EXHIBIT 10.9
EXECUTION
COUNTERPART
REVOLVING CREDIT AGREEMENT
dated as of June 20, 2001
among
DELTIC TIMBER CORPORATION,
as Borrower
THE LENDERS FROM TIME TO TIME PARTY HERETO,
SUNTRUST BANK,
as Administrative Agent
and
BANK ONE, N.A.,
as Syndication Agent
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SUNTRUST EQUITABLE SECURITIES CORPORATION
as Arranger and Book Manager
TABLE OF CONTENTS
Page
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Schedules
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Schedule I - Applicable Margin and Applicable
Commitment Fee Percentage
Schedule 4.14 - Subsidiaries
Schedule 7.1 - Outstanding Indebtedness
Schedule 7.2 - Existing Liens
Schedule 7.4 - Existing Investments
Exhibits
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Exhibit A - Revolving Credit Note
Exhibit B - Swingline Note
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Subsidiary Guaranty Agreement
Exhibit E - Form of Indemnity, Subrogation and
Contribution Agreement
Exhibit 2.3 - Notice of Revolving Borrowing
Exhibit 2.5 - Notice of Swingline Borrowing
Exhibit 2.9 - Form of Continuation/Conversion
Exhibit 3.1(b)(iv) - Form of Secretary's Certificate
Exhibit 3.1(b)(vii) - Form of Officer's Certificate
ii
REVOLVING CREDIT AGREEMENT
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THIS REVOLVING CREDIT AGREEMENT (this "Agreement") is made and entered
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into as of June 20, 2001, by and among DELTIC TIMBER CORPORATION, a Delaware
corporation (the "Borrower"), the several banks and other financial institutions
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from time to time party hereto (the "Lenders"), SUNTRUST BANK, in its capacity
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as Administrative Agent for the Lenders (the "Administrative Agent") and BANK
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ONE, N.A., as Syndication Agent, (the "Syndication Agent").
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W I T N E S S E T H:
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WHEREAS, the Borrower has requested that the Lenders establish a
$105,000,000 revolving credit facility in favor of the Borrower;
WHEREAS, subject to the terms and conditions of this Agreement, the
Lenders severally, to the extent of their respective Commitments as defined
herein, are willing to severally establish the requested revolving credit
facility in favor the Borrower.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Borrower, the Lenders and the Administrative
Agent agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
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Section 1.1. Definitions. In addition to the other terms defined
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herein, the following terms used herein shall have the meanings herein specified
(to be equally applicable to both the singular and plural forms of the terms
defined):
"Adjusted LIBO Rate" shall mean, with respect to each Interest Period
for a Eurodollar Borrowing, the rate per annum obtained by dividing (i) LIBOR
for such Interest Period by (ii) a percentage equal to 1.00 minus the Eurodollar
Reserve Percentage.
"Administrative Agent" shall have the meaning assigned to such term in
the opening paragraph hereof.
"Administrative Questionnaire" shall mean, with respect to each
Lender, an administrative questionnaire in the form prepared by the
Administrative Agent and submitted to the Administrative Agent duly completed by
such Lender.
"Affiliate" shall mean, as to any Person, any other Person that
directly, or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with, such Person. For purposes of
this definition, the term "Control" shall mean the power, directly or
indirectly, either to (i) vote 5% or more of securities having ordinary voting
power for the election of directors (or persons performing similar functions) of
a Person or (ii) direct or cause the direction of the management and policies of
a Person, whether through the ability to exercise voting power, by contract or
otherwise; the terms "Controlling", "Controlled by", and "under common Control
with" have meanings correlative thereto.
"Aggregate Revolving Commitment Amount" shall mean the aggregate
principal amount of the Aggregate Revolving Commitments from time to time. On
the Closing Date, the Aggregate Revolving Commitment Amount equals $105,000,000.
"Aggregate Revolving Commitments" shall mean, collectively, all
Revolving Commitments of all Lenders at any time outstanding.
"Applicable Commitment Fee Percentage" shall mean, with respect to the
commitment fee as of any date, the percentage per annum determined by reference
to the applicable Total Debt to EBITDA Ratio in effect on such date as set forth
on Schedule I attached hereto; provided, that a change in the Applicable
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Commitment Fee Percentage resulting from a change in the Total Debt to EBITDA
Ratio shall be effective on the second Business Day after which the Borrower
delivers the financial statements required by Section 5.1(a) or (b) and the
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compliance certificate required by Section 5.1 (c); provided, further, that if
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at any time the Borrower shall have failed to deliver such financial statements
and such certificate by the due date as set forth herein, the Applicable
Commitment Fee Percentage shall be at Level V until such time as such financial
statements and certificate are delivered, at which time the Applicable
Commitment Fee Percentage shall be determined as provided above.
Notwithstanding the foregoing, the Applicable Commitment Fee Percentage for the
commitment fee from the Closing Date until the financial statement and
compliance certificate for the fiscal quarter ending on June 30, 2001 are
delivered shall be at Level V.
"Applicable Lending Office" shall mean, for each Lender and for each
Type of Loan, the "Lending Office" of such Lender (or an Affiliate of such
Lender) designated for such Type of Loan in the Administrative Questionnaire
submitted by such Lender or such other office of such Lender (or an Affiliate of
such Lender) as such Lender may from time to time specify to the Administrative
Agent and the Borrower as the office by which its Loans of such Type are to be
made and maintained.
"Applicable Margin" shall mean with respect to all Revolving Loans
outstanding on any date, a percentage per annum determined by reference to the
applicable Total Debt to EBITDA Ratio in effect on such date as set forth on
Schedule I attached hereto; provided, that a change in the Applicable Margin
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resulting from a change in the Total Debt to EBITDA Ratio shall be effective on
the second Business Day after which the Borrower delivers the financial
statements required by Section 5.1(a) or (b) and the compliance certificate
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required by Section 5.1 (c); provided further, that if at any time the Borrower
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shall have failed to deliver such financial statements and such certificate by
the due date as set forth herein, the Applicable Margin shall be at Level V
until such time as such financial statements and certificate are delivered, at
which time the Applicable Margin shall be determined as provided above.
Notwithstanding the foregoing, the Applicable Margin from the Closing Date until
the financial statement and compliance certificate for the fiscal quarter ending
on June 30, 2001 are delivered shall be at Level V.
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"Approved Fund" means any Person (other than a natural Person) that is
(or will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business and that is administered or managed by (a) a Lender, (b) an Affiliate
of a Lender or (c) an entity or an Affiliate of an entity that administers or
manages a Lender.
"Asset Like Kind Exchange" shall mean a like kind exchange of timber
or real estate development assets of the Borrower or any of its Subsidiaries
made in accordance with Section 1031 and Section 1033 of the Code.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 10.4(b)) and accepted by the Administrative
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Agent, in the form of Exhibit C attached hereto or any other form approved by
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the Administrative Agent.
"Availability Period" shall mean the period from the Closing Date to
the Revolving Commitment Termination Date.
"Base Rate" shall mean the higher of (i) the per annum rate which the
Administrative Agent publicly announces from time to time to be its prime
lending rate, as in effect from time to time, or (ii) the Federal Funds Rate, as
in effect from time to time, plus one-half of one percent (0.50%). The
Administrative Agent's prime lending rate is a reference rate and does not
necessarily represent the lowest or best rate charged to customers. The
Administrative Agent may make commercial loans or other loans at rates of
interest at, above or below the Administrative Agent's prime lending rate. Each
change in the Administrative Agent's prime lending rate shall be effective from
and including the date such change is publicly announced as being effective.
"Borrower" shall have the meaning in the introductory paragraph
hereof.
"Borrowing" shall mean a borrowing consisting of (i) Loans of the same
Class and Type, made, converted or continued on the same date and in case of
Eurodollar Loans, as to which a single Interest Period is in effect, or (ii) a
Swingline Loan.
"Business Day" shall mean (i) any day other than a Saturday, Sunday or
other day on which commercial banks in Atlanta, Georgia are authorized or
required by law to close and (ii) if such day relates to a Borrowing of, a
payment or prepayment of principal or interest on, a conversion of or into, or
an Interest Period for, a Eurodollar Loan or a notice with respect to any of the
foregoing, any day on which dealings in Dollars are carried on in the London
interbank market.
"Capital Lease Obligations" of any Person shall mean all obligations
of such Person to pay rent or other amounts under any lease (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and
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the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Change in Control" shall mean the occurrence of one or more of the
following events: (a) any sale, lease, exchange or other transfer (in a single
transaction or a series of related transactions) of all or substantially all of
the assets of the Borrower to any Person or "group" (within the meaning of the
Securities Exchange Act of 1934 and the rules of the Securities and Exchange
Commission thereunder in effect on the date hereof), (b) the acquisition of
ownership, directly or indirectly, beneficially or of record, by any Person or
"group" (within the meaning of the Securities Exchange Act of 1934 and the rules
of the Securities and Exchange Commission thereunder as in effect on the date
hereof) other than the ▇▇▇▇▇▇ Family of 30% or more of the outstanding shares of
the voting stock of the Borrower; or (c) occupation of a majority of the seats
(other than vacant seats) on the board of directors of the Borrower by Persons
who were neither (i) nominated by the current board of directors or (ii)
appointed by directors so nominated.
"Change in Law" shall mean (i) the adoption of any applicable law,
rule or regulation after the date of this Agreement, (ii) any change in any
applicable law, rule or regulation, or any change in the interpretation or
application thereof, by any Governmental Authority after the date of this
Agreement, or (iii) compliance by any Lender (or its Applicable Lending Office)
(or for purposes of Section 2.17(b), by such Lender's holding company, if
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applicable) with any request, guideline or directive (whether or not having the
force of law) of any Governmental Authority made or issued after the date of
this Agreement.
"Class", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans
or Swingline Loans or and when used in reference to any Commitment, refers to
whether such Commitment is a Revolving Commitment or a Swingline Commitment.
"Closing Date" shall mean June 20, 2001.
"Code" shall mean the Internal Revenue Code of 1986, as amended and in
effect from time to time.
"Commitment" shall mean a Revolving Commitment or a Swingline
Commitment or any combination thereof (as the context shall permit or require).
"Consolidated EBITDA" shall mean, for the Borrower and its
Subsidiaries for any period, an amount equal to the sum of (a) Consolidated Net
Income for such period plus (b) to the extent deducted in determining
Consolidated Net Income for such period, (i) Consolidated Interest Expense, (ii)
income tax expense determined on a consolidated basis in accordance with GAAP,
(iii) depreciation and amortization determined on a consolidated basis in
accordance with GAAP, and (iv) all other non-cash charges determined on a
consolidated basis in accordance with GAAP (other than write-down or write-off
of any accounts or inventory unless related to an extraordinary item), in each
case for such period.
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"Consolidated Fixed Charges" shall mean, for the Borrower and its
Subsidiaries for any period, the sum (without duplication) of (a) Consolidated
Interest Expense for such period and (b) scheduled principal payments made on
Consolidated Total Debt during such period.
"Consolidated Interest Expense" shall mean, for the Borrower and its
Subsidiaries for any period determined on a consolidated basis in accordance
with GAAP, the sum of (i) total interest expense, including without limitation
the interest component of any payments in respect of Capital Leases Obligations
capitalized or expensed during such period (whether or not actually paid during
such period) plus (ii) the net amount payable (or minus the net amount
receivable) under Hedging Agreements during such period (whether or not actually
paid or received during such period).
"Consolidated Net Income" shall mean, for the Borrower and its
Subsidiaries for any period, the net income (or loss) of the Borrower and its
Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP, but excluding therefrom (to the extent otherwise included therein)
(i) any extraordinary gains or losses, (ii) any gains attributable to write-ups
of assets, (iii) any equity interest of the Borrower or any Subsidiary of the
Borrower in the unremitted earnings of any Person that is not a Subsidiary and
(iv) any income (or loss) of any Person accrued prior to the date it becomes a
Subsidiary or is merged into or consolidated with the Borrower or any Subsidiary
on the date that such Person's assets are acquired by the Borrower or any
Subsidiary.
"Consolidated Net Worth" shall mean, as of any date, (i) the total
assets of the Borrower and its Subsidiaries that would be reflected on the
Borrower's consolidated balance sheet as of such date prepared in accordance
with GAAP, after eliminating all amounts properly attributable to minority
interests, if any, in the stock and surplus of Subsidiaries, minus (ii) the
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total liabilities of the Borrower and its Subsidiaries that would be reflected
on the Borrower's consolidated balance sheet as of such date prepared in
accordance with GAAP.
"Consolidated Total Capital" shall mean, as of any date, the sum of
(i) Consolidated Total Debt as of such date and (ii) Consolidated Net Worth as
of such date.
"Consolidated Total Debt" shall mean, as of any date, all Indebtedness
of the Borrower and its Subsidiaries described in the definition of
"Indebtedness" (other than Indebtedness described in clause (xi) of such
definition), including, without limitation, the Loans.
"Default" shall mean any condition or event that, with the giving of
notice or the lapse of time or both, would constitute an Event of Default.
"Default Interest" shall have the meaning set forth in Section
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2.12(c).
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"Del-Tin" shall mean Del-Tin Fiber, LLC, an Arkansas limited
liability company.
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"Del-Tin Agreements" shall mean, collectively, (i) Del-Tin Fiber
L.L.C. Operating Agreement, and (ii) the Del-Tin Fiber Contingent Equity
Agreement.
"Del-Tin Fiber Contingent Equity Agreement" shall mean that certain
Contingent Equity Contribution Agreement, dated as of November 23, 1998, by and
among the Borrower, Del-Tin and The First National Bank of Chicago, as agent.
"Dollar(s)" and the sign "$" shall mean lawful money of the United
States of America.
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund; and (d) any other Person (other than a natural Person)
approved by the Administrative Agent, in the case of any assignment of any
Revolving Credit Exposure, and Swingline Lender, and, unless (x) such Person is
taking delivery of an assignment in connection with physical settlement of a
credit derivatives transaction or (y) an Event of Default has occurred and is
continuing, the Borrower (each such approval not to be unreasonably withheld or
delayed). If the consent of the Borrower to an assignment or to an Eligible
Assignee is required pursuant to this definition or under Section 10.4
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(including a consent to an assignment which does not meet the minimum assignment
thresholds specified in paragraph (b)(i) of Section 10.4), the Borrower shall be
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deemed to have given its consent five Business Days after the date notice
thereof has been delivered by the assigning Lender (through the Administrative
Agent) unless such consent is expressly refused by the Borrower prior to such
fifth Business Day.
"Environmental Laws" shall mean all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, Release or threatened Release of any
Hazardous Material or to health and safety matters.
"Environmental Liability" shall mean any liability, contingent or
otherwise (including any liability for damages, costs of environmental
investigation and remediation, costs of administrative oversight, fines, natural
resource damages, penalties or indemnities), of the Borrower or any Subsidiary
directly or indirectly resulting from or based upon (a) any actual or alleged
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
any actual or alleged exposure to any Hazardous Materials, (d) the Release or
threatened Release of any Hazardous Materials or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated), which, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for the purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
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"ERISA Event" shall mean (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator appointed by the PBGC of any notice
relating to an intention to terminate any Plan or Plans or to appoint a trustee
to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal
from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any
ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Borrower or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
"Eurodollar" when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, bears interest at
a rate determined by reference to the Adjusted LIBO Rate.
"Eurodollar Reserve Percentage" shall mean the aggregate of the
maximum reserve percentages (including, without limitation, any emergency,
supplemental, special or other marginal reserves) expressed as a decimal
(rounded upwards to the next 1/100th of 1%) in effect on any day to which the
Administrative Agent is subject with respect to the Adjusted LIBO Rate pursuant
to regulations issued by the Board of Governors of the Federal Reserve System
(or any Governmental Authority succeeding to any of its principal functions)
with respect to eurocurrency funding (currently referred to as "eurocurrency
liabilities" under Regulation D). Eurodollar Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under Regulation D. The Eurodollar
Reserve Percentage shall be adjusted automatically on and as of the effective
date of any change in any reserve percentage.
"Event of Default" shall have the meaning provided in Article VIII.
"Excluded Taxes" shall mean with respect to the Administrative Agent,
any Lender or any other recipient of any payment to be made by or on account of
any obligation of the Borrower hereunder, (a) income or franchise taxes imposed
on (or measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which any Lender is located and (c) in the case of a Foreign
Lender, any withholding tax that (i) is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this
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Agreement, (ii) is imposed on amounts payable to such Foreign Lender at any time
that such Foreign Lender designates a new lending office, other than taxes that
have accrued prior to the designation of such lending office that are otherwise
not Excluded Taxes, and (iii) is attributable to such Foreign Lender's failure
to comply with Section 2.19(e).
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"Existing Lenders" shall mean Bank of America, N.A., Whitney National
Bank, Hibernia National Bank, Bank One, N.A. and SunTrust Bank.
"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the next 1/100/th/ of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
member banks of the Federal Reserve System arranged by Federal funds brokers, as
published by the Federal Reserve Bank of New York on the next succeeding
Business Day or if such rate is not so published for any Business Day, the
Federal Funds Rate for such day shall be the average rounded upwards, if
necessary, to the next 1/100th of 1% of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by the Administrative Agent.
"Fixed Charge Coverage Ratio" shall mean, for any period of four
consecutive fiscal quarters of the Borrower, the ratio of (a) Consolidated
EBITDA for such period less the actual amount paid by the Borrower and its
Subsidiaries in cash during such period on account of (i) all dividends and
distributions paid with respect to shares of capital stock of the Borrower and
(ii) income tax expense to (b) Consolidated Fixed Charges for such period.
"Foreign Lender" shall mean any Lender that is not a United States
person under Section 7701(a)(3) of the Code.
"GAAP" shall mean generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms of Section
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1.3.
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"Governmental Authority" shall mean the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any Person (the "guarantor") shall mean any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly and including any obligation, direct or indirect, of the guarantor
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or
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letter of guaranty issued in support of such Indebtedness or obligation;
provided, that the term "Guarantee" shall not include endorsements for
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collection or deposits in the ordinary course of business. The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which Guarantee is made or, if
not so stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith. The term "Guarantee" used as a verb has
a corresponding meaning.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreements" shall mean interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap agreements,
currency future or option contracts, commodity agreements and other similar
agreements or arrangements designed to protect against fluctuations in interest
rates, currency values or commodity values, in each case to which any Borrower
or any Subsidiary is a party.
"Indebtedness" of any Person shall mean, without duplication (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person in respect of the deferred purchase price of
property or services (other than trade payables incurred in the ordinary course
of business; provided, that for purposes of Section 8.1(f), trade payables
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overdue by more than 120 days shall be included in this definition except to the
extent that any of such trade payables are being disputed in good faith and by
appropriate measures), (iv) all obligations of such Person under any conditional
sale or other title retention agreement(s) relating to property acquired by such
Person, (v) all Capital Lease Obligations of such Person, (vi) all obligations,
contingent or otherwise, of such Person in respect of letters of credit,
acceptances or similar extensions of credit, (vii) all Guarantees of such Person
of the type of Indebtedness described in clauses (i) through (v) above, (viii)
all Indebtedness of a third party secured by any Lien on property owned by such
Person, whether or not such Indebtedness has been assumed by such Person, (ix)
all obligations of such Person, contingent or otherwise, to purchase, redeem,
retire or otherwise acquire for value any common stock of such Person, (x) Off-
Balance Sheet Liabilities, and (xi) all obligations of such Person under Hedging
Agreements. The Indebtedness of any Person shall include (i) the Indebtedness of
any partnership or joint venture in which such Person is a general partner or a
joint venturer, except to the extent that the terms of such Indebtedness provide
that such Person is not liable therefor and (ii) any contingent obligations of
such Person owing pursuant to the Del-Tin Fiber Contingent Equity Agreement.
"Indemnified Taxes" shall mean Taxes other than Excluded Taxes.
"Indemnity and Contribution Agreement" shall mean the Indemnity,
Subrogation and Contribution Agreement, substantially in the form of Exhibit E,
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among the
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Borrower, the Subsidiary Loan Parties and the Administrative Agent, as amended,
restated, supplemented or otherwise modified from time to time.
"Interest Coverage Ratio" shall mean, as of any date, the ratio of (i)
Consolidated EBITDA for the four consecutive fiscal quarters ending on or
immediately prior to such date to (ii) Consolidated Interest Expense for the
four consecutive fiscal quarters ending on or immediately prior to such date.
"Interest Period" shall mean with respect to any Eurodollar Borrowing,
a period of one, two, three or six months; provided, that:
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(i) the initial Interest Period for such Borrowing shall commence on
the date of such Borrowing (including the date of any conversion from a
Borrowing of another Type), and each Interest Period occurring thereafter
in respect of such Borrowing shall commence on the day on which the next
preceding Interest Period expires;
(ii) if any Interest Period would otherwise end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day, unless such Business Day falls in another calendar month, in
which case such Interest Period would end on the next preceding Business
Day;
(iii) any Interest Period which 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 such calendar month; and
(iv) no Interest Period may extend beyond the Revolving Commitment
Termination Date.
