Exhibit 10.1

--------------------------------------------------------------------------------

AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of August 12, 2014
among
POTLATCH CORPORATION,
POTLATCH FOREST HOLDINGS, INC.
and
POTLATCH LAND & LUMBER, LLC
as Borrowers,
Any Material Subsidiaries of the Borrowers
which may from time to time be required to become a party hereto
as Guarantors
KEYBANK NATIONAL ASSOCIATION,
as Administrative Agent, Swing Line Lender and L/C Issuer,
and
THE LENDERS PARTY HERETO
KEYBANC CAPITAL MARKETS, INC.
and
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
as Joint Lead Arrangers and Bookrunners
BANK OF AMERICA, N.A.
as Syndication Agent
and
U.S. BANK NATIONAL ASSOCIATION
and
NORTHWEST FARM CREDIT SERVICES, PCA
and
WELLS FARGO BANK, N.A.
as Co-Documentation Agents

--------------------------------------------------------------------------------

TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

1
1.01    Defined Terms    

1
1.02    Other Interpretive Provisions    

35
1.03    Accounting Terms

36
1.04    Rounding

36
1.05    References to Agreements and Laws

37
1.06    Exchange Rates; Currency Equivalents

37
1.07    Additional Alternative Currencies

37
1.08    Change of Currency

38
1.09    Times of Day

39
1.10    Letter of Credit Amounts

39
ARTICLE II COMMITMENTS AND CREDIT EXTENSIONS

39
2.01    Committed Loans

39
2.02    Borrowings, Conversions and Continuations of Committed Loans

39
2.03    Letters of Credit

42
2.04    Swing Line Loans

55
2.05    Prepayments

59
2.06    Termination or Reduction of Commitments    

60
2.07    Repayment of Loans

60
2.08    Interest

61
2.09    Fees

62
2.10    Computation of Interest and Fees; Retroactive Adjustments of
Applicable Rate

62
2.11    Evidence of Debt

63
2.12    Payments Generally

64
2.13    Sharing of Payments by Lenders

66
2.14    Increase in Aggregate Commitments

67
2.15    Joint and Several Liability of Borrowers

68
2.16    Appointment of the Administrative Borrower

70
2.17    Cash Collateral

71
2.18    Defaulting Lenders

72
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY

75
3.01    Taxes

75
3.02    Illegality

81
3.03    Inability to Determine Rates

82
3.04    Increased Costs; Reserves on LIBOR Loans

82
3.05    Compensation for Losses

84
3.06    Mitigation Obligations; Replacement of Lenders

85
3.07    Survival    

86
ARTICLE IV CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

86
4.01    Conditions to Amendment and Restatement

86
4.02    Conditions to all Credit Extensions

89
ARTICLE V REPRESENTATIONS AND WARRANTIES

90

i

--------------------------------------------------------------------------------

5.01    Financial Condition

90
5.02    No Material Change; No Internal Control Event

91
5.03    Organization and Good Standing

91
5.04    Power; Authorization; Enforceable Obligations

91
5.05    No Conflicts

92
5.06    No Default

92
5.07    Ownership; Liens

92
5.08    Indebtedness

93
5.09    Litigation

93
5.10    Taxes

93
5.11    Compliance with Law

93
5.12    ERISA

94
5.13    Corporate Structure; Capital Stock, Etc

95
5.14    Governmental Regulations, Etc

96
5.15    Purpose of Loans and Letters of Credit

96
5.16    Environmental Matters

96
5.17    Solvency

97
5.18    Investments

98
5.19    Disclosure

98
5.20    No Burdensome Restrictions

98
5.21    Brokers’ Fees

98
5.22    Labor Matters

98
5.23    REIT Status

98
5.24    Business Locations

98
5.25    Casualty, Etc

99
5.26    Intellectual Property

99
5.27    Insurance

99
5.28    Anti-Corruption Laws

99
ARTICLE VI AFFIRMATIVE COVENANTS

99
6.01    Information Covenants

100
6.02    Preservation of Existence, Franchises and REIT Status

104
6.03    Books and Records

104
6.04    Compliance with Law

104
6.05    Payment of Taxes and Other Claims

104
6.06    Insurance

105
6.07    Maintenance of Property; Management of Timberlands

105
6.08    Use of Proceeds

105
6.09    Audits/Inspections

105
6.10    Financial Covenants    

106
6.11    Additional Guarantors

106
6.12    Performance of Obligations

106
6.13    Timberland Valuations and Updates

107
6.14    Anti-Corruption Laws

107
ARTICLE VII NEGATIVE COVENANTS

107
7.01    Indebtedness

107
7.02    Liens

109

ii

--------------------------------------------------------------------------------

7.03    Nature of Business

112
7.04    Consolidation, Merger, Dissolution, Etc

112
7.05    Asset Dispositions

113
7.06    Investments

113
7.07    Restricted Payments

115
7.08    Limitation on Actions with Respect to Other Indebtedness

115
7.09    Transactions with Affiliates

116
7.10    Fiscal Year; Organizational Documents

116
7.11    Limitation on Restricted Actions

116
7.12    Ownership of Subsidiaries

117
7.13    Sale Leasebacks    

117
7.14    No Further Negative Pledges

117
7.15    Subsidiaries

118
7.16    Use of Proceeds

118
7.17    Sanctions

118
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES

119
8.01    Events of Default

119
8.02    Remedies Upon Event of Default

122
8.03    Application of Funds

123
ARTICLE IX ADMINISTRATIVE AGENT

124
9.01    Appointment and Authority

124
9.02    Rights as a Lender

124
9.03    Exculpatory Provisions

124
9.04    Reliance by Administrative Agent

125
9.05    Delegation of Duties

126
9.06    Resignation of Administrative Agent

126
9.07    Non Reliance on Administrative Agent and Other Lenders

128
9.08    No Other Duties, Etc

128
9.09    Administrative Agent May File Proofs of Claim

129
9.10    Guaranty Matters    

129
9.11    Lender Reply Period

130
ARTICLE X MISCELLANEOUS

131
10.01    Amendments, Etc

131
10.02    Notices; Effectiveness; Electronic Communication

132
10.03    No Waiver; Cumulative Remedies; Enforcement

135
10.04    Expenses; Indemnity; Damage Waiver

135
10.05    Payments Set Aside
138
10.06    Successors and Assigns

138
10.07    Treatment of Certain Information; Confidentiality

145
10.08    Right of Set-off

146
10.09    Interest Rate Limitation    

147
10.10    Counterparts; Integration; Effectiveness

147
10.11    Survival of Representations and Warranties

148
10.12    Severability

148
10.13    Replacement of Lenders

149
10.14    Governing Law; Jurisdiction; Etc

149

iii

--------------------------------------------------------------------------------

10.15    Waiver of Jury Trial    

151
10.16    USA PATRIOT Act

151
10.17    Judgment Currency

151
10.18    No Advisory or Fiduciary Responsibility

152
10.19    Electronic Execution of Assignments and Certain Other Documents

153
ARTICLE XI GUARANTY

153
11.01    The Guaranty

153
11.02    Obligations Unconditional

154
11.03    Reinstatement

155
11.04    Certain Additional Waivers

155
11.05    Remedies

155
11.06    Rights of Contribution

156
11.07    Guarantee of Payment; Continuing Guarantee

157
 
 

iv

--------------------------------------------------------------------------------

SCHEDULES
1.01        Existing Letters of Credit
2.01        Commitments and Applicable Percentages
5.04        Required Consents, Authorizations, Notices and Filings
5.09         Litigation
5.12        ERISA
5.13        Corporate Structure; Capital Stock, Etc.
5.16        Environmental Disclosures
5.24(a)        Chief Executive Office, Etc.
5.24(b)        Timberlands
7.01        Existing Indebtedness
7.02        Existing Liens
7.06        Existing Investments
10.02        Administrative Agent’s Office, Certain Addresses for Notices

EXHIBITS

Form of
A    Committed Loan Notice
B    Swing Line Loan Notice
C    Note
D    Compliance Certificate
E    Assignment and Assumption
F    Joinder Agreement
G    Forms of U.S. Tax Compliance Certificates

v

--------------------------------------------------------------------------------

AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT (“Agreement”) is entered into as of
August 12, 2014, among (i) POTLATCH CORPORATION, a Delaware corporation and a
REIT (“Potlatch” or the “Company”), (ii) POTLATCH FOREST HOLDINGS, INC., a
Delaware corporation (“Potlatch Forest”), (iii) POTLATCH LAND & LUMBER, LLC, a
Delaware limited liability company and a taxable REIT subsidiary of Potlatch
(“Potlatch Land & Lumber”), (collectively, the “Borrowers” and each
individually, a “Borrower”), (iv) the Guarantors party hereto and certain
Material Subsidiaries of the Borrowers that may from time to time become party
hereto as guarantors (the “Guarantors”), (v) each lender from time to time party
hereto (collectively, the “Lenders” and individually, a “Lender”), and (vi)
KEYBANK NATIONAL ASSOCIATION, as Administrative Agent, Swing Line Lender and an
L/C Issuer amends and restates the Credit Agreement dated as of December 11,
2012 among the Borrowers, the Guarantors, the Lenders Bank of America, N.A., as
Administrative Agent, Surety Line Lender and L/C Issuer and Merrill, Lynch,
Peirce, Fenner & Smith Incorporated and Keybank Capital Markets, Inc. as joint
lender arrangers and Book Managers (“Existing Credit Agreement”).
PRELIMINARY STATEMENTS
WHEREAS, the Borrowers have requested that the Lenders modify the Existing
Credit Agreement and the Lenders have indicated their willingness to lend and
the L/C Issuer has indicated its willingness to issue letters of credit, in each
case on terms and subject to the conditions set forth herein.
In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01    Defined Terms.
As used in this Agreement, the following terms shall have the meanings set forth
below:
“6.95% Debentures” means the 6.95% Debentures issued by Potlatch Forest pursuant
to the Indenture, dated December 18, 1995, to U.S. Bank National Association,
successor to First Trust of California, National Association, as trustee, as
amended, restated, supplemented or modified from time to time.

--------------------------------------------------------------------------------

“Acquisition”, by any Person, means the acquisition by such Person of (i) timber
or timberlands or (ii) all of the Capital Stock or all or substantially all of
the Property of another Person or a division or business unit thereof, whether
or not involving a merger or consolidation with such other Person.
“Administrative Agent” means KeyBank in its capacity as administrative agent
under any of the Loan Documents, or any successor administrative agent.
“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.02, or such other address or
account as the Administrative Agent may from time to time notify the
Administrative Borrower and the Lenders.
“Administrative Borrower” means Potlatch.
“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.
“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified. “Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise. “Controlling” and
“Controlled” have meanings correlative thereto. Without limiting the generality
of the foregoing, a Person shall be deemed to be Controlled by another Person if
such other Person possesses, directly or indirectly, power to vote 10% or more
of the securities having ordinary voting power for the election of directors,
managing general partners or the equivalent.
“Aggregate Commitments” means the Commitments of all the Lenders, as such amount
may be reduced or increased as set forth herein. The Aggregate Commitments as of
the Closing Date shall be TWO HUNDRED FIFTY MILLION DOLLARS ($250,000,000).
“Agreement” means this Credit Agreement.
“Agreement Currency” has the meaning specified in Section 10.17.
“Alternative Currency” means Euro and each other currency (other than Dollars)
that is approved in accordance with Section 1.06.
“Alternative Currency Equivalent” means, at any time, with respect to any amount
denominated in Dollars, the equivalent amount thereof in the applicable
Alternative Currency as determined by the Administrative Agent or the L/C
Issuer, as applicable, at such time on the basis

- 2 -

--------------------------------------------------------------------------------

of the Spot Rate (determined in respect of the most recent Revaluation Date) for
the purchase of such Alternative Currency with Dollars.
“Applicable Percentage” means with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Aggregate Commitments
represented by such Lender’s Commitment at such time, subject to adjustment as
provided in Section 2.18. If the commitment of each Lender to make Loans and the
obligation of the L/C Issuer to make L/C Credit Extensions have been terminated
pursuant to Section 8.02 or if the Aggregate Commitments have expired, then the
Applicable Percentage of each Lender shall be determined based on the Applicable
Percentage of such Lender most recently in effect, giving effect to any
subsequent assignments. The initial Applicable Percentage of each Lender is set
forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.
“Applicable Rate” means, from time to time, for the purposes of calculating (a)
the facility fee for the purposes of Section 2.09(a), (b) the interest rate
applicable to LIBOR Loans for the purposes of Section 2.08, (c) the interest
rate applicable to Base Rate Loans for the purposes of Section 2.08 or (d) the
Letter of Credit Fee for the purposes of Section 2.03(h), the following
percentages per annum, based upon the Debt Rating:
Applicable Rate
Pricing
Level
Debt Rating
LIBOR Loans
Base Rate Loans
Letter of Credit Fee
Facility Fee
All-In Drawn LIBOR Margin
 
I
At Least BBB+ or Baa1
0.875%
0.00%
0.875%
0.125%
1.00%
 
II
At Least BBB or Baa2
1.10%
0.10%
1.10%
0.15%
1.25%
 
III
At Least BBB- or Baa3
1.30%
0.30%
1.30%
0.20%
1.50%
 
IV
At Least BB+ or Ba1
1.50%
0.50%
1.50%
0.25%
1.75%
 
V
Below BB+ and Ba1
1.70%
0.70%
1.70%
0.30%
2.00%
 
 
 
 
 
 
 
 
 

Initially, the Applicable Rate shall be determined based upon the Debt Rating
specified in the certificate delivered pursuant to Section 4.01(f). Thereafter,
each change in the Applicable Rate resulting from a publicly announced change in
the Debt Rating shall be effective, in the case of an upgrade, during the period
commencing on the date of delivery by the Borrower to the Administrative Agent
of notice thereof pursuant to Section 6.01(g) and ending on the date immediately
preceding the effective date of the next such change and, in the case of a
downgrade, during the period commencing on the date of the public announcement
thereof and ending on the date immediately preceding the effective date of the
next such change.

- 3 -

--------------------------------------------------------------------------------

“Applicable Time” means, with respect to any borrowings and payments in any
Alternative Currency, the local time in the place of settlement for such
Alternative Currency as may be determined by the Administrative Agent or the L/C
Issuer, as the case may be, to be necessary for timely settlement on the
relevant date in accordance with normal banking procedures in the place of
payment.
“Approved Fund” means any Fund 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.
“Arrangers” means (a) KeyBanc Capital Markets, Inc., and (b) Merrill Lynch,
Pierce, Fenner & Smith Incorporated, each in its capacity as joint lead arranger
and joint book manager.
“Asset Disposition” means any disposition (including pursuant to a Sale and
Leaseback Transaction) of any or all of the Property (including without
limitation the Capital Stock of a Subsidiary) of any Consolidated Party whether
by sale, lease, licensing, transfer or otherwise, but other than pursuant to any
casualty or condemnation event; provided, however, that (i) the term “Asset
Disposition” shall be deemed to include any “Asset Sale” (or any comparable
term) under, and as defined in the documents evidencing or governing any
Subordinated Indebtedness and (ii) the term “Asset Disposition” shall not
include (a) an Equity Issuance, (b) the sale of conservation easements or other
easements on Timberlands which, individually or in the aggregate, do not impair
the value of the Timberlands as commercial timberlands in any material respect
or materially detract from the use of the Timberlands, in each case taken as a
whole, as such or the sale of inventory, electricity, timber or other assets,
each in the ordinary course of business (other than a sale of a fee interest in
Timberlands) and (c) the exchange of Property for similar or like-kind Property
in connection with an exchange under Section 1031 of the Code.
“Assignee Group” means two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor.
“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 10.06(b)), and accepted by the Administrative Agent, in
substantially the form of Exhibit E or any other form (including electronic
documentation generated by MarkitClear or other electronic platform) approved by
the Administrative Agent.
“Attorney Costs” means and includes all reasonable fees, expenses and
disbursements of any law firm or other external counsel and, without
duplication, the allocated cost of internal legal services and all out-of-pocket
expenses and disbursements of internal counsel.
“Attributable Indebtedness” means, on any date, (a) in respect of any capital
lease of any Person, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared

- 4 -

--------------------------------------------------------------------------------

as of such date in accordance with GAAP, and (b) in respect of any Synthetic
Lease Obligation, the capitalized amount of the remaining lease payments under
the relevant lease that would appear on a balance sheet of such Person prepared
as of such date in accordance with GAAP if such lease were accounted for as a
Capital Lease.
“Audited Financial Statements” means the audited consolidated balance sheet of
Potlatch and its Subsidiaries as of December 31, 2013 and 2012, and the related
consolidated statements of income, comprehensive income, stockholders’ equity
and cash flows for the three years ended December 31, 2013 of Potlatch and its
Subsidiaries, including the notes thereto, included in Potlatch’s annual report
on Form 10-K for the year ended December 31, 2013.
“Availability” means, as of any date of determination, the undrawn amount the
Borrowers are able to borrow on such date under the Aggregate Commitments
without a Default or Event of Default occurring or existing after giving pro
forma effect to such borrowing.
“Availability Period” means the period from and including the Closing Date to
the earliest of (a) the Maturity Date, (b) the date of termination of the
Aggregate Commitments pursuant to Section 2.06, and (c) the date of termination
of the commitment of each Lender to make Loans and of the obligation of the L/C
Issuer to make L/C Credit Extensions pursuant to Section 8.02.
“Bank of America” means Bank of America, N.A. and its successors.
“Bankruptcy Code” means the Bankruptcy Code in Title 11 of the United States
Code, as amended, modified, succeeded or replaced from time to time.
“Base Rate” means for any day a fluctuating rate per annum equal to the highest
of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect
for such day as publicly announced from time to time by KeyBank as its “prime
rate,” and (c) the sum of the LIBOR that would apply to a one month Interest
Period beginning on such day, plus 1.00%. The “prime rate” is a rate set by
KeyBank based upon various factors including KeyBank’s costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such prime rate announced by KeyBank shall take effect at
the opening of business on the day specified in the public announcement of such
change.
“Base Rate Committed Loan” means a Committed Loan that is a Base Rate Loan.
“Base Rate Loan” means a Loan that bears interest based on the Base Rate.
“Borrower Materials” has the meaning specified in Section 6.01.
“Borrowers” has the meaning specified in the introductory paragraph hereto.

- 5 -

--------------------------------------------------------------------------------

“Borrowing” means a Committed Borrowing or a Swing Line Borrowing, as the
context may require.
“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office is located and, if
such day relates to any LIBOR Loan, means any such day that is also a London
Banking Day.
“Capital Lease” means, as applied to any Person, any lease of any Property
(whether real, personal or mixed) by that Person as lessee which, in accordance
with GAAP, is required to be accounted for as a capital lease on the balance
sheet of that Person.
“Capital Stock” means (i) in the case of a corporation, capital stock, (ii) in
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of capital
stock, (iii) in the case of a partnership, partnership interests (whether
general or limited), (iv) in the case of a limited liability company, membership
interests and (v) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
“Cash Collateralize” means to deposit in a Controlled Account or to pledge and
deposit with or deliver to the Administrative Agent, for the benefit of one or
more of the L/C Issuer or the Lenders, as collateral for L/C Obligations or
obligations of the Lenders to fund participations in respect of L/C Obligations,
cash or deposit account balances or, if the Administrative Agent and the L/C
Issuer shall agree in their sole discretion, other credit support, in each case
pursuant to documentation in form and substance satisfactory to the
Administrative Agent and the L/C Issuer. “Cash Collateral” shall have a meaning
correlative to the foregoing and shall include the proceeds of such cash
collateral and other credit support.
“Cash Equivalents” means, as at any date, (a) securities issued or directly and
fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than twelve
(12) months from the date of acquisition, (b) Dollar denominated time deposits
and certificates of deposit of (i) any Lender, (ii) any domestic commercial bank
of recognized standing having capital and surplus in excess of $500,000,000 or
(iii) any bank whose short-term commercial paper rating from S&P is at least A-2
or the equivalent thereof or from Moody’s is at least P-2 or the equivalent
thereof (any such bank being an “Approved Bank”), in each case with maturities
of not more than 270 days from the date of acquisition, (c) commercial paper and
variable or fixed rate notes issued by any Approved Bank (or by the parent
company thereof) or any variable rate notes issued by, or guaranteed by, any
domestic corporation rated A‑2 (or the equivalent thereof) or better by S&P or
P-2 (or the equivalent thereof) or better by Moody’s and maturing within six

- 6 -

--------------------------------------------------------------------------------

(6) months of the date of acquisition, (d) repurchase agreements entered into by
any Person with a bank or trust company (including any of the Lenders) or
recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the United
States in which such Person shall have a perfected first priority security
interest (subject to no other Liens) and having, on the date of purchase
thereof, a fair market value of at least 100% of the amount of the repurchase
obligations and (e) Investments, classified in accordance with GAAP as current
assets, in money market investment programs registered under the Investment
Company Act of 1940, as amended, which are administered by reputable financial
institutions having capital of at least $500,000,000 and the portfolios of which
are limited to Investments of the character described in the foregoing
subdivisions (a) through (d).
“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided that notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection
therewith and (y) all requests, rules, guidelines or directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted or issued.
“Change of Control” means the occurrence of any of the following: (i) any
“person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in
Rule l3d 3 under the Securities Exchange Act of 1934) of more than 35% of then
outstanding Voting Stock of Potlatch measured by voting power rather than the
number of shares; provided, however, that for the purposes hereof any Person
shall not be deemed to be a “beneficial owner” (as defined in Rule l3d 3 under
the Securities Exchange Act of 1934) of shares tendered pursuant to a tender
offer or exchange offer paid by or on behalf of that Person or any Affiliate of
that Person until the tendered shares are accepted for purchase or exchange and,
provided further, however, that no Person who is a “beneficial owner” of Voting
Stock of Potlatch as of the Closing Date (an “Existing Holder”) or a Permitted
Transferee (as hereinafter defined) (collectively a “Permitted Holder”) shall be
deemed to have become the “beneficial owner” of Voting Stock of Potlatch, as a
result of the formation of a “syndicate” or “group” (each within the meaning of
Section l3d 3 of the Securities Exchange Act of 1934) with one or more other
Permitted Holders to the extent of the Voting Stock of Potlatch as to which such
other Permitted Holder or Permitted Holders is a “beneficial owner” as of the
Closing Date; (ii) any Borrower shall merge or consolidate with any Person other
than in a transaction permitted under

- 7 -

--------------------------------------------------------------------------------

Section 7.04; (iii) Continuing Directors shall fail to constitute a majority of
the members of the board of directors of Potlatch; (iv) any Asset Disposition
shall be made that (of itself or when combined with any or all other Asset
Dispositions) constitutes a sale of all or substantially all of the assets of
the Borrowers and their Subsidiaries, taken as a whole; (v) any event shall
occur that constitutes a “Change of Control” (or any comparable term) under, and
as defined in, the documents evidencing or governing any Subordinated
Indebtedness; (vi) any event shall occur that requires any Borrower or any
Subsidiary to repay, redeem, or repurchase (or to offer to repay, redeem or
repurchase) any Indebtedness outstanding in a principal amount in excess of
$50,000,000 by reason of any change of ownership or control affecting a Borrower
or such Subsidiary; or (vii) Potlatch shall fail to own, directly or indirectly,
100% of the Voting Stock of each other Borrower. For the purposes hereof,
“Permitted Transferee” shall mean any direct or indirect transferee of Voting
Stock of the Borrowers from an Existing Holder (1) by gift, bequest,
distribution from (or deposit into) a trust or other transfer without
consideration, (2) by succession or testamentary disposition upon death or (3)
to a spouse or former spouse pursuant to an agreement for division of community
property or other property settlement agreement in connection with a marital
dissolution or legal separation. A Permitted Transferee shall be deemed to be
the “beneficial owner” of any such Voting Stock as of the Closing Date.
“Closing Date” means the first date all the conditions precedent in Section 4.01
are satisfied in accordance with Section 4.01.
“Code” means the Internal Revenue Code of 1986, as amended.
“Commitment” means, as to each Lender, its obligation to (a) make Committed
Loans to the Borrowers pursuant to Section 2.01, (b) purchase participations in
L/C Obligations, and (c) purchase participations in Swing Line Loans, in an
aggregate principal amount at any one time outstanding not to exceed the amount
set forth opposite such Lender’s name on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable,
as such amount may be adjusted from time to time in accordance with this
Agreement.
“Committed Borrowing” means a borrowing consisting of simultaneous Committed
Loans of the same Type and, in the case of LIBOR Loans, having the same Interest
Period made by each of the Lenders pursuant to Section 2.01.
“Committed Loan” has the meaning specified in Section 2.01.
“Committed Loan Notice” means a notice of (a) a Committed Borrowing, (b) a
conversion of Committed Loans from one Type to the other, or (c) a continuation
of LIBOR Loans, pursuant to Section 2.02(a), which, if in writing, shall be
substantially in the form of Exhibit A or such other form as may be approved by
Administrative Agent.

- 8 -

--------------------------------------------------------------------------------

“Company” has the meaning specified in the introductory paragraph hereto.
"Company Owned Life Insurance" means the cash value of life insurance policies
owned by one or more of the Borrowers, net of any applicable loans outstanding
under such policies.
“Compliance Certificate” means a certificate substantially in the form of
Exhibit D.
“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.
“Consolidated EBITDDA” means, as of any date for the four fiscal quarter period
ending on such date with respect to the Consolidated Parties on a consolidated
basis, the sum of (i) Consolidated Net Income, plus (ii) an amount which, in the
determination of Consolidated Net Income for such period, has been deducted for
(A) Consolidated Interest Expense, (B) income taxes, (C) depreciation, depletion
and amortization expense, (D) any prepayment penalty, make whole premium or loss
associated with the Repayment of any Indebtedness permitted hereunder and (E)
non-cash equity compensation expense, plus (iii) the cost basis of any
Timberlands sold.
“Consolidated Interest Expense” means, as of any date for the four fiscal
quarter period ending on such date with respect to the Consolidated Parties on a
consolidated basis, cash interest expense (including the amortization of issue
costs, debt discount and premium, the interest component under Capital Leases
and the implied interest component under Synthetic Lease Obligations) net of
interest income, all as determined in accordance with GAAP.
"Consolidated Leverage Ratio" means Consolidated Total Funded Indebtedness to
Total Asset Value.
“Consolidated Net Income” means, as of any date for the four fiscal quarter
period ending on such date with respect to the Consolidated Parties on a
consolidated basis, net income (excluding (i) extraordinary items and (ii)
non-cash, non-recurring items) after interest expense, income taxes,
depreciation, depletion and amortization expense, all as determined in
accordance with GAAP.
“Consolidated Parties” means a collective reference to the Borrowers and their
Subsidiaries, and “Consolidated Party” means any one of them.
“Consolidated Timberland Value” means, as of any date of determination with
respect to the Timberlands but excluding any Timberlands subject to a Lien
(excluding Permitted Liens but including Liens arising pursuant to Section
7.02(v)), the sum of (a) the aggregate value of such Timberlands as indicated in
the most recently delivered Opening Timberland Valuation and/or Timberland
Valuation Update, as applicable, minus (b) the aggregate value of any such
Timberlands that have been disposed of in accordance with Section 7.05(e)
hereof, which value shall be

- 9 -

--------------------------------------------------------------------------------

determined by multiplying the average price per acre for the Timberlands located
in the state in which such disposed Timberlands were located as indicated in the
most recently delivered Opening Timberland Valuation and/or Timberland Valuation
Update, as applicable, by the acreage that was disposed since the date of the
most recently delivered Opening Timberland Valuation and/or Timberland Valuation
Update plus in the case of any such newly acquired Timberlands, the value of
such newly acquired Timberlands, which value shall be determined based on an
Timberland Valuation Update for such additional Timberlands, or if no Timberland
Valuation Update for such additional Timberlands is available, then such value
shall be deemed to be the price paid by the Borrower or a member of the
Consolidated Parties.
“Consolidated Total Funded Indebtedness” means, as of any date of determination,
Funded Indebtedness of the Consolidated Parties on a consolidated basis.
“Continuing Directors” means the directors of Potlatch on the Closing Date, and
each other director whose election by the board of directors of Potlatch or
whose nomination for election by the stockholders of Potlatch was approved by a
vote of at least a majority of the directors who were either directors on the
Closing Date or whose election or nomination for election was previously so
approved by directors who were Continuing Directors.
“Control” has the meaning specified in the definition of “Affiliate.”
“Controlled Account” means each deposit account and securities account that is
subject to an account control agreement in form and substance satisfactory to
the Administrative Agent and the L/C Issuer.
“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C
Credit Extension.
“Debt Rating” means, as of any date of determination, the rating as determined
by either S&P or Moody’s (collectively, the “Debt Ratings”) of the Company’s
non-credit-enhanced, senior unsecured long-term debt; provided that (a) if the
respective Debt Ratings issued by the foregoing rating agencies differ by one
level, then the Pricing Level for the higher of such Debt Ratings shall apply
(with the Debt Rating for Pricing Level I being the highest and the Debt Rating
for Pricing Level V being the lowest); (b) if there is a split in Debt Ratings
of more than one level, then the Pricing Level that is one level higher than the
Pricing Level of the lower Debt Rating shall apply; (c) if the Borrower has only
one Debt Rating, the Pricing Level that is one level lower than that of such
Debt Rating shall apply; and (d) if the Borrower does not have any Debt Rating,
Pricing Level V shall apply.
“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium,

- 10 -

--------------------------------------------------------------------------------

rearrangement, receivership, insolvency, reorganization, or similar debtor
relief Laws of the United States or other applicable jurisdictions from time to
time in effect.
“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.
“Default Rate” means (a) when used with respect to Obligations other than Letter
of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the
Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum;
provided, however, that with respect to a LIBOR Loan, the Default Rate shall be
an interest rate equal to the interest rate (including any Applicable Rate)
otherwise applicable to such Loan plus 2% per annum, and (b) when used with
respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus 2%
per annum.
“Defaulting Lender” means, subject to Section 2.18(b), any Lender that (a) has
failed to (i) fund all or any portion of its Loans within two Business Days of
the date such Loans were required to be funded hereunder unless such Lender
notifies the Administrative Agent and the Borrowers in writing that such failure
is the result of such Lender’s determination that one or more conditions
precedent to funding (each of which conditions precedent, together with any
applicable default, shall be specifically identified in such writing) has not
been satisfied, or (ii) pay to the Administrative Agent, the L/C Issuer, the
Swing Line Lender or any other Lender any other amount required to be paid by it
hereunder (including in respect of its participation in Letters of Credit or
Swing Line Loans) within two Business Days of the date when due, (b) has
notified the Borrowers, the Administrative Agent, the L/C Issuer or the Swing
Line Lender in writing that it does not intend to comply with its funding
obligations hereunder, or has made a public statement to that effect (unless
such writing or public statement relates to such Lender’s obligation to fund a
Loan hereunder and states that such position is based on such Lender’s
determination that a condition precedent to funding (which condition precedent,
together with any applicable default, shall be specifically identified in such
writing or public statement) cannot be satisfied), (c) has failed, within three
Business Days after written request by the Administrative Agent or the
Borrowers, to confirm in writing to the Administrative Agent and the Borrowers
that it will comply with its prospective funding obligations hereunder (provided
that such Lender shall cease to be a Defaulting Lender pursuant to this clause
(c) upon receipt of such written confirmation by the Administrative Agent and
the Borrowers), or (d) has, or has a direct or indirect parent company that has,
(i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had
appointed for it a receiver, custodian, conservator, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with
reorganization or liquidation of its business or assets, including the Federal
Deposit Insurance Corporation or any other state or federal regulatory authority
acting in such a capacity; provided that a Lender shall not be a Defaulting
Lender solely by virtue of the ownership or acquisition of any Equity Interest
in that Lender or any direct or indirect parent company thereof by a
Governmental Authority so long as such ownership interest does not result in or
provide such Lender with immunity

- 11 -

--------------------------------------------------------------------------------

from the jurisdiction of courts within the United States or from the enforcement
of judgments or writs of attachment on its assets or permit such Lender (or such
Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts
or agreements made with such Lender. Any determination by the Administrative
Agent that a Lender is a Defaulting Lender under any one or more of clauses (a)
through (d) above, and of the effective date of such status, shall be conclusive
and binding absent manifest error, and such Lender shall be deemed to be a
Defaulting Lender (subject to Section 2.17(b)) as of the date established
therefor by the Administrative Agent in a written notice of such determination,
which shall be delivered by the Administrative Agent to the Borrowers, the L/C
Issuer, the Swing Line Lender and each other Lender promptly following such
determination.
"Designated Jurisdiction" means any country or territory to the extent such
country or territory itself is the subject of any Sanction.
“Discretionary L/C Issuer” has the meaning specified in Section 2.03(b)(vi).
“Dollar” and “$” mean lawful money of the United States.
“Dollar Equivalent” means, at any time, (a) with respect to any amount
denominated in Dollars, such amount, and (b) with respect to any amount
denominated in any Alternative Currency, the equivalent amount thereof in
Dollars as determined by the Administrative Agent or the L/C Issuer, as the case
may be, at such time on the basis of the Spot Rate (determined in respect of the
most recent Revaluation Date) for the purchase of Dollars with such Alternative
Currency.
“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
any political subdivision of the United States.
“Eligible Assignee” means any Person that meets the requirements to be an
assignee under Section 10.06(b)(iii) and (v) (subject to such consents, if any,
as may be required under Section 10.06(b)(iii)).
“Environmental Claims” means all claims, however asserted, by any Governmental
Authority alleging potential liability or responsibility for violation of any
Environmental Law, or for release or injury to the environment.
“Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

- 12 -

--------------------------------------------------------------------------------

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of a Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
“Equity Issuance” means any issuance by any Consolidated Party to any Person of
(a) shares of its Capital Stock, (b) any shares of its Capital Stock pursuant to
the exercise of options or warrants, (c) any shares of its Capital Stock
pursuant to the conversion of any debt securities to equity or (d) any options
or warrants relating to its Capital Stock. The term “Equity Issuance” shall be
deemed not to include (i) any Asset Disposition or (ii) issuances pursuant to
(x) employee plans of the Borrowers that are in place as of the Closing Date to
the extent such issuances are permitted pursuant to the documentation governing
those plans as in effect as of the Closing Date or (y) new or amended employee
plans of the Borrowers to the extent such issuances are consistent with past
practices of the Borrowers.
“ERISA” means the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with a Borrower within the meaning of Section 414(b) or (c)
of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions
relating to Section 412 of the Code).
“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by a Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by a Borrower or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the
filing of a notice of intent to terminate, the treatment of a plan amendment as
a termination under Sections 4041 or 4041A of ERISA with respect to, or the
commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any
liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon a Borrower or any ERISA Affiliate.
“Event of Default” has the meaning specified in Section 8.01.

- 13 -

--------------------------------------------------------------------------------

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
any Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its Lending Office located in, the
jurisdiction imposing such Tax (or any political subdivision thereof) or (ii)
that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or Commitment pursuant
to a law in effect on the date on which (i) such Lender acquires such interest
in the Loan or Commitment (other than pursuant to an assignment request by the
Borrowers under Section 10.13) or (ii) such Lender changes its Lending Office,
except in each case to the extent that, pursuant to Section 3.01(a)(ii) or (c),
amounts with respect to such Taxes were payable either to such Lender’s assignor
immediately before such Lender became a party hereto or to such Lender
immediately before it changed its Lending Office, (c) Taxes attributable to such
Recipient’s failure to comply with Section 3.01(e) and (d) any U.S. federal
withholding Taxes imposed pursuant to FATCA.
“Existing Credit Agreement” has the meaning specified in the introductory
paragraph hereto.
“Existing Letters of Credit” means the letters of credit outstanding on the
Closing Date and identified on Schedule 1.01(a).
“Farm Credit Administration” means that certain agency known as the Farm Credit
Administration that derives its authority from the Farm Credit Act of 1971, as
amended.
“Farm Credit System” means any lending institution (including any wholly-owned
subsidiaries) governed by the Farm Credit Administration.
“FASB ASC” means the Accounting Standards Codification of the Financial
Accounting Standards Board.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with) and any current or future
regulations or official interpretations thereof.
“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the

- 14 -

--------------------------------------------------------------------------------

average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%)
charged to KeyBank on such day on such transactions as determined by the
Administrative Agent.
“Fee Letters” means (i) the letter agreement, dated May 9, 2014, among the
Company, the Administrative Agent and Keybanc Capital Markets, Inc.
“Foreign Lender” means (a) if any Borrower is a U.S. Person, a Lender that is
not a U.S. Person, and (b) if any Borrower is not a U.S. Person, a Lender that
is resident or organized under the laws of a jurisdiction other than that in
which the Borrowers are residents for tax purposes. For purposes of this
definition, the United States, each State thereof and the District of Columbia
shall be deemed to constitute a single jurisdiction.
“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.
“FRB” means the Board of Governors of the Federal Reserve System of the United
States.
“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with
respect to the L/C Issuer, such Defaulting Lender’s Applicable Percentage of the
outstanding L/C Obligations other than L/C Obligations as to which such
Defaulting Lender’s participation obligation has been reallocated to other
Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with
respect to the Swing Line Lender, such Defaulting Lender’s Applicable Percentage
of Swing Line Loans other than Swing Line Loans as to which such Defaulting
Lender’s participation obligation has been reallocated to other Lenders in
accordance with the terms hereof.
“Fully Satisfied” means, with respect to the Obligations as of any date, that,
as of such date, (a) all principal of and interest accrued to such date which
constitute Obligations shall have been irrevocably paid in full in cash, (b) all
fees, expenses and other amounts then due and payable which constitute
Obligations shall have been irrevocably paid in cash, and (c) the Commitments
shall have expired or shall have been terminated in full.
“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 activities.
“Funded Indebtedness” means, with respect to any Person, without duplication,
(a) all obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, debentures, notes or similar instruments, or
upon which interest payments are customarily made, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
Property purchased by such Person (other than customary reservations or
retentions of title under agreements with suppliers entered into in the ordinary
course of business), (d) all obligations of such Person issued or assumed as the
deferred purchase price of Property or services

- 15 -

--------------------------------------------------------------------------------

purchased by such Person (other than trade debt incurred in the ordinary course
of business and due within six months of the incurrence thereof) which would
appear as liabilities on a balance sheet of such Person, (e) the implied
principal component of all obligations of such Person under Capital Leases, (f)
the maximum amount of all performance and standby letters of credit issued or
bankers’ acceptances facilities created for the account of such Person and,
without duplication, all drafts drawn thereunder (to the extent unreimbursed),
(g) all preferred Capital Stock issued by such Person and which by the terms
thereof could be (at the request of the holders thereof or otherwise) subject to
mandatory sinking fund payments, redemption or other acceleration (other than as
a result of a Change of Control or an Asset Disposition that does not in fact
result in a redemption of such preferred Capital Stock) at any time prior to the
Maturity Date, (h) the principal portion of all obligations of such Person under
Synthetic Lease Obligations, (i) all obligations of such Person to repurchase
any securities issued by such Person at any time prior to the Maturity Date
which repurchase obligations are related to the issuance thereof, including,
without limitation, obligations commonly known as residual equity appreciation
potential shares, (j) the aggregate amount of uncollected accounts receivable of
such Person subject at such time to a sale of receivables (or similar
transaction) (whether or not such transaction would be reflected on the balance
sheet of such Person in accordance with GAAP), (k) all Funded Indebtedness of
others secured by (or for which the holder of such Funded Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on, or
payable out of the proceeds of production from, Property owned or acquired by
such Person, whether or not the obligations secured thereby have been assumed,
(l) all Guarantees of such Person with respect to Funded Indebtedness of another
Person and (m) the Funded Indebtedness of any partnership or unincorporated
joint venture in which such Person is a general partner or a joint venturer to
the extent such Indebtedness is recourse to such Person.
“GAAP” means generally accepted accounting principles in the United States that
are applicable to the circumstances as of the date of determination,
consistently applied.
“Governmental Authority” means the government of the United States or any other
nation, or of 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 (including any
supra-national bodies such as the European Union or the European Central Bank).
“Granting Lender” has the meaning specified in Section 10.06(f).
“Guarantee” means, as to any Person, (a) any obligation (other than endorsements
in the ordinary course of business of negotiable instruments for deposit or
collection), contingent or otherwise, of such Person guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation payable or
performable by another Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of such Person, direct

- 16 -

--------------------------------------------------------------------------------

or indirect, (i) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation, (ii) to purchase or lease
property, securities or services for the purpose of assuring the obligee in
respect of such Indebtedness or other obligation of the payment or performance
of such Indebtedness or other obligation, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity or level
of income or cash flow of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation, or (iv) entered into for
the purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any uncontested Lien on any assets of such Person securing any Indebtedness
or other obligation of any other Person, whether or not such Indebtedness or
other obligation is assumed by such Person. The amount of any Guarantee shall be
deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guaranteeing Person in good
faith. The term “Guarantee” as a verb has a corresponding meaning.
“Guarantors” means, collectively, each Person that becomes a Guarantor hereunder
pursuant to Section 6.11 by executing a Joinder Agreement in substantially the
form of Exhibit F, and “Guarantor” means any one of them.
“Guaranty” means the Guaranty made by the Guarantors in favor of the
Administrative Agent, on behalf of the Lenders, pursuant to Article XI hereof.
“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.
“Increase Effective Date” has the meaning set forth in Section 2.14.
“Indebtedness” means, with respect to any Person, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person either evidenced by bonds, debentures, notes or similar instruments, or
upon which interest payments are customarily made, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
Property purchased by such Person (other than customary reservations or
retentions of title under agreements with suppliers entered into in the ordinary
course of business), (d) all obligations of such Person issued or assumed as the
deferred purchase price of Property or services purchased by such Person (other
than trade debt incurred in the ordinary course of business and due within six
months of the incurrence thereof) which would appear as liabilities on a balance
sheet of such

- 17 -

--------------------------------------------------------------------------------

Person, (e) all obligations of such Person under take-or-pay or similar
arrangements or under commodities agreements under which such Person must make
payments notwithstanding the failure of the counter-party to deliver the goods
or services which such counter-party is required to deliver thereunder (and, for
the avoidance of doubt shall not include arrangements under which such Person
must pay for capacity or availability that must be delivered or made available
to entitle the counter-party to payment, notwithstanding that such Person may
not use such capacity or availability), (f) the implied principal component of
all obligations of such Person under Capital Leases, (g) all net obligations of
such Person under Swap Contracts, (h) the maximum amount of all performance and
standby letters of credit issued or bankers’ acceptances facilities created for
the account of such Person and, without duplication, all drafts drawn thereunder
(to the extent unreimbursed), (i) all preferred Capital Stock issued by such
Person and which by the terms thereof could be (at the request of the holders
thereof or otherwise) subject to mandatory sinking fund payments, redemption or
other acceleration (other than as a result of a Change of Control or an Asset
Disposition that does not in fact result in a redemption of such preferred
Capital Stock) at any time prior to the Maturity Date, (j) the principal portion
of all obligations of such Person under Synthetic Lease Obligations and other
Off-Balance Sheet Liabilities (excluding Operating Leases to the extent they
would otherwise be included), (k) all obligations of such Person to repurchase
any securities issued by such Person at any time prior to the Maturity Date
which repurchase obligations are related to the issuance thereof, including,
without limitation, obligations commonly known as residual equity appreciation
potential shares, (l) the aggregate amount of uncollected accounts receivable of
such Person subject at such time to a sale of receivables (or similar
transaction) (whether or not such transaction would be reflected on the balance
sheet of such Person in accordance with GAAP), (m) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, Property owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed, (n) all Guarantees of
such Person with respect to Indebtedness of another Person and (o) the
Indebtedness of any partnership or unincorporated joint venture in which such
Person is a general partner or a joint venturer to the extent such Indebtedness
is recourse to such Person. The amount of any net obligation under any Swap
Contract on any date shall be deemed to be the Swap Termination Value thereof as
of such date. The amount of any Capital Lease or Synthetic Lease Obligation as
of any date shall be deemed to be the amount of Attributable Indebtedness in
respect thereof as of such date.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of any Loan
Party under any Loan Document and (b) to the extent not otherwise described in
(a), Other Taxes.
“Indemnitee” has the meaning set forth in Section 10.04(b).
“Information” has the meaning specified in Section 10.07.

