest are payable in lawful money of the United States
of America in immediately available funds to Bank of America National Trust
and Savings Association, as
<PAGE>
Agent for the Bank, at the Agent's Payment Office described in the Agreement.
The Company hereby waives presentment, demand, protest or other notice
of any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA; PROVIDED,
HOWEVER, THAT THE AGENT AND THE BANK SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.
IN WITNESS WHEREOF, the Company has caused this Note to be executed by its
officer thereunto duly authorized.
CROWN PACIFIC LIMITED PARTNERSHIP,
a Delaware limited partnership
By: CROWN PACIFIC MANAGEMENT LIMITED PARTNERSHIP
a Delaware limited partnership, its general partner
By: ________________________
Title:
SCHEDULE
Date Loan Maturity Principal Date Principal
Disbursed Amount of Loan Date Payment Paid
<PAGE>
EXHIBIT B
NOTICE OF CONVERSION/CONTINUATION
Date: __________________
To: Bank of America National Trust and Savings Association, as Agent for
the Banks parties to the Amended and Restated Facility B Credit Agreement
dated as of May 13, 1996 (as extended, renewed, amended or restated from time
to time, the "Credit Agreement") among Crown Pacific Limited Partnership (the
"Company"), certain Banks which are signatories thereto, ABN AMRO Bank, N.V.,
as Documentation Agent, and Bank of America National Trust and Savings
Association, as Agent and Issuing Bank
Ladies and Gentlemen:
The undersigned, the Company, refers to the Credit Agreement, the terms
defined therein being used herein as therein defined, and hereby gives you
notice irrevocably, pursuant to Section 2.4 of the Credit Agreement, of the
[conversion] [continuation] of the Syndicated Loans specified herein, that:
1. The date of the [conversion] [continuation] is ______________________,
19__.
2. The aggregate amount of the Syndicated Loans [converted] [continued] is
$______________.
3. The Syndicated Loans are to be [converted into] [continued as]
[Offshore Rate Loans] [Base Rate Syndicated Loans].
4. [If applicable:] The duration of the Interest Period for the
Syndicated Loans included in the [conversion] [continuation] shall be [____]
months. The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the proposed
[conversion][continuation], before and after giving effect thereto and to the
application of the proceeds therefrom:
(a) the representations and warranties of the Company contained in Article
VI of the Credit Agreement are true and correct as though made on and as of
such date (except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true and
correct as of such earlier date);
(b) no Default or Event of Default exists; and
(c) the proposed [conversion] [continuation] will not cause the Effective
Amount of all Syndicated Loans and Swingline Loans plus the Effective Amount
of all L/C Obligations to exceed the Aggregate Commitment.
CROWN PACIFIC LIMITED PARTNERSHIP,
a Delaware limited partnership
By: CROWN PACIFIC MANAGEMENT LIMITED
PARTNERSHIP, a Delaware limited partnership,
its general partner
By:
Title:
<PAGE>
EXHIBIT C
CROWN PACIFIC LIMITED PARTNERSHIP
COMPLIANCE CERTIFICATE
Date:
Reference is made to the Amended and Restated Credit Agreement dated as of
May 13, 1996 (as extended, renewed, amended or restated from time to time,
the "Credit Agreement") among Crown Pacific Limited Partnership, a Delaware
limited partnership (the "Company"), certain financial institutions from
time to time parties to the Credit Agreement (the "Banks"), ABN AMRO Bank,
N.V., as documentation agent for the Banks, and Bank of America National
Trust and Savings Association, a national banking association, as agent for
the Banks (in such capacity, the "Agent"). Unless otherwise defined
herein, capitalized terms used herein have the respective meanings assigned
to them in the Credit Agreement.
The undersigned Responsible Officer of the Company hereby certifies as of the
date hereof that he/she is the __________________________ of the Company, and
that, as such, he/she is authorized to execute and deliver this Certificate
to the Banks and the Agent on behalf of the Company and its Subsidiaries and
not as an individual, and that:
[Use the following paragraph if this Certificate is delivered in connection
with the financial statements required by subsection 6.1(a) or (c) of the
Credit Agreement.]
1.(a) Attached as Schedule 1A hereto are (i) a true and correct copy of the
audited consolidated balance sheet of the Company and its Subsidiaries as at
the end of the fiscal year ended December 31, ____ and (ii) the related
consolidated statements of income, partners' equity and cash flows for such
fiscal year, setting forth in each case in comparative form the figures for
the previous fiscal year, identifying any material change in accounting
policies or financial reporting practices by the Company or any of its
consolidated Subsidiaries, and accompanied by the opinion of Price Waterhouse
LLP or another nationally-recognized certified independent public accounting
firm. Such opinion is not qualified or limited because of a restricted or
limited examination by such accounting firm of any material portion of the
Company's or any of its Subsidiary's records and is delivered to the Agent
pursuant to a reliance agreement between the Agent and Banks and such
accounting firm which you have advised us is in form and substance
satisfactory to the Agent and the Required Banks;
(b)Attached as Schedule 1 B hereto are a true and correct copy of the
unaudited consolidating balance sheet of the Company and its Subsidiaries as
at the end of the fiscal year ended December 31, ____ and the related
consolidating statement of income for such fiscal year; which financial
statements were used in connection with the preparation of the audited
consolidated balance sheet of the Company as of the end of such fiscal year
and the related consolidated statements of income, partners' equity and cash
flows for such fiscal year.
or
[Use the following paragraph if this Certificate is delivered in connection
with the financial statements required by subsections 6.1(b) or (d) of the
Credit Agreement.]
1.(a)Attached as Schedule 1A hereto is (i) a true and correct copy of the
unaudited consolidated balance sheet of the Company and its Subsidiaries as
of the end of the fiscal quarter ended __________ __, ____ and (ii) the
related consolidated statements of income, partners' equity and cash flows of
the Company and its Subsidiaries for the period commencing on the first day
and ending on the last day of such quarter, setting forth in each case in
comparative form the figures for the previous year (subject to ordinary, good
faith year-end audit adjustments) and identifying any material change in
<PAGE>
accounting policies or financial reporting practices by the Company or its
consolidated Subsidiaries.
(b)Attach as Schedule 1B hereto is a true and correct copy of the unaudited
consolidating balance sheet of the Company and its Subsidiaries as of the end
of the fiscal quarter ended __________ __, ____ and the related consolidating
statement of income for such quarter, which financial statements were used in
connection with the preparation of the financial statements referred to in
paragraph 1(a) above of this Certificate.
2.The undersigned has reviewed and is familiar with the terms of the Credit
Agreement and has made, or has caused to be made under his/her supervision, a
detailed review of the transactions and conditions (financial or otherwise)
of the Company during the accounting period covered by the attached financial
statements.
3.The attached financial statements are complete and correct, and have been
prepared in accordance with GAAP on a basis consistent with prior periods.
4.The attached financial statements fairly state the financial position and
results of operations of the Company and its consolidated Subsidiaries.
5.To the best of the undersigned's knowledge, the Company, during such
period, has observed, performed or satisfied all of its covenants and other
agreements, and satisfied every condition in the Loan Documents to be
observed, performed or satisfied by the Company, and the undersigned has no
knowledge of any Default or Event of Default.
6.The financial covenant analyses and information set forth on Schedule 2
attached hereto are true and accurate on and as of the date of this
Certificate.
7.For the fiscal quarter that commenced ___________, the Applicable Margin
should have been __% in the case of Offshore Rate Loans and __% in the case
of Base Rate Loans.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
_______________ __, ____.
CROWN PACIFIC LIMITED PARTNERSHIP,
a Delaware limited partnership
By:CROWN PACIFIC MANAGEMENT
LIMITED PARTNERSHIP, a Delaware limited
partnership, its general partner
By:
Title:
SCHEDULE 2
CROWN PACIFIC LIMITED PARTNERSHIP
Compliance Certificate*
Section
Requirement
Computations
Amount
Allowed/Required
<PAGE>
Actual Amount
7.1(g)
Judgment or Judicial
attachment liens
Maximum allowed
Outstanding at month-day-year
$5,000,000
$_________
7.1(i)
Purchase money security
interests
Maximum allowed
Outstanding at month-day-year
$25,000,000
$__________
7.2(c)
Sales of assets
Maximum allowed ("Annual Sales Amount") in
(1)1996 calendar year
(2)each calendar year thereafter:
(a)Annual Sales Amount for preceding calendar year
(b)percentage increase in the CPI for preceding
calendar year
(c)(a) multiplied by (b)
(d)sum of (a) plus (c) (Annual Sales Amount for such
calendar year)
$10,000,000
$_________
_____%
$_________
$_________
Cumulative dispositions from Closing Date through month-
day-year
Maximum allowed during term of Agreement
(1)Basic amount
<PAGE>
(2)percentage increase in the CPI from January 1, 1996 to
date of determination (month-day-year)
(3)(1) multiplied by (2)
(4)sum of (1) plus (3)
Cumulative dispositions from Closing Date through month-
day-year
$51,500,000
_____%
$_________
$_________
$___________
7.2(e)
Exchanges of timberland
Maximum allowed for timberland during term of Agreement
Cumulative exchanges through month-day-year
$400,000,000
$__________
$__________
Maximum allowed during term of Agreement for timberland
received in exchange located in Canada, Mexico or New
Zealand plus Net Proceeds invested in productive assets in such
countries plus net proceeds of harvesting used to purchase
timber or timberlands in such countries
$50,000,000
Actual amount of
(1)timberland received in exchange located in Canada,
Mexico
<PAGE>
or New Zealand
(2)Net Proceeds invested in productive assets in such
countries
(3)Net proceeds of harvesting used to purchase timber or
timberlands in such countries
(4)sum of (1), (2) and (3)
$_________
$_________
$_________
$_________
7.2(f)
Dispositions of assets not
otherwise permitted
Maximum Net Proceeds of disposition allowed at any time
which are not applied to purchase assets or repay Senior Debt
Cumulative dispositions through month-day-year
$25,000,000
$__________
7.4
Planned Volume
[year-end only]
(1)Basic per annum amount:
(2)Annual Timber Increase [to be calculated for each year
after 1996]
(a)timber acquired by Company and Subsidiaries during
calendar year _____ (not including timber acquired
with the net proceeds of an excess harvest)
(b)timber sold by Company and its Subsidiaries during
such calendar year
(c) (a) minus (b) [Annual Timber Increase for such
calendar year]
250 MMBF
<PAGE>
_____ MMBF
_____ MMBF
_____ MMBF
(3)Annual Timber Increase amount to be added to current
year Planned Volume (per definition thereof)
_____ MMBF
(4)Planned Volume before Asset Coverage Ratio decreases
[sum of (1) and (3)]
_____MMBF
(5)Asset Coverage Ratio decreases (20% per year), if
applicable
_____MMBF
(6)Planned Volume [(4) minus (5)]
_____ MMBF
Asset Coverage Ratio
[year-end only]
(1)Wholesale value of Inventory
(a)Inventory at end of prior year
(b)Growth
(c)Annual Timber Increase
(d)Disposition of inventory
(e)Harvest
(f)(a) plus (b) plus (c) minus (d) minus (e)
(g)Retail Value of (f) [attach species and price detail]
(h)60% of (g)
(2)Indebtedness at end of year
(3)Asset Coverage Ratio
(1) (h)to (2)
<PAGE>
2.0 to 1.0
_____ MMBF
_____ MMBF
_____ MMBF
_____ MMBF
_____ MMBF
_____ MMBF
$_________
$_________
__ to 1.0
Harvesting Restrictions/
[year-end only]
(1)Maximum allowed for any one calendar year (150% of
Planned Volume)
Volume harvested during calendar year ending month-day-
year
_________MMBF
_________MMBF
(2)[1997 and thereafter] Maximum allowed for any two
consecutive calendar years (140% of Planned Volume)
Volume harvested during preceding two calendar years
ending month-day-year
_________MMBF
_________MMBF
(3)[1998 and thereafter] Maximum allowed for any three
calendar years (130% of Planned Volume)
Volume harvested during preceding three calendar years
ending month-day-year
<PAGE>
_________MMBF
_________MMBF
(4)[1999 and thereafter] Maximum allowed for any four
consecutive calendar years (120% of Planned Volume)
Volume harvested during preceding four calendar years
ending month-day-year
_________MMBF
_________MMBF
7.5(f)
Loans & Investments not
otherwise permitted
Maximum allowed
(1)in 1996 calendar year
(2)in each calendar year thereafter:
(a)Annual Investment Amount for the preceding
calendar year
(b)CPI for such preceding calendar year
(c)(a) multiplied by (b)
$10,000,000
$_________
_____%
$_________
Cumulative investment for current calendar year through
month-day-year
Maximum allowed during term of this Agreement
(1)Basic amount
(2)Percentage increase in the CPI from January 1, 1996 to
date of determination (month-day-year)
(3)(1) multiplied by (2)
(4)sum of (1) plus (3)
Cumulative investment through month-day-year
<PAGE>
$51,500,000
_____%
$_________
$_________
$_________
$_________
7.6(h)
Other ordinary course
unsecured subordinated
Indebtedness
Maximum allowed
Outstanding at month-day-year
$10,000,000
$__________
7.11
Restricted Payments
Available Cash:
(1)cash receipts of Company from all sources during fiscal
quarter ending month-day-year
$__________
$__________
(2)reduction with respect to such fiscal quarter in cash
reserves
(other than SAU Reserve)
$__________
(3)amount available to be borrowed on the last day of
such
<PAGE>
fiscal quarter under the Working Capital Facility
$__________
(4)sum of (1), (2) and (3)
$__________
(5)cash disbursements of Company during such fiscal quarter
$__________
(6)cash reserves established with respect to such fiscal
quarter
and increase with respect to such fiscal quarter in cash
reserves
$__________
(7)sum of (5) and (6)
$__________
(8)excess of (4) over (7)
$__________
7.16
Cash Flow to Interest Expense
Ratio
Cash Flow:
(1)EBITDA
<PAGE>
(a)Consolidated net income (or net loss) without
extraordinary losses or extraordinary gains
$__________
(b)Amounts treated as expenses for depreciation,
depletion
and interest and amortization of intangibles
$__________
(c)Accrued taxes on or measured by income
$__________
(d)sum of (a), (b) and (c)
$__________
(2)Net Proceeds from disposition of assets under subsections
7.2(a), (b), (c), (d), or (f)(ii)(c) to the extent not
otherwise included in EBITDA
$__________
(3)Permitted Inclusions
$__________
(4)additional amounts that would be included in determining
EBITDA had timberland acquired by Company with
proceeds of Indebtedness within such four fiscal quarter
period been owned by Company
$__________
<PAGE>
(5)sum of 1(d) plus (2) plus (3) plus (4)
$__________
Interest Expense:
(1)interest expense
$__________
(2)additional interest expense that would have accrued on
Indebtedness incurred to acquire certain timberlands
$__________
(3)sum of (1) plus (2)
$__________
Ratio of Cash Flow to Interest Expense
___:___
Minimum allowed at end of any fiscal quarter ending
(1)on or before December 31, 1996
1.5 to 1.0
(2)after December 31, 1996 and on or before December 31,
1997
2.0 to 1.0
<PAGE>
(3)thereafter
2.25 to 1.0
7.17
Total Debt to Cash Flow Ratio
Total Debt
$__________
Cash Flow (See Section 7.16 Cash Flow calculation)
$__________
Total Debt to Cash Flow Ratio
___:___
Maximum allowed at end of any fiscal quarter ending
(1)before receipt by the Company of Equity Proceeds:
(a) through September 30, 1996
(b) through June 30, 1997
(c) through December 31, 1997
(d) thereafter
5.75 : 1.0
5.5 : 1.0
4.5 : 1.0
4.25: 1.0
(2)after receipt by the Company of Equity Proceeds:
(a) through December 31, 1997
(b) thereafter
4.5 : 1.0
4.0 : 1.0
<PAGE>
7.18
Cash Coverage Ratio
Minimum allowed
1.0 : 1.0
(1)EBITDA (See Section 7.16 EBIDTA calculation)
$__________
(2)Net Proceeds from disposition of assets under subsections
7.2(a), (b), (c), (d), or (f)(ii)(c) to the extent not
otherwise included in EBITDA
$__________
(3)Permitted Inclusions
$__________
(4)Any decreases to any reserves described in clauses (c)(i),
(ii) and (iii) of the definition of Cash Provided by
Operating Activity
$__________
(5)Any increases to such reserves
$__________
(6)Any decreases in amount available to be borrowed under
Working Capital Facility
$__________
(7)Any increases in such amount
<PAGE>
$__________
(8)Capital expenditures (excluding capital expenditures
financed with Indebtedness incurred for such purpose)
$__________
(9)Sum of (1), (2), (3) and (4) minus (5) plus (6) minus (7)
minus (8)
$__________
(10)Cash distributions to partners
$__________
(11)Interest expense
$__________
(12)Principal payments
$__________
(13)Sum of (10), (11) and (12)
(14)Ratio (9) to (13)
___ : 1.0
Minimum allowed
1.0 to 1.0
<PAGE>
Pro Forma Consolidated Cash
Flow Ratios
Pro Forma Consolidated Cash Flow
(1)Cash Provided by Operating Activity
$__________
(a)cash receipts (excluding cash proceeds from Interim
Capital Transactions)
(b)(i)cash operating expenditures
(ii)cash debt service payments (other than certain
payments or prepayments of principal and
premium)
(iii)cash capital expenditures
(iv)sum of (i), (ii) and (iii)
(c)reductions less additions to certain cash reserves and
amounts held in the SAU Reserve
(d)(a) minus (b)(iv) plus (c)
$__________
$__________
$__________
$__________
$__________
$__________
$__________
(2)Cash debt service payments to extent subtracted in
determining Cash Provided by Operating Activity
$__________
(3)Cash capital expenditures, except those relating to
Operating Capacity Acquisitions, Capital Additions and
Improvements and Interim Capital Transactions, to
extent subtracted in determining Cash Provided by
Operating Activity
<PAGE>
$__________
(4)Reductions minus additions to certain cash reserves
$__________
(5)Additions minus reductions to SAU Reserve and certain
other cash reserves
$__________
(6)In connection with any timberland to be acquired with the
proceeds of a Loan or previously acquired within such
four fiscal quarters, an amount equal to good faith
estimate of such additional amounts that would be
included in clauses (1), (2), (3) and (4) above had such
timberlands been owned by Company
$__________
(7)Sum of (1), (2), (3), (4) and (5) plus and minus, as
applicable, (6)
$__________
Pro Forma Interest Expense
(1)Interest expense payable during four fiscal quarter period
on all Indebtedness of Company and Subsidiaries
$__________
(2)Interest expense that would have been payable during such
four fiscal quarter period in respect of any Indebtedness
proposed to be incurred on such date of determination,
and Indebtedness incurred after the end of such four fiscal
quarter period and before such date of determination
<PAGE>
$__________
(3)Sum of (1) and (2)
$__________
Pro Forma Maximum Debt Service
(1)Highest amount payable by Company and Subsidiaries
during any consecutive four fiscal quarters, in respect of
scheduled principal and interest with respect to all
Indebtedness of Company and Subsidiaries
$__________
(2)Interest expense accrued on Facility B Loans during the
most recent four fiscal quarters
$__________
(3)Sum of (1) and (2)
$__________
7.3
Pro Forma Consolidated Cash Flow to Pro Forma Interest
Expense
___:___
6.4, 7.3
Pro Forma Consolidated Cash Flow to Pro Forma Maximum
Debt Service
___:___
* [The calculations set forth in this form of Compliance Certificate are by
necessity less detailed than those contained in the Credit Agreement. In the
event of any
<PAGE>
conflict between this Compliance Certificate and the Credit
Agreement, the Credit Agreement shall in all cases prevail.]