"Lenders" shall have the meaning assigned to such term in the opening
paragraph of this Agreement and shall include, where appropriate, the Swingline
Lender.
"Leverage Ratio" shall mean, as of any date of determination with
respect to the Borrower, the ratio of (i) Consolidated Total Debt as of such
date to (ii) Consolidated Total Capital.
"LIBOR" shall mean, for any applicable Interest Period with respect to
any Eurodollar Loan, the rate per annum for deposits in Dollars for a period
equal to such Interest Period appearing on the display designated as Page 3750
on the Dow ▇▇▇▇▇ Markets Service (or such other page on that service or such
other service designated by the British Banker's Association for the display of
such Association's Interest Settlement Rates for Dollar deposits) as of 11:00
a.m. (London, England time) on the day that is two Business Days prior to the
first day of the Interest Period or if such Page 3750 is unavailable for any
reason at such time, the rate which appears on the Reuters Screen ISDA Page as
of such date and such time; provided, that if the Administrative Agent
--------
determines that the relevant foregoing sources are unavailable for the relevant
Interest Period, LIBOR shall mean the rate of interest determined by the
Administrative
-10-
Agent to be the average (rounded upward, if necessary, to the nearest 1/100/th/
of 1%) of the rates per annum at which deposits in Dollars are offered to the
Administrative Agent two (2) Business Days preceding the first day of such
Interest Period by leading banks in the London interbank market as of 10:00 a.m.
for delivery on the first day of such Interest Period, for the number of days
comprised therein and in an amount comparable to the amount of the Eurodollar
Loan of the Administrative Agent.
"Lien" shall mean any mortgage, pledge, security interest, lien
(statutory or otherwise), charge, encumbrance, hypothecation, assignment,
deposit arrangement, or other arrangement having the practical effect of the
foregoing or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement and any capital lease having
the same economic effect as any of the foregoing).
"Loan Documents" shall mean, collectively, this Agreement, the Notes
(if any), the Subsidiary Guarantee Agreement, the Indemnity and Contribution
Agreement, all Notices of Borrowing, all Notices of Conversion/Continuation and
any and all other instruments, agreements, documents and writings executed in
connection with any of the foregoing.
"Loan Parties" shall mean the Borrower and the Subsidiary Loan
Parties.
"Loans" shall mean all Revolving Loans and Swingline Loans in the
aggregate or any of them, as the context shall require.
"Material Adverse Effect" shall mean, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding),
whether singularly or in conjunction with any other event or events, act or
acts, condition or conditions, occurrence or occurrences whether or not related,
a material adverse change in, or a material adverse effect on, (i) the business,
results of operations, financial condition, assets, liabilities or prospects of
the Borrower or of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Loan Parties to perform any of their respective obligations under
the Loan Documents, (iii) the rights and remedies of the Administrative Agent
and the Lenders under any of the Loan Documents or (iv) the legality, validity
or enforceability of any of the Loan Documents.
"Material Indebtedness" shall mean Indebtedness (other than the Loans)
or obligations in respect of one or more Hedging Agreements, of any one or more
of the Borrower and the Subsidiaries in an aggregate principal amount exceeding
$500,000. For purposes of determining Material Indebtedness, the "principal
amount" of the obligations of the Borrower or any Subsidiary in respect to any
Hedging Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that the Borrower or such Subsidiary would be
required to pay if such Hedging Agreement were terminated at such time.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
-11-
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"▇▇▇▇▇▇ Family" shall mean, collectively, ▇.▇. ▇▇▇▇▇▇, ▇▇., his
sisters, any of their spouses or descendants or persons married to their
descendants and any investment entity that is controlled by any of the
foregoing.
"Note Purchase Agreement" shall mean that certain Note Purchase
Agreement, dated as of December 18, 1998, by and among the Borrower and Pacific
Coast Farm Credit Services, ACA, relating to $40,000,000 6.66% Senior Notes due
December 18, 2008, as the same may be amended or otherwise modified and in
effect from time to time.
"Notes" shall mean, collectively, the Revolving Credit Notes and the
Swingline Note.
"Notices of Borrowing" shall mean, collectively, the Notices of
Revolving Borrowing and the Notices of Swingline Borrowing.
"Notice of Conversion/Continuation" shall mean the notice given by the
Borrower to the Administrative Agent in respect of the conversion or
continuation of an outstanding Borrowing as provided in Section 2.7(b) hereof.
----------- -
"Notice of Revolving Borrowing" shall have the meaning as set forth in
Section 2.3.
-----------
"Notice of Swingline Borrowing" shall have the meaning as set forth in
Section 2.5.
-----------
"Obligations" shall mean all amounts owing by the Borrower to the
Administrative Agent or any Lender (including the Swingline Lender) pursuant to
or in connection with this Agreement or any other Loan Document, including
without limitation, all principal, interest (including any interest accruing
after the filing of any petition in bankruptcy or the commencement of any
insolvency, reorganization or like proceeding relating to the Borrower, whether
or not a claim for post-filing or post-petition interest is allowed in such
proceeding), all reimbursement obligations, fees, expenses, indemnification and
reimbursement payments, costs and expenses (including all fees and expenses of
counsel to the Administrative Agent and any Lender (including the Swingline
Lender) incurred pursuant to this Agreement or any other Loan Document), whether
direct or indirect, absolute or contingent, liquidated or unliquidated, now
existing or hereafter arising hereunder or thereunder, and all obligations
arising under Hedging Agreements relating to the foregoing to the extent
permitted hereunder, and all obligations and liabilities incurred in connection
with collecting and enforcing the foregoing, together with all renewals,
extensions, modifications or refinancings thereof.
"Off-Balance Sheet Liabilities" of any Person shall mean (i) any
repurchase obligation or liability of such Person with respect to accounts or
notes receivable sold by such Person, (ii) any liability of such Person under
any sale and leaseback transactions which do not
-12-
create a liability on the balance sheet of such Person, (iii) any liability of
such Person under any so-called "synthetic" lease transaction or (iv) any
obligation arising with respect to any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the balance sheet of such Person.
"Other Taxes" shall mean any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
"Participant" shall have the meaning set forth in Section 10.4(d).
------------ -
"Payment Office" shall mean the office of the Administrative Agent
located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other
location as to which the Administrative Agent shall have given written notice to
the Borrower and the other Lenders.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA, and any successor entity performing similar functions.
"Permitted Encumbrances" shall mean
(i) Liens imposed by law for taxes or special assessments not yet
due or which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves are being maintained in
accordance with GAAP;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law created
in the ordinary course of business for amounts not yet due or which are
being contested in good faith by appropriate proceedings and with respect
to which adequate reserves are being maintained in accordance with GAAP;
(iii) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(iv) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary course
of business;
(v) judgment and attachment liens not giving rise to an Event of
Default or Liens created by or existing from any litigation or legal
proceeding that are currently being contested in good faith by appropriate
proceedings and with respect to which adequate reserves are being
maintained in accordance with GAAP; and
(vi) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not
-13-
secure any monetary obligations and do not materially detract from the
value of the affected property or materially interfere with the ordinary
conduct of business of the Borrower and its Subsidiaries taken as a whole;
provided, that the term "Permitted Encumbrances" shall not include any Lien
--------
securing Indebtedness.
"Permitted Investments" shall mean:
(i) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States (or
by any agency thereof to the extent such obligations are backed by the full
faith and credit of the United States), in each case maturing within one
year from the date of acquisition thereof;
(ii) commercial paper having the highest rating, at the time of
acquisition thereof, of S&P or Moody's and in either case maturing within
six months from the date of acquisition thereof;
(iii) certificates of deposit, bankers' acceptances and time deposits
maturing within 180 days of the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the
laws of the United States or any state thereof which has a combined capital
and surplus and undivided profits of not less than $500,000,000;
(iv) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (i) above and entered
into with a financial institution satisfying the criteria described in
clause (iii) above; and
(v) mutual funds investing solely in any one or more of the
Permitted Investments described in clauses (i) through (iv) above.
"Person" shall mean any individual, partnership, firm, corporation,
association, joint venture, limited liability company, trust or other entity, or
any Governmental Authority.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pro Rata Share" shall mean with respect to any Revolving Commitment
of any Lender at any time, a percentage, the numerator of which shall be such
Lender's Revolving Commitment (or if such Revolving Commitments have been
terminated or expired or the Loans have been declared to be due and payable,
such Lender's Loan funded under such Revolving Commitment), and the denominator
of which shall be the sum of such Revolving Commitments of all Lenders (or if
such Revolving Commitments have been terminated or expired or the Loans
-14-
have been declared to be due and payable, all Loans of all Lenders funded under
such Revolving Commitments).
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System, as the same may be in effect from time to time, and
any successor regulations.
"Related Parties" shall mean, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"Release" means any release, spill, emission, leaking, dumping,
injection, pouring, deposit, disposal, discharge, dispersal, leaching or
migration into the environment (including ambient air, surface water,
groundwater, land surface or subsurface strata) or within any building,
structure, facility or fixture.
"Required Lenders" shall mean, at any time, Lenders holding more than
50% of the aggregate outstanding Revolving Commitments at such time or if the
Lenders have no Commitments outstanding, then Lenders holding more than 50% of
the Loans.
"Requirement of Law" for any Person shall mean the articles or
certificate of incorporation and bylaws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or a court or other governmental authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Responsible Officer" shall mean any of the president, the chief
executive officer, the chief operating officer, the chief financial officer, the
treasurer or a vice president of the Borrower or such other representative of
the Borrower as may be designated in writing by any one of the foregoing with
the consent of the Administrative Agent; and, with respect to the financial
covenants only, the chief financial officer or the treasurer of the Borrower.
"Restricted Payment" shall have the meaning set forth in Section 7.5.
-----------
"Revolving Commitment" shall mean, with respect to each Lender, the
obligation of such Lender to make Revolving Loans to the Borrower and to
participate in Swingline Loans in an aggregate principal amount not exceeding
the amount set forth with respect to such Lender on the signature pages to this
Agreement, or in the case of a Person becoming a Lender after the Closing Date,
the amount of the assigned "Revolving Commitment" as provided in the Assignment
and Acceptance Agreement executed by such Person as an assignee, as the same may
be increased or deceased pursuant to terms hereof.
"Revolving Commitment Termination Date" shall mean the earliest of (i)
July 15, 2004, (ii) the date on which the Revolving Commitments are terminated
pursuant to Section 2.8 and (iii) the date on which all amounts outstanding
-----------
under this Agreement have been declared or have automatically become due and
payable (whether by acceleration or otherwise).
-15-
"Revolving Credit Availability Period" shall mean the period from the
Closing Date to the Revolving Commitment Termination Date.
"Revolving Credit Exposure" shall mean, for any Lender, the sum of
such Lender's Revolving Loans and Swingline Exposure.
"Revolving Credit Note" shall mean a promissory note of the Borrower
payable to the order of a requesting Lender in the principal amount of such
Lender's Revolving Commitment, in substantially the form of Exhibit A.
---------
"Revolving Loan" shall mean a loan made by a Lender (other than the
Swingline Lender) to the Borrower under its Revolving Commitment, which may
either be a Base Rate Loan or a Eurodollar Loan.
"S&P" shall mean Standard & Poor's.
"Subsidiary" shall mean, with respect to any Person (the "parent"),
any corporation, partnership, joint venture, limited liability company,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, partnership, joint venture, limited liability
company, association or other entity (i) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power, or in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held,
or (ii) that is, as of such date, otherwise controlled, by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent. Unless otherwise indicated, all references to "Subsidiary" hereunder
shall mean a Subsidiary of the Borrower.
"Subsidiary Guaranty Agreement" shall mean the Subsidiary Guaranty
Agreement, substantially in the form of Exhibit D, made by the Subsidiary Loan
---------
Parties in favor of the Administrative Agent for the benefit of the Lenders, as
amended, restated, supplemented or otherwise modified from time to time.
"Subsidiary Loan Party" shall mean any Subsidiary that is not a
Foreign Subsidiary.
"Swingline Commitment" shall mean the commitment of the Swingline
Lender to make Swingline Loans in an aggregate principal amount at any time
outstanding not to exceed $5,000,000.
"Swingline Exposure" shall mean, with respect to each Lender, the
principal amount of the Swingline Loans in which such Lender is legally
obligated either to make a Base Rate Loan or to purchase a participation in
accordance with Section 2.5, which shall equal such Lender's Pro Rata Share of
-----------
all outstanding Swingline Loans.
-16-
"Swingline Lender" shall mean SunTrust Bank, or any other Lender that
may agree to make Swingline Loans hereunder.
"Swingline Loan" shall mean a loan made to the Borrower by the
Swingline Lender under the Swingline Commitment.
"Swingline Note" shall mean the promissory note of the Borrower
payable to the order of the Swingline Lender in the principal amount of the
Swingline Commitment, substantially the form of Exhibit D.
---------
"Swingline Rate" shall mean, for any Interest Period, the rate as
offered by the Administrative Agent and accepted by the Borrower. The Borrower
shall have no obligation to accept this rate and the Administrative Agent shall
have no obligation to provide this rate.
"Taxes" shall mean any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Timber Market Value" shall mean the lessor of (i) the fair market
value of all timber owned by the Borrower or any of its Subsidiaries as
determined by reference to the average price received by Borrower or any of its
Subsidiaries for their sales of timber for the preceding four quarters
multiplied by the current quarter's ending inventory of timber, or (ii) if an
appraisal is requested by the Administrative Agent, the appraised value of all
timber owned by the Borrower or any of its Subsidiaries as determined in
accordance with Section 5.7.
"Total Debt to EBITDA Ratio" shall mean, as of any date of
determination, the ratio of (a) Consolidated Total Debt as of such date to (b)
Consolidated EBITDA for the four fiscal quarter period ending on or immediately
prior to such date.
"Type", when used in reference to a Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Base
Rate.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
Section 1.2. Classifications of Loans and Borrowings. For purposes
---------------------------------------
of this Agreement, Loans may be classified and referred to by Class (e.g. a
"Revolving Loan") or by Type (e.g. a "Eurodollar Loan" or "Base Rate Loan") or
by Class and Type (e.g. "Revolving Eurodollar Loan"). Borrowings also may be
classified and referred to by Class (e.g. "Revolving Borrowing") or by Type
(e.g. "Eurodollar Borrowing") or by Class and Type (e.g. " Revolving Eurodollar
Borrowing").
Section 1.3. Accounting Terms and Determination. Unless otherwise
----------------------------------
defined or specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered
-17-
hereunder shall be prepared, in accordance with GAAP as in effect from time to
time, applied on a basis consistent with the most recent audited consolidated
financial statement of the Borrower delivered pursuant to Section 5.1(a);
----------- -
provided, that if the Borrower notifies the Administrative Agent that the
--------
Borrower wishes to amend any covenant in Article VI to eliminate the effect of
any change in GAAP on the operation of such covenant (or if the Administrative
Agent notifies the Borrower that the Required Lenders wish to amend Article VI
for such purpose), then the Borrower's compliance with such covenant shall be
determined on the basis of GAAP in effect immediately before the relevant change
in GAAP became effective, until either such notice is withdrawn or such covenant
is amended in a manner satisfactory to the Borrower and the Required Lenders.
Section 1.4. Terms Generally. The definitions of terms herein shall
---------------
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall". In
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the word "to" means "to but
excluding". Unless the context requires otherwise (i) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as it was
originally executed or as it may from time to time be amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (ii) any reference herein to any Person
shall be construed to include such Person's successors and permitted assigns,
(iii) the words "hereof", "herein" and "hereunder" and words of similar import
shall be construed to refer to this Agreement as a whole and not to any
particular provision hereof, (iv) all references to Articles, Sections, Exhibits
and Schedules shall be construed to refer to Articles, Sections, Exhibits and
Schedules to this Agreement and (v) all references to a specific time shall be
construed to refer to the time in the city and state of the Administrative
Agent's principal office, unless otherwise indicated.
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENTS
-----------------------------------
Section 2.1. General Description of Facilities. Subject to and upon
---------------------------------
the terms and conditions herein set forth, (i) the Lenders hereby establish in
favor of the Borrower a revolving credit facility pursuant to which the Lenders
severally agree (to the extent of such Lender's Revolving Commitment) to make
Revolving Loans to the Borrower in accordance with Section 2.2, (ii) the
-----------
Swingline Lender agrees to make Swingline Loans in accordance with Section 2.4,
-----------
and (iii) each Lender agrees to purchase a participation interest in the
Swingline Loans pursuant to the terms and conditions hereof; provided, that in
--------
no event shall the aggregate principal amount of all outstanding Revolving Loans
and Swingline Loans exceed at any time the Aggregate Revolving Commitments from
time to time in effect.
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Section 2.2. Revolving Loans. Subject to the terms and conditions
---------------
set forth herein, each Lender severally agrees to make Revolving Loans to the
Borrower, from time to time during the Availability Period, in an aggregate
principal amount outstanding at any time that will not result in (a) such
Lender's Revolving Credit Exposure exceeding such Lender's Revolving Commitment
or (b) the sum of the aggregate Revolving Credit Exposures of all Lenders
exceeding the Aggregate Revolving Commitments. During the Availability Period,
the Borrower shall be entitled to borrow, prepay and reborrow Revolving Loans in
accordance with the terms and conditions of this Agreement; provided, that the
--------
Borrower may not borrow or reborrow should there exist a Default or Event of
Default.
Section 2.3. Procedure for Revolving Borrowings. The Borrower shall
----------------------------------
give the Administrative Agent written notice (or telephonic notice promptly
confirmed in writing) of each Revolving Borrowing substantially in the form of
Exhibit 2.3 attached hereto (a "Notice of Revolving Borrowing") (x) prior to
-----------
11:00 a.m. one (1) Business Day prior to the requested date of each Base Rate
Borrowing and (y) prior to 11:00 a.m. three (3) Business Days prior to the
requested date of each Eurodollar Borrowing. Each Notice of Revolving Borrowing
shall be irrevocable and shall specify: (i) the aggregate principal amount of
such Borrowing, (ii) the date of such Borrowing (which shall be a Business Day),
(iii) the Type of such Revolving Loan comprising such Borrowing and (iv) in the
case of a Eurodollar Borrowing, the duration of the initial Interest Period
applicable thereto (subject to the provisions of the definition of Interest
Period). Each Revolving Borrowing shall consist entirely of Base Rate Loans or
Eurodollar Loans, as the Borrower may request. The aggregate principal amount of
each Eurodollar Borrowing shall be not less than $2,000,000 or a larger multiple
of $1,000,000, and the aggregate principal amount of each Base Rate Borrowing
shall not be less than $1,000,000 or a larger multiple of $100,000; provided,
--------
that Base Rate Loans made pursuant to Section 2.5 may be made in lesser amounts
-----------
as provided therein. At no time shall the total number of Eurodollar Borrowings
outstanding at any time exceed six. Promptly following the receipt of a Notice
of Revolving Borrowing in accordance herewith, the Administrative Agent shall
advise each Lender of the details thereof and the amount of such Lender's
Revolving Loan to be made as part of the requested Revolving Borrowing.
Section 2.4. Swingline Commitment. Subject to the terms and
--------------------
conditions set forth herein, the Swingline Lender agrees to make Swingline Loans
to the Borrower, from time to time from the Closing Date to the Revolving
Commitment Termination Date, in an aggregate principal amount outstanding at any
time not to exceed the lesser of (i) the Swingline Commitment then in effect and
(ii) the difference between the Aggregate Revolving Commitments and the
aggregate Revolving Credit Exposures of all Lenders; provided, that the
--------
Swingline Lender shall not be required to make a Swingline Loan to refinance an
outstanding Swingline Loan. The Borrower shall be entitled to borrow, repay and
reborrow Swingline Loans in accordance with the terms and conditions of this
Agreement.
Section 2.5. Procedure for Swingline Borrowing; Etc. (a) The
--------------------------------------
Borrower shall give the Administrative Agent written notice (or telephonic
notice promptly confirmed in writing) of each Swingline Borrowing ("Notice of
Swingline Borrowing") prior to 12:00 noon on the requested date of each
Swingline Borrowing. Each Notice of Swingline Borrowing shall
-19-
be irrevocable and shall specify: (i) the principal amount of such Swingline
Loan, (ii) the date of such Swingline Loan (which shall be a Business Day) and
(iii) the account of the Borrower to which the proceeds of such Swingline Loan
should be credited. The Administrative Agent will promptly advise the Swingline
Lender of each Notice of Swingline Borrowing. Each Swingline Loan shall accrue
interest at the Swingline Rate and shall have an Interest Period (subject to the
definition thereof) as agreed between the Borrower and the Swingline Lender. The
aggregate principal amount of each Swingline Loan shall be not less than
$100,000 or a larger multiple of $50,000, or such other minimum amounts agreed
to by the Swingline Lender and the Borrower. The Swingline Lender will make the
proceeds of each Swingline Loan available to the Borrower in Dollars in
immediately available funds at the account specified by the Borrower in the
applicable Notice of Swingline Borrowing not later than 3:00 p.m. on the
requested date of such Swingline Loan. The Administrative Agent will notify the
Lenders on a quarterly basis if any Swingline Loans occurred during such
quarter.