- 18 -

--------------------------------------------------------------------------------

“Interest Coverage Ratio” means, as of the end of any fiscal quarter of the
Consolidated Parties, the ratio of (a) Consolidated EBITDDA as of such date to
(b) Consolidated Interest Expense as of such date.
“Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan,
the last day of each Interest Period applicable to such Loan and the Maturity
Date; provided, however, that if any Interest Period for a LIBOR Loan exceeds
three (3) months, the respective dates that fall every three (3) months after
the beginning of such Interest Period shall also be Interest Payment Dates; and
(b) as to any Base Rate Loan (including a Swing Line Loan), the first Business
Day of each month and the Maturity Date.
“Interest Period” means, as to each LIBOR Loan, the period commencing on the
date such LIBOR Loan is disbursed or converted to or continued as a LIBOR Loan
and ending on the date one, two, three or six (6) months thereafter, as selected
by the Administrative Borrower in the Committed Loan Notice; provided further
that:
(i)    any Interest Period that would otherwise end on a day that is not a
Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;
(ii)    any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period; and
(iii)    no Interest Period shall extend beyond the Maturity Date.
“Internal Control Event” means a material weakness in, or fraud that involves
management or other employees who have a significant role in, any Borrower’s
internal controls over financial reporting, in each case as described in the
Securities Laws.
“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person whether or
not constituting a business unit or product line, including the purchase of
timber or timberlands but excluding (i) the purchase of inventory and supplies
in the ordinary course of business and (ii) any acquisition of assets to the
extent such acquisition is included as a capital

- 19 -

--------------------------------------------------------------------------------

expenditure in accordance with GAAP. For purposes of covenant compliance, the
amount of any Investment shall be the amount actually invested, without
adjustment for subsequent increases or decreases in the value of such
Investment.
“Involuntary Disposition” means any loss of, damage to or destruction of, or any
condemnation or other taking for public use of, any Property of any Consolidated
Party.
“IRS” means the United States Internal Revenue Service.
“ISP” means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law &
Practice, Inc. (or such later version thereof as may be in effect at the time of
issuance).
“Issuer Documents” means with respect to any Letter of Credit, the Letter of
Credit Application, and any other document, agreement and instrument entered
into by the L/C Issuer and a Borrower (or any Subsidiary) or in favor the L/C
Issuer and relating to any such Letter of Credit.
“Joinder Agreement” means a Joinder Agreement substantially in the form of
Exhibit F hereto, executed and delivered by a new Guarantor in accordance with
the provisions of Section 6.11.
“Judgment Currency” has the meaning specified in Section 10.17.
"KeyBank" means KeyBank National Association and its successors.
“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
“L/C Advance” means, with respect to each Lender, such Lender’s funding of its
participation in any L/C Borrowing in accordance with its Applicable Percentage.
All L/C Advances shall be denominated in Dollars.
“L/C Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Committed Borrowing. All L/C Borrowings shall be denominated in
Dollars.
“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the renewal or increase of
the amount thereof.

- 20 -

--------------------------------------------------------------------------------

“L/C Documents” means, with respect to any Letter of Credit, such Letter of
Credit, any amendments thereto, any documents delivered in connection therewith,
any application therefor, and any agreements, instruments, guarantees or other
documents (whether general in application or applicable only to such Letter of
Credit) governing or providing for (i) the rights and obligations of the parties
concerned or at risk or (ii) any collateral security for such obligations.
“L/C Issuer” means KeyBank in its capacity as issuer of Letters of Credit
hereunder, any Discretionary L/C Issuer, any Lender that has issued an Existing
Letter of Credit, or any successor issuer of Letters of Credit hereunder.
“L/C Obligations” means, as at any date of determination, the aggregate amount
available to be drawn under all outstanding Letters of Credit plus the aggregate
of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of
computing the amount available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with Section
1.10. For all purposes of this Agreement, if on any date of determination a
Letter of Credit has expired by its terms but any amount may still be drawn
thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of
Credit shall be deemed to be “outstanding” in the amount so remaining available
to be drawn.
“Lender” has the meaning specified in the introductory paragraph hereto and, as
the context requires, includes the L/C Issuer and the Swing Line Lender.
“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Administrative
Borrower and the Administrative Agent , which office may include any Affiliate
of such Lender or any domestic or foreign branch of such Lender or such
Affiliate. Unless the context otherwise requires each reference to a Lender
shall include its applicable Lending Office.
“Letter of Credit” means any standby letter of credit issued hereunder and shall
include the Existing Letters of Credit (if any). A Letter of Credit may be
issued in Dollars or in an Alternative Currency.
“Letter of Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the L/C Issuer.
“Letter of Credit Expiration Date” means the day that is thirty (30) days prior
to the Maturity Date then in effect (or, if such day is not a Business Day, the
next preceding Business Day).
“Letter of Credit Fee” has the meaning specified in Section 2.03(h).

- 21 -

--------------------------------------------------------------------------------

“Letter of Credit Sublimit” means an amount equal to FORTY MILLION DOLLARS
($40,000,000). The Letter of Credit Sublimit is part of, and not in addition to,
the Aggregate Commitments.
“LIBOR” means for any Interest Period, the rate per annum equal to the London
Interbank Offered Rate or a comparable or successor rate, which rate is approved
by the Administrative Agent, as published on the applicable Bloomberg screen
page (or such other commercially available source providing such quotations as
may be designated by the Administrative Agent from time to time) at
approximately 1:00 p.m., London time, two Business Days prior to the
commencement of such Interest Period, for Dollar deposits (for delivery on the
first day of such Interest Period) with a term equivalent to such Interest
Period; provided that to the extent a comparable or successor rate is approved
by the Administrative Agent in connection herewith, the approved rate shall be
applied in a manner consistent with market practice; provided, further that to
the extent such market practice is not administratively feasible for the
Administrative Agent, such approved rate shall be applied in a manner as
otherwise reasonably determined by the Administrative Agent.
“LIBOR Loan” means a Committed Loan that bears interest at a rate based on LIBOR
other than by reason of clause (c) of the definition of "Base Rate".
“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), other security interest or
charge (including any conditional sale or other title retention agreement, and
any financing lease having substantially the same economic effect as any of the
foregoing, but excluding operating leases).
“Loan” means an extension of credit by a Lender to the Borrowers under Article
II in the form of a Committed Loan or a Swing Line Loan.
“Loan Documents” means this Agreement, each Note, each Joinder Agreement, the
Fee Letter, any agreement creating or perfecting rights in Cash Collateral
pursuant to provisions of Section 2.17 of this Agreement.
“Loan Parties” means, collectively, the Borrowers and each Guarantor.
“London Banking Day” means any day on which dealings in Dollar deposits are
conducted by and between banks in the London interbank eurodollar market.
“Mandatory Cash Collateralization Date” has the meaning specified in
Section 2.03(b)(vii).
“Manufacturing Facilities” means the forest products manufacturing facilities
owned from time to time by the Loan Parties.

- 22 -

--------------------------------------------------------------------------------

“Material Adverse Effect” means (a) a material adverse effect upon the
operations, business, assets, properties, liabilities (actual or contingent) or
condition (financial or otherwise) of the Borrowers or the Borrowers and their
Subsidiaries taken as a whole; (b) a material impairment of the ability of the
Borrowers or the Borrowers and their Subsidiaries taken as a whole to perform
their material obligations under any Loan Document to which they are a party; or
(c) a material adverse effect upon the material rights and remedies of the
Administrative Agent and the Lenders under the Loan Documents.
“Material Domestic Subsidiary” means any Domestic Subsidiary that is a Material
Subsidiary.
“Material Foreign Subsidiary” means any foreign Subsidiary that is a Material
Subsidiary.
“Material Subsidiary” means as of any date of determination any Subsidiary, that
together with its Subsidiaries on a consolidated basis, accounts for (or to
which may be attributed) 5% or more of the Total Asset Value of the Consolidated
Parties.
“Maturity Date” means February 12, 2020.
“Medium-Term Notes” means the Medium-Term Notes due 9 months to 30 years from
date of issue issued by Potlatch Forest pursuant to the Indenture, dated as of
November 27, 1990, to U.S. Bank National Association, successor to Bankers Trust
Company of California, National Association, as trustee, as amended, restated
supplemented or modified from time to time.
“Minimum Collateral Amount” means, at any time, (i) with respect to Cash
Collateral consisting of cash or deposit account balances provided to reduce or
eliminate Fronting Exposure during the existence of a Defaulting Lender, an
amount equal to 105% of the Fronting Exposure of the L/C Issuer with respect to
Letters of Credit issued and outstanding at such time, (ii) with respect to Cash
Collateral consisting of cash or deposit account balances provided in accordance
with the provisions of Section 2.17(a)(i), (a)(ii) or (a)(iii), an amount equal
to 105% of the Outstanding Amount of all LC Obligations, and (iii) otherwise, an
amount determined by the Administrative Agent and the L/C Issuer in their sole
discretion.
“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.
“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA and subject to Title IV of ERISA, to which any
Borrower or any ERISA Affiliate makes or is obligated to make contributions, or
during the preceding five plan years, has made or been obligated to make
contributions.

- 23 -

--------------------------------------------------------------------------------

“Multiple Employer Plan” means a Plan (other than a Multiemployer Plan) which
any Consolidated Party or any ERISA Affiliate and at least one employer other
than the Consolidated Parties or any ERISA Affiliate are contributing sponsors.
“Net Cash Proceeds” means the aggregate cash or Cash Equivalents proceeds
received by any Consolidated Party in respect of any Asset Disposition, net of
(a) direct costs (including, without limitation, legal, accounting and
investment banking fees, and sales commissions), (b) taxes paid or payable as a
result thereof and (c) the amount necessary to Repay any Indebtedness either
secured by a Permitted Lien on the related Property or incurred in connection
with the Property that is included in such Asset Disposition; it being
understood that “Net Cash Proceeds” shall include, without limitation, any cash
or Cash Equivalents received upon the sale or other disposition of any non-cash
consideration received by any such Consolidated Party in any Asset Disposition.
In addition, the “Net Cash Proceeds” of any Asset Disposition shall include any
other amounts which constitute “Net Proceeds” (or any comparable term) of such
transaction under, and as defined in the documents evidencing or governing any
Subordinated Indebtedness.
“Non-Consenting Lender” means any Lender that does not approve any consent,
waiver or amendment that (i) requires the approval of all Lenders or all
affected Lenders in accordance with the terms of Section 10.01 and (ii) has been
approved by the Required Lenders.
“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting
Lender at such time.
“Note” means a promissory note made by the Borrowers in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of Exhibit C.
“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan or Letter of Credit, whether direct or
indirect (including those acquired by assumption), absolute or contingent, due
or to become due, now existing or hereafter arising and including (i) interest
and fees that accrue after the commencement by or against any Loan Party or any
Affiliate thereof of any proceeding under any Debtor Relief Laws naming such
Person as the debtor in such proceeding, regardless of whether such interest and
fees are allowed claims in such proceeding.
“OFAC” means the Office of Foreign Assets Control of the United States
Department of the Treasury.
“Off-Balance Sheet Liabilities” means, with respect to any Person as of any date
of determination thereof, without duplication and to the extent not included as
a liability on the consolidated balance sheet of such Person and its
Subsidiaries in accordance with GAAP: (a) with respect to any asset
securitization or similar transaction (including any accounts receivable
purchase

- 24 -

--------------------------------------------------------------------------------

facility) (i) the unrecovered investment of purchasers or transferees of assets
so transferred and (ii) any other payment, recourse, repurchase, hold harmless,
indemnity or similar obligation of such Person or any of its Subsidiaries in
respect of assets transferred or payments made in respect thereof, other than
limited recourse provisions that are customary for transactions of such type and
that neither (x) have the effect of limiting the loss or credit risk of such
purchasers or transferees with respect to payment or performance by the obligors
of the assets so transferred nor (y) impair the characterization of the
transaction as a true sale under applicable Laws (including Debtor Relief Laws);
or (b) the monetary obligations under any financing lease (excluding any
operating lease) or so-called “synthetic,” tax retention or off-balance sheet
lease transaction which, upon the application of any Debtor Relief Law to such
Person or any of its Subsidiaries, would be characterized as indebtedness; or
(c) the monetary obligations under any sale and leaseback transaction which does
not create a liability on the consolidated balance sheet of such Person and its
Subsidiaries; or (d) any other monetary obligation arising with respect to any
other transaction which (i) upon the application of any Debtor Relief Law to
such Person or any of its Subsidiaries, would be characterized as indebtedness
or (ii) is the functional equivalent of or takes the place of borrowing but
which does not constitute a liability on the consolidated balance sheet of such
Person and its Subsidiaries (for purposes of this clause (d), any transaction
structured to provide tax deductibility as interest expense of any dividend,
coupon or other periodic payment will be deemed to be the functional equivalent
of a borrowing).
“Opening Timberland Valuation” means that valuation of the Timberlands dated as
of August 11, 2014 prepared by the Timberland Valuation Consultant and delivered
to the Administrative Agent on or before the Closing Date. It is acknowledged
and agreed that the aggregate value of the Timberlands pursuant to the Opening
Timberland Valuation is $1,879,141,628.00 (which is calculated on the basis of
the perpetual value as a going concern operation).
“Operating Lease” means, as applied to any Person, any lease (including, without
limitation, leases which may be terminated by the lessee at any time) of any
Property (whether real, personal or mixed) which is not a Capital Lease other
than any such lease in which that Person is the lessor.
“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

- 25 -

--------------------------------------------------------------------------------

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).
“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 3.06).
“Outstanding Amount” means (i) with respect to Committed Loans and Swing Line
Loans on any date, the aggregate outstanding principal amount thereof after
giving effect to any borrowings and prepayments or repayments of Committed Loans
and Swing Line Loans, as the case may be, occurring on such date; and (ii) with
respect to any L/C Obligations on any date, the Dollar Equivalent of the
aggregate outstanding amount of such L/C Obligations on such date after giving
effect to any L/C Credit Extension occurring on such date and any other changes
in the aggregate amount of the L/C Obligations as of such date, including as a
result of any reimbursements of outstanding unpaid drawings under any Letters of
Credit or any reductions in the maximum amount available for drawing under
Letters of Credit taking effect on such date.
“Overnight Rate” means, for any day, (a) with respect to any amount denominated
in Dollars, the Federal Funds Rate for that day, and (b) with respect to any
amount denominated in an Alternative Currency, the rate of interest per annum at
which overnight deposits in the applicable Alternative Currency, in an amount
approximately equal to the amount with respect to which such rate is being
determined, would be offered for such day by a branch or Affiliate of KeyBank in
the applicable offshore interbank market for such currency to major banks in
such interbank market.
“Participant” has the meaning specified in Section 10.06(d).
“PBGC” means the Pension Benefit Guaranty Corporation.
“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by a Borrower or any
ERISA Affiliate or to which any Borrower or any ERISA Affiliate contributes or
has an obligation to contribute, or in the case of a multiple employer or other
plan described in Section 4064(a) of ERISA, has made contributions at any time
during the immediately preceding five plan years.

- 26 -

--------------------------------------------------------------------------------

“Permitted Acquisition” means an Acquisition by any Borrower or any Subsidiary
of a Borrower that is permitted pursuant to the terms of Section 7.06(g).
“Permitted Asset Disposition” means any Asset Disposition permitted by Section
7.05.
“Permitted Investments” means, at any time, Investments by the Consolidated
Parties permitted to exist at such time pursuant to the terms of Section 7.06.
“Permitted Liens” means, at any time, Liens in respect of Property of the
Consolidated Parties permitted to exist at such time pursuant to the terms of
Section 7.02.
“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
“Plan” means any “employee benefit plan” (as such term is defined in Section
3(3) of ERISA) established by a Borrower or, with respect to any such plan that
is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.
“Platform” has the meaning specified in Section 6.01.
“Potlatch” has the meaning specified in the introductory paragraph hereto.
“Potlatch Forest” has the meaning specified in the introductory paragraph
hereto.
“Potlatch Land & Lumber” has the meaning specified in the introductory paragraph
hereto.
“Pro Forma Basis” means, for purposes of calculating (utilizing the principles
set forth in Section 1.03(b)) compliance with each of the financial covenants
set forth in Section 6.10(a)-(c) in respect of a proposed transaction, that such
transaction shall be deemed to have occurred as of the first day of the four
fiscal-quarter period ending as of the most recent fiscal quarter end preceding
the date of such transaction with respect to which the Administrative Agent has
received the Required Financial Information. As used herein, “transaction” shall
mean (i) any incurrence or assumption of Indebtedness as referred to in Section
7.01(f), (ii) any Asset Disposition as referred to in Section 7.05, (iii) any
Acquisition as referred to in Section 7.06(g), or (iv) any Restricted Payment as
referred to in Section 7.07(c). In connection with any calculation of the
financial covenants set forth in Section 6.10(a)-(c) upon giving effect to a
transaction on a Pro Forma Basis:
(A)    for purposes of any such calculation in respect of any incurrence or
assumption of Indebtedness as referred to in Section 7.01(f), any Indebtedness
which is retired in connection with such transaction shall be excluded and
deemed to have been retired as of the first day of the applicable period;

- 27 -

--------------------------------------------------------------------------------

(B)    for purposes of any such calculation in respect of any Asset Disposition
as referred to in Section 7.05, (1) income statement items (whether positive or
negative) attributable to the Property disposed of shall be excluded and (2) any
Indebtedness which is retired in connection with such transaction shall be
excluded and deemed to have been retired as of the first day of the applicable
period; and
(C)    for purposes of any such calculation in respect of any Acquisition as
referred to in Section 7.06(g), (1) any Indebtedness incurred by any
Consolidated Party in connection with such transaction (x) shall be deemed to
have been incurred as of the first day of the applicable period and (y) if such
Indebtedness has a floating or formula rate, shall have an implied rate of
interest for the applicable period for purposes of this definition determined by
utilizing the rate which is or would be in effect with respect to such
Indebtedness as at the relevant date of determination, (2) income statement
items (whether positive or negative) attributable to the Person or Property
acquired shall be included beginning as of the first day of the applicable
period and (3) pro forma adjustments may be included to the extent that such
adjustments would be permitted under GAAP and give effect to events that are (x)
directly attributable to such transaction, (y) expected to have a continuing
impact on the Consolidated Parties and (z) factually supportable.
(D)    for purposes of any such calculation in connection with the making of any
Restricted Payment referred to in Section 7.07(c), any Indebtedness incurred (or
to be incurred) by any Consolidated Party in connection with such payment or
repurchases shall be deemed to have been incurred as of the first day of the
applicable period.
“Pro Forma Compliance Certificate” means a certificate of a Responsible Officer
of the Administrative Borrower delivered to the Administrative Agent in
connection with (i) any incurrence or assumption of Indebtedness as referred to
in Section 7.01(f), (ii) any Asset Disposition as referred to in Section 7.05,
(iii) any Acquisition as referred to in Section 7.06(g) and (iv) any Restricted
Payment made pursuant to Section 7.07(c), as applicable, and containing
reasonably detailed calculations, upon giving effect to the applicable
transaction on a Pro Forma Basis, of the Consolidated Leverage Ratio and the
Interest Coverage Ratio as of the most recent fiscal quarter end preceding the
date of the applicable transaction with respect to which the Administrative
Agent shall have received the Required Financial Information.
“Property” means any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible.
“Public Lender” has the meaning specified in Section 6.01.
“Recipient” means the Administrative Agent, any Lender, the L/C Issuer or any
other recipient of any payment to be made by or on account of any obligation of
any Loan Party hereunder.

- 28 -

--------------------------------------------------------------------------------

“Register” has the meaning set forth in Section 10.06(c).
“REIT” means a Real Estate Investment Trust as defined in Sections 856-860 of
the Code.
“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents, trustees,
administrators, managers, advisors and representatives of such Person and of
such Person’s Affiliates.
“Repay” or “Repayment” means with respect to Indebtedness, to permanently pay,
prepay, redeem, repurchase, retire, defease (including by way of depositing
money or securities with the trustee with respect thereto before due for the
purpose of paying when due), establish a sinking fund or similar payment or
acquire for value.
“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.
“Request for Credit Extension” means (a) with respect to a Borrowing, conversion
or continuation of Committed Loans, a Committed Loan Notice, (b) with respect to
an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to
a Swing Line Loan, a Swing Line Loan Notice.
“Required Financial Information” means, with respect to each fiscal period or
quarter of the Borrowers, (a) the financial statements required to be delivered
pursuant to Section 6.01(a) or (b) for such fiscal period or quarter, and (b)
the certificate of a Responsible Officer of Potlatch required by Section 6.01(c)
to be delivered with the financial statements described in clause (a) above.
“Required Lenders” means, as of any date of determination, Lenders having more
than 50% of the Aggregate Commitments or, if the commitment of each Lender to
make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions
have been terminated pursuant to Section 8.02, Lenders holding in the aggregate
more than 50% of the Total Outstandings (with the aggregate amount of each
Lender’s risk participation and funded participation in L/C Obligations and
Swing Line Loans being deemed “held” by such Lender for purposes of this
definition); provided that the Commitment of, and the portion of the Total
Outstandings held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders (except that the amount
of any participation in any Swing Line Loan and Unreimbursed Amounts that such
Defaulting Lender has failed to fund that has not been reallocated to and funded
by another Lender shall be deemed to be “held” by the Lender that is the Swing
Line Lender or L/C Issuer, as the case may be, in making such determination).
“Responsible Officer” of any Person means any of the chief executive officer,
chief operating officer, president, vice president, chief financial officer,
treasurer, assistant treasurer or other duly

- 29 -

--------------------------------------------------------------------------------

elected officer of such Person. Any document delivered hereunder that is signed
by a Responsible Officer of a Loan Party shall be conclusively presumed to have
been authorized by all necessary corporate, partnership and/or other action on
the part of such Loan Party and such Responsible Officer shall be conclusively
presumed to have acted on behalf of such Loan Party.
“Restricted Payment” means (i) any dividend or other payment or distribution,
direct or indirect, on account of any shares of any class of Capital Stock of
any Consolidated Party, now or hereafter outstanding (including without
limitation any payment in connection with any dissolution, merger, consolidation
or disposition involving any Consolidated Party) to the holders, in their
capacity as such, of any shares of any class of Capital Stock of any
Consolidated Party, now or hereafter outstanding (other than dividends or
distributions payable in Capital Stock of the applicable Person and dividends or
distributions payable (directly or indirectly through Subsidiaries) to a
Borrower), (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of Capital Stock of any Consolidated Party, now or hereafter
outstanding, (iii) any payment made to retire, or to obtain the surrender of,
any outstanding warrants, options or other rights to acquire shares of any class
of Capital Stock of any Consolidated Party, now or hereafter outstanding, and
(iv) any payment or prepayment of principal of, or premium, if any, on
(including any redemption, purchase, retirement, defeasance, sinking fund or
similar payment with respect to) any Subordinated Indebtedness. Notwithstanding
the foregoing, the term Restricted Payment shall not include any redemption of
share purchase rights issued pursuant to any customary shareholder rights plan
implemented by Potlatch from time to time (as the same may be amended from time
to time), for a redemption price not to exceed $0.01 per share purchase right.
“Revaluation Date” means with respect to any Letter of Credit, each of the
following: (a) each date of issuance of any Letter of Credit, (b) each date of
an amendment of any Letter of Credit having the effect of increasing the amount
thereof (solely with respect to the increased amount), (c) each date of any
payment by the L/C Issuer of any Letter of Credit denominated in an Alternative
Currency, (d) the last Business Day of each calendar month and (e) such
additional dates as the Administrative Agent or the L/C Issuer shall require.
“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. and any successor thereto.
“Sale and Leaseback Transaction” means any arrangement pursuant to which any
Consolidated Party, directly or indirectly, becomes liable as lessee, guarantor
or other surety with respect to any lease, whether an Operating Lease or a
Capital Lease, of any Property (a) which such Consolidated Party has sold or
transferred (or is to sell or transfer) to a Person which is not a Consolidated
Party or (b) which such Consolidated Party intends to use for substantially the
same purpose as any other Property which has been sold or transferred (or is to
be sold or transferred)

- 30 -

--------------------------------------------------------------------------------

by such Consolidated Party to another Person which is not a Consolidated Party
in connection with such lease, provided that any transaction that satisfies the
conditions in preceding subsection (a) or (b) shall not constitute a “Sale and
Leaseback Transaction” where lessor under such lease is organized under the laws
of a jurisdiction outside of the United States, the Property is located in the
United States and the obligations in respect of the lease or incurred in
connection therewith for which the Consolidated Party is liable have been
defeased.
“Same Day Funds” means (a) with respect to disbursements and payments in
Dollars, immediately available funds, and (b) with respect to disbursements and
payments in an Alternative Currency, same day or other funds as may be
determined by the Administrative Agent or the L/C Issuer, as applicable, to be
customary in the place of disbursement or payment for the settlement of
international banking transactions in the relevant Alternative Currency.
“Sanction(s)” means any sanction administered or enforced by the United States
Government (including without limitation, OFAC), the United Nations Security
Council, the European Union, Her Majesty’s Treasury or other relevant sanctions
authority.
“Sarbanes‑Oxley” means the Sarbanes‑Oxley Act of 2002.
“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
“Securities Laws” means the Securities Act of 1933, the Securities Exchange Act
of 1934, Sarbanes-Oxley and the applicable accounting and auditing principles,
rules, standards and practices promulgated, approved or incorporated by the SEC
or the Public Company Accounting Oversight Board, as each of the foregoing may
be amended and in effect on any applicable date hereunder.
“Single Employer Plan” means any Plan which is covered by Title IV of ERISA, but
which is not a Multiemployer Plan or a Multiple Employer Plan.
“Solvent” or “Solvency” means, with respect to any Person as of a particular
date, that on such date (i) such Person is able to pay its debts and other
liabilities, contingent obligations and other commitments as they mature in the
normal course of business, (ii) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person’s ability to
pay as such debts and liabilities mature in their ordinary course, (iii) such
Person is not engaged in a business or a transaction, and is not about to engage
in a business or a transaction, for which such Person’s Property would
constitute unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which such Person is engaged or is to
engage, (iv) the fair market value of the Property of such Person is greater
than the total amount of liabilities, including, without limitation, contingent
liabilities, of such Person and (v) the present fair market value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability

- 31 -

--------------------------------------------------------------------------------

of such Person on its debts as they become absolute and matured. In computing
the amount of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
“SPC” has the meaning specified in Section 10.06(f).
“Spot Rate” for a currency means the rate determined by the Administrative Agent
or the L/C Issuer, as applicable, to be the rate quoted by the Person acting in
such capacity as the spot rate for the purchase by such Person of such currency
with another currency through its principal foreign exchange trading office at
approximately 11:00 a.m. on the date two Business Days prior to the date as of
which the foreign exchange computation is made; provided that the Administrative
Agent or the L/C Issuer may obtain such spot rate from another financial
institution designated by the Administrative Agent or the L/C Issuer if the
Person acting in such capacity does not have as of the date of determination a
spot buying rate for any such currency; and provided further that the L/C Issuer
may use such spot rate quoted on the date as of which the foreign exchange
computation is made in the case of any Letter of Credit denominated in an
Alternative Currency.
“Subordinated Indebtedness” means any Indebtedness of the Borrowers which by its
terms is subordinated to the Obligations in a manner and to an extent acceptable
to the Required Lenders.
“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
a Borrower.
“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master

- 32 -

--------------------------------------------------------------------------------

agreement published by the International Swaps and Derivatives Association,
Inc., any International Foreign Exchange Master Agreement, or any other master
agreement (any such master agreement, together with any related schedules, a
“Master Agreement”), including any such obligations or liabilities under any
Master Agreement.
“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
“Swing Line” means the revolving credit facility made available by the Swing
Line Lender pursuant to Section 2.04.
“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to
Section 2.04.
“Swing Line Lender” means KeyBank in its capacity as provider of Swing Line
Loans, or any successor swing line lender hereunder.
“Swing Line Loan” has the meaning specified in Section 2.04(a).
“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to
Section 2.04(b), which, if in writing, shall be substantially in the form of
Exhibit B or such other form as may be approved by Administrative Agent.
“Swing Line Sublimit” means an amount equal to the lesser of (a) TWENTY-FIVE
MILLION DOLLARS ($25,000,000) and (b) the Aggregate Commitments. The Swing Line
Sublimit is part of, and not in addition to, the Aggregate Commitments.
“Synthetic Lease Obligation” means the monetary obligation of a Person under (a)
a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment). In no event shall any Operating
Lease be construed as a Synthetic Lease Obligation.

- 33 -

--------------------------------------------------------------------------------

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.
“Timberland Inventory Update” means an annual inventory and acreage update with
respect to the Timberlands delivered to the Administrative Agent, in accordance
with Section 6.13 hereof, which update shall be provided by the Borrowers and
which shall include, without limitation, (i) an update of timber inventory
reflecting depletion and growth of the timber as of December 31st of the prior
year (which shall reflect any Timberlands added or disposed of since the Opening
Timberland Valuation or Timberland Valuation Update most recently delivered) and
(ii) an indication of the total acreage comprising the Timberlands.
“Timberland Valuation Consultant” means RISI, Inc. or another third party
timberland valuation consultant acceptable to the Administrative Agent.
“Timberland Valuation Update” means an update to the Opening Timberland
Valuation delivered to the Administrative Agent every year, in accordance with
Section 6.13 hereof, which update shall be conducted by the Timberland Valuation
Consultant and which shall include, without limitation, (i) the updated value of
the Timberlands based on the current market conditions which shall include an
aggregate value for the Timberlands as well as values of the Timberlands by
region and (ii) an indication by Timberland Valuation Consultant of the total
acreage comprising the Timberlands, the aggregate value for the Timberlands and
the average per acre value for the Timberlands taken as a whole, in each case,
in form and detail reasonably satisfactory to the Administrative Agent.
“Timberlands” means all the timberlands from time to time owned by the Loan
Parties.
"Total Asset Value" means, as of any date, (i) the most recent Consolidated
Timberland Value, plus (ii) the GAAP book basis of the Consolidated Parties for
Manufacturing Facilities, provided that such amount shall not exceed 5% of Total
Asset Value, plus (iii) cash, Cash Equivalents, Company Owned Life Insurance
(provided that such amount of Company Owned Life Insurance shall not be more
than 5% of Total Asset Value) and marketable securities owned by the
Consolidated Parties as of the end of such fiscal quarter.
“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all
L/C Obligations.
“Type” means, with respect to a Committed Loan, its character as a Base Rate
Loan or a LIBOR Loan.
“United States” and “U.S.” mean the United States of America.

- 34 -

--------------------------------------------------------------------------------

“Unreimbursed Amount” has the meaning set forth in Section 2.03(c)(i).
“U.S. Tax Compliance Certificate” has the meaning specified in
Section 3.01(e)(i)(B)(III).
1.02    Other Interpretive Provisions.
With reference to this Agreement and each other Loan Document, unless otherwise
specified herein or in such other Loan Document:
(a)    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.” Unless the context requires otherwise,
(i) any definition of or reference to any agreement, instrument or other
document (including any Organization Document) shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to include
such Person’s successors and assigns, (iii) the words “herein,” “hereof” and
“hereunder,” and words of similar import when used in any Loan Document, shall
be construed to refer to such Loan Document in its entirety and not to any
particular provision thereof, (iv) all references in a Loan Document to
Articles, Sections, Preliminary Statements, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Preliminary Statements,
Exhibits and Schedules to, the Loan Document in which such references appear,
(v) any reference to any law shall include all statutory and regulatory
provisions consolidating, amending, replacing or interpreting such law and any
reference to any law or regulation shall, unless otherwise specified, refer to
such law or regulation as amended, modified or supplemented from time to time,
and (vi) the words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.
(b)    In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including;” the words “to” and
“until” each mean “to but excluding;” and the word “through” means “to and
including.”
(c)    Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

- 35 -

--------------------------------------------------------------------------------

1.03    Accounting Terms.
(a)    Generally. All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP applied on
a consistent basis, as in effect from time to time, applied in a manner
consistent with that used in preparing the Audited Financial Statements, except
as otherwise specifically prescribed herein. Notwithstanding the foregoing, for
purposes of determining compliance with any covenant (including the computation
of any financial covenant) contained herein, Indebtedness of the Borrowers and
their respective Subsidiaries shall be deemed to be carried at 100% of the
outstanding principal amount thereof, and the effects of FASB ASC 825 on
financial liabilities shall be disregarded.
(b)    Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Administrative Borrower or the Required Lenders shall
so request, the Administrative Agent, the Lenders and the Borrowers shall
negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP (subject to the approval
of the Required Lenders); provided that, until so amended, (A) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (B) the Administrative Borrower shall provide to the
Administrative Agent and the Lenders financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting forth
a reconciliation between calculations of such ratio or requirement made before
and after giving effect to such change in GAAP. Without limiting the foregoing,
leases shall continue to be classified and accounted for on a basis consistent
with that reflected in the Audited Financial Statements for all purposes of this
Agreement, notwithstanding any change in GAAP relating thereto, unless the
parties hereto shall enter into a mutually acceptable amendment addressing such
changes, as provided for above.
(c)    Notwithstanding the above, the parties hereto acknowledge and agree that,
for purposes of all calculations made under the financial covenants set forth in
Section 6.10 (including without limitation for purposes of the definitions of
“Applicable Rate” and “Pro Forma Basis” set forth in Section 1.01, (i) after
consummation of any Asset Disposition for consideration (cash and non-cash) in
excess of $50,000,000 and (ii) after consummation of any Acquisition for an
Investment for consideration (cash and non-cash) in excess of $50,000,000, such
calculations shall be made on a Pro Forma Basis.
1.04    Rounding.

- 36 -

--------------------------------------------------------------------------------

Any financial ratios required to be maintained by the Borrowers on a
consolidated basis pursuant to this Agreement shall be calculated by dividing
the appropriate component by the other component, carrying the result to one
place more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
1.05    References to Agreements and Laws.
Unless otherwise expressly provided herein, (a) references to Organization
Documents, agreements (including the Loan Documents) and other contractual
instruments shall be deemed to include all subsequent amendments, restatements,
extensions, supplements and other modifications thereto, but only to the extent
that such amendments, restatements, extensions, supplements and other
modifications are not prohibited by any Loan Document; and (b) references to any
Law shall include all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting such Law.
1.06    Exchange Rates; Currency Equivalents.
(a)    The Administrative Agent or the L/C Issuer, as applicable, shall
determine the Spot Rates as of each Revaluation Date to be used for calculating
Dollar Equivalent amounts of Credit Extensions and Outstanding Amounts
denominated in Alternative Currencies. Such Spot Rates shall become effective as
of such Revaluation Date and shall be the Spot Rates employed in converting any
amounts between the applicable currencies until the next Revaluation Date to
occur. Except for purposes of financial statements delivered by Loan Parties
hereunder or calculating financial covenants hereunder or except as otherwise
provided herein, the applicable amount of any currency (other than Dollars) for
purposes of the Loan Documents shall be such Dollar Equivalent amount as so
determined by the Administrative Agent or the L/C Issuer, as applicable.
(b)    Wherever in this Agreement in connection with the issuance, amendment or
extension of a Letter of Credit, an amount, such as a required minimum or
multiple amount, is expressed in Dollars, but such Letter of Credit is
denominated in an Alternative Currency, such amount shall be the relevant
Alternative Currency Equivalent of such Dollar amount (rounded to the nearest
unit of such Alternative Currency, with 0.5 of a unit being rounded upward), as
determined by the Administrative Agent or the L/C Issuer, as applicable.
1.07    Additional Alternative Currencies.
The Administrative Borrower may from time to time request that Letters of Credit
be issued in a currency other than those specifically listed in the definition
of “Alternative Currency;” provided that such requested currency is a lawful
currency (other than Dollars) that is readily available and

- 37 -

--------------------------------------------------------------------------------

freely transferable and convertible into Dollars. Such request shall be subject
to the approval of the Administrative Agent and the L/C Issuer. Any such request
shall be made to the Administrative Agent not later than 12:00 p.m., twenty (20)
Business Days prior to the date of the desired Credit Extension (or such other
time or date as may be agreed by the Administrative Agent and the L/C Issuer, in
their sole discretion). The L/C Issuer shall notify the Administrative Agent,
not later than 12:00 p.m., ten (10) Business Days after receipt of such request
whether it consents, in its sole discretion, to the issuance of Letters of
Credit in such requested currency. Any failure by the L/C Issuer to respond to
such request within the time period specified in the preceding sentence shall be
deemed to be a refusal by the L/C Issuer to permit Letters of Credit to be
issued in such requested currency. If the Administrative Agent and the L/C
Issuer consent to the issuance of Letters of Credit in such requested currency,
the Administrative Agent shall so notify the Administrative Borrower and such
currency shall thereupon be deemed for all purposes to be an Alternative
Currency hereunder for purposes of any Letter of Credit issuances. If the
Administrative Agent shall fail to obtain consent to any request for an
additional currency under this Section 1.07, the Administrative Agent shall
promptly so notify the Administrative Borrower.
1.08    Change of Currency.
(a)    Each obligation of the Borrowers to make a payment denominated in the
national currency unit of any member state of the European Union that adopts the
Euro as its lawful currency after the date hereof shall be redenominated into
Euro at the time of such adoption. If, in relation to the currency of any such
member state, the basis of accrual of interest expressed in this Agreement in
respect of that currency shall be inconsistent with any convention or practice
in the London interbank market for the basis of accrual of interest in respect
of the Euro, such expressed basis shall be replaced by such convention or
practice with effect from the date on which such member state adopts the Euro as
its lawful currency; provided that if any Credit Extension in the currency of
such member state is outstanding immediately prior to such date, such
replacement shall take effect, with respect to such Credit Extension, at the end
of the then current Interest Period.
(b)    Each provision of this Agreement shall, upon written notice to the
Administrative Borrower explaining the basis for such construction, be subject
to such reasonable changes of construction as the Administrative Agent may from
time to time specify to be appropriate to reflect the adoption of the Euro by
any member state of the European Union and any relevant market conventions or
practices relating to the Euro.
(c)    Each provision of this Agreement also shall, upon written notice to the
Administrative Borrower explaining the basis for such construction, be subject
to such reasonable changes of construction as the Administrative Agent may from
time to time

- 38 -

--------------------------------------------------------------------------------

specify to be appropriate to reflect a change in currency of any other country
and any relevant market conventions or practices relating to the change in
currency.
1.09    Times of Day.
Unless otherwise specified, all references herein to times of day shall be
references to Eastern time (daylight or standard, as applicable).
1.10    Letter of Credit Amounts.
Unless otherwise specified herein, the amount of a Letter of Credit at any time
shall be deemed to be the Dollar Equivalent of the stated amount of such Letter
of Credit in effect at such time; provided, however, that with respect to any
Letter of Credit that, by its terms or the terms of any Issuer Document related
thereto, provides for one or more automatic increases in the stated amount
thereof, the amount of such Letter of Credit shall be deemed to be the Dollar
Equivalent of the maximum stated amount of such Letter of Credit after giving
effect to all such increases, whether or not such maximum stated amount is in
effect at such time.
ARTICLE II    
COMMITMENTS AND CREDIT EXTENSIONS
2.01    Committed Loans.
Subject to the terms and conditions set forth herein, each Lender severally
agrees to make loans in Dollars (each such loan, a “Committed Loan”) for the
account of any Borrower as designated by the Administrative Borrower pursuant to
Section 2.02(a) from time to time, on any Business Day during the Availability
Period, in an aggregate amount not to exceed at any time outstanding the amount
of such Lender’s Commitment; provided, however, that after giving effect to any
Committed Borrowing, (i) the Total Outstandings shall not exceed the Aggregate
Commitments and (ii) the aggregate Outstanding Amount of the Committed Loans of
any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount
of all L/C Obligations, plus such Lender’s Applicable Percentage of the
Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s
Commitment. Within the limits of each Lender’s Commitment, and subject to the
other terms and conditions hereof, any of the Borrowers may borrow under this
Section 2.01, prepay under Section 2.05, and reborrow under this Section 2.01.
Committed Loans may be Base Rate Loans or LIBOR Loans, as further provided
herein.
2.02    Borrowings, Conversions and Continuations of Committed Loans.