<PAGE>
EXHIBIT C
CROWN PACIFIC LIMITED PARTNERSHIP COMPLIANCE CERTIFICATE
Date:
Reference is made to the Amended and Restated Facility B Credit Agreement
dated as of May 13, 1996 (as extended, renewed, amended or restated from time
to time, the "Credit Agreement") among Crown Pacific Limited Partnership, a
Delaware limited partnership (the "Company"), certain financial
institutions from time to time parties to the Credit Agreement (the
"Banks"), ABN AMRO Bank, N.V., as documentation agent for the Banks, and
Bank of America National Trust and Savings Association, a national banking
association, as agent for the Banks (in such capacity, the "Agent").
Unless otherwise defined herein, capitalized terms used herein have the
respective meanings assigned to them in the Credit Agreement.
The undersigned Responsible Officer of the Company hereby certifies as of the
date hereof that he/she is the ________________________ of the Company, and
that, as such, he/she is authorized to execute and deliver this Certificate
to the Banks and the Agent on behalf of the Company and its Subsidiaries and
not as an individual, and that:
[Use the following paragraph if this Certificate is delivered in connection
with the financial statements required by subsection 7.1(a) or (c) of the
Credit Agreement.]
1.(a) Attached as Schedule 1A hereto are (i) a true and correct copy of the
audited consolidated balance sheet of the Company and its Subsidiaries as at
the end of the fiscal year ended December 31, ____ and (ii) the related
consolidated statements of income, partners' equity and cash flows for such
fiscal year, setting forth in each case in comparative form the figures for
the previous fiscal year, identifying any material change in accounting
policies or financial reporting practices by the Company or any of its
consolidated Subsidiaries, and accompanied by the opinion of Price Waterhouse
LLP or another nationally-recognized certified independent public accounting
firm. Such opinion is not qualified or limited because of a restricted or
limited examination by such accounting firm of any material portion of the
Company's or any of its Subsidiary's records and is delivered to the Agent
pursuant to a reliance agreement between the Agent and Banks and such
accounting firm which you have advised us is in form and substance
satisfactory to the Agent and the Required Banks;
(b)Attached as Schedule 1 B hereto are a true and correct copy of the
unaudited consolidating balance sheet of the Company and its Subsidiaries as
at the end of the fiscal year ended December 31, ____ and the related
consolidating statement of income for such fiscal year; which financial
statements were used in connection with the preparation of the audited
consolidated balance sheet of the Company as of the end of such fiscal year
and the related consolidated statements of income, partners' equity and cash
flows for such fiscal year.
or
[Use the following paragraph if this Certificate is delivered in connection
with the financial statements required by subsections 7.1(b) or (d) of the
Credit Agreement.]
1.(a)Attached as Schedule 1A hereto is (i) a true and correct copy of the
unaudited consolidated balance sheet of the Company and its Subsidiaries as
of the end of the fiscal quarter ended __________ __, ____ and (ii) the
related consolidated statements of income, partners' equity and cash flows of
the Company and its Subsidiaries for the period commencing on the first day
and ending on the last day of such quarter, setting forth in each case in
comparative form the figures for the previous year (subject to ordinary, good
faith year-end audit adjustments) and identifying any material change in
<PAGE>
accounting policies or financial reporting practices by the Company or its
consolidated Subsidiaries.
(b)Attach as Schedule 1B hereto is a true and correct copy of the unaudited
consolidating balance sheet of the Company and its Subsidiaries as of the end
of the fiscal quarter ended __________ __, ____ and the related consolidating
statement of income for such quarter, which financial statements were used in
connection with the preparation of the financial statements referred to in
paragraph 1(a) above of this Certificate.
2.The undersigned has reviewed and is familiar with the terms of the Credit
Agreement and has made, or has caused to be made under his/her supervision, a
detailed review of the transactions and conditions (financial or otherwise)
of the Company during the accounting period covered by the attached financial
statements.
3.The attached financial statements are complete and correct, and have been
prepared in accordance with GAAP on a basis consistent with prior periods.
4.The attached financial statements fairly state the financial position and
results of operations of the Company and its consolidated Subsidiaries.
5.To the best of the undersigned's knowledge, the Company, during such
period, has observed, performed or satisfied all of its covenants and other
agreements, and satisfied every condition in the Loan Documents to be
observed, performed or satisfied by the Company, and the undersigned has no
knowledge of any Default or Event of Default.
6.The financial covenant analyses and information set forth on Schedule 2
attached hereto are true and accurate on and as of the date of this
Certificate.
7.For the fiscal quarter that commenced ___________, the Applicable Margin
should have been (i) __% in the case of Offshore Rate Loans and __% in the
case of Base Rate Syndicated Loans and Swingline Loans, and (ii) the Letter
of Credit Rate should have been __% per annum.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
_______________ __, ____.
CROWN PACIFIC LIMITED PARTNERSHIP, a Delaware limited partnership
By:CROWN PACIFIC MANAGEMENT LIMITED PARTNERSHIP, a Delaware limited
partnership, its general partner
By: Title:
SCHEDULE 2
CROWN PACIFIC LIMITED PARTNERSHIP
Compliance Certificate*
Section
Requirement
Computations
Amount
<PAGE>
Allowed/Required Actual Amount
2.7(a)(v)
Clean-Up Period
Identify the period of 30 consecutive days during the immediately preceding
12 calendar months ending month-day-year during which the Effective Amount of
Syndicated Loans and Swingline Loans was $0
from ______ to ________
8.1(g)
Judgment or Judicial attachment liens Maximum allowed Outstanding at
month-day-year $5,000,000
$_________
8.1(i)
Purchase money security interests Maximum allowed Outstanding at
month-day-year $25,000,000
$__________
8.2(c)
Sales of assets Maximum allowed ("Annual Sales Amount") in
(1)1996 calendar year
(2)each calendar year thereafter:
(a)Annual Sales Amount for preceding calendar year
(b)percentage increase in the CPI for preceding calendar year
(c)(a) multiplied by (b)
(d)sum of (a) plus (c) (Annual Sales Amount for such calendar year)
$10,000,000
$_________
_____%
<PAGE>
$_________
$_________
Cumulative dispositions from Closing Date through month-day-year
Maximum allowed during term of Agreement
(1)Basic amount
(2)percentage increase in the CPI from January 1, 1996 to date of
determination (month-day-year)
(3)(1) multiplied by (2)
(4)sum of (1) plus (3)
Cumulative dispositions from Closing Date through month-day-year
$51,500,000
_____%
$_________
$_________
$___________
8.2(e)
Exchanges of timberland Maximum allowed for timberland during term of
Agreement Cumulative exchanges through month-day-year
$400,000,000
$__________ $__________
Maximum allowed during term of Agreement for timberland
<PAGE>
received in exchange
located in Canada, Mexico or New Zealand plus Net Proceeds invested in
productive assets in such countries plus net proceeds of harvesting used to
purchase timber or timberlands in such countries
$50,000,000
Actual amount of
(1)timberland received in exchange located in Canada, Mexico or New Zealand
(2)Net Proceeds invested in productive assets in such countries
(3)Net proceeds of harvesting used to purchase timber or timberlands in such
countries
(4)sum of (1), (2) and (3)
$_________
$_________
$_________
$_________
8.2(f)
Dispositions of assets not otherwise permitted
Maximum Net Proceeds of disposition allowed at any time which are not applied
to purchase assets or repay Senior Debt
Cumulative dispositions through month-day-year
$25,000,000
$__________
8.4
Planned Volume [year-end only]
(1)Basic per annum amount:
(2)Annual Timber Increase [to be calculated for each year after 1996]
(a)timber acquired by Company and Subsidiaries during calendar year _____
(not including timber acquired with the net proceeds of an excess harvest)
<PAGE>
(b)timber sold by Company and its Subsidiaries during such calendar year
(c) (a) minus (b) [Annual Timber Increase for such calendar year]
250 MMBF
_____ MMBF
_____ MMBF
_____ MMBF
(3)Annual Timber Increase amount to be added to current year Planned Volume
(per definition thereof)
_____ MMBF
(4)Planned Volume before Asset Coverage Ratio decreases [sum of (1) and (3)]
_____MMBF
(5)Asset Coverage Ratio decreases (20% per year), if applicable
_____MMBF
(6)Planned Volume [(4) minus (5)]
_____ MMBF
Asset Coverage Ratio [year-end only]
(1)Wholesale value of Inventory
<PAGE>
(a)Inventory at end of prior year
(b)Growth
(c)Annual Timber Increase
(d)Disposition of inventory
(e)Harvest
(f)(a) plus (b) plus (c) minus (d) minus (e)
(g)Retail Value of (f) [attach species and price detail]
(h)60% of (g)
(2)Indebtedness at end of year
(3)Asset Coverage Ratio
(1)(h) to (2)
2.0 to 1.0
_____ MMBF
_____ MMBF
_____ MMBF
_____ MMBF
_____ MMBF
_____ MMBF
$_________
$_________
__ to 1.0
Harvesting Restrictions/ [year-end only]
(1)Maximum allowed for any one calendar year (150% of Planned Volume)
Volume harvested during calendar year ending month-day-year
_________MMBF
_________MMBF
(2)[1997 and thereafter] Maximum allowed for any two consecutive calendar
years (140% of Planned Volume)
<PAGE>
Volume harvested during preceding two calendar years ending month-day-year
_________MMBF
_________MMBF
(3)[1998 and thereafter] Maximum allowed for any three calendar years (130%
of Planned Volume)
Volume harvested during preceding three calendar years ending month-day-year
_________MMBF
_________MMBF
(4)[1999 and thereafter] Maximum allowed for any four consecutive calendar
years (120% of Planned Volume)
Volume harvested during preceding four calendar years ending month-day-year
_________MMBF
_________MMBF
8.5(f)
Loans & Investments not otherwise permitted
Maximum allowed
(1)in 1996 calendar year
(2)in each calendar year thereafter:
(a)Annual Investment Amount for the preceding calendar year
(b)CPI for such preceding calendar year
(c)(a) multiplied by (b)
$10,000,000
$_________
_____%
$_________
<PAGE>
Cumulative investment for current calendar year through month-day-year
Maximum allowed during term of this Agreement
(1)Basic amount
(2)Percentage increase in the CPI from January 1, 1996 to date of
determination (month-day-year)
(3)(1) multiplied by (2)
(4)sum of (1) plus (3)
Cumulative investment through month-day-year
$51,500,000
_____%
$_________
$_________
$_________
$_________
8.6(g)
Other ordinary course unsecured subordinated
Indebtedness
Maximum allowed
Outstanding at month-day-year
$10,000,000
$__________
8.11
Restricted Payments Available Cash:
(1)cash receipts of Company from all sources during fiscal quarter ending
month-day-year
$__________
$__________
<PAGE>
(2)reduction with respect to such fiscal quarter in cash reserves (other than
SAU Reserve)
$__________
(3)amount available to be borrowed on the last day of such fiscal quarter
under the Working Capital Facility
$__________
(4)sum of (1), (2) and (3)
$__________
(5)cash disbursements of Company during such fiscal quarter
$__________
(6)cash reserves established with respect to such fiscal quarter and increase
with respect to such fiscal quarter in cash reserves
$__________
(7)sum of (5) and (6)
$__________
(8)excess of (4) over (7)
<PAGE>
$__________
8.16
Cash Flow to Interest Expense Ratio
Cash Flow:
(1)EBITDA
(a)Consolidated net income (or net loss) without extraordinary losses or
extraordinary gains
$__________
(b)Amounts treated as expenses for depreciation, depletion and interest and
amortization of intangibles
$__________
(c)Accrued taxes on or measured by income
$__________
(d)sum of (a), (b) and (c)
$__________
(2)Net Proceeds from disposition of assets under subsections 8.2(a), (b),
(c), (d), or (f)(ii)(c) to the extent not otherwise included in EBITDA
$__________
(3)Permitted Inclusions
$__________
<PAGE>
(4)additional amounts that would be included in determining EBITDA had
timberland acquired by Company with proceeds of Indebtedness within such four
fiscal quarter period been owned by Company
$__________
(5)sum of 1(d) plus (2) plus (3) plus (4)
$__________
Interest Expense:
(1)interest expense
$__________
(2)additional interest expense that would have accrued on Indebtedness
incurred to acquire certain timberlands
$__________
(3)sum of (1) plus (2)
$__________
Ratio of Cash Flow to Interest Expense
___:___
Minimum allowed at end of any fiscal quarter ending
<PAGE>
(1)on or before December 31, 1996 1.5 to 1.0
(2)after December 31, 1996 and on or before December 31, 1997
2.0 to 1.0
(3)thereafter
2.25 to 1.0
8.17
Total Debt to Cash Flow Ratio
Total Debt
$__________
Cash Flow (See Section 8.16 Cash Flow calculation)
$__________
Total Debt to Cash Flow Ratio
___:___
Maximum allowed at end of any fiscal quarter ending
(1)before receipt by the Company of Equity Proceeds:
(a) through September 30, 1996
(b) through June 30, 1997
(c) through December 31, 1997
(d) thereafter
5.75 : 1.0
5.5 : 1.0
4.5 : 1.0
4.25: 1.0
<PAGE>
(2)after receipt by the Company of Equity Proceeds:
(a) through December 31, 1997
(b) thereafter
4.5 : 1.0 4.0 : 1.0
8.18
Cash Coverage Ratio Minimum allowed
1.0 : 1.0
(1)EBITDA (See Section 7.16 EBIDTA calculation)
$__________
(2)Net Proceeds from disposition of assets under subsections 8.2(a), (b),
(c), (d), or (f)(ii)(c) to the extent not otherwise included in EBITDA
$__________
(3)Permitted Inclusions
$__________
(4)Any decreases to any reserves described in clauses (c)(i), (ii) and (iii)
of the definition of Cash Provided by Operating Activity
$__________
(5)Any increases to such reserves
<PAGE>
$__________
(6)Any decreases in amount available to be borrowed under Working Capital
Facility
$__________
(7)Any increases in such amount
$__________
(8)Capital expenditures (excluding capital expenditures financed with
Indebtedness incurred for such purpose)
$__________
(9)Sum of (1), (2), (3) and (4) minus (5) plus (6) minus (7) minus (8)
$__________
(10)Cash distributions to partners
$__________
(11)Interest expense
$__________
(12)Principal payments
$__________
(13)Sum of (10), (11) and (12)
<PAGE>
(14)Ratio (9) to (13)
___ : 1.0
Minimum allowed
1.0 to 1.0
Pro Forma Consolidated Cash Flow Ratios
Pro Forma Consolidated Cash Flow
(1)Cash Provided by Operating Activity
$__________
(a)cash receipts (excluding cash proceeds from Interim Capital Transactions)
(b)(i)cash operating expenditures (ii)cash debt service payments (other than
certain payments or prepayments of principal and premium) (iii)cash capital
expenditures (iv)sum of (i), (ii) and (iii)
(c)reductions less additions to certain cash reserves and amounts held in the
SAU Reserve
(d)(a) minus (b)(iv) plus (c)
$__________
$__________
$__________
$__________
$__________
$__________
$__________
<PAGE>
(2)Cash debt service payments to extent subtracted in determining Cash
Provided by Operating Activity
$__________
(3)Cash capital expenditures, except those relating to Operating Capacity
Acquisitions, Capital Additions and Improvements and Interim Capital
Transactions, to extent subtracted in determining Cash Provided by Operating
Activity
$__________
(4)Reductions minus additions to certain cash reserves
$__________
<PAGE>
(5)Additions minus reductions to SAU Reserve and certain other cash reserves
$__________
(6)In connection with any timberland to be acquired with the proceeds of a
Loan or previously acquired within such four fiscal quarters, an amount equal
to good faith estimate of such additional amounts that would be included in
clauses (1), (2), (3) and (4) above had such timberlands been owned by Company
$__________
(7)Sum of (1), (2), (3), (4) and (5) plus and minus, as applicable, (6)
$__________
Pro Forma Interest Expense
(1)Interest expense payable during four fiscal quarter period
<PAGE>
on all Indebtedness of Company and Subsidiaries
$__________
(2)Interest expense that would have been payable during such four fiscal
quarter period in respect of any Indebtedness proposed to be incurred on such
date of determination, and Indebtedness incurred after the end of such four
fiscal quarter period and before such date of determination
$__________
(3)Sum of (1) and (2)
$__________
Pro Forma Maximum Debt Service
(1)Highest amount payable by Company and Subsidiaries during any consecutive
four fiscal quarters, in respect of scheduled principal and interest with
respect to all Indebtedness of Company and Subsidiaries
$__________
(2)Interest expense accrued on Facility B Loans during the most recent four
fiscal quarters
$__________
(3)Sum of (1) and (2)
$__________
8.3
Pro Forma Consolidated Cash Flow to Pro Forma Interest Expense
<PAGE>
___:___
7.4, 8.3
Pro Forma Consolidated Cash Flow to Pro Forma Maximum Debt Service
___:___
*[The calculations set forth in this form of Compliance Certificate are by
necessity less detailed than those contained in the Credit Agreement. In the
event of any conflict between this Compliance Certificate and the Credit
Agreement, the Credit Agreement shall in all cases prevail.]