(b) The Swingline Lender, at any time and from time to time in its
sole discretion, may, on behalf of the Borrower (which hereby irrevocably
authorizes and directs the Swingline Lender to act on its behalf), give a Notice
of Revolving Borrowing to the Administrative Agent requesting the Lenders
(including the Swingline Lender) to make Base Rate Loans in an amount equal to
the unpaid principal amount of any Swingline Loan. Each Lender will make the
proceeds of its Base Rate Loan included in such Borrowing available to the
Administrative Agent for the account of the Swingline Lender in accordance with
Section 2.6, which will be used solely for the repayment of such Swingline Loan.
-----------
(c) If for any reason a Base Rate Borrowing may not be (as determined
in the sole discretion of the Administrative Agent), or is not, made in
accordance with the foregoing provisions, then each Lender (other than the
Swingline Lender) shall purchase an undivided participating interest in such
Swingline Loan in an amount equal to its Pro Rata Share thereof on the date that
such Base Rate Borrowing should have occurred. On the date of such required
purchase, each Lender shall promptly transfer, in immediately available funds,
the amount of its participating interest to the Administrative Agent for the
account of the Swingline Lender. If such Swingline Loan bears interest at a rate
other than the Base Rate, such Swingline Loan shall automatically become a Base
Rate Loan on the effective date of any such participation and interest shall
become payable on demand.
(d) Each Lender's obligation to make a Base Rate Loan pursuant to
Section 2.5(b) or to purchase the participating interests pursuant to Section
----------- - -------
2.5(c) shall be absolute and unconditional and shall not be affected by any
--- -
circumstance, including without limitation (i) any setoff, counterclaim,
recoupment, defense or other right that such Lender or any other Person may have
or claim against the Swingline Lender, the Borrower or any other Person for any
reason whatsoever, (ii) the existence of a Default or an Event of Default or the
termination of any Lender's Revolving Commitment, (iii) the existence (or
alleged existence) of any event or condition which has had or could reasonably
be expected to have a Material Adverse Effect, (iv) any breach of this Agreement
or any other Loan Document by the Borrower, the Administrative Agent or any
Lender or (v) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing. If such amount is not in fact made
available to the Swingline
-20-
Lender by any Lender, the Swingline Lender shall be entitled to recover such
amount on demand from such Lender, together with accrued interest thereon for
each day from the date of demand thereof at the Federal Funds Rate. Until such
time as such Lender makes its required payment, the Swingline Lender shall be
deemed to continue to have outstanding Swingline Loans in the amount of the
unpaid participation for all purposes of the Loan Documents. In addition, such
Lender shall be deemed to have assigned any and all payments made of principal
and interest on its Loans and any other amounts due to it hereunder, to the
Swingline Lender to fund the amount of such Lender's participation interest in
such Swingline Loans that such Lender failed to fund pursuant to this Section,
until such amount has been purchased in full.
Section 2.6. Funding of Borrowings.
---------------------
(a) Each Lender will make available each Loan to be made by it
hereunder on the proposed date thereof by wire transfer in immediately available
funds by 1:00 p.m. to the Administrative Agent at the Payment Office; provided,
--------
that the Swingline Loans will be made as set forth in Section 2.5. The
-----------
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts that it receives, in like funds by the close of business
on such proposed date, to an account maintained by the Borrower with the
Administrative Agent or at the Borrower's option, by effecting a wire transfer
of such amounts to an account designated by the Borrower to the Administrative
Agent.
(b) Unless the Administrative Agent shall have been notified by any
Lender prior to 5 p.m. one (1) Business Day prior to the date of a Borrowing in
which such Lender is participating that such Lender will not make available to
the Administrative Agent such Lender's share of such Borrowing, the
Administrative Agent may assume that such Lender has made such amount available
to the Administrative Agent on such date, and the Administrative Agent, in
reliance on such assumption, may make available to the Borrower on such date a
corresponding amount. If such corresponding amount is not in fact made available
to the Administrative Agent by such Lender on the date of such Borrowing, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest at the Federal Funds Rate for up
to two (2) days and thereafter at the rate specified for such Borrowing. If such
Lender does not pay such corresponding amount forthwith upon the Administrative
Agent's demand therefor, the Administrative Agent shall promptly notify the
Borrower, and the Borrower shall immediately pay such corresponding amount to
the Administrative Agent together with interest at the rate specified for such
Borrowing. Nothing in this subsection shall be deemed to relieve any Lender from
its obligation to fund its Pro Rata Share of any Borrowing hereunder or to
prejudice any rights which the Borrower may have against any Lender as a result
of any default by such Lender hereunder.
(c) All Revolving Borrowings shall be made by the Lenders on the
basis of their respective Pro Rata Shares. No Lender shall be responsible for
any default by any other Lender in its obligations hereunder, and each Lender
shall be obligated to make its Loans provided to be made by it hereunder,
regardless of the failure of any other Lender to make its Loans hereunder.
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Section 2.7. Interest Elections.
------------------
(a) Each Borrowing initially shall be of the Type specified in the
applicable Notice of Borrowing, and in the case of a Eurodollar Borrowing, shall
have an initial Interest Period as specified in such Notice of Borrowing.
Thereafter, the Borrower may elect to convert such Borrowing into a different
Type or to continue such Borrowing, and in the case of a Eurodollar Borrowing,
may elect Interest Periods therefor, all as provided in this Section. The
Borrower may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably
among the Lenders holding Loans comprising such Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing. This
Section shall NOT apply to Swingline Borrowings, which may not be converted or
continued.
(b) To make an election pursuant to this Section, the Borrower shall
give the Administrative Agent prior written notice (or telephonic notice
promptly confirmed in writing) of each Borrowing (a "Notice of
Conversion/Continuation") that is to be converted or continued, as the case may
be, (x) prior to 10:00 a.m. one (1) Business Day prior to the requested date of
a conversion into a Base Rate Borrowing and (y) prior to 11:00 a.m. three (3)
Business Days prior to a continuation of or conversion into a Eurodollar
Borrowing. Each such Notice of Conversion/Continuation shall be irrevocable and
shall specify (i) the Borrowing to which such Notice of Continuation/Conversion
applies and if different options are being elected with respect to different
portions thereof, the portions thereof that are to be allocated to each
resulting Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) shall be specified for each resulting Borrowing); (ii)
the effective date of the election made pursuant to such Notice of
Continuation/Conversion, which shall be a Business Day, (iii) whether the
resulting Borrowing is to be a Base Rate Borrowing or a Eurodollar Borrowing;
and (iv) if the resulting Borrowing is to be a Eurodollar Borrowing, the
Interest Period applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of "Interest Period". If any
such Notice of Continuation/Conversion requests a Eurodollar Borrowing but does
not specify an Interest Period, the Borrower shall be deemed to have selected an
Interest Period of one month. The principal amount of any resulting Borrowing
shall satisfy the minimum borrowing amount for Eurodollar Borrowings and Base
Rate Borrowings set forth in Section 2.3.
-----------
(c) If, on the expiration of any Interest Period in respect of any
Eurodollar Borrowing, the Borrower shall have failed to deliver a Notice of
Conversion/ Continuation, then, unless such Borrowing is repaid as provided
herein, the Borrower shall be deemed to have elected to convert such Borrowing
to a Base Rate Borrowing. No Borrowing may be converted into, or continued as, a
Eurodollar Borrowing if a Default or an Event of Default exists, unless the
Administrative Agent and each of the Lenders shall have otherwise consented in
writing. No conversion of any Eurodollar Loans shall be permitted except on the
last day of the Interest Period in respect thereof.
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(d) Upon receipt of any Notice of Conversion/Continuation, the
Administrative Agent shall promptly notify each Lender of the details thereof
and of such Lender's portion of each resulting Borrowing.
Section 2.8. Optional Reduction and Termination of Commitments.
-------------------------------------------------
(a) Unless previously terminated, all Revolving Commitments shall
terminate on the Revolving Commitment Termination Date.
(b) Upon at least three (3) Business Days' prior written notice (or
telephonic notice promptly confirmed in writing) to the Administrative Agent
(which notice shall be irrevocable), the Borrower may reduce the Aggregate
Revolving Commitments in part or terminate the Aggregate Revolving Commitments
in whole; provided, that (i) any partial reduction shall apply to reduce
--------
proportionately and permanently the Revolving Commitment of each Lender, (ii)
any partial reduction pursuant to this Section 2.8 shall be in an amount of at
-----------
least $2,000,000 and any larger multiple of $1,000,000, and (iii) no such
reduction shall be permitted which would reduce the Aggregate Revolving
Commitments to an amount less than the outstanding Revolving Credit Exposures of
all Lenders. Any such reduction in the Aggregate Revolving Commitments shall
result in a proportionate reduction (rounded to the next lowest integral
multiple of $100,000) in the Swingline Commitment.
Section 2.9. Repayment of Loans.
------------------
(a) The outstanding principal amount of all Revolving Loans shall be
due and payable (together with accrued and unpaid interest thereon) on the
Revolving Commitment Termination Date.
(b) The principal amount of each Swingline Borrowing shall be due and
payable (together with accrued interest thereon) on the earlier of (i) the last
day of the Interest Period applicable to such Borrowing and (ii) the Revolving
Commitment Termination Date.
Section 2.10. Evidence of Indebtedness. (a) Each Lender shall
------------------------
maintain in accordance with its usual practice appropriate records evidencing
the indebtedness of the Borrower to such Lender resulting from each Loan made by
such Lender from time to time, including the amounts of principal and interest
payable thereon and paid to such Lender from time to time under this Agreement.
The Administrative Agent shall maintain appropriate records in which shall be
recorded (i) the Revolving Commitment of each Lender, (ii) the amount of each
Loan made hereunder by each Lender, the Class and Type thereof and the Interest
Period applicable thereto, (iii) the date of each continuation thereof pursuant
to Section 2.7, (iv) the date of each conversion of all or a portion thereof to
-----------
another Type pursuant to Section 2.7, (v) the date and amount of any principal
-----------
or interest due and payable or to become due and payable from the Borrower to
each Lender hereunder in respect of such Loans and (vi) both the date and amount
of any sum received by the Administrative Agent hereunder from the Borrower in
respect of the Loans and each Lender's Pro Rata Share thereof. The entries made
in such records shall be prima facie evidence of the existence and amounts of
the obligations of the Borrower therein recorded; provided, that the failure or
--------
delay of any Lender or the Administrative Agent in
-23-
maintaining or making entries into any such record or any error therein shall
not in any manner affect the obligation of the Borrower to repay the Loans (both
principal and unpaid accrued interest) of such Lender in accordance with the
terms of this Agreement.
(b) At the request of any Lender (including the Swingline Lender) at
any time, the Borrower agrees that it will execute and deliver to such Lender a
Revolving Credit Note and, in the case of the Swingline Lender only, a Swingline
Note, payable to the order of such Lender.
Section 2.11. Prepayments.
-----------
(a) The Borrower shall have the right at any time and from time to
time to prepay any Borrowing, in whole or in part, without premium or penalty,
by giving irrevocable written notice (or telephonic notice promptly confirmed in
writing) to the Administrative Agent no later than (i) in the case of prepayment
of any Eurodollar Borrowing, 11:00 a.m. not less than three (3) Business Days
prior to any such prepayment, (ii) in the case of any prepayment of any Base
Rate Borrowing, not less than one Business Day prior to the date of such
prepayment, and (iii) in the case of Swingline Borrowings, prior to 11:00 a. m.
on the date of such prepayment. Each such notice shall be irrevocable and shall
specify the proposed date of such prepayment and the principal amount of each
Borrowing or portion thereof to be prepaid. Upon receipt of any such notice, the
Administrative Agent shall promptly notify each affected Lender of the contents
thereof and of such Lender's Pro Rata Share of any such prepayment. If such
notice is given, the aggregate amount specified in such notice shall be due and
payable on the date designated in such notice, together with accrued interest to
such date on the amount so prepaid in accordance with Section 2.12(d); provided,
------------ - --------
that if a Eurodollar Borrowing is prepaid on a date other than the last day of
an Interest Period applicable thereto, the Borrower shall also pay all amounts
required pursuant to Section 2.18. Each partial prepayment of any Loan (other
------------
than a Swingline Loan) shall be in an amount that would be permitted in the case
of an advance of a Revolving Borrowing of the same Type pursuant to Section 2.3
-----------
or in the case of a Swingline Loan pursuant to Section 2.5. Each prepayment of a
-----------
Borrowing shall be applied ratably to the Loans comprising such Borrowing.
(b) If at any time the Revolving Credit Exposure of all Lenders
exceeds the aggregate principal amount of the Revolving Credit Commitments at
such time, the Borrower shall immediately repay Swingline Loans and Revolving
Loans in an amount equal to such excess, together with all accrued and unpaid
interest on such excess amount and any amounts due under Section 2.18. Each
------------
prepayment of a Borrowing shall be applied ratably first to the Swingline Loans
to the full extent thereof, then to the Revolving Base Rate Loans to the full
extent thereof, and finally to Revolving Eurodollar Loans to the full extent
thereof.
(c) Immediately upon receipt by the Borrower of proceeds of the sale
or disposition by the Borrower or any of its Subsidiaries of any of their assets
(other than proceeds from the sale of assets in the ordinary course of
business), the total consideration of which exceeds $5,000,000 in the aggregate
(including condemnation proceeds), the Borrower shall prepay the Loans in an
amount equal to all such proceeds, net of commissions, taxes paid or reasonably
estimated by the Borrower to be payable in connection with such transaction in
the
-24-
current year or the immediately following year and other reasonable and
customary transaction costs, fees and expenses properly attributable to such
transaction and payable by the Borrower in connection therewith (in each case,
paid to non-Affiliates) provided, however, if the Borrower intends to (i) enter
into an Asset Like Kind Exchange, the Borrower shall have no obligation to so
prepay the Loans if, within 180 days of receipt of such proceeds, the Borrower
shall have used such net cash proceeds for the purchase of timber or real estate
assets to replace the sold or disposed assets according to the terms of such
Asset Like Kind Exchange; or (ii) replace any other assets, the Borrower shall
have no obligation to so prepay the Loans if, within 180 days of receipt of such
proceeds, the Borrower shall have used such net cash proceeds for capital
investments to replace the sold or disposed assets; provided, further, however,
that if such Asset Like Kind Exchange or capital investment does not occur
within such 180-day period, such prepayment shall be due on the first Business
Day following the expiration of the applicable Asset Like Kind Exchange or
capital investment period set forth above along with a detailed calculation
showing all deductions from gross proceeds in order to arrive at net cash
proceeds. Any such prepayments shall be applied in accordance with paragraph (e)
below.
(d) If the Borrower issues any capital stock, any other equity
interests, or any debt securities (other than notes payable issued in connection
with any timber land acquisition), then no later than the Business Day following
the date of receipt of any cash proceeds thereof, the Borrower shall prepay the
Loans in an amount equal to all such cash proceeds, net of underwriting
discounts and commissions and other reasonable costs paid to non-Affiliates in
connection therewith. Any such prepayment shall be applied in accordance with
paragraph (e) below.
(e) Any prepayments made by the Borrower pursuant to paragraphs (c)
or (d) above shall be applied as follows: first, to fees and reimbursable
-----
expenses of the Administrative Agent then due and payable pursuant to any of the
Loan Documents; second, to all other fees and reimbursable expenses of the
------
Lenders then due and payable pursuant to any of the Loan Documents, pro rata to
the Lenders based on their respective Pro Rata Shares of thereof; third, to
-----
interest then due and payable on Loans made to the Borrower, pro rata to the
Lenders based on their respective Pro Rata Shares thereof; and fourth, to the
------
principal balance of the Revolving Loans until the same shall have been paid in
full, pro rata to the Lenders based on their respective Pro Rata Shares thereof.
Section 2.12. Interest on Loans.
-----------------
(a) The Borrower shall pay interest on each Base Rate Loan at the
Base Rate plus the Applicable Margin for Base Rate Loans, in each case as in
effect from time to time, and on each Eurodollar Loan at the Adjusted LIBO Rate
for the applicable Interest Period in effect for such Loan, plus the Applicable
Margin for Eurodollar Loans in effect from time to time.
(b) The Borrower shall pay interest on each Swingline Loan at the
Swingline Rate in effect from time to time.
(c) While an Event of Default exists or after acceleration, at the
option of the Required Lenders, the Borrower shall pay interest ("Default
Interest") with respect to all
-25-
Eurodollar Loans at the rate otherwise applicable for the then-current Interest
Period plus an additional 2% per annum until the last day of such Interest
Period, and thereafter, and with respect to all Base Rate Loans (including all
Swingline Loans) and all other Obligations hereunder (other than Loans), at an
all-in rate in effect for Base Rate Loans, plus an additional 2% per annum.
(d) Interest on the principal amount of all Loans shall accrue from
and including the date such Loans are made to but excluding the date of any
repayment thereof. Interest on all outstanding Base Rate Loans and Swingline
Loans shall be payable quarterly in arrears on the last day of each March, June,
September and December and on the Revolving Commitment Termination Date.
Interest on all outstanding Eurodollar Loans shall be payable on the last day of
each Interest Period applicable thereto, and, in the case of any Eurodollar
Loans having an Interest Period in excess of three months or 90 days, on each
day which occurs every three months or 90 days, as the case may be, after the
initial date of such Interest Period, and on the Revolving Commitment
Termination Date. Interest on any Loan which is converted into a Loan of another
Type or which is repaid or prepaid shall be payable on the date of such
conversion or on the date of any such repayment or prepayment (on the amount
repaid or prepaid) thereof. All Default Interest shall be payable on demand.
(e) The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder and shall promptly notify the Borrower and the
Lenders of such rate in writing (or by telephone, promptly confirmed in
writing). Any such determination shall be conclusive and binding for all
purposes, absent manifest error.
Section 2.13. Fees.
----
(a) The Borrower shall pay to the Administrative Agent for its own
account fees in the amounts and at the times previously agreed upon by the
Borrower and the Administrative Agent.
(b) Commitment Fee. The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee, which shall accrue at the
Applicable Commitment Fee Percentage (determined daily in accordance with
Schedule I) on the daily amount of the unused Revolving Commitment of such
----------
Lender during the Availability Period. Accrued commitment fees shall be payable
in arrears on the last day of each March, June, September and December of each
year and on the Revolving Commitment Termination Date, commencing on the first
such date after the Closing Date. For purposes of computing commitment fees with
respect to the Revolving Commitments, the Revolving Commitment of each Lender
shall be deemed used to the extent of the outstanding Revolving Loans of such
Lender.
(c) Payments. Accrued fees shall be payable quarterly in arrears on
the last day of each March, June, September and December, commencing on
September 30, 2001 and on the Revolving Commitment Termination Date (and if
later, the date the Loans shall be repaid in their entirety).
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Section 2.14. Computation of Interest and Fees.
--------------------------------
All computations of interest and fees hereunder shall be made on the
basis of a year of 360 days for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such interest
or fees are payable (to the extent computed on the basis of days elapsed). Each
determination by the Administrative Agent of an interest amount or fee hereunder
shall be made in good faith and, except for manifest error, shall be final,
conclusive and binding for all purposes.
Section 2.15. Inability to Determine Interest Rates. If prior to the
-------------------------------------
commencement of any Interest Period for any Eurodollar Borrowing,
(i) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant interbank market, adequate
means do not exist for ascertaining LIBOR for such Interest Period, or
(ii) the Administrative Agent shall have received notice from the
Required Lenders that the Adjusted LIBO Rate does not adequately and fairly
reflect the cost to such Lenders (or Lender, as the case may be) of making,
funding or maintaining their (or its, as the case may be) Eurodollar Loans
for such Interest Period,
the Administrative Agent shall give written notice (or telephonic notice,
promptly confirmed in writing) to the Borrower and to the Lenders as soon as
practicable thereafter. In the case of Eurodollar Loans, until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) the obligations of
the Lenders to make Eurodollar Revolving Loans or to continue or convert
outstanding Loans as or into Eurodollar Loans shall be suspended and (ii) all
such affected Loans shall be converted into Base Rate Loans on the last day of
the then current Interest Period applicable thereto unless the Borrower prepays
such Loans in accordance with this Agreement. Unless the Borrower notifies the
Administrative Agent at least one Business Day before the date of any Eurodollar
Revolving Borrowing for which a Notice of Revolving Borrowing has previously
been given that it elects not to borrow on such date, then such Revolving
Borrowing shall be made as a Base Rate Borrowing.