- 39 -

--------------------------------------------------------------------------------

(d)    Each Committed Borrowing, each conversion of Committed Loans from one
Type to the other, and each continuation of LIBOR Loans shall be made upon
irrevocable notice from the Administrative Borrower to the Administrative Agent,
which may be given by telephone (provided that such telephonic notice complies
with the information requirements of the form of Committed Loan Notice attached
hereto). Each such notice must be received by the Administrative Agent not later
than (i) 1:00 p.m. three Business Days prior to the requested date of any
Borrowing of, conversion to or continuation of LIBOR Loans or of any conversion
of LIBOR Loans to Base Rate Loans, and (ii) 12:00 p.m. on the requested date of
any Borrowing of Base Rate Committed Loans. Each telephonic notice by the
Administrative Borrower pursuant to this Section 2.02(a) must be confirmed
promptly by delivery to the Administrative Agent of a written Committed Loan
Notice, appropriately completed and signed by a Responsible Officer of the
Administrative Borrower. Each Borrowing of, conversion to or continuation of
LIBOR Loans shall be in a principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof. Except as provided in Sections 2.03(c) and
2.04(c), each Borrowing of or conversion to Base Rate Committed Loans shall be
in a principal amount of $500,000 or a whole multiple of $100,000 in excess
thereof. Each Committed Loan Notice (whether telephonic or written) shall
specify (i) the applicable Borrower to which the proceeds of the Loan shall be
disbursed, (ii) whether the Administrative Borrower is requesting a Committed
Borrowing, a conversion of Committed Loans from one Type to the other, or a
continuation of LIBOR Loans, (iii) the requested date of the Borrowing,
conversion or continuation, as the case may be (which shall be a Business Day),
(iv) the principal amount of Committed Loans to be borrowed, converted or
continued, (v) the Type of Committed Loans to be borrowed or to which existing
Committed Loans are to be converted, and (vi) if applicable, the duration of the
Interest Period with respect thereto. If the Administrative Borrower fails to
specify a Type of Committed Loan in a Committed Loan Notice or if the
Administrative Borrower fails to give a timely notice requesting a conversion or
continuation, then the applicable Committed Loans shall be made as, or converted
to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be
effective as of the last day of the Interest Period then in effect with respect
to the applicable LIBOR Loans. If the Administrative Borrower requests a
Borrowing of, conversion to, or continuation of LIBOR Loans in any such
Committed Loan Notice, but fails to specify an Interest Period, it will be
deemed to have specified an Interest Period of one month. Notwithstanding the
foregoing, all Borrowings made on the Closing Date shall be made as Base Rate
Loans unless the Administrative Agent shall have received an appropriate funding
indemnity letter executed by the Borrowers and reasonably acceptable to the
Administrative Agent at least three (3) Business Days prior to the Closing Date.
In addition, notwithstanding anything to the contrary herein, a Swing Line Loan
may not be converted to a LIBOR Loan.

- 40 -

--------------------------------------------------------------------------------

(e)    Following receipt of a Committed Loan Notice, the Administrative Agent
shall promptly notify each Lender of the amount of its Applicable Percentage of
the applicable Committed Loans, and if no timely notice of a conversion or
continuation is provided by the Administrative Borrower, the Administrative
Agent shall notify each Lender of the details of any automatic conversion to
Base Rate Loans described in the preceding subsection. In the case of a
Committed Borrowing, each Lender shall make the amount of its Committed Loan
available to the Administrative Agent in immediately available funds at the
Administrative Agent’s Office not later than 2:00 p.m. on the Business Day
specified in the applicable Committed Loan Notice. Upon satisfaction of the
applicable conditions set forth in Section 4.02 (and, if such Borrowing is the
initial Credit Extension, Section 4.01), the Administrative Agent shall make all
funds so received available to the applicable Borrower designated to receive the
proceeds of the Loan in the Committed Loan Notice in like funds as received by
the Administrative Agent either by (i) crediting the account of the applicable
Borrower on the books of KeyBank with the amount of such funds or (ii) wire
transfer of such funds, in each case in accordance with instructions provided to
(and reasonably acceptable to) the Administrative Agent by the Administrative
Borrower; provided, however, that if, on the date the Committed Loan Notice with
respect to such Borrowing is given by the Administrative Borrower, there are L/C
Borrowings outstanding, then the proceeds of such Borrowing shall be applied,
first, to the payment in full of any such L/C Borrowings, and second, to the
applicable Borrower as provided above.
(f)    Except as otherwise provided herein, a LIBOR Loan may be continued or
converted only on the last day of an Interest Period for such LIBOR Loan. During
the existence of a Default, no Loans may be requested as, converted to or
continued as LIBOR Loans without the consent of the Required Lenders.
(g)    The Administrative Agent shall promptly notify the Administrative
Borrower and the Lenders of the interest rate applicable to any Interest Period
for LIBOR Loans upon determination of such interest rate. The determination of
the LIBOR by the Administrative Agent shall be conclusive in the absence of
manifest error. At any time that Base Rate Loans are outstanding, the
Administrative Agent shall notify the Administrative Borrower and the Lenders of
any change in KeyBank’s prime rate used in determining the Base Rate promptly
following the public announcement of such change.
(h)    After giving effect to all Committed Borrowings, all conversions of
Committed Loans from one Type to the other, all continuations of Committed Loans
as the same Type and all Swing Line Loans, the sum of (i) the number of Interest
Periods in effect with respect to Committed Loans and (ii) Swing Line Loans
shall not exceed ten (10) at any one time.

- 41 -

--------------------------------------------------------------------------------

2.03    Letters of Credit.
(a)    The Letter of Credit Commitment.
(i)    Subject to the terms and conditions set forth herein, (A) the L/C Issuer
agrees, in reliance upon the agreements of the Lenders set forth in this Section
2.03, (1) from time to time on any Business Day during the period from the
Closing Date until the Letter of Credit Expiration Date, to issue Letters of
Credit denominated in Dollars or in one or more Alternative Currencies for the
account of any Borrower or any Subsidiary, and to amend or extend Letters of
Credit previously issued by it, in accordance with Section 2.03(b), and (2) to
honor drawings under the Letters of Credit; and (B) the Lenders severally agree
to participate in Letters of Credit issued for the account of any of the
Borrowers and any drawings thereunder; provided that after giving effect to any
L/C Credit Extension with respect to any Letter of Credit, (x) the Total
Outstandings shall not exceed the Aggregate Commitments, (y) the aggregate
Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus
such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line
Loans shall not exceed such Lender’s Commitment, and (z) the Outstanding Amount
of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each
request by the Administrative Borrower for the issuance or amendment of a Letter
of Credit shall be deemed to be a representation by the Borrowers that the L/C
Credit Extension so requested complies with the conditions set forth in the
proviso to the preceding sentence. Within the foregoing limits, and subject to
the terms and conditions hereof, the Borrowers’ ability to obtain Letters of
Credit shall be fully revolving, and accordingly the Borrowers may, during the
foregoing period, obtain Letters of Credit to replace Letters of Credit that
have expired or that have been drawn upon and reimbursed. All Existing Letters
of Credit shall be deemed to have been issued pursuant hereto, and from and
after the Closing Date shall be subject to and governed by the terms and
conditions hereof. Each Letter of Credit Application shall be prepared and
signed by the Administrative Borrower; provided, however, that the
Administrative Borrower shall be permitted to designate any Borrower, Subsidiary
or other third party as the account party for the requested Letter of Credit,
although, notwithstanding such designation, the Borrowers shall be the actual
account party for all purposes of this Agreement for such Letters of Credit and
such designation shall not affect the Borrowers’ reimbursement obligations
hereunder with respect to such Letter of Credit.
(ii)    The L/C Issuer shall not issue any Letter of Credit if:

- 42 -

--------------------------------------------------------------------------------

(A)    subject to Section 2.03(b)(iii), the expiry date of such requested Letter
of Credit would occur more than twelve months after the date of issuance or last
extension, unless the Required Lenders have approved such expiry date; or
(B)    subject to Section 2.03(b)(vii), the expiry date of such requested Letter
of Credit would occur after the Letter of Credit Expiration Date, unless all the
Lenders have approved such expiry date.
(iii)    The L/C Issuer shall not be under any obligation to issue any Letter of
Credit if:
(A)    any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain the L/C Issuer from issuing
such Letter of Credit, or any Law applicable to the L/C Issuer or any request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over the L/C Issuer shall prohibit, or request that
the L/C Issuer refrain from, the issuance of letters of credit generally or such
Letter of Credit in particular or shall impose upon the L/C Issuer with respect
to such Letter of Credit any restriction, reserve or capital requirement (for
which the L/C Issuer is not otherwise compensated hereunder) not in effect on
the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss,
cost or expense which was not applicable on the Closing Date and which the L/C
Issuer in good faith deems material to it;
(B)    the issuance of such Letter of Credit would violate one or more policies
of the L/C Issuer applicable to letters of credit generally;
(C)    except as otherwise agreed to by the Administrative Agent and the L/C
Issuer, such Letter of Credit is in an initial stated amount less than $25,000
(or such lesser amount as may be agreed to by the Borrowers, the L/C Issuer and
the Administrative Agent);
(D)    such Letter of Credit is to be denominated in a currency other than
Dollars or an Alternative Currency;
(E)    such Letter of Credit contains any provisions for automatic reinstatement
of the stated amount after any drawing thereunder;

- 43 -

--------------------------------------------------------------------------------

(F)    the L/C Issuer does not as of the issuance date of the requested Letter
of Credit issue Letters of Credit in the requested currency; or
(G)    any Lender is at such time a Defaulting Lender, unless the L/C Issuer has
entered into arrangements, including the delivery of Cash Collateral,
satisfactory to the L/C Issuer (in its sole discretion) with the Borrowers or
such Lender to eliminate the L/C Issuer’s actual or potential Fronting Exposure
(after giving effect to Section 2.18(a)(iv)) with respect to the Defaulting
Lender arising from either the Letter of Credit then proposed to be issued or
that Letter of Credit and all other L/C Obligations as to which the L/C Issuer
has actual or potential Fronting Exposure, as it may elect in its sole
discretion.
(iv)    The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer
would not be permitted at such time to issue such Letter of Credit in its
amended form under the terms hereof.
(v)    The L/C Issuer shall be under no obligation to amend any Letter of Credit
if (A) the L/C Issuer would have no obligation at such time to issue such Letter
of Credit in its amended form under the terms hereof, or (B) the beneficiary of
such Letter of Credit does not accept the proposed amendment to such Letter of
Credit.
(vi)    The L/C Issuer shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith, and the
L/C Issuer shall have all of the benefits and immunities (A) provided to the
Administrative Agent in Article IX with respect to any acts taken or omissions
suffered by the L/C Issuer in connection with Letters of Credit issued by it or
proposed to be issued by it and Issuer Documents pertaining to such Letters of
Credit as fully as if the term “Administrative Agent” as used in Article IX
included the L/C Issuer with respect to such acts or omissions, and (B) as
additionally provided herein with respect to the L/C Issuer.
(b)    Procedures for Issuance and Amendment of Letters of Credit;
Auto-Extension Letters of Credit.
(i)    Each Letter of Credit shall be issued or amended, as the case may be,
upon the request of the Administrative Borrower delivered to the L/C Issuer
(with a copy to the Administrative Agent) in the form of a Letter of Credit
Application, appropriately completed and signed by a Responsible Officer of the
Administrative Borrower. Such Letter of Credit Application may be sent by
facsimile, by United

- 44 -

--------------------------------------------------------------------------------

States mail, by overnight courier, by electronic transmission using the system
provided by the L/C Issuer, by personal delivery or by any other means
acceptable to the L/C Issuer. Such Letter of Credit Application must be received
by the L/C Issuer and the Administrative Agent (A) not later than 12:00 p.m. at
least two Business Days (or such later date and time as the Administrative Agent
and the L/C Issuer may agree in a particular instance in their sole discretion)
prior to the proposed issuance date or date of amendment, as the case may be, of
any Letter of Credit denominated in Dollars and (B) not later than 12:00 p.m. at
least ten Business Days (or such later date and time as the L/C Issuer may agree
in a particular instance in its sole discretion) prior to the proposed issuance
date or date of amendment, as the case may be, of any Letter of Credit
denominated in an Alternative Currency. In the case of a request for an initial
issuance of a Letter of Credit, such Letter of Credit Application shall specify
in form and detail satisfactory to the L/C Issuer: (A) the proposed issuance
date of the requested Letter of Credit (which shall be a Business Day); (B) the
amount thereof; (C) the expiry date thereof; (D) the name and address of the
beneficiary thereof; (E) the documents to be presented by such beneficiary in
case of any drawing thereunder; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; (G) the purpose
and nature of the requested Letter of Credit; and (H) such other matters as the
L/C Issuer may require. In the case of a request for an amendment of any
outstanding Letter of Credit, such Letter of Credit Application shall specify in
form and detail satisfactory to the L/C Issuer (1) the Letter of Credit to be
amended; (2) the proposed date of amendment thereof (which shall be a Business
Day); (3) the nature of the proposed amendment; and (4) such other matters as
the L/C Issuer may require. Additionally, the Borrower for whose account the
Letter of Credit is being issued shall furnish through the Administrative
Borrower to the L/C Issuer and the Administrative Agent such other documents and
information pertaining to such requested Letter of Credit issuance or amendment,
including any Issuer Documents, as the L/C Issuer or the Administrative Agent
may reasonably require.
(ii)    Promptly after receipt of any Letter of Credit Application, the L/C
Issuer will confirm with the Administrative Agent (by telephone or in writing)
that the Administrative Agent has received a copy of such Letter of Credit
Application from the Administrative Borrower and, if not, the L/C Issuer will
provide the Administrative Agent with a copy thereof. Unless the L/C Issuer has
received written notice from any Lender, the Administrative Agent or any Loan
Party, at least one Business Day prior to the requested date of issuance or
amendment of the applicable Letter of Credit, that one or more applicable
conditions contained in Article IV shall not then be satisfied, then, subject to
the terms and conditions hereof, the L/C Issuer

- 45 -

--------------------------------------------------------------------------------

shall, on the requested date, issue a Letter of Credit for the account of the
Borrower for whose account the Letter of Credit is being issued or enter into
the applicable amendment, as the case may be, in each case in accordance with
the L/C Issuer’s usual and customary business practices. Immediately upon the
issuance of each Letter of Credit, each Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk
participation in such Letter of Credit in an amount equal to the product of such
Lender’s Applicable Percentage times the amount of such Letter of Credit.
(iii)    If the Administrative Borrower so requests in any applicable Letter of
Credit Application, the L/C Issuer may, in its sole and absolute discretion,
agree to issue a Letter of Credit that has automatic extension provisions (each,
an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension
Letter of Credit must permit the L/C Issuer to prevent any such extension at
least once in each twelve-month period (commencing with the date of issuance of
such Letter of Credit) by giving prior notice to the beneficiary thereof not
later than a day (the “Non-Extension Notice Date”) in each such twelve-month
period to be agreed upon at the time such Letter of Credit is issued. Unless
otherwise directed by the L/C Issuer, the Administrative Borrower shall not be
required to make a specific request to the L/C Issuer for any such extension.
Once an Auto- Extension Letter of Credit has been issued, the Lenders shall be
deemed to have authorized (but may not require) the L/C Issuer to permit the
extension of such Letter of Credit at any time to an expiry date not later than
the Letter of Credit Expiration Date; provided, however, that the L/C Issuer
shall not permit any such extension if (A) the L/C Issuer has determined that it
would not be permitted, or would have no obligation, at such time to issue such
Letter of Credit in its revised form (as extended) under the terms hereof (by
reason of the provisions of clause (ii) or (iii) of Section 2.03(a) or
otherwise), or (B) it has received notice (which may be by telephone or in
writing) on or before the day that is five (5) Business Days before the Non-
Extension Notice Date (1) from the Administrative Agent that the Required
Lenders have elected not to permit such extension or (2) from the Administrative
Agent, any Lender or a Borrower that one or more of the applicable conditions
specified in Section 4.02 is not then satisfied, and in each such case directing
the L/C Issuer not to permit such extension.
(iv)    If the Administrative Borrower so requests in any applicable Letter of
Credit Application, the L/C Issuer may, in its sole and absolute discretion,
agree to issue a Letter of Credit that permits the automatic reinstatement of
all or a portion of the stated amount thereof after any drawing thereunder
(each, an “Auto-Reinstatement Letter of Credit”). Unless otherwise directed by
the L/C Issuer, the Administrative Borrower shall not be required to make a
specific request to the L/

- 46 -

--------------------------------------------------------------------------------

C Issuer to permit such reinstatement. Once an Auto-Reinstatement Letter of
Credit has been issued, except as provided in the following sentence, the
Lenders shall be deemed to have authorized (but may not require) the L/C Issuer
to reinstate all or a portion of the stated amount thereof in accordance with
the provisions of such Letter of Credit. Notwithstanding the foregoing, if such
Auto-Reinstatement Letter of Credit permits the L/C Issuer to decline to
reinstate all or any portion of the stated amount thereof after a drawing
thereunder by giving notice of such non-reinstatement within a specified number
of days after such drawing (the “Non-Reinstatement Deadline”), the L/C Issuer
shall not permit such reinstatement if it has received a notice (which may be by
telephone or in writing) on or before the day that is seven Business Days before
the Non-Reinstatement Deadline (A) from the Administrative Agent that the
Required Lenders have elected not to permit such reinstatement or (B) from the
Administrative Agent, any Lender or a Borrower that one or more of the
applicable conditions specified in Section 4.02 is not then satisfied (treating
such reinstatement as an L/C Credit Extension for purposes of this clause) and,
in each case, directing the L/C Issuer not to permit such reinstatement.
(v)    Promptly after its delivery of any Letter of Credit or any amendment to a
Letter of Credit to an advising bank with respect thereto or to the beneficiary
thereof, the L/C Issuer will also deliver to the Administrative Borrower and the
Administrative Agent a true and complete copy of such Letter of Credit or
amendment.
(vi)    Any Lender with a Commitment (in such capacity, a “Discretionary L/C
Issuer”) may from time to time, at the written request of the Administrative
Borrower (with a copy to the Administrative Agent) and with the consent of the
Administrative Agent (such consent not to be unreasonably withheld), and in such
Lender’s sole discretion, agree to issue one or more Letters of Credit for the
account of the applicable Borrower designated in such request on the same terms
and conditions in all respects as are applicable to the Letters of Credit issued
by the L/C Issuer hereunder by executing and delivering to the Administrative
Agent a written agreement to such effect, among (and in form and substance
satisfactory to) the Borrowers, the Administrative Agent and such Discretionary
L/C Issuer. With respect to each of the Letters of Credit issued (or to be
issued) thereby, each of the Discretionary L/C Issuers shall have all of the
same rights and obligations under and in respect of this Agreement and the other
Loan Documents, and shall be entitled to all of the same benefits (including,
without limitation, the rights, obligations and benefits set forth in Sections
2.03, 9.07 and 10.01), as are afforded to the L/C Issuer hereunder and
thereunder. The Administrative Agent shall promptly notify each of the Lenders
with a Commitment of the appointment of any Discretionary L/C Issuer.

- 47 -

--------------------------------------------------------------------------------

Each Discretionary L/C Issuer shall provide to the Administrative Agent, on a
monthly basis, a report that details the activity with respect to each Letter of
Credit issued by such Discretionary L/C Issuer (including an indication of the
maximum amount then in effect with respect to each such Letter of Credit).
(vii)    The L/C Issuer may, in its sole discretion, issue one or more Letters
of Credit hereunder, with expiry dates that would occur after the Letter of
Credit Expiration Date (and after the Maturity Date), to the extent the
Borrowers have agreed to fully Cash Collateralize the L/C Obligations relating
to such Letters of Credit on the date that is five (5) Business Days prior to
the Maturity Date (the “Mandatory Cash Collateralization Date”) in accordance
with the terms of Section 2.17. In the event the Borrowers fail to Cash
Collateralize the outstanding L/C Obligations on the Mandatory Cash
Collateralization Date, each outstanding Letter of Credit shall automatically be
deemed to be drawn in full and the Borrowers shall be deemed to have requested a
Base Rate Committed Loan to be funded by the Lenders on the Mandatory Cash
Collateralization Date to reimburse such drawing (with the proceeds of such Loan
being used to Cash Collateralize outstanding L/C Obligations as set forth in
Section 2.17) in accordance with the provisions of Section 2.03(c). If a Base
Rate Committed Loan cannot be made because the conditions set forth in Section
4.02 cannot be satisfied or for any other reason, the Borrowers shall be deemed
to have incurred an L/C Borrowing from the L/C Issuer and each Lender shall be
obligated to fund its Applicable Percentage of such L/C Borrowing in the form of
an L/C Advance in accordance with the provisions of Section 2.03(c) (with the
proceeds of such L/C Advance being used to Cash Collateralize outstanding L/C
Obligations as set forth in Section 2.17). The funding by a Lender of its
Applicable Percentage of such Base Rate Committed Loan or such L/C Advance, as
applicable, to Cash Collateralize the outstanding L/C Obligations on the
Mandatory Cash Collateralization Date shall be deemed payment by such Lender in
respect of its participation interest in such L/C Obligations.
(c)    Drawings and Reimbursements; Funding of Participations.
(i)    Upon receipt from the beneficiary of any Letter of Credit of any notice
of a drawing under such Letter of Credit, the L/C Issuer shall notify the
Administrative Borrower and the Administrative Agent thereof. Not later than
2:00 p.m. on the date of any payment by the L/C Issuer under a Letter of Credit
to be reimbursed in Dollars, or the Applicable Time on the date of any payment
by the L/C Issuer under a Letter of Credit to be reimbursed in an Alternative
Currency (each such date, an “Honor Date”), the Borrowers shall reimburse the
L/C Issuer through the Administrative Agent in an amount equal to the amount of
such drawing. In the

- 48 -

--------------------------------------------------------------------------------

case of a Letter of Credit denominated in Dollars, the Borrowers shall reimburse
the L/C Issuer in Dollars. In the case of a Letter of Credit denominated in an
Alternative Currency, the Borrowers shall reimburse the L/C Issuer in Dollars
unless the L/C Issuer (at its option) shall specify in such notice that it will
require payment in the currency in which the drawing is made. In the case of any
such reimbursement in Dollars of a drawing under a Letter of Credit denominated
in an Alternative Currency, the L/C Issuer shall notify the Administrative
Borrower of the Dollar Equivalent of the amount of the drawing promptly
following the determination thereof. If the Borrowers fail to so reimburse the
L/C Issuer by such time, the Administrative Agent shall promptly notify each
Lender of the Honor Date, the amount of the unreimbursed drawing (the
“Unreimbursed Amount”), and the amount of such Lender’s Applicable Percentage
thereof. In such event, the Borrowers shall be deemed to have requested a
Committed Borrowing of Base Rate Committed Loans to be disbursed on the Honor
Date in an amount equal to the Unreimbursed Amount, without regard to the
minimum and multiples specified in Section 2.02 for the principal amount of Base
Rate Loans, but subject to the amount of the unutilized portion of the Aggregate
Commitments and the conditions set forth in Section 4.02 (other than the
delivery of a Committed Loan Notice). Any notice given by the L/C Issuer or the
Administrative Agent pursuant to this Section 2.03(c)(i) may be given by
telephone if immediately confirmed in writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding effect of
such notice.
(ii)    Each Lender (including the Lender acting as L/C Issuer) shall upon any
notice pursuant to Section 2.03(c)(i) make funds available (and the
Administrative Agent may apply Cash Collateral provided for this purpose) for
the account of the L/C Issuer at the Administrative Agent’s Office in Dollars in
an amount equal to its Applicable Percentage of the Unreimbursed Amount not
later than 2:00 p.m. on the Business Day specified in such notice by the
Administrative Agent, whereupon, subject to the provisions of
Section 2.03(c)(iii), each Lender that so makes funds available shall be deemed
to have made a Base Rate Committed Loan to the Borrowers in such amount. The
Administrative Agent shall remit the funds so received to the L/C Issuer in
Dollars, or if requested by the L/C Issuer, the equivalent amount thereof in an
Alternative Currency as determined by the Administrative Agent at such time on
the basis of the Spot Rate (determined as of such funding date) for the purchase
of such Alternative Currency with Dollars.
(iii)    With respect to any Unreimbursed Amount that is not fully refinanced by
a Committed Borrowing of Base Rate Loans because the conditions set forth in
Section 4.02 cannot be satisfied or for any other reason, the Borrowers shall be
deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of

- 49 -

--------------------------------------------------------------------------------

the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be
due and payable on demand (together with interest) and shall bear interest at
the Default Rate. In such event, each Lender’s payment to the Administrative
Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be
deemed payment in respect of its participation in such L/C Borrowing and shall
constitute an L/C Advance from such Lender in satisfaction of its participation
obligation under this Section 2.03.
(iv)    Until each Lender funds its Committed Loan or L/C Advance pursuant to
this Section 2.03(c) to reimburse the L/C Issuer for any amount drawn under any
Letter of Credit, interest in respect of such Lender’s Applicable Percentage of
such amount shall be solely for the account of the L/C Issuer.
(v)    Each Lender’s obligation to make Committed Loans or L/C Advances to
reimburse the L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this Section 2.03(c), shall be absolute and unconditional and
shall not be affected by any circumstance, including (A) any set-off,
counterclaim, recoupment, defense or other right which such Lender may have
against the L/C Issuer, the Borrowers or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default; (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
or (D) with respect to the obligation of each Lender to fund and satisfy its
participation in an L/C Borrowing in accordance with this Section 2.03, the
occurrence of the Letter of Credit Expiration Date or the Maturity Date or the
termination of the Commitments hereunder; provided, however, that each Lender’s
obligation to make Committed Loans pursuant to this Section 2.03(c) is subject
to the conditions set forth in Section 4.02 (other than delivery by the
Administrative Borrower of a Committed Loan Notice). No such making of an L/C
Advance shall relieve or otherwise impair the obligation of the Borrowers to
reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer
under any Letter of Credit, together with interest as provided herein.
(vi)    If any Lender fails to make available to the Administrative Agent for
the account of the L/C Issuer any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 2.03(c) by the time
specified in Section 2.03(c)(ii), then, without limiting the other provisions of
this Agreement, the L/C Issuer shall be entitled to recover from such Lender
(acting through the Administrative Agent), on demand, such amount with interest
thereon for the period from the date such payment is required to the date on
which such payment is immediately available to the L/C Issuer at a rate per
annum equal to the greater of the Federal Funds Rate and a rate determined by
the L/C Issuer in accordance with

- 50 -

--------------------------------------------------------------------------------

banking industry rules on interbank compensation, plus any administrative,
processing or similar fees customarily charged by the L/C Issuer in connection
with the foregoing (it being understood that such customary fees shall not be
subject to the indemnification obligations of the Borrowers pursuant to Section
10.04(b)). If such Lender pays such amount (with interest and fees as
aforesaid), the amount so paid shall constitute such Lender’s Committed Loan
included in the relevant Committed Borrowing or L/C Advance in respect of the
relevant L/C Borrowing, as the case may be. A certificate of the L/C Issuer
submitted to any Lender (through the Administrative Agent) with respect to any
amounts owing under this Section 2.03(c)(vi) shall be conclusive absent manifest
error.
(d)    Repayment of Participations.
(i)    At any time after the L/C Issuer has made a payment under any Letter of
Credit and has received from any Lender such Lender’s L/C Advance in respect of
such payment in accordance with Section 2.03(c), if the Administrative Agent
receives for the account of the L/C Issuer any payment in respect of the related
Unreimbursed Amount or interest thereon (whether directly from the Borrowers or
otherwise, including proceeds of Cash Collateral applied thereto by the
Administrative Agent), the Administrative Agent will distribute to such Lender
its Applicable Percentage thereof in the same funds as those received by the
Administrative Agent.
(ii)    If any payment received by the Administrative Agent for the account of
the L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under
any of the circumstances described in Section 10.05 (including pursuant to any
settlement entered into by the L/C Issuer in its discretion), each Lender shall
pay to the Administrative Agent for the account of the L/C Issuer its Applicable
Percentage thereof on demand of the Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned by such Lender,
at a rate per annum equal to the Federal Funds Rate from time to time in effect.
The obligations of the Lenders under this clause shall survive the payment in
full of the Obligations and the termination of this Agreement.
(e)    Obligations Absolute. The obligation of the Borrowers to reimburse the
L/C Issuer for each drawing under each Letter of Credit and to repay each L/C
Borrowing shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including the following:

- 51 -

--------------------------------------------------------------------------------

(i)    any lack of validity or enforceability of such Letter of Credit, this
Agreement, or any other Loan Document;
(ii)    the existence of any claim, counterclaim, set-off, defense or other
right that any Borrower or any Subsidiary may have at any time against any
beneficiary or any transferee of such Letter of Credit (or any Person for whom
any such beneficiary or any such transferee may be acting), the L/C Issuer or
any other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction;
(iii)    any draft, demand, certificate or other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
or any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under such Letter of Credit;
(iv)    waiver by the L/C Issuer of any requirement that exists for the L/C
Issuer’s protection and not the protection of any Borrower or any waiver by the
L/C Issuer which does not in fact materially prejudice any Borrower;
(v)    honor of a demand for payment presented electronically even if such
Letter of Credit requires that demand be in the form of a draft;
(vi)    any payment made by the L/C Issuer in respect of an otherwise complying
item presented after the date specified as the expiration date of, or the date
by which documents must be received under such Letter of Credit if presentation
after such date is authorized by the UCC, the ISP or the UCP, as applicable;
(vii)    any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit; or any payment made by the L/C Issuer under such
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any Debtor Relief Law;
(viii)    any adverse change in the relevant exchange rates or in the
availability of the relevant Alternative Currency to any Borrower or any
Subsidiary or in the relevant currency markets generally; or

- 52 -

--------------------------------------------------------------------------------

(ix)    any other circumstance or happening whatsoever, whether or not similar
to any of the foregoing, including any other circumstance that might otherwise
constitute a defense available to, or a discharge of, any Borrower or any
Subsidiary.
The Administrative Borrower shall promptly examine a copy of each Letter of
Credit and each amendment thereto that is delivered to it and, in the event of
any claim of noncompliance with the Administrative Borrower’s instructions or
other irregularity, the Administrative Borrower will immediately notify the L/C
Issuer. The Borrowers shall be conclusively deemed to have waived any such claim
against the L/C Issuer and its correspondents unless such notice is given as
aforesaid.
(f)    Role of L/C Issuer. Each Lender and each Borrower agree that, in paying
any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
the Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of the L/C Issuer shall be liable to any
Lender for (i) any action taken or omitted in connection herewith at the request
or with the approval of the Lenders or the Required Lenders, as applicable; (ii)
any action taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Issuer Document. The Borrowers hereby assume all risks of the acts or omissions
of any beneficiary or transferee with respect to its use of any Letter of
Credit; provided, however, that this assumption is not intended to, and shall
not, preclude the Borrowers’ pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement. None
of the L/C Issuer, the Administrative Agent, any of their respective Related
Parties nor any correspondent, participant or assignee of the L/C Issuer, shall
be liable or responsible for any of the matters described in clauses (i) through
(ix) of Section 2.03(e); provided, however, that anything in such clauses to the
contrary notwithstanding, the Borrowers may have a claim against the L/C Issuer,
and the L/C Issuer may be liable to the Borrowers, to the extent, but only to
the extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Borrowers which the Borrowers prove were caused by the L/C
Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful
failure to pay under any Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly complying with the
terms and conditions of a Letter of Credit. In furtherance and not in limitation
of the foregoing, the L/C Issuer may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary, and the L/C Issuer shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits

- 53 -

--------------------------------------------------------------------------------

thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason. The L/C Issuer may send a Letter of
Credit or conduct any communication to or from the beneficiary via the Society
for Worldwide Interbank Financial Telecommunication (“SWIFT”) message or
overnight courier, or any other commercially reasonable means of communicating
with a beneficiary.
(g)    Applicability of ISP and UCP; Limitation of Liability. Unless otherwise
expressly agreed by the L/C Issuer and the Borrowers when a Letter of Credit is
issued (including any such agreement applicable to an Existing Letter of
Credit), (i) the rules of the ISP shall apply to each standby Letter of Credit,
and (ii) the rules of the UCP shall apply to each commercial Letter of Credit.
Notwithstanding the foregoing, the L/C Issuer shall not be responsible to the
Borrowers for, and the L/C Issuer’s rights and remedies against the Borrowers
shall not be impaired by, any action or inaction of the L/C Issuer required or
permitted under any law, order, or practice that is required or permitted to be
applied to any Letter of Credit or this Agreement, including the Law or any
order of a jurisdiction where the L/C Issuer or the beneficiary is located, the
practice stated in the ISP or UCP, as applicable, or in the decisions, opinions,
practice statements, or official commentary of the ICC Banking Commission, the
Bankers Association for Finance and Trade - International Financial Services
Association (BAFT-IFSA), or the Institute of International Banking Law &
Practice, whether or not any Letter of Credit chooses such law or practice.
(h)    Letter of Credit Fees. The Borrowers shall pay to the Administrative
Agent for the account of each Lender in accordance with its Applicable
Percentage in Dollars a Letter of Credit fee (the “Letter of Credit Fee”) for
each Letter of Credit equal to the Applicable Rate times the Dollar Equivalent
of the daily amount available to be drawn under such Letter of Credit. For
purposes of computing the daily amount available to be drawn under any Letter of
Credit, the amount of such Letter of Credit shall be determined in accordance
with Section 1.10. Such letter of credit fees shall be computed on a quarterly
basis in arrears. Such letter of credit fees shall be due and payable on the
first Business Day after the end of each March, June, September and December,
commencing with the first such date to occur after the issuance of such Letter
of Credit, on the Letter of Credit Expiration Date and thereafter on demand. If
there is any change in the Applicable Rate during any quarter, the daily amount
available to be drawn under each Letter of Credit shall be computed and
multiplied by the Applicable Rate separately for each period during such quarter
that such Applicable Rate was in effect. Notwithstanding anything to the
contrary contained herein, upon the request of the Required Lenders, while any
Event of Default exists, all Letter of Credit Fees shall accrue at the Default
Rate.
(i)    Fronting Fee and Processing Charges Payable to L/C Issuer. The Borrowers
shall pay directly to the L/C Issuer for its own account a fronting fee in
Dollars or such

- 54 -

--------------------------------------------------------------------------------

Alternative Currency as shall be separately agreed, for each Letter of Credit
equal to 0.125% times the Dollar Equivalent of the daily amount available to be
drawn under such Letter of Credit. For purposes of computing the daily amount
available to be drawn under any Letter of Credit, the amount of such Letter of
Credit shall be determined in accordance with Section 1.10. Such letter of
credit fees shall be computed on a quarterly basis in arrears. Such fronting fee
for each Letter of Credit shall be due and payable on the first Business Day
after the end of each March, June, September and December, commencing with the
first such date to occur after the issuance of such Letter of Credit, on the
Letter of Credit Expiration Date and thereafter on demand. In addition, the
Borrowers shall pay directly to the L/C Issuer for its own account the customary
issuance, presentation, amendment and other processing fees, and other standard
costs and charges, of the L/C Issuer relating to letters of credit as from time
to time in effect in Dollars or such Alternative Currency as shall be separately
agreed. Such customary fees and standard costs and charges are due and payable
on demand and are nonrefundable.
(j)    Conflict with Issuer Documents. In the event of any conflict between the
terms hereof and the terms of any Issuer Document, the terms hereof shall
control.
(k)    Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter
of Credit issued or outstanding hereunder is in support of any obligations of a
Subsidiary and subject to the provisions of Section 2.15, such Letter of Credit
shall be deemed to be for the account of Potlatch Forest, in the case of any
Subsidiary that is a REIT, and Potlatch Land & Lumber, in the case of all other
Subsidiaries, and the applicable Borrowers shall be obligated to reimburse the
L/C Issuer hereunder for any and all drawings under such Letter of Credit. The
Borrowers hereby acknowledge that the issuance of Letters of Credit for the
account of Subsidiaries inures to the benefit of the Borrowers, and that the
Borrowers’ business derives substantial benefits from the businesses of such
Subsidiaries.
2.04    Swing Line Loans.
(a)    The Swing Line. Subject to the terms and conditions set forth herein, the
Swing Line Lender, in reliance upon the agreement of the other Lenders set forth
in this Section 2.04, may in its sole and absolute discretion make loans (each
such loan, a “Swing Line Loan”) for the account of any of the Borrowers from
time to time on any Business Day during the Availability Period in an aggregate
amount not to exceed at any time outstanding the amount of the Swing Line
Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated
with the Applicable Percentage of the Outstanding Amount of Committed Loans and
L/C Obligations of the Lender acting as Swing Line Lender, may exceed the amount
of such Lender’s Commitment; provided, however, that (x) after giving effect to
any Swing Line Loan, (i) the Total Outstandings shall not exceed the Aggregate

- 55 -

--------------------------------------------------------------------------------

Commitments, and (ii) the aggregate Outstanding Amount of the Committed Loans of
any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount
of all L/C Obligations, plus such Lender’s Applicable Percentage of the
Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s
Commitment, (y) the Borrowers shall not use the proceeds of any Swing Line Loan
to refinance any outstanding Swing Line Loan, and (z) the Swing Line Lender
shall not be under any obligation to make any Swing Line Loan if it shall
determine (which determination shall be conclusive and binding absent manifest
error) that it has, or by such Credit Extension may have, Fronting Exposure.
Within the foregoing limits, and subject to the other terms and conditions
hereof, any of the Borrowers may borrow under this Section 2.04, prepay under
Section 2.05, and reborrow under this Section 2.04. Immediately upon the making
of a Swing Line Loan, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Swing Line Lender a risk
participation in such Swing Line Loan in an amount equal to the product of such
Lender’s Applicable Percentage times the amount of such Swing Line Loan.
(b)    Borrowing Procedures. Each Swing Line Borrowing shall be made upon the
Administrative Borrower’s irrevocable notice to the Swing Line Lender and the
Administrative Agent, which may be given by telephone (provided that such
telephonic notice complies with the informational requirements of the form of
Swing Line Loan Notice attached hereto). Each such notice must be received by
the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on
the requested borrowing date, and shall specify (i) the amount to be borrowed,
which shall be a minimum of $100,000 (and in integral multiples of $100,000),
(ii) the requested borrowing date, which shall be a Business Day and (iii) the
Borrower to which the funds are to be disbursed. Each such telephonic notice
must be confirmed promptly by delivery to the Swing Line Lender and the
Administrative Agent of a written Swing Line Loan Notice, appropriately
completed and signed by a Responsible Officer of the Administrative Borrower.
Promptly after receipt by the Swing Line Lender of any telephonic Swing Line
Loan Notice, the Swing Line Lender will confirm with the Administrative Agent
(by telephone or in writing) that the Administrative Agent has also received
such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the
Administrative Agent (by telephone or in writing) of the contents thereof.
Unless the Swing Line Lender has received notice (by telephone or in writing)
from the Administrative Agent (including at the request of any Lender) prior to
12:00 p.m. on the date of the proposed Swing Line Borrowing (A) directing the
Swing Line Lender not to make such Swing Line Loan as a result of the
limitations set forth in the proviso to the first sentence of Section 2.04(a),
or (B) that one or more of the applicable conditions specified in Article IV is
not then satisfied, then, subject to the terms and conditions hereof, the Swing