<PAGE>
ASSET SALE, PURCHASE AND TRANSFER AGREEMENT
This Asset Sale, Purchase and Transfer Agreement (this "Agreement") is
made as of this 11th day of April, 1996, between Willamette Industries, Inc., an
Oregon corporation ("Seller") and Crown Pacific Limited Partnership, a Delaware
limited partnership ("Buyer").
RECITALS:
A. Seller and Hanson Natural Resources Company, a Delaware general
partnership ("Hanson"), Cavenham Energy Resources Inc., a Delaware corporation
("CERI"), and Cavenham Forest Industries Inc., a Delaware corporation ("CFII")
(Hanson, CERI and CFII are collectively called "Owner") have entered into an
agreement (the "Purchase Agreement") pursuant to which Owner has agreed to sell
and transfer and Seller has agreed to buy and accept from Owner substantially
all of the assets which are used in the conduct of Hanson's timber, wood
products and energy business located in Oregon, Washington, Southwest Louisiana,
and North Louisiana.
B. Seller has delivered to Buyer a copy of the Purchase Agreement without
Schedules.
C. Seller and Buyer desire to enter into this Agreement pursuant to which
Seller agrees to sell and transfer and Buyer agrees to buy and accept from
Seller certain timberland properties and related assets in the states of Oregon
and Washington.
D. Seller intends to sell certain other assets it acquires from Owner to
other purchasers ("Other Purchasers").
It is therefore agreed as follows:
DEFINITIONS. As used herein, the following terms shall have the
following meanings:
ASSETS - The term "Assets" shall mean the Timberland Properties,
Contracts, and other items and leases described in Sections 1.1 and 1.4, but
excluding the Excluded Assets.
ASSET SALE, PURCHASE AND
TRANSFER AGREEMENT 1
<PAGE>
CONTRACTS - The term "Contracts" shall mean the contracts and leases
which are described in Sections 1.1 and 1.4.
CLOSING - The term "Closing" or "Closing Date" shall have the meaning
ascribed to it in Section 3.1.
CLOSING DATE PAYMENT - The term "Closing Date Payment" shall have the
meaning ascribed to it in Section 2.1(b).
EXCLUDED ASSETS - The term "Excluded Assets" shall mean the assets
excluded in Section 1.5.
MATERIAL ADVERSE EFFECT - The term "Material Adverse Effect" shall
mean events which have an adverse effect in the aggregate which, measured in
dollars, exceeds the sum of $15,000,000.
MATERIAL CONTRACT - The term "Material Contract" shall have the
meaning ascribed to it in Section 6.3.
PRORATION DATE - The term "Proration Date" shall mean the specific
date set for Closing in Section 3.1, or any subsequent date set for Closing,
provided that the actual date of Closing occurs within five (5) business days
after said date set for Closing.
TIMBERLAND PROPERTIES - The term "Timberland Properties" shall mean
the real property and real property interests described in Section 1.1(a).
AFFILIATE OF OWNER - The term "Affiliate of Owner" shall mean (i) any
individual, partnership, corporation, or other entity or person which is owned
or controlled directly or indirectly by Hanson plc; (ii) any other individual,
partnership, corporation, or other entity or person which controls or is
controlled by or under common control with Owner; and (iii) any officer,
director, partner, or owner of 10 percent or greater equity or voting interest
in any such other corporation, partnership, or other entity or person.
CODE - The term "Code" shall mean the Internal Revenue Code of 1986,
as amended.
AGREEMENT - The term "Agreement" shall mean this instrument and all
Schedules and Exhibits attached hereto.
ASSET SALE, PURCHASE AND
TRANSFER AGREEMENT 2
<PAGE>
1. SALE, PURCHASE AND TRANSFER OF ASSETS.
Subject to the terms and conditions of this Agreement, at the Closing
referred to herein, Seller agrees to sell, transfer and assign or cause to be
sold, transferred and assigned, and Buyer agrees to purchase and accept on the
terms stated herein, all of Seller's right, title and interest in and to the
Assets, including, without limitation, the following:
1.1 REAL PROPERTY (TIMBERLAND PROPERTIES).
(a) TIMBERLAND. Those certain parcels of real property, owned by
Owner situated in the states of Oregon and Washington and described on Schedule
1.1 (a), together with all timber of all species, standing, dead or down,
pulpwood, all felled and bucked logs, trees, shrubs and reproduction thereon as
of the Closing Date, the ("Timberland" or "Timberland Properties"), excepting
therefrom changes therein prior to Closing pursuant to Section 5.
(b) LOG INVENTORY. The log inventory situated in Port Angeles,
Washington.
(c) BUILDINGS, IMPROVEMENTS AND EASEMENTS. All buildings and
improvements, all roads, bridges, permits, servitudes, and easements, owned or
leased by Owner or which Owner has a right to use and on or appurtenant to the
Timberland Properties, including those described on Schedule 1.1 (c).
(d) RELATED FACILITIES. All sorting yards, log booms, offices, and
rock pits, owned or leased by Owner and associated with the Timberland
Properties, whether or not located on the Timberland Properties, including those
described on Schedule 1.1 (d).
(e) OTHER RIGHTS. All other contracts and rights of Owner
specifically relating to the Timberland Properties and operations thereon
including, but not limited to, contracts, contract rights, leases, servitudes,
permits, licenses, notifications, approvals and authorizations of governmental
bodies, including those described on Schedule 1.1 (e), to the extent assignable.
ASSET SALE, PURCHASE AND
TRANSFER AGREEMENT 3
<PAGE>
(f) WATER RIGHTS. All water rights owned by Owner relating to and
appurtenant to the Timberland Properties.
(g) MINERAL RIGHTS. All minerals, including without express or
implied limitation, oil, gas, and hydrocarbon and geothermal resources in which
Owner has an interest related to the Timberland Properties including those
Mineral Rights listed on Schedule 1.1 (g) (the "Mineral Rights").
1.2 INTENTIONALLY OMITTED
1.3 INTENTIONALLY OMITTED
1.4 PERSONAL PROPERTY.
The following personal property related to the Timberland Properties:
(a) RECORDS. Owner's land management and other records relating to
the Timberland Properties, Mineral Rights, and other Assets which, in the
reasonable judgment and discretion of Seller, are segregated or segregable by
Seller from the overall records to be acquired by Seller from Owner, including
but not limited to management unit maps, aerial photographs, timber cruises,
road and gate records, operational records and leases, easements, deeds,
licenses, survey and survey notes, information relating to oil, gas, and mineral
activities, permits, approvals and authorizations of governmental agencies held
by Owner in connection with the Timberland Properties, Mineral Rights, and other
Assets. The records shall also include all files and documents relating to
customers, suppliers and contractors directly related to the Timberland
Properties, Mineral Rights, and other Assets which, in the reasonable judgment
and discretion of Seller, are segregated or segregable from all other business
records, files, books and documents of Seller.
(b) MOBILE EQUIPMENT, MACHINERY AND EQUIPMENT. The mobile equipment,
machinery, equipment, tools, fixtures and furniture used by Owner exclusively in
connection with the Timberland Properties including those listed on Schedule 1.4
(b), as such items listed thereon may have been sold, replaced, deleted or added
in the ordinary course of business, together with certificates of title for
motor vehicles constituting part of such equipment which are licensed and owned
by Owner.
ASSET SALE, PURCHASE AND
TRANSFER AGREEMENT 4
<PAGE>
(c) OFFICE SUPPLIES. The office supplies and forms, packaging
materials and similar miscellaneous tangible personal property used by Owner
exclusively in connection with the Timberland Properties except such supplies
which are marked or identifiable with the logo, mark or trademark of Owner or
Hanson's general partners.
(d) CONTRACTS. All rights and obligations under those instruments
related to the operation of the Assets that are not related to real property,
including the contracts, leases, permits and licenses described on
Schedule 1.4 (d), to the extent the same are assignable, including sales orders
and commitments, purchase orders and commitments, agreements and contracts of
Owner which relate to work or services to be performed for or at the Assets.
1.5 EXCLUDED ASSETS. The parties to this Agreement expressly understand
and agree that the Seller is selling, assigning, transferring or conveying or
causing to be sold, assigned, transferred or conveyed to Buyer only the
Timberland Properties and the assets related thereto that Seller has the right
to acquire from Owner pursuant to the Purchase Agreement. Rights, assets, and
properties which are retained by Owner pursuant to the Purchase Agreement shall
be specifically excluded from the transactions contemplated by this Agreement,
notwithstanding anything to the contrary elsewhere in this Agreement ("Excluded
Assets").
1.6 ASSIGNMENT OF CONTRACTS.
(a) CONTRACTS ASSIGNABLE WITHOUT CONSENT. Seller agrees to assign or
cause to be assigned to Buyer as of the Closing, all of the rights of Seller and
Owner under the Contracts that are assignable without consent of any third party
and Buyer shall assume, as of the Closing, all obligations of Seller and Owner
thereunder which arise before, at or after Closing.
(b) SELLER TO USE REASONABLE EFFORTS. Anything in this Agreement to
the contrary notwithstanding, Seller shall not be obligated to sell, assign,
transfer or convey or cause to be sold, assigned, transferred or conveyed to
Buyer any of its rights in and to any of the Contracts without first obtaining
all necessary approvals, consents or waivers. Seller shall use all
ASSET SALE, PURCHASE AND
TRANSFER AGREEMENT 5
<PAGE>
reasonable efforts, and Buyer shall reasonably cooperate with Seller, to obtain
all necessary approvals, consents or waivers, or to resolve any impracticalities
of transfer necessary to assign or convey to Buyer each such Contract as soon as
practicable; provided, however, that neither Seller nor Buyer shall be obligated
to pay any consideration therefor except for filing fees and other ordinary
administrative charges which shall be paid by Seller to the third party from
whom such approval, consent or waiver is requested. In the event Seller obtains
consent to assignment of a Contract prior to the Closing, Buyer shall assume, as
of Closing, all obligations of Seller and Owner thereunder which arise before,
at or after the Closing, as though no consent was required.
(c) IF WAIVERS OR CONSENTS CANNOT BE OBTAINED. To the extent that
any of the approvals, consents or waivers referred to in Section 1.6(b) have not
been obtained by Seller as of the Closing, or until the impracticalities of
transfer are resolved, Seller shall, during the remaining term of such
Contracts, use all reasonable efforts to (i) obtain the consent of any such
third party with the filing fees and ordinary administrative charges payable to
such third party to be split equally by the parties; (ii) cooperate with Buyer
in any reasonable and lawful arrangements designed to provide the benefits of
such Contracts to Buyer so long as Buyer fully cooperates with Seller and Owner
in such arrangements; and (iii) enforce, or cause to be enforced, at the request
of Buyer and at the expense and for the account of Buyer, any rights of Seller
or Owner arising from such Contracts against such issuer thereof or the other
party or parties thereto (including the right to elect to terminate any such
Contracts in accordance with the terms thereof upon the request of, and
indemnification of Seller and Owner from, Buyer).
(d) NON-ASSIGNABILITY. To the extent that any Contract or any claim,
right or benefit arising thereunder or resulting therefrom is not capable of
being sold, assigned, transferred or conveyed without the approval, consent or
waiver of the issuer thereof or the other party thereto, or any third person
(including a government or governmental unit), or if such sale, assignment,
transfer or conveyance or attempted assignment, transfer or conveyance would
constitute a breach thereof or a violation of any law, decree, order, regulation
or other governmental edict, this Agreement shall not constitute a sale,
ASSET SALE, PURCHASE AND
TRANSFER AGREEMENT 6
<PAGE>
assignment, transfer or conveyance thereof, or an attempted assignment, transfer
or conveyance thereof.
1.7 TRANSFERRING PERMITS AND LICENSES. Seller will assign, transfer or
convey, or cause to be assigned, transferred or conveyed to Buyer at the Closing
those permits and licenses, including those described in Schedules 1.1 (c) and
(e), and 1.4 (d) which are held or used by Owner in connection with the Assets
and which can be assigned without having to obtain the consent of any third
party with respect thereto. Seller will cooperate with Buyer in obtaining any
third party consents necessary to the assignment or transfer of any other
permits or licenses used or held by Seller or Owner in connection with the
Assets which are so assignable or transferable; however, neither Seller nor
Buyer shall be obligated to pay any consideration therefor except for filing
fees and other ordinary administrative charges which shall be paid by Buyer to
the third party from whom such approval, consent or waiver is requested. Buyer
shall assume, as of Closing, all obligations of Seller and Owner arising prior
to, at or after Closing under those permits and licenses which can be
transferred without having to obtain the consent of any third party and those
permits and licenses for which consent to transfer is obtained prior to Closing.
Subsequent to the Closing, to the extent permitted by law, upon ninety (90) days
prior written notice, Owner has the right to cancel any permits or licenses or
any bonds, guarantees or undertakings by Owner applicable to the Assets to the
extent such are not so assigned or transferred to Seller pursuant to Section 1.7
of the Purchase Agreement to Buyer pursuant to this Section 1.7.
1.8 LIABILITIES ASSUMED BY BUYER; LIABILITIES NOT ASSUMED BY BUYER.
(a) ASSUMED LIABILITIES. Except as expressly provided in Subsection
1.8(b), Buyer shall, effective as of the Closing and without any further
responsibility or liability of or recourse to Seller, or its directors,
shareholders, officers, partners, employees, agents, consultants,
representatives, successors, transferees or assignees, absolutely and
irrevocably assume and shall be liable and responsible for the claims,
liabilities, and obligations of Seller arising pursuant to the Purchase
Agreement and Owner with respect to the Timberland Properties, Mineral Rights,
and other Assets, whether or not disclosed to Buyer, and whether or not
occurring or arising prior
ASSET SALE, PURCHASE AND
TRANSFER AGREEMENT 7
<PAGE>
to, at or after Closing, except as expressly set forth in Section 1.8(b) and
except to the extent to which Seller indemnifies Buyer as expressly set forth in
Section 10.1(a); and nothing in this Section 1.8(a) shall diminish Buyer's
rights in Section 8.11.