Section 2.16. Illegality. If any Change in Law shall make it unlawful
----------
or impossible for any Lender to make, maintain or fund any Eurodollar Loan and
such Lender shall so notify the Administrative Agent, the Administrative Agent
shall promptly give notice thereof to the Borrower and the other Lenders,
whereupon until such Lender notifies the Administrative Agent and the Borrower
that the circumstances giving rise to such suspension no longer exist, the
obligation of such Lender to make Eurodollar Revolving Loans, or to continue or
convert outstanding Loans as or into Eurodollar Loans, shall be suspended. In
the case of the making of a Eurodollar Revolving Borrowing, such Lender's
Revolving Loan shall be made as a Base Rate Loan as part of the same Revolving
Borrowing for the same Interest Period and if the affected Eurodollar Loan is
then outstanding, such Loan shall be converted to a Base Rate Loan either (i) on
the last day of the then current Interest Period applicable to such Eurodollar
Loan if such
-27-
Lender may lawfully continue to maintain such Loan to such date or (ii)
immediately if such Lender shall determine that it may not lawfully continue to
maintain such Eurodollar Loan to such date. Notwithstanding the foregoing, the
affected Lender shall, prior to giving such notice to the Administrative Agent,
designate a different Applicable Lending Office if such designation would avoid
the need for giving such notice and if such designation would not otherwise be
disadvantageous to such Lender in the good faith exercise of its discretion.
Section 2.17. Increased Costs.
---------------
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement that is not otherwise included in the determination of
the Adjusted LIBO Rate hereunder against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the eurodollar interbank market any other
condition affecting this Agreement or any Eurodollar Loans made by such
Lender;
and the result of the foregoing is to increase the cost to such Lender of
making, converting into, continuing or maintaining a Eurodollar Loan or to
increase the cost to such Lender or to reduce the amount received or receivable
by such Lender hereunder (whether of principal, interest or any other amount),
then the Borrower shall promptly pay, upon written notice from and demand by
such Lender on the Borrower (with a copy of such notice and demand to the
Administrative Agent), to the Administrative Agent for the account of such
Lender, within five Business Days after the date of such notice and demand,
additional amount or amounts sufficient to compensate such Lender for such
additional costs incurred or reduction suffered.
(b) If any Lender shall have determined that on or after the date of
this Agreement any Change in Law regarding capital requirements has or would
have the effect of reducing the rate of return on such Lender's capital (or on
the capital of such Lender's parent corporation) as a consequence of its
obligations hereunder to a level below that which such Lender or such Lender's
parent corporation could have achieved but for such Change in Law (taking into
consideration such Lender's policies or the policies of such Lender's parent
corporation with respect to capital adequacy) then, from time to time, within
five (5) Business Days after receipt by the Borrower of written demand by such
Lender (with a copy thereof to the Administrative Agent), the Borrower shall pay
to such Lender such additional amounts as will compensate such Lender or such
Lender's parent corporation for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or such Lender's parent corporation, as the
case may be, specified in paragraph (a) or (b) of this Section shall be
delivered to the Borrower (with a copy to the Administrative Agent) and shall be
conclusive, absent manifest error. The Borrower shall pay any such Lender such
amount or amounts within 10 days after receipt thereof.
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(d) Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender's right to
demand such compensation.
Section 2.18. Funding Indemnity. In the event of (a) the payment of
-----------------
any principal of a Eurodollar Loan other than on the last day of the Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion or continuation of a Eurodollar Loan other than on the last day
of the Interest Period applicable thereto or (c) the failure by the Borrower to
borrow, prepay, convert or continue any Eurodollar Loan on the date specified in
any applicable notice (regardless of whether such notice is withdrawn or
revoked), then, in any such event, the Borrower shall compensate each Lender,
within five (5) Business Days after written demand from such Lender, for any
loss, cost or expense attributable to such event. In the case of a Eurodollar
Loan, such loss, cost or expense shall be deemed to include an amount determined
by such Lender to be the excess, if any, of (A) the amount of interest that
would have accrued on the principal amount of such Eurodollar Loan if such event
had not occurred at the Adjusted LIBO Rate applicable to such Eurodollar Loan
for the period from the date of such event to the last day of the then current
Interest Period therefor (or in the case of a failure to borrow, convert or
continue, for the period that would have been the Interest Period for such
Eurodollar Loan) over (B) the amount of interest that would accrue on the
principal amount of such Eurodollar Loan for the same period if the Adjusted
LIBO Rate were set on the date such Eurodollar Loan was prepaid or converted or
the date on which the Borrower failed to borrow, convert or continue such
Eurodollar Loan. A certificate as to any additional amount payable under this
Section 2.18 submitted to the Borrower by any Lender (with a copy to the
------------
Administrative Agent) shall be conclusive, absent manifest error.
Section 2.19. Taxes .
-----
(a) Any and all payments by or on account of any obligation of the
Borrower hereunder shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided, that if the Borrower shall be
--------
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) the Administrative Agent or any Lender (as the case may be)
shall receive an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent and each
Lender, within five (5) Business Days after written demand therefor, for the
full amount of any Indemnified Taxes or Other Taxes paid by the Administrative
Agent or such Lender, as the case may be, on or with respect to any payment by
or on account of any obligation of the Borrower hereunder (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to
-29-
amounts payable under this Section) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to the Borrower by a Lender or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the Code or any treaty to which the United
States is a party, with respect to payments under this Agreement shall deliver
to the Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law or reasonably requested by the Borrower as will
permit such payments to be made without withholding or at a reduced rate.
Without limiting the generality of the foregoing, each Foreign Lender agrees
that it will deliver to the Administrative Agent and the Borrower (or in the
case of a Participant, to the Lender from which the related participation shall
have been purchased), as appropriate, two (2) duly completed copies of (i)
Internal Revenue Service Form W-8 ECI, or any successor form thereto, certifying
that the payments received from the Borrower hereunder are effectively connected
with such Foreign Lender's conduct of a trade or business in the United States;
or (ii) Internal Revenue Service Form W-8 BEN, or any successor form thereto,
certifying that such Foreign Lender is entitled to benefits under an income tax
treaty to which the United States is a party which reduces the rate of
withholding tax on payments of interest; or (iii) Internal Revenue Service Form
W-8 BEN, or any successor form prescribed by the Internal Revenue Service,
together with a certificate (A) establishing that the payment to the foreign
lender qualifies as "portfolio interest" exempt from U.S. withholding tax under
Code section 871(h) or 881(c), and (B) stating that (1) the Foreign Lender is
not a bank for purposes of Code section 881(c)(3)(A), or the obligation of the
--
Borrower hereunder is not, with respect to such Foreign Lender, a loan agreement
entered into in the ordinary course of its trade or business, within the meaning
of that section; (2) the Foreign Lender is not a 10% shareholder of the Borrower
within the meaning of Code section 871(h)(3) or 881(c)(3)(B); and (3) the
Foreign Lender is not a controlled foreign corporation that is related to the
Borrower within the meaning of Code section 881(c)(3)(C); or (iv) such other
Internal Revenue Service forms as may be applicable to the Foreign Lender,
including Forms W-8 IMY or W-8 EXP. Each such Foreign Lender shall deliver to
the Borrower and the Administrative Agent such forms on or before the date that
it becomes a party to this Agreement (or in the case of a Participant, on or
before the date such Participant purchases the related participation). In
addition, each such Foreign Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Foreign
Lender. Each such Foreign Lender shall promptly notify the Borrower and the
Administrative Agent at any time that it determines that it is no longer in a
position to provide
-30-
any previously delivered certificate to the Borrower (or any other form of
certification adopted by the Internal Revenue Service for such purpose).
Section 2.20. Payments Generally; Pro Rata Treatment; Sharing of Set-
-------------------------------------------------------
offs.
----
(a) The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees, or of amounts payable under
Section 2.17, 2.18 or 2.19, or otherwise) prior to 1:00 p.m., on the date when
------------ ---- ----
due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at the Payment Office, except payments
to be made directly to the Swingline Lender as expressly provided herein and
except that payments pursuant to Sections 2.17, 2.18 and 2.19 and 10.3 shall be
------------- ---- ---- ----
made directly to the Persons entitled thereto. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be made payable for the period
of such extension. All payments hereunder shall be made in Dollars.
(b) If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal, interest and
fees then due hereunder, such funds shall be applied (i) first, towards payment
of interest and fees then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of interest and fees then due to such
parties, and (ii) second, towards payment of principal due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of principal
then due to such parties.
(c) If any Lender shall, by exercising any right of set-of or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans or participations in Swingline Loans that
would result in such Lender receiving payment of a greater proportion of the
aggregate amount of its Revolving Loans and participations in Swingline Loans
and accrued interest thereon than the proportion received by any other Lender,
then the Lender receiving such greater proportion shall purchase (for cash at
face value) participations in the Revolving Loans and participations in
Swingline Loans of other Lenders to the extent necessary so that the benefit of
all such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective
Revolving Loans and participations in Swingline Loans; provided, that (i) if any
--------
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in Swingline Loans
-31-
to any assignee or participant, other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.
(d) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Borrower will not make
such payment, the Administrative Agent may assume that the Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders, the amount or amounts due. In such event,
if the Borrower has not in fact made such payment, then each of the Lenders
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender with interest thereon, for each day from
and including the date such amount is distributed to it to but excluding the
date of payment to the Administrative Agent, at the greater of the Federal Funds
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.5(b), 2.20(c) or (d), 10.3(d), then the
----------- - ---- - - ---- -
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender's obligations under
such Sections until all such unsatisfied obligations are fully paid.
Section 2.21. Mitigation of Obligations. If any Lender requests
--------------------------
compensation under Section 2.17, or if the Borrower is required to pay any
------------
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 2.19, then such Lender shall use reasonable
------------
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the sole judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable under
Section 2.17 or Section 2.19, as the case may be, in the future and (ii) would
------------ ------------
not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay
all costs and expenses incurred by any Lender in connection with such
designation or assignment.
Section 2.22. Replacement of Lenders. If any Lender requests
----------------------
compensation under Section 2.17, or if the Borrower is required to pay any
------------
additional amount to any Lender or any Governmental Authority of the account of
any Lender pursuant to Section 2.19, or if any Lender defaults in its obligation
------------
to fund Loans hereunder, then the Borrower may, at its sole expense and effort,
upon notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions set forth in Section 10.4(b) all its interests, rights and
------------ -
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender); provided, that (i) the
--------
Borrower shall have received the prior written consent of the
-32-
Administrative Agent, which consent shall not be unreasonably withheld, (ii)
such Lender shall have received payment of an amount equal to the outstanding
principal amount of all Loans owed to it, accrued interest thereon, accrued fees
and all other amounts payable to it hereunder, from the assignee (in the case of
such outstanding principal and accrued interest) and from the Borrower (in the
case of all other amounts) and (iii) in the case of a claim for compensation
under Section 2.17 or payments required to be made pursuant to Section 2.19,
------------ ------------
such assignment will result in a reduction in such compensation or payments. A
Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.
ARTICLE III
CONDITIONS PRECEDENT TO LOANS
-----------------------------
Section 3.1. Conditions To Effectiveness. The obligations of the
---------------------------
Lenders (including the Swingline Lender) to make Loans hereunder shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 10.2).
------------
(a) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Closing Date, including reimbursement
or payment of all out-of-pocket expenses (including reasonable fees, charges and
disbursements of counsel to the Administrative Agent) required to be reimbursed
or paid by the Borrower hereunder, under any other Loan Document and under any
agreement with the Administrative Agent or SunTrust Equitable Securities
Corporation, as Arranger.
(b) The Administrative Agent (or its counsel) shall have received
the following:
(i) a counterpart of this Agreement signed by or on behalf of each
party thereto or written evidence satisfactory to the Administrative Agent
(which may include telecopy transmission of a signed signature page of this
Agreement) that such party has signed a counterpart of this Agreement;
(ii) if requested by any Lender, duly executed Notes payable to such
Lender;
(iii) a duly executed Subsidiary Guaranty Agreement and Indemnity and
Contribution Agreement;
(iv) copies of duly executed payoff letters, in form and substance
satisfactory to Administrative Agent, executed by each of the Existing
Lenders;
(v) a certificate of the Secretary or Assistant Secretary of each
Loan Party, attaching and certifying copies of its bylaws and of the
resolutions of its boards of directors, authorizing the execution, delivery
and performance of the Loan Documents to
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which it is a party and certifying the name, title and true signature of
each officer of such Loan Party executing the Loan Documents to which it is
a party;
(vi) certified copies of the articles of incorporation or other
charter documents of each Loan Party, together with certificates of good
standing or existence, as may be available from the Secretary of State of
the jurisdiction of incorporation of such Loan Party and each other
jurisdiction where such Loan Party is required to be qualified to do
business as a foreign corporation;
(vii) a favorable written opinion of ▇. ▇▇▇▇▇▇▇ ▇▇▇▇, Vice
President, General Counsel and Secretary of the Borrower, addressed to the
Administrative Agent and each of the Lenders, and covering such matters
relating to the Loan Parties, the Loan Documents and the transactions
contemplated therein as the Administrative Agent or the Required Lenders
shall reasonably request;
(viii) a certificate, dated the Closing Date and signed by a
Responsible Officer, confirming compliance with the conditions set forth in
paragraphs (a), (b) and (c) of Section 3.2;
-----------
(ix) a duly executed Notice of Borrowing, if applicable;
(x) a duly executed funds disbursement agreement;
(xi) certified copies of all consents, approvals, authorizations,
registrations and filings and orders required or advisable to be made or
obtained under any Requirement of Law, or by any contractual obligation of
each Loan Party, in connection with the execution, delivery, performance,
validity and enforceability of the Loan Documents or any of the
transactions contemplated thereby, and such consents, approvals,
authorizations, registrations, filings and orders shall be in full force
and effect and all applicable waiting periods shall have expired; and
(xii) copies of the consolidated financial statements of the
Borrower and its subsidiaries for the fiscal years ended 1998, 1999, and
2000, including balance sheets, income and cash flow statements audited by
independent public accountants of recognized national standing and prepared
in conformity with GAAP, and the consolidated financial statements of
Borrower and its subsidiaries for the fiscal quarter ending March 31, 2001,
and such other financial information as the Administrative Agent may
reasonably request;
(xiii) a certified copy of the Del-Tin Agreements; and
(xiv) certificates of insurance issued on behalf of insurers of the
Borrower and all guarantors, describing in reasonable detail the types and
amounts of insurance (property and liability) maintained by the Borrower
and all guarantors, naming the Administrative Agent as additional insured
and loss payee, as appropriate.
-34-
Section 3.2. Each Credit Event. The obligation of each Lender to make
-----------------
a Loan on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
(a) at the time of and immediately after giving effect to such
Borrowing no Default or Event of Default shall exist; and
(b) all representations and warranties of each Loan Party set
forth in the Loan Documents shall be true and correct in all material respects
on and as of the date of such Borrowing before and after giving effect thereto;
(c) since the date of the audited financial statements of the
Borrower described in Section 4.4, there shall have been no change which has had
-----------
or could reasonably be expected to have a Material Adverse Effect; and
(d) the Administrative Agent shall have received such other
documents, certificates, information or legal opinions as the Administrative
Agent or the Required Lenders may reasonably request, all in form and substance
reasonably satisfactory to the Administrative Agent or the Required Lenders.
Each Borrowing shall be deemed to constitute a representation and
warranty by the Borrower on the date thereof as to the matters specified in
paragraphs (a), (b) and (c) of this Section 3.2.
-----------
Section 3.3. Delivery of Documents. All of the Loan Documents,
---------------------
certificates, legal opinions and other documents and papers referred to in this
Article III, unless otherwise specified, shall be delivered to the
Administrative Agent for the account of each of the Lenders and, except for the
Notes, in sufficient counterparts or copies for each of the Lenders and shall be
in form and substance satisfactory in all respects to the Administrative Agent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower represents and warrants to the Administrative Agent and
each Lender as follows:
Section 4.1. Existence; Power. The Borrower and each of its
----------------
Subsidiaries (i) is duly organized, validly existing and in good standing as a
corporation under the laws of the jurisdiction of its organization, (ii) has all
requisite power and authority to carry on its business as now conducted, and
(iii) is duly qualified to do business, and is in good standing, in each
jurisdiction where such qualification is required, except where a failure to be
so qualified could not reasonably be expected to result in a Material Adverse
Effect.
Section 4.2. Organizational Power; Authorization. The execution,
-----------------------------------
delivery and performance by each Loan Party of the Loan Documents to which it is
a party are within such Loan Party's organizational powers and have been duly
authorized by all necessary
-35-
organizational, and if required, stockholder, action. This Agreement has been
duly executed and delivered by the Borrower, and constitutes, and each other
Loan Document to which any Loan Party is a party, when executed and delivered by
such Loan Party, will constitute, valid and binding obligations of the Borrower
or such Loan Party (as the case may be), enforceable against it in accordance
with their respective terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity.
Section 4.3. Governmental Approvals; No Conflicts. The execution,
------------------------------------
delivery and performance by the Borrower of this Agreement, and by each Loan
Party of the other Loan Documents to which it is a party (a) do not require any
consent or approval of, registration or filing with, or any action by, any
Governmental Authority, except those as have been obtained or made and are in
full force and effect, (b) will not violate any applicable law or regulation or
the charter, by-laws or other organizational documents of the Borrower or any of
its Subsidiaries or any judgment or order of any Governmental Authority, (c)
will not violate or result in a default under any indenture, material agreement
or other material instrument binding on the Borrower or any of its Subsidiaries
or any of its assets or give rise to a right thereunder to require any payment
to be made by the Borrower or any of its Subsidiaries and (d) will not result in
the creation or imposition of any Lien on any asset of the Borrower or any of
its Subsidiaries.
Section 4.4. Financial Statements. The Borrower has furnished to each
--------------------
Lender (i) the audited consolidated balance sheet of the Borrower and its
Subsidiaries as of December 31, 2000 and the related consolidated statements of
income, shareholders' equity and cash flows for the fiscal year then ended
reported on by KPMG, LLP and (ii) the unaudited consolidated balance sheet of
the Borrower and its Subsidiaries as at the end of March 31, 2001, and the
related unaudited consolidated statements of income and cash flows for the
fiscal quarter and year-to-date period then ending, certified by a Responsible
Officer. Such financial statements fairly present the consolidated financial
condition of the Borrower and its Subsidiaries as of such dates and the
consolidated results of operations for such periods in conformity with GAAP
consistently applied, subject to year end audit adjustments and the absence of
footnotes in the case of the statements referred to in clause (ii). Since
December 31, 2000, there have been no changes with respect to the Borrower and
its Subsidiaries which have had or could reasonably be expected to have, singly
or in the aggregate, a Material Adverse Effect.
Section 4.5. Litigation and Environmental Matters.
------------------------------------
(a) No litigation, investigation or proceeding of or before any
arbitrators or Governmental Authorities is pending against or, to the knowledge
of the Borrower, threatened against or affecting the Borrower or any of its
Subsidiaries (i) as to which there is a reasonable possibility of an adverse
determination that could reasonably be expected to have, either individually or
in the aggregate, a Material Adverse Effect or (ii) which in any manner draws
into question the validity or enforceability of this Agreement or any other Loan
Document.
(b) Neither the Borrower nor any of its Subsidiaries (i) has
failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other
-36-
approval required under any Environmental Law, (ii) has become subject to any
Environmental Liability, (iii) has received notice of any claim with respect to
any Environmental Liability or (iv) knows of any basis for any Environmental
Liability, in each case which could reasonably be expected to have a Material
Adverse Effect.
Section 4.6. Compliance with Laws and Agreements. The Borrower and
-----------------------------------
each Subsidiary is in compliance with (a) all applicable laws, rules,
regulations and orders of any Governmental Authority, and (b) all indentures,
agreements or other instruments binding upon it or its properties, except where
non-compliance, either singly or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
Section 4.7. Investment Company Act, Etc. Neither the Borrower nor
---------------------------
any of its Subsidiaries is (a) an "investment company", as defined in, or
subject to regulation under, the Investment Company Act of 1940, as amended, (b)
a "holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935, as amended or (c) otherwise subject to any
other regulatory scheme limiting its ability to incur debt.
Section 4.8. Taxes. The Borrower and its Subsidiaries and each other
-----
Person for whose taxes the Borrower or any Subsidiary could become liable have
timely filed or caused to be filed all Federal income tax returns and all other
material tax returns that are required to be filed by them, and have paid all
taxes shown to be due and payable on such returns or on any assessments made
against it or its property and all other taxes, fees or other charges imposed on
it or any of its property by any Governmental Authority, except (i) to the
extent the failure to do so would not have a Material Adverse Effect or (ii)
where the same are currently being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary, as the case may be,
has set aside on its books adequate reserves. The charges, accruals and reserves
on the books of the Borrower and its Subsidiaries in respect of such taxes are
adequate, and no tax liabilities that could be materially in excess of the
amount so provided are anticipated.
