EXHIBIT 10.33

EXECUTION VERSION

 

 

TERM LOAN CREDIT AGREEMENT

dated as of August 27, 2015

among

DELTIC TIMBER CORPORATION,

as Borrower

THE LENDERS FROM TIME TO TIME PARTY HERETO,

and

AMERICAN AGCREDIT, PCA,

as Administrative Agent

 

 

AMERICAN AGCREDIT, PCA,

as Sole Lead Arranger and Sole Book Manager

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TABLE OF CONTENTS

 

         Page  

ARTICLE I. DEFINITIONS; CONSTRUCTION

     1   

Section 1.1.

  Definitions      1   

Section 1.2.

  [Reserved]      14   

Section 1.3.

  Accounting Terms and Determination      14   

Section 1.4.

  Terms Generally      15   

ARTICLE II. AMOUNT AND TERMS OF THE COMMITMENTS

     15   

Section 2.1.

  General Description of Facility      15   

Section 2.2.

  Term Loans      15   

Section 2.3.

  [Reserved]      15   

Section 2.4.

  [Reserved]      15   

Section 2.5.

  [Reserved]      15   

Section 2.6.

  Fundings      16   

Section 2.7.

  [Reserved]      16   

Section 2.8.

  Reduction and Termination of Commitments      16   

Section 2.9.

  Repayment of Loans      16   

Section 2.10.

  Evidence of Indebtedness      16   

Section 2.11.

  Prepayments      17   

Section 2.12.

  Interest on Loans      17   

Section 2.13.

  Fees      17   

Section 2.14.

  Computation of Interest and Fees      17   

Section 2.15.

  [Reserved]      18   

Section 2.16.

  [Reserved]      18   

Section 2.17.

  Increased Costs      18   

Section 2.18.

  Funding Indemnity      19   

Section 2.19.

  Taxes      19   

Section 2.20.

  Payments Generally; Pro Rata Treatment; Sharing of Set-offs      22   

Section 2.21.

  Mitigation of Obligations      23   

Section 2.22.

  Replacement of Lenders      24   

ARTICLE III. CONDITIONS PRECEDENT TO LOANS

     24   

Section 3.1.

  Conditions To Effectiveness      24   

Section 3.2.

  Delivery of Documents      26   

ARTICLE IV. REPRESENTATIONS AND WARRANTIES

     27   

Section 4.1.

  Existence; Power      27   

Section 4.2.

  Organizational Power; Authorization      27   

Section 4.3.

  Governmental Approvals; No Conflicts      27   

Section 4.4.

  Financial Statements      27   

Section 4.5.

  Litigation and Environmental Matters      28   

Section 4.6.

  Compliance with Laws and Agreements      28   

Section 4.7.

  Investment Company Act, Etc.      28   

Section 4.8.

  Taxes      28   

Section 4.9.

  Margin Regulations      28   

Section 4.10.

  ERISA      29   

Section 4.11.

  Ownership of Property      29   

Section 4.12.

  Disclosure      30   

Section 4.13.

  Labor Relations      30   

Section 4.14.

  Subsidiaries      30   

Section 4.15.

  Foreign Assets Control Regulations, Etc.      30   

Section 4.16.

  Anti-Corruption Laws and Sanctions      31   

 

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TABLE OF CONTENTS

(continued)

 

         Page  

ARTICLE V. AFFIRMATIVE COVENANTS

     31   

Section 5.1.

  Financial Statements and Other Information      31   

Section 5.2.

  Notices of Material Events      32   

Section 5.3.

  Existence; Conduct of Business      33   

Section 5.4.

  Compliance with Laws, Etc.      33   

Section 5.5.

  Payment of Obligations      33   

Section 5.6.

  Books and Records      33   

Section 5.7.

  Visitation, Inspection, Appraisals Etc.      33   

Section 5.8.

  Maintenance of Properties; Insurance      34   

Section 5.9.

  Use of Proceeds      34   

Section 5.10.

  Additional Subsidiaries      34   

Section 5.11.

  Farm Credit Equities      34   

ARTICLE VI. FINANCIAL COVENANTS

     35   

Section 6.1.

  Leverage Ratio      35   

Section 6.2.

  Minimum Timber Market Value