Without limiting the foregoing, Buyer shall assume the following:
(i) Buyer shall assume all Contracts assigned to Buyer pursuant
to Section 1.6, and permits and licenses assigned to Buyer pursuant to Section
1.7;
(ii) Buyer shall assume all matters disclosed to Buyer in
Schedules 6.3 through 6.6;
(iii) Buyer shall assume the employee matters that are set forth
in Section 11 as Buyer's responsibility; and
(iv) INTENTIONALLY OMITTED.
(v) Buyer shall assume all undertakings of, and liabilities and
obligations assumed by, CFII, and all indemnity obligations of CFII, if any, to
Crown Zellerbach Corporation and its successors and assigns relating to all
environmental conditions arising from ownership, possession, use, or conduct of
business and operations of the Indemnification Properties (as defined in Section
6.7(e) of this Agreement), which undertakings, liabilities, obligations, and
indemnity obligations are contemplated in that certain Transaction Agreement
dated December 14, 1985, by and between James River Corporation of Virginia and
Crown Zellerbach Corporation and are more specifically set forth in that certain
Undertaking dated as of May 2, 1986, by CFII in favor of Crown Zellerbach
Corporation (the Transaction Agreement and Undertaking are collectively referred
to herein as "Transaction Agreement/Undertaking").
At Closing, the parties shall execute an Assignment, Acceptance, and
Assumption Agreement in the form attached hereto as Schedule 1.8 to evidence the
foregoing matters to be assumed by Buyer, in addition to the more specific
instruments of assignment and assumption described in this Agreement.
(b) EXCLUDED LIABILITIES. Notwithstanding anything to the contrary
in this Agreement, the following liabilities and
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obligations ("Excluded Liabilities") shall not be assigned to Buyer nor
assumed by Buyer:
(i) all liabilities and obligations related to the Excluded
Assets;
(ii) trade accounts payable for items purchased and delivered as
of the Closing Date, and all accrued expenses of the type set forth on Schedule
1.8 (b)(ii) attached hereto which are, or under generally accepted accounting
principles should be, accrued at Closing;
(iii) all liabilities and obligations for taxes, except for
assessments and real estate taxes which shall be prorated on the Proration Date
as provided in this Agreement, and except for the deferred ad valorem taxes
because of classification of all or a portion of the Timberland Properties as
farmland, grazing land, or timberland;
(iv) all liabilities and obligations of Owner to any Affiliate
of Owner, except for any matters listed on Schedule 1.8 (b)(iv) attached hereto;
(v) any liabilities or obligations to or with respect to
employees of Seller or Owner, except for the obligations and liabilities to be
assumed by Buyer pursuant to Section 11;
(vi) any obligations for borrowed funds; the term "borrowed
funds" shall not be construed to include purchase money contracts and similar
security interests for personal property;
(vii) all bodily injury claims occurring on or in connection
with the Assets prior to Closing and all product liability claims arising from
sale or operation of the Assets prior to Closing;
(viii) any matters retained by Seller or Owner pursuant to
Section 8.2(c);
(ix) all undertakings of, and liabilities and obligations
assumed by, CFII, and all indemnity obligations of CFII, contemplated by or set
forth in the Transaction Agreement/Undertaking, except for the undertakings,
assumed
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liabilities and obligations, and indemnity obligations described in Section
1.8(a)(v) of this Agreement; and
(x) liens and encumbrances to be satisfied by Owner as provided
in Section 3.6.
2. PURCHASE PRICE. Subject to adjustment in accordance with the
provisions of this Agreement, the purchase price for the Assets ("Purchase
Price") shall be Two Hundred Five Million Dollars ($205,000,000). The Purchase
Price shall be payable as provided in Section 2.1.
2.1 PAYMENT OF PURCHASE PRICE.
(a) INTENTIONALLY OMITTED.
(b) Buyer shall pay to Seller the entire Purchase Price (the "Closing
Date Payment"), by wire transfer of immediately available funds to the escrow
trust account established by Chicago Title Insurance Company (herein "Chicago
Title" or "Escrow Agent") at Chemical Bank, New York, New York ("Owner's Bank"),
which transfer shall have been received by Owner's Bank no later than 8 a.m. PDT
on the Closing Date. Upon confirmation to Buyer by the Escrow Agent that the
deeds described in Section 3.4 have been recorded, the Escrow Agent shall
deliver the Closing Date Payment to Seller or to Seller's order.
(c) If Buyer is legally obligated to Close and if the Closing Date
Payment is not received by Owner's Bank by 8 a.m. PDT on the Closing Date,
Seller may, at its option, either exercise the Seller's remedies described in
Section 9 by reason of Buyer's default, or may accept late payment of the
Closing Date Payment which shall, in such event, be accompanied by payment of an
amount determined by computing simple interest on the amount of that payment at
the rate of interest announced publicly by Chemical Bank in New York, New York
from time to time as its "Prime Rate" (on the basis of a 360-day year) from the
Closing Date to the date of payment. If the Closing Date Payment is not
received by Owner's Bank on the Closing Date by 8 a.m. PDT, and if Seller elects
to accept a late payment, the Closing Date Payment shall be transferred to an
account to be designated by Seller.
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(d) If, at the Closing, the parties have not resolved the Purchase
Price reduction as contemplated in Section 8.6, or the Price Adjustment Items or
Price Adjustment Notice as contemplated in Section 8.11, then the parties shall
proceed to Close as scheduled and the amount to be paid to Seller at Closing
shall be the Closing Date Payment. Seller shall reimburse Buyer for any
overpayment in the Purchase Price within three (3) business days of resolution
of the amount of the Purchase Price reduction.
3. CLOSING.
3.1 DATE OF CLOSING. The Closing shall take place concurrently with the
closing under the Purchase Agreement at the offices of Ater Wynne Hewitt Dodson
& Skerritt, 222 SW Columbia, Suite 1800, Portland, Oregon, or at such other
place as the parties may agree in writing, on May 15, 1996, unless another time
and date are mutually designated by Seller and Owner. The foregoing date is the
date on which Owner's deed(s) to Buyer are to be recorded immediately prior to
the delivery of the Purchase Price to Seller and is referred to in this
Agreement as the "Closing" or "Closing Date". Seller shall deliver possession
of the Assets to Buyer on the Closing Date. Seller shall have no obligation to
consummate the Closing if for any reason the closing under the Purchase
Agreement does not occur.
3.2 HART-SCOTT RODINO ACT. Buyer and Seller have prepared all necessary
documentation and performed all other necessary actions to complete all
necessary filings under the Hart-Scott Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"). Each party agrees to respond to any request
for additional information within twenty (20) days of receipt of the request.
In the event the waiting period (which term includes the extension period) under
the HSR Act has not expired by the Closing Date set forth in Section 3.1, the
Closing Date shall be delayed until five (5) business days after expiration of
the waiting period; provided, that Seller, in its sole discretion, may terminate
this Agreement (i) if the waiting period has not expired or been terminated
prior to the closing under the Purchase Agreement within 115 calendar days
following the date on which Seller completes its initial filing, or (ii) if
Owner terminates the Purchase Agreement pursuant to Section 3.2 thereof, and
Buyer, in its sole discretion, may terminate this Agreement if the waiting
period has not expired or been
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terminated within 180 calendar days of the date on which Buyer completes its
initial filing.
3.3 EXECUTION AND DEPOSIT OF DOCUMENTS PRIOR TO CLOSING. At least five
(5) business days prior to the Closing Date, each of the parties, as applicable,
shall execute and deposit with the Escrow Agent all of the documents listed in
Section 3.4 below which are to be recorded or filed on the Closing Date. Each
of the parties, as applicable, shall execute and deliver to the other party all
remaining documents listed in Subsection 3.4 below on the Closing Date.
3.4 DOCUMENTS TO BE DELIVERED BY SELLER. At or prior to the Closing,
Seller shall deliver, or cause to be delivered, the following:
(a) Documents of transfer, bills of sale, certificates of title and
other instruments of transfer, dated the Closing Date, transferring to Buyer
title to the Assets. With respect to the Timberland described on Schedule 1.1
(a) (including the buildings, improvements and other appurtenant interests
described in Section 1.1(c) and (d)) title shall be transferred in the form of
the deed(s) attached hereto as Schedule 3.4 (a) directly from Owner to Buyer;
with respect to the Mineral Rights described in Schedule 1.1 (g), transfer shall
be accomplished through mineral quit claim deeds directly from Owner to Buyer
and other instruments of transfer without warranty; with respect to all personal
property, title shall be transferred by Bill of Sale in the form attached hereto
as Schedule 3.4 (a)(a);
(b) Documents evidencing the assignment and assumption of the
Contracts to Buyer (together with any third-party consents required for such
transfers) and the assignment and assumption of any permits and licenses
(together with any third-party consents required for such transfers) not
transferred pursuant to Section 3.4(a), and the Assignment, Acceptance, and
Assumption Agreement described in Section 1.8;
(c) A copy of the resolutions of the board of directors of Seller
authorizing the execution, delivery and performance of this Agreement by Seller
and a certificate of the secretary or assistant secretary of Seller, dated the
Closing Date, that such resolutions were duly adopted and are in full force and
effect;
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(d) The affidavits of Seller required by Section 1445 (b)(2) of the
Code and by local taxing authorities, and any other documents required of Seller
to transfer the Assets in accordance with this Agreement;
(e) Copies of satisfactions, releases or terminations of the liens
and encumbrances referred to in Section 3.6; and
(f) Copies of documents delivered to Seller by Owner pursuant to
Sections 3.4(c) and (d) of the Purchase Agreement.
3.5 DOCUMENTS TO BE DELIVERED BY BUYER. At or prior to the Closing Date,
Buyer shall deliver the following:
(a) Documents evidencing the assignment and assumption of all
Contracts and the assignment and assumption of all permits and licenses
transferred by Seller to Buyer pursuant to Section 3.4(a) and (b), and the Bill
of Sale, and Assignment, Acceptance, and Assumption Agreement described in
Section 1.8;
(b) A copy of the resolutions of the management committee, board of
directors, or other appropriate body of Buyer vested with the authority to
manage Buyer authorizing the execution, delivery and performance of this
Agreement by Buyer, and a certificate of its secretary or assistant secretary,
dated the Closing Date, that such resolutions were duly adopted and are in full
force and effect;
(c) The affidavits, if any, of Buyer required by local taxing
authorities, including the affidavits specified in Section 8.8(b), and any other
documents required of Buyer to transfer the Assets in accordance with this
Agreement.
3.6 SATISFACTION OF LIENS AND ENCUMBRANCES. At or prior to the Closing
Date, Owner has agreed to pay in full all liens and encumbrances for borrowed
funds, income tax liens, and judgment liens on the Assets. At or prior to the
Closing Date, Owner has agreed to pay all delinquent property taxes on the
Assets. Buyer shall assume sole responsibility, as of Closing, for any ad
valorem taxes which are deferred because of farm or grazing or forest use or
classification.
3.7 TRANSFER TAXES; PRORATIONS. Any recording fees, transfer taxes, or
sales taxes payable as a result of the sale of
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<PAGE>
the Assets shall be paid by Seller or Owner. Escrow fees pursuant to Section
3.8 shall be split equally between the parties. Buyer shall reimburse Seller
for other escrow fees payable by Seller pursuant to the Purchase Agreement,
including fees in connection with the Deposit under the Purchase Agreement, in
the proportion that the Purchase Price bears to One Billion Five Hundred Eighty
Eight Million Dollars ($1,588,000,000). Real estate taxes, assessments for
public improvements, and all other fees and assessments related to the Assets
shall be prorated as of the Proration Date.
3.8 DEFAULT DEEDS. At least five (5) business days prior to the Closing
Date, Buyer shall execute and deposit with Chicago Title, in escrow, quitclaim
deeds (the "Quitclaim Deeds") quitclaiming and releasing unto Seller all of
Buyer's right, title, and interest in and to the Timberland Properties,
including any and all after acquired title to the Timberland Properties. If the
closing under the Purchase Agreement occurs and the Closing Date Payment is made
to Owner's Bank by 9 a.m. PDT on the Closing Date, Chicago Title shall return
the Quitclaim Deeds to Buyer. If the closing under the Purchase Agreement
occurs and Buyer fails to make the Closing Date Payment by 9 a.m. PDT on the
Closing Date, regardless of whether such failure is justified on account of any
alleged default by Seller, then Chicago Title shall release the Quitclaim Deeds
to Seller which may proceed to record them in the applicable real estate
records.
4. TITLE INSURANCE. Seller has delivered to Buyer evidence of title in
the form of draft title reports and title commitments ("Title Reports"), as
appropriate, covering the Timberland Properties, copies of which are attached
hereto as Schedule 4; Seller and Buyer acknowledge that the Title Reports may be
revised, corrected, and supplemented by Chicago Title between the date of this
Agreement and the Closing Date, as contemplated in Section 5(c) and, as
contemplated in the letters from Rosalee Merritt to Malcolm Newkirk, copies of
which are included in Schedule 4 as part of the Title Reports. In the event
that Chicago Title is not prepared to issue at Closing to Buyer, owner's
policies of title insurance insuring title in the Timberland Properties in
Buyer, subject only to the exceptions set forth in the Title Reports, as those
Title Reports may have been revised, corrected, and supplemented by Chicago
Title as set forth above, but with no reductions, in excess of five hundred
(500) acres in the aggregate, in the acreage vested in Owner, and
ASSET SALE, PURCHASE AND
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<PAGE>
subject to the printed exceptions contained in such Title Reports, then Buyer
shall have the rights set forth in Section 8.11 with respect to the additional
reductions in acreage and additional material encumbrances to be added as
exceptions to title. If Chicago Title is not prepared to issue such owner's
policies on the Closing Date for reasons other than additional reductions in
acreage or additional exceptions to title, either Buyer or Seller may delay
Closing until Chicago Title or another title insurance company is prepared to
issue such owner's policies. At Closing Buyer shall purchase, at its own
expense, such owner's policies unless otherwise agreed to by the parties.
5. CONDUCT PENDING CLOSING.
(a) Between the date hereof and the Closing Date, Owner has agreed to
continue to operate the Timberland Properties in the ordinary course and in a
manner reasonably consistent with its present operating plan which establishes a
maximum volume of harvest or stumpage sales for harvest ("Maximum Volume")
through the Closing Date ("Operating Plan"), a copy of which is attached hereto
as Schedule 5(a); provided, that Owner has agreed that it will not enter into
log export contracts that provide for delivery of logs after Closing in
recognition of the fact that Seller will not export logs, and this change of
conduct by Owner may modify Owner's ordinary course and Operating Plan but shall
not affect the Maximum Volume set forth on Schedule 5(a). Subject to the
foregoing, Owner has agreed that it shall continue to harvest, or sell stumpage
for harvest, timber standing, lying, and situated upon the Timberland Properties
described in Schedule 1.1 (a). Owner has agreed that it shall continue its
various silvicultural practices consistent with its past practices, from the
date hereof until the Closing Date. The log inventory referred to in Section
1.1(b) as of the close of business on the day preceding the date the Closing
actually occurs shall have a value of at least $400,000; such determination of
value to be made on a basis consistent with Owner's prior practice.
(b) The Purchase Price shall be increased or decreased by the
difference between the actual harvest (including stumpage sales for harvest) and
the Maximum Volume pursuant to the formula ("Harvesting Formula") attached
hereto as Schedule 5(b), as of the date the Closing actually occurs, but such
difference between actual harvest and the Maximum Volume shall not be considered
a
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TRANSFER AGREEMENT 15
<PAGE>
breach by Seller of this Agreement. The Purchase Price shall also be increased
or decreased by the amount by which the value of the log inventory referred to
in Section 1.1(b), on hand as of the close of business on the day preceding the
date the Closing actually occurs; if such value is more than $400,000, the
Purchase Price shall be increased by the difference and if such value is less
than $400,000, the Purchase Price shall be decreased by the difference. Any
such shortfall or excess of inventories on hand shall not be considered a breach
by Seller of this Agreement. Adjustments, if any, to the Purchase Price in this
Subsection (b) shall be made within fifteen (15) days of the date the Closing
actually occurs, and each party agrees to pay to the other the adjusted amount,
as applicable, without interest within said fifteen (15) days.
(c) Owner has agreed that it will not take any action, (i) the result
of which will be to create a Material Adverse Effect on the value of the assets
covered by the Purchase Agreement, or (ii) which is both not reasonably
consistent with its Operating Plan and not in the ordinary course of business,
except as otherwise set forth in this Section 5. Owner may, but is not
obligated, to continue, in the ordinary course of business, to grant and obtain
easements, rights of way and other similar rights to the Timberland Properties,
to grant options to or lease additional Mineral Rights, and to purchase or sell
or exchange additional real properties or interests therein consistent with its
present plan ("Real Estate Plan"), a copy of the relevant portions of which is
attached hereto as Schedule 5(c). In the event Owner sells any portion of the
Timberland Properties or interests therein or grants options to or leases
additional Mineral Rights, other than those identified in the Real Estate Plan,
the Purchase Price shall be reduced by an amount equal to the proceeds of any
such sales, options, or leases, but Seller will not be deemed in breach of this
Agreement. Seller shall promptly notify Buyer of any notice received from Owner
related to the granting or obtaining of any easement, right of way or other
similar right, any additional option to or lease of Mineral Rights, and any such
purchase, sale or exchange; and if the transaction involves more than two
hundred fifty thousand dollars ($250,000.00), Seller shall obtain Buyer's prior
written consent to the transaction, which consent shall not be unreasonably
withheld. For purposes of Section 4, the Title Reports shall be revised or
deemed revised to reflect such transactions.