Section 4.9. Margin Regulations. None of the proceeds of any of the
------------------
Loans will be used for "purchasing" or "carrying" any "margin stock" with the
respective meanings of each of such terms under Regulation U as now and from
time to time hereafter in effect or for any purpose that violates the provisions
of the applicable Margin Regulations.
Section 4.10. ERISA. No ERISA Event has occurred or is reasonably
-----
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than
$100,000 the fair market value of the assets of such Plan, and the present value
of all accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Standards No. 87) did
not, as of the date of the most recent financial statements reflecting such
amounts, exceed by more than $100,000 the fair market value of the assets of all
such underfunded Plans.
-37-
Section 4.11. Ownership of Property.
---------------------
(a) Each of the Borrower and its Subsidiaries has good title to,
or valid leasehold interests in, all of its real and personal property material
to the operation of its business.
(b) Each of the Borrower and its Subsidiaries owns, or is
licensed, or otherwise has the right, to use, all patents, trademarks, service
marks, tradenames, copyrights and other intellectual property material to its
business, and the use thereof by the Borrower and its Subsidiaries does not
infringe on the rights of any other Person, except for any such infringements
that, individually or in the aggregate, would not have a Material Adverse
Effect.
Section 4.12. Disclosure. The Borrower has disclosed to the Lenders
----------
all agreements, instruments, and corporate or other restrictions to which the
Borrower or any of its Subsidiaries is subject, and all other matters known to
any of them, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. None of the reports (including
without limitation all reports that the Borrower is required to file with the
Securities and Exchange Commission), financial statements, certificates or other
information furnished by or on behalf of the Borrower to the Administrative
Agent or any Lender in connection with the negotiation or syndication of this
Agreement or any other Loan Document or delivered hereunder or thereunder (as
modified or supplemented by any other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, taken as a whole, in light of the circumstances
under which they were made, not misleading;
Section 4.13. Labor Relations. There are no strikes, lockouts or
---------------
other material labor disputes or grievances against the Borrower or any of its
Subsidiaries, or, to the Borrower's knowledge, threatened against or affecting
the Borrower or any of its Subsidiaries, and no significant unfair labor
practice, charges or grievances are pending against the Borrower or any of its
Subsidiaries, or to the Borrower's knowledge, threatened against any of them
before any Governmental Authority, which could reasonably be expected to have a
Material Adverse Effect. All payments due from the Borrower or any of its
Subsidiaries pursuant to the provisions of any collective bargaining agreement
have been paid or accrued as a liability on the books of the Borrower or any
such Subsidiary, except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
Section 4.14. Subsidiaries. Schedule 4.14 sets forth the name of, the
------------ -------------
ownership interest of the Borrower in, the jurisdiction of incorporation of, and
the type of, each Subsidiary as of the Closing Date.
ARTICLE V
AFFIRMATIVE COVENANTS
---------------------
The Borrower covenants and agrees that so long as any Lender has a
Commitment hereunder or the principal of and interest on any Loan or any fee
remains unpaid:
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Section 5.1. Financial Statements and Other Information. The Borrower
------------------------------------------
will deliver to the Administrative Agent and each Lender:
(a) as soon as available and in any event within 90 days after the
end of each fiscal year of Borrower, a copy of the annual audited report for
such fiscal year for the Borrower and its Subsidiaries, containing a
consolidated balance sheet of the Borrower and its Subsidiaries as of the end of
such fiscal year and the related consolidated statements of income,
stockholders' equity and cash flows (together with all footnotes thereto) of the
Borrower and its Subsidiaries for such fiscal year, setting forth in each case
in comparative form the figures for the previous fiscal year, all in reasonable
detail and reported on by KPMG, LLP or other independent public accountants of
nationally recognized standing (without a "going concern" or like qualification,
exception or explanation and without any qualification or exception as to scope
of such audit) to the effect that such financial statements present fairly in
all material respects the financial condition and the results of operations of
the Borrower and its Subsidiaries for such fiscal year on a consolidated and
consolidating basis in accordance with GAAP and that the examination by such
accountants in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards;
(b) as soon as available and in any event within 45 days after the
end of each of the first three fiscal quarters of each fiscal year of the
Borrower, an unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such fiscal quarter and the related unaudited
consolidated statements of income and cash flows of the Borrower and its
Subsidiaries for such fiscal quarter and the then elapsed portion of such fiscal
year, setting forth in each case in comparative form the figures for the
corresponding quarter and the corresponding portion of Borrower's previous
fiscal year, all certified by the chief financial officer or treasurer of the
Borrower as presenting fairly in all material respects the financial condition
and results of operations of the Borrower and its Subsidiaries on a consolidated
basis in accordance with GAAP, subject to normal year-end audit adjustments and
the absence of footnotes;
(c) concurrently with the delivery of the financial statements
referred to in clauses (a) and (b) above, a certificate of a Responsible
Officer, (i) certifying as to whether there exists a Default or Event of Default
on the date of such certificate, and if a Default or an Event of Default then
exists, specifying the details thereof and the action which the Borrower has
taken or proposes to take with respect thereto, (ii) setting forth in reasonable
detail calculations demonstrating compliance with Article VI, (iii) setting
forth in reasonable detail the calculation of Total Debt to EBITDA Ratio and
(iv) stating whether any change in GAAP or the application thereof has occurred
since the date of the Borrower's audited financial statements referred to in
Section 4.4 and, if any change has occurred, specifying the effect of such
-----------
change on the financial statements accompanying such certificate;
(d) promptly after the same become publicly available, copies of
all periodic and other reports, proxy statements and other materials filed with
the Securities and Exchange Commission, or any Governmental Authority succeeding
to any or all functions of said Commission, or with any national securities
exchange, or distributed by the Borrower to its shareholders generally, as the
case may be;
-39-
(e) promptly upon the consummation of any offering of common or
preferred stock of the Borrower, notice thereof and the aggregate amount of
proceeds raised therefrom.
(f) promptly following any request therefor, such other
information regarding the results of operations, business affairs and financial
condition of the Borrower or any Subsidiary as the Administrative Agent or any
Lender may reasonably request.
Section 5.2. Notices of Material Events. The Borrower will furnish to
--------------------------
the Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default or Event of Default;
(b) the filing or commencement of any action, suit or proceeding
by or before any arbitrator or Governmental Authority against or, to the
knowledge of the Borrower, affecting the Borrower or any Subsidiary which, if
adversely determined, could reasonably be expected to result in a Material
Adverse Effect;
(c) the occurrence of any event or any other development by which
the Borrower or any of its Subsidiaries (i) fails to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) becomes subject to any
Environmental Liability, (iii) receives notice of any claim with respect to any
Environmental Liability, or (iv) becomes aware of any basis for any
Environmental Liability and in each of the preceding clauses, which individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect;
(d) the occurrence of any ERISA Event that alone, or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Borrower and its Subsidiaries in an aggregate amount
exceeding $5,000,000; and
(e) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
(f) Each notice delivered under this Section shall be accompanied
by a written statement of a Responsible Officer setting forth the details of the
event or development requiring such notice and any action taken or proposed to
be taken with respect thereto.
Section 5.3. Existence; Conduct of Business. The Borrower will, and
------------------------------
will cause each of its Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and maintain in full force and effect its legal
existence and its respective rights, licenses, permits, privileges, franchises,
patents, copyrights, trademarks and trade names material to the conduct of its
business; provided, that nothing in this Section shall prohibit any merger,
--------
consolidation, liquidation or dissolution permitted under Section 7.3.
-----------
Section 5.4. Compliance with Laws, Etc. The Borrower will, and will
-------------------------
cause each of its Subsidiaries to, comply with all laws, rules, regulations and
requirements of any Governmental Authority applicable to its properties, except
where the failure to do so, either
-40-
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
Section 5.5. Payment of Obligations. The Borrower will, and will
----------------------
cause each of its Subsidiaries to, pay and discharge at or before maturity, all
of its obligations and liabilities (including without limitation all tax
liabilities and claims that could result in a statutory Lien) before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) the
Borrower or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
Section 5.6. Books and Records. The Borrower will, and will cause
-----------------
each of its Subsidiaries to, keep proper books of record and account in which
full, true and correct entries shall be made of all dealings and transactions in
relation to its business and activities to the extent necessary to prepare the
consolidated financial statements of Borrower in conformity with GAAP.
Section 5.7. Visitation, Inspection, Appraisals Etc.
---------------------------------------
(a) The Borrower will, and will cause each of its Subsidiaries to,
permit any representative of the Administrative Agent or any Lender, to visit
and inspect its properties, to examine its books and records and to make copies
and take extracts therefrom, and to discuss its affairs, finances and accounts
with any of its officers and with its independent certified public accountants,
all at such reasonable times and as often as the Administrative Agent or any
Lender may reasonably request after reasonable prior notice to the Borrower;
provided, however, if an Event of Default has occurred and is continuing, no
prior notice shall be required.
(b) The Borrower will, and will cause each of its Subsidiaries to,
deliver to the Lenders such appraisals of the timber land of the Loan Parties as
the Administrative Agent may reasonably request at any time and from time to
time, such appraisals to be conducted by an appraiser, and in form and
substance, reasonably satisfactory to the Administrative Agent conducted at the
expense of the Lenders, unless an Event of Default has occurred and is
continuing, at which time such appraisals shall be conducted at the expense of
the Borrower as frequently as the Required Lenders shall request.
Section 5.8. Maintenance of Properties; Insurance. The Borrower will,
------------------------------------
and will cause each of its Subsidiaries to, (a) keep and maintain all property
material to the conduct of its business in good working order and condition,
ordinary wear and tear except where the failure to do so, either individually or
it the aggregate, could not reasonably be expected to result in a Material
Adverse Effect and (b) maintain with financially sound and reputable insurance
companies, insurance with respect to its properties and business, and the
properties and business of its Subsidiaries, against loss or damage of the kinds
customarily insured against by companies in the same or similar businesses
operating in the same or similar locations.
-41-
Section 5.9. Use of Proceeds. The Borrower will use the proceeds of
---------------
all Loans to refinance existing indebtedness on the Closing Date and thereafter
to provide for working capital needs and for other general corporate purposes of
the Borrower and its Subsidiaries. No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that would violate any
rule or regulation of the Board of Governors of the Federal Reserve System,
including Regulations T, U or X.
Section 5.10. Additional Subsidiaries. If any additional Subsidiary
-----------------------
is acquired or formed after the Closing Date, the Borrower will, within ten (10)
business days after such Subsidiary is acquired or formed, notify the
Administrative Agent and the Lenders thereof and will cause such Subsidiary to
become a Subsidiary Loan Party by executing agreements in the form of Annex I to
the Subsidiary Guaranty Agreement and Annex I to the Indemnity and Contribution
Agreement in form and substance satisfactory to the Administrative Agent and the
Required Lenders and will cause such Subsidiary to deliver simultaneously
therewith similar documents applicable to such Subsidiary required under Section
-------
3.1 as reasonably requested by the Administrative Agent.
---
ARTICLE VI
FINANCIAL COVENANTS
-------------------
The Borrower covenants and agrees that so long as any Lender has a
Commitment hereunder or the principal of or interest on or any Loan remains
unpaid or any fee remains unpaid:
Section 6.1. Leverage Ratio. The Borrower and its Subsidiaries shall
--------------
maintain, as of the last day of each fiscal quarter of the Borrower, commencing
on the fiscal quarter ending on June 30, 2001, a Leverage Ratio of not greater
than 0.50:1.0.
Section 6.2. Interest Coverage Ratio. The Borrower and its
-----------------------
Subsidiaries shall maintain, as of last day of each fiscal quarter of the
Borrower, commencing with the fiscal quarter ending June 30, 2001, an Interest
Coverage Ratio of not less than 5.0:1.0.
Section 6.3. Fixed Charge Coverage Ratio. The Borrower and its
---------------------------
Subsidiaries shall maintain, as of last day of each fiscal quarter of the
Borrower, commencing with the fiscal quarter ending June 30, 2001, a Fixed
Charge Coverage Ratio of not less than 2.0:1.0.
Section 6.4. Consolidated Net Worth The Borrower will not permit its
----------------------
Consolidated Net Worth at any time to be less than an amount equal to the sum of
(i) $150,308,900, plus (ii) 50% of Consolidated Net Income accrued during each
fiscal quarter ending thereafter, commencing with the fiscal quarter ending
March 31, 2001, provided, that if Consolidated Net Income is negative in any
--------
fiscal quarter the amount added for such fiscal quarter shall be zero and such
negative Consolidated Net Income shall not reduce the amount of Consolidated Net
Income added from any previous fiscal quarter, plus (iii) 100% of the net
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proceeds from any public or private offering of common or preferred stock of the
Borrower issued after the Closing Date.
Section 6.5. Minimum Timber Market Value. The Borrower and its
---------------------------
Subsidiaries shall maintain, as of the last day of each fiscal quarter of the
Borrower, commencing with the fiscal quarter ending June 30, 2001, a Timber
Market Value greater than 200% of the Aggregate Revolving Commitment Amount.
ARTICLE VII
NEGATIVE COVENANTS
------------------
The Borrower covenants and agrees that so long as any Lender has a
Commitment hereunder or the principal of or interest on any Loan remains unpaid
or any fee remains unpaid:
Section 7.1. Indebtedness. The Borrower will not, and will not
------------
permit any of its Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness created pursuant to the Loan Documents;
(b) Indebtedness existing on the date hereof and set forth on
Schedule 7.1 and extensions, renewals and replacements of any such Indebtedness
------------
that do not increase the outstanding principal amount thereof (immediately prior
to giving effect to such extension, renewal or replacement) or shorten the
maturity or the weighted average life thereof;
(c) Indebtedness of the Borrower or any Subsidiary incurred to
finance the acquisition, construction or improvement of any fixed or capital
assets, including Capital Lease Obligations and any Indebtedness assumed in
connection with the acquisition of any such assets if secured by a Lien on any
such assets prior to the acquisition thereof; provided, that such Indebtedness
is incurred prior to or within 90 days after such acquisition or the completion
of such construction or improvements or extensions, renewals, and replacements
of any such Indebtedness that do not increase the outstanding principal amount
thereof (immediately prior to giving effect to such extension, renewal or
replacement) or shorten the maturity or the weighted average life thereof;
provided further, that the aggregate principal amount of such Indebtedness does
not exceed $1,000,000 at any time outstanding;
(d) Indebtedness of the Borrower owing to any Subsidiary Loan Party
and of any Subsidiary Loan Party owing to the Borrower or any other Subsidiary
Loan Party;
(e) Guarantees by the Borrower of Indebtedness of any Subsidiary Loan
Party and by any Subsidiary of Indebtedness of the Borrower or any other
Subsidiary Loan Party;
(f) Indebtedness of any Person which becomes a Subsidiary after the
date of this Agreement; provided, that such Indebtedness exists at the time that
--------
such Person becomes a Subsidiary and is not created in contemplation of or in
connection with such Person becoming a
-43-
Subsidiary and the aggregate principal amount of such Indebtedness permitted
hereunder shall not exceed $5,000,000 outstanding at any time;
(g) Indebtedness in respect of obligations under Hedging Agreements
permitted by Section 7.10;
------------
(h) Indebtedness incurred under a line of credit with BancorpSouth in
an amount not to exceed $1,000,000;
(i) Letters of Credit issued in the ordinary course of business of
the Borrower in an aggregate stated amount not to exceed $5,000,000; and
(j) other unsecured Indebtedness in an aggregate principal amount not
to exceed $5,000,000 at any time outstanding.
Section 7.2. Negative Pledge. The Borrower will not, and will not
---------------
permit any of its Subsidiaries to, create, incur, assume or suffer to exist any
Lien on any of its assets or property now owned or hereafter acquired or,
except:
(a) Permitted Encumbrances;
(b) any Liens on any property or asset of the Borrower or any
Subsidiary existing on the Closing Date set forth on Schedule 7.2; provided,
------------ --------
that such Lien shall not apply to any other property or asset of the Borrower or
any Subsidiary;
(c) purchase money Liens upon or in any fixed or capital assets to
secure the purchase price or the cost of construction or improvement of such
fixed or capital assets or to secure Indebtedness incurred solely for the
purpose of financing the acquisition, construction or improvement of such fixed
or capital assets (including Liens securing any Capital Lease Obligations);
provided, that (i) such Lien secures Indebtedness permitted by Section 7.1(c),
-------- --------------
(ii) such Lien attaches to such asset concurrently or within 90 days after the
acquisition, improvement or completion of the construction thereof; (iii) such
Lien does not extend to any other asset; and (iv) the Indebtedness secured
thereby does not exceed the cost of acquiring, constructing or improving such
fixed or capital assets;
(d) any Lien (i) existing on any asset of any Person at the time such
Person becomes a Subsidiary of the Borrower, (ii) existing on any asset of any
Person at the time such Person is merged with or into the Borrower or any
Subsidiary of the Borrower or (iii) existing on any asset prior to the
acquisition thereof by the Borrower or any Subsidiary of the Borrower; provided,
--------
that any such Lien was not created in the contemplation of any of the foregoing
and any such Lien secures only those obligations which it secures on the date
that such Person becomes a Subsidiary or the date of such merger or the date of
such acquisition; and
(e) extensions, renewals, or replacements of any Lien referred to in
paragraphs (a) through (d) of this Section; provided, that the principal amount
--------
of the
-44-
Indebtedness secured thereby is not increased and that any such extension,
renewal or replacement is limited to the assets originally encumbered thereby.
Section 7.3. Fundamental Changes.
-------------------
(a) The Borrower will not, and will not permit any Subsidiary to,
merge into or consolidate into any other Person, or permit any other Person to
merge into or consolidate with it or liquidate or dissolve; provided, that if at
--------
the time thereof and immediately after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing (i) the Borrower or any
Subsidiary may merge with a Person if the Borrower (or such Subsidiary if the
Borrower is not a party to such merger) is the surviving Person, (ii) any
Subsidiary may merge into another Subsidiary; provided, that if any party to
--------
such merger is a Subsidiary Loan Party, the Subsidiary Loan Party shall be the
surviving Person and (iii) any Subsidiary (other than a Subsidiary Loan Party)
may liquidate or dissolve if the Borrower determines in good faith that such
liquidation or dissolution is in the best interests of the Borrower and is not
materially disadvantageous to the Lenders; provided, that any such merger
--------
involving a Person that is not a wholly-owned Subsidiary immediately prior to
such merger shall not be permitted unless also permitted by Section 7.4.
-----------
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, engage in any business other than businesses of the type
conducted by the Borrower and its Subsidiaries on the date hereof and businesses
reasonably related thereto.
Section 7.4. Investments, Loans, Etc. The Borrower will not, and
------------------------
will not permit any of its Subsidiaries to, purchase, hold or acquire (including
pursuant to any merger with any Person that was not a wholly-owned Subsidiary
prior to such merger), any common stock, evidence of indebtedness or other
securities (including any option, warrant, or other right to acquire any of the
foregoing) of, make or permit to exist any loans or advances to, Guarantee any
obligations of, or make or permit to exist any investment or any other interest
in, any other Person (all of the foregoing being collectively called
"Investments"), or purchase or otherwise acquire (in one transaction or a series
of transactions) any assets of any other Person that constitute a business unit,
or create or form any Subsidiary, except:
(a) Investments (other than Permitted Investments) existing on the
date hereof and set forth on Schedule 7.4 (including Investments in
------------
Subsidiaries);
(b) Permitted Investments;
(c) Guarantees constituting Indebtedness permitted by Section 7.1;
-----------
(d) Investments made by the Borrower in or to any Subsidiary Loan
Party and by any Subsidiary to the Borrower or in or to another Subsidiary Loan
Party;
(e) loans or advances to employees, officers or directors of the
Borrower or any Subsidiary in the ordinary course of business for travel,
relocation and related expenses;
-45-
provided, however, that the aggregate amount of all such loans and advances does
not exceed $500,000 at any time;
(f) Hedging Agreements permitted by Section 7.10; and
------------
(g) Other Investments which in the aggregate do not exceed $1,000,000
in any fiscal year of the Borrower.
Section 7.5. Restricted Payments. The Borrower will not, and will
-------------------
not permit its Subsidiaries to, declare or make, or agree to pay or make,
directly or indirectly, any dividend on any class of its stock, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, retirement, defeasance or other acquisition of,
any shares of common stock or Indebtedness subordinated to the Obligations of
the Borrower or any options, warrants, or other rights to purchase such common
stock or such Indebtedness, whether now or hereafter outstanding (each, a
"Restricted Payment"), except for (i) dividends payable by the Borrower solely
in shares of any class of its common, (ii) Restricted Payments made by any
Subsidiary to the Borrower or to another Subsidiary and (iii) cash dividends
paid on, and cash redemptions of, the common stock or preferred stock of the
Borrower; provided, that no Default or Event of Default has occurred and is
--------
continuing at the time such dividend is paid or redemption is made.