- 56 -

--------------------------------------------------------------------------------

Line Lender will, not later than 2:30 p.m. on the borrowing date specified in
such Swing Line Loan Notice, make the amount of its Swing Line Loan available to
the Borrowers.
(c)    Refinancing of Swing Line Loans.
(iii)    The Swing Line Lender at any time in its sole and absolute discretion
may request, on behalf of the Borrowers (which hereby irrevocably authorize the
Swing Line Lender to so request on their behalf), that each Lender make a Base
Rate Committed Loan in an amount equal to such Lender’s Applicable Percentage of
the amount of Swing Line Loans then outstanding. Such request shall be made in
writing (which written request shall be deemed to be a Committed Loan Notice for
purposes hereof) and in accordance with the requirements of Section 2.02,
without regard to the minimum and multiples specified therein for the principal
amount of Base Rate Loans, but subject to the unutilized portion of the
Aggregate Commitments and the conditions set forth in Section 4.02. The Swing
Line Lender shall furnish the Administrative Borrower with a copy of the
applicable Committed Loan Notice promptly after delivering such notice to the
Administrative Agent. Each Lender shall make an amount equal to its Applicable
Percentage of the amount specified in such Committed Loan Notice available to
the Administrative Agent in immediately available funds (and the Administrative
Agent may apply Cash Collateral available with respect to the applicable Swing
Line Loan) for the account of the Swing Line Lender at the Administrative
Agent’s Office not later than 12:00 p.m. on the day specified in such Committed
Loan Notice, whereupon, subject to Section 2.04(c)(ii), each Lender that so
makes funds available shall be deemed to have made a Base Rate Committed Loan to
the Borrowers in such amount. The Administrative Agent shall remit the funds so
received to the Swing Line Lender.
(iv)    If for any reason any Swing Line Loan cannot be refinanced by such a
Committed Borrowing in accordance with Section 2.04(c)(i), the request for Base
Rate Committed Loans submitted by the Swing Line Lender as set forth herein
shall be deemed to be a request by the Swing Line Lender that each of the
Lenders fund its risk participation in the relevant Swing Line Loan and each
Lender’s payment to the Administrative Agent for the account of the Swing Line
Lender pursuant to Section 2.04(c)(i) shall be deemed payment in respect of such
participation.
(v)    If any Lender fails to make available to the Administrative Agent for the
account of the Swing Line Lender any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 2.04(c) by the time
specified in Section 2.04(c)(i), the Swing Line Lender shall be entitled to
recover from such Lender (acting through the Administrative Agent), on demand,
such amount with

- 57 -

--------------------------------------------------------------------------------

interest thereon for the period from the date such payment is required to the
date on which such payment is immediately available to the Swing Line Lender at
a rate per annum equal to the greater of the Federal Funds Rate and a rate
determined by the Swing Line Lender in accordance with banking industry rules on
interbank compensation, plus any administrative, processing or similar fees
customarily charged by the Swing Line Lender in connection with the foregoing.
If such Lender pays such amount (with interest and fees as aforesaid), the
amount so paid shall constitute such Lender’s Committed Loan included in the
relevant Committed Borrowing or funded participation in the relevant Swing Line
Loan, as the case may be. A certificate of the Swing Line Lender submitted to
any Lender (through the Administrative Agent) with respect to any amounts owing
under this clause (iii) shall be conclusive absent manifest error.
(vi)    Each Lender’s obligation to make Committed Loans or to purchase and fund
risk participations in Swing Line Loans pursuant to this Section 2.04(c) shall
be absolute and unconditional and shall not be affected by any circumstance,
including (A) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against the Swing Line Lender, the Borrowers or any
other Person for any reason whatsoever, (B) the occurrence or continuance of a
Default, or (C) any other occurrence, event or condition, whether or not similar
to any of the foregoing; provided, however, that each Lender’s obligation to
make Committed Loans pursuant to this Section 2.04(c) is subject to the
conditions set forth in Section 4.02. No such funding of risk participations
shall relieve or otherwise impair the obligation of the Borrowers to repay Swing
Line Loans, together with interest as provided herein.
(d)    Repayment of Participations.
(x)    At any time after any Lender has purchased and funded a risk
participation in a Swing Line Loan, if the Swing Line Lender receives any
payment on account of such Swing Line Loan, the Swing Line Lender will
distribute to such Lender its Applicable Percentage of such payment
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender’s risk participation was funded) in the same
funds as those received by the Swing Line Lender.
(xi)    If any payment received by the Swing Line Lender in respect of principal
or interest on any Swing Line Loan is required to be returned by the Swing Line
Lender under any of the circumstances described in Section 10.05 (including
pursuant to any settlement entered into by the Swing Line Lender in its
discretion),

- 58 -

--------------------------------------------------------------------------------

each Lender shall pay to the Swing Line Lender its Applicable Percentage thereof
on demand of the Administrative Agent, plus interest thereon from the date of
such demand to the date such amount is returned, at a rate per annum equal to
the Federal Funds Rate. The Administrative Agent will make such demand upon the
request of the Swing Line Lender. The obligations of the Lenders under this
clause shall survive the payment in full of the Obligations and the termination
of this Agreement.
(e)    Interest for Account of Swing Line Lender. The Swing Line Lender shall be
responsible for invoicing the Borrowers for interest on the Swing Line Loans.
Until each Lender funds its Base Rate Committed Loan or risk participation
pursuant to this Section 2.04 to refinance such Lender’s Applicable Percentage
of any Swing Line Loan, interest in respect of such Applicable Percentage shall
be solely for the account of the Swing Line Lender.
(f)    Payments Directly to Swing Line Lender. The Borrowers shall make all
payments of principal and interest in respect of the Swing Line Loans directly
to the Swing Line Lender.
2.05    Prepayments.
(c)    The Borrowers may, upon notice to the Administrative Agent, at any time
or from time to time voluntarily prepay Committed Loans in whole or in part
without premium or penalty; provided that (i) such notice must be in a form
acceptable to Administrative Agent and be received by the Administrative Agent
not later than 1:00 p.m. (A) three Business Days prior to any date of prepayment
of LIBOR Loans and (B) on the date of prepayment of Base Rate Committed Loans;
(ii) any prepayment of LIBOR Loans shall be in a minimum principal amount of
$5,000,000 or a whole multiple of $1,000,000 in excess thereof; and (iii) any
prepayment of Base Rate Committed Loans shall be in a minimum principal amount
of $500,000 or a whole multiple of $100,000 in excess thereof or, in each case,
if less, the entire principal amount thereof then outstanding. Each such notice
shall specify the date and amount of such prepayment and the Type(s) of
Committed Loans to be prepaid and, if LIBOR Loans are to be prepaid, the
Interest Period(s) of such Loans. The Administrative Agent will promptly notify
each Lender of its receipt of each such notice, and of the amount of such
Lender’s Applicable Percentage of such prepayment. If such notice is given by
the Borrowers, the Borrowers shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein.
Any prepayment of a LIBOR Loan shall be accompanied by all accrued interest on
the amount prepaid, together with any additional amounts required pursuant to
Section 3.05. Subject to Section 2.18, each such prepayment shall be applied to
the Committed Loans of the Lenders in accordance with their respective
Applicable Percentages.

- 59 -

--------------------------------------------------------------------------------

(d)    The Borrowers may, upon notice to the Swing Line Lender (with a copy to
the Administrative Agent), at any time or from time to time, voluntarily prepay
Swing Line Loans in whole or in part without premium or penalty; provided that
(i) such notice must be received by the Swing Line Lender and the Administrative
Agent not later than 1:00 p.m. on the date of the prepayment, and (ii) any such
prepayment shall be in a minimum principal amount of $100,000 or a whole
multiple of $100,000. Each such notice shall specify the date and amount of such
prepayment. If such notice is given by the Borrowers, the Borrowers shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein.
(e)    If for any reason the Total Outstandings at any time exceed the Aggregate
Commitments then in effect, the Borrowers shall immediately prepay Loans and/or
Cash Collateralize the L/C Obligations in an aggregate amount equal to such
excess; provided, however, that the Borrowers shall not be required to Cash
Collateralize the L/C Obligations pursuant to this Section 2.05(c) unless after
the prepayment in full of the Committed Loans and Swing Line Loans the Total
Outstandings exceed the Aggregate Commitments then in effect.
2.06    Termination or Reduction of Commitments.
The Borrowers may, upon notice from the Administrative Borrower to the
Administrative Agent, terminate the Aggregate Commitments, or from time to time
permanently reduce the Aggregate Commitments; provided that (i) any such notice
shall be received by the Administrative Agent not later than 12:00 p.m. five (5)
Business Days prior to the date of termination or reduction, (ii) any such
partial reduction shall be in an aggregate amount of $5,000,000 or any whole
multiple of $1,000,000 in excess thereof, (iii) the Borrowers shall not
terminate or reduce the Aggregate Commitments if, after giving effect thereto
and to any concurrent prepayments hereunder, the Total Outstandings would exceed
the Aggregate Commitments, and (iv) if, after giving effect to any reduction of
the Aggregate Commitments, the Letter of Credit Sublimit or the Swing Line
Sublimit exceeds the amount of the Aggregate Commitment, the Letter of Credit
Sublimit and/or the Swing Line Sublimit, as applicable, shall be automatically
reduced by the amount of such excess. The Administrative Agent will promptly
notify the Lenders of any such notice of termination or reduction of the
Aggregate Commitments. Any reduction of the Aggregate Commitments shall be
applied to the Commitment of each Lender according to its Applicable Percentage.
All commitment fees accrued until the effective date of any termination of the
Aggregate Commitments shall be paid on the effective date of such termination.
2.07    Repayment of Loans.

- 60 -

--------------------------------------------------------------------------------

(d)    Revolving Loans. The Borrowers shall repay to the Lenders on the Maturity
Date the aggregate principal amount of Committed Loans outstanding on such date.
(e)    Swing Line Loans. The Borrowers shall repay each Swing Line Loan on the
earlier to occur of (i) the date ten (10) Business Days after such Loan is made
and (ii) the Maturity Date.
2.08    Interest.
(a)    Subject to the provisions of subsection (b) below, (i) each LIBOR Loan
shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to the LIBOR for such Interest Period
plus the Applicable Rate; (ii) each Base Rate Committed Loan shall bear interest
on the outstanding principal amount thereof from the applicable borrowing date
at a rate per annum equal to the Base Rate plus the Applicable Rate; and (iii)
each Swing Line Loan shall bear interest on the outstanding principal amount
thereof from the applicable borrowing date at a rate per annum equal to, at the
Borrowers’ option, (x) the Base Rate plus the Applicable Rate or (y) such other
rate mutually agreed to by the Borrowers and the Swing Line Lender at the time
of the borrowing of such Swing Line Loan.
(b)    (i)    If any amount of principal of any Loan is not paid when due
(without regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.
(i)    If any amount (other than principal of any Loan) payable by the Borrowers
under any Loan Document is not paid when due (without regard to any applicable
grace periods), whether at stated maturity, by acceleration or otherwise, then
upon the request of the Required Lenders, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws.
(ii)    Upon the request of the Required Lenders, while any Event of Default
exists (other than as set forth in clauses (b)(i) and (b)(ii) above), the
Borrowers shall pay interest on the principal amount of all outstanding
Obligations hereunder at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.
(iii)    Accrued and unpaid interest on past due amounts (including interest on
past due interest) shall be due and payable upon demand.

- 61 -

--------------------------------------------------------------------------------

(c)    Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
2.09    Fees.
In addition to certain fees described in subsections (h) and (i) of Section
2.03:
(a)    Facility Fee. The Borrowers shall pay to the Administrative Agent for the
account of each Lender in accordance with its Applicable Percentage, a facility
fee equal to the Applicable Rate times the Aggregate Commitments. The facility
fee shall accrue at all times during the Availability Period, including at any
time during which one or more of the conditions in Article IV is not met, and
shall be due and payable quarterly in arrears on the first Business Day to occur
after the last day of each March, June, September and December, commencing with
the first such date to occur after the Closing Date, and on the Maturity Date.
The facility fee shall be calculated quarterly in arrears, and if there is any
change in the Applicable Rate during any quarter, the actual daily amount shall
be computed and multiplied by the Applicable Rate separately for each period
during such quarter that such Applicable Rate was in effect.
(b)    Other Fees. The Borrowers shall pay to the Administrative Agent for their
own respective accounts fees in the amounts and at the times specified in the
Fee Letters. Such fees shall be fully earned when paid and shall not be
refundable for any reason whatsoever.
2.10    Computation of Interest and Fees; Retroactive Adjustments of Applicable
Rate.
(a)    All computations of interest for Base Rate Loans (including Base Rate
Loans determined by reference to the LIBOR) shall be made on the basis of a year
of 365 or 366 days, as the case may be, and actual days elapsed. All other
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more fees or interest, as applicable,
being paid than if computed on the basis of a 365-day year). Interest shall
accrue on each Loan for the day on which the Loan is made, and shall not accrue
on a Loan, or any portion thereof, for the day on which the Loan or such portion
is paid, provided that any Loan that is repaid on the same day on which it is
made shall, subject to Section 2.12(a), bear interest for one day. Each
determination by the Administrative Agent of an interest rate or fee hereunder
shall be conclusive and binding for all purposes, absent manifest error.

- 62 -

--------------------------------------------------------------------------------

(b)    If the Borrowers or the Lenders determine that: (i) (A) the Debt Rating
used to determine the Applicable Rate was not the correct Debt Rating and (B)
that use of the correct Debt Rating would have resulted in higher pricing for
such period, then the Borrowers shall immediately and retroactively be obligated
to pay to the Administrative Agent for the account of the applicable Lenders or
the L/C Issuer, as the case may be, promptly on demand by the Administrative
Agent (or, after the occurrence of an actual or deemed entry of an order for
relief with respect to the Borrowers under the Bankruptcy Code of the United
States, automatically and without further action by the Administrative Agent,
any Lender or the L/C Issuer), an amount equal to the excess of the amount of
interest and fees that should have been paid for such period over the amount of
interest and fees actually paid for such period. This paragraph shall not limit
the rights of the Administrative Agent, any Lender or the L/C Issuer, as the
case may be, under Section 2.03(c)(iii), 2.03(h) or 2.08(b) or under Article
VIII. The Borrowers’ obligations and rights under this paragraph shall survive
the termination of the Aggregate Commitments and the repayment of all other
Obligations hereunder.
2.11    Evidence of Debt.
(a)    The Credit Extensions made by each Lender shall be evidenced by one or
more accounts or records maintained by such Lender and by the Administrative
Agent in the ordinary course of business. The accounts or records maintained by
the Administrative Agent and each Lender shall be conclusive absent manifest
error of the amount of the Credit Extensions made by the Lenders to the
Borrowers and the interest and payments thereon. Any failure to so record or any
error in doing so shall not, however, limit or otherwise affect the obligation
of the Borrowers hereunder to pay any amount owing with respect to the
Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon the request of any
Lender made through the Administrative Agent, the Borrowers shall execute and
deliver to such Lender (through the Administrative Agent) a Note, which shall
evidence such Lender’s Loans in addition to such accounts or records. Each
Lender may attach schedules to its Note and endorse thereon the date, Type (if
applicable), amount and maturity of its Loans and payments with respect thereto.
(b)    In addition to the accounts and records referred to in subsection (a),
each Lender and the Administrative Agent shall maintain in accordance with its
usual practice accounts or records evidencing the purchases and sales by such
Lender of participations in Letters of Credit and Swing Line Loans. In the event
of any conflict between the accounts and records maintained by the
Administrative Agent and the accounts and records of any

- 63 -

--------------------------------------------------------------------------------

Lender in respect of such matters, the accounts and records of the
Administrative Agent shall control in the absence of manifest error.
2.12    Payments Generally.
(a)    All payments to be made by the Borrowers shall be made free and clear of
and without condition or deduction for any counterclaim, defense, recoupment or
set-off. Except as otherwise expressly provided herein, all payments by the
Borrowers hereunder shall be made to the Administrative Agent, for the account
of the respective Lenders to which such payment is owed, at the Administrative
Agent’s Office in Dollars and in Same Day Funds not later than 12:00 noon on the
date specified herein. The Administrative Agent will promptly distribute to each
Lender its Applicable Percentage (or other applicable share as provided herein)
of such payment in like funds as received by wire transfer to such Lender’s
Lending Office. All payments received by the Administrative Agent (i) after 2:00
p.m., in the case of payments in Dollars, or (ii) after the Applicable Time
specified by the Administrative Agent in the case of payments in an Alternative
Currency, shall in each case be deemed received on the next succeeding Business
Day and any applicable interest or fee shall continue to accrue. If any payment
to be made by the Borrowers shall come due on a day other than a Business Day,
payment shall be made on the next following Business Day, and such extension of
time shall be reflected in computing interest or fees, as the case may be.
(b)    (i)    Funding by Lenders; Presumption by Administrative Agent. Unless
the Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Committed Borrowing of LIBOR Loans (or, in the case of any
Committed Borrowing of Base Rate Loans, prior to 2:00 p.m. on the date of such
Committed Borrowing) that such Lender will not make available to the
Administrative Agent such Lender’s share of such Committed Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with Section 2.02 (or, in the case of a Committed
Borrowing of Base Rate Loans, that such Lender has made such share available in
accordance with and at the time required by Section 2.02) and may, in reliance
upon such assumption, make available to the Borrowers a corresponding amount. In
such event, if a Lender has not in fact made its share of the applicable
Committed Borrowing available to the Administrative Agent, then the applicable
Lender and the Borrowers severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount in immediately available funds
with interest thereon, for each day from and including the date such amount is
made available to the Borrowers to but excluding the date of payment to the
Administrative Agent, at (A) in the case of a payment to be made by such Lender,
the greater of the Federal

- 64 -

--------------------------------------------------------------------------------

Funds Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation, plus any administrative,
processing or similar fees customarily charged by the Administrative Agent in
connection with the foregoing (it being understood that such customary fees
shall not be subject to the indemnification obligations of the Borrowers
pursuant to Section 10.04(b)) and (B) in the case of a payment to be made by the
Borrowers, the interest rate applicable to Base Rate Loans. If the Borrowers and
such Lender shall pay such interest to the Administrative Agent for the same or
an overlapping period, the Administrative Agent shall promptly remit to the
Borrowers the amount of such interest paid by the Borrowers for such period. If
such Lender pays its share of the applicable Committed Borrowing to the
Administrative Agent, then the amount so paid shall constitute such Lender’s
Committed Loan included in such Committed Borrowing. Any payment by the
Borrowers shall be without prejudice to any claim the Borrowers may have against
a Lender that shall have failed to make such payment to the Administrative
Agent.
(ii)    Payments by Borrowers; Presumptions by Administrative Agent. Unless the
Administrative Agent shall have received notice from the Administrative Borrower
prior to the date on which any payment is due to the Administrative Agent for
the account of the Lenders or the L/C Issuer hereunder that the Borrowers will
not make such payment, the Administrative Agent may assume that the Borrowers
have made such payment on such date in accordance herewith and may, in reliance
upon such assumption, distribute to the Lenders or the L/C Issuer, as the case
may be, the amount due. In such event, if the Borrowers have not in fact made
such payment, then each of the Lenders or the L/C Issuer, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender or the L/C Issuer, in immediately available
funds 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.
A notice of the Administrative Agent to any Lender or the Borrowers with respect
to any amount owing under this subsection (b) shall be conclusive, absent
manifest error.
(c)    If any Lender makes available to the Administrative Agent funds for any
Loan to be made by such Lender as provided in the foregoing provisions of this
Article II, and such funds are not made available to the Borrowers by the
Administrative Agent because the conditions to the applicable Credit Extension
set forth in Article IV are not satisfied or

- 65 -

--------------------------------------------------------------------------------

waived in accordance with the terms hereof, the Administrative Agent shall
return such funds (in like funds as received from such Lender) to such Lender,
without interest.
(d)    The obligations of the Lenders hereunder to make Committed Loans, to fund
participations in Letters of Credit and Swing Line Loans and to make payments
pursuant to Section 10.04(c) are several and not joint. The failure of any
Lender to make any Committed Loan or to fund any such participation or to make
any payment under Section 10.04(c) on any date required hereunder shall not
relieve any other Lender of its corresponding obligation to do so on such date,
and no Lender shall be responsible for the failure of any other Lender to so
make its Committed Loan or purchase its participation or to make its payment
under Section 10.04(c).
(e)    Nothing herein shall be deemed to obligate any Lender to obtain the funds
for any Loan in any particular place or manner or to constitute a representation
by any Lender that it has obtained or will obtain the funds for any Loan in any
particular place or manner.
2.13    Sharing of Payments by Lenders.
If any Lender shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
the Committed Loans made by it, or the participations in L/C Obligations or in
Swing Line Loans held by it resulting in such Lender’s receiving payment of a
proportion of the aggregate amount of such Committed Loans or participations and
accrued interest thereon greater than its pro rata share thereof as provided
herein, then the Lender receiving such greater proportion shall (a) notify the
Administrative Agent of such fact, and (b) purchase (for cash at face value)
participations in the Committed Loans and subparticipations in L/C Obligations
and Swing Line Loans of the other Lenders, or make such other adjustments as
shall be equitable, 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 Committed Loans and other amounts owing
them, provided that:
(a)    if any such participations or subparticipations are purchased and all or
any portion of the payment giving rise thereto is recovered, such participations
or subparticipations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest; and
(b)    the provisions of this Section shall not be construed to apply to (x) any
payment made by or on behalf of the Borrowers pursuant to and in accordance with
the express terms of this Agreement (including the application of funds arising
from the existence of a Defaulting Lender), (y) the application of Cash
Collateral provided for in Section 2.17, or (z) any payment obtained by a Lender
as consideration for the assignment of or sale of a participation in any of its
Committed Loans or subparticipations in L/C Obligations or

- 66 -

--------------------------------------------------------------------------------

Swing Line Loans to any assignee or participant, other than an assignment to the
Borrowers or any of their Subsidiaries thereof (as to which the provisions of
this Section shall apply).
Each Loan Party 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 such
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Loan Party in the
amount of such participation.
2.14    Increase in Aggregate Commitments.
(a)    Provided there exists no Default (and no Default would result therefrom),
upon notice from the Administrative Borrower to the Administrative Agent (which
shall promptly notify the Lenders), the Borrowers may from time to time, request
an increase in the Aggregate Commitments in an aggregate amount for all such
increases not to exceed $250,000,000; provided, however, that (i) the Borrowers
may make a maximum of three (3) such requests and (ii) the Borrowers shall have
delivered to the Administrative Agent a Pro Forma Compliance Certificate
demonstrating that, upon giving effect on a Pro Forma Basis to the increase in
the Aggregate Commitments, the Loan Parties would be in compliance with the
financial covenants set forth in Section 6.10. The aggregate amount of any
individual increase hereunder shall be in a minimum amount of $5,000,000 (and in
integral multiples of $1,000,000 in excess thereof). To achieve the full amount
of a requested increase, the Borrowers may solicit increased commitments from
existing Lenders and/or invite additional Eligible Assignees to become Lenders;
provided, however, that no existing Lender shall be obligated and/or required to
accept an increase in its Commitment pursuant to this Section 2.14 unless it
specifically consents to such increase in writing. Any Lender or Eligible
Assignee agreeing to increase its Commitment or provide a new Commitment
pursuant to this Section 2.14 shall, in connection therewith, deliver to the
Administrative Agent a new commitment agreement in form and substance
satisfactory to the Administrative Agent and its counsel.
(b)    If the Aggregate Commitments are increased in accordance with this
Section, the Administrative Agent and the Borrowers shall determine the
effective date (the “Increase Effective Date”) and the final allocation of such
increase. The Administrative Agent shall promptly notify the Administrative
Borrower and the Lenders of the final allocation of such increase and the
Increase Effective Date and Schedule 2.01 hereto shall be deemed amended to
reflect such increase and final allocation. As a condition precedent to such
increase, in addition to any deliveries pursuant to subsection (a) above, the
Borrowers shall deliver to the Administrative Agent each of the following in
form and substance satisfactory to the Administrative Agent: (1) a certificate
of each Loan Party dated as of the Increase Effective

- 67 -

--------------------------------------------------------------------------------

Date (in sufficient copies for each Lender) signed by a Responsible Officer of
such Loan Party (i) certifying and attaching the resolutions adopted by such
Loan Party approving or consenting to such increase, and (ii) certifying that,
before and after giving effect to such increase, (A) the representations and
warranties contained in Article V and the other Loan Documents are true and
correct on and as of the Increase Effective Date, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct as of such earlier date, and except that for
purposes of this Section 2.14, the representations and warranties contained in
subsections (a) and (b) of Section 5.01 shall be deemed to refer to the most
recent financial statements furnished pursuant to subsections (a) and (b),
respectively, of Section 6.01, and (B) no Default exists; (2) a statement of
reaffirmation from each Loan Party pursuant to which each such Loan Party
ratifies this Agreement and the other Loan Documents and acknowledges and
reaffirms that, after giving effect to such increase, it is bound by all terms
of this Agreement and the other Loan Documents; (3) if the increase is being
provided by an existing Lender, and such Lender is then in possession of a
Committed Note, a revised Committed Note in favor of such Lender reflecting such
Lender’s Commitment after giving effect to such increase; (4) if the increase is
being provided by a new Lender, a Committed Note in favor of such Lender if so
requested by such Lender; and (5) payment of any applicable fee related to such
increase (including, without limitation, any applicable arrangement, upfront
and/or administrative fee). The Borrowers shall prepay any Committed Loans
outstanding on the Increase Effective Date (and pay any additional amounts
required pursuant to Section 3.05) to the extent necessary to keep the
outstanding Committed Loans ratable with any revised Applicable Percentages
arising from any nonratable increase in the Commitments under this Section.
Borrower may prepay such Committed Loans with the proceeds of Base Rate Loans
hereunder without regard to the minimum and multiples specified herein for the
principal amount of Base Rate Loans, but subject to the unutilized portion of
the Aggregate Commitments and the conditions set forth in Section 4.02.
(c)    This Section shall supersede any provisions in Sections 2.12 or 10.01 to
the contrary.
2.15    Joint and Several Liability of Borrowers.
(a)    Each of the Borrowers is accepting joint and several liability hereunder
in consideration of the financial accommodation to be provided by the Lenders
under this Agreement, for the mutual benefit, directly and indirectly, of each
of the Borrowers and in consideration of the undertakings of each of the
Borrowers to accept joint and several liability for the obligations of each of
them.

- 68 -

--------------------------------------------------------------------------------

(b)    Each of the Borrowers jointly and severally hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Borrowers with respect to the payment and
performance of all of the Obligations arising under this Agreement and the other
Loan Documents, it being the intention of the parties hereto that all the
Obligations shall be the joint and several obligations of each of the Borrowers
without preferences or distinction among them.
(c)    If and to the extent that any of the Borrowers shall fail to make any
payment with respect to any of the Obligations as and when due or to perform any
of the Obligations in accordance with the terms thereof, then in each such
event, the other Borrowers will make such payment with respect to, or perform,
such Obligation.
(d)    The obligations of each Borrower under the provisions of this Section
2.15 constitute full recourse Obligations of such Borrower, enforceable against
it to the full extent of its properties and assets.
(e)    Except as otherwise expressly provided herein, to the extent permitted by
Law, each Borrower (in its capacity as a joint and several obligor in respect of
the Obligations of the other Borrowers) hereby waives notice of acceptance of
its joint and several liability, notice of occurrence of any Default or Event of
Default (except to the extent notice is expressly required to be given pursuant
to the terms of this Agreement), or of any demand for any payment under this
Agreement, notice of any action at any time taken or omitted by the
Administrative Agent or the Lenders under or in respect of any of the
Obligations, any requirement of diligence and, generally, all demands, notices
and other formalities of every kind in connection with this Agreement. Each
Borrower hereby assents to, and waives notice of, any extension or postponement
of the time for the payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
the Administrative Agent or the Lenders at any time or times in respect of any
default by the other Borrowers in the performance or satisfaction of any term,
covenant, condition or provision of this Agreement, any and all other
indulgences whatsoever by the Administrative Agent or the Lenders in respect of
any of the obligations hereunder, and the taking, addition, substitution or
release, in whole or in part, at any time or times, of any security for any of
the Obligations or the addition, substitution or release, in whole or in part,
of any other Borrower. Without limiting the generality of the foregoing, each
Borrower (in its capacity as a joint and several obligor in respect of the
Obligations of the other Borrowers) assents to any other action or delay in
acting or any failure to act on the part of the Administrative Agent or the
Lenders, including, without limitation, any failure strictly or diligently to
assert any right or to pursue any remedy or to comply fully with applicable laws
or regulations thereunder which might, but for the provisions of this Section
2.15, afford grounds for terminating, discharging or relieving such Borrower, in
whole or in part,

- 69 -

--------------------------------------------------------------------------------

from any of its Obligations under this Section 2.15, it being the intention of
each Borrower that, so long as any of the Obligations hereunder remain
unsatisfied, the Obligations of such Borrower under this Section 2.15 shall not
be discharged except by performance and then only to the extent of such
performance. The Obligations of each Borrower under this Section 2.15 shall not
be diminished or rendered unenforceable by any winding up, reorganization,
arrangement, liquidation, reconstruction or similar proceeding with respect to
any Borrower or a Lender. The joint and several liability of the Borrowers
hereunder shall continue in full force and effect notwithstanding any
absorption, merger, amalgamation or any other change whatsoever in the name,
membership, constitution or place of formation of any Borrower or any of the
Lenders.
(f)    The provisions of this Section 2.15 are made for the benefit of the
Lenders and their successors and assigns, and may be enforced by them from time
to time against any of the Borrowers as often as occasion therefor may arise and
without requirement on the part of the Lenders first to marshal any of its
claims or to exercise any of its rights against the other Borrowers or to
exhaust any remedies available to it against the other Borrowers or to resort to
any other source or means of obtaining payment of any of the Obligations
hereunder or to elect any other remedy. The provisions of this Section 2.15
shall remain in effect until all the Obligations shall have been paid in full or
otherwise fully satisfied. If at any time, any payment, or any part thereof,
made in respect of any of the Obligations is rescinded or must otherwise be
restored or returned by the Lenders upon the insolvency, bankruptcy or
reorganization of any of the Borrowers, or otherwise, the provisions of this
Section 2.15 will forthwith be reinstated and in effect as though such payment
had not been made.
(g)    Notwithstanding any provision to the contrary contained herein or in any
of the other Loan Documents, to the extent the Obligations of any Borrower shall
be adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of any applicable state or federal Law relating to
fraudulent conveyances or transfers) then the Obligations of such Borrower
hereunder shall be limited to the maximum amount that is permissible under
applicable Law (whether federal or state and including, without limitation, the
Bankruptcy Code of the United States).
2.16    Appointment of the Administrative Borrower.
Potlatch Forest and Potlatch Land & Lumber hereby appoint the Administrative
Borrower to act as their agent for all purposes under this Agreement (including,
without limitation, with respect to all matters related to the borrowing and
repayment of Loans) and agree that (a) the Administrative Borrower may execute
such documents on behalf of Potlatch Forest and Potlatch Land & Lumber as the
Administrative Borrower deems appropriate in its sole discretion and Potlatch
Forest and

- 70 -

--------------------------------------------------------------------------------

Potlatch Land & Lumber shall be obligated by all of the terms of any such
document executed on its behalf, (b) any notice or communication delivered by
the Administrative Agent or the Lender to the Administrative Borrower shall be
deemed delivered to Potlatch Forest and Potlatch Land & Lumber and (c) the
Administrative Agent or the Lenders may accept, and be permitted to rely on, any
document, instrument or agreement executed by the Administrative Borrower on
behalf of Potlatch Forest and Potlatch Land & Lumber.
2.17    Cash Collateral.
(a)    Certain Credit Support Events. If (i) the L/C Issuer has honored any full
or partial drawing request under any Letter of Credit and such drawing has
resulted in an L/C Borrowing, (ii) as of the Mandatory Cash Collateralization
Date, any L/C Obligation for any reason remains outstanding, (iii) the Borrowers
shall be required to provide Cash Collateral pursuant to Section 8.02(c), or
(iv) there shall exist a Defaulting Lender, the Borrowers shall immediately (in
the case of clause (iii) above) or within one Business Day (in all other cases)
following any request by the Administrative Agent or the L/C Issuer, provide
Cash Collateral in an amount not less than the applicable Minimum Collateral
Amount (determined in the case of Cash Collateral provided pursuant to clause
(iv) above, after giving effect to Section 2.18(a)(iv) and any Cash Collateral
provided by the Defaulting Lender).
(b)    Grant of Security Interest. The Borrowers, and to the extent provided by
any Defaulting Lender, such Defaulting Lender, hereby grants to (and subjects to
the control of) the Administrative Agent, for the benefit of the Administrative
Agent, the L/C Issuer and the Lenders, and agrees to maintain, a first priority
security interest in all such cash, deposit accounts and all balances therein,
and all other property so provided as collateral pursuant hereto, and in all
proceeds of the foregoing, all as security for the obligations to which such
Cash Collateral may be applied pursuant to Section 2.17(c). If at any time the
Administrative Agent determines that Cash Collateral is subject to any right or
claim of any Person other than the Administrative Agent or the L/C Issuer as
herein provided, or that the total amount of such Cash Collateral is less than
the Minimum Collateral Amount, the Borrowers will, promptly upon demand by the
Administrative Agent, pay or provide to the Administrative Agent additional Cash
Collateral in an amount sufficient to eliminate such deficiency. All Cash
Collateral (other than credit support not constituting funds subject to deposit)
shall be maintained in one or more Controlled Accounts at the Administrative
Agent. The Borrowers shall pay on demand therefor from time to time all
customary account opening, activity and other administrative fees and charges in
connection with the maintenance and disbursement of Cash Collateral.

- 71 -

--------------------------------------------------------------------------------

(c)    Application. Notwithstanding anything to the contrary contained in this
Agreement, Cash Collateral provided under any of this Section 2.17 or Sections
2.03, 2.04, 2.05, 2.18 or 8.02 in respect of Letters of Credit shall be held and
applied to the satisfaction of the specific L/C Obligations, obligations to fund
participations therein (including, as to Cash Collateral provided by a
Defaulting Lender, any interest accrued on such obligation) and other
obligations for which the Cash Collateral was so provided, prior to any other
application of such property as may otherwise be provided for herein.
(d)    Release. Cash Collateral (or the appropriate portion thereof) provided to
reduce Fronting Exposure or to secure other obligations shall be released
promptly following (i) the elimination of the applicable Fronting Exposure or
other obligations giving rise thereto (including by the termination of
Defaulting Lender status of the applicable Lender (or, as appropriate, its
assignee following compliance with Section 10.06(b)(vi))) or (ii) the
determination by the Administrative Agent and the L/C Issuer that there exists
excess Cash Collateral; provided, however, the Person providing Cash Collateral
and the L/C Issuer may agree that Cash Collateral shall not be released but
instead held to support future anticipated Fronting Exposure or other
obligations.
2.18    Defaulting Lenders.
(a)    Adjustments. Notwithstanding anything to the contrary contained in this
Agreement, if any Lender becomes a Defaulting Lender, then, until such time as
that Lender is no longer a Defaulting Lender, to the extent permitted by
applicable Law:
(i)    Waivers and Amendments. Such Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement shall
be restricted as set forth in the definition of “Required Lenders” and Section
10.01.
(ii)    Defaulting Lender Waterfall. Any payment of principal, interest, fees or
other amounts received by the Administrative Agent for the account of such
Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
Article VIII or otherwise) or received by the Administrative Agent from a
Defaulting Lender pursuant to Section 10.09 shall be applied at such time or
times as may be determined by the Administrative Agent as follows: first, to the
payment of any amounts owing by such Defaulting Lender to the Administrative
Agent hereunder; second, to the payment on a pro rata basis of any amounts owing
by such Defaulting Lender to the L/C Issuer or Swing Line Lender hereunder;
third, to Cash Collateralize the L/C Issuer’s Fronting Exposure with respect to
such Defaulting Lender in accordance with Section 2.17; fourth, as the Borrowers
may request (so long as no Default or

- 72 -

--------------------------------------------------------------------------------

Event of Default exists), to the funding of any Loan in respect of which such
Defaulting Lender has failed to fund its portion thereof as required by this
Agreement, as determined by the Administrative Agent; fifth, if so determined by
the Administrative Agent and the Borrowers, to be held in a deposit account and
released pro rata in order to (x) satisfy such Defaulting Lender’s potential
future funding obligations with respect to Loans under this Agreement and (y)
Cash Collateralize the L/C Issuer’s future Fronting Exposure with respect to
such Defaulting Lender with respect to future Letters of Credit issued under
this Agreement, in accordance with Section 2.17; sixth, to the payment of any
amounts owing to the Lenders, the L/C Issuer or Swing Line Lender as a result of
any judgment of a court of competent jurisdiction obtained by any Lender, the
L/C Issuer or the Swing Line Lender against such Defaulting Lender as a result
of such Defaulting Lender’s breach of its obligations under this Agreement;
seventh, so long as no Default or Event of Default exists, to the payment of any
amounts owing to the Borrowers as a result of any judgment of a court of
competent jurisdiction obtained by the Borrowers against such Defaulting Lender
as a result of such Defaulting Lender’s breach of its obligations under this
Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a
court of competent jurisdiction; provided that if (x) such payment is a payment
of the principal amount of any Loans or L/C Borrowings in respect of which such
Defaulting Lender has not fully funded its appropriate share, and (y) such Loans
were made or the related Letters of Credit were issued at a time when the
conditions set forth in Section 4.02 were satisfied or waived, such payment
shall be applied solely to pay the Loans of, and L/C Obligations owed to, all
Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment
of any Loans of, or L/C Obligations owed to, such Defaulting Lender until such
time as all Loans and funded and unfunded participations in L/C Obligations and
Swing Line Loans are held by the Lenders pro rata in accordance with the
Commitments hereunder without giving effect to Section 2.18(a)(iv). Any
payments, prepayments or other amounts paid or payable to a Defaulting Lender
that are applied (or held) to pay amounts owed by a Defaulting Lender or to post
Cash Collateral pursuant to this Section 2.18(a)(ii) shall be deemed paid to and
redirected by such Defaulting Lender, and each Lender irrevocably consents
hereto.
(iii)    Certain Fees.
(A)    No Defaulting Lender shall be entitled to receive any fee payable under
Section 2.09(a) for any period during which that Lender is a Defaulting Lender
(and the Borrowers shall not be required to pay any such fee that otherwise
would have been required to have been paid to that Defaulting Lender).