ASSET SALE, PURCHASE AND
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(d) Notwithstanding the foregoing, the parties agree that, if the
Closing Date is extended beyond May 15, 1996, Owner shall be deemed to be
operating the Timberland Properties in the ordinary course of business from May
16, 1996, to the date the Closing actually occurs, with respect to the
activities described below if Owner:
(i) meets its obligations under the "fiber supply agreements"
described in Section 1.8(a)(iv); and
(ii) continues its harvest of timber at a level that is between
fifty percent (50%) and one hundred percent (100%) of the level in the Operating
Plan; and
(iii) continues road maintenance and road construction as
necessary to prevent substantial deterioration from the condition of the roads
as of May 15, 1996, and as necessary to meet the needs of Owner's harvest
activities; and
(iv) continues silvicultural and reforestation activities in
Oregon and Washington as required by the forest practices acts of said states.
6. REPRESENTATIONS OF SELLER. Seller represents to Buyer that:
6.1 ORGANIZATION, STANDING AND AUTHORITY. Seller is a corporation
organized, existing, and in good standing under the laws of the State of Oregon.
Seller has full power and authority to enter into and perform this Agreement.
Seller is not a "foreign person" within the meaning of Section 1445 of the Code.
6.2 AUTHORIZATION OF AGREEMENT; AUTHORITY. The execution, delivery and
performance of this Agreement by Seller has been duly authorized by all
necessary corporate action of Seller, and this Agreement constitutes the valid
and binding obligation of Seller, enforceable against Seller in accordance with
its terms, except to the extent enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights in general and subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law). The execution, delivery and performance of this Agreement
by Seller will not (a) violate or conflict with Seller's
ASSET SALE, PURCHASE AND
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corporate power and authority; (b) constitute a violation of any law,
regulation, order, writ, judgment, injunction or decree applicable to Seller; or
(c) subject to the receipt of appropriate consents as specified in this
Agreement as of the Closing Date and subject to the provisions of Section
1.6(d), conflict with, or result in the breach of the provisions of, or
constitute a default under, any agreement, license, permit or other instrument
to which Seller is a party or is bound or by which the Assets are bound. Except
as required by the HSR Act, no consent, approval or authorization of any
governmental authority is required on the part of Seller in connection with the
execution, delivery and performance of this Agreement.
6.3 MATERIAL CONTRACTS. All of the Material Contracts which are to be
transferred to Buyer at Closing and which relate to the Timberland Properties
are listed on Schedule 6.3 or Schedule 4. Except as disclosed in Schedule 6.3
or Schedule 4, the Material Contracts have not been further modified or amended;
and to the best of Owner's knowledge, neither Owner nor any party thereto is in
default of any material term in the Material Contracts and true and complete
copies, including applicable amendments, of the Material Contracts have been
made available to Buyer for review prior to execution of this Agreement. A
Material Contract shall mean a Contract which involves payments, performance of
services or delivery of goods by or to Owner after the Closing Date in an amount
or value of two hundred fifty thousand dollars ($250,000.00) or more.
6.4 LITIGATION; COMPLIANCE WITH LAWS. There are no judicial or
administrative actions, proceedings or investigations pending or, to the best of
Seller's knowledge, threatened, that question the validity of this Agreement or
any action taken or to be taken by Seller in connection with this Agreement.
Except as set forth on Schedule 6.4, there is no claim, litigation, proceeding
or governmental investigation pending or, to the best of Owner's knowledge,
threatened, or any order, injunction or decree outstanding which, if decided
unfavorably, would cause Buyer to incur loss or damage in excess of one hundred
thousand dollars ($100,000.00); except as disclosed on Schedule 6.4, to the best
of Owner's knowledge, Owner has received no written notice from a governmental
authority of a material violation of law relating to the Timberland Properties
which has not or will not have been resolved prior to Closing.
ASSET SALE, PURCHASE AND
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<PAGE>
6.5 PERSONAL PROPERTY. Owner has, or will have on the Closing Date, good
and marketable title (which includes leasehold title if applicable) to the
personal property to be transferred to Buyer on the Closing Date pursuant to
Section 1.4, subject to equipment leases, purchase money contracts, and similar
security interests to be assumed by Buyer pursuant to Section 1.8.
6.6 ENVIRONMENTAL CONDITIONS. Except as disclosed on Schedule 6.6, to the
best of Owner's knowledge there are no environmental conditions on the
Indemnification Properties (as defined in Section 6.7(e)) that would cause Buyer
to incur more than one hundred thousand dollars ($100,000) in loss or damage for
each such environmental condition.
6.7 DISCLAIMER OF WARRANTIES AND REPRESENTATIONS FROM SELLER; AS IS;
INDEMNITY
(a) PERSONAL PROPERTY. Except as otherwise expressly set forth in
this Agreement, this Agreement is executed, and the personal property will be
transferred, without any warranty of title, either express or implied, and
without any express or implied warranty or representation as to the
merchantability or fitness for any purpose of any of the equipment or other
personal property included in the Assets, and without any other express or
implied warranty or representation whatsoever.
(b) REAL PROPERTY. Except as otherwise expressly set forth in this
Agreement, this Agreement is executed, and the real property including
Timberland Properties, and Mineral Rights will be transferred, without any
warranty of title, either express or implied, except warranties (if any)
contained in the deed(s) conveying the real property included in the Assets, and
without any express or implied warranty or representation as to the
merchantability of any of the real property included in the Assets, acreage,
legal access, operations or encroachments or any other condition affecting the
Assets.
(c) CONDITION OF PROPERTY. Except as otherwise expressly set forth
in this Agreement, Buyer agrees to purchase the Timberland Properties, Mineral
Rights, personal property, mobile equipment, machinery and equipment and all
other Assets "as is", "where is" and with all faults. The Buyer certifies by
execution hereof that it has had an opportunity to inspect the Timberland
Properties, and Mineral Rights and other Assets
ASSET SALE, PURCHASE AND
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(including the surface and subsurface of any real property) prior to executing
this Agreement; that Buyer either has inspected or waived its right to inspect
the Timberland Properties, and Mineral Rights and other Assets for all purposes
and satisfied itself as to its physical condition, both surface and subsurface,
including but not limited to conditions specifically related to the presence,
release or disposal of hazardous substances, but without limiting Buyer's rights
under Section 8.11; that it has not relied upon any information delivered by
Owner, Seller or their respective agents concerning the Timberland Properties,
and Mineral Rights and other Assets; and that it is relying upon its own
examination of the Timberland Properties, and Mineral Rights and all other
Assets in entering into and in consummating this Agreement. Buyer further
acknowledges and agrees that, except as otherwise expressly set forth in this
Agreement, neither Owner nor Seller nor any of their respective agents have made
any representations, warranties or covenants whatsoever with respect to the
quantity or quality of the timber, the acreage, tax status, legal access,
encroachment or physical condition of the Timberland Properties, and Mineral
Rights, nor, except as expressly set forth in this Agreement, have they made any
representations, warranties, or covenants whatsoever concerning the presence,
release or disposal of hazardous substances thereon.
(d) DISCLAIMER. Except as otherwise expressly set forth in this
Agreement, the transaction contemplated hereby shall be without any express,
implied, statutory or other warranty or representation as to the condition,
quantity, quality, fitness for particular purpose, conformity to models or
samples of materials or merchantability of any of the Assets, their fitness for
any purpose, and without any other express, implied, statutory or other warranty
or representation whatsoever. In addition, except as otherwise expressly set
forth in this Agreement, Seller makes no warranty or representation, express,
implied, statutory or otherwise, as to the accuracy or completeness of any data,
reports, records, projections information or materials now, heretofore or
hereafter furnished or made available to the Buyer in connection with this
Agreement including, without limitation, any description of the Assets, pricing
assumptions, or the environmental condition of the Assets or the portions
affected by the Endangered Species Act or any other materials furnished or made
available to Buyer by Seller or its agents or representatives; any and all such
data, records,
ASSET SALE, PURCHASE AND
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<PAGE>
reports, projections, information and other materials furnished by Seller or
otherwise made available to Buyer are provided to Buyer as a convenience, and
shall not create or give rise to any liability of or against Seller; and any
reliance on or use of the same shall be at Buyer's sole risk.
(e) WAIVER OF CLAIMS AND INDEMNITY. Without limiting the generality
of any other provision in this Section 6.7, except as otherwise expressly set
forth in this Agreement, Buyer assumes any and all liabilities, past, present,
or future, of Seller and "Owners" as defined below, relating to hazardous
substances or materials, wastes, toxics, pollutants, solid wastes, or
contaminants, including without limitation liabilities arising under any current
or future legal requirement pertaining thereto, which are based upon the
ownership or operation of the Assets. Except as otherwise expressly set forth
in this Agreement, Buyer assumes the risk that hazardous substances or
materials, wastes, toxics, pollutants, solid wastes, or contaminants may be
present in, on or under the Timberland Properties, Mineral Rights or other
Assets, and hereby waives, releases, and discharges forever Owner, Hanson's
general partners, Affiliates of Owner, Owner's successors and assigns, and their
respective shareholders, directors, officers, employees, and agents (in this
Section 6.7(e) collectively referred to as "Owners") and Seller from any and all
present or future claims or demands, and any and all damages, loss, injury,
liability, claims or costs, including fines, penalties judgments, claims for
contribution, and cost recovery actions, arising from or in any way related to
the condition, operation, or use of the Timberland Properties, Mineral Rights or
other Assets or the presence of any hazardous substances or materials, wastes,
toxics, pollutants, solid wastes, or contaminants in, on or under the Timberland
Properties, Mineral Rights or other Assets; provided, however, that to the
extent such waiver, release, or discharge will prejudice Buyer's rights to
pursue third parties (not including Affiliates of Owner) who have indemnified or
insured Owner (or any of the three Owners) for some or all of the foregoing
matters, Buyer shall not, and shall not be deemed to, have waived, released, or
discharged "Owners" for the sole purpose of pursuing such third parties. Except
as otherwise expressly set forth in this Agreement, Buyer hereby indemnifies,
holds harmless, and agrees to defend Seller and "Owners" from and against any
and all present or future claims or demands, and any and all damages, losses,
liabilities, injuries, fines, penalties,
ASSET SALE, PURCHASE AND
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<PAGE>
judgments, claims for contribution, and cost recovery actions, and consultant
fees, expert witness fees, costs and expenses (including attorney's fees
incurred by Seller or Owners in the case of matters involving third parties)
arising from or in any way related to the presence of any hazardous substances
or materials, wastes, toxics, pollutants, solid wastes, or contaminants in, on
or under the (i) Timberland, (ii) Mineral Rights, and (iii) any other real
property constituting a part of other Assets (collectively, the Indemnification
Properties"). This indemnity specifically includes the obligation of Buyer to
remove, remediate, reimburse or take other actions required by law concerning
any hazardous substances or materials, wastes, toxics, pollutants, solid wastes,
or contaminants in, on or under the Indemnification Properties. Nothing herein
shall limit Buyer's right, in good faith, to contest any action, request or
requirement of any governmental agency provided that such action is taken at
Buyer's sole cost, risk and expense. The provisions of this Section 6.7(e)
shall not include, or create any obligation of Buyer with respect to any
contractual obligation of "Owners" or Owner's predecessors except as provided in
Section 1.8(a)(v) or as disclosed on any Schedule attached to this Agreement,
are solely for the benefit of Seller and "Owners" and shall not be construed to
be for the benefit of any third party or to constitute a waiver or release of
rights against any third party. Seller hereby assigns to Buyer all rights and
claims which Seller may now or hereafter have against third parties relating to
any matter for which Buyer indemnifies Seller or "Owners." The provisions of
this Section 6.7(e) and Section 1.8(a)(v) are intended to exclusively set forth
Buyer's obligations under this Agreement with respect to assumption, waiver,
release, discharge, and indemnification of environmental matters, and the
provisions of Section 10.1(b) and Section 1.8(a) (other than Section 1.8(a)(v))
shall not apply to such obligations of Buyer.
7. REPRESENTATIONS OF BUYER. Buyer represents to Seller as follows:
7.1 BUYER'S ORGANIZATION. Buyer is a limited partnership organized,
existing and in good standing under the laws of Delaware and has the full
corporate power and authority to enter into and to perform this Agreement.
Buyer is qualified to do business and is in good standing in the states of
Washington and Oregon.
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7.2 AUTHORIZATION OF AGREEMENT. The execution, delivery and performance
of this Agreement by Buyer have been duly authorized by all necessary
partnership action of Buyer, and this Agreement constitutes the valid and
binding obligation of Buyer enforceable against it in accordance with its terms,
except to the extent enforceability may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors' rights in general and
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
7.3 CONSENTS OF THIRD PARTIES. The execution, delivery and performance of
this Agreement by Buyer will not (a) violate or conflict with the certificate of
limited partnership or partnership agreement of Buyer; or (b) constitute a
violation of any law, regulation, order, writ, judgment, injunction or decree
applicable to Buyer. Except as required by the HSR Act, no consent, approval or
authorization of any governmental authority is required on the part of Buyer in
connection with the execution, delivery and performance of this Agreement.
7.4 LITIGATION. There are no judicial or administrative actions,
proceedings or investigations pending or, to the best of Buyer's knowledge,
threatened, that question the validity of this Agreement or any action taken or
to be taken by Buyer in connection with this Agreement. There is no litigation,
proceeding or governmental investigation pending or, to the best of Buyer's
knowledge, threatened, or any order, injunction or decree outstanding, against
the Buyer that, if adversely determined, would have a material effect upon
Buyer's ability to perform its obligations under this Agreement.
7.5 FINANCING. Buyer will have, on the Closing Date, all funds necessary
to pay the Purchase Price and related fees and expenses, and has, or will have
on the Closing Date, the financial capacity to perform all of its other
obligations under this Agreement.
8. FURTHER AGREEMENTS OF THE PARTIES.
8.1 ACCESS TO INFORMATION. Owner has agreed that Buyer (subject to
Section 8.7) shall have access to information in the possession of Owner, and
Seller will make available to Buyer information in its possession, relating to
the Timberland
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Properties, the Mineral Rights, and other Assets for due diligence investigation
purposes and to facilitate an orderly transition in the management of those
Assets in anticipation of Closing. In addition, Owner has agreed to make
available to Buyer its financial statements and shall cooperate and instruct
Owner's independent auditors to cooperate, at Buyer's expense, in preparing the
financial statement related to the Timberland Properties which Buyer may be
required to file with the Securities Exchange Commission.
8.2 NOTICE OF CHANGES AND EVENTS.
(a) Each party shall promptly notify the other party in writing, and
furnish to such party any information that such party may reasonably request,
with respect to the occurrence of any event or the existence of any state of
facts that would (i) result in the party's or Owner's representations and
warranties not being true if they were made at any time prior to or as of the
Closing Date, or (ii) impair the party's or Owner's ability to perform its
obligations under this Agreement.
(b) Subject to receipt of necessary information from Owner, Seller
agrees to update and bring current all Schedules attached to this Agreement
prior to the Closing Date. Any such updated Schedule shall be for informational
purposes only and shall not affect the rights and obligations of the parties as
set forth in this Agreement.
(c) Notwithstanding anything to the contrary in this Agreement, Owner
or Seller shall have the right, in their respective sole discretion, to retain
any claim, obligation, or liability that may otherwise be transferred to or
assumed by Buyer in this Agreement. Owner or Seller may, without limitation,
exercise this right by omitting or deleting a claim, liability, or obligation on
one or more of the Schedules attached to this Agreement. If Owner or Seller
exercises this right, Seller shall provide written notice to Buyer of the claim,
liability, or obligation that Seller shall retain within thirty-five (35) days
of Seller's receipt of written notice of said claim, liability, or obligation.
8.3 EXPENSES. Except as otherwise specifically provided in this
Agreement, Buyer and Seller shall bear their own respective expenses incurred in
connection with this Agreement and in
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connection with all obligations required to be performed by each of them under
this Agreement.
8.4 PUBLICITY. Buyer and Seller shall consult with each other before
issuing any public announcement or press release concerning the transactions
contemplated by this Agreement and, except as may be required by applicable law
or regulation or rule of any stock exchange or organized securities market on
which the securities of Buyer or Seller are listed or traded, will not make a
public announcement or issue a press release prior to such consultation. If
Buyer or Seller are so required to make a public announcement or issue a press
release such party shall use its best efforts to inform the other party hereto
prior to making or issuing it.