Section 7.6. Sale of Assets. The Borrower will not, and will not
--------------
permit any of its Subsidiaries to, convey, sell, lease, assign, transfer or
otherwise dispose of, any of its assets, business or property, whether now owned
or hereafter acquired, or, in the case of any Subsidiary, issue or sell any
shares of such Subsidiary's common stock to any Person other than the Borrower
(or to qualify directors if required by applicable law), except (i) the sale or
other disposition for fair market value of obsolete or worn out property or
other property not necessary for operations disposed of in the ordinary course
of business, (ii) the sale of inventory and Permitted Investments in the
ordinary course of business, (iii) the sale of timber land and real estate in
connection with any Asset Like Kind Exchange, (iv) other sales of assets not to
exceed $5,000,000 in the aggregate in any fiscal year of the Borrower or (v) the
sale of assets in the ordinary course of business not to exceed $1,000,000 at
any one time.
Section 7.7. Transactions with Affiliates. The Borrower will not,
----------------------------
and will not permit any of its Subsidiaries to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Affiliates, except (a) in the ordinary course of business at prices and
on terms and conditions not less favorable to the Borrower or such Subsidiary
than could be obtained on an arm's-length basis from unrelated third parties,
(b) transactions between or among the Borrower and its wholly-owned Subsidiaries
not involving any other Affiliates and (c) any Restricted Payment permitted by
Section 7.5.
-----------
Section 7.8. Restrictive Agreements. The Borrower will not, and
----------------------
will not permit any Subsidiary to, directly or indirectly, enter into, incur or
permit to exist any agreement that prohibits, restricts or imposes any condition
upon (a) the ability of the Borrower or any Subsidiary to create, incur or
permit any Lien upon any of its assets or properties, whether now
-46-
owned or hereafter acquired, or (b) the ability of any Subsidiary to pay
dividends or other distributions with respect to its common stock, to make or
repay loans or advances to the Borrower or any other Subsidiary, to Guarantee
Indebtedness of the Borrower or any other Subsidiary or to transfer any of its
property or assets to the Borrower or any Subsidiary of the Borrower; provided,
--------
that (i) the foregoing shall not apply to restrictions or conditions imposed by
law or by this Agreement or any other Loan Document or the Note Agreement, (ii)
the foregoing shall not apply to customary restrictions and conditions contained
in agreements relating to the sale of a Subsidiary pending such sale, provided
such restrictions and conditions apply only to the Subsidiary that is sold and
such sale is permitted hereunder, (iii) clause (a) shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions and conditions
apply only to the property or assets securing such Indebtedness and (iv) clause
(a) shall not apply to customary provisions in leases restricting the assignment
thereof.
Section 7.9. Sale and Leaseback Transactions. The Borrower will
-------------------------------
not, and will not permit any of the Subsidiaries to, enter into any arrangement,
directly or indirectly, whereby it shall sell or transfer any property, real or
personal, used or useful in its business, whether now owned or hereinafter
acquired, and thereafter rent or lease such property or other property that it
intends to use for substantially the same purpose or purposes as the property
sold or transferred.
Section 7.10. Hedging Agreements. The Borrower will not, and will not
------------------
permit any of the Subsidiaries to, enter into any Hedging Agreement other than
Hedging Agreements entered into in the ordinary course of business to hedge or
mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct
of its business or the management of its liabilities. Solely for the avoidance
of doubt, the Borrower acknowledges that a Hedging Agreement entered into for
speculative purposes or of a speculative nature (which shall be deemed to
include any Hedging Agreement under which the Borrower or any of the
Subsidiaries is or may become obliged to make any payment (i) in connection with
the purchase by any third party of any common stock or any Indebtedness or (ii)
as a result of changes in the market value of any common stock or any
Indebtedness) is not a Hedging Agreement entered into in the ordinary course of
business to hedge or mitigate risks.
Section 7.11. Amendment to Material Documents. The Borrower will
-------------------------------
not, and will not permit any Subsidiary to, amend, modify or waive any of its
rights in a manner materially adverse to the Lenders under (a) its certificate
of incorporation, bylaws or other organizational documents or (b) the Del-Tin
Agreements
Section 7.12. Accounting Changes. The Borrower will not, and will not
------------------
permit any Subsidiary to, make any significant change in accounting treatment or
reporting practices, except as required or permitted by GAAP, or change the
fiscal year of the Borrower or of any Subsidiary, except to change the fiscal
year of a Subsidiary to conform its fiscal year to that of the Borrower.
-47-
ARTICLE VIII
EVENTS OF DEFAULT
-----------------
Section 8.1. Events of Default. If any of the following events (each
-----------------
an "Event of Default") shall occur:
----------------
(a) the Borrower shall fail to pay any principal of any Loan when and
as the same shall become due and payable, whether at the due date thereof or at
a date fixed for prepayment or otherwise; or
(b) the Borrower shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount payable under clause (a) of this
Article) payable under this Agreement or any other Loan Document, when and as
the same shall become due and payable, and such failure shall continue
unremedied for a period of three (3) Business Days; or
(c) any representation or warranty made or deemed made by or on
behalf of the Borrower or any Subsidiary in or in connection with this Agreement
or any other Loan Document (including the Schedules attached thereto) and any
amendments or modifications hereof or waivers hereunder, or in any certificate,
report, financial statement or other document submitted to the Administrative
Agent or the Lenders by any Loan Party or any representative of any Loan Party
pursuant to or in connection with this Agreement or any other Loan Document
shall prove to be incorrect in any material respect when made or deemed made or
submitted; or
(d) the Borrower shall fail to observe or perform any covenant or
agreement contained in Sections 5.1, 5.2, 5.3 (with respect to the Borrower's
------------ --- ---
existence) or Articles VI or VII; or
(e) any Loan Party shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those referred to in clauses
(a), (b) and (d) above), and such failure shall remain unremedied for 30 days
after the earlier of (i) any officer of the Borrower becomes aware of such
failure, or (ii) notice thereof shall have been given to the Borrower by the
Administrative Agent or any Lender; or
(f) the Borrower or any Subsidiary (whether as primary obligor or as
guarantor or other surety) shall fail to pay any principal of or premium or
interest on any Material Indebtedness that is outstanding, when and as the same
shall become due and payable (whether at scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument evidencing such Indebtedness; or any other event shall occur or
condition shall exist under any agreement or instrument relating to such
Indebtedness and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event or
condition is to accelerate, or permit the acceleration of, the maturity of such
Indebtedness; or any such Indebtedness shall be declared to be due and payable;
or required to be prepaid or redeemed (other than by a regularly scheduled
required prepayment or redemption),
-48-
purchased or defeased, or any offer to prepay, redeem, purchase or defease such
Indebtedness shall be required to be made, in each case prior to the stated
maturity thereof; or
(g) the Borrower or any Subsidiary Loan Party shall (i) commence a
voluntary case or other proceeding or file any petition seeking liquidation,
reorganization or other relief under any federal, state or foreign bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a custodian, trustee, receiver, liquidator or other similar
official of it or any substantial part of its property, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (i) of this Section, (iii) apply for
or consent to the appointment of a custodian, trustee, receiver, liquidator or
other similar official for the Borrower or any such Subsidiary Loan Party or for
a substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors, or (vi) take any action for the
purpose of effecting any of the foregoing; or
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of the Borrower or any Subsidiary Loan Party or its debts, or any
substantial part of its assets, under any federal, state or foreign bankruptcy,
insolvency or other similar law now or hereafter in effect or (ii) the
appointment of a custodian, trustee, receiver, liquidator or other similar
official for the Borrower or any Subsidiary Loan Party or for a substantial part
of its assets, and in any such case, such proceeding or petition shall remain
undismissed for a period of 60 days or an order or decree approving or ordering
any of the foregoing shall be entered; or
(i) the Borrower or any Subsidiary Loan Party shall become unable to
pay, shall admit in writing its inability to pay, or shall fail to pay, its
debts as they become due; or
(j) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with other ERISA Events that have
occurred, could reasonably be expected to result in liability to the Borrower
and the Subsidiaries in an aggregate amount exceeding $5,000,000; or
(k) any judgment or order for the payment of money in excess of
$500,000 in the aggregate shall be rendered against the Borrower or any
Subsidiary, and either (i) enforcement proceedings shall have been commenced by
any creditor upon such judgment or order or (ii) there shall be a 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) any non-monetary judgment or order shall be rendered against the
Borrower or any Subsidiary that could reasonably be expected to have a Material
Adverse Effect, and there shall be a 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
(m) a Change in Control shall occur or exist; or
-49-
(n) any provision of any Subsidiary Guaranty Agreement shall for any
reason cease to be valid and binding on, or enforceable against, any Subsidiary
Loan Party, or any Subsidiary Loan Party shall so state in writing, or any
Subsidiary Loan Party shall seek to terminate its Subsidiary Guaranty Agreement;
or
(o) an "Event of Default" shall occur under any other Loan Document;
then, and in every such event (other than an event with respect to the Borrower
described in clause (g) or (h) of this Section) and at any time thereafter
during the continuance of such event, the Administrative Agent may, and upon the
written request of the Required Lenders shall, by notice to the Borrower, take
any or all of the following actions, at the same or different times: (i)
terminate the Commitments, whereupon the Commitment of each Lender shall
terminate immediately; (ii) declare the principal of and any accrued interest on
the Loans, and all other Obligations owing hereunder, to be, whereupon the same
shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower and
(iii) exercise all remedies contained in any other Loan Document; and that, if
an Event of Default specified in either clause (g) or (h) shall occur, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon, and all fees, and all other
Obligations shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower.
ARTICLE IX
THE ADMINISTRATIVE AGENT
------------------------
Section 9.1. Appointment of Administrative Agent. Each Lender
-----------------------------------
irrevocably appoints SunTrust Bank as the Administrative Agent and authorizes it
to take such actions on its behalf and to exercise such powers as are delegated
to the Administrative Agent under this Agreement and the other Loan Documents,
together with all such actions and powers that are reasonably incidental
thereto. The Administrative Agent may perform any of its duties hereunder by or
through any one or more sub-agents appointed by the Administrative Agent. The
Administrative Agent and any such sub-agent may perform any and all of its
duties and exercise its rights and powers through their respective Related
Parties. The exculpatory provisions set forth in this Article shall apply to any
such sub-agent and the Related Parties of the Administrative Agent and any such
sub-agent and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as Administrative Agent.
Section 9.2. Nature of Duties of Administrative Agent. The
----------------------------------------
Administrative Agent shall not have any duties or obligations except those
expressly set forth in this Agreement and the other Loan Documents. Without
limiting the generality of the foregoing, (a) the Administrative Agent shall not
be subject to any fiduciary or other implied duties, regardless of whether a
Default or an Event of Default has occurred and is continuing, (b) the
Administrative Agent shall not have any duty to take any discretionary action or
exercise any discretionary
-50-
powers, except those discretionary rights and powers expressly contemplated by
the Loan Documents that the Administrative Agent is required to exercise in
writing by the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section
10.2), and (c) except as expressly set forth in the Loan Documents, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Borrower or
any of its Subsidiaries that is communicated to or obtained by the
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 10.2) or in the absence of its own gross negligence or
willful misconduct. The Administrative Agent shall not be deemed to have
knowledge of any Default or Event of Default unless and until written notice
thereof is given to the Administrative Agent by the Borrower or any Lender, and
the Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with any Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements, or other terms and conditions set forth in any Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article III or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.
Section 9.3. Lack of Reliance on the Administrative Agent. Each of
--------------------------------------------
the Lenders and the Swingline Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each of the Lenders and the
Swingline Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, continue to make its own
decisions in taking or not taking of any action under or based on this
Agreement, any related agreement or any document furnished hereunder or
thereunder.
Section 9.4. Certain Rights of the Administrative Agent. If the
------------------------------------------
Administrative Agent shall request instructions from the Required Lenders with
respect to any action or actions (including the failure to act) in connection
with this Agreement, the Administrative Agent shall be entitled to refrain from
such act or taking such act, unless and until it shall have received
instructions from such Lenders; and the Administrative Agent shall not incur
liability to any Person by reason of so refraining. Without limiting the
foregoing, no Lender shall have any right of action whatsoever against the
Administrative Agent as a result of the Administrative Agent acting or
refraining from acting hereunder in accordance with the instructions of the
Required Lenders where required by the terms of this Agreement.
Section 9.5. Reliance by Administrative Agent. The Administrative
--------------------------------
Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice,
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request, certificate, consent, statement, instrument, document or other writing
believed by it to be genuine and to have been signed, sent or made by the proper
Person. The Administrative Agent may also rely upon any statement made to it
orally or by telephone and believed by it to be made by the proper Person and
shall not incur any liability for relying thereon. The Administrative Agent may
consult with legal counsel (including counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or not taken by it in accordance with the advice of such
counsel, accountants or experts.
Section 9.6. The Administrative Agent in its Individual Capacity. The
---------------------------------------------------
bank serving as the Administrative Agent shall have the same rights and powers
under this Agreement and any other Loan Document in its capacity as a Lender as
any other Lender and may exercise or refrain from exercising the same as though
it were not the Administrative Agent; and the terms "Lenders", "Required
Lenders", "holders of Notes", or any similar terms shall, unless the context
clearly otherwise indicates, include the Administrative Agent in its individual
capacity. The bank acting as the Administrative Agent and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Subsidiary or Affiliate of the Borrower as if
it were not the Administrative Agent hereunder.
Section 9.7. Successor Administrative Agent.
------------------------------
(a) The Administrative Agent may resign at any time by giving
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Administrative
Agent, subject to the approval by the Borrower provided that no Default or Event
of Default shall exist at such time. If no successor Administrative Agent shall
have been so appointed, and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a commercial bank organized under the laws
of the United States of America or any state thereof or a bank which maintains
an office in the United States, having a combined capital and surplus of at
least $500,000,000.
(b) Upon the acceptance of its appointment as the Administrative
Agent hereunder by a successor, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents. If within 45 days after written notice is given of
the retiring Administrative Agent's resignation under this Section 9.7 no
-----------
successor Administrative Agent shall have been appointed and shall have accepted
such appointment, then on such 45/th/ day (i) the retiring Administrative
Agent's resignation shall become effective, (ii) the retiring Administrative
Agent shall thereupon be discharged from its duties and obligations under the
Loan Documents and (iii) the Required Lenders shall thereafter perform all
duties of the retiring Administrative Agent under the Loan Documents until such
time as the Required Lenders appoint a successor Administrative Agent as
provided above. After any retiring Administrative Agent's resignation hereunder,
the provisions of this Article IX shall continue in effect for the benefit of
such retiring Administrative Agent and its representatives and agents in
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respect of any actions taken or not taken by any of them while it was serving as
the Administrative Agent.
Section 9.8. Authorization to Execute other Loan Documents. Each
---------------------------------------------
Lender hereby authorizes the Administrative Agent to execute on behalf of all
Lenders all Loan Documents other than this Agreement.
Section 9.9. Syndication Agent. Each Lender hereby designates Bank
-----------------
One, N.A. as Syndication Agent and agrees that the Syndication Agent shall have
no duties or obligations under any Loan Documents to any Lender or any Loan
Party.
ARTICLE X
MISCELLANEOUS
-------------
Section 10.1. Notices.
-------
(a) Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other
communications to any party herein to be effective shall be in writing and shall
be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
To the Borrower: Deltic Timber Corporation
▇▇▇ ▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. Clef ▇▇▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
To the Administrative Agent SunTrust Bank
or the Swingline Lender: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy Number: (▇▇▇)▇▇▇-▇▇▇▇ fax
With a copy to: SunTrust Agency Services
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇. E./ ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
To any other Lender: the address set forth in the
Administrative Questionnaire
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Any party hereto may change its address or telecopy number for notices
and other communications hereunder by notice to the other parties hereto. All
such notices and other 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 mails
or if delivered, upon receipt; provided, that notices delivered to the
Administrative Agent or the Swingline Bank shall not be effective until actually
received by such Person at its address specified in this Section 10.1.
------------
(b) Any agreement of the Administrative Agent and the Lenders
herein to receive certain notices by telephone or facsimile is solely for the
convenience and at the request of the Borrower. The Administrative Agent and the
Lenders shall be entitled to rely on the authority of any Person purporting to
be a Person authorized by the Borrower to give such notice and the
Administrative Agent and Lenders shall not have any liability to the Borrower or
other Person on account of any action taken or not taken by the Administrative
Agent or the Lenders in reliance upon such telephonic or facsimile notice. The
obligation of the Borrower to repay the Loans and all other Obligations
hereunder shall not be affected in any way or to any extent by any failure of
the Administrative Agent and the Lenders to receive written confirmation of any
telephonic or facsimile notice or the receipt by the Administrative Agent and
the Lenders of a confirmation which is at variance with the terms understood by
the Administrative Agent and the Lenders to be contained in any such telephonic
or facsimile notice.
Section 10.2. Waiver; Amendments.
------------------
(a) No failure or delay by the Administrative Agent or any Lender
in exercising any right or power hereunder or any other Loan Document, and no
course of dealing between the Borrower and the Administrative Agent or any
Lender, shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power or any abandonment or discontinuance of
steps to enforce such right or power, preclude any other or further exercise
thereof or the exercise of any other right or power hereunder or thereunder. The
rights and remedies of the Administrative Agent and the Lenders hereunder and
under the other Loan Documents are cumulative and are not exclusive of any
rights or remedies provided by law. No waiver of any provision of this Agreement
or any other Loan Document or consent to any departure by the Borrower therefrom
shall in any event be effective unless the same shall be permitted by paragraph
(b) of this Section, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan shall not be construed as a
waiver of any Default or Event of Default, regardless of whether the
Administrative Agent or any Lender may have had notice or knowledge of such
Default or Event of Default at the time.
(b) No amendment or waiver of any provision of this Agreement or
the other Loan Documents, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Borrower and the Required Lenders or the Borrower and the
Administrative Agent with the consent of the Required Lenders and then such
waiver or consent shall be effective only in the specific instance and for the
spe-
-54-
cific purpose for which given; provided, that no amendment or waiver shall: (i)
--------
increase the Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the written
consent of each Lender affected thereby, (iii) postpone the date fixed for any
payment of any principal of, or interest on, any Loan or any fees hereunder or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date for the termination or reduction of any Commitment, without the
written consent of each Lender affected thereby, (iv) change Section 2.20 (b) or
------------
(c) in a manner that would alter the pro rata sharing of payments required
thereby, without the written consent of each Lender, (v) change any of the
provisions of this Section or the definition of "Required Lenders" or any other
provision hereof specifying the number or percentage of Lenders which are
required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, without the consent of each
Lender; (vi) release any guarantor or limit the liability of any such guarantor
under any guaranty agreement, without the written consent of each Lender; (vii)
release all or substantially all collateral (if any) securing any of the
Obligations, without the written consent of each Lender; provided further, that
----------------
no such agreement shall amend, modify or otherwise affect the rights, duties or
obligations of the Administrative Agent or the Swingline Bank without the prior
written consent of such Person.
Section 10.3. Expenses; Indemnification.
-------------------------
(a) The Borrower shall pay (i) all reasonable, out-of-pocket costs
and expenses of the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent and its Affiliates, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of the Loan
Documents and any amendments, modifications or waivers thereof (whether or not
the transactions contemplated in this Agreement or any other Loan Document shall
be consummated), and (ii) all out-of-pocket costs and expenses (including,
without limitation, the reasonable fees, charges and disbursements of outside
counsel) incurred by the Administrative Agent or any Lender in connection with
the enforcement or protection of its rights in connection with this Agreement,
including its rights under this Section, or in connection with the Loans made
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans.
(b) The Borrower shall indemnify the Administrative Agent and each
Lender, and each Related Party of any of the foregoing (each, an "Indemnitee")
against, and hold each of them harmless from, any and all reasonable costs,
losses, liabilities, claims, damages and related expenses, including the fees,
charges and disbursements of any counsel for any Indemnitee, which may be
incurred by or asserted against any Indemnitee arising out of, in connection
with or as a result of (i) the execution or delivery of this Agreement or any
other agreement or instrument contemplated hereby, the performance by the
parties hereto of their respective obligations hereunder or the consummation of
any of the transactions contemplated hereby, (ii) any Loan or any actual or
proposed use of the proceeds therefrom, (iii) any actual or alleged presence or
release of Hazardous Materials on or from any property owned by the Borrower or
any Subsidiary or any Environmental Liability related in any way to the Borrower
or any
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Subsidiary or (iv) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory and regardless of whether any Indemnitee is a party thereto;
provided, that the Borrower shall not be obligated to indemnify any Indemnitee
--------
for any of the foregoing arising out of such Indemnitee's gross negligence or
willful misconduct as determined by a court of competent jurisdiction in a final
and nonappealable judgment.
(c) The Borrower shall pay, and hold the Administrative Agent and
each of the Lenders harmless from and against, any and all present and future
stamp, documentary, and other similar taxes with respect to this Agreement and
any other Loan Documents, any collateral described therein, or any payments due
thereunder, and save the Administrative Agent and each Lender harmless from and
against any and all liabilities with respect to or resulting from any delay or
omission to pay such taxes.