- 73 -

--------------------------------------------------------------------------------

(B)    Each Defaulting Lender shall be entitled to receive Letter of Credit Fees
for any period during which that Lender is a Defaulting Lender only to the
extent allocable to its Applicable Percentage of the stated amount of Letters of
Credit for which it has provided Cash Collateral pursuant to Section 2.17.
(C)    With respect to any fee payable under Section 2.09(a) or any Letter of
Credit Fee not required to be paid to any Defaulting Lender pursuant to clause
(A) or (B) above, the Borrowers shall (x) pay to each Non-Defaulting Lender that
portion of any such fee otherwise payable to such Defaulting Lender with respect
to such Defaulting Lender’s participation in L/C Obligations or Swing Line Loans
that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv)
below, (y) pay to the L/C Issuer and Swing Line Lender, as applicable, the
amount of any such fee otherwise payable to such Defaulting Lender to the extent
allocable to such L/C Issuer’s or Swing Line Lender’s Fronting Exposure to such
Defaulting Lender, and (z) not be required to pay the remaining amount of any
such fee.
(iv)    Reallocation of Applicable Percentages to Reduce Fronting Exposure. All
or any part of such Defaulting Lender’s participation in L/C Obligations and
Swing Line Loans shall be reallocated among the Non-Defaulting Lenders in
accordance with their respective Applicable Percentages (calculated without
regard to such Defaulting Lender’s Commitment) but only to the extent that (x)
the conditions set forth in Section 4.02 are satisfied at the time of such
reallocation (and, unless the Borrowers shall have otherwise notified the
Administrative Agent at such time, the Borrowers shall be deemed to have
represented and warranted that such conditions are satisfied at such time), and
(y) such reallocation does not cause any Non-Defaulting Lender’s share of the
Total Outstandings to exceed such Non-Defaulting Lender’s Commitment. No
reallocation hereunder shall constitute a waiver or release of any claim of any
party hereunder against a Defaulting Lender arising from that Lender having
become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a
result of such Non-Defaulting Lender’s increased exposure following such
reallocation.
(v)    Cash Collateral, Repayment of Swing Line Loans. If the reallocation
described in clause (a)(iv) above cannot, or can only partially, be effected,
the Borrowers shall, without prejudice to any right or remedy available to it
hereunder or under applicable Law, (x) first, prepay Swing Line Loans in an
amount equal to the Swing Line Lenders’ Fronting Exposure and (y) second, Cash
Collateralize the

- 74 -

--------------------------------------------------------------------------------

L/C Issuers’ Fronting Exposure in accordance with the procedures set forth in
Section 2.17.
(b)    Defaulting Lender Cure. If the Borrowers, the Administrative Agent, Swing
Line Lender and the L/C Issuer agree in writing that a Lender is no longer a
Defaulting Lender, the Administrative Agent will so notify the parties hereto,
whereupon as of the effective date specified in such notice and subject to any
conditions set forth therein (which may include arrangements with respect to any
Cash Collateral), that Lender will, to the extent applicable, purchase at par
that portion of outstanding Loans of the other Lenders or take such other
actions as the Administrative Agent may determine to be necessary to cause the
Committed Loans and funded and unfunded participations in Letters of Credit and
Swing Line Loans to be held on a pro rata basis by the Lenders in accordance
with their Applicable Percentages (without giving effect to
Section 2.18(a)(iv)), whereupon such Lender will cease to be a Defaulting
Lender; provided that no adjustments will be made retroactively with respect to
fees accrued or payments made by or on behalf of the Borrowers while that Lender
was a Defaulting Lender; and provided, further, that except to the extent
otherwise expressly agreed by the affected parties, no change hereunder from
Defaulting Lender to Lender will constitute a waiver or release of any claim of
any party hereunder arising from that Lender’s having been a Defaulting Lender.
ARTICLE III    
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01    Taxes.
(i)    Payments Free of Taxes; Obligation to Withhold; Payments on Account of
Taxes.
(i)    Any and all payments by or on account of any obligation of any Loan Party
under any Loan Document shall be made without deduction or withholding for any
Taxes, except as required by applicable Laws. If any applicable Laws (as
determined in the good faith discretion of the Administrative Agent) require the
deduction or withholding of any Tax from any such payment by the Administrative
Agent or a Loan Party, then the Administrative Agent or such Loan Party shall be
entitled to make such deduction or withholding, upon the basis of the
information and documentation to be delivered pursuant to subsection (e) below.
(ii)    If any Loan Party or the Administrative Agent shall be required by the
Code to withhold or deduct any Taxes, including both United States Federal

- 75 -

--------------------------------------------------------------------------------

backup withholding and withholding taxes, from any payment, then (A) the
Administrative Agent shall withhold or make such deductions as are determined by
the Administrative Agent to be required based upon the information and
documentation it has received pursuant to subsection (e) below, (B) the
Administrative Agent shall timely pay the full amount withheld or deducted to
the relevant Governmental Authority in accordance with the Code, and (C) to the
extent that the withholding or deduction is made on account of Indemnified
Taxes, the sum payable by the applicable Loan Party shall be increased as
necessary so that after any required withholding or the making of all required
deductions (including deductions applicable to additional sums payable under
this Section 3.01) the applicable Recipient receives an amount equal to the sum
it would have received had no such withholding or deduction been made.
(iii)    If any Loan Party or the Administrative Agent shall be required by any
applicable Laws other than the Code to withhold or deduct any Taxes from any
payment, then (A) such Loan Party or the Administrative Agent, as required by
such Laws, shall withhold or make such deductions as are determined by it to be
required based upon the information and documentation it has received pursuant
to subsection (e) below, (B) such Loan Party or the Administrative Agent, to the
extent required by such Laws, shall timely pay the full amount withheld or
deducted to the relevant Governmental Authority in accordance with such Laws,
and (C) to the extent that the withholding or deduction is made on account of
Indemnified Taxes, the sum payable by the applicable Loan Party shall be
increased as necessary so that after any required withholding or the making of
all required deductions (including deductions applicable to additional sums
payable under this Section 3.01) the applicable Recipient receives an amount
equal to the sum it would have received had no such withholding or deduction
been made.
(j)    Payment of Other Taxes by the Borrowers. Without limiting the provisions
of subsection (a) above, the Loan Parties shall timely pay to the relevant
Governmental Authority in accordance with applicable Laws, or at the option of
the Administrative Agent timely reimburse it for the payment of, any Other
Taxes.
(k)    Tax Indemnifications.
(i)    Each of the Loan Parties shall, and does hereby, jointly and severally
indemnify each Recipient, and shall make payment in respect thereof within 10
days after demand therefor, for the full amount of any Indemnified Taxes
(including Indemnified Taxes imposed or asserted on or attributable to amounts
payable under this Section 3.01) payable or paid by such Recipient or required
to be withheld or

- 76 -

--------------------------------------------------------------------------------

deducted from a payment to such Recipient, and any penalties, interest and
reasonable expenses arising therefrom or with respect thereto, whether or not
such Indemnified 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 Administrative Borrower by a Lender or the L/C
Issuer (with a copy to the Administrative Agent), or by the Administrative Agent
on its own behalf or on behalf of a Lender or the L/C Issuer, shall be
conclusive absent manifest error. Each of the Loan Parties shall, and does
hereby, jointly and severally indemnify the Administrative Agent, and shall make
payment in respect thereof within 10 days after demand therefor, for any amount
which a Lender or the L/C Issuer for any reason fails to pay indefeasibly to the
Administrative Agent as required pursuant to Section 3.01(c)(ii) below.
(ii)    Each Lender and the L/C Issuer shall, and does hereby, severally
indemnify, and shall make payment in respect thereof within 10 days after demand
therefor, (x) the Administrative Agent against any Indemnified Taxes
attributable to such Lender or the L/C Issuer (but only to the extent that any
Loan Party has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of the Loan Parties to do
so), (y) the Administrative Agent and the Loan Parties, as applicable, against
any Taxes attributable to such Lender’s failure to comply with the provisions of
Section 10.06(d) relating to the maintenance of a Participant Register and (z)
the Administrative Agent and the Loan Parties, as applicable, against any
Excluded Taxes attributable to such Lender or the L/C Issuer, in each case, that
are payable or paid by the Administrative Agent or a Loan Party in connection
with any Loan Document, and any reasonable expenses arising therefrom or with
respect thereto, whether or not such 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 any Lender by the Administrative Agent
shall be conclusive absent manifest error. Each Lender and the L/C Issuer hereby
authorizes the Administrative Agent to set off and apply any and all amounts at
any time owing to such Lender or the L/C Issuer, as the case may be, under this
Agreement or any other Loan Document against any amount due to the
Administrative Agent under this clause (ii).
(l)    Evidence of Payments. Upon request by the Administrative Borrower or the
Administrative Agent, as the case may be, after any payment of Taxes by the
Borrowers or by the Administrative Agent to a Governmental Authority as provided
in this Section 3.01, the Administrative Borrower shall deliver to the
Administrative Agent or the Administrative Agent shall deliver to the
Administrative Borrower, as the case may be, the original or a certified copy of
a receipt issued by such Governmental Authority evidencing such payment,

- 77 -

--------------------------------------------------------------------------------

a copy of any return required by Laws to report such payment or other evidence
of such payment reasonably satisfactory to the Administrative Borrower or the
Administrative Agent, as the case may be.
(m)    Status of Lenders; Tax Documentation.
(i)    Any Lender that is entitled to an exemption from or reduction of
withholding Tax with respect to payments made under any Loan Document shall
deliver to the Administrative Borrower and the Administrative Agent, at the time
or times reasonably requested by the Administrative Borrower or the
Administrative Agent, such properly completed and executed documentation
reasonably requested by the Administrative Borrower or the Administrative Agent
as will permit such payments to be made without withholding or at a reduced rate
of withholding. In addition, any Lender, if reasonably requested by the
Administrative Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable Law or reasonably requested by the
Administrative Borrower or the Administrative Agent as will enable the Borrowers
or the Administrative Agent to determine whether or not such Lender is subject
to backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 3.01(e)(ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if in the Lender’s reasonable judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.
(ii)    Without limiting the generality of the foregoing, in the event that any
Borrower is a U.S. Person,
(A)    any Lender that is a U.S. Person shall deliver to the Administrative
Borrower and the Administrative Agent on or prior to the date on which such
Lender becomes a Lender under this Agreement (and from time to time thereafter
upon the reasonable request of the Administrative Borrower or the Administrative
Agent), executed originals of IRS Form W-9 certifying that such Lender is exempt
from U.S. federal backup withholding tax;
(B)    any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Administrative Borrower and the Administrative Agent (in such
number of copies as shall be requested by the recipient) on or prior

- 78 -

--------------------------------------------------------------------------------

to the date on which such Foreign Lender becomes a Lender under this Agreement
(and from time to time thereafter upon the reasonable request of the
Administrative Borrower or the Administrative Agent), whichever of the following
is applicable:
(I)    in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “interest” article of such tax treaty and (y) with respect to
any other applicable payments under any Loan Document, IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “business profits” or “other income” article of such tax treaty;
(II)    executed originals of IRS Form W-8ECI;
(III)    in the case of a Foreign Lender claiming the benefits of the exemption
for portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit G-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10
percent shareholder” of any such Borrower within the meaning of Section
881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in
Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y)
executed originals of IRS Form W-8BEN; or
(IV)    to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a
U.S. Tax Compliance Certificate substantially in the form of Exhibit G-2 or
Exhibit G-3, IRS Form W-9, and/or other certification documents from each
beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of such Foreign Lender
are claiming the portfolio interest exemption, such Foreign Lender may provide a
U.S. Tax Compliance Certificate substantially in the form of Exhibit G-4 on
behalf of each such direct and indirect partner;

- 79 -

--------------------------------------------------------------------------------

(C)    any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Administrative Borrower and the Administrative Agent (in such
number of copies as shall be requested by the recipient) on or prior to the date
on which such Foreign Lender becomes a Lender under this Agreement (and from
time to time thereafter upon the reasonable request of the Administrative
Borrower or the Administrative Agent), executed originals of any other form
prescribed by applicable Law as a basis for claiming exemption from or a
reduction in U.S. federal withholding Tax, duly completed, together with such
supplementary documentation as may be prescribed by applicable law to permit the
Borrowers or the Administrative Agent to determine the withholding or deduction
required to be made; and
(D)    if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Administrative Borrower and the Administrative Agent at the
time or times prescribed by Law and at such time or times reasonably requested
by the Administrative Borrower or the Administrative Agent such documentation
prescribed by applicable Law (including as prescribed by Section
1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably
requested by the Administrative Borrower or the Administrative Agent as may be
necessary for the Borrowers and the Administrative Agent to comply with their
obligations under FATCA and to determine that such Lender has complied with such
Lender’s obligations under FATCA or to determine the amount to deduct and
withhold from such payment. Solely for purposes of this clause (D), “FATCA”
shall include any amendments made to FATCA after the date of this Agreement.
(iii)    Each Lender agrees that if any form or certification it previously
delivered pursuant to this Section 3.01 expires or becomes obsolete or
inaccurate in any respect, it shall update such form or certification or
promptly notify the Administrative Borrower and the Administrative Agent in
writing of its legal inability to do so.
(n)    Treatment of Certain Refunds. Unless required by applicable Laws, at no
time shall the Administrative Agent have any obligation to file for or otherwise
pursue on behalf of a Lender or the L/C Issuer, or have any obligation to pay to
any Lender or the L/C Issuer, any refund of Taxes withheld or deducted from
funds paid for the account of such Lender or the L/C Issuer, as the case may be.
If any Recipient determines, that it has received

- 80 -

--------------------------------------------------------------------------------

a refund of any Taxes as to which it has been indemnified by any Loan Party or
with respect to which any Loan Party has paid additional amounts pursuant to
this Section 3.01, it shall pay to the Loan Party an amount equal to such refund
(but only to the extent of indemnity payments made, or additional amounts paid,
by a Loan Party under this Section 3.01 with respect to the Taxes giving rise to
such refund), net of all out-of-pocket expenses (including Taxes) incurred by
such Recipient, and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund), provided that the
Loan Party, upon the request of the Recipient, agrees to repay the amount paid
over to the Loan Party (plus any penalties, interest or other charges imposed by
the relevant Governmental Authority) to the Recipient in the event the Recipient
is required to repay such refund to such Governmental Authority. Notwithstanding
anything to the contrary in this subsection, in no event will the applicable
Recipient be required to pay any amount to the Loan Party pursuant to this
subsection the payment of which would place the Recipient in a less favorable
net after-Tax position than such Recipient would have been in if the
indemnification payments or additional amounts giving rise to such refund had
never been paid. This subsection shall not be construed to require any Recipient
to make available its tax returns (or any other information relating to its
taxes that it deems confidential) to any Loan Party or any other Person.
(o)    Survival. Each party’s obligations under this Section 3.01 shall survive
the resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender or the L/C Issuer, the termination of
the Commitments and the repayment, satisfaction or discharge of all other
Obligations.
3.02    Illegality.
If any Lender reasonably determines that any Law has made it unlawful, or that
any Governmental Authority has asserted that it is unlawful, for any Lender or
its Lending Office to make, maintain or fund Loans whose interest is determined
by reference to the LIBOR, or to determine or charge interest rates based upon
the LIBOR, or any Governmental Authority has imposed material restrictions on
the authority of such Lender to purchase or sell, or to take deposits of,
Dollars in the London interbank market, then, on notice thereof by such Lender
to the Administrative Borrower through the Administrative Agent, (i) any
obligation of such Lender to make or continue LIBOR Loans or to convert Base
Rate Committed Loans to LIBOR Loans shall be suspended, and (ii) if such notice
asserts the illegality of such Lender making or maintaining Base Rate Loans the
interest rate on which is determined by reference to the LIBOR component of the
Base Rate, the interest rate on which Base Rate Loans of such Lender shall, if
necessary to avoid such illegality, be determined by the Administrative Agent
without reference to the LIBOR component of the Base Rate, in each case until
such Lender notifies the Administrative Agent and the Administrative Borrower
that the circumstances giving rise to such determination no longer

- 81 -

--------------------------------------------------------------------------------

exist, which such Lender agrees to do promptly after permitted by applicable
Laws. Upon receipt of such notice, (x) the Borrowers shall, upon demand from
such Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all LIBOR Loans of such Lender to Base Rate Loans (the interest rate on
which Base Rate Loans of such Lender shall, if necessary to avoid such
illegality, be determined by the Administrative Agent without reference to the
LIBOR component of the Base Rate), either on the last day of the Interest Period
therefor, if such Lender may lawfully continue to maintain such LIBOR Loans to
such day, or immediately, if such Lender may not lawfully continue to maintain
such LIBOR Loans and (y) if such notice asserts the illegality of such Lender
determining or charging interest rates based upon the LIBOR, the Administrative
Agent shall during the period of such suspension compute the Base Rate
applicable to such Lender without reference to the LIBOR component thereof until
the Administrative Agent is advised in writing by such Lender that it is no
longer illegal for such Lender to determine or charge interest rates based upon
the LIBOR. Upon any such prepayment or conversion, the Borrowers shall also pay
accrued interest on the amount so prepaid or converted.
3.03    Inability to Determine Rates.
If the Required Lenders reasonably determine that for any reason in connection
with any request for a LIBOR Loan or a conversion to or continuation thereof
that (a) Dollar deposits are not being offered to banks in the London interbank
eurodollar market for the applicable amount and Interest Period of such LIBOR
Loan, (b) adequate and reasonable means do not exist for determining the LIBOR
for any requested Interest Period with respect to a proposed LIBOR Loan or in
connection with an existing or proposed Base Rate Loan, or (c) the LIBOR for any
requested Interest Period with respect to a proposed LIBOR Loan does not
adequately and fairly reflect the cost to such Lenders of funding such Loan, the
Administrative Agent will promptly so notify the Administrative Borrower and
each Lender. Thereafter, (x) the obligation of the Lenders to make or maintain
LIBOR Loans shall be suspended, and (y) in the event of a determination
described in the preceding sentence with respect to the LIBOR component of the
Base Rate, the utilization of the LIBOR component in determining the Base Rate
shall be suspended, in each case until the Administrative Agent (upon the
instruction of the Required Lenders) revokes such notice. Upon receipt of such
notice, the Borrowers may revoke any pending request for a Borrowing of,
conversion to or continuation of LIBOR Loans or, failing that, will be deemed to
have converted such request into a request for a Committed Borrowing of Base
Rate Loans in the amount specified therein.
3.04    Increased Costs; Reserves on LIBOR Loans.
(f)    Increased Costs Generally. If any Change in Law shall:
(iv)    impose, modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets of,
deposits

- 82 -

--------------------------------------------------------------------------------

with or for the account of, or credit extended or participated in by, any Lender
(except any reserve requirement contemplated by Section 3.04(e)) or the L/C
Issuer;
(v)    subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B)
Taxes described in clauses (b) through (d) of the definition of Excluded Taxes
and (C) Connection Income Taxes) on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto; or
(vi)    impose on any Lender or the L/C Issuer or the London interbank market
any other condition, cost or expense affecting this Agreement or LIBOR Loans
made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making, converting to, continuing or maintaining any Loan the interest
on which is determined by reference to the LIBOR (or of maintaining its
obligation to make any such Loan), or to increase the cost to such Lender or the
L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or
of maintaining its obligation to participate in or to issue any Letter of
Credit), or to reduce the amount of any sum received or receivable by such
Lender or the L/C Issuer hereunder (whether of principal, interest or any other
amount) then, upon request of such Lender or the L/C Issuer, the Borrowers will
pay to such Lender or the L/C Issuer, as the case may be, such additional amount
or amounts as will compensate such Lender or the L/C Issuer, as the case may be,
for such additional costs incurred or reduction suffered.
(g)    Capital Requirements. If any Lender or the L/C Issuer determines that any
Change in Law affecting such Lender or the L/C Issuer or any Lending Office of
such Lender or such Lender’s or the L/C Issuer’s holding company, if any,
regarding capital or liquidity requirements has or would have the effect of
reducing the rate of return on such Lender’s or the L/C Issuer’s capital or on
the capital of such Lender’s or the L/C Issuer’s holding company, if any, as a
consequence of this Agreement, the Commitments of such Lender or the Loans made
by, or participations in Letters of Credit or Swing Line Loans held by, such
Lender, or the Letters of Credit issued by the L/C Issuer, to a level below that
which such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding
company could have achieved but for such Change in Law (taking into
consideration such Lender’s or the L/C Issuer’s policies and the policies of
such Lender’s or the L/C Issuer’s holding company with respect to capital
adequacy), then from time to time the Borrowers will pay to such Lender or the
L/C Issuer, as the case may be, such additional amount or amounts as will
compensate such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s
holding company for any such reduction suffered.

- 83 -

--------------------------------------------------------------------------------

(h)    Certificates for Reimbursement. A certificate of a Lender or the L/C
Issuer setting forth the amount or amounts necessary to compensate such Lender
or the L/C Issuer or its holding company, as the case may be, as specified in
subsection (a) or (b) of this Section and delivered to the Administrative
Borrower shall be conclusive absent manifest error. The Borrowers shall pay such
Lender or the L/C Issuer, as the case may be, the amount shown as due on any
such certificate within 10 days after receipt thereof.
(i)    Delay in Requests. Failure or delay on the part of any Lender or the L/C
Issuer to demand compensation pursuant to the foregoing provisions of this
Section 3.04 shall not constitute a waiver of such Lender’s or the L/C Issuer’s
right to demand such compensation, provided that the Borrowers shall not be
required to compensate a Lender or the L/C Issuer pursuant to the foregoing
provisions of this Section for any increased costs incurred or reductions
suffered more than nine months prior to the date that such Lender or the L/C
Issuer, as the case may be, notifies the Administrative Borrower of the Change
in Law giving rise to such increased costs or reductions and of such Lender’s or
the L/C Issuer’s intention to claim compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the nine-month period referred to above shall be extended to include the
period of retroactive effect thereof).
(j)    Reserves on LIBOR Loans. The Borrowers shall pay to each Lender, as long
as such Lender shall be required to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or deposits
(currently known as “Eurocurrency liabilities”), additional interest on the
unpaid principal amount of each LIBOR Loan equal to the actual costs of such
reserves allocated to such Loan by such Lender (as determined by such Lender in
good faith, which determination shall be conclusive absent manifest error),
which shall be due and payable on each date on which interest is payable on such
Loan, provided the Borrowers shall have received at least 15 days’ prior notice
(with a copy to the Administrative Agent) of such additional interest from such
Lender. If a Lender fails to give notice 15 days prior to the relevant Interest
Payment Date, such additional interest shall be due and payable 15 days from
receipt of such notice.
3.05    Compensation for Losses.
Upon demand of any Lender (with a copy to the Administrative Agent) from time to
time, the Borrowers shall promptly compensate such Lender for and hold such
Lender harmless from any loss, cost or expense incurred by it as a result of:
(a)    any continuation, conversion, payment or prepayment of any Loan other
than a Base Rate Loan on a day other than the last day of the Interest Period
for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise);

- 84 -

--------------------------------------------------------------------------------

(b)    any failure by the Borrowers (for a reason other than the failure of such
Lender to make a Loan) to prepay, borrow, continue or convert any Loan other
than a Base Rate Loan on the date or in the amount notified by the
Administrative Borrower; or
(c)    any failure by the Borrowers to make payment of any Loan or drawing under
any Letter of Credit (or interest due thereon) denominated in an Alternative
Currency on its scheduled due date or any payment thereof in a different
currency; or
(d)    any assignment of a LIBOR Loan on a day other than the last day of the
Interest Period therefor as a result of a request by the Administrative Borrower
pursuant to Section 10.13;
including any loss of anticipated profits, any foreign currency exchange losses
and any loss or expense arising from the liquidation or reemployment of funds
obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained or from the performance of any
foreign currency exchange contract. The Borrowers shall also pay any customary
administrative fees charged by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrowers to the Lenders
under this Section 3.05, each Lender shall be deemed to have funded each LIBOR
Loan made by it at the LIBOR for such Loan by a matching deposit or other
borrowing in the London interbank eurodollar market for a comparable amount and
for a comparable period, whether or not such LIBOR Loan was in fact so funded.
3.06    Mitigation Obligations; Replacement of Lenders.
(f)    Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.04, or requires the Borrowers to pay any
Indemnified Taxes or additional amounts to any Lender, the L/C Issuer, or any
Governmental Authority for the account of any Lender or the L/C Issuer pursuant
to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then
at the request of the Administrative Borrower, such Lender or the L/C Issuer
shall, as applicable, 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 judgment of such Lender or the L/C Issuer, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04,
as the case may be, in the future, or eliminate the need for the notice pursuant
to Section 3.02, as applicable, and (ii) in each case, would not subject such
Lender or the L/C Issuer, as the case may be, to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender or the L/C
Issuer, as the case may be. The Borrowers hereby agree to pay all reasonable
costs and

- 85 -

--------------------------------------------------------------------------------

expenses incurred by any Lender or the L/C Issuer in connection with any such
designation or assignment.
(g)    Replacement of Lenders. If any Lender requests compensation under Section
3.04, or if the Borrowers are required to pay any Indemnified Taxes or
additional amounts to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 3.01 and, in each case, such Lender has
declined or is unable to designate a different lending office in accordance with
Section 3.06(a), the Borrowers may replace such Lender in accordance with
Section 10.13.
3.07    Survival.
All of the Borrowers’ obligations under this Article III shall survive
termination of the Aggregate Commitments, repayment of all other Obligations
hereunder, and resignation of the Administrative Agent.
ARTICLE IV    
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01    Conditions to Amendment and Restatement.
The effectiveness of this Amendment and Restatement is subject to satisfaction
of the following conditions precedent:
(l)    Loan Documents, Organization Documents, Etc. The Administrative Agent’s
receipt of the following, each of which shall be originals or telecopies
(followed promptly by originals) unless otherwise specified, each properly
executed by a Responsible Officer of the signing Loan Party, each dated the
Closing Date (or, in the case of certificates of governmental officials, a
recent date before the Closing Date) and each in form and substance satisfactory
to the Administrative Agent, its legal counsel, the Arrangers and each of the
Lenders:
(iv)    executed counterparts of this Agreement and the other Loan Documents;
(v)    a Note executed by the Borrowers in favor of each Lender requesting a
Note;

- 86 -

--------------------------------------------------------------------------------

(vi)    copies of the Organization Documents of each Loan Party certified by a
secretary or assistant secretary of such Loan Party to be true and correct as of
the Closing Date;
(vii)    such certificates of resolutions or other action, incumbency
certificates (including specimen signatures) and/or other certificates of
Responsible Officers of each Loan Party as the Administrative Agent may require
evidencing the identity, authority and capacity of each Responsible Officer
thereof authorized to act as a Responsible Officer in connection with this
Agreement and the other Loan Documents to which such Loan Party is a party; and
(viii)    such documents and certifications as the Administrative Agent may
reasonably require to evidence that each Loan Party is duly organized or formed,
and is validly existing, in good standing and qualified to engage in business in
(A) the jurisdiction of its incorporation or organization and (B) each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification, except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect.
(m)    Opinions of Counsel. The Administrative Agent shall have received (i) a
legal opinion of Lorrie D. Scott, Vice President, General Counsel and Corporate
Secretary of the Borrowers and Guarantors, and (ii) a legal opinion of Perkins
Coie LLP, special counsel to the Borrowers, in each case dated as of the Closing
Date and in form and substance reasonably satisfactory to the Administrative
Agent;
(n)    Officer’s Certificates. The Administrative Agent shall have received a
certificate or certificates executed by a Responsible Officer of the Borrowers
as of the Closing Date, in form and substance satisfactory to the Administrative
Agent, (i) stating that (A) the conditions specified in Sections 4.02(a) and (b)
have been satisfied as of the Closing Date, (B) the Borrowers are in compliance
with all existing material financial obligations, (C) all governmental,
shareholder and third party consents and approvals, if any, with respect to the
Loan Documents and the transactions contemplated thereby have been obtained (and
attaching copies thereof), (D) no action, suit, investigation or proceeding is
pending or threatened in any court or before any arbitrator or governmental
instrumentality that purports to affect any Borrower, any Guarantor or any
transaction contemplated by the Loan Documents, if such action, suit,
investigation or proceeding could have a Material Adverse Effect, (E) (1) no
Default or Event of Default exists and (2) all representations and warranties
contained herein and in the other Loan Documents are true and correct in all
material respects and (ii)(A) attaching copies of all consents, licenses and
approvals required in connection with the execution, delivery and performance by
the Loan Parties and the validity against

- 87 -

--------------------------------------------------------------------------------

the Loan Parties of the Loan Documents to which they are a party, and such
consents, licenses and approvals shall be in full force and effect, or (B)
stating that no such consents, licenses or approvals are so required.
(o)    No Material Adverse Change. There shall not have occurred a material
adverse change since December 31, 2013 in the business, assets, liabilities
(actual or contingent), operations, condition (financial or otherwise) or
prospects of the Company and its Subsidiaries taken as a whole or in the facts
and information regarding such entities as represented to date.
(p)    Evidence of Insurance. Receipt by the Administrative Agent of evidence
that all insurance required to be maintained pursuant to the Loan Documents has
been obtained and is in effect.
(q)    Debt Rating. The Administrative Agent shall have received a certificate
or certificates from a Responsible Officer of Potlatch as of the Closing Date,
in form and substance satisfactory to the Administrative Agent, confirming the
Debt Rating of Potlatch.
(r)    Opening Timberland Valuation. The Administrative Agent shall have
received, in form and substance reasonably satisfactory to the Administrative
Agent, the Opening Timberland Valuation.
(s)    Fees. Any fees required to be paid to the Administrative Agent, the
Arrangers and/or the Lenders on or before the Closing Date shall have been paid.
(t)    Attorney Costs. Unless waived by the Administrative Agent, the Borrowers
shall have paid all reasonable fees, expenses and disbursements of counsel to
the Administrative Agent to the extent invoiced prior to or on the Closing Date.
(u)    Financial Statements. The Administrative Agent shall have received the
Audited Financial Statements which statements shall be reasonably satisfactory
to the Administrative Agent.
(v)    Accuracy of Representations and Warranties. The representations and
warranties of the Loan Parties contained in Article V or any other Loan
Document, or which are contained in any document furnished at any time under or
in connection herewith or therewith, shall be true and correct on and as of the
Closing Date.
(w)    No Default. No Default shall exist and be continuing as of the Closing
Date.

- 88 -

--------------------------------------------------------------------------------

(x)    Other. Receipt by the Lenders of such other assurances, certificates,
documents, consents or opinions as the Administrative Agent, the L/C Issuer, the
Swing Line Lender or the Lenders reasonably may require.
Without limiting the generality of the provisions of the last paragraph of
Section 9.03, for purposes of determining compliance with the conditions
specified in this Section 4.01, each Lender that has signed this Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter required thereunder to be consented to or approved
by or acceptable or satisfactory to a Lender unless the Administrative Agent
shall have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.
4.02    Conditions to all Credit Extensions.
The obligation of each Lender to honor any Request for Credit Extension (other
than a Committed Loan Notice requesting only a conversion of Committed Loans to
the other Type, or a continuation of LIBOR Loans) is subject to the following
conditions precedent:
(g)    The representations and warranties of the Borrowers and each other Loan
Party contained in Article V or any other Loan Document, or which are contained
in any document furnished at any time under or in connection herewith or
therewith, shall be true and correct on and as of the date of such Credit
Extension, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct as of such earlier date, and except that for purposes of this Section
4.02, the representations and warranties contained in Sections 5.01(a) and (b)
shall be deemed to refer to the most recent financial statements furnished
pursuant to clauses (a) and (b), respectively, of Section 6.01.
(h)    No Default shall exist, or would result from, such proposed Credit
Extension or from the application of proceeds thereof.
(i)    There shall not have been commenced against any Consolidated Party an
involuntary case under any applicable Debtor Relief Law, now or hereafter in
effect, or any case, proceeding or other action for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or for the
winding up or liquidation of its affairs, and such involuntary case or other
case, proceeding or other action shall remain undismissed.
(j)    The Administrative Agent and, if applicable, the L/C Issuer or the Swing
Line Lender shall have received a Request for Credit Extension in accordance
with the requirements hereof.

- 89 -

--------------------------------------------------------------------------------

(k)    In the case of a Credit Extension to be denominated in an Alternative
Currency, there shall not have occurred any change in national or international
financial, political or economic conditions or currency exchange rates or
exchange controls which in the reasonable opinion of the Administrative Agent or
the L/C Issuer (in the case of any Letter of Credit to be denominated in an
Alternative Currency) would make it impracticable for such Credit Extension to
be denominated in the relevant Alternative Currency.
Each Request for Credit Extension (other than a Committed Loan Notice requesting
only a conversion of Committed Loans to the other Type or a continuation of
LIBOR Loans) submitted by the Administrative Borrower shall be deemed to be a
representation and warranty by the Borrowers that the conditions specified in
Sections 4.02(a), (b) and (c) have been satisfied on and as of the date of the
applicable Credit Extension.
ARTICLE V    
REPRESENTATIONS AND WARRANTIES
The Loan Parties, jointly and severally, represent and warrant to the
Administrative Agent and the Lenders that:
5.01    Financial Condition.
(l)    The Audited Financial Statements (i) have been audited by KPMG LLP, (ii)
have been prepared in accordance with GAAP consistently applied throughout the
periods covered thereby, except as otherwise expressly noted therein and (iii)
present fairly (on the basis disclosed in the footnotes to such financial
statements) in all material respects the consolidated financial condition,
results of operations and cash flows of the Consolidated Parties as of such date
and for such periods. The unaudited interim balance sheets of the Consolidated
Parties as at the end of, and the related unaudited interim statements of
earnings and of cash flows for, each quarterly period ended after December 31,
2013 and prior to the Closing Date (i) have been prepared in accordance with
GAAP consistently applied throughout the periods covered thereby, except as
otherwise expressly noted therein and (ii) present fairly (on the basis
disclosed in the footnotes to such financial statements) in all material
respects the consolidated financial condition, results of operations and cash
flows of the Consolidated Parties as of such date and for such periods. During
the period from December 31, 2013 to and including the Closing Date, there has
been no sale, transfer or other disposition by any Consolidated Party of any
material part of the business or property of the Consolidated Parties, taken as
a whole, and no purchase or other acquisition by any of them of any business or
property (including any Capital Stock of any other Person) material in relation
to the consolidated financial condition of the Consolidated Parties, taken

- 90 -

--------------------------------------------------------------------------------

as a whole, in each case, which is not reflected in the foregoing financial
statements or in the notes thereto and has not otherwise been disclosed in
writing to the Lenders on or prior to the Closing Date. As of the Closing Date,
the Borrowers and their Subsidiaries have no material liabilities (contingent or
otherwise) that are not reflected in the foregoing financial statements or in
the notes thereto.
(m)    The financial statements delivered pursuant to Section 6.01(a) and (b)
have been prepared in accordance with GAAP (except as may otherwise be permitted
under Section 6.01(a) and (b)) and present fairly (on the basis disclosed in the
footnotes to such financial statements) the consolidated financial condition,
results of operations and cash flows of the Consolidated Parties as of such date
and for such periods.
5.02    No Material Change; No Internal Control Event.
(k)    Since the date of the Audited Financial Statements, there has been no
event or circumstance, either individually or in the aggregate, that has had or
could reasonably be expected to have a Material Adverse Effect other than facts,
circumstances, changes or events which, as of the Closing Date, have been
disclosed in the Borrowers’ public filings with the SEC (to the extent so
disclosed).
(l)    Since the date of the Audited Financial Statements, no Internal Control
Event has occurred that has not been (i) disclosed to the Administrative Agent
and the Lenders and (ii) remedied or otherwise diligently addressed (or is in
the process of being diligently addressed) by the Borrowers and/or the
applicable Loan Party in accordance with recommendations made by the Borrowers’
and/or such Loan Party’s auditors.
5.03    Organization and Good Standing.
Each of the Consolidated Parties (a) is duly organized, validly existing and is
in good standing under the Laws of the jurisdiction of its incorporation or
organization, (b) has the corporate or other necessary power and authority, and
the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged
and (c) is duly qualified as a foreign entity and in good standing under the
Laws of each jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification, other than in such
jurisdictions where the failure to be so qualified and in good standing would
not reasonably be expected to have a Material Adverse Effect.
5.04    Power; Authorization; Enforceable Obligations.
Each of the Loan Parties has the corporate or other necessary power and
authority, and the legal right, to make, deliver and perform the Loan Documents
to which it is a party, and in the case

- 91 -

--------------------------------------------------------------------------------

of the Borrowers, to obtain extensions of credit hereunder, and has taken all
necessary corporate or other necessary action to authorize the borrowings and
other extensions of credit on the terms and conditions of this Agreement and to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party. No consent or authorization of, filing with, notice to or other
similar act by or in respect of, any Governmental Authority or any other Person
is required to be obtained or made by or on behalf of any Loan Party in
connection with the borrowings or other extensions of credit hereunder or with
the execution, delivery, performance, validity or enforceability of the Loan
Documents to which such Loan Party is a party, except for consents,
authorizations, notices and filings described in Schedule 5.04, all of which
have been obtained or made or have the status described in such Schedule 5.04.
This Agreement has been, and each other Loan Document to which any Loan Party is
a party will be, duly executed and delivered on behalf of the Loan Parties. This
Agreement constitutes, and each other Loan Document to which any Loan Party is a
party when executed and delivered will constitute, a legal, valid and binding
obligation of such Loan Party enforceable against such party in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
5.05    No Conflicts.
Neither the execution and delivery of the Loan Documents, nor the consummation
of the transactions contemplated therein, nor performance of and compliance with
the terms and provisions thereof by such Loan Party will (a) violate or conflict
with any provision of its articles or certificate of incorporation or bylaws or
other organizational or governing documents of such Person, (b) violate,
contravene or materially conflict with any Law or any other law, regulation
(including, without limitation, Regulation U or Regulation X), order, writ,
judgment, injunction, decree or permit applicable to it, (c) violate, contravene
or conflict with contractual provisions of, or cause an event of default under,
any material indenture, loan agreement, mortgage, deed of trust, contract or
other agreement or instrument to which it is a party or by which it may be bound
or (d) result in or require the creation of any Lien upon or with respect to its
properties.
5.06    No Default.
No Consolidated Party is in default in any respect under any contract, lease,
loan agreement, indenture, mortgage, security agreement or other agreement or
obligation to which it is a party or by which any of its properties is bound
which default could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred or exists except as previously
disclosed in writing to the Lenders.
5.07    Ownership; Liens.

- 92 -

--------------------------------------------------------------------------------

Each Consolidated Party is the owner of, and has good and marketable title to,
all of its respective assets except for defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The Property of the Borrowers (including the Timberlands) and
their Subsidiaries are not subject to any Lien other than Permitted Liens. The
Timberlands are not subject to any easements which, individually or in the
aggregate, impair the value of the Timberlands as commercial timberlands in any
material respect or materially detract from the use of the Timberlands, in each
case taken as a whole, as such.
5.08    Indebtedness.
Except as otherwise permitted under Section 7.01, the Consolidated Parties have
no Indebtedness. Without limiting the foregoing, there are no Material
Subsidiaries that have incurred any Indebtedness related to the Borrowers,
including providing a Guarantee with respect to any Indebtedness of the
Borrowers, unless such Material Subsidiary has become a Guarantor in accordance
with Section 6.11.
5.09    Litigation.
Schedule 5.09 sets forth any material litigation of the Company and its
Subsidiaries on the Closing Date. There does not exist any pending or, to the
knowledge of the Company, threatened action, suit or legal, equitable,
arbitration or administrative proceeding against the Company and its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect, and there has been no adverse change in the status of or in the
financial effect on the Company and its Subsidiaries as a result of the matters
described in Schedule 5.09.
5.10    Taxes.
Each Consolidated Party has filed, or caused to be filed, all material tax
returns (Federal, state, local and foreign) required to be filed and paid (a)
all amounts of material taxes shown thereon to be due (including interest and
penalties) and (b) all other material taxes, fees, assessments and other
governmental charges (including mortgage recording taxes, documentary stamp
taxes and intangibles taxes) owing by it, except for such taxes (i) which are
not yet delinquent or (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. No Loan Party is aware as of the Closing Date of any
proposed material tax assessments against it or any other Consolidated Party.
5.11    Compliance with Law.
Each Consolidated Party is in compliance with all Laws and all other laws,
rules, regulations, orders and decrees (including without limitation
Environmental Laws) applicable to it, or to its

- 93 -

--------------------------------------------------------------------------------

properties, unless such failure to comply could not reasonably be expected to
have a Material Adverse Effect. No Law could reasonably be expected to cause a
Material Adverse Effect.
5.12    ERISA.
Except as disclosed and described in Schedule 5.12 attached hereto:
(h)    During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred, and, to
the best knowledge of the Responsible Officers of the Loan Parties, no event or
condition has occurred or exists as a result of which any ERISA Event could
reasonably be expected to occur, with respect to any Plan; (ii) each Plan has
been maintained, operated, and funded in compliance with its own terms and in
material compliance with the provisions of ERISA, the Code, and any other
applicable Federal or state laws; (iii) no Lien in favor of the PBGC or a Plan
has arisen or is reasonably likely to arise on account of any Plan; and (iv) the
minimum required contribution (as defined in Code Section 430(a)) has been
contributed for any Pension Plan except if the failure to make the minimum
required contribution could not reasonably be expected to have a Material
Adverse Effect.
(i)    The projected benefit obligation under each Single Employer Plan, as of
the last annual valuation date prior to the date on which this representation is
made or deemed made (determined, in each case, in accordance with FASB ASC 715,
utilizing the actuarial assumptions used in such Plan’s most recent actuarial
valuation report), did not exceed as of such valuation date the fair market
value of the assets of such Plan by more than $150,000,000 in the aggregate for
all such Plans.
(j)    Neither any Consolidated Party nor any ERISA Affiliate has incurred, or,
to the best knowledge of the Responsible Officers of the Loan Parties, could be
reasonably expected to incur, any withdrawal liability under ERISA to any
Multiemployer Plan or Multiple Employer Plan. Neither any Consolidated Party nor
any ERISA Affiliate would become subject to any withdrawal liability under ERISA
if any Consolidated Party or any ERISA Affiliate were to withdraw completely
from all Multiemployer Plans and Multiple Employer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. Neither any Consolidated Party nor any ERISA Affiliate has received
any notification that any Multiemployer Plan is in reorganization (within the
meaning of Section 4241 of ERISA), is insolvent (within the meaning of Section
4245 of ERISA), or has been terminated (within the meaning of Title IV of
ERISA), and no Multiemployer Plan is, to the best knowledge of the Responsible
Officers of the Loan Parties, reasonably expected to be in reorganization,
insolvent, or terminated.