8.5 PRESERVATION OF RECORDS.
(a) Buyer agrees that, without expense to Seller, Buyer (i) shall
preserve and keep the records relating to the Timberland Properties, Mineral
Rights, and other Assets delivered to it by Seller for a period of six (6) years
from the Closing, and (ii) shall give Seller and Owner reasonable access to such
records and to personnel during regular business hours if needed for any bona
fide purpose, provided such access shall be at Seller's or Owner's cost and
expense, including reimbursement of Buyer's extraordinary costs, if any, of
providing such access.
(b) Seller or Owner, without expense to Buyer, (i) shall preserve and
keep the records relating to the Timberland Properties, Mineral Rights, and
other Assets which were not transferred to Buyer pursuant to Section 1.4(a), and
(ii) shall give Buyer reasonable access to such records and to personnel during
regular business hours if needed for any bona fide purpose, provided such access
shall be at Buyer's cost and expense, including reimbursement of Seller's or
Owner's extraordinary costs, if any, of providing such access.
(c) Notwithstanding the expiration of the six (6) year period in
Subsection (a) above, Buyer agrees not to destroy the records described in
Subsection (a) without first giving Seller sixty-five (65) days advance written
notice and an opportunity to take custody of such records, at Seller's cost and
expense, including reimbursement of Buyer's extraordinary costs, if any.
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8.6 CASUALTY OR CONDEMNATION. In the event any uninsured loss or damage
occurs to the assets being acquired by Seller from Owner, including the Assets,
after the date of the Purchase Agreement, but before Closing, which has an
adverse financial impact in excess of fifteen million dollars ($15,000,000) on
the value of such assets, Buyer shall be entitled to a reduction of the Purchase
Price. Buyer's share of any Purchase Price reduction as a result of an
uninsured loss shall be determined pursuant to Section 8.12. If the amount of
the Purchase Price reduction has not been determined by the date set for
Closing, the parties shall proceed to Close as scheduled and Subsection 2.1(d)
shall apply. In the event any insured loss, destruction, casualty or damage
occurs to the Assets after the date of this Agreement, but before Closing, or in
the event condemnation action is instituted on the Assets after the date of this
Agreement, but before Closing, then Seller shall assign to Buyer at Closing all
proceeds from such policies or condemnation action, and there shall be no
adjustment in the Purchase Price.
8.7 CONFIDENTIALITY. Hanson and Buyer have previously executed a
Confidentiality Agreement in the form attached hereto as Schedule 8.7.
Notwithstanding anything to the contrary in the Confidentiality Agreement, the
parties hereto covenant and agree that the terms and provisions of this
Agreement and all information and data obtained in connection with this
Agreement shall be treated as Evaluation Material in the Confidentiality
Agreement. Buyer shall require any third party which has not already executed
the Confidentiality Agreement and to which it intends to disclose any
information supplied under the Confidentiality Agreement or this Agreement to
countersign and assume all of the obligations and covenants of the
Confidentiality Agreement and deliver a copy of the Confidentiality Agreement to
Seller and Owner prior to delivery of any information to such third party. If
this Agreement is terminated for any reason, the foregoing covenant shall
survive the termination; if this Agreement is not so terminated, then the
foregoing covenant shall be deemed terminated at Closing.
8.8 ALLOCATION AND TAX MATTERS.
(a) The Purchase Price shall be allocated among the Assets in
accordance with Schedule 8.8 attached hereto. Seller and Buyer agree to
complete IRS form 8594 consistently with the foregoing allocation and to furnish
each other with a copy of
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such form prepared in draft form within forty five (45) days prior to the filing
due date for such form. Within fifty-five (55) days after the Closing, Buyer
shall submit to Seller a proposed detailed allocation schedule which is in all
respects consistent with Schedule 8.8. Thereafter, Buyer and Seller shall use
their respective best efforts to promptly agree to a final detailed schedule.
Neither Seller nor Buyer shall file any tax return or take a position with any
taxing authority that is inconsistent with the foregoing allocation.
(b) For purposes of preparing Washington Real Estate Excise Tax
affidavits provided for in RCW 82.45.150, the parties agree to use the market
value assessment as reflected on the county property tax rolls at the time of
Closing. The Buyer agrees to execute at Closing a Notice of Continuance,
incorporated in the Real Estate Excise Tax Affidavits provided for in RCW
82.45.150, continuing the forest land classification or designation of that
portion of the Timberland Properties in the State of Washington so classified or
designated as provided in RCW 84.33.140.
8.9 TERMINATION. This Agreement shall be terminated at any time prior to
the Closing:
(a) By mutual written agreement executed by Seller and Buyer; or
(b) By either party if applicable law (including but not limited to
the HSR Act) prohibits the consummation of the sale and purchase of the Assets
pursuant to this Agreement or if, at the Closing Date, any action, proceeding or
investigation shall have been instituted or threatened in writing by any
governmental agency seeking to enjoin, restrain, prohibit, impose material
conditions upon or obtain substantial damages in respect of, the transactions
contemplated by this Agreement;
(c) By either party as provided in Section 3.2; or
(d) By either party if the Purchase Agreement is terminated for any
reason.
Upon such termination, neither of the parties shall have any liability or
further obligation arising out of this Agreement except as expressly stated in
this Agreement.
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8.10 ACCESS PENDING CLOSING. Owner has agreed that Buyer may, upon
reasonable notice to Owner, have access to the Timberland Properties, and other
Assets for purposes of conducting due diligence investigations and preparing for
transition of ownership, all in accordance with the terms and conditions of the
Access Agreement previously executed by Buyer, a copy of which is attached
hereto as Schedule 8.10.
8.11 BUYER'S DUE DILIGENCE.
(a) Buyer may conduct due diligence examinations during a period
commencing on the date hereof and ending at the close of business on the day
prior to the Closing Date (the "Due Diligence Period"). In the event that Buyer
makes a reasonable and objective determination that there are Price Adjustment
Items as defined in Section 8.11(d), Buyer will have the right, but only during
the Due Diligence Period, to notify Seller in writing, with reasonable detail,
of said Price Adjustment Items; provided, that no such written notice given to
Seller later than April 8, 1996, shall include a Price Adjustment Item relating
to environmental matters.
(b) In the event Buyer makes a reasonable and objective determination
that there are Price Adjustment Items as defined in Section 8.11(d) which will
have an adverse financial impact in the Price Adjustment Formula set forth in
Section 8.11(e), Buyer will have the right to deliver to Seller, but only during
the Due Diligence Period, a notice that Buyer is entitled to an adjustment in
the Purchase Price (the "Price Adjustment Notice"), provided that no Price
Adjustment Notice given later than April 8, 1996, shall include a Price
Adjustment Item relating to environmental matters. The Price Adjustment Notice
shall be accompanied by a schedule setting forth in reasonable detail Buyer's
computation of the dollar amount of the Price Adjustment Items. Seller shall
deliver the Price Adjustment Notice to Owner as one of Seller's Price Adjustment
Notices. Buyer hereby appoints Seller as its agent to pursue a price reduction
as specified in the Price Adjustment Notice. Subject to the provisions of the
Purchase Agreement, Seller agrees to use reasonable diligence in pursuing a
price reduction with respect to the matters referred to in each such Price
Adjustment Notice.
(c) If Buyer provides written notice of Price Adjustment Items as
provided in Subsection (a) above but does not
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deliver to Seller the Price Adjustment Notice described in Subsection (b) above
during the Due Diligence Period, Buyer will have the right, within six (6)
months after Closing, to deliver to Seller a notice (the "Post Closing
Adjustment Notice"). The Post Closing Adjustment Notice shall be accompanied by
a schedule setting forth in reasonable detail Buyer's computation of the dollar
amount of the Price Adjustment Items that provide the basis for the Post Closing
Adjustment Notice; provided however, the Post Closing Adjustment Notice cannot
allege an adverse financial impact greater than fifteen million dollars
($15,000,000) (the First Threshold). Seller shall deliver the Post Closing
Adjustment Notice to Owner as one of Seller's Post Closing Adjustment Notices
and shall pursue an adjustment in the First Threshold as contemplated by Section
10.4 of the Purchase Agreement; provided that if the Post Closing Adjustment
Notices exceed Fifteen Million Dollars ($15,000,000) in the aggregate, each such
notice shall be reduced pro rata so that the total does not exceed Fifteen
Million Dollars ($15,000,000). The adjustment so determined shall not adjust
the Purchase Price, but shall be carried forward as a portion of the First
Threshold in making the calculations in Section 10.4(c) of the Purchase
Agreement.
(d) In determining the adverse financial impact for purposes of
Section 8.11(a), the following items shall be taken into account as Price
Adjustment Items:
(i) Failure of Owner to be vested in title in more than five
hundred (500) acres of the Timberland Properties described in the Title Reports
attached to this Agreement as Schedule 4, and the threshold provisions of
Section 8.11 and the allocation provisions of Section 8.12 shall not apply to
any such Price Adjustment Item (i.e., the Purchase Price shall be reduced by the
amount of the adverse financial impact of such Item), nor shall the reduction in
Purchase Price for such Item reduce the threshold provisions for purposes of
Section 10.4 of the Purchase Agreement. As used in this Subsection (i), "vested
in title" means that the applicable Title Report states that Owner (or any of
the three Owners) is vested in title (without regard to exceptions or objections
noted in such Title Report);
(ii) The existence of any exception to title on any portion of
the Timberland Properties: (a) which was not shown on Schedule 4, and (b) which
was not disclosed on any other Schedule attached to this Agreement, and (c)
which materially
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interferes with the use thereof for the production and harvesting of timber;
provided that the threshold provisions of Section 8.11 and the allocation
provisions of Section 8.12 shall not apply to such Price Adjustment Item if the
exception to title was created by Owner after the date of the applicable Title
Report and was not either created in the ordinary course or consented to by
Buyer, nor shall the reduction in Purchase Price for such Item reduce the
threshold provisions for purposes of Section 10.4 of the Purchase Agreement.
(iii) The presence of any hazardous substances or materials,
wastes, toxics, or contaminants in, on or under any of the Indemnification
Properties (but only until April 8, 1996, and only to the extent they were not
disclosed in Schedule 6.6).
(iv) Any breach of representations of Seller in Section 6 of this
Agreement during the Due Diligence Period, but with respect to Section 6.6, only
if included in a Price Adjustment Notice given not later than April 8, 1996;
provided, that in determining the adverse financial impact for breach of
representations of Seller, any benefit to Buyer caused by such breaches of
representations of Seller and other breaches of representations of Seller during
the Due Diligence Period shall be offset or taken into account.
(e) PRICE ADJUSTMENT FORMULA. As used in this Section 8.11 (and in
Sections 10.4(b) and (c) of the Purchase Agreement), the term "First Threshold"
means fifteen million dollars ($15,000,000); the term "Second Threshold" means
twenty five million dollars ($25,000,000); the term "Third Threshold" means
thirty five million dollars ($35,000,000). Subject to the provisions of Section
8.12, if the First Threshold, but not the Second Threshold, is met, the purchase
price under the Purchase Agreement shall be reduced by fifty percent (50%) of
the amount of the adverse financial impact in excess of the First Threshold; and
if the Second Threshold, but not the Third Threshold, is met, the purchase price
under the Purchase Agreement shall be additionally reduced by two-thirds of the
amount of the adverse financial impact in excess of the Second Threshold; and if
the Third Threshold is met, the purchase price under the Purchase Agreement
shall be additionally reduced by one hundred percent (100%) of the amount of the
adverse financial impact in excess of the Third Threshold.
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8.12 ALLOCATION OF PRICE REDUCTION.
No Purchase Price reduction will be allowed to Buyer under this Agreement
unless a purchase price reduction is allowed to Seller under the Purchase
Agreement. If a purchase price reduction is allowed to Seller under the
Purchase Agreement, except as expressly provided in Section 8.11(d), Buyer will
be entitled to a fraction of such reduction, the numerator of which shall be
Buyer's total allowed Purchase Price adjustment claims and the denominator of
which shall be the total purchase price adjustment claims submitted by Seller to
Owner pursuant to the Purchase Agreement and allowed. Buyer shall be bound by
any proceeding or agreement between Owner and Seller determining the amount of
any Purchase Price adjustment.
8.13 ENFORCEMENT OF SELLER'S RIGHTS. Seller agrees to use commercially
reasonable efforts as determined by Seller in its reasonable judgment to enforce
the obligations of Owner under Sections 3.6, 5(a), 5(c), 8.1, 11.3(b), and
11.3(c) of the Purchase Agreement. Buyer shall reimburse Seller for Seller's
expenses related to such enforcement in accordance with the formula for sharing
of arbitration costs under the Purchase Agreement set forth in Section 9.2 of
this Agreement.
8.14 SELLER'S KNOWLEDGE. In the event that Seller obtains knowledge prior
to the Closing Date of any material fact which, if known to Owner, would result
in a breach of a representation or warranty of Owner under the Purchase
Agreement, Seller shall notify Owner so that Owner will have knowledge of such
fact.
9. DEFAULT; REMEDIES; ARBITRATION.
9.1 DEFAULT; REMEDIES. Time is of the essence of this Agreement. If
either party fails or refuses to carry out this Agreement according to its
terms, the other party shall be entitled to the remedies set forth below.
(a) BUYER'S DEFAULT. Except as otherwise provided in this Agreement,
in the event Buyer fails, without legal excuse, to complete the purchase of the
Assets pursuant to this Agreement, Seller shall be entitled to terminate this
Agreement and/or pursue any and all remedies available at law or in equity by
reason of Buyer's breach or default, including without limitation, specific
performance and damages for any failure by
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Buyer to perform the obligations to be performed by it from and after the date
of this Agreement.
(b) SELLER'S DEFAULT. Except as otherwise provided in this
Agreement, in the event Seller fails or refuses to complete the purchase of the
Assets or is otherwise in breach or default of its obligations in this
Agreement, Buyer shall be entitled to terminate this Agreement and/or pursue any
and all remedies available at law or in equity by reason of Seller's breach or
default, including without limitation, specific performance and damages for any
failure by Seller to perform the obligations to be performed by it from and
after the date of this Agreement; provided, however, that Buyer's sole remedy
against Seller for Seller's breach of Section 6 and the representations set
forth therein shall be as set forth in Section 8.11 and the indemnification by
Seller of Buyer as set forth in Section 10.
(c) OWNER DEFAULT. Notwithstanding the foregoing, Buyer shall have
no rights against Seller if Seller's failure to transfer the Assets to Buyer
results from a default by Owner under the Purchase Agreement. If Seller elects
to seek damages as a result of a default by Owner under the Purchase Agreement
and if any award to Seller includes any amount with respect to damages suffered
by Buyer, Seller shall pay such amount to Buyer minus Buyer's share of expenses
determined pursuant to the formula for allocation of expenses of arbitration
under the Purchase Agreement set forth in Section 9.2. If Seller seeks specific
performance of Owner's obligations under the Purchase Agreement, Seller agrees
that it will not terminate this Agreement pursuant to Section 8.9(d) if Buyer
agrees to be bound by the outcome of such specific performance proceeding and if
Buyer agrees to reimburse Seller for the costs of such proceeding in the
proportion that the Purchase Price bears to One Billion Five Hundred Eighty
Eight Million Dollars ($1,588,000,000).
9.2 ARBITRATION. This Agreement shall not be subject to termination
except as specifically provided in this Agreement. Any question, controversy or
claim arising under or relating to this Agreement, shall be settled by
arbitration in accordance with the rules of the American Arbitration Association
and the provisions of the laws of the State of Washington relating to
arbitration, as said rules and laws are in effect on the date of this Agreement.
The arbitration shall be conducted in Vancouver, Washington, by and before a
single arbitrator, who is experienced
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in the problem or problems in dispute, to be agreed upon by the Seller and
Buyer, or if they are unable to agree upon an arbitrator within ten (10) days
after written demand by either party for arbitration, then, at the written
request of either party, the arbitrator shall be appointed by the American
Arbitration Association, or failing such appointment, by the Superior Court in
and for the County of Clark, State of Washington. Proceedings to obtain a
judgment with respect to any award rendered hereunder shall be undertaken in
accordance with the law of the State of Washington including the conflicts of
laws provisions thereof.
Each party shall pay one-half of the arbitrator's fees and expenses. Upon
application to the arbitrator, the parties shall be entitled to limited
discovery, including only exchange of documents and only depositions on such
terms as the arbitrator may allow for purposes of fairness and to reduce the
overall time and expense of the arbitration.
Buyer shall also reimburse Seller for the costs of any arbitration under
the Purchase Agreement, including arbitrator's fees and reasonable attorney's
fees, incurred by Seller in the proportion that the claims related to the Assets
bears to the total of all claims involved in the arbitration. In any
arbitration proceeding under the Purchase Agreement including any arbitration
related to a Purchase Price adjustment claim or indemnification claim which
relates to the Assets, Seller agrees to request of the arbitrator that Buyer be
allowed to participate in the arbitration. Buyer shall be allowed to
participate to the extent allowed by the arbitrator.