(d) To the extent that the Borrower fails to pay any amount required
to be paid to the Administrative Agent or the Swingline Lender under clauses
(a), (b) or (c) hereof, each Lender severally agrees to pay to the
Administrative Agent or the Swingline Lender, as the case may be, such Lender's
Pro Rata Share (determined as of the time that the unreimbursed expense or
indemnity payment is sought) of such unpaid amount; provided, that the
--------
unreimbursed expense or indemnified payment, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent or the Swingline Lender in its capacity as such.
(e) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to actual or direct damages) arising out of, in connection with or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
transactions contemplated therein, any Loan or the use of proceeds thereof.
(f) All amounts due under this Section shall be payable promptly
after written demand therefor.
Section 10.4. Successors and Assigns.
----------------------
(a) 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 Borrower may not assign or transfer any of its rights
or obligations hereunder without the prior written consent of each Lender (and
any attempted assignment or transfer by the Borrower without such consent shall
be null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
-56-
(b) Any Lender may assign to one or more Eligible Assignees at any
time assign to one or more assignees all or a portion of its rights and
obligations under this Agreement and the other Loan Documents (including all or
a portion of its Commitment and the Loans at the time owing to it); provided,
--------
that (i) except in the case of an assignment of the entire remaining amount of
the assigning Lender's Commitment and the Revolving Credit Exposure owing to it
or in the case of an assignment to a Lender or an Affiliate of a Lender or an
Approved Fund with respect to a Lender, the aggregate amount of the Commitment
(which for this purpose includes Revolving Credit Exposure outstanding
thereunder) of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $1,000,000, unless
each of the Administrative Agent and, so long as no Event of Default has
occurred and is continuing, the Borrower otherwise consent (each such consent
not to be unreasonably withheld or delayed; provided, that the Borrower shall be
deemed to have reasonably withheld such consent if the Eligible Assignee is a
bank owned by any forest products company), (ii) each partial assignment shall
be made as an assignment of a proportionate part of all the assigning Lender's
rights and obligations under this Agreement with respect to the Commitment or
Revolving Credit Exposure assigned, except that this clause (ii) shall not
prohibit any Lender from assigning all or a portion of its rights and
obligations on a non-pro rata basis, and (iii) the parties to each assignment
shall execute and deliver to the Administrative Agent an Assignment and
Acceptance, together with a processing and recordation fee of $1,000, and the
Eligible Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire and, if it is a Foreign
Lender, the appropriate documents required under Section 2.19(e). Subject to
---------------
acceptance and recording thereof by the Administrative Agent pursuant to
paragraph (c) of this Section, from and after the effective date specified in
each Assignment and Acceptance, the Eligible Assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.17, 2.18 and 2.19 and 10.3). Any assignment or transfer
-------- ---- ---- ---- ----
by a Lender of rights or obligations under this Agreement that does not comply
with this paragraph shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
paragraph (d) of this Section. Any consent of the Borrower otherwise required
hereunder shall not be required if an Event of Default has occurred and is
continuing. Upon the consummation of any such assignment hereunder, the
assigning Lender, the Administrative Agent and the Borrower shall make
appropriate arrangements to have new Notes issued if so requested by either or
both the assigning Lender or the assignee. Any assignment or other transfer by a
Lender that does not fully comply with the terms of this clause (b) shall be
treated for purposes of this Agreement as a sale of a participation pursuant to
clause (d) below.
(c) The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at one of its offices in Atlanta, Georgia,
or at the offices of its designated agent, a copy of each Assignment and
Acceptance delivered to it and a register for the
-57-
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
--------
conclusive, and the Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by the Borrower
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.
(d) Any Lender may, without the consent of, or notice to, the
Borrower, the Administrative Agent or the Swingline Lender, sell participations
to one or more banks or other entities (a "Participant") in all or a portion of
-----------
such Lender's rights and obligations under this Agreement (including all or a
portion of its Commitment, the Loans owing to it and its other Revolving Credit
Exposure); provided, that (i) such Lender's obligations under this Agreement
--------
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of its obligations hereunder, and (iii)
the Borrower, the Administrative Agent, the Swingline Bank and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and the other Loan
Documents. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and the other Loan Documents and to approve any
amendment, modification or waiver of any provision of this Agreement and the
other Loan Documents; provided, that such agreement or instrument may provide
--------
that such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver of this Agreement described in the first
proviso of Section 10.2(b) that affect the Participant. Subject to paragraph (e)
---------------
of this Section, the Borrower agrees that each Participant shall be entitled to
the benefits of Sections 2.17, 2.18 and 2.19 to the same extent as if it were a
------------- ---- ----
Lender hereunder and had acquired its interest by assignment pursuant to
paragraph (b) of this Section. To the extent permitted by law, each Participant
shall also be entitled to the benefits of Section 2.20 as though it were a
------------
Lender, provided, that such Participant agrees to be subject to Section 2.20 as
-------- ------------
though it were a Lender hereunder.
(e) A Participant shall not be entitled to receive any greater
payment under Section 2.17, 2.18 and 2.19 than the applicable Lender would have
---------------------------
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower's prior written consent. A Participant that would be a Foreign
Lender if it were a Lender shall not be entitled to the benefits of Section 2.19
------------
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower, to comply with
Section 2.19(e) as though it were a Lender.
---------------
(e) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement and its Notes (if any)
to secure obligations of such Lender, including without limitation any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided, that no
--------
such pledge or assignment of a security interest shall release a
-58-
Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.
Section 10.5. Governing Law; Jurisdiction; Consent to Service of
--------------------------------------------------
Process.
-------
(a) This Agreement and the other Loan Documents shall be construed
in accordance with and be governed by the law (without giving effect to the
conflict of law principles thereof) of the State of Georgia.
(b) The Borrower hereby irrevocably and unconditionally submits to
the non-exclusive jurisdiction of the United States District Court of the
Northern District of Georgia, and of any state court of the State of Georgia
located in ▇▇▇▇▇▇ County and any appellate court from any thereof, in any action
or proceeding arising out of or relating to this Agreement or any other Loan
Document or the transactions contemplated hereby or thereby, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such Georgia state court or,
to the extent permitted by applicable law, such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement or
any other Loan Document shall affect any right that the Administrative Agent or
any Lender may otherwise have to bring any action or proceeding relating to this
Agreement or any other Loan Document against the Borrower in the courts of any
jurisdiction.
(c) The Borrower irrevocably and unconditionally waives any
objection which it may now or hereafter have to the laying of venue of any such
suit, action or proceeding described in paragraph (b) of this Section and
brought in any court referred to in paragraph (b) of this Section. Each of the
parties hereto irrevocably waives, to the fullest extent permitted by applicable
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to the
service of process in the manner provided for notices in Section 10.1. Nothing
------------
in this Agreement or in any other Loan Document will affect the right of any
party hereto to serve process in any other manner permitted by law.
Section 10.6. WAIVER OF JURY TRIAL. EACH PARTY HERETO IRREVOCABLY
--------------------
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B)
-59-
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 10.7. Right of Setoff. In addition to any rights now or
---------------
hereafter granted under applicable law and not by way of limitation of any such
rights, each Lender shall have the right, at any time or from time to time upon
the occurrence and during the continuance of an Event of Default, without prior
notice to the Borrower, any such notice being expressly waived by the Borrower
to the extent permitted by applicable law, to set off and apply against all
deposits (general or special, time or demand, provisional or final) of the
Borrower at any time held or other obligations at any time owing by such Lender
to or for the credit or the account of the Borrower against any and all
Obligations held by such Lender irrespective of whether such Lender shall have
made demand hereunder and although such Obligations may be unmatured. Each
Lender agrees promptly to notify the Administrative Agent and the Borrower after
any such set-off and any application made by such Lender; provided, that the
--------
failure to give such notice shall not affect the validity of such set-off and
application.
Section 10.8. Counterparts; Integration. This Agreement may be
-------------------------
executed by one or more of the parties to this Agreement on any number of
separate counterparts (including by telecopy), and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. This
Agreement, the other Loan Documents, and any separate letter agreement(s)
relating to any fees payable to the Administrative Agent constitute the entire
agreement among the parties hereto and thereto regarding the subject matters
hereof and thereof and supersede all prior agreements and understandings, oral
or written, regarding such subject matters.
Section 10.9. Survival. All covenants, agreements, representations
--------
and warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under this Agreement is outstanding and
unpaid and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.17, 2.18, 2.19, and 10.3 and Article IX shall survive
------------- ---- ---- ----
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Commitments or the termination of this Agreement or any
provision hereof. All representations and warranties made herein, in the
certificates, reports, notices, and other documents delivered pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
other Loan Documents, and the making of the Loans.
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SECTION 10.10. Severability. Any provision of this Agreement or any
------------
other Loan Document held to be illegal, invalid or unenforceable in any
jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of
such illegality, invalidity or unenforceability without affecting the legality,
validity or enforceability of the remaining provisions hereof or thereof.
SECTION 10.11. Confidentiality. The Administrative Agent and each
---------------
Lender agrees to take normal and reasonable precautions to maintain the
confidentiality of any information designated in writing as confidential and
provided to it by the Borrower or any Subsidiary, except that such information
may be disclosed (i) to any Related Party of the Administrative Agent or any
such Lender, including without limitation accountants, legal counsel and other
advisors, (ii) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (iii) to the extent requested by any
regulatory agency or authority, (iv) to the extent that such information becomes
publicly available other than as a result of a breach of this Section, or which
becomes available to the Administrative Agent, any Lender or any Related Party
of any of the foregoing on a nonconfidential basis from a source other than the
Borrower, (v) in connection with the exercise of any remedy hereunder or any
suit, action or proceeding relating to this Agreement or the enforcement of
rights hereunder, and (ix) subject to provisions substantially similar to this
Section 10.11, to any actual or prospective assignee or Participant, or (vi)
-------------
with the consent of the Borrower. Any Person required to maintain the
confidentiality of any information as provided for in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
information as such Person would accord its own confidential information.
SECTION 10.12. Interest Rate Limitation. Notwithstanding anything
------------------------
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which may be treated as
interest on such Loan under applicable law (collectively, the "Charges"), shall
exceed the maximum lawful rate of interest (the "Maximum Rate") which may be
contracted for, charged, taken, received or reserved by a Lender holding such
Loan in accordance with applicable law, the rate of interest payable in respect
of such Loan hereunder, together with all Charges payable in respect thereof,
shall be limited to the Maximum Rate and, to the extent lawful, the interest and
Charges that would have been payable in respect of such Loan but were not
payable as a result of the operation of this Section shall be cumulated and the
interest and Charges payable to such Lender in respect of other Loans or periods
shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Rate to
the date of repayment, shall have been received by such Lender.
SECTION 10.13. Waiver of Effect of Corporate Seal. The Borrower
----------------------------------
represents and warrants that neither it nor any other Loan Party is required to
affix its corporate or company seal to this Agreement or any other Loan Document
pursuant to any requirement of law or regulation, and waives any shortening of
the statute of limitations that may result from not affixing the corporate seal
to this Agreement or such other Loan Documents.
-61-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
DELTIC TIMBER CORPORATION
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Treasurer
SUNTRUST BANK
as Administrative Agent, as Swingline Lender
and as a Lender
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
Revolving Commitment: $30,000,000
BANK ONE, N.A.,
as Syndication Agent and a Lender
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
Revolving Commitment: $25,000,000
AMERICAN AGCREDIT, PCA
By /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
Revolving Commitment: $20,000,000
REGIONS BANK
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President/CEO - El Dorado
Revolving Commitment: $20,000,000
BANCORPSOUTH BANK
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and CEO
Revolving Commitment: $10,000,000
SUBSIDIARY GUARANTY AGREEMENT
SUBSIDIARY GUARANTY AGREEMENT dated as of June 20, 2001, among each of
the Subsidiaries listed on Schedule I hereto (each such subsidiary individually,
a "Guarantor" and collectively, the "Guarantors") of DELTIC TIMBER CORPORATION,
a Delaware corporation (the "Borrower"), and SUNTRUST BANK, a Georgia banking
corporation as administrative agent (the "Administrative Agent") for the Lenders
(as defined in the Credit Agreement referred to below).
Reference is made to the Revolving Credit Agreement dated as of June
20, 2001 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Borrower, the lenders from time to time party
thereto (the "Lenders") and SunTrust Bank, as administrative agent for the
Lenders (in such capacity, the "Administrative Agent"), and swingline lender.
Capitalized terms used herein and not defined herein shall have the meanings
assigned to such terms in the Credit Agreement.
The Lenders have agreed to make Loans to the Borrower, pursuant to,
and upon the terms and subject to the conditions specified in, the Credit
Agreement. Each of the Guarantors is a direct or indirect wholly-owned
Subsidiary of the Borrower (except for Deltic Real Estate Investment Company
whose common stock is 100% owned by Borrower) and acknowledges that it will
derive substantial benefit from the making of the Loans by the Lenders. The
obligations of the Lenders to make Loans are conditioned on, among other things,
the execution and delivery by the Guarantors of a Subsidiary Guaranty Agreement
in the form hereof. As consideration therefor and in order to induce the Lenders
to make Loans, the Guarantors are willing to execute this Subsidiary Guaranty
Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. Guarantee. Each Guarantor unconditionally guarantees,
---------
jointly with the other Guarantors and severally, as a primary obligor and not
merely as a surety, (a) the due and punctual payment of (i) the principal of and
premium, if any, and interest (including interest accruing during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding) on the Loans,
when and as due, whether at maturity, by acceleration, upon one or more dates
set for prepayment or otherwise, and, (ii) all other monetary obligations,
including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), of
the Loan Parties to the Administrative Agent and the Lenders under the Credit
Agreement and the other Loan Documents, (b) the due and punctual performance of
all covenants, agreements, obligations and liabilities of the Loan Parties under
or pursuant to the Credit Agreement and the other Loan Documents; and (c) the
due and punctual payment and performance of all obligations of the Borrower,
monetary or otherwise, under each Hedging Agreement entered into with a
counterparty that was a Lender or an Affiliate of a Lender at the time such
Hedging Agreement was entered into (all the monetary and other obligations
referred to in the preceding clauses (a) through (c) being collectively called
the "Obligations"). Each Guarantor further agrees that the
Obligations may be extended or renewed, in whole or in part, without notice to
or further assent from it, and that it will remain bound upon its guarantee
notwithstanding any extension or renewal of any Obligation.
SECTION 2. Obligations Not Waived. To the fullest extent permitted by
----------------------
applicable law, each Guarantor waives presentment to, demand of payment from and
protest to the Borrower of any of the Obligations, and also waives notice of
acceptance of its guarantee and notice of protest for nonpayment. To the fullest
extent permitted by applicable law, the obligations of each Guarantor hereunder
shall not be affected by (a) the failure of the Administrative Agent or any
Lender to assert any claim or demand or to enforce or exercise any right or
remedy against the Borrower or any other Guarantor under the provisions of the
Credit Agreement, any other Loan Document or otherwise, (b) any rescission,
waiver, amendment or modification of, or any release from any of the terms or
provisions of, this Agreement, any other Loan Document, any Guarantee or any
other agreement, including with respect to any other Guarantor under this
Agreement, or (c) the failure to perfect any security interest in, or the
release of, any of the security held by or on behalf of the Administrative Agent
or any Lender.
SECTION 3. Guarantee of Payment. Each Guarantor further agrees that
--------------------
its guarantee constitutes a guarantee of payment when due and not of collection,
and waives any right to require that any resort be had by the Administrative
Agent or any Lender to any of the security held for payment of the Obligations
or to any balance of any deposit account or credit on the books of the
Administrative Agent or any Lender in favor of the Borrower or any other person.
SECTION 4. No Discharge or Diminishment of Guarantee. The obligations
-----------------------------------------
of each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in
full in cash of the Obligations), including any claim of waiver, release,
surrender, alteration or compromise of any of the Obligations, and shall not be
subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Guarantor hereunder shall not be discharged or impaired or
otherwise affected by the failure of the Administrative Agent or any Lender to
assert any claim or demand or to enforce any remedy under the Credit Agreement,
any other Loan Document or any other agreement, by any waiver or modification of
any provision of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the Obligations, or by any other act or
omission that may or might in any manner or to the extent vary the risk of any
Guarantor or that would otherwise operate as a discharge of each Guarantor as a
matter of law or equity (other than the indefeasible payment in full in cash of
all the Obligations).
SECTION 5. Defenses of Borrower Waived. To the fullest extent
---------------------------
permitted by applicable law, each Guarantor waives any defense based on or
arising out of any defense of the Borrower or the unenforceability of the
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower, other than the final and indefeasible payment
in full in cash of the Obligations. The Administrative Agent and the Lenders
may, at
D-2
their election, foreclose on any security held by one or more of them by one or
more judicial or nonjudicial sales, accept an assignment of any such security in
lieu of foreclosure, compromise or adjust any part of the Obligations, make any
other accommodation with the Borrower or any other guarantor, without affecting
or impairing in any way the liability of any Guarantor hereunder except to the
extent the Obligations have been fully, finally and indefeasibly paid in cash.
Pursuant to applicable law, each Guarantor waives any defense arising out of any
such election even though such election operates, pursuant to applicable law, to
impair or to extinguish any right of reimbursement or subrogation or other right
or remedy of such Guarantor against the Borrower or any other Guarantor or
guarantor, as the case may be, or any security.
SECTION 6. Agreement to Pay; Subordination. In furtherance of the
-------------------------------
foregoing and not in limitation of any other right that the Administrative Agent
or any Lender has at law or in equity against any Guarantor by virtue hereof,
upon the failure of the Borrower or any other Loan Party to pay any Obligation
when and as the same shall become due, whether at maturity, by acceleration,
after notice of prepayment or otherwise, each Guarantor hereby promises to and
will forthwith pay, or cause to be paid, to the Administrative Agent for the
benefit of the Lenders in cash the amount of such unpaid Obligations. Upon
payment by any Guarantor of any sums to the Administrative Agent, all rights of
such Guarantor against the Borrower arising as a result thereof by way of right
of subrogation, contribution, reimbursement, indemnity or otherwise shall in all
respects be subordinate and junior in right of payment to the prior indefeasible
payment in full in cash of all the Obligations. In addition, any indebtedness
of the Borrower now or hereafter held by any Guarantor is hereby subordinated in
right of payment to the prior payment in full in cash of the Obligations. If
any amount shall erroneously be paid to any Guarantor on account of (i) such
subrogation, contribution, reimbursement, indemnity or similar right or (ii) any
such indebtedness of the Borrower, such amount shall be held in trust for the
benefit of the Administrative Agent and the Lenders and shall forthwith be paid
to the Administrative Agent to be credited against the payment of the
Obligations, whether matured or unmatured, in accordance with the terms of the
Loan Documents.
SECTION 7. Information. Each Guarantor assumes all responsibility for
-----------
being and keeping itself informed of the Borrower's financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Obligations and the nature, scope and extent of the risks that such
Guarantor assumes and incurs hereunder, and agrees that none of the
Administrative Agent or the Lenders will have any duty to advise any of the
Guarantors of information known to it or any of them regarding such
circumstances or risks.
SECTION 8. Representations and Warranties. Each Guarantor represents
------------------------------
and warrants as to itself that all representations and warranties relating to it
(as a Subsidiary of the Borrower) contained in the Credit Agreement are true and
correct.
SECTION 9. Termination. The guarantees made hereunder (a) shall
-----------
terminate when all the Obligations have been paid in full in cash and the
Lenders have no further commitment to lend under the Credit Agreement, and (b)
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any Obligation is rescinded or must
otherwise be restored by any Lender or any Guarantor upon the bankruptcy or
D-3
reorganization of the Borrower, any Guarantor or otherwise. In connection with
the foregoing, the Administrative Agent shall execute and deliver to such
Guarantor or Guarantor's designee, at such Guarantor's expense, any documents or
instruments which such Guarantor shall reasonably request from time to time to
evidence such termination and release.
SECTION 10. Binding Effect; Several Agreement; Assignments. Whenever
----------------------------------------------
in this Agreement any of the parties hereto is referred to, such reference shall
be deemed to include the successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of the Guarantors that are
contained in this Agreement shall bind and inure to the benefit of each party
hereto and their respective successors and assigns. This Agreement shall become
effective as to any Guarantor when a counterpart hereof executed on behalf of
such Guarantor shall have been delivered to the Administrative Agent, and a
counterpart hereof shall have been executed on behalf of the Administrative
Agent, and thereafter shall be binding upon such Guarantor and the
Administrative Agent and their respective successors and assigns, and shall
inure to the benefit of such Guarantor, the Administrative Agent and the
Lenders, and their respective successors and assigns, except that no Guarantor
shall have the right to assign its rights or obligations hereunder or any
interest herein (and any such attempted assignment shall be void). If all of
the capital stock of a Guarantor is sold, transferred or otherwise disposed of
pursuant to a transaction permitted by the Credit Agreement, such Guarantor
shall be released from its obligations under this Agreement without further
action. This Agreement shall be construed as a separate agreement with respect
to each Guarantor and may be amended, modified, supplemented, waived or released
with respect to any Guarantor without the approval of any other Guarantor and
without affecting the obligations of any other Guarantor hereunder.