- 94 -

--------------------------------------------------------------------------------

(k)    No prohibited transaction (within the meaning of Section 406 of ERISA or
Section 4975 of the Code) other than as exempted under Section 408 of ERISA or
breach of fiduciary responsibility has occurred with respect to a Plan which has
subjected or may subject any Consolidated Party or any ERISA Affiliate to any
material liability under Sections 406, 409, 502(i), or 502(l) of ERISA or
Section 4975 of the Code, or under any agreement or other instrument pursuant to
which any Consolidated Party or any ERISA Affiliate has agreed or is required to
indemnify any Person against any such liability.
(l)    Except as reported in the Audited Financial Statements, neither any
Consolidated Party nor any ERISA Affiliate has any material liability with
respect to “expected post-retirement benefit obligations” within the meaning of
FASB ASC 715. Each Plan which is a welfare plan (as defined in Section 3(1) of
ERISA) to which Sections 601-609 of ERISA and Section 4980B of the Code apply
has been administered in compliance in all material respects of such sections.
(m)    Neither the execution and delivery of this Agreement nor the consummation
of the financing transactions contemplated hereunder will involve any
transaction which is subject to the prohibitions of Sections 404, 406 or 407 of
ERISA or in connection with which a tax could be imposed pursuant to Section
4975 of the Code. The representation by the Loan Parties in the preceding
sentence is subject, in the event that the source of the funds used by the
Lenders in connection with this transaction is an insurance company’s general
asset account, to the application of Prohibited Transaction Class Exemption
95-60, 60 Fed. Reg. 35,925 (1995), compliance with the regulations issued under
Section 401(c)(1)(A) of ERISA, or the issuance of any other prohibited
transaction exemption or similar relief, to the effect that assets in an
insurance company’s general asset account do not constitute assets of an
“employee benefit plan” within the meaning of Section 3(3) of ERISA or a “plan”
within the meaning of Section 4975(e)(1) of the Code.
5.13    Corporate Structure; Capital Stock, Etc.
The corporate capital and ownership structure of the Consolidated Parties as of
the Closing Date is as described on Schedule 5.13. Set forth on Schedule 5.13 is
a complete and accurate list as of the Closing Date with respect to each of the
Borrowers’ direct and indirect Subsidiaries of (i) jurisdiction of
incorporation, (ii) number of shares of each class of Capital Stock outstanding,
(iii) number and percentage of outstanding shares of each class owned (directly
or indirectly) by the Consolidated Parties and (iv) number and effect, if
exercised, of all outstanding options, warrants, rights of conversion or
purchase and all other similar rights with respect thereto as of the Closing
Date. The outstanding Capital Stock of all such Persons is validly issued, fully
paid and non-assessable and is owned by the Consolidated Parties, directly or
indirectly, in the manner set forth on Schedule 5.13, free and clear of all
Liens. Other than as set forth in Schedule 5.13, none of the

- 95 -

--------------------------------------------------------------------------------

Borrowers’ Subsidiaries has outstanding any securities convertible into or
exchangeable for its Capital Stock nor does any such Person have outstanding any
rights to subscribe for or to purchase or any options for the purchase of, or
any agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to its Capital Stock.
5.14    Governmental Regulations, Etc.
(e)    None of the transactions contemplated by this Agreement (including,
without limitation, the direct or indirect use of the proceeds of the Loans)
will violate or result in a violation of the Securities Act, the Securities
Exchange Act of 1934 or any of Regulations U and X. If requested by any Lender
or the Administrative Agent, the Borrowers will furnish to the Administrative
Agent and each Lender a statement, in conformity with the requirements of FR
Form U-1 referred to in Regulation U, that no part of the Letters of Credit or
proceeds of the Loans will be used, directly or indirectly, for the purpose of
“buying” or “carrying” any “margin stock” within the meaning of Regulations U
and X, or for the purpose of purchasing or carrying or trading in any
securities.
(f)    None of the Consolidated Parties is (i) an “investment company”, or a
company “controlled” by an “investment company”, within the meaning of the
Investment Company Act of 1940, as amended, (ii) a “holding company” as defined
in, or otherwise subject to regulation under, the Public Utility Holding Company
Act of 1935, as amended or (iii) subject to regulation under any other Federal
or state statute or regulation which limits its ability to incur Indebtedness.
5.15    Purpose of Loans and Letters of Credit.
The proceeds of the Loans hereunder shall be used solely by the Borrowers to
provide for working capital, capital expenditures and any other lawful corporate
purposes of the Borrowers and their Subsidiaries (including, without limitation,
Permitted Acquisitions). The Letters of Credit shall be used only for or in
connection with credit support required for bonds issued in respect of
financings for which a Loan Party is responsible for, directly or indirectly,
repayment, appeal bonds, reimbursement obligations arising in connection with
surety and reclamation bonds, reinsurance and obligations not otherwise
aforementioned relating to transactions entered into by the applicable account
party in the ordinary course of business.
5.16    Environmental Matters.
Except as disclosed and described on Schedule 5.16 or except as could not
reasonably be expected to result in a Material Adverse Effect:

- 96 -

--------------------------------------------------------------------------------

(a)    Each of the real Properties and all operations at the real Properties are
in compliance with all applicable Environmental Laws, there is no violation of
any Environmental Law with respect to the real Properties or the businesses, and
to the best knowledge of the Responsible Officers of the Loan Parties, there are
no conditions relating to the real Properties or the businesses that could give
rise to liability under any applicable Environmental Laws.
(b)    None of the real Properties contains, or to the best knowledge of the
Responsible Officers of the Loan Parties, has previously contained, any
Hazardous Materials at, on or under the real Properties in amounts or
concentrations that constitute or constituted a violation of, or could give rise
to liability under, Environmental Laws.
(c)    No Consolidated Party has received any written or verbal notice of, or
inquiry from any Governmental Authority alleging any violation, non-compliance,
liability or potential liability pursuant to, or regarding compliance with,
Environmental Laws with regard to any of the real Properties or the businesses,
nor does any Responsible Officer of any Loan Party have knowledge or reason to
believe that any such notice will be received or is being threatened.
(d)    Hazardous Materials have not been transported or disposed of from the
real Properties, or generated, treated, stored or disposed of at, on or under
any of the real Properties or any other location, in each case by or on behalf
of any Consolidated Party in violation of, or in a manner that to the best
knowledge of the Responsible Officers of the Loan Parties could give rise to
liability under, any applicable Environmental Law.
(e)    No judicial proceeding or governmental or administrative action is
pending or, to the best knowledge of the Responsible Officers of the Loan
Parties, threatened, under any Environmental Law to which any Consolidated Party
is or will be named as a party, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to the Consolidated Parties, the real Properties or the businesses.
(f)    There has been no release, or threat of release, of Hazardous Materials
at or from the real Properties, or arising from or related to the operations
(including, without limitation, disposal) of any Consolidated Party in
connection with the real Properties or otherwise in connection with the
businesses, in violation of or in amounts or in a manner that to the best
knowledge of the Responsible Officers of the Loan Parties could give rise to
liability under Environmental Laws.
5.17    Solvency.

- 97 -

--------------------------------------------------------------------------------

The Loan Parties are Solvent on a consolidated basis.
5.18    Investments.
All Investments of each Consolidated Party are Permitted Investments.
5.19    Disclosure.
Neither this Agreement nor any financial statements delivered to the Lenders nor
any other document, certificate or statement furnished to the Lenders by or on
behalf of any Consolidated Party in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein or herein not misleading.
5.20    No Burdensome Restrictions.
No Consolidated Party is a party to any agreement or instrument or subject to
any other obligation or any charter or corporate restriction or any provision of
any applicable Law which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
5.21    Brokers’ Fees.
No Consolidated Party has any obligation to any Person in respect of any
finder’s, broker’s, investment banking or other similar fee in connection with
any of the transactions contemplated under the Loan Documents.
5.22    Labor Matters.
None of the Consolidated Parties has suffered any strikes, walkouts, work
stoppages or other material labor difficulty within the last five years which
has had or could reasonably be expected to have a Material Adverse Effect.
5.23    REIT Status.
Potlatch is duly organized as a REIT.
5.24    Business Locations.
Set forth on Schedule 5.24(a) is the chief executive office, jurisdiction of
incorporation or formation and principal place of business of each Loan Party as
of the Closing Date. Set forth on Schedule 5.24(b) is a list of all Timberlands
that are owned by the Loan Parties as of the Closing Date, which list sets forth
the county and state in which such Timberlands are located and the approximate
acreage in each state. Set forth on Schedule 5.24(c) is a list of all
Manufacturing

- 98 -

--------------------------------------------------------------------------------

Facilities that are owned by the Loan Parties as of the Closing Date, which list
sets forth the city, county and state in which each such Manufacturing Facility
is located.
5.25    Casualty, Etc.
Neither the business nor the properties of any Loan Party or any of its
Subsidiaries are affected by any fire, explosion, accident, strike, lockout or
other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of
the public enemy or other casualty (whether or not covered by insurance) that,
either individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
5.26    Intellectual Property.
The Consolidated Parties own, or possess the right to use, all of the
trademarks, service marks, trade names, copyrights, patents, patent rights,
franchises, licenses and other intellectual property rights (collectively, “IP
Rights”) that are reasonably necessary for the operation of their respective
businesses, without conflict with the rights of any other Person. To the best
knowledge of the Borrowers, no slogan or other advertising device, product,
process, method, substance, part or other material now employed, or now
contemplated to be employed, by the Consolidated Parties infringes upon any
rights held by any other Person.
5.27    Insurance.
The properties of the Consolidated Parties are insured with financially sound
and reputable insurance companies not Affiliates of the Borrowers, in such
amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar properties
in localities where the Borrowers or the applicable Subsidiary operates.
5.28    Anti-Corruption Laws.
The Borrower and its Subsidiaries have conducted their businesses in compliance
with applicable anti-corruption laws and have instituted and maintained policies
and procedures designed to promote and achieve compliance with such laws.

ARTICLE VI    
AFFIRMATIVE COVENANTS

- 99 -

--------------------------------------------------------------------------------

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, each Loan Party hereby covenants and agrees to the
following:
6.01    Information Covenants.
The Loan Parties will furnish, or cause to be furnished, to the Administrative
Agent and each of the Lenders:
(m)    Annual Financial Statements. As soon as available, but in any event no
later than the earlier of (i) the 90th day after the end of each fiscal year of
the Borrowers and (ii) the day that is three (3) Business Days after the date
the Borrowers’ annual report on Form 10-K is required to be filed with the SEC,
a consolidated balance sheet and income statement of the Consolidated Parties as
of the end of such fiscal year, together with related consolidated statements of
retained earnings and cash flows for such fiscal year, in each case setting
forth in comparative form consolidated figures for the preceding fiscal year,
all such financial information described above to be in reasonable form and
detail and audited by independent certified public accountants of recognized
national standing reasonably acceptable to the Administrative Agent and whose
opinion shall be to the effect that such financial statements have been prepared
in accordance with GAAP (except for changes with which such accountants concur)
and shall not be limited as to the scope of the audit or qualified as to the
status of the Consolidated Parties as a going concern or any other material
qualifications or exceptions.
(n)    Quarterly Financial Statements. As soon as available, but in any event no
later than the earlier of (i) the 45th day after the end of each of the first
three fiscal quarters of each fiscal year of the Borrowers and (ii) the day that
is three (3) Business Days after the date the Borrowers’ quarterly report on
Form 10-Q is required to be filed with the SEC, a consolidated balance sheet and
income statement of the Consolidated Parties as of the end of such fiscal
quarter, together with related consolidated statements of cash flows for such
fiscal quarter, in each case setting forth in comparative form consolidated
figures for (x) the corresponding period of the preceding fiscal year with
respect to the income and cash flow statements of the Consolidated Parties and
(y) the end of the preceding fiscal year with respect to the balance sheet of
the Consolidated Parties, all such financial information described above to be
in reasonable form and detail and reasonably acceptable to the Administrative
Agent, and accompanied by a certificate of a Responsible Officer of Potlatch to
the effect that such quarterly financial statements fairly present in all
material respects the financial condition of the Consolidated Parties and have
been prepared in accordance with GAAP, subject to changes resulting from audit
and normal year-end audit adjustments.

- 100 -

--------------------------------------------------------------------------------

(o)    Officer’s Compliance Certificate. At the time of delivery of the
financial statements provided for in Sections 6.01(a) and 6.01(b) above, a duly
completed Compliance Certificate signed by a Responsible Officer of Potlatch
substantially in the form of Exhibit D (i) demonstrating compliance with the
financial covenants contained in Section 6.10 by calculation thereof as of the
end of each such fiscal period and (ii) stating that no Default or Event of
Default exists, or if any Default or Event of Default does exist, specifying the
nature and extent thereof and what action the Loan Parties propose to take with
respect thereto.
(p)    Annual Budgets. Within 30 days after the end of each fiscal year of the
Borrowers, beginning with the fiscal year ending December 31, 2014, an annual
budget of the Consolidated Parties containing, among other things, pro forma
consolidated financial statements (including consolidated income statement,
consolidated balance sheet and consolidated statement of cash flows) for the
next fiscal year.
(q)    Auditor’s Reports. Promptly upon receipt thereof, a copy of any other
report or “management letter” submitted by independent accountants to any
Consolidated Party in connection with any annual, interim or special audit of
the books of such Person.
(r)    Reports. Promptly upon transmission or receipt thereof, (i) copies of any
filings and registrations with, and reports to or from, the SEC, or any
successor agency, and copies of all financial statements, proxy statements,
notices and reports as any Consolidated Party shall send to its shareholders or
to a holder of any Indebtedness owed by any Consolidated Party in its capacity
as such a holder and (ii) upon the reasonable request of the Administrative
Agent, all reports and material written information to and from the United
States Environmental Protection Agency, or any state or local agency responsible
for environmental matters, the United States Occupational Health and Safety
Administration, or any state or local agency responsible for health and safety
matters, or any successor agencies or authorities concerning environmental,
health or safety matters.
(s)    Notices. Upon any Responsible Officer of a Loan Party obtaining knowledge
thereof, the Loan Parties will give written notice to the Administrative Agent
and the Lenders (i) immediately of the occurrence of an event or condition
consisting of a Default or Event of Default, specifying the nature and existence
thereof and what action the Loan Parties propose to take with respect thereto,
(ii) promptly of the occurrence of any of the following with respect to any
Consolidated Party: (A) of any matter that has resulted or could be reasonably
expected to result in a Material Adverse Effect including without limitation (I)
the pendency or commencement of any litigation, arbitral or governmental
proceeding against such Person which if adversely determined is likely to have a
Material Adverse Effect or (II) the institution of any proceedings against such
Person with respect to, or the

- 101 -

--------------------------------------------------------------------------------

receipt of notice by such Person of potential liability or responsibility for
violation, or alleged violation of any Federal, state or local law, rule or
regulation, including but not limited to, Environmental Laws, the violation of
which could have a Material Adverse Effect, (B) any material change in
accounting policies or financial reporting practices by such Person, (C) the
occurrence of any Internal Control Event or (D) any announcement by Moody’s or
S&P of any change or possible change in a Debt Rating, and (iii) notice of a
change to the list of Manufacturing Facilities contained in Schedule 5.24(c).
(t)    ERISA. Upon any Responsible Officer of a Loan Party obtaining knowledge
thereof, the Loan Parties will give written notice to the Administrative Agent
promptly (and in any event within fifteen Business Days) of: (i) any event or
condition, including, but not limited to, any Reportable Event, that
constitutes, or could reasonably be expected to constitute, an ERISA Event; (ii)
with respect to any Multiemployer Plan, the receipt of notice as prescribed in
ERISA or otherwise of any withdrawal liability assessed against the Loan Parties
or any ERISA Affiliates, or of a determination that any Multiemployer Plan is in
reorganization or insolvent (both within the meaning of Title IV of ERISA);
(iii) the failure to make full payment on or before the due date (including
extensions) thereof of all amounts which any Consolidated Party or any ERISA
Affiliate is required to contribute to each Plan pursuant to its terms and as
required to meet the minimum funding standard set forth in ERISA and the Code
with respect thereto; or (iv) any change in the funding status of any Plan, in
each case that could reasonably be expected to have a Material Adverse Effect,
together with a description of any such event or condition or a copy of any such
notice and a statement by an Responsible Officer of the Borrowers briefly
setting forth the details regarding such event, condition, or notice, and the
action, if any, which has been or is being taken or is proposed to be taken by
the Loan Parties with respect thereto. Promptly upon request, the Loan Parties
shall furnish the Administrative Agent and the Lenders with such additional
information concerning any Plan as may be reasonably requested, including, but
not limited to, copies of each annual report/return (Form 5500 series), as well
as all schedules and attachments thereto required to be filed with the
Department of Labor and/or the IRS pursuant to ERISA and the Code, respectively,
for each “plan year” (within the meaning of Section 3(39) of ERISA).
(u)    Other Information. With reasonable promptness upon any such request, such
other information regarding the business, properties or financial condition of
any Consolidated Party as the Administrative Agent or any Lender may reasonably
request.
Documents required to be delivered pursuant to Section 6.01(a), (b) or (f) (to
the extent any such documents are included in materials otherwise filed with the
SEC) may be delivered electronically and if so delivered, shall be deemed to
have been delivered on the date (i) on which Potlatch posts such documents, or
provides a link thereto on Potlatch’s website on the Internet at

- 102 -

--------------------------------------------------------------------------------

the website address listed on Schedule 10.02; or (ii) on which such documents
are posted on the Borrowers’ behalf on SyndTrak, IntraLinks or another relevant
website, if any, to which each Lender and the Administrative Agent have access
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided that: (i) upon written request by the
Administrative Agent, Potlatch shall deliver paper copies of such documents to
the Administrative Agent until a written request to cease delivering paper
copies is given by the Administrative Agent and (ii) Potlatch shall notify
(which may be by facsimile or electronic mail) the Administrative Agent and each
Lender of the posting of any such documents and provide to the Administrative
Agent by electronic mail electronic versions (i.e., soft copies) of such
documents. Notwithstanding anything contained herein, in every instance Potlatch
shall be required to provide paper copies of the Compliance Certificates
required by Section 6.01(c) to the Administrative Agent. Except for such
Compliance Certificates, the Administrative Agent shall have no obligation to
request the delivery or to maintain copies of the documents referred to above,
and in any event shall have no responsibility to monitor compliance by the
Borrowers with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.
The Borrowers hereby acknowledge that (a) the Administrative Agent and/or the
Arrangers will make available to the Lenders and the L/C Issuer materials and/or
information provided by or on behalf of the Borrowers hereunder (collectively,
“Borrower Materials”) by posting the Borrower Materials on SyndTrak, IntraLinks
or another similar electronic system (the “Platform”) and (b) certain of the
Lenders may be “public-side” Lenders (i.e., Lenders who may have personnel who
do not wish to receive material non-public information with respect to the
Borrowers or their Affiliates, or their respective securities of any of the
foregoing, and who may be engaged in investment and other market-related
activities with respect to such Person’s securities) (each, a “Public Lender”).
The Borrowers hereby agree that they will use commercially reasonable efforts to
identify that portion of the Borrower Materials that may be distributed to the
Public Lenders and that (w) all Borrower Materials that are to be made available
to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a
minimum, shall mean that the word “PUBLIC” shall appear prominently on the first
page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrowers shall be
deemed to have authorized the Administrative Agent, the Arrangers, the L/C
Issuer and the Lenders to treat such Borrower Materials as not containing any
material non-public information (although it may be sensitive and proprietary)
with respect to the Borrowers or their securities for purposes of United States
Federal and state securities laws (provided, however, that to the extent such
Borrower Materials constitute Information, they shall be treated as set forth in
Section 10.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be
made available through a portion of the Platform designated “Public Side
Information;” and (z) the Administrative Agent and the Arrangers shall be
entitled to treat any Borrower Materials that are not marked

- 103 -

--------------------------------------------------------------------------------

“PUBLIC” as being suitable only for posting on a portion of the Platform not
designated “Public Side Information.”
6.02    Preservation of Existence, Franchises and REIT Status.
Except as a result of or in connection with a dissolution, merger or disposition
of a Subsidiary not prohibited by Section 7.04 or Section 7.05, each Loan Party
will, and will cause each of its Subsidiaries to, do all things necessary to (a)
preserve and keep in full force and effect its existence, (b) where failure to
do so could reasonably be expected to have a Material Adverse Effect, preserve
and keep in full force and effect its rights, franchises and authority and (c)
in the case of Potlatch, maintain REIT status.
6.03    Books and Records.
Each Loan Party will, and will cause each of its Subsidiaries to, keep complete
and accurate books and records of its transactions in accordance with good
accounting practices on the basis of GAAP (including the establishment and
maintenance of appropriate reserves).
6.04    Compliance with Law.
Each Loan Party will, and will cause each of its Subsidiaries to:
(d)    comply with all Laws, applicable to it and its Property if noncompliance
with any such Laws could reasonably be expected to have a Material Adverse
Effect.
(e)    without limiting the generality of the foregoing clause (a), comply, and
cause all lessees and other Persons operating or occupying its properties to
comply with all applicable Environmental Laws and Environmental Permits; obtain
and renew all Environmental Permits necessary for its operations and properties;
and conduct any investigation, study, sampling and testing, and undertake any
cleanup, removal, remedial or other action necessary to remove and clean up all
Hazardous Materials from any of its properties, in accordance with the
requirements of all Environmental Laws if, in each case, such noncompliance,
action or inaction (i) could reasonably be expected to have a Material Adverse
Effect or (ii) materially diminishes the Consolidated Timberland Value;
provided, however, that neither the Borrowers nor any of their Subsidiaries
shall be required to undertake any such cleanup, removal, remedial or other
action to the extent that its obligation to do so is being contested in good
faith and by proper proceedings and appropriate reserves are being maintained
with respect to such circumstances in accordance with GAAP.
6.05    Payment of Taxes and Other Claims.

- 104 -

--------------------------------------------------------------------------------

Each Loan Party will, and will cause each of its Subsidiaries to, pay and
discharge (a) all taxes, assessments and governmental charges or levies imposed
upon it, or upon its income or profits, or upon any of its Properties, before
they shall become delinquent and (b) all lawful claims (including claims for
labor, materials and supplies) which, if unpaid, might give rise to a Lien upon
any of its properties; provided, however, that no Consolidated Party shall be
required to pay any such tax, assessment, charge, levy or claim which is being
contested in good faith by appropriate proceedings and as to which adequate
reserves therefor have been established in accordance with GAAP.
6.06    Insurance.
Each Loan Party will, and will cause each of its Subsidiaries to, at all times
maintain in full force and effect insurance (including worker’s compensation
insurance, liability insurance, property insurance and business interruption
insurance) with financially sound and reputable insurance companies not
Affiliates of the Borrowers (excluding the Borrowers’ mutual insurance
arrangement for workers compensation insurance in Idaho), with respect to its
properties and business against loss or damage of the kinds customarily insured
against by Persons engaged in the same or similar business, of such types and in
such amounts covering such risks and liabilities and with such deductibles or
self insurance retentions as are customarily carried under similar circumstances
by such other Persons.
6.07    Maintenance of Property; Management of Timberlands.
Each Loan Party will, and will cause each of its Subsidiaries to, maintain and
preserve its properties and equipment material to the conduct of its business in
good repair, working order and condition, normal wear and tear and Involuntary
Dispositions excepted. Each Loan Party will, and will cause each of its
Subsidiaries to, manage its Timberlands in accordance with the guidelines
established by either SFI, Inc. or the Forest Stewardship Council.
6.08    Use of Proceeds.
The Borrowers will use the proceeds of the Loans and will use the Letters of
Credit solely for the purposes set forth in Section 5.15.
6.09    Audits/Inspections.
Upon reasonable notice and during normal business hours, each Loan Party will,
and will cause each of its Subsidiaries to, permit representatives appointed by
the Administrative Agent or the Required Lenders, including, without limitation,
independent accountants, agents, attorneys, and appraisers to visit and inspect
its property, including its books and records, its accounts receivable and
inventory, its facilities and its other business assets, and to make photocopies
or photographs

- 105 -

--------------------------------------------------------------------------------

thereof and to write down and record any information such representative obtains
and shall permit the Administrative Agent or its representatives to investigate
and verify the accuracy of information provided to the Lenders and to discuss
all such matters with the officers, employees and representatives of such
Person; provided, however, that when an Event of Default has occurred and is
continuing, the Administrative Agent or any Lender (or any of their respective
representatives or independent contractors) may do any of the foregoing at the
expense of the Borrowers at any time during normal business hours and, to the
extent commercially practicable, with advance notice.
6.10    Financial Covenants.
(d)    Interest Coverage Ratio. The Interest Coverage Ratio, as of the last day
of each fiscal quarter of the Consolidated Parties, shall be greater than or
equal to 3.00 to 1.00.
(e)    Leverage Ratio. The Consolidated Leverage Ratio, shall at all times not
be greater than 40%.
(f)    Sale of Timberland.    The Loan Parties shall not permit the Consolidated
Parties to sell more than an aggregate of 433,051 acres during the term of this
Agreement unless otherwise approved by the Required Lenders.
6.11    Additional Guarantors.
The Administrative Borrower shall notify the Administrative Agent at the time
that any Person becomes a wholly-owned Material Subsidiary that has given a
guaranty of, or otherwise incurred any Indebtedness related to the Borrowers,
and promptly thereafter (and in any event within 30 days), cause each such
Person (other than any Foreign Subsidiary to the extent the joinder as a
Guarantor by such Foreign Subsidiary could reasonably be expected to (1) cause
the undistributed earnings of such Foreign Subsidiary as determined for United
States federal income tax purposes to be treated as a deemed dividend to such
Foreign Subsidiary’s United States parent or (2) result in any material adverse
tax consequences) to (i) become a Guarantor by executing and delivering to the
Administrative Agent a Joinder Agreement, and (ii) deliver to the Administrative
Agent documents of the types referred to in clauses (iii), (iv) and (v) of
Section 4.01(a) and favorable opinions of counsel to such Person (which shall
cover, among other things, the legality, validity, binding effect and
enforceability of the documentation referred to herein), all in form, content
and scope reasonably satisfactory to the Administrative Agent.
6.12    Performance of Obligations.
Each of the Loan Parties will, and will cause each of its Subsidiaries to, pay
when due all Indebtedness under all material agreements, indentures, mortgages,
security agreements or other debt instruments to which it is a party or by which
it is bound.

- 106 -

--------------------------------------------------------------------------------

6.13    Timberland Valuations and Updates.
The Borrowers will obtain, at their expense, and deliver to the Administrative
Agent (i) on or before March 31, 2015 and on or before March 31 of each
subsequent year, a Timberland Valuation Update from the Timberland Valuation
Consultant as of the prior December 31, (ii) on or before January 31 of each
year during the term of this Agreement (beginning with January 31, 2015), a
Timberland Inventory Update prepared by the Borrowers as of December 31st of the
prior calendar year and (iii) on or before the last day of each of January,
April, July and October, a report or reports prepared by the Borrowers and in
form and substance satisfactory to the Administrative Agent, of harvesting,
acquisitions and divestitures of Timberlands as of the last day of the
immediately preceding calendar quarter and reflecting the changes to the
Timberlands since the most recently delivered Opening Timberland Valuation or
Timberland Valuation Update, as applicable. The Borrowers and their Subsidiaries
will promptly provide the Timberland Valuation Consultant with any information
reasonably necessary or requested by such Timberland Valuation Consultant to
complete or perform any Timberland Valuation Update.
6.14    Anti-Corruption Laws.
Conduct its businesses in compliance with applicable anti-corruption laws and
maintain policies and procedures designed to promote and achieve compliance with
such laws.
ARTICLE VII    
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding (to the extent such Letter of Credit is not fully Cash
Collateralized in accordance with Section 2.17), each Loan Party hereby
covenants and agrees to the following:
7.01    Indebtedness.
The Loan Parties will not permit any Consolidated Party to contract, create,
incur, assume or permit to exist any Indebtedness, except:
(e)    Indebtedness arising under this Agreement and the other Loan Documents;
(f)    Indebtedness of the Borrowers and their Subsidiaries set forth in
Schedule 7.01 (and renewals, refinancings and extensions thereof; provided that
(x) the amount of such Indebtedness is not increased at the time of such
renewal, refinancing or extension, (y) the terms of such renewal, refinancing or
extension are materially not less

- 107 -

--------------------------------------------------------------------------------

favorable to such Borrowers or Subsidiary, taken as a whole and (z) the maturity
date of such renewal, refinancing or extension shall be a date after the
Maturity Date);
(g)    purchase money Indebtedness (including obligations in respect of Capital
Leases or Synthetic Lease Obligations) hereafter incurred by the Borrowers or
any of its Subsidiaries to finance the purchase of fixed assets provided that
(i) the total of all such Indebtedness for all such Persons taken together along
with all Indebtedness incurred pursuant to Section 7.01(i) shall not exceed
$75,000,000 at any one time outstanding; (ii) such Indebtedness when incurred
shall not exceed the purchase price of the asset(s) financed; and (iii) no such
Indebtedness shall be refinanced for a principal amount in excess of the
principal balance outstanding thereon at the time of such refinancing;
(h)    obligations (contingent or otherwise) of the Borrowers or any Subsidiary
existing or arising under any Swap Contracts, provided that such obligations are
(or were) entered into by such Person in the ordinary course of business for the
purpose of directly mitigating risks associated with purchases, sales,
liabilities, commitments, investments, assets, or property held or reasonably
anticipated by such Person, or changes in the value of securities issued by such
Person, and not for purposes of speculation or taking a “market view;
(i)    intercompany Indebtedness and Guarantees permitted under Section 7.06;
(j)    in addition to the Indebtedness otherwise permitted by this Section 7.01,
other Indebtedness incurred by the Borrowers or any of their Subsidiaries after
the Closing Date, provided that (i) such Indebtedness shall be unsecured and
(ii) the Borrowers shall have delivered to the Administrative Agent a Pro Forma
Compliance Certificate demonstrating that, upon giving effect on a Pro Forma
Basis to the incurrence of such Indebtedness and to the concurrent retirement of
any other Indebtedness of any Consolidated Party, the Loan Parties would be in
compliance with the financial covenants set forth in Section 6.10(a)-(c);
(k)    Indebtedness pursuant to (i) the 6.95% Debentures in an aggregate
outstanding principal amount not to exceed $22,500,000 and (ii) the Medium-Term
Notes in an aggregate outstanding principal amount not to exceed $27,250,000,
including, in the case of clauses (i) and (ii), any renewals, refinancings and
extensions thereof; provided that (w) the amount of such Indebtedness is not
increased at the time of such renewal, refinancing or extension, (x) the terms
of such renewal, refinancing or extension are materially not less favorable to
such Borrowers or Subsidiary, taken as a whole, (y) such Indebtedness is
unsecured, and (z) the maturity date of such renewal, refinancing or extension
shall be a date after the Maturity Date; and

- 108 -

--------------------------------------------------------------------------------

(l)    unsecured Indebtedness owing by the Company pursuant to the 7½% Senior
Notes issued on November 3, 2009 and due 2019 in an aggregate principal amount
not to exceed $150,000,000 (and renewals, refinancings and extensions thereof;
provided that (x) the amount of such Indebtedness is not increased at the time
of such renewal, refinancing or extension, (y) the terms of such renewal,
refinancing or extension are materially not less favorable to such Borrowers or
Subsidiary, taken as a whole and (z) the maturity date of such renewal,
refinancing or extension shall be a date after the Maturity Date); and
(m)    in addition to the Indebtedness otherwise permitted by this Section 7.01,
other secured Indebtedness incurred by the Borrowers or any of their
Subsidiaries after the Closing Date, provided that (i) the Borrowers shall have
delivered to the Administrative Agent a Pro Forma Compliance Certificate
demonstrating that, upon giving effect on a Pro Forma Basis to the incurrence of
such Indebtedness and to the concurrent retirement of any other Indebtedness of
any Consolidated Party, the Loan Parties would be in compliance with the
financial covenants set forth in Section 6.10(a) and (b) and (ii) the aggregate
principal amount of all secured Indebtedness taken together along with all
Indebtedness pursuant to Section 7.01(c) shall not exceed $75,000,000.
7.02    Liens.
The Loan Parties will not permit any Consolidated Party to contract, create,
incur, assume or permit to exist any Lien with respect to any of its Property,
whether now owned or hereafter acquired, except for:
(h)    Liens (other than Liens created or imposed under ERISA) for taxes,
assessments or governmental charges or levies not yet due or Liens for taxes
being contested in good faith by appropriate proceedings for which adequate
reserves determined in accordance with GAAP have been established (and as to
which the Property subject to any such Lien is not yet subject to foreclosure,
sale or loss on account thereof);
(i)    statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and suppliers and other Liens imposed by law or pursuant
to customary reservations or retentions of title arising in the ordinary course
of business; provided that such Liens (i) secure only amounts not yet due and
payable or, if due and payable, are unfiled and no other action has been taken
to enforce the same or (ii) are being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with GAAP have
been established; provided further, the Property subject to any such Lien is not
yet subject to foreclosure, sale or loss on account thereof;
(j)    Liens (other than Liens created or imposed under ERISA) incurred or
deposits made by any Consolidated Party in the ordinary course of business in
connection with

- 109 -

--------------------------------------------------------------------------------

workers’ compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations, bids,
leases, government contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed
money);
(k)    Liens in connection with attachments or judgments (including judgment or
appeal bonds) provided that the judgments secured shall, within 30 days after
the entry thereof, have been discharged or execution thereof stayed pending
appeal, or shall have been discharged within 30 days after the expiration of any
such stay;
(l)    easements, rights-of-way, restrictions (including zoning restrictions),
rights of the public and governmental bodies in the beds of waterways, boundary
agreements, mineral reservations and mineral reservations of third parties in
existence on the Closing Date, access restrictions, rights of Indian tribes,
reservations in federal patents, minor defects or irregularities in title and
other similar charges or encumbrances not, in any material respect, impairing
the use of the encumbered Property for its intended purposes; provided, that
with respect to the Timberlands, such easements, rights-of-way, restrictions
(including zoning restrictions), minor defects or irregularities in title and
other similar charges or encumbrances shall not, individually or in the
aggregate, impair the value of the Timberlands as commercial timberlands in any
material respect or materially detract from the use of the Timberlands, in each
case taken as a whole, as such;
(m)    Liens on Property of any Person securing purchase money Indebtedness
(including Capital Leases and Synthetic Lease Obligations) of such Person
permitted under Section 7.01(c), provided (x) that any such Lien attaches to
such Property concurrently with or within 90 days after the acquisition thereof
and (y) such Liens (when combined with the Liens permitted under Section 7.02(p)
and 7.02(v)) do not relate to Property with an aggregate fair market value in
excess of $100,000,000;
(n)    leases or subleases granted to others not interfering in any material
respect with the business of any Consolidated Party;
(o)    any interest of title of a lessor under, and Liens arising from UCC
financing statements (or equivalent filings, registrations or agreements in
foreign jurisdictions) relating to, leases permitted by this Agreement;
(p)    Liens in favor of customs and revenue authorities arising as a matter of
law to secure payment of customs duties in connection with the importation of
goods;
(q)    Liens deemed to exist in connection with Investments in repurchase
agreements permitted under Section 7.06;

- 110 -

--------------------------------------------------------------------------------

(r)    normal and customary rights of set-off upon deposits of cash in favor of
banks or other depository institutions;
(s)    Liens of a collection bank arising under Section 4-210 of the Uniform
Commercial Code on items in the course of collection;
(t)    Liens of sellers of goods to the Borrowers and any of their Subsidiaries
arising under Article 2 of the Uniform Commercial Code or similar provisions of
applicable law in the ordinary course of business, covering only the goods sold
and securing only the unpaid purchase price for such goods and related expenses;
(u)    any interest of title of a buyer in connection with, and Liens arising
from UCC financing statements relating to, a sale of receivables permitted by
this Agreement;
(v)    Liens existing as of the Closing Date and set forth on Schedule 7.02;
(w)    Liens on property of a Person existing at the time such Person is merged
with or into or consolidated with any Borrower or any Subsidiary of any
Borrower; provided that (x) such Liens were in existence prior to the
contemplation of such merger or consolidation, (y) do not extend to any assets
other than those of the Person merged into or consolidated with such Borrower or
such Subsidiary and (z) such Liens (when combined with the Liens permitted under
Section 7.02(f) and 7.02(v)) do not relate to Property with an aggregate fair
market value in excess of $100,000,000;
(x)    Liens on property existing at the time of acquisition of the property by
any Borrower or any Subsidiary of any Borrower, provided that such Liens were in
existence prior to the contemplation of such acquisition;
(y)    Liens created or assumed in the ordinary course of business of exploring
for, developing or producing oil, gas or other minerals (including borrowings in
connection therewith) on, or any interest in, or on any proceeds from the sale
of, property acquired for such purposes, production therefrom (including the
proceeds thereof), or material or equipment located thereon;
(z)    Liens arising from the pledge of any bonds, debentures, notes or similar
instruments which are purchased and held by any remarketing agent for the
account of, or as agent for, the Borrowers;
(aa)    conservation easements on Timberlands; provided, that with respect to
the Timberlands, such conservation easements shall not, individually or in the
aggregate, impair

- 111 -

--------------------------------------------------------------------------------

the value of the Timberlands as commercial timberlands in any material respect
or materially detract from the use of the Timberlands, in each case taken as a
whole, as such;
(bb)    Liens, if any, in favor of the L/C Issuer and/or Swing Line Lender to
cash collateralize or otherwise secure the obligations of a Defaulting Lender to
fund risk participations hereunder;
(cc)    Liens securing Indebtedness permitted pursuant to Section 7.01(i) of
this Agreement; provided that such Liens (when combined with the Liens permitted
under Section 7.02(f) and 7.02(p)) do not relate to Property with an aggregate
fair market value in excess of $100,000,000; and
(dd)    any extension, renewal or replacement, in whole or in part, of any Lien
described in the foregoing clauses (a) through (u); provided that any such
extension, renewal or replacement shall be no more restrictive in any material
respect than the Lien extended, renewed or replaced and shall not extend to any
other Property of the Loan Parties other than such item of Property originally
covered by such Lien or by improvement thereof or additions or accessions
thereto.
7.03    Nature of Business.
The Loan Parties will not permit any Consolidated Party to materially alter the
character or conduct of the business conducted by such Person as of the Closing
Date.
7.04    Consolidation, Merger, Dissolution, etc.
Except in connection with a Permitted Asset Disposition, the Loan Parties will
not permit any Consolidated Party to enter into any transaction of merger or
consolidation or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution); provided that, notwithstanding the foregoing
provisions of this Section 7.04 but subject to the terms of Sections 7.11 and
7.12, (a) any Borrower may merge or consolidate with any of its Subsidiaries,
provided that such Borrower shall be the continuing or surviving corporation,
(b) any Loan Party other than Potlatch may merge or consolidate with any other
Loan Party other than Potlatch; provided that in the case of the merger of any
Borrower, such Borrower shall be the continuing or surviving corporation, (c)
any Consolidated Party which is not a Loan Party may be merged or consolidated
with or into any Loan Party other than Potlatch, provided that such Loan Party
shall be the continuing or surviving corporation, (d) any Consolidated Party
which is not a Loan Party may be merged or consolidated with or into any other
Consolidated Party which is not a Loan Party, (e) any Subsidiary of a Borrower
may merge with any Person that is not a Loan Party in connection with an Asset
Disposition permitted under Section 7.05, (f) any Borrower or any Subsidiary of
any Borrower may merge with any Person other than a Consolidated Party in
connection with a Permitted Acquisition, provided that, if such

- 112 -

--------------------------------------------------------------------------------

transaction involves a Borrower, such Borrower shall be the continuing or
surviving corporation, and (g) any wholly owned Subsidiary of such Borrower may
dissolve, liquidate or wind up its affairs at any time provided that such
dissolution, liquidation or winding up, as applicable, could not have a Material
Adverse Effect.
7.05    Asset Dispositions.
The Loan Parties will not permit any Consolidated Party to make any Asset
Disposition or enter into any agreement to make any Asset Disposition, except:
(c)    any Consolidated Party may sell, lease, transfer or otherwise dispose of
equipment or real property to the extent that (i) such property is exchanged for
credit against the purchase price of similar replacement property or (ii) the
proceeds of any such transaction are reasonably promptly applied to the purchase
price of such replacement property;
(d)    any Subsidiary may sell, lease, transfer or otherwise dispose of Property
to the Borrowers or to a wholly-owned Subsidiary; provided that if the
transferor of such Property is a Guarantor, the transferee thereof must either
be a Borrower or a Guarantor;
(e)    Asset Dispositions permitted by Section 7.04;
(f)    Asset Dispositions by the Borrowers and their Subsidiaries of Property
pursuant to sale-leaseback transactions to the extent such disposition is
permitted by Section 7.13; and
(g)    the Borrowers and their Subsidiaries may sell, lease, transfer or
otherwise dispose of assets, to the extent not otherwise permitted under this
Section 7.05; provided that (i) at the time of such Asset Disposition, no
Default shall exist or would result therefrom, (ii) upon giving effect to such
Asset Disposition on a Pro Forma Basis, the Loan Parties would be in compliance
with the financial covenants set forth in Section 6.10(a)-(c), which, in
connection with Asset Dispositions the aggregate Net Cash Proceeds of which are
in excess of $50,000,000, shall be evidenced by a Pro Forma Compliance
Certificate delivered by the Borrowers to the Administrative Agent;
provided, however, that any Asset Disposition pursuant to clauses (a) through
(e) shall be for fair market value.
7.06    Investments.
The Loan Parties will not permit any Consolidated Party to make any Investments,
except for:

- 113 -

--------------------------------------------------------------------------------

(c)    Investments consisting of cash and Cash Equivalents;
(d)    Investments consisting of accounts receivable created, acquired or made
by any Consolidated Party in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms;
(e)    Investments consisting of Capital Stock, obligations, securities or other
property received by any Consolidated Party in settlement of accounts receivable
(created in the ordinary course of business) from bankrupt obligors;
(f)    Investments existing as of the Closing Date and set forth in Schedule
7.06;
(g)    Investments consisting of advances or loans to directors, officers,
employees, agents, customers or suppliers that do not exceed $10,000,000 in the
aggregate at any one time outstanding; provided that all such advances must be
in compliance with applicable Laws, including, but not limited to, the
Sarbanes-Oxley;
(h)    Investments in any Loan Party; or
(i)    Investments consisting of an Acquisition by any Borrower or any
Subsidiary of any Borrower, provided that (i) with respect to any Property
acquired (or the Property of the Person acquired) that does not constitute
timber or timberlands, such Property is (A) used or useful in the same or a
similar line of business as the Borrowers and their Subsidiaries were engaged in
on the Closing Date, or any reasonable extension or expansions thereof or (B) is
ancillary to the primary Property acquired (or the Property of the Person
acquired), (ii) in the case of an Acquisition of the Capital Stock of another
Person, the board of directors (or other comparable governing body) of such
other Person shall have duly approved such Acquisition, (iii) the Borrowers
shall have delivered to the Administrative Agent, to the extent the aggregate
consideration paid in connection with such Acquisition is equal to or greater
than $50,000,000, a Pro Forma Compliance Certificate demonstrating that, upon
giving effect to such Acquisition on a Pro Forma Basis, the Loan Parties would
be in compliance with the financial covenants set forth in Section 6.10(a)-(c),
(iv) the representations and warranties made by the Loan Parties in all Loan
Documents shall be true and correct in all material respects at and as if made
as of the date of such Acquisition (after giving effect thereto) except to the
extent such representations and warranties expressly relate to an earlier date,
(v) if such transaction involves the purchase of an interest in a partnership
between any Borrower (or a Subsidiary of any Borrower) as a general partner and
entities unaffiliated with such Borrower or such Subsidiary as the other
partners, such transaction shall be effected by having such equity interest
acquired by a corporate holding company directly or indirectly wholly-owned by
such Borrower newly formed for the sole

- 114 -

--------------------------------------------------------------------------------

purpose of effecting such transaction and (vi) after giving effect to such
Acquisition, there shall be at least $50,000,000 of Availability
7.07    Restricted Payments.
The Loan Parties will not permit any Consolidated Party to, directly or
indirectly, declare, order, make or set apart any sum for or pay any Restricted
Payment, except (a) to make dividends or other distributions payable to any Loan
Party (directly or indirectly through Subsidiaries), (b) as permitted by Section
7.06, Section 7.08 or Section 7.09, (c) the Borrowers shall be permitted to pay
dividends and distributions to the shareholders of Potlatch; provided, that in
the case of this clause (c), (i) no Default or Event of Default shall exist on
the date of, or shall result from, the making of any such distributions and (ii)
upon giving effect on a Pro Forma Basis to such transaction, the Borrowers would
be in compliance with the financial covenants set forth in Section 6.10(a)-(c),
(d) to make distributions necessary solely for the purposes of maintaining
Potlatch’s REIT status, and (e) to repurchase up to an aggregate amount of
$50,000,000 of Potlatch Capital Stock during the term hereof provided that in
the case of this clause (e), (i) no Default or Event of Default shall exist on
the date of, or shall result from, the making of any such distributions, (ii)
upon giving effect on a Pro Forma Basis to such transaction, the Borrowers would
be in compliance with the financial covenants set forth in Section 6.10(a)-(c),
and (iii) the Consolidated Leverage Ratio is less than or equal to 30% at the
time of such repurchase.
7.08    Limitation on Actions with Respect to Other Indebtedness.
No Loan Party will, nor will it permit any of its Subsidiaries to:
(c)    upon the occurrence and continuance of a Default or Event of Default (i)
amend or modify any of the terms of any Indebtedness of such Person (other than
Indebtedness arising under the Loan Documents) if such amendment or modification
would add or change any terms in a manner materially adverse to the Lenders, or
(ii) materially shorten the final maturity or average life to maturity thereof
or require any payment thereon to be made sooner than originally scheduled or
increase the interest rate or fees applicable thereto, or (iii) make (or give
any notice with respect thereto) any voluntary or optional payment or prepayment
thereof, or make (or give any notice with respect thereto) any redemption or
acquisition for value or defeasance (including without limitation, by way of
depositing money or securities with the trustee with respect thereto before due
for the purpose of paying when due), refund, refinance or exchange with respect
thereto; provided, however that the Borrowers may Repay Indebtedness in
accordance with Section 7.07;
(d)    after the issuance thereof, amend or modify any of the terms of any
Subordinated Indebtedness of such Person if such amendment or modification would
(i) add or change any terms in a manner materially adverse to such Person or to
the Lenders, (ii)

- 115 -

--------------------------------------------------------------------------------

materially shorten the final maturity or average life to maturity thereof, (iii)
require any payment thereon to be made sooner than originally scheduled, (iv)
increase the interest rate or fees applicable thereto or (v) change any
subordination provision thereof in a manner adverse to the Lenders;
(e)    make interest payments in respect of any Subordinated Indebtedness in
violation of the applicable subordination provisions;
(f)    make (or give any notice with respect thereto) any voluntary or optional
payment or prepayment in respect of any Subordinated Indebtedness; or
(g)    make (or give any notice with respect thereto) any redemption,
acquisition for value or defeasance (including without limitation, by way of
depositing money or securities with the trustee with respect thereto before due
for the purpose of paying when due), refund, refinance or exchange of any
Subordinated Indebtedness.
7.09    Transactions with Affiliates.
The Loan Parties will not permit any Consolidated Party to enter into or permit
to exist any transaction or series of transactions with any officer, director,
shareholder, Subsidiary or Affiliate of such Person other than (a) advances of
working capital to any Loan Party, (b) transfers of cash and assets to any Loan
Party, (c) intercompany transactions expressly permitted by Section 7.01,
Section 7.04, Section 7.05, Section 7.06, or Section 7.07, (d) normal
compensation and reimbursement of expenses of officers and directors, (e)
agreements and arrangements entered into with employees of the Loan Parties in
connection with termination of their employment therewith, and (f) except as
otherwise specifically limited in this Agreement, other transactions which are
entered into in the ordinary course of such Person’s business on terms and
conditions substantially as favorable to such Person as would be obtainable by
it in a comparable arms-length transaction with a Person other than an officer,
director, shareholder, Subsidiary or Affiliate.
7.10    Fiscal Year; Organizational Documents.
The Loan Parties will not permit any Consolidated Party to (a) change its fiscal
year, (b) change its accounting policies or reporting practices except as
required by GAAP or in connection with the adoption of International Financial
Reporting Standards on terms reasonably acceptable to the Administrative Agent
or (c) amend, modify or change its articles of incorporation (or corporate
charter or other similar organizational document) or bylaws (or other similar
document) to the extent such change, amendment or modification could reasonably
be expected to have a Material Adverse Effect.
7.11    Limitation on Restricted Actions.