10. INDEMNIFICATION AND RELATED MATTERS.
10.1 INDEMNIFICATION.
(a) Seller agrees to defend, indemnify and hold Buyer and its
parents, subsidiaries, affiliates, predecessors, successors and assigns (and
their respective officers, directors, employees and agents) harmless from and
against any and all loss, claims, liabilities, damages, costs and expenses,
including attorneys fees incurred with respect to third parties ("Damages")
resulting from, based upon, or arising out of:
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(i) subject to Section 10.4(a), (b) and (c), all of the Excluded
Liabilities set forth in Section 1.8(b);
(ii) subject to Section 10.4, and taking into account any
adjustments made for such breach in Section 8.11, breaches of Seller's
representations set forth in Section 6;
(iii) subject to Section 10.4, claims of third parties that are
asserted after Closing, to the extent the basis of such claims arose prior to
Closing; provided, that this Subsection (iii) shall only apply to a claim which
will result in loss to Buyer in excess of $100,000; and provided further, that
the indemnity in this Subsection (iii) shall not apply at all to matters
disclosed on Schedule 6.4 or to matters covered by Section 8.11 or to matters
for which Buyer is indemnifying Seller as provided in this Agreement;
(iv) subject to Section 10.4, permits, licenses, or Contracts
(which are not Material Contracts) assumed by Buyer pursuant to Section 1.8 but
which were not disclosed to Buyer in any Schedule attached to this Agreement;
provided, that this Subsection (iv) shall only apply to a permit, license, or
Contract: (a) which will require Buyer to pay more than $100,000 in any
twelve-month period, and (b) which will not expire and cannot be terminated
within twelve months of Closing without penalty, liability, or premium, and (c)
which provides no material benefit to Buyer; and
(v) all actions, claims, suits, proceedings, demands,
assessments, judgments, costs and expenses, including attorneys' fees (incurred
with respect to third parties), with respect to the foregoing.
(b) Buyer agrees to save, defend, indemnify and hold Seller and Owner
and its general partners, parents, subsidiaries, affiliates, predecessors,
successors and assigns (and their respective officers, directors, employees and
agents) harmless from and against any loss, claims, liabilities, damages, costs
and expenses, including attorneys' fees incurred with respect to third parties
("Damages") resulting from, based upon, or arising out of:
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(i) any breaches, occurring before, at or after Closing, of
Contracts, permits, licenses, and all other agreements and obligations
transferred or assigned to Buyer;
(ii) the operation, management or condition of the Assets,
whether arising before, at or after the Closing, excluding only those matters
covered by Section 10.1(a)(i) above;
(iii) all matters assumed by the Buyer pursuant to any and all
provisions of this Agreement or any related agreement; and
(iv) all actions, claims, suits, proceedings, demands,
assessments, judgments, costs and expenses, including attorneys' fees (incurred
with respect to third parties), with respect to the foregoing.
Wherever this Agreement provides for Buyer's indemnification of Owner, the
term "Owner" shall mean each or all of CERI, CFII, and Hanson.
10.2 DETERMINATION OF DAMAGES; CLAIMS. In calculating any amounts payable
to Buyer pursuant to Section 10.1(a) or payable to Seller pursuant to Section
10.1(b), Seller or Buyer, as the case may be, shall receive credit for (i) any
reduction in tax liability as a result of the facts giving rise to the claim for
indemnification, and (ii) any insurance recoveries.
10.3 DEFENSE OF CLAIMS BY THIRD PARTIES. If any claim is made against
Buyer or Seller that, if sustained, would give rise to a liability of the other
under this Agreement, Buyer or Seller, as the case may be, shall promptly cause
notice of the claim to be delivered to the other and shall afford the other and
its counsel, at the other's sole expense, the opportunity to defend, with
counsel reasonably satisfactory to the party against which such claim is made,
or settle the claim. If either party takes said opportunity to settle the claim,
such party shall obtain a release of the other party in any settlement agreement
with the third party. In the event of an indemnification claim by Buyer against
Seller, Seller may cause Owner to undertake the defense in which event Owner
shall have the opportunity to settle the claim as provided above.
10.4 LIMITATIONS ON THE INDEMNIFICATION.
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(a) With respect to Seller's indemnification of Buyer pursuant to
Sections 10.1(a), Buyer shall promptly inform Seller in writing of each such
matter, as and when Buyer becomes aware of such matter, and shall keep complete
and accurate records of actual damages incurred by Buyer as a result thereof.
(b) Notwithstanding any other provision of this Agreement, Seller's
obligations for indemnification of Buyer and all Other Purchasers shall not
exceed the proceeds of indemnification recoveries by Seller from Owner. Seller
agrees to submit all of Buyer's indemnification claims to Owner as Seller's
indemnification claims. Buyer hereby appoints Seller as Buyer's agent to pursue
such indemnification claims. Seller agrees to use reasonable diligence in the
pursuit of such claims. Buyer shall be bound by the results of any proceedings
under the Purchase Agreement to determine the validity of Seller's
indemnification claims.
(c) Buyer shall be entitled to its pro rata share of total recoveries
by Seller for (i) Purchase Price adjustment claims subject to the allocation
provisions of Section 8.12, and (ii) indemnification claims submitted by Seller
to Owner under the Purchase Agreement. Amounts payable to Buyer from
indemnification claims recovered subsequent to payment of Purchase Price
adjustment claims shall be adjusted to reflect amounts paid with respect to such
Purchase Price adjustment claims.
(d) Notwithstanding anything to the contrary to this Agreement,
Seller shall not be obligated to indemnify Buyer on any claim for
indemnification submitted by Buyer to Seller after December 31, 1998, except for
matters arising under Section 10.1(a)(i).
11. EMPLOYEE MATTERS.
11.1 DEFINITIONS.
(a) EMPLOYEES. The term "Employees" shall mean all of the persons
actively employed by Owner exclusively in connection with the Timberland
Properties in daily operations in hourly or salaried status immediately
preceding the Closing, and those persons identified in Schedule 11.2(f) as
employed by Owner in daily operations in connection with the Timberland
Properties who
ASSET SALE, PURCHASE AND
TRANSFER AGREEMENT 36
<PAGE>
are either (a) on disability, or (b) on leave of absence. This does not include
persons listed in Schedule 11.1(a), which lists executive officers of Owner.
(b) TRANSFERRING EMPLOYEES. All Employees who apply for, are
offered, and who accept employment with Buyer on the Closing Date or within 90
days thereafter.
(c) INTENTIONALLY OMITTED.
(d) LIST OF EMPLOYEES. Schedule 11.1(d) sets forth a true and
correct list of all Employees, together with their respective job titles, hourly
rates or base salary, date of birth, Social Security number, and most recent
date of hire (or credited service), as of ten (10) days prior to the date of
this Agreement, and will be updated to be true and correct as of ten (10) days
prior to the Closing Date.
11.2 APPLICATIONS/HIRING.
(a) Within ten (10) days after the date this Agreement is signed,
Seller will provide applications for employment to all Owner's Employees, as
defined in 11.1(d) above.
(b) Employees from whom applications will be solicited by Buyer will
also be provided with a document or documents setting forth the essential terms
and conditions of employment under which Buyer intends to operate the Assets.
Buyer will provide such information to Seller promptly following the execution
of this Agreement. Buyer will consider applications from all Employees who
apply for employment under such terms and conditions of employment pursuant to
its normal hiring procedure. If applications acceptable to Buyer are received
from Salaried Employees, offers of employment shall be extended within fifteen
(15) working days of application receipt or as soon as reasonably practical
thereafter. Offers to other Employees who submit application and who are
acceptable to Buyer will be extended on or before the Closing Date.
(c) SALARIED TERMS AND CONDITIONS. Solicitations of salaried
Employees who submit applications for employment with Buyer will be made on
terms and conditions of employment consistent with and generally applicable to
Buyer's salaried work force in positions of like status and pay. However, in
order to
ASSET SALE, PURCHASE AND
TRANSFER AGREEMENT 37
<PAGE>
minimize Owner's severance cost, Buyer agrees to offer employment to at least
eight (8) salaried Employees (or to such lesser number if such lesser number of
salaried Employees apply), and that those salaried Employees offered employment
will be hired at 96 percent or more of their Base pay with Owner as listed in
Schedule 11.1(d).
(d) NONUNION HOURLY TERMS AND CONDITIONS. Solicitations of Owner's
nonunion hourly Employees who submit applications for employment with Buyer will
be made as Buyer may determine on terms and conditions of employment consistent
with their existing terms and conditions or terms and conditions consistent with
and generally applicable to Buyer's nonunion hourly work force in positions of
like status and pay in similar type operations of Buyer in the same region or
geographic proximity.
(e) INTENTIONALLY OMITTED.
(f) DISABLED EMPLOYEES/LEAVE OF ABSENCES. Employees identified in
Schedule 11.2(f) who make application, are offered, and accept employment must
begin employment as evidenced by having worked at least one (1) compensable day
with Buyer no later than the first working day of the sixth (6th) month
following the month in which the Closing Date occurs unless otherwise provided
by law or extended by Buyer.
11.3 EMPLOYMENT OBLIGATIONS OF SELLER AND BUYER.
(a) BUYER'S OBLIGATIONS/EMPLOYMENT CLAIMS.
(i) Subject to the provisions of Section 11.4 and Section 11.5,
Buyer agrees to assume all employment-related obligations accruing on or after
the Closing Date pertaining to Transferring Employees including, without
limitation, compensation for services performed for Buyer (and related
employment and withholding taxes); benefits accrued under any Buyer-sponsored
employee welfare or pension benefit plan (as defined under ERISA Sections 3(1)
and 3(2), respectively); benefits accrued under any other employee benefit plan
or arrangement of Buyer covering the Transferring Employees; and workers'
compensation benefits with respect to claims relating to events occurring on or
after the Closing Date or filed more than
ASSET SALE, PURCHASE AND
TRANSFER AGREEMENT 38
<PAGE>
one-hundred eighty (180) days after the Closing Date, regardless of date of
accident or illness.
(ii) Buyer will retain all liability for all claims, losses,
damages, and expenses (including, without limitation, reasonable attorney's
fees), and other liabilities and obligations relating to or arising out of all
unfair labor practice charges, wrongful termination litigation, employment
discrimination charges, severance claims, health and welfare claims, retirement
claims and any other claims related to employment and based upon Buyer's conduct
on or after the Closing Date which are filed within applicable statutes of
limitations.
(b) SELLER'S OBLIGATION/EMPLOYMENT CLAIMS.
(i) Subject to the provisions of Section 11.4 and 11.5, Owner
has agreed to assume all employment related obligations with respect to all
Employees accruing prior to the Closing Date including, without limitation,
compensation for services performed for Owner (and related employment and
withholding taxes); benefits accrued under any Owner sponsored employee welfare
or pension plan (as defined under ERISA Sections 3(1) and 3(2) respectively)
covering the Employees or former Employees prior to or after the Closing Date;
benefits accrued under any other employee benefit plan or arrangement of Owner
covering the Employees or former Employees prior to or after the Closing Date;
and workers' compensation benefits with respect to claims filed before the
Closing Date or within one hundred eighty (180) days after the Closing Date and
relating to events occurring prior to the Closing Date.
(ii) Owner has agreed to retain all liability for any and all
claims, losses, damages, and expenses (including, without limitation, reasonable
attorney's fees) and other liabilities and obligations relating to or arising
out of all unfair labor practice charges, wrongful termination litigation,
employment discrimination charges, severance claims, health and welfare claims,
asbestos claims, retirement claims, OSHA citations and any other claims arising
out of any employment and based upon Owner's conduct occurring prior to the
Closing Date including actions filed as of the Closing Date or filed thereafter
within applicable statutes of limitations.
ASSET SALE, PURCHASE AND
TRANSFER AGREEMENT 39
<PAGE>
(c) COBRA. Owner has agreed to be responsible for the health care
coverage of any Employees as may be required by COBRA under affected Owner
Welfare Plans. After the Closing Date, Owner has agreed that it shall ensure
that the option of continuing health care coverage under the Owner Welfare Plans
is extended to the Employees to the extent required by COBRA. Buyer shall be
responsible for providing health care continuation coverage as required by COBRA
to any Transferring Employees terminated by Buyer after the Closing Date.
(d) VACATION OBLIGATIONS/TRANSFERRING EMPLOYEES.
(i) Vacation earned as of May 1, 1996 and to be taken in 1996 by
Transferring Employees under Owner's vacation policy will be credited to
Transferring Employees on the Closing Date to the extent not then taken. Buyer
shall grant Transferring Employees time off with pay (vacation) for this full
credited amount, or pay in lieu of time off for any portion not taken by
December 31, 1996. Promptly following receipt of payment from Owner Seller
shall pay to Buyer the amount of such earned vacation pay payable by Buyer to
such Transferring Employees.
(ii) Vacation accruing in 1996 to be taken in 1997 by
Transferring Employees will be determined in accordance with Buyer's vacation
policy. In the application of Buyer's vacation policy, Buyer shall recognize
service of such Employees with Owner and its predecessors to the extent Owner
recognized such service under its vacation policy. Seller shall provide Buyer,
on or before the Closing Date, with a list of such recognized service including
the number of vacation weeks earned under Owner's Plan for all Employees as of
May 1, 1996. For those Transferring Employees who remain in Buyer's employment
until at least January 1, 1997, Buyer will accrue vacation from January 1, 1996
notwithstanding the fact that the Transferring Employees were not its Employees
until after the Closing Date. For those who do not remain in employment with
Buyer until year end, vacation will accrue 1/12 pro rata for each completed
calendar month of employment between the Closing Date and December 31, 1996.
(e) SEVERANCE PAY OBLIGATIONS.
ASSET SALE, PURCHASE AND
TRANSFER AGREEMENT 40
<PAGE>
(i) Owner has assumed all severance pay obligations, if any, for
all Employees who are not hired by Buyer pursuant to Owner's policies, plans, or
agreements relating to severance from employment.
(ii) Any salaried Transferring Employee hired by Buyer who is
terminated during the first six (6) months following the month in which the
Closing Date occurs, for reasons other than cause or misconduct, shall receive
severance pay from Buyer equal to that which he or she would have received under
Owner's severance pay policies as written on January 1, 1996, generally
applicable to Owner's Employees in like positions and pay status in the same
amount which would have been payable had such salaried Transferring Employee not
been hired by Buyer. Seller shall provide Buyer with copies of Owner's
applicable policies as soon as reasonably practical after signing of this
Agreement.
(iii) Any salaried Transferring Employee hired by Buyer who is
terminated by Buyer after the six (6) month period in (ii) above or any other
Transferring Employee will receive severance pay, if any, in accordance with
Buyer's severance pay policies uniformly applicable to other Employees in
positions of similar status and pay. In the application of such policies, Buyer
shall recognize the Transferring Employee's service with Owner from his or her
most recent date of hire with Owner.
11.4 EMPLOYEE BENEFITS.
(a) All Transferring Employees who accept employment with Buyer and
commence such employment immediately on the Closing Date will be, starting on
the Closing Date, covered by Buyer's existing employee benefit plans in
accordance with their terms and will be subject to Buyer's existing employment
policies, as applicable to Buyer's Employees who are similarly situated.
Transferring Employees shall be credited with their service with Owner from
their most recent date of hire for purposes of vesting, participation and
eligibility (but not benefit calculations, except as provided in Section 11.5(c)
pertaining to certain Salaried Employees), under Buyer's plans and policies, as
though such service had been with Buyer.
(b) With respect to Buyer medical coverage, there shall be no waiting
period for participation by Transferring Employees or their covered dependents
and they shall be credited
ASSET SALE, PURCHASE AND
TRANSFER AGREEMENT 41
<PAGE>
with any deductibles satisfied under Owner's medical plans for claims incurred
during calendar year 1996 in meeting the deductible requirements of Buyer's
plans. Buyer will also waive any preexisting condition restrictions under the
Buyer Welfare Plans with respect to Transferring Employees or their dependents.
(c) Buyer will provide no benefit coverage to a Transferring Employee
or his or her dependents to the extent that such person has not reported to work
and continues to be eligible by reason of disability under the Owner Welfare
Plans in accordance with their terms as in effect immediately prior to the
Closing Date.