SECTION 11. Waivers; Amendment. (a) No failure or delay of the
------------------
Administrative Agent of any in exercising any power or right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and of the Administrative
Agent hereunder and of the Lenders under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provision of this Agreement or consent to any departure by any
Guarantor therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver and consent shall be
effective only in the specific instance and for the purpose for which given. No
notice or demand on any Guarantor in any case shall entitle such Guarantor to
any other or further notice in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into between
the Guarantors with respect to which such waiver, amendment or modification
relates and the Administrative Agent, with the prior written consent of the
Required Lenders (except as otherwise provided in the Credit Agreement).
D-4
SECTION 12. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
-------------
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA.
SECTION 13. Notices. All communications and notices hereunder shall
-------
be in writing and given as provided in Section 10.1 of the Credit Agreement.
All communications and notices hereunder to each Guarantor shall be given to it
at its address set forth on Schedule I attached hereto.
SECTION 14. Survival of Agreement; Severability. (a) All covenants,
-----------------------------------
agreements representations and warranties made by the Guarantors herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or the other Loan Document shall be considered to
have been relied upon by the Administrative Agent and the Lenders and shall
survive the making by the Lenders of the Loans regardless of any investigation
made by any of them or on their behalf, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
other fee or amount payable under this Agreement or any other Loan Document is
outstanding and unpaid and as long as the Commitments have not been terminated.
(b) In the event one or more of the provisions contained in this
Agreement or in any other Loan Document should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 15. Counterparts. This Agreement may be executed in
------------
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute a single contract (subject to Section 11), and
shall become effective as provided in Section 11. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be as effective
as delivery of a manually executed counterpart of this Agreement.
SECTION 16. Rules of Interpretation. The rules of interpretation
-----------------------
specified in Section 1.3 of the Credit Agreement shall be applicable to this
Agreement.
SECTION 17. Jurisdiction; Consent to Service of Process. (a) Each
-------------------------------------------
Guarantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any Georgia State court or Federal
court of the United States of America sitting in Atlanta, Georgia, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such Georgia State court or, to the
extent permitted by law, in such Federal
D-5
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Administrative Agent,
the Issuing Bank or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or the other Loan Documents against any
Guarantor or its properties in the courts of any jurisdiction.
(b) Each Guarantor hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents in any Georgia State or Federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 13. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 18. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO
--------------------
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 18.
SECTION 19. Additional Guarantors. Pursuant to Section 5.10 of the
---------------------
Credit Agreement, each Subsidiary Loan Party that was not in existence on the
date of the Credit Agreement is required to enter into this Agreement as a
Guarantor upon becoming Subsidiary Loan Party. Upon execution and delivery
after the date hereof by the Administrative Agent and such Subsidiary of an
instrument in the form of Annex 1, such Subsidiary shall become a Guarantor
hereunder with the same force and effect as if originally named as a Guarantor
herein. The execution and delivery of any instrument adding an additional
Guarantor as a party to this Agreement shall not require the consent of any
other Guarantor hereunder. The rights and obligations of each Guarantor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Guarantor as a party to this Agreement.
SECTION 20. Right of Setoff. If an Event of Default shall have
---------------
occurred and be continuing, each Lender and the Issuing Bank are hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or
D-6
special, time or demand, provisional or final) at any time held and other
Indebtedness at any time owing by such Lender or the Issuing Bank to or for the
credit or the account of any Guarantor against any or all the obligations of
such Guarantor now or hereafter existing under this Agreement and the other Loan
Documents held by such Lender or the Issuing Bank, irrespective of whether or
not such Person shall have made any demand under this Agreement or any other
Loan Document and although such obligations may be unmatured. The rights of each
Lender and the Issuing Bank under this Section 20 are in addition to other
rights and remedies (including other rights of setoff) which such Lender or the
Issuing Bank, as the case may be, may have.
D-7
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
EACH OF THE SUBSIDIARIES LISTED ON
SCHEDULE I HERETO
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Secretary
SUNTRUST BANK, as
Administrative Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
D-8
SCHEDULE I TO THE
SUBSIDIARY GUARANTEE AGREEMENT
Guarantor(s) Address
------------ -------
Deltic Timber Purchasers, Inc. ▇▇▇ ▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Deltic Southwest Timber Company ▇▇▇ ▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Chenal Properties, Inc. ▇▇▇ ▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Chenal Country Club, Inc. ▇▇▇ ▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Deltic Real Estate Investment Company ▇▇▇ ▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Schedule I
ANNEX 1 TO THE
SUBSIDIARY GUARANTY AGREEMENT
SUPPLEMENT NO. [ ] dated as of [ ], to the Subsidiary Guaranty
Agreement (the "Guaranty Agreement") dated as of June 20, 2001 among each of the
subsidiaries listed on Schedule I thereto (each such Subsidiary individually, a
"Guarantor" and collectively, the "Guarantors") of DELTIC TIMBER CORPORATION, a
----------
Delaware corporation (the "Borrower"), and SUNTRUST BANK, a Georgia banking
corporation, as Administrative Agent (the "Administrative Agent") for the
Lenders (as defined in the Credit Agreement referred to below).
A. Reference is made to the Revolving Credit Agreement dated as of June
__, 2001 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Borrower, the lenders from time to time party
thereto (the "Lenders") and SunTrust Bank, as Administrative Agent, and
swingline lender. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement.
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Guaranty Agreement and the
Credit Agreement.
C. The Guarantors have entered into the Guaranty Agreement in order to
induce the Lenders to make Loans. Pursuant to Section 5.10 of the Credit
Agreement, each Subsidiary Loan Party that was not in existence or not a
Subsidiary Loan Party on the date of the Credit Agreement is required to enter
into the Guarantee Agreement as a Guarantor upon becoming a Subsidiary Loan
Party. Section 19 of the Guarantee Agreement provides that additional
Subsidiaries of the Borrower may become Guarantors under the Guaranty Agreement
by execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary of the Borrower (the "New Guarantor") is executing this
Supplement in accordance with the requirements of the Credit Agreement to become
a Guarantor under the Guaranty Agreement in order to induce the Lenders to make
additional Loans and as consideration for Loans previously made.
Accordingly, the Administrative Agent and the New Guarantor agree as
follows:
SECTION 1. In accordance with Section 19 of the Guaranty Agreement, the New
Guarantor by its signature below becomes a Guarantor under the Guaranty
Agreement with the same force and effect as if originally named therein as a
Guarantor and the New Guarantor hereby (a) agrees to all the terms and
provisions of the Guaranty Agreement applicable to it as Guarantor thereunder
and (b) represents and warrants that the representations and warranties made by
it as a Guarantor thereunder are true and correct on and as of the date hereof.
Each reference to a Guarantor in the Guaranty Agreement shall be deemed to
include the New Guarantor. The Guaranty Agreement is hereby incorporated herein
by reference.
Schedule I
SECTION 2. The New Guarantor represents and warrants to the Administrative
Agent and the Lenders that this Supplement has been duly authorized, executed
and delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts each of which
shall constitute an original, but all of which when taken together shall
constitute a single contract. This Supplement shall become effective when the
Administrative Agent shall have received counterparts of this Supplement that,
when taken together, bear the signatures of the New Guarantor and the
Administrative Agent. Delivery of an executed signature page to this Supplement
by facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the Guaranty Agreement
shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA.
SECTION 6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Guaranty Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision hereof in a particular jurisdiction shall not in and of itself affect
the validity of such provision in any other jurisdiction). The parties hereto
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 7. All communications and notices hereunder shall be in writing and
given as provided in Section 13 of the Guaranty Agreement. All communications
and notices hereunder to the New Guarantor shall be given to it at the address
set forth under its signature below, with a copy to the Borrower.
SECTION 8. The New Guarantor agrees to reimburse the Administrative Agent
for its out-of-pocket expenses in connection with this Supplement, including the
fees, disbursements and other charges of counsel for the Administrative Agent.
D-3
IN WITNESS WHEREOF, the New Guarantor and the Administrative Agent have
duly executed this Supplement to the Guaranty Agreement as of the day and year
first above written.
[Name of New Guarantor]
By:____________________________
Name:
Title:
Address:
SUNTRUST BANK, as
Administrative Agent
By:____________________________
Name:
Title:
D-4
INDEMNITY, SUBROGATION and CONTRIBUTION AGREEMENT
INDEMNITY, SUBROGATION and CONTRIBUTION AGREEMENT dated as of June 20,
2001, among DELTIC TIMBER CORPORATION, a Delaware corporation (the "Borrower"),
each Subsidiary listed on Schedule I hereto (the "Guarantors"), SUNTRUST BANK, a
Georgia banking corporation, as administrative agent (in such capacity, the
"Administrative Agent") for the Lenders (as defined in the Credit Agreement
referred to below).
Reference is made to (a) the Revolving Credit Agreement dated as of June
20, 2001 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Borrower, the lenders from time to time party
thereto (the "Lenders") and SunTrust Bank, as Administrative Agent, and
swingline lender, and (b) the Subsidiary Guaranty Agreement dated as June 20,
2001, among the Guarantors and the Administrative Agent (as amended,
supplemented or otherwise modified from time to time, the "Guaranty Agreement").
Capitalized terms used herein and not defined herein shall have the meanings
assigned to such terms in the Credit Agreement.
The Lenders have agreed to make Loans to the Borrower, pursuant to, and
upon the terms and subject to the conditions specified in, the Credit Agreement.
The Guarantors have guaranteed such Loans and the other Obligations (as defined
in the Guaranty Agreement) of the Borrower under the Credit Agreement pursuant
to the Guaranty Agreement. The obligations of the Lenders to make Loans are
conditioned on, among other things, the execution and delivery by the Borrower
and the Guarantors of an agreement in the form hereof.
Accordingly, the Borrower, each Guarantor and the Administrative Agent
agree as follows:
SECTION 1. Indemnity and Subrogation. In addition to all such rights of
-------------------------
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 3), the Borrower agrees that in the event a payment shall be
made by any Guarantor under the Guaranty Agreement, the Borrower shall indemnify
such Guarantor for the full amount of such payment and such Guarantor shall be
subrogated to the rights of the person to whom such payment shall have been made
to the extent of such payment.
SECTION 2. Contribution and Subrogation. Each Guarantor (a "Contributing
----------------------------
Guarantor") agrees (subject to Section 3) that, in the event a payment shall be
made by any other Guarantor under the Guaranty Agreement and such other
Guarantor (the "Claiming Guarantor") shall not have been fully indemnified by
the Borrower as provided in Section 1, the Contributing Guarantor shall
indemnify the Claiming Guarantor in an amount equal to the amount of such
payment or the greater of the book value or the fair market value of such
assets, as the case may be, in each case multiplied by a fraction of which the
numerator shall be the net worth of the Contributing Guarantor on the date
hereof and the denominator shall be the aggregate net worth of all the
Guarantors on the date hereof (or, in the case of any Guarantor becoming a party
hereto pursuant to Section 12, the date of the Supplement hereto executed and
delivered by such Guarantor). Any Contributing Guarantor making any payment to
a Claiming
Guarantor pursuant to this Section 2 shall be subrogated to the rights of such
Claiming Guarantor under Section 1 to the extent of such payment.
SECTION 3. Subordination. Notwithstanding any provision of this Agreement
-------------
to the contrary, all rights of the Guarantors under Sections 1 and 2 and all
other rights of indemnity, contribution or subrogation under applicable law or
otherwise shall be fully subordinated to the indefeasible payment in full in
cash of the Obligations. No failure on the part of the Borrower or any
Guarantor to make the payments required under applicable law or otherwise shall
in any respect limit the obligations and liabilities of any Guarantor with
respect to its obligations hereunder, and each Guarantor shall remain liable for
the full amount of the obligations of such Guarantor hereunder.
SECTION 4. Termination. This Agreement shall survive and be in full force
-----------
and effect so long as any Obligation is outstanding and has not been
indefeasibly paid in full in cash, and any of the Commitments under the Credit
Agreement have not been terminated, and shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any Obligation is rescinded or must otherwise be restored by any Lender or any
Guarantor upon the bankruptcy or reorganization of the Borrower, any Guarantor
or otherwise.
SECTION 5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
-------------
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA.
SECTION 6. No Waiver; Amendment. (a) No failure on the part of the
--------------------
Administrative Agent or any Guarantor to exercise, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or remedy by the
Administrative Agent or any Guarantor preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. All remedies
hereunder are cumulative and are not exclusive of any other remedies provided by
law. None of the Administrative Agent and the Guarantors shall be deemed to
have waived any rights hereunder unless such waiver shall be in writing and
signed by such parties.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to a written agreement entered into between the
Borrower, the Guarantors and the Administrative Agent, with the prior written
consent of the Required Lenders (except as otherwise provided in the Credit
Agreement).
SECTION 7. Notices. All communications and notices hereunder shall be in
-------
writing and given as provided in the Guaranty Agreement and addressed as
specified therein.
SECTION 8. Binding Agreement; Assignments. Whenever in this Agreement any
------------------------------
of the parties hereto is referred to, such reference shall be deemed to include
the successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of the parties that are contained in this Agreement
shall bind and inure to the benefit of their respective successors and assigns.
Neither the Borrower nor any Guarantor may assign or transfer any of
E-2
its rights or obligations hereunder (and any such attempted assignment or
transfer shall be void) without the prior written consent of the Required
Lenders. Notwithstanding the foregoing, at the time any Guarantor is released
from its obligations under the Guaranty Agreement in accordance with such
Guaranty Agreement and the Credit Agreement, such Guarantor will cease to have
any rights or obligations under this Agreement.
SECTION 9. Survival of Agreement; Severability. (a) All covenants and
-----------------------------------
agreements made by the Borrower and each Guarantor herein and in the
certificates or other instruments prepared or delivered in connection with this
Agreement or the other Loan Documents shall be considered to have been relied
upon by the Administrative Agent, the Lenders and each Guarantor and shall
survive the making by the Lenders of the Loans, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loans or
any other fee or amount payable under the Credit Agreement or this Agreement or
under any of the other Loan Documents is outstanding and unpaid and as long as
the Commitments have not been terminated.
(b) In case one or more of the provisions contained in this Agreement
should be held invalid, illegal or unenforceable in any respect, no party hereto
shall be required to comply with such provision for so long as such provision is
held to be invalid, illegal or unenforceable, but the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 10. Counterparts. This Agreement may be executed in counterparts
------------
(and by different parties hereto on different counterparts) each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Agreement shall be effective with respect to any
Guarantor when a counterpart bearing the signature of such Guarantor shall have
been delivered to the Administrative Agent. Delivery of an executed signature
page to this Agreement by facsimile transmission shall be as effective as
delivery of a manually signed counterpart of this Agreement.
SECTION 11. Rules of Interpretation. The rules of interpretation specified
-----------------------
in Section 1.03 of the Credit Agreement shall be applicable to this Agreement.
SECTION 12. Additional Guarantors. Pursuant to Section 5.10 of the Credit
---------------------
Agreement, each Subsidiary Loan Party of the Borrower that was not in existence
or not such a Subsidiary Loan Party on the date of the Credit Agreement is
required to enter into the Guaranty Agreement as Guarantor upon becoming such a
Subsidiary Loan Party. Upon the execution and delivery, after the date hereof,
by the Administrative Agent and such Subsidiary of an instrument in the form of
Annex I hereto, such Subsidiary shall become a Guarantor hereunder with the same
force and effect as if originally named as a Guarantor hereunder. The execution
and delivery of any instrument adding an additional Guarantor as a party to this
Agreement shall not require the consent of any Guarantor hereunder. The rights
and obligations of each Guarantor
E-3
hereunder shall remain in full force and effect notwithstanding the addition of
any new Guarantor as a party to this Agreement.
E-4
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first appearing above.
DELTIC TIMBER CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Treasurer
EACH OF THE SUBSIDIARIES LISTED ON
SCHEDULE I HERETO, as a Guarantor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Treasurer
SUNTRUST BANK, as
Administrative Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
E-5
SCHEDULE I
TO THE INDEMNITY, SUBROGATION
AND CONTRIBUTION AGREEMENT
Guarantors
----------
Name Address
---- -------
Deltic Timber Purchasers, Inc. ▇▇▇ ▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Deltic Southwest Timber Company ▇▇▇ ▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Chenal Properties, Inc. ▇▇▇ ▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Chenal Country Club, Inc. ▇▇▇ ▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Deltic Real Estate Investment Company ▇▇▇ ▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Schedule I
ANNEX I TO
THE INDEMNITY, SUBROGATION AND
CONTRIBUTION AGREEMENT
SUPPLEMENT NO. [ ] dated as of [ ], to the Indemnity, Subrogation and
Contribution Agreement dated as of June 20, 2001, (as the same may be amended,
supplemented or otherwise modified from time to time, the "Indemnity,
Subrogation and Contribution Agreement") among DELTIC TIMBER CORPORATION, a
Delaware corporation (the "Borrower"), each Subsidiary listed on Schedule I
thereto (the "Guarantors") and SUNTRUST BANK, a Georgia banking corporation, as
administrative agent (the "Administrative Agent") for the Lenders (as defined in
the Credit Agreement referred to below).
A. Reference is made to (a) the Revolving Credit Agreement dated as of June
20, 2001 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Borrower, the lenders from time to time party
thereto (the "Lenders") and SunTrust Bank, as the Administrative Agent, and
swingline lender, and (b) the Subsidiary Guaranty Agreement dated as of June 20,
2001, among the Guarantors and the Administrative Agent (as amended,
supplemented or otherwise modified from time to time, the "Guarantee
Agreement").
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Indemnity, Subrogation and
Contribution Agreement and the Credit Agreement.
C. The Borrower and the Guarantors have entered into the Indemnity,
Subrogation and Contribution Agreement in order to induce the Lenders to make
Loans. Pursuant to Section 5.10 of the Credit Agreement, each Subsidiary Loan
Party that was not in existence or not such a Subsidiary Loan Party on the date
of the Credit Agreement is required to enter into the Guaranty Agreement as a
Guarantor upon becoming a Subsidiary Loan Party. Section 12 of the Indemnity,
Subrogation and Contribution Agreement provides that additional Subsidiaries may
become Guarantors under the Indemnity, Subrogation and Contribution Agreement by
execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary (the "New Guarantor") is executing this Supplement in
accordance with the requirements of the Credit Agreement to become a Guarantor
under the Indemnity, Subrogation and Contribution Agreement in order to induce
the Lenders to make additional Loans and as consideration for Loans previously
made.
Accordingly, the Administrative Agent and the New Guarantor agree as
follows:
SECTION 1. In accordance with Section 12 of the Indemnity, Subrogation and
Contribution Agreement, the New Guarantor by its signature below becomes a
Guarantor under the Indemnity, Subrogation and Contribution Agreement with the
same force and effect as if originally named therein as a Guarantor and the New
Guarantor hereby agrees to all the terms and provisions of the Indemnity,
Subrogation and Contribution Agreement applicable to it as
Annex I
Guarantor thereunder. Each reference to a Guarantor in the Indemnity,
Subrogation and Contribution Agreement shall be deemed to include the New
Guarantor. The Indemnity, Subrogation and Contribution Agreement is hereby
incorporated herein by reference.
SECTION 2. The New Guarantor represents and warrants to the Administrative
Agent and the Lenders that this Supplement has been duly authorized, executed
and delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts) each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Administrative
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signature of the New Guarantor and the Administrative Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the Indemnity,
Subrogation and Contribution Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA.
SECTION 6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect,
neither party hereto shall be required to comply with such provision for so long
as such provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions contained
herein and in the Indemnity, Subrogation and Contribution Agreement shall not in
any way be affected or impaired. The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 7. All communications and notices hereunder shall be in writing
and given as provided in Section 7 of the Indemnity, Subrogation and
Contribution Agreement. All communications and notices hereunder to the New
Guarantor shall be given to it at the address set forth under its signature.
SECTION 8. The New Guarantor agrees to reimburse the Administrative Agent
for its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Administrative Agent.
Annex I-2
IN WITNESS WHEREOF, the New Guarantor and the Administrative Agent have
duly executed this Supplement to the Indemnity, Subrogation and Contribution
Agreement as of the day and year first above written.
[Name of New Guarantor]
By:_______________________________
Name:
Title:
Address:
SUNTRUST BANK, as
Administrative Agent
By:_______________________________
Name:
Title:
Annex I-3
SCHEDULE I
TO SUPPLEMENT NO. ____ TO THE INDEMNITY,
SUBROGATION AND CONTRIBUTION AGREEMENT
Guarantors
----------
Name Address
---- -------
Annex I