- 116 -

--------------------------------------------------------------------------------

The Loan Parties will not permit any Consolidated Party to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Person to (a) pay
dividends or make any other distributions to any Loan Party on its Capital Stock
or with respect to any other interest or participation in, or measured by, its
profits, (b) pay any Indebtedness or other obligation owed to any Loan Party,
(c) make loans or advances to any Loan Party, (d) sell, lease or transfer any of
its Property to any Loan Party, or (e) act as a Loan Party and pledge its assets
pursuant to the Loan Documents or any renewals, refinancings, exchanges,
refundings or extension thereof, except (in respect of any of the matters
referred to in clauses (a)-(c) above) for such encumbrances or restrictions
existing under or by reason of (i) this Agreement and the other Loan Documents,
(ii) applicable Law, (iii) any document or instrument governing Indebtedness
incurred pursuant to Section 7.01(c), provided that any such restriction
contained therein relates only to the asset or assets constructed or acquired in
connection therewith, (iv) any Permitted Lien or any document or instrument
governing any Permitted Lien, provided that any such restriction contained
therein relates only to the asset or assets subject to such Permitted Lien or
(v) customary restrictions and conditions contained in any agreement relating to
the sale of any Property permitted under Section 7.05 pending the consummation
of such sale.
7.12    Ownership of Subsidiaries.
Notwithstanding any other provisions of this Agreement to the contrary, the Loan
Parties will not permit any Consolidated Party to (i) permit any Person (other
than the Borrowers or any wholly owned Subsidiary of a Borrower) to own any
Capital Stock of any Subsidiary of the Borrowers, except (A) to qualify
directors where required by applicable Law or to satisfy other requirements of
applicable Law with respect to the ownership of Capital Stock of Foreign
Subsidiaries, (B) as a result of or in connection with a dissolution, merger,
consolidation or disposition of a Subsidiary not prohibited by Section 7.04 or
Section 7.05, or (C) in connection with the ownership of an interest in a joint
venture permitted under Section 7.06, (ii) permit any Subsidiary of the
Borrowers to issue or have outstanding any shares of preferred Capital Stock or
(iii) permit, create, incur, assume or suffer to exist any Lien on any Capital
Stock of any Subsidiary of the Borrowers, except for Permitted Liens.
7.13    Sale Leasebacks.
The Loan Parties will not permit any Consolidated Party to enter into any Sale
and Leaseback Transaction after the date of this Agreement, except to the extent
the aggregate net book value of the Property sold or transferred (or to be sold
or transferred) in connection with all such Sale and Leaseback Transactions does
not exceed $25,000,000.
7.14    No Further Negative Pledges.

- 117 -

--------------------------------------------------------------------------------

The Loan Parties will not permit any Consolidated Party to enter into, assume or
become subject to any agreement prohibiting or otherwise restricting the
existence of any Lien upon any of its Property in favor of the Administrative
Agent (for the benefit of the Lenders) for the purpose of securing the
Obligations, whether now owned or hereafter acquired, or requiring the grant of
any security for any obligation if such Property is given as security for the
Obligations, except (a) in connection with any document or instrument governing
Indebtedness incurred pursuant to Section 7.01(c), provided that any such
restriction contained therein relates only to the asset or assets constructed or
acquired in connection therewith, (b) in connection with any Permitted Lien or
any document or instrument governing any Permitted Lien, provided that any such
restriction contained therein relates only to the asset or assets subject to
such Permitted Lien and (c) pursuant to customary restrictions and conditions
contained in any agreement relating to the sale of any Property permitted under
Section 7.05, pending the consummation of such sale.
7.15    Subsidiaries.
The Loan Parties will not create, acquire or permit to exist any (a) new
Subsidiaries unless Section 6.11 hereof, if applicable, has been, or will be
concurrently complied with, or (b) Foreign Subsidiaries to the extent that the
revenue, assets and cash flows of the Foreign Subsidiaries would exceed in the
aggregate 15% of the revenue, assets and cash flows of the Consolidated Parties
on a consolidated basis.
7.16    Use of Proceeds.
The Loan Parties will not use the proceeds of any Credit Extension, whether
directly or indirectly, and whether immediately or ultimately, to purchase or
carry margin stock (within the meaning of Regulation U of the FRB) or to extend
credit to others for the purpose of purchasing or carrying margin stock or to
refund indebtedness originally incurred for such purpose.
7.17    Sanctions.
The Loan Parties will not directly or indirectly, use the proceeds of any Credit
Extension, or lend, contribute or otherwise make available such proceeds to any
Subsidiary, joint venture partner or other individual or entity, to fund any
activities of or business with any individual or entity, or in any Designated
Jurisdiction, that, at the time of such funding, is the subject of Sanctions, or
in any other manner that will result in a violation by any individual or entity
(including any individual or entity participating in the transaction, whether as
Lender, Arranger, Administrative Agent, L/C Issuer, Swing Line Lender, or
otherwise) of Sanctions.

- 118 -

--------------------------------------------------------------------------------

ARTICLE VIII    
EVENTS OF DEFAULT AND REMEDIES
8.01    Events of Default.
Any of the following shall constitute an Event of Default:
(ee)    Non-Payment. The Borrowers or any other Loan Party fail to pay (i) when
and as required to be paid herein and in the currency required hereunder, any
amount of principal of any Loan or any L/C Obligation, or (ii) within five
Business Days after the same becomes due and in the currency required hereunder,
any interest on any Loan or on any L/C Obligation, or any commitment or other
fee due hereunder, or (iii) within five Business Days after the same becomes due
and in the currency required hereunder, any other amount payable hereunder or
under any other Loan Document; or
(ff)    Specific Covenants. The Borrowers shall
(i)    default in the due performance or observance of any term, covenant or
agreement contained in Sections 6.02, 6.08, 6.10, or Article VII;
(ii)    default in the due performance or observance of any term, covenant or
agreement contained in Section 6.01(a), (b), (c) or (d), 6.09 or 6.11 and such
default shall continue unremedied for a period of at least 5 Business Days after
the earlier of a Responsible Officer of a Borrower becoming aware of such
default or written notice thereof by the Administrative Agent or any Lender; or
(gg)    Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days after the earlier of a Responsible Officer of a Borrower
becoming aware of such default or written notice thereof by the Administrative
Agent or any Lender or, if such failure cannot reasonably be cured within such
30-day period, 60 days (but only to the extent such failure can reasonably be
cured within such 60-day period) so long as the Borrowers have diligently
commenced such cure and are diligently prosecuting the completion thereof; or
(hh)    Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Borrowers or any other Loan Party herein, in any other Loan Document, or in any
document delivered in connection herewith or therewith shall prove untrue in any
material respect on the date as of which it was deemed to have been made; or

- 119 -

--------------------------------------------------------------------------------

(ii)    Cross-Default. (i) Any Borrower or any Subsidiary (A) fails to make any
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise beyond the applicable grace period with
respect thereto) in respect of any Indebtedness or Guarantee (other than
Indebtedness hereunder and Indebtedness under Swap Contracts) having an
aggregate principal amount (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $25,000,000 or (B) fails to observe or perform any
other agreement or condition relating to any such Indebtedness or Guarantee or
contained in any instrument or agreement evidencing, securing or relating
thereto beyond the applicable grace period with respect thereto, or any other
event occurs, the effect of which default or other event is to cause, or to
permit the holder or holders of such Indebtedness or the beneficiary or
beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder
or holders or beneficiary or beneficiaries) to cause, with the giving of notice
if required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an
offer to repurchase, prepay, defease or redeem such Indebtedness to be made,
prior to its stated maturity, or such Guarantee to become payable or cash
collateral in respect thereof to be demanded, or (ii) there occurs under any
Swap Contract an Early Termination Date (as defined in such Swap Contract)
resulting from (A) any event of default under such Swap Contract as to which any
Borrower or any Subsidiary is the Defaulting Party (as defined in such Swap
Contract) or (B) any Termination Event (as so defined) under such Swap Contract
as to which any Borrower or any Subsidiary is an Affected Party (as so defined)
and, in either event, the Swap Termination Value owed by such Borrower or such
Subsidiary as a result thereof is greater than $25,000,000; or
(jj)    Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged
or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any such
proceeding; or
(kk)    Inability to Pay Debts; Attachment. (i) A Borrower or any Subsidiary
becomes unable or admits in writing its inability or fails generally to pay its
debts as they become due, or (ii) any writ or warrant of attachment or execution
or similar process is

- 120 -

--------------------------------------------------------------------------------

issued or levied against all or any material part of the property of any such
Person and is not released, vacated or fully bonded within 30 days after its
issue or levy; or
(ll)    Judgments. There is entered against any Borrower or any Subsidiary (i) a
final judgment or order for the payment of money in an aggregate amount
exceeding $25,000,000 (to the extent not covered by independent third-party
insurance as to which the insurer does not dispute coverage), or (ii) any one or
more non-monetary final judgments that have, or could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect and, in either
case, (A) enforcement proceedings are commenced by any creditor upon such
judgment or order, or (B) there is a period of 30 consecutive days during which
a stay of enforcement of such judgment, by reason of a pending appeal or
otherwise, is not in effect; or
(mm)    ERISA. (i) The minimum required contribution (as defined in Code Section
430(a)) has failed to be contributed for any Pension Plan and could reasonably
be expected to have a Material Adverse Effect or (ii) any of the following
events or conditions, if such event or condition could reasonably be expected to
result in taxes, penalties, and other liabilities to any Consolidated Party in
an aggregate amount greater than $25,000,000: (A) any lien shall arise on the
assets of any Consolidated Party or any ERISA Affiliate in favor of the PBGC or
a Plan; (B) an ERISA Event shall occur with respect to a Single Employer Plan,
which is, in the reasonable opinion of the Administrative Agent, likely to
result in the termination of such Plan for purposes of Title IV of ERISA; (C) an
ERISA Event shall occur with respect to a Multiemployer Plan or Multiple
Employer Plan, which is, in the reasonable opinion of the Administrative Agent,
likely to result in (x) the termination of such Plan for purposes of Title IV of
ERISA, or (y) any Consolidated Party or any ERISA Affiliate incurring any
liability in connection with a withdrawal from, reorganization of (within the
meaning of Section 4241 of ERISA), or insolvency (within the meaning of Section
4245 of ERISA) of such Plan; or (D) any prohibited transaction (within the
meaning of Section 406 of ERISA or Section 4975 of the Code) or breach of
fiduciary responsibility shall occur which may subject any Consolidated Party or
any ERISA Affiliate to any liability under Sections 406, 409, 502(i), or 502(l)
of ERISA or Section 4975 of the Code, or under any agreement or other instrument
pursuant to which any Consolidated Party or any ERISA Affiliate has agreed or is
required to indemnify any person against any such liability; or
(nn)    Invalidity of Loan Documents. Any Loan Document, at any time after its
execution and delivery and for any reason other than as expressly permitted
hereunder or satisfaction in full of all the Obligations, ceases to be in full
force and effect; or any Loan Party contests in any manner the validity or
enforceability of any Loan Document; or any Loan Party denies that it has any or
further liability or obligation under any Loan Document, or purports to revoke,
terminate or rescind any Loan Document;

- 121 -

--------------------------------------------------------------------------------

(oo)    Change of Control. There occurs any Change of Control with respect to
the Borrowers; or
(pp)    Subordinated Indebtedness Documentation. (i) There shall occur and be
continuing any “Event of Default” (or any comparable term) under, and as defined
in the documents evidencing or governing any Subordinated Debt, (ii) any of the
Obligations for any reason shall cease to be “Designated Senior Debt” (or any
comparable term) under, and as defined in the documents evidencing or governing
any Subordinated Indebtedness, (iii) any Indebtedness other than the Obligations
shall constitute “Designated Senior Indebtedness” (or any comparable term) under
, and as defined in, any documents evidencing or governing any Subordinated
Indebtedness or (iv) the subordination provisions of the documents evidencing or
governing any Subordinated Indebtedness shall, in whole or in part, terminate,
cease to be effective or cease to be legally valid, binding and enforceable
against any holder of the applicable Subordinated Indebtedness.
8.02    Remedies Upon Event of Default.
If any Event of Default occurs and is continuing, the Administrative Agent
shall, at the request of, or may, with the consent of, the Required Lenders,
take any or all of the following actions:
(f)    declare the commitment of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;
(g)    declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrowers;
(h)    require that the Borrowers Cash Collateralize the L/C Obligations (in an
amount equal to the then Outstanding Amount thereof); and
(i)    exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable Law;
provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to any Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrowers to Cash Collateralize the L/C

- 122 -

--------------------------------------------------------------------------------

Obligations as aforesaid shall automatically become effective, in each case
without further act of the Administrative Agent or any Lender.
8.03    Application of Funds.
After the exercise of remedies provided for in Section 8.02 (or after the Loans
have automatically become immediately due and payable and the L/C Obligations
have automatically been required to be Cash Collateralized as set forth in the
proviso to Section 8.02), any amounts received on account of the Obligations
shall be applied by the Administrative Agent in the following order:
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including Attorney Costs and amounts
payable under Article III) payable to the Administrative Agent in its capacity
as such;
Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders (including Attorney Costs and amounts payable under Article III),
ratably among them in proportion to the amounts described in this clause Second
payable to them;
Third, to payment of that portion of the Obligations constituting accrued and
unpaid Letter of Credit Fees and interest on the Loans and L/C Borrowings,
ratably among the Lenders and the L/C Issuer in proportion to the respective
amounts described in this clause Third held by them;
Fourth, to (a) payment of that portion of the Obligations constituting unpaid
principal of the Loans and L/C Borrowings, and (b) Cash Collateralize that
portion of L/C Obligations comprised of the aggregate undrawn amount of Letters
of Credit, ratably among the Lenders and the L/C Issuer in proportion to the
respective amounts described in this clause Fourth held by them; and
Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Borrowers or as otherwise required by Law.
Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fourth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.

- 123 -

--------------------------------------------------------------------------------

ARTICLE IX    
ADMINISTRATIVE AGENT
9.01    Appointment and Authority.
Each of the Lenders and the L/C Issuer hereby irrevocably appoints KeyBank to
act on its behalf as the Administrative Agent hereunder and under the other Loan
Documents and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto. The provisions of this Article are solely for the
benefit of the Administrative Agent, the Lenders and the L/C Issuer (other than
with respect to the consent rights provided to the Borrowers in Section 9.06),
and neither the Borrowers nor any other Loan Party shall have rights as a third
party beneficiary of any of such provisions. It is understood and agreed that
the use of the term “agent” herein or in any other Loan Documents (or any other
similar term) with reference to the Administrative Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable Law. Instead such term is used as a matter of
market custom, and is intended to create or reflect only an administrative
relationship between contracting parties.
9.02    Rights as a Lender.
The Person serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent and the term
“Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the
context otherwise requires, include the Person serving as the Administrative
Agent hereunder in its individual capacity. Such Person and its Affiliates may
accept deposits from, lend money to, own securities of, act as the financial
advisor or in any other advisory capacity for and generally engage in any kind
of business with the Borrowers or any Subsidiary or other Affiliate thereof as
if such Person were not the Administrative Agent hereunder and without any duty
to account therefor to the Lenders.
9.03    Exculpatory Provisions.
The Administrative Agent shall not have any duties or obligations except those
expressly set forth herein and in the other Loan Documents, and its duties
hereunder shall be administrative in nature. Without limiting the generality of
the foregoing, the Administrative Agent:
(h)    shall not be subject to any fiduciary or other implied duties, regardless
of whether a Default has occurred and is continuing;

- 124 -

--------------------------------------------------------------------------------

(i)    shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents), provided that the Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Administrative Agent to liability or that is
contrary to any Loan Document or applicable Law, including for the avoidance of
doubt any action that may be in violation of the automatic stay under any Debtor
Relief Law or that may effect a forfeiture, modification or termination of
property of a Defaulting Lender in violation of any Debtor Relief Law; and
(j)    shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrowers or any of their Affiliates
that is communicated to or obtained by the Person serving as 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 (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of
its own gross negligence or willful misconduct as determined by a court of
competent jurisdiction by final and nonappealable judgment. The Administrative
Agent shall be deemed not to have knowledge of any Default unless and until
notice describing such Default is given to the Administrative Agent by the
Borrowers, a Lender or the L/C Issuer.
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 this Agreement or any other 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 or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document, or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.
9.04    Reliance by Administrative Agent.

- 125 -

--------------------------------------------------------------------------------

The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by the
proper Person. The Administrative Agent also may rely upon any statement made to
it orally or by telephone and believed by it to have been made by the proper
Person, and shall not incur any liability for relying thereon. In determining
compliance with any condition hereunder to the making of a Loan, or the issuance
of a Letter of Credit, that by its terms must be fulfilled to the satisfaction
of a Lender or the L/C Issuer, the Administrative Agent may presume that such
condition is satisfactory to such Lender or the L/C Issuer unless the
Administrative Agent shall have received notice to the contrary from such Lender
or the L/C Issuer prior to the making of such Loan or the issuance, extension,
renewal or increase of such Letter of Credit. The Administrative Agent may
consult with legal counsel (who may be counsel for the Borrowers), independent
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 any such
counsel, accountants or experts.
9.05    Delegation of Duties.
The Administrative Agent may perform any and all of its duties and exercise its
rights and powers hereunder or under any other Loan Document 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 by or through their respective Related Parties. The
exculpatory provisions of this Article shall apply to any such sub-agent and to
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. The Administrative Agent shall not be responsible for the
negligence or misconduct of any sub-agents except to the extent that a court of
competent jurisdiction determines in a final and non appealable judgment that
the Administrative Agent acted with gross negligence or willful misconduct in
the selection of such sub-agents.
9.06    Resignation of Administrative Agent.
(h)    The Administrative Agent may at any time give notice of its resignation
to the Lenders, the L/C Issuer and the Administrative Borrower. Upon receipt of
any such notice of resignation, the Required Lenders shall have the right, in
consultation with the Borrowers, to appoint a successor, which shall be a bank
with an office in the United States, or an Affiliate of any such bank with an
office in the United States. If no such successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation (or such
earlier day as shall be agreed by the Required Lenders) (the “Resignation

- 126 -

--------------------------------------------------------------------------------

Effective Date”), then the retiring Administrative Agent may (but shall not be
obligated to) on behalf of the Lenders and the L/C Issuer, appoint a successor
Administrative Agent meeting the qualifications set forth above. Whether or not
a successor has been appointed, such resignation shall become effective in
accordance with such notice on the Resignation Effective Date.
(i)    If the Person serving as Administrative Agent is a Defaulting Lender
pursuant to clause (d) of the definition thereof, the Required Lenders may, to
the extent permitted by applicable Law, by notice in writing to the
Administrative Borrower and such Person remove such Person as Administrative
Agent and, in consultation with the Borrowers, appoint a successor. If no such
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days (or such earlier day as shall be agreed
by the Required Lenders) (the “Removal Effective Date”), then such removal shall
nonetheless become effective in accordance with such notice on the Removal
Effective Date.
(j)    With effect from the Resignation Effective Date or the Removal Effective
Date (as applicable) (1) the retiring or removed Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents and (2) except for any indemnity payments or other amounts then owed
to the retiring or removed Administrative Agent, all payments, communications
and determinations provided to be made by, to or through the Administrative
Agent shall instead be made by or to each Lender and the L/C Issuer directly,
until such time, if any, as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section. Upon the acceptance
of a successor’s appointment as Administrative Agent hereunder, such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring (or removed) Administrative Agent (other than as
provided in Section 3.01(g) and other than any rights to indemnity payments or
other amounts owed to the retiring or removed Administrative Agent as of the
Resignation Effective Date or the Removal Effective Date, as applicable), and
the retiring or removed Administrative Agent shall be discharged from all of its
duties and obligations hereunder or under the other Loan Documents (if not
already discharged therefrom as provided above in this Section). The fees
payable by the Borrowers to a successor Administrative Agent shall be the same
as those payable to its predecessor unless otherwise agreed between the
Borrowers and such successor. After the retiring or removed Administrative
Agent’s resignation or removal hereunder and under the other Loan Documents, the
provisions of this Article and Section 10.04 shall continue in effect for the
benefit of such retiring or removed Administrative Agent, its sub agents and
their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while the retiring or removed Administrative Agent was
acting as Administrative Agent.

- 127 -

--------------------------------------------------------------------------------

(k)    Any resignation by KeyBank as Administrative Agent pursuant to this
Section shall also constitute its resignation as L/C Issuer and Swing Line
Lender. If KeyBank resigns as an L/C Issuer, it shall retain all the rights,
powers, privileges and duties of the L/C Issuer hereunder with respect to all
Letters of Credit outstanding as of the effective date of its resignation as L/C
Issuer and all L/C Obligations with respect thereto, including the right to
require the Lenders to make Base Rate Loans or fund risk participations in
Unreimbursed Amounts pursuant to Section 2.03(c). If KeyBank resigns as Swing
Line Lender, it shall retain all the rights of the Swing Line Lender provided
for hereunder with respect to Swing Line Loans made by it and outstanding as of
the effective date of such resignation, including the right to require the
Lenders to make Base Rate Loans or fund risk participations in outstanding Swing
Line Loans pursuant to Section 2.04(c). Upon the appointment by the Borrowers of
a successor L/C Issuer or Swing Line Lender hereunder (which successor shall in
all cases be a Lender other than a Defaulting Lender), (a) such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring L/C Issuer or Swing Line Lender, as applicable, (b) the
retiring L/C Issuer and Swing Line Lender shall be discharged from all of their
respective duties and obligations hereunder or under the other Loan Documents,
and (c) the successor L/C Issuer shall issue letters of credit in substitution
for the Letters of Credit, if any, outstanding at the time of such succession or
make other arrangements satisfactory to KeyBank to effectively assume the
obligations of KeyBank with respect to such Letters of Credit.
9.07    Non Reliance on Administrative Agent and Other Lenders.
Each Lender and the L/C Issuer acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender or any of
their Related Parties 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 Lender and the L/C Issuer also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.
9.08    No Other Duties, Etc.
Anything herein to the contrary notwithstanding, none of the Book Managers or
Arrangers listed on the cover page hereof shall have any powers, duties or
responsibilities under this Agreement or any of the other Loan Documents, except
in its capacity, as applicable, as the Administrative Agent, a Lender or the L/C
Issuer hereunder.

- 128 -

--------------------------------------------------------------------------------

9.09    Administrative Agent May File Proofs of Claim.
In case of the pendency of any proceeding under any Debtor Relief Law or any
other judicial proceeding relative to any Loan Party, the Administrative Agent
(irrespective of whether the principal of any Loan or L/C Obligation shall then
be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the Borrowers) shall be entitled and empowered, by intervention in such
proceeding or otherwise
(a)    to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders, the L/C
Issuer and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders, the L/C
Issuer and the Administrative Agent and their respective agents and counsel and
all other amounts due the Lenders, the L/C Issuer and the Administrative Agent
under Sections 2.03(h) and (i) and 2.09) allowed in such judicial proceeding;
and
(b)    to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the L/C Issuer to make such payments to the Administrative Agent
and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders and the L/C Issuer, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and
counsel, and any other amounts due the Administrative Agent under Section 2.09.
Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender or the L/C
Issuer any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or the L/C Issuer to
authorize the Administrative Agent to vote in respect of the claim of any Lender
or the L/C Issuer in any such proceeding.
9.10    Guaranty Matters.
Each of the Lenders and the L/C Issuer irrevocably authorize the Administrative
Agent, at its option and in its discretion, to release any Guarantor from its
obligations under the Guaranty if such Person ceases to be a Subsidiary as a
result of a transaction permitted hereunder.

- 129 -

--------------------------------------------------------------------------------

Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Guaranty pursuant to this Section
9.10. In each case as specified in this Section 9.10, the Administrative Agent
will, at the Borrowers’ expense, execute and deliver to the applicable Loan
Party such documents as such Loan Party may reasonably request to evidence the
release of such Guarantor from its obligations under the Guaranty, in each case
in accordance with the terms of the Loan Documents and this Section 9.10.
9.11    Lender Reply Period.
All communications from Administrative Agent to Lenders requesting Lenders’
determination, consent or approval (i) shall be given in the form of a written
notice to each Lender, (ii) shall be accompanied by a description of the matter
as to which such determination, consent or approval is requested, (iii) shall
include a legend substantially as follows, printed in capital letters or
boldface type:
“THIS COMMUNICATION REQUIRES IMMEDIATE RESPONSE. FAILURE TO RESPOND WITHIN TEN
(10) BUSINESS DAYS AFTER THE DELIVERY OF THIS COMMUNICATION SHALL CONSTITUTE A
DEEMED APPROVAL BY THE ADDRESSEE OF THE MATTER DESCRIBED ABOVE.”
and (iv) shall include Administrative Agent’s recommended course of action or
determination in respect thereof. Each Lender shall reply promptly to any such
request, but in any event within ten (10) Business Days after the delivery of
such request by Administrative Agent (the “Lender Reply Period”). Unless a
Lender shall give written notice to Administrative Agent that it objects to the
recommendation or determination of Administrative Agent (together with a written
explanation of the reasons behind such objection) within the Lender Reply
Period, such Lender shall be deemed to have approved of or consented to such
recommendation or determination. With respect to decisions requiring the
approval of the Required Lenders or all Lenders, Administrative Agent shall
timely submit any required written notices to all Lenders and upon receiving the
required approval or consent shall follow the course of action or determination
recommended by Administrative Agent or such other course of action recommended
by the Required Lenders or all of the Lenders, as the case may be, and each
non-responding Lender shall be deemed to have concurred with such recommended
course of action. Notwithstanding the foregoing, the provision contained herein
for deemed approval shall not apply to a request for approval of any of the
matters listed in Section 10.01(a)-(f).

- 130 -

--------------------------------------------------------------------------------

ARTICLE X    
MISCELLANEOUS
10.01    Amendments, Etc.
No amendment or waiver of any provision of this Agreement or any other Loan
Document, and no consent to any departure by the Borrowers or any other Loan
Party therefrom, shall be effective unless in writing signed by the Required
Lenders and the Borrowers or the applicable Loan Party, as the case may be, and
acknowledged by the Administrative Agent, and each such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no such amendment, waiver or consent shall:
(c)    extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 8.02) without the written consent of
such Lender;
(d)    postpone any date fixed by this Agreement or any other Loan Document for
any payment of principal, interest, fees or other amounts due to the Lenders (or
any of them) hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby;
(e)    reduce the principal of, or the rate of interest specified herein on, any
Loan or L/C Borrowing, or (subject to clause (v) of the second proviso to this
Section 10.01) any fees or other amounts payable hereunder or under any other
Loan Document, or change the manner of computation of any financial ratio
(including any change in any applicable defined term) used in determining the
Applicable Rate that would result in a reduction of any interest rate on any
Loan or any fee payable hereunder without the written consent of each Lender
directly affected thereby; provided, however, that only the consent of the
Required Lenders shall be necessary to amend the definition of “Default Rate” or
to waive any obligation of the Borrowers to pay interest or Letter of Credit
Fees at the Default Rate;
(f)    change Section 8.03 in a manner that would alter the pro rata sharing of
payments required thereby without the written consent of each Lender;
(g)    change any provision of this Section or the definition of “Required
Lenders” or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender; or
(h)    release all or substantially all of the value of the Guarantees given by
the Guarantors without the written consent of each Lender;

- 131 -

--------------------------------------------------------------------------------

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Issuer
Document relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and signed by the Swing
Line Lender in addition to the Lenders required above, affect the rights or
duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver
or consent shall, unless in writing and signed by the Administrative Agent in
addition to the Lenders required above, affect the rights or duties of the
Administrative Agent under this Agreement or any other Loan Document; (iv)
Section 10.06(f) may not be amended, waived or otherwise modified without the
consent of each Granting Lender all or any part of whose Loans are being funded
by an SPC at the time of such amendment, waiver or other modification; and (v)
the Fee Letter may be amended, or rights or privileges thereunder waived, in a
writing executed only by the parties thereto. Notwithstanding anything to the
contrary herein, no Defaulting Lender shall have any right to approve or
disapprove any amendment, waiver or consent hereunder, (and any amendment,
waiver or consent which by its terms requires the consent of all Lenders or each
affected Lender may be effected with the consent of the applicable Lenders other
than Defaulting Lenders), except that (x) the Commitment of any Defaulting
Lender may not be increased or extended without the consent of such Lender and
(y) any waiver, amendment or modification requiring the consent of all Lenders
or each affected Lender that by its terms affects any Defaulting Lender
disproportionately adversely relative to other affected Lenders shall require
the consent of such Defaulting Lender.
10.02    Notices; Effectiveness; Electronic Communication.
(k)    Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
subsection (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by facsimile as follows, and all
notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:
(i)    if to the Borrowers, the Administrative Agent, the L/C Issuer or the
Swing Line Lender, to the address, facsimile number, electronic mail address or
telephone number specified for such Person on Schedule 10.02; and
(ii)    if to any other Lender, to the address, facsimile number, electronic
mail address or telephone number specified in its Administrative Questionnaire
including, as appropriate, notices delivered solely to the Person designated by
a Lender on its Administrative Questionnaire then in effect for the delivery of
notices that may contain material non-public information relating to the
Borrowers).

- 132 -

--------------------------------------------------------------------------------

Notices and other communications sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices and other communications sent by facsimile shall be deemed to
have been given when sent (except that, if not given during normal business
hours for the recipient, shall be deemed to have been given at the opening of
business on the next Business Day for the recipient). Notices and other
communications delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).
(l)    Electronic Communications. Notices and other communications to the
Lenders and the L/C Issuer hereunder may be delivered or furnished by electronic
communication (including e‑mail and Internet or intranet websites) pursuant to
procedures approved by the Administrative Agent, provided that the foregoing
shall not apply to notices to any Lender or the L/C Issuer pursuant to Article
II if such Lender or the L/C Issuer, as applicable, has notified the
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication. The Administrative Agent, the Swing Line
Lender, the L/C Issuer or any Borrower each may, in its discretion, agree to
accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that approval of
such procedures may be limited to particular notices or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e‑mail or other
written acknowledgement), and (ii) notices or communications posted to an
Internet or intranet website shall be deemed received upon the deemed receipt by
the intended recipient at its e‑mail address as described in the foregoing
clause (i) of notification that such notice or communication is available and
identifying the website address therefor; provided that, for both clauses (i)
and (ii), if such notice, email or other communication is not sent during the
normal business hours of the recipient, such notice, email or communication
shall be deemed to have been sent at the opening of business on the next
business day for the recipient.
(m)    The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE
AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF
THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT
PARTY IN

- 133 -

--------------------------------------------------------------------------------

CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the
Administrative Agent or any of its Related Parties (individually an "Agent Party
and collectively, the “Agent Parties”) have any liability to the Borrowers, any
Lender, the L/C Issuer or any other Person for losses, claims, damages,
liabilities or expenses of any kind (whether in tort, contract or otherwise)
arising out of the Borrowers’, any Loan Party’s or the Administrative Agent’s
transmission of Borrower Materials or notices through the Platform, any other
electronic platform or electronic messaging service or through the Internet,
except to the extent that such losses, claims, damages, liabilities or expenses
are determined by a court of competent jurisdiction by a final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Agent Party; provided, however, that in no event shall any Agent Party have
any liability to the Borrowers, any Lender, the L/C Issuer or any other Person
for indirect, special, incidental, consequential or punitive damages (as opposed
to direct or actual damages).
(n)    Change of Address, Etc. Each of the Borrowers, the Administrative Agent,
the L/C Issuer and the Swing Line Lender may change its address, facsimile or
telephone number for notices and other communications hereunder by notice to the
other parties hereto. Each other Lender may change its address, facsimile or
telephone number for notices and other communications hereunder by notice to the
Borrowers, the Administrative Agent, the L/C Issuer and the Swing Line Lender.
In addition, each Lender agrees to notify the Administrative Agent from time to
time to ensure that the Administrative Agent has on record (i) an effective
address, contact name, telephone number, facsimile number and electronic mail
address to which notices and other communications may be sent and (ii) accurate
wire instructions for such Lender. Furthermore, each Public Lender agrees to
cause at least one individual at or on behalf of such Public Lender to at all
times have selected the “Private Side Information” or similar designation on the
content declaration screen of the Platform in order to enable such Public Lender
or its delegate, in accordance with such Public Lender’s compliance procedures
and applicable Law, including United States Federal and state securities Laws,
to make reference to Borrower Materials that are not made available through the
“Public Side Information” portion of the Platform and that may contain material
non-public information with respect to the Borrowers or their securities for
purposes of United States Federal or state securities laws.
(o)    Reliance by Administrative Agent, L/C Issuer and Lenders. The
Administrative Agent, the L/C Issuer and the Lenders shall be entitled to rely
and act upon any notices (including telephonic or electronic Committed Loan
Notices, Letter of Credit Applications and Swing Line Loan Notices) purportedly
given by or on behalf of the Borrowers even if (i) such notices were not made in
a manner specified herein, were incomplete or were not preceded or followed by
any other form of notice specified herein, or (ii) the terms thereof, as
understood by the recipient, varied from any confirmation thereof.

- 134 -

--------------------------------------------------------------------------------

The Borrowers shall indemnify the Administrative Agent, the L/C Issuer, each
Lender and the Related Parties of each of them from all losses, costs, expenses
and liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrowers. All telephonic notices to
and other telephonic communications with the Administrative Agent may be
recorded by the Administrative Agent, and each of the parties hereto hereby
consents to such recording.
10.03    No Waiver; Cumulative Remedies; Enforcement.
No failure by any Lender or the Administrative Agent to exercise, and no delay
by any such Person in exercising, any right, remedy, power or privilege
hereunder or any other Loan Document shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided, and provided under each other Loan Document, are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
Notwithstanding anything to the contrary contained herein or in any other Loan
Document, the authority to enforce rights and remedies hereunder and under the
other Loan Documents against the Loan Parties or any of them shall be vested
exclusively in, and all actions and proceedings at law in connection with such
enforcement shall be instituted and maintained exclusively by, the
Administrative Agent in accordance with Section 8.02 for the benefit of all the
Lenders and the L/C Issuer; provided, however, that the foregoing shall not
prohibit (a) the Administrative Agent from exercising on its own behalf the
rights and remedies that inure to its benefit (solely in its capacities as
Administrative Agent) hereunder and under the other Loan Documents, (b) the L/C
Issuer or the Swing Line Lender from exercising the rights and remedies that
inure to its benefit (solely in its capacity as L/C Issuer or Swing Line Lender,
as the case may be) hereunder and under the other Loan Documents, (c) any Lender
from exercising set-off rights in accordance with Section 10.08 (subject to the
terms of Section 2.13), or (d) any Lender from filing proofs of claim or
appearing and filing pleadings on its own behalf during the pendency of a
proceeding relative to any Loan Party under any Debtor Relief Law; and provided,
further, that if at any time there is no Person acting as Administrative Agent
hereunder and under the other Loan Documents, then (i) the Required Lenders
shall have the rights otherwise ascribed to the Administrative Agent pursuant to
Section 8.02 and (ii) in addition to the matters set forth in clauses (b), (c)
and (d) of the preceding proviso and subject to Section 2.13, any Lender may,
with the consent of the Required Lenders, enforce any rights and remedies
available to it and as authorized by the Required Lenders.
10.04    Expenses; Indemnity; Damage Waiver.