(d) In particular, but without limitation, (i) claims for medical,
hospital or other health care expenses incurred by Transferring Employees or
their dependents on or after the Closing Date shall be covered under the Buyer
Welfare Plans, subject to the limitations thereof and claims for such expenses
incurred by Transferring Employees or their dependents prior to the Closing Date
shall be covered, subject to the limitations thereof (but in accordance with the
terms of this Agreement), under Owner's Welfare Plans; (ii) claims of
Transferring Employees or their dependents for life insurance, accidental death
and dismemberment and disability benefits with respect to death, disability or
other injury occurring on or after the Closing Date shall be covered under
Buyer's Welfare Plans, and claim for such benefits with respect to death,
disability or injury occurring prior to the Closing Date shall be covered under
Owner's plans (as applicable). The amount and type of benefits payable in any
case shall be determined in accordance with the terms of the applicable Welfare
Plan. Seller and Buyer acknowledge that certain Transferring Employees who will
have attained age 65 or age 55 and 5 years of service for purposes of Owner's
retiree medical plan as of the Closing Date will be eligible to elect retiree
medical coverage under Owner's retiree medical plan, but only if they do so
immediately after the Closing Date; that such coverage requires payment of
contributions in an amount determined by Owner pursuant to Owner's retiree
medical plan with respect to all participants in such retiree plans and is
secondary to active coverage under Buyer's medical plans while the Transferring
Employees are participating in any of Buyer's medical plans which may cover such
Employees.
ASSET SALE, PURCHASE AND
TRANSFER AGREEMENT 42
<PAGE>
11.5 RETIREMENT PLAN MATTERS.
(a) OWNER RETIREMENT PLANS. "Owner Retirement Plans" shall mean the
Cavenham Forest Industries Inc. Retirement Plan for Hourly Paid Employees and
Cavenham Forest Industries Inc. Retirement Plan for Salaried Employees.
(b) VESTING OF BENEFITS. As of the Closing Date, all Transferring
Salaried Employees shall become fully vested in their accrued benefits under the
Owner Retirement Plans. Buyer will recognize past service credited under the
Owner's Retirement Plan for purposes of determining vesting requirements under
Buyer's Plan for Transferring Employees.
(c) DETERMINATION OF BENEFITS/PAYMENT OF SUPPLEMENT. Seller will
provide Buyer with a statement, within 180 days of Closing, listing credited
service and accrued benefits (expressed as a Single Life Annuity) through the
Closing Date as determined under Owner's Plan for Salaried Employees (the "CSAB
Statement"). Such accrued benefit amounts shall be listed in the CSAB Statement
for each Transferring Employee. The accrued benefit amount shall be calculated
by Owner's actuary, Hewitt Associates, in consultation with Seller, using
assumptions shown on the CSAB Statement in conjunction with Owner's current
retirement plan formula. Buyer shall provide each salaried Transferring
Employee, upon retirement, a supplemental retirement benefit under its Salaried
Retirement Plan, or under such other form of supplemental plan or payment
acceptable to Buyer, (a "Supplement") equal to:
(i) the age 62 Single Life Annuity amount, taking into account
the credited service listed in the CSAB Statement as applied to the benefit
formula of Buyer's Salaried Retirement Plan, using compensation with Buyer at
retirement, minus,
(ii) the amount of accrued benefit set forth in the CSAB
Statement for each such salaried Transferred Employee.
If the Supplement is provided under Buyer's Salaried Retirement Plan, such
Supplement shall be adjusted pursuant to any options elected by such Employee
pursuant to such plan. If provided outside of Buyer's Salaried Retirement Plan,
such Supplement will be calculated on an actuarial equivalent basis, using
assumptions no less favorable than the assumptions listed
ASSET SALE, PURCHASE AND
TRANSFER AGREEMENT 43
<PAGE>
on Schedule 11.5(c) which are used by Owner in determining the accrued benefit
amount. Such Supplement shall be in addition to any benefits earned by such
Employees as a participant in Buyer's Salaried Retirement Plan based upon their
credited service with Buyer and compensation from Buyer after the Closing Date.
If Buyer does not have a defined benefit retirement plan, the Supplement
(for this purpose calculated by using Seller's retirement plan formula and the
actuarial assumptions set forth on Schedule 11.5(c)) shall be provided to the
Transferring Employee hired by Buyer through an alternative form (such as a
single-life annuity or a lump sum payment of the present value of such
Supplement).
At the time Seller provides the CSAB Statement to Buyer, Seller shall pay
to Buyer an amount equal to the present value of the Supplements to be provided
to the salaried Transferring Employees calculated for this purpose by using
Seller's retirement plan formula and the actuarial assumptions set forth on
Schedule 11.5(c).
(d) HOURLY RETIREMENT PLAN. For hourly Transferring Employees, Owner
remains responsible for all liabilities of the Cavenham Forest Industries Inc.
Retirement Plan for Hourly Paid Employees for benefits accrued as of the Closing
Date. After the Closing Date, Buyer will provide an appropriate Hourly
Retirement Plan for all Transferring Employees consistent with Buyer's existing
retirement plans covering similarly situated Employee throughout the country.
Buyer will credit Transferring Employees with service since their most recent
date of hire with Owner for purposes of meeting the vesting requirements of
Buyer's plan covering such Employees.
11.6 EMPLOYEE PAYROLL INFORMATION. Seller shall transfer to Buyer copies
of any records relating to withholding and payment of income and unemployment
taxes (federal, state and local) and FICA and FUTA taxes with respect to wages
paid to Employees hired by Buyer for the calendar year in which the Closing
occurs (including, without limitation, Forms W-4 and Employee's Withholding
Allowance Certificate). Buyer shall provide such Employees with Forms W-2, Wage
and Tax Statement, for the calendar year in which the Closing occurs setting
forth the wages paid and taxes withheld with respect to such Employees for such
calendar year by Owner and Buyer as predecessor and
ASSET SALE, PURCHASE AND
TRANSFER AGREEMENT 44
<PAGE>
successor Employees, respectively, as provided by Revenue Procedure 84-77.
11.7 NO THIRD-PARTY BENEFICIARY. This Agreement is being entered into
solely for the benefit of the parties hereto, and the parties do not intend that
any Employee or any other person shall be a third-party beneficiary of the
covenants by either Seller or Buyer contained in this Agreement; provided,
however, that any Transferring Salaried Employee shall have the right to
directly enforce the provisions of Section 11.5(c) against Buyer, and if legal
action is instituted in connection therewith, the prevailing party shall be
entitled to its reasonable attorney fees as set by the court or courts at trial
and on any appeal.
11.8 LABOR MATTERS. As of the date hereof, but not as of the Closing Date
or any other date, except as set forth in Schedule 11.8, (i) within the last two
years Owner has not experienced any material work stoppage due to labor
disagreements with respect to the Timberland Properties; (ii) there is no unfair
labor practice, charge, or complaint against Owner relating the Timberland
Properties pending or, to the knowledge of Owner, threatened, before the
National Labor Relations Board or other similar local tribunal; (iii) there is
no labor strike, request for representation, slowdown or stoppage actually
pending, or to the knowledge of Owner, threatened against or affecting Owner
relating to the Timberland Properties; (iv) to the knowledge of Owner, no
question concerning representation as defined in the National Labor Relations
Act is pending or threatened against Owner respecting the Timberland Properties;
and (v) no arbitration proceeding arising out of or under any collective
bargaining agreement relating to the Timberland Properties is pending or, to the
knowledge of Owner, is threatened.
11.9 INDEMNIFICATION. Anything in this Agreement to the contrary
notwithstanding, Buyer agrees to indemnify Seller against and hold Seller and
Owner harmless from any and all claims, losses, damages, expenses, obligations
and liabilities arising out of or otherwise in respect of any failure of Buyer
to discharge its obligation under this Section 11. Anything in this Agreement
to the contrary notwithstanding, Seller agrees to indemnify Buyer against and
hold Buyer harmless from any and all claims, losses, damages, expenses,
obligations and liabilities arising out of or otherwise in respect of any
failure of Seller
ASSET SALE, PURCHASE AND
TRANSFER AGREEMENT 45
<PAGE>
to discharge its obligations under this Section 11. This indemnity shall
survive closing.
12. MISCELLANEOUS.
12.1 FINDERS. Buyer and Seller respectively represent and warrant that
they have not employed or utilized the services of any broker or finder in
connection with this Agreement or the transactions contemplated by it. Seller
shall indemnify and hold Buyer harmless from and against any and all claims for
brokers' commissions made by any third party as a result of this Agreement and
the transaction contemplated hereunder to the extent that any such commission
was incurred, or alleged to have been incurred, by, through or under Seller.
Buyer shall indemnify and hold Seller harmless from and against any and all
claims for brokers' commissions made by any third party as a result of this
Agreement and transactions contemplated hereunder to the extent that any such
commission was incurred, or alleged to have been incurred, by, through or under
Buyer.
12.2 ENTIRE AGREEMENT. This Agreement (with its Schedules and Exhibits)
contains, and is intended as, a complete statement of all of the terms of the
arrangements between the parties with respect to the matters provided for,
supersedes any previous agreements and understandings between the parties with
respect to those matters, and cannot be changed or terminated orally.
12.3 GOVERNING LAW. Seller and Buyer each hereby consent to personal
jurisdiction in any action brought with respect to this Agreement and the
transactions contemplated hereunder in the State of Washington and to the
arbitration described in Section 9.2. Section 9.1 of this Agreement shall be
governed by and construed in accordance with the law of the State of Washington
generally, and RCW 64.04.005 specifically, without giving effect to conflicts of
law principles thereof. The balance of this Agreement shall be governed by and
construed in accordance with the laws of the State of Washington, including the
conflicts of laws principles thereof.
12.4 TABLES OF CONTENTS AND HEADINGS. The table of contents and section
headings of this Agreement and titles given to Schedules to this Agreement are
for reference purposes only and are to be given no effect in the construction or
interpretation of this Agreement.
ASSET SALE, PURCHASE AND
TRANSFER AGREEMENT 46
<PAGE>
12.5 NOTICES. All notices and other communications under this Agreement
shall be in writing and shall be deemed given when delivered personally or
mailed by registered mail, return receipt requested, to the parties at the
following addresses (or to such address as a party may have specified by notice
given to the other party pursuant to this provision):
If to Seller to:
Willamette Industries, Inc.
1300 S.W. Fifth Avenue, Suite 3800
Portland, Oregon 97201
Attention: Chief Financial Officer
With a copy to:
Miller, Nash, Wiener, Hager & Carlsen
111 S.W. Fifth Avenue, Suite 3500
Portland, Oregon 97204
Attention: J. Franklin Cable
If to Buyer to:
Crown Pacific Limited Partnership
121 S.W. Morrison Street
Suite 1500
Portland, Oregon 97204
Attention: Peter Stott, President
ASSET SALE, PURCHASE AND
TRANSFER AGREEMENT 47
<PAGE>
With a copy to:
Ball, Janik & Novack
One Main Place
101 S.W. Main Street, Suite 1100
Portland, Oregon 97204-3274
Attention: Robert S. Ball
12.6 SEVERABILITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement which shall remain in full force and effect.
12.7 FURTHER ASSURANCES AND ASSISTANCE. Buyer and Seller agree that each
will execute and deliver to the other any and all documents, in addition to
those expressly provided for herein, that may be necessary or appropriate to
effectuate the provisions of this Agreement, whether before, at or after the
Closing. Seller agrees that, at any time and from time to time after the
Closing, it will execute and deliver to Buyer such further assignments or other
written assurances as Buyer may reasonably request to perfect and protect
Buyer's title to the Assets.
12.8 SURVIVAL. The terms, covenants, agreements, representations and
warranties contained in or made pursuant to this Agreement together with all
indemnities and undertakings contained herein shall survive the Closing, subject
to the time limits specified herein, if any, delivery of the Purchase Price and
delivery and/or recordation of the instruments of conveyances and assignment,
bills of sale, assignments of contract rights and other closing documents, and
shall not be deemed to have been merged in any of the documents delivered at the
Closing, irrespective of any investigation made by or on behalf of any party.
12.9 WAIVER. Any party may waive compliance by another with any of the
provisions of this Agreement. No waiver of any provision shall be construed as
a waiver of any other provision. Any waiver must be in writing and signed by
the party waiving such provision.
12.10 BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns. Except as expressly
ASSET SALE, PURCHASE AND
TRANSFER AGREEMENT 48
<PAGE>
set forth in Section 11.7, nothing in this Agreement shall create or be deemed
to create any third party beneficiary rights in any person or entity not a party
to this Agreement, including any such person or entity asserting rights as a
third party beneficiary with respect to environmental matters. No assignment of
this Agreement or of any rights or obligation hereunder may be made by either
party (by operation of law or otherwise) without the prior written consent of
the other and any attempted assignment without the required consent shall be
void.
12.11 BEST KNOWLEDGE. As used in this Agreement (i) "to the best of
Owner's knowledge" shall mean the actual knowledge possessed, at the time the
Purchase Agreement was entered into, by William B. Freck, the Division General
Counsel for Owner, David E. Harris, the Division Chief Financial Officer of
Owner, Richard E. Dahlin, a Division Vice President for Owner, and Lee T.
Alford, a Division Vice President for Owner, all of whom are executive officers
of Owner, and any of the forest managers or the mill manager of Owner; (ii) "to
the best of Seller's knowledge" shall mean actual knowledge possessed by Steven
R. Rogel, President and Chief Executive Officer; J. A. Parsons, Executive Vice
President and Chief Financial Officer; and Duane C. McDougall, Vice President-
Building Materials Group; all of whom are executive officers of Seller, and
(iii) "to the best of Buyer's knowledge" shall mean actual knowledge possessed
by any executive officer of Buyer.
12.12 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be an original, but which together shall constitute one and the
same Agreement.
12.13 NO RECORDATION. Neither this Agreement nor a memorandum hereof shall
be recorded in any jurisdiction or public record.
12.14 INTENTIONALLY OMITTED.
12.15 INTENTIONALLY OMITTED.
12.16 NOTICE OF REFORESTATION REQUIREMENTS. In accordance with ORS
527.665, Schedule 12.16 is notice to Buyer of Seller's reforestation
requirements pursuant to the Oregon Forest Practices Act.
ASSET SALE, PURCHASE AND
TRANSFER AGREEMENT 49
<PAGE>
12.17 INTENTIONALLY OMITTED.
12.18 NO PRESUMPTIONS. This Agreement is a result of negotiations between
Seller and Buyer, both of whom are represented by counsel of their choosing. No
presumption shall exist in favor of either party concerning the interpretation
of the documents constituting this Agreement by reason of which party drafted
the documents.
12.19 DISCLAIMER REQUIRED BY OREGON STATUTE. THE PROPERTY DESCRIBED IN
THIS INSTRUMENT MAY NOT BE WITHIN A FIRE PROTECTION DISTRICT PROTECTING
STRUCTURES. THE PROPERTY IS SUBJECT TO LAND USE LAWS AND REGULATIONS, WHICH, IN
FARM OR FOREST ZONES, MAY NOT AUTHORIZE CONSTRUCTION OR SITING OF A RESIDENCE.
BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO
THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING
DEPARTMENT TO VERIFY APPROVED USES AND EXISTENCE OF FIRE PROTECTION FOR
STRUCTURES.
SELLER: WILLAMETTE INDUSTRIES, INC., an Oregon corporation
By:
----------------------------------------------------
Jerry A. Parsons
Executive Vice President and Chief Financial
Officer
BUYER: CROWN PACIFIC LIMITED PARTNERSHIP, a Delaware limited
partnership
By: Crown Pacific Management Limited Partnership, its
General Partner
By: HS Corp. of Oregon, an Oregon corporation, a
general partner
By:
------------------------------------------
Peter W. Stott
President and Chief Executive Officer
ASSET SALE, PURCHASE AND
TRANSFER AGREEMENT 50
<PAGE>
GUARANTY
IN CONSIDERATION of the granting of the forgoing Asset Sale, Purchase
and Transfer Agreement (the "Agreement"), Crown Pacific Partners, L.P., a
Delaware limited partnership ("Guarantor") hereby unconditionally and
irrevocably guarantees to Seller and to Seller's successors and assigns the
prompt payment by Buyer of the Purchase Price under the Agreement and the full
performance by Buyer of all of the terms and provisions of the Agreement on
Buyer's part to be performed. Guarantor hereby expressly waives (1) notice of
acceptance of this guaranty and (2) any other notice given to Buyer in
accordance with the provisions of the Agreement of any default under the
Agreement.
Guarantor hereby agrees that neither the waiver by Seller of any
rights against Buyer, arising out of any default by Buyer or otherwise, nor any
modification or amendment of the Agreement shall in any way modify or release
the obligations of Guarantor under this guaranty. Upon any default by Buyer,
Guarantor agrees to pay to Seller the entire amount of any damages suffered by
Seller as a result of such default without any obligation on the part of Seller
to endeavor to collect such indebtedness from or to proceed against Buyer.
In the event any suit or action is instituted against Guarantor on
account of, in connection with, or based upon this guaranty, in addition to the
costs and disbursements provided by statute, such sum as the court may adjudge
reasonable as attorneys' fees in such suit or action or any appeal therefrom.
CROWN PACIFIC PARTNERS, L.P., a Delaware limited
partnership
by CROWN PACIFIC MANAGEMENT LIMITED PARTNERSHIP,
Managing General Partner
By:
----------------------------------------------------
Title: General Partner
By:
----------------------------------------------------
Name:
--------------------------------------------------
Title:
-------------------------------------------------
ASSET SALE, PURCHASE AND
TRANSFER AGREEMENT 52