- 135 -

--------------------------------------------------------------------------------

(f)    Costs and Expenses. The Borrowers shall pay (i) all reasonable out of
pocket expenses incurred by the Administrative Agent and its Affiliates
(including the reasonable fees, charges and disbursements of counsel for and
consultants to the Administrative Agent), in connection with the syndication of
the credit facilities provided for herein, the preparation, negotiation,
execution, delivery and administration of this Agreement and the other Loan
Documents or any amendments, modifications or waivers of the provisions hereof
or thereof (whether or not the transactions contemplated hereby or thereby shall
be consummated), (ii) all reasonable out‑of‑pocket expenses incurred by the L/C
Issuer in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all out of
pocket expenses incurred by the Administrative Agent, any Lender or the L/C
Issuer (including the fees, charges and disbursements of any counsel for and
consultants to the Administrative Agent, any Lender or the L/C Issuer), in
connection with the enforcement or protection of its rights (A) in connection
with this Agreement and the other Loan Documents, including its rights under
this Section, or (B) in connection with the Loans made or Letters of Credit
issued hereunder, including all such out of pocket expenses incurred during any
bankruptcy, workout, restructuring or negotiations in respect of such Loans or
Letters of Credit.
(g)    Indemnification by the Borrowers. The Borrowers shall indemnify the
Administrative Agent (and any sub‑agent thereof), each Lender and the L/C
Issuer, and each Related Party of any of the foregoing Persons (each such Person
being called an “Indemnitee”) against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses (including
the fees, charges and disbursements of any counsel for any Indemnitee), incurred
by any Indemnitee or asserted against any Indemnitee by any Person (including
the Borrowers or any other Loan Party) other than such Indemnitee and its
Related Parties arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder, the
consummation of the transactions contemplated hereby or thereby, or, in the case
of the Administrative Agent (and any sub agent thereof) and its Related Parties
only, the administration of this Agreement and the other Loan Documents
(including in respect of any matters addressed in Section 3.01), (ii) any Loan
or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the L/C Issuer to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence or release of Hazardous Materials on or from any property
owned or operated by the Borrowers or any of their Subsidiaries, or any
Environmental Liability related in any way to the Borrowers or any of their
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding

- 136 -

--------------------------------------------------------------------------------

relating to any of the foregoing, whether based on contract, tort or any other
theory, whether brought by a third party or by the Borrowers or any other Loan
Party, and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or (y) result from a claim brought by any Borrower or any other
Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s
obligations hereunder or under any other Loan Document, if such Borrower or such
Loan Party has obtained a final and nonappealable judgment in its favor on such
claim as determined by a court of competent jurisdiction. Without limiting the
provisions of Section 3.01(c), this Section 10.04(b) shall not apply with
respect to Taxes other than any Taxes that represent losses, claims, damages,
etc. arising from any non-Tax claim.
(h)    Reimbursement by Lenders. To the extent that the Borrowers for any reason
fail to indefeasibly pay any amount required under subsection (a) or (b) of this
Section to be paid by the Borrowers to the Administrative Agent (or any
sub‑agent thereof), the L/C Issuer, the Swing Line Lender or any Related Party
of any of the foregoing, each Lender severally agrees to pay to the
Administrative Agent (or any such sub‑agent), the L/C Issuer, the Swing Line
Lender or such Related Party, as the case may be, such Lender’s Applicable
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount, provided, further that,
the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent), the L/C Issuer or the Swing Line
Lender in its capacity as such, or against any Related Party of any of the
foregoing acting for the Administrative Agent (or any such sub-agent), the L/C
Issuer or Swing Line Lender in connection with such capacity. The obligations of
the Lenders under this subsection (c) are subject to the provisions of Section
2.12(d).
(i)    Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable Law, the Borrowers shall not assert, and hereby waive, and
acknowledge that no other Person shall have, any claim against any Indemnitee,
on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby, the transactions contemplated
hereby or thereby, any Loan or Letter of Credit or the use of the proceeds
thereof. No Indemnitee referred to in subsection (b) above shall be liable for
any damages arising from the use by unintended recipients of any information or
other materials distributed to such unintended recipients by such Indemnitee
through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Loan Documents or

- 137 -

--------------------------------------------------------------------------------

the transactions contemplated hereby or thereby other than for direct or actual
damages resulting from the gross negligence or willful misconduct of such
Indemnitee as determined by a final and nonappealable judgment of a court of
competent jurisdiction.
(j)    Payments. All amounts due under this Section shall be payable not later
than ten Business Days after demand therefor.
(k)    Survival. The agreements in this Section and the indemnity provisions of
Section 10.02(e) shall survive the resignation of the Administrative Agent, the
L/C Issuer and the Swing Line Lender, the replacement of any Lender, the
termination of the Aggregate Commitments and the repayment, satisfaction or
discharge of all the other Obligations.
10.05    Payments Set Aside.
To the extent that any payment by or on behalf of the Borrowers is made to the
Administrative Agent, the L/C Issuer or any Lender, or the Administrative Agent,
the L/C Issuer or any Lender exercises its right of set-off, and such payment or
the proceeds of such set-off or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including
pursuant to any settlement entered into by the Administrative Agent, the L/C
Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or
any other party, in connection with any proceeding under any Debtor Relief Law
or otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such set-off had
not occurred, and (b) each Lender and the L/C Issuer severally agrees to pay to
the Administrative Agent upon demand its applicable share (without duplication)
of any amount so recovered from or repaid by the Administrative Agent, plus
interest thereon from the date of such demand to the date such payment is made
at a rate per annum equal to the Federal Funds Rate from time to time in effect.
The obligations of the Lenders and the L/C Issuer under clause (b) of the
preceding sentence shall survive the payment in full of the Obligations and the
termination of this Agreement.
10.06    Successors and Assigns.
(g)    Successors and Assigns Generally. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that neither the
Borrowers nor any other Loan Party may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of the
Administrative Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an assignee in
accordance with Section 10.06(b), (ii) by way of participation in accordance
with the provisions of Section 10.06(d), (iii) by way of pledge or assignment of
a security interest subject to the restrictions of Section 10.06(f), or (iv) to
an SPC in accordance with the

- 138 -

--------------------------------------------------------------------------------

provisions of Section 10.06(h) (and any other attempted assignment or transfer
by any party hereto 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,
Participants to the extent provided in subsection (d) of this Section and, to
the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the L/C Issuer and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
(h)    Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment(s) and the Loans (including for
purposes of this Section 10.06(b), participations in L/C Obligations and in
Swing Line Loans) at the time owing to it); provided that any such assignment
shall be subject to the following conditions:
(i)    Minimum Amounts.
(A)    in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitment and/or the Loans at the time owing to it or
contemporaneous assignments to related Approved Funds that equal at least the
amount specified in paragraph (b)(i)(B) of this Section in the aggregate or in
the case of an assignment to a Lender, an Affiliate of a Lender or an Approved
Fund, no minimum amount need be assigned; and
(B)    in any case not described in subsection (b)(i)(A) of this Section, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning Lender subject to
each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $5,000,000 unless each of the Administrative Agent
and, so long as no Event of Default has occurred and is continuing, the
Borrowers otherwise consent (each such consent not to be unreasonably withheld
or delayed); provided, however, that concurrent assignments to members of an
Assignee Group and concurrent assignments from members of an Assignee Group to a
single Eligible Assignee (or to an Eligible Assignee and members of its Assignee
Group) will be treated as a single assignment for purposes of determining
whether such minimum amount has been met.

- 139 -

--------------------------------------------------------------------------------

(ii)    Proportionate Amount. 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 Loans or the Commitment
assigned, except that this clause (ii) shall not apply to the Swing Line
Lender’s rights and obligations in respect of Swing Line Loans;
(iii)    Required Consents. No consent shall be required for any assignment
except to the extent required by subsection (b)(i)(B) of this Section and, in
addition:
(A)    the consent of Potlatch (such consent not to be unreasonably withheld or
delayed) shall be required unless (1) an Event of Default has occurred and is
continuing at the time of such assignment or (2) such assignment is to a Lender,
an Affiliate of a Lender or an Approved Fund; provided that Potlatch shall be
deemed to have consented to any such assignment unless it shall object thereto
by written notice to the Administrative Agent within five (5) Business Days
after having received notice thereof;
(B)    the consent of the Administrative Agent (such consent not to be
unreasonably withheld or delayed) shall be required for assignments to a Person
that is not a Lender with a Commitment in respect of the Committed Loans, an
Affiliate of such Lender or an Approved Fund with respect to such Lender;
(C)    the consent of the L/C Issuer (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment in respect of the
Committed Loans; and
(D)    the consent of the Swing Line Lender (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment in respect of the
Committed Loans.
(iv)    Assignment and Assumption. The parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption, together
with a processing and recordation fee in the amount of $3,500; provided,
however, that the Administrative Agent may, in its sole discretion, elect to
waive such processing and recordation fee in the case of any assignment. The
assignee, if it is not a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.

- 140 -

--------------------------------------------------------------------------------

(v)    No Assignment to Certain Persons. No such assignment shall be made to (A)
the Borrowers or any of the Borrowers’ Affiliates or Subsidiaries, (B) to any
Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a
Lender hereunder, would constitute any of the foregoing Persons described in
this clause (B), or (C) to a natural Person.
(vi)    Certain Additional Payments. In connection with any assignment of rights
and obligations of any Defaulting Lender hereunder, no such assignment shall be
effective unless and until, in addition to the other conditions thereto set
forth herein, the parties to the assignment shall make such additional payments
to the Administrative Agent in an aggregate amount sufficient, upon distribution
thereof as appropriate (which may be outright payment, purchases by the assignee
of participations or subparticipations, or other compensating actions, including
funding, with the consent of Potlatch and the Administrative Agent, the
applicable pro rata share of Loans previously requested but not funded by the
Defaulting Lender, to each of which the applicable assignee and assignor hereby
irrevocably consent), to (x) pay and satisfy in full all payment liabilities
then owed by such Defaulting Lender to the Administrative Agent, the L/C Issuer
or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund
as appropriate) its full pro rata share of all Loans and participations in
Letters of Credit and Swing Line Loans in accordance with its Applicable
Percentage. Notwithstanding the foregoing, in the event that any assignment of
rights and obligations of any Defaulting Lender hereunder shall become effective
under applicable Law without compliance with the provisions of this paragraph,
then the assignee of such interest shall be deemed to be a Defaulting Lender for
all purposes of this Agreement until such compliance occurs.
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, 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 Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption 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 3.01, 3.04, 3.05, and 10.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment; provided, that except to the extent otherwise expressly agreed by
the affected parties, no assignment by a Defaulting Lender will constitute a
waiver or release of any claim of any party hereunder arising from that Lender’s
having been a Defaulting Lender. Upon request, the Borrowers (at their expense)
shall execute and

- 141 -

--------------------------------------------------------------------------------

deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection 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
subsection (d) of this Section.
(i)    Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrowers (and such agency being solely for tax purposes), shall
maintain at the Administrative Agent’s Office a copy of each Assignment and
Assumption delivered to it (or the equivalent thereof in electronic form) and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts (and stated interest) of the Loans and L/C
Obligations owing to, each Lender pursuant to the terms hereof from time to time
(the “Register”). The entries in the Register shall be conclusive absent
manifest error, and the Borrowers, the Administrative Agent and the Lenders
shall 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. The
Register shall be available for inspection by each of the Borrowers and any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(j)    Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrowers or the Administrative Agent, sell participations to any
Person (other than a natural Person, a Defaulting Lender or any Borrower or any
of the Borrowers’ Affiliates or Subsidiaries) (each, a “Participant”) in all or
a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans (including such
Lender’s participations in L/C Obligations and/or Swing Line Loans) owing to
it); 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 such obligations and (iii) the Borrowers,
the Administrative Agent, the Lenders and the L/C Issuer shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. For the avoidance of doubt, each Lender shall
be responsible for the indemnity under Section 10.04(c) without regard to the
existence of any participation.
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 to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide (A) that such Lender will not, without the consent of the Participant,
agree to any amendment, waiver or other modification described in the first
proviso to Section 10.01 that affects such Participant and (B) solely in the
case of a bank that is a member of the Farm Credit System that (x) has purchased
a participation interest in the minimum amount of $3,000,000 in such Lender’s
Commitment on or after the Closing Date and (y) is, by written notice

- 142 -

--------------------------------------------------------------------------------

(“Voting Participant Notification”), designated by such Lender to the
Administrative Borrower and the Administrative Agent as being entitled to be
accorded the rights of a Voting Participant hereunder (any bank that is a member
of the Farm Credit System so designated being called a “Voting Participant”),
that such Voting Participant shall be entitled to vote (and the voting rights of
such Lender shall be correspondingly reduced), on a Dollar for Dollar basis, as
if such Voting Participant were a Lender on any matter requiring or allowing a
Lender to provide or withhold its consent or to otherwise vote on any proposed
action. To be effective, each Voting Participant Notification shall, with
respect to such Voting Participant, (1) state the full legal name of such Voting
Participant, as well as all contact information required of a Lender as set
forth in Section 10.02(a)(ii) and (2) state the Dollar amount of participation
interest purchased. Notwithstanding the above, the Administrative Agent
acknowledges the participations noted on Schedule 2.01 as of the Closing Date
and no Voting Participation Notification shall be required with respect to such
participations.
Subject to subsection (e) of this Section, the Borrowers agree that each
Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to subsection (b) of this Section; provided that such
Participant (A) agrees to be subject to the provisions of Sections 3.06 and
10.13 as if it were an assignee under paragraph (b) of this Section and (B)
shall not be entitled to receive any greater payment under Sections 3.01 or
3.04, with respect to any participation, than the Lender from whom it acquired
the applicable participation would have been entitled to receive, except to the
extent such entitlement to receive a greater payment results from a Change in
Law that occurs after the Participant acquired the applicable participation.
Each Lender that sells a participation agrees, at the Borrowers’ request and
expense, to use reasonable efforts to cooperate with the Borrowers to effectuate
the provisions of Section 3.06 with respect to any Participant. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 10.08 as though it were a Lender; provided that such Participant agrees
to be subject to Section 2.13 as though it were a Lender. Each Lender that sells
a participation shall, acting solely for this purpose as an agent of the
Borrowers, maintain a register on which it enters the name and address of each
Participant and the principal amounts (and stated interest) of each
Participant’s interest in the Loans or other obligations under the Loan
Documents (the “Participant Register”); provided that no Lender shall have any
obligation to disclose all or any portion of the Participant Register (including
the identity of any Participant or any information relating to a Participant’s
interest in any commitments, loans, letters of credit or its other obligations
under any Loan Document) to any Person except to the extent that such disclosure
is necessary to establish that such commitment, loan, letter of credit or other
obligation is in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations. The entries in the Participant Register shall be
conclusive absent manifest error, and such Lender shall treat each Person whose
name is recorded in the Participant Register as the owner of such participation
for all purposes of this Agreement notwithstanding any notice to the contrary.
For the

- 143 -

--------------------------------------------------------------------------------

avoidance of doubt, the Administrative Agent (in its capacity as Administrative
Agent) shall have no responsibility for maintaining a Participant Register.
(k)    Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
(l)    Special Purpose Funding Vehicles. Notwithstanding anything to the
contrary contained herein, any Lender (a “Granting Lender”) may grant to a
special purpose funding vehicle identified as such in writing from time to time
by the Granting Lender to the Administrative Agent and the Borrowers (an “SPC”)
the option to provide all or any part of any Committed Loan that such Granting
Lender would otherwise be obligated to make pursuant to this Agreement; provided
that (i) nothing herein shall constitute a commitment by any SPC to fund any
Committed Loan, and (ii) if an SPC elects not to exercise such option or
otherwise fails to make all or any part of such Committed Loan, the Granting
Lender shall be obligated to make such Committed Loan pursuant to the terms
hereof or, if it fails to do so, to make such payment to the Administrative
Agent as is required under Section 2.12(b)(ii). Each party hereto hereby agrees
that (i) neither the grant to any SPC nor the exercise by any SPC of such option
shall increase the costs or expenses or otherwise increase or change the
obligations of the Borrowers under this Agreement (including its obligations
under Section 3.04), (ii) no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement for which a Lender would be liable, and
(iii) the Granting Lender shall for all purposes, including the approval of any
amendment, waiver or other modification of any provision of any Loan Document,
remain the lender of record hereunder. The making of a Committed Loan by an SPC
hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Committed Loan were made by such Granting Lender. In
furtherance of the foregoing, each party hereto hereby agrees (which agreement
shall survive the termination of this Agreement) that, prior to the date that is
one year and one day after the payment in full of all outstanding commercial
paper or other senior debt of any SPC, it will not institute against, or join
any other Person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency, or liquidation proceeding under the
laws of the United States or any State thereof. Notwithstanding anything to the
contrary contained herein, any SPC may (i) with notice to, but without prior
consent of the Borrowers and the Administrative Agent and with the payment of a
processing fee in the amount of $3,500 (which processing fee may be waived by
the Administrative Agent at its sole discretion), assign all or any portion of
its right to receive payment with respect to any Committed Loan to the Granting
Lender and (ii) disclose

- 144 -

--------------------------------------------------------------------------------

on a confidential basis any non‑public information relating to its funding of
Committed Loans to any rating agency, commercial paper dealer or provider of any
surety or Guarantee or credit or liquidity enhancement to such SPC.
(m)    Resignation as L/C Issuer or Swing Line Lender after Assignment.
Notwithstanding anything to the contrary contained herein, if at any time
KeyBank assigns all of its Commitment and Loans pursuant to subsection (b)
above, KeyBank may, (i) upon 30 days’ notice to the Borrowers and the Lenders,
resign as L/C Issuer and/or (ii) upon 30 days’ notice to the Borrowers, resign
as Swing Line Lender. In the event of any such resignation as L/C Issuer or
Swing Line Lender, the Borrowers shall be entitled to appoint from among the
Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided,
however, that no failure by the Borrowers to appoint any such successor shall
affect the resignation of KeyBank as L/C Issuer or Swing Line Lender, as the
case may be. If KeyBank resigns as L/C Issuer, it shall retain all the rights,
powers, privileges and duties of the L/C Issuer hereunder with respect to all
Letters of Credit outstanding as of the effective date of its resignation as L/C
Issuer and all L/C Obligations with respect thereto (including the right to
require the Lenders to make Base Rate Committed Loans or fund risk
participations in Unreimbursed Amounts pursuant to Section 2.03(c)). If KeyBank
resigns as Swing Line Lender, it shall retain all the rights of the Swing Line
Lender provided for hereunder with respect to Swing Line Loans made by it and
outstanding as of the effective date of such resignation, including the right to
require the Lenders to make Base Rate Committed Loans or fund risk
participations in outstanding Swing Line Loans pursuant to Section 2.04(c). Upon
the appointment of a successor L/C Issuer and/or Swing Line Lender, (a) such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the
case may be, and (b) the successor L/C Issuer shall issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or make other arrangements satisfactory to KeyBank to effectively
assume the obligations of KeyBank with respect to such Letters of Credit.
10.07    Treatment of Certain Information; Confidentiality.
Each of the Administrative Agent, the Lenders and the L/C Issuer agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its Affiliates and to Related Parties (it
being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent required or requested by any
regulatory authority purporting to have jurisdiction over such Person or its
Related Parties (including any self regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable Laws or by any subpoena or similar legal process, and to the extent
practicable, with

- 145 -

--------------------------------------------------------------------------------

prompt notice to the Administrative Borrower (except with respect to any routine
or ordinary course audit or examination conducted by bank accountants or any
governmental or bank regulatory authority), (d) to any other party hereto, (e)
in connection with the exercise of any remedies hereunder or under any other
Loan Document or any action or proceeding relating to this Agreement or any
other Loan Document or the enforcement of rights hereunder or thereunder, (f)
subject to an agreement containing provisions substantially the same as those of
this Section, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement or (ii) any actual or prospective party (or its Related Parties) to
any swap, derivative or other transaction under which payments are to be made by
reference to the Borrowers and their obligations, this Agreement or payments
hereunder, (g) on a confidential basis to (i) any rating agency in connection
with rating the Borrowers or their Subsidiaries or the credit facilities
provided hereunder or (ii) the CUSIP Service Bureau or any similar agency in
connection with the issuance and monitoring of CUSIP numbers or other market
identifiers with respect to the credit facilities provided hereunder, (h) with
the consent of the Borrowers or (i) to the extent such Information (x) becomes
publicly available other than as a result of a breach of this Section or (y)
becomes available to the Administrative Agent, any Lender, the L/C Issuer or any
of their respective Affiliates on a nonconfidential basis from a source other
than the Borrowers.
For purposes of this Section, “Information” means all information received from
any Loan Party or any Subsidiary thereof relating to any Loan Party or any
Subsidiary thereof or any of their respective businesses, other than any such
information that is available to the Administrative Agent, any Lender or the L/C
Issuer on a nonconfidential basis prior to disclosure by any Loan Party or any
Subsidiary thereof, provided that, in the case of information received from a
Loan Party or any such Subsidiary after the date hereof, such information is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Information as provided 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 to its own confidential information.
Each of the Administrative Agent, the Lenders and the L/C Issuer acknowledges
that (a) the Information may include material non public information concerning
the Borrowers or a Subsidiary, as the case may be, (b) it has developed
compliance procedures regarding the use of material non public information and
(c) it will handle such material non public information in accordance with
applicable Law, including United States Federal and state securities Laws.
10.08    Right of Set-off.
If an Event of Default shall have occurred and be continuing, each Lender, the
L/C Issuer and each of their respective Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by applicable Law,
to set off and apply any and all deposits (general or

- 146 -

--------------------------------------------------------------------------------

special, time or demand, provisional or final, in whatever currency) at any time
held and other obligations (in whatever currency) at any time owing by such
Lender, the L/C Issuer or any such Affiliate to or for the credit or the account
of the Borrowers or any other Loan Party against any and all of the obligations
of the Borrowers or such Loan Party now or hereafter existing under this
Agreement or any other Loan Document to such Lender or the L/C Issuer or their
respective Affiliates, irrespective of whether or not such Lender, L/C Issuer or
Affiliate shall have made any demand under this Agreement or any other Loan
Document and although such obligations of the Borrowers or such Loan Party may
be contingent or unmatured or are owed to a branch, office or Affiliate of such
Lender or the L/C Issuer different from the branch, office or Affiliate holding
such deposit or obligated on such indebtedness; provided, that in the event that
any Defaulting Lender shall exercise any such right of setoff, (x) all amounts
so set off shall be paid over immediately to the Administrative Agent for
further application in accordance with the provisions of Section 2.18 and,
pending such payment, shall be segregated by such Defaulting Lender from its
other funds and deemed held in trust for the benefit of the Administrative
Agent, the L/C Issuer and the Lenders, and (y) the Defaulting Lender shall
provide promptly to the Administrative Agent a statement describing in
reasonable detail the Obligations owing to such Defaulting Lender as to which it
exercised such right of setoff. The rights of each Lender, the L/C Issuer and
their respective Affiliates under this Section are in addition to other rights
and remedies (including other rights of setoff) that such Lender, the L/C Issuer
or their respective Affiliates may have. Each Lender and the L/C Issuer agrees
to notify the Borrowers and the Administrative Agent promptly after any such
setoff and application, provided that the failure to give such notice shall not
affect the validity of such setoff and application.
10.09    Interest Rate Limitation.
Notwithstanding anything to the contrary contained in any Loan Document, the
interest paid or agreed to be paid under the Loan Documents shall not exceed the
maximum rate of non-usurious interest permitted by applicable Law (the “Maximum
Rate”). If the Administrative Agent or any Lender shall receive interest in an
amount that exceeds the Maximum Rate, the excess interest shall be applied to
the principal of the Loans or, if it exceeds such unpaid principal, refunded to
the Borrowers. In determining whether the interest contracted for, charged, or
received by the Administrative Agent or a Lender exceeds the Maximum Rate, such
Person may, to the extent permitted by applicable Law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather than
interest, (b) exclude voluntary prepayments and the effects thereof, and (c)
amortize, prorate, allocate, and spread in equal or unequal parts the total
amount of interest throughout the contemplated term of the Obligations
hereunder.
10.10    Counterparts; Integration; Effectiveness.

- 147 -

--------------------------------------------------------------------------------

This Agreement may be executed in counterparts (and by different parties hereto
in different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract. This Agreement,
the other Loan Documents, and any separate letter agreements with respect to
fees payable to the Administrative Agent or the L/C Issuer, constitute the
entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in Section 4.01, this
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto. Delivery of an executed counterpart of a signature
page of this Agreement by facsimile or other electronic imaging means (e.g.
“pdf” or “tif”) shall be effective as delivery of a manually executed
counterpart of this Agreement.
10.11    Survival of Representations and Warranties.
All representations and warranties made hereunder and in any other Loan Document
or other document delivered pursuant hereto or thereto or in connection herewith
or therewith shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
10.12    Severability.
If any provision of this Agreement or the other Loan Documents is held to be
illegal, invalid or unenforceable, (a) the legality, validity and enforceability
of the remaining provisions of this Agreement and the other Loan Documents shall
not be affected or impaired thereby and (b) the parties shall endeavor in good
faith negotiations to replace the illegal, invalid or unenforceable provisions
with valid provisions the economic effect of which comes as close as possible to
that of the illegal, invalid or unenforceable provisions. The invalidity of a
provision in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without limiting the
foregoing provisions of this Section 10.12, if and to the extent that the
enforceability of any provisions in this Agreement relating to Defaulting
Lenders shall be limited by Debtor Relief Laws, as determined in good faith by
the Administrative Agent, the L/C Issuer or the Swing Line Lender, as
applicable, then such provisions shall be deemed to be in effect only to the
extent not so limited.

- 148 -

--------------------------------------------------------------------------------

10.13    Replacement of Lenders.
If the Borrowers are entitled to replace a Lender pursuant to the provisions of
Section 3.06, or if any Lender is a Defaulting Lender or a Non-Consenting
Lender, then the Borrowers may, at their 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
contained in, and consents required by, Section 10.06), all of its interests,
rights (other than its existing rights to payments pursuant to Sections 3.01 and
3.04) and obligations under this Agreement and the related Loan Documents to an
Eligible Assignee that shall assume such obligations (which assignee may be
another Lender, if a Lender accepts such assignment), provided that:
(a)    the Borrowers shall have paid to the Administrative Agent the assignment
fee specified in Section 10.06(b);
(b)    such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and L/C Advances, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder and under the other
Loan Documents (including any amounts under Section 3.05) from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or the
Borrowers (in the case of all other amounts);
(c)    in the case of any such assignment resulting from a claim for
compensation under Section 3.04 or payments required to be made pursuant to
Section 3.01, such assignment will result in a reduction in such compensation or
payments thereafter;
(d)    such assignment does not conflict with applicable Laws; and
(e)    in the case of an assignment resulting from a Lender becoming a
Non-Consenting Lender, the applicable assignee shall have consented to the
applicable amendment, waiver or consent.
A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrowers to require such assignment and delegation
cease to apply.
10.14    Governing Law; Jurisdiction ; Etc..
(a)    GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND ANY CLAIMS
CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR
OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN

- 149 -

--------------------------------------------------------------------------------

DOCUMENT (EXCEPT, AS TO ANY OTHER LOAN DOCUMENT, AS EXPRESSLY SET FORTH THEREIN)
AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b)    SUBMISSION TO JURISDICTION. EACH OF THE BORROWERS AND EACH OTHER LOAN
PARTY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY
ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR
EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST THE ADMINISTRATIVE
AGENT, ANY LENDER, THE L/C ISSUER, OR ANY RELATED PARTY OF THE FOREGOING IN ANY
WAY RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF
NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF
THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE
JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK
STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH
FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION, LITIGATION 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 IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY
RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE
HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT AGAINST THE BORROWERS OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN
THE COURTS OF ANY JURISDICTION.
(c)    WAIVER OF VENUE. EACH OF THE BORROWERS AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS
SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY

- 150 -

--------------------------------------------------------------------------------

APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT.
(d)    SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.
10.15    Waiver of Jury Trial.
EACH PARTY HERETO HEREBY 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 OR RELATING TO 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 PERSON HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PERSON 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 BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
10.16    USA PATRIOT Act.
Each Lender that is subject to the Act (as hereinafter defined) and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrowers that pursuant to the requirements of the USA PATRIOT Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it
is required to obtain, verify and record information that identifies each Loan
Party, which information includes the name and address of the Borrowers and
other information that will allow such Lender or the Administrative Agent, as
applicable, to identify the each Loan Party in accordance with the Act. The
Borrowers shall, promptly following a request by the Administrative Agent or any
Lender, provide all documentation and other information that the Administrative
Agent or such Lender requests in order to comply with its ongoing obligations
under applicable “know your customer” anti-money laundering rules and
regulations, including the Act.
10.17    Judgment Currency.

- 151 -

--------------------------------------------------------------------------------

If, for the purposes of obtaining judgment in any court, it is necessary to
convert a sum due hereunder or any other Loan Document in one currency into
another currency, the rate of exchange used shall be that at which in accordance
with normal banking procedures the Administrative Agent could purchase the first
currency with such other currency on the Business Day preceding that on which
final judgment is given. The obligation of the Borrowers in respect of any such
sum due from it to the Administrative Agent or the Lenders hereunder or under
the other Loan Documents shall, notwithstanding any judgment in a currency (the
“Judgment Currency”) other than that in which such sum is denominated in
accordance with the applicable provisions of this Agreement (the “Agreement
Currency”), be discharged only to the extent that on the Business Day following
receipt by the Administrative Agent of any sum adjudged to be so due in the
Judgment Currency, the Administrative Agent may in accordance with normal
banking procedures purchase the Agreement Currency with the Judgment Currency.
If the amount of the Agreement Currency so purchased is less than the sum
originally due to the Administrative Agent from the Borrowers in the Agreement
Currency, the Borrowers agree, as a separate obligation and notwithstanding any
such judgment, to indemnify the Administrative Agent or the Person to whom such
obligation was owing against such loss. If the amount of the Agreement Currency
so purchased is greater than the sum originally due to the Administrative Agent
in such currency, the Administrative Agent agrees to return the amount of any
excess to the Borrowers (or to any other Person who may be entitled thereto
under applicable Law).
10.18    No Advisory or Fiduciary Responsibility.
In connection with all aspects of each transaction contemplated hereby
(including in connection with any amendment, waiver or other modification hereof
or of any other Loan Document), each of the Borrowers acknowledges and agrees,
and acknowledges its Affiliates’ understanding, that: (i) (A) the arranging and
other services regarding this Agreement provided by the Administrative Agent,
the Arrangers and the Lenders, are arm’s-length commercial transactions between
the Borrowers and their respective Affiliates, on the one hand, and the
Administrative Agent, the Arrangers and the Lenders, on the other hand, (B) each
of the Borrowers has consulted its own legal, accounting, regulatory and tax
advisors to the extent it has deemed appropriate, and (C) each of the Borrowers
is capable of evaluating, and understands and accepts, the terms, risks and
conditions of the transactions contemplated hereby and by the other Loan
Documents; (ii) (A) the Administrative Agent, each Arranger and each Lender is
and has been acting solely as a principal and, except as expressly agreed in
writing by the relevant parties, has not been, is not, and will not be acting as
an advisor, agent or fiduciary for the Borrowers or any of their respective
Affiliates, or any other Person and (B) neither the Administrative Agent, any
Arranger nor any Lender has any obligation to the Borrowers or any of their
respective Affiliates with respect to the transactions contemplated hereby
except those obligations expressly set forth herein and in the other Loan
Documents; and (iii) the Administrative Agent, the Arrangers and the Lenders and
their respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from

- 152 -

--------------------------------------------------------------------------------

those of the Borrowers and their respective Affiliates, and neither the
Administrative Agent, any Arranger nor any Lender has any obligation to disclose
any of such interests to the Borrowers or any of their respective Affiliates. To
the fullest extent permitted by law, each of the Borrowers hereby waives and
releases any claims that it may have against the Administrative Agent, the
Arrangers or any Lender with respect to any breach or alleged breach of agency
or fiduciary duty in connection with any aspect of any transaction contemplated
hereby.
10.19    Electronic Execution of Assignments and Certain Other Documents.
The words “execute,” “execution,” “signed,” “signature,” and words of like
import in or related to any document to be signed in connection with this
Agreement and the transactions contemplated hereby (including without limitation
Assignment and Assumptions, amendments or other modifications, Committed Loan
Notices, Swingline Loan Notices, waivers and consents) shall be deemed to
include electronic signatures, the electronic matching of assignment terms and
contract formations on electronic platforms approved by the Administrative
Agent, or the keeping of records in electronic form, each of which shall be of
the same legal effect, validity or enforceability as a manually executed
signature or the use of a paper-based recordkeeping system, as the case may be,
to the extent and as provided for in any applicable Law, including the Federal
Electronic Signatures in Global and National Commerce Act, the New York State
Electronic Signatures and Records Act, or any other similar state laws based on
the Uniform Electronic Transactions Act; provided that notwithstanding anything
contained herein to the contrary the Administrative Agent is under no obligation
to agree to accept electronic signatures in any form or in any format unless
expressly agreed to by the Administrative Agent pursuant to procedures approved
by it.
ARTICLE XI    
GUARANTY
11.01    The Guaranty.
Each of the Guarantors hereby jointly and severally guarantees to each Lender,
and the Administrative Agent as hereinafter provided, as primary obligor and not
as surety, the prompt payment of the Obligations in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) strictly in accordance with the terms thereof.
The Guarantors hereby further agree that if any of the Obligations are not paid
in full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise), the
Guarantors will, jointly and severally, promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Obligations, the same will be promptly paid in
full when

- 153 -

--------------------------------------------------------------------------------

due (whether at extended maturity, as a mandatory prepayment, by acceleration,
as a mandatory cash collateralization or otherwise) in accordance with the terms
of such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in any other
of the Loan Documents, the obligations of each Guarantor under this Agreement
and the other Loan Documents shall be limited to an aggregate amount equal to
the largest amount that would not render such obligations subject to avoidance
under the Debtor Relief Laws or any comparable provisions of any applicable
state law.
11.02    Obligations Unconditional.
The obligations of the Guarantors under Section 11.01 are joint and several,
absolute and unconditional, irrespective of the value, genuineness, validity,
regularity or enforceability of any of the Loan Documents, or any other
agreement or instrument referred to therein, or any substitution, release,
impairment or exchange of any other guarantee of or security for any of the
Obligations, and, to the fullest extent permitted by applicable Law,
irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section 11.02 that the obligations of the Guarantors
hereunder shall be absolute and unconditional under any and all circumstances.
Each Guarantor agrees that such Guarantor shall have no right of subrogation,
indemnity, reimbursement or contribution against the Borrowers or any other
Guarantor for amounts paid under this Article XI until such time as the
Obligations have been Fully Satisfied. Without limiting the generality of the
foregoing, it is agreed that, to the fullest extent permitted by Law, the
occurrence of any one or more of the following shall not alter or impair the
liability of any Guarantor hereunder which shall remain absolute and
unconditional as described above:
(j)    at any time or from time to time, without notice to any Guarantor, the
time for any performance of or compliance with any of the Obligations shall be
extended, or such performance or compliance shall be waived;
(k)    any of the acts mentioned in any of the provisions of any of the Loan
Documents, or any other agreement or instrument referred to in the Loan
Documents, shall be done or omitted;
(l)    the maturity of any of the Obligations shall be accelerated, or any of
the Obligations shall be modified, supplemented or amended in any respect, or
any right under any of the Loan Documents, or any other agreement or instrument
referred to in the Loan Documents, shall be waived or any other guarantee of any
of the Obligations or any security therefor shall be released, impaired or
exchanged in whole or in part or otherwise dealt with;

- 154 -

--------------------------------------------------------------------------------

(m)    any Lien granted to, or in favor of, the Agent or any Lender or Lenders
as security for any of the Obligations shall fail to attach or be perfected; or
(n)    any of the Obligations shall be determined to be void or voidable
(including, without limitation, for the benefit of any creditor of any
Guarantor) or shall be subordinated to the claims of any Person (including,
without limitation, any creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Administrative Agent or any Lender
exhaust any right, power or remedy or proceed against any Person under any of
the Loan Documents, or any other agreement or instrument referred to in the Loan
Documents, or against any other Person under any other guarantee of, or security
for, any of the Obligations.
11.03    Reinstatement.
The obligations of the Guarantors under this Article XI shall be automatically
reinstated if and to the extent that for any reason any payment by or on behalf
of any Person in respect of the Obligations is rescinded or must be otherwise
restored by any holder of any of the Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, and each Guarantor
agrees that it will indemnify the Agent and each Lender on demand for all
reasonable costs and expenses (including, without limitation, fees and expenses
of counsel) incurred by the Agent or such Lender in connection with such
rescission or restoration, including any such costs and expenses incurred in
defending against any claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law.
11.04    Certain Additional Waivers.
Each Guarantor agrees that such Guarantor shall have no right of recourse to
security for the Obligations, except through the exercise of rights of
subrogation pursuant to Section 11.02 and through the exercise of rights of
contribution pursuant to Section 11.06.
11.05    Remedies.
The Guarantors agree that, to the fullest extent permitted by law, as between
the Guarantors, on the one hand, and the Agent and the Lenders, on the other
hand, the Obligations may be declared to be forthwith due and payable as
provided in Section 8.02 (and shall be deemed to have become automatically due
and payable in the circumstances provided in said Section 8.02) for purposes of
Section 11.01 notwithstanding any stay, injunction or other prohibition
preventing such declaration (or preventing the Obligations from becoming
automatically due and payable) as against any other Person and that, in the
event of such declaration (or the Obligations being deemed to have become

- 155 -

--------------------------------------------------------------------------------

automatically due and payable), the Obligations (whether or not due and payable
by any other Person) shall forthwith become due and payable by the Guarantors
for purposes of Section 11.01. The Guarantors acknowledge and agree that to the
extent their obligations hereunder become secured, the Lenders may exercise
their remedies thereunder in accordance with the terms of the applicable
security documents.
11.06    Rights of Contribution.
The Guarantors hereby agree as among themselves that, in connection with
payments made hereunder, each Guarantor shall have a right of contribution from
each other Guarantor in accordance with applicable Law. Such contribution rights
shall be subordinate and subject in right of payment to the Obligations until
such time as the Obligations have been Fully Satisfied, and none of the
Guarantors shall exercise any such contribution rights until the Obligations
have been Fully Satisfied.
11.07    Guarantee of Payment; Continuing Guarantee.
The guarantee in this Article XI is a guaranty of payment and not of collection,
is a continuing guarantee, and shall apply to all Obligations whenever arising.

[Remainder of Page Intentionally Left Blank.]

- 156 -

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
BORROWERS:
POTLATCH CORPORATION,
a Delaware corporation

By: /s/ Jerald W. Richards    
Name: Jerald W. Richards    
Title: Vice President, Chief Financial Officer    

POTLATCH FOREST HOLDINGS, INC.,
a Delaware corporation
By: /s/ Jerald W. Richards    
Name: Jerald W. Richards    
Title: Vice President, Chief Financial Officer    

POTLATCH LAND & LUMBER, LLC,
a Delaware limited liability company
By: /s/ Jerald W. Richards    
Name: Jerald W. Richards    
Title: Vice President, Chief Financial Officer    

S-1

--------------------------------------------------------------------------------

GUARANTORS:
PFHI IDAHO INVESTMENT LLC,
a Delaware limited liability company

By: /s/ Jerald W. Richards    
Name: Jerald W. Richards    
Title: Vice President, Chief Financial Officer    

POTLATCH TIMBERLANDS, LLC,
a Delaware limited liability company
By: /s/ Jerald W. Richards    
Name: Jerald W. Richards    
Title: Vice President, Chief Financial Officer    

POTLATCH LAKE STATES TIMBERLANDS, LLC,
a Delaware limited liability company
By: /s/ Jerald W. Richards    
Name: Jerald W. Richards    
Title: Vice President, Chief Financial Officer    

POTLATCH MINNESOTA TIMBERLANDS, LLC,
a Delaware limited liability company
By: /s/ Jerald W. Richards    
Name: Jerald W. Richards    
Title: Vice President, Chief Financial Officer    

S-2

--------------------------------------------------------------------------------

PFPC MCCALL INVESTMENT LLC,
a Delaware limited liability company
By: /s/ Jerald W. Richards    
Name: Jerald W. Richards    
Title: Vice President, Chief Financial Officer    

S-3

--------------------------------------------------------------------------------

ADMINISTRATIVE AGENT
AND LENDERS:
KEYBANK NATIONAL ASSOCIATION,
as Administrative Agent

By: /s/ Nathan Weyer    
Name: Nathan Weyer    
Title: Vice President    

S-4

--------------------------------------------------------------------------------

KEYBANK NATIONAL ASSOCIATION,
as a Lender, an L/C Issuer and Swing Line Lender
By: /s/ Nathan Weyer    
Name: Nathan Weyer    
Title: Vice President    

S-5

--------------------------------------------------------------------------------

BANK OF AMERICA, N.A.,
Syndication Agent and as a Lender

By: /s/ Daryl K. Hogge    
Name: Daryl K. Hogge    
Title: Senior Vice President    

S-6

--------------------------------------------------------------------------------

U.S. BANK NATIONAL ASSOCIATION
By: /s/ Kurban H. Merchant    
Name: Kurban H. Merchant    
Title: Vice President    

S-7

--------------------------------------------------------------------------------

NORTHWEST FARM CREDIT SERVICES, PCA
By: /s/ Carol L. Sobson    
Name: Carol L. Sobson    
Title: Vice President    

S-8

--------------------------------------------------------------------------------

WELLS FARGO BANK, N.A.
By: /s/ Peter Kiedrowki    
Name: Peter Kiedrowski    
Title: Director    

S-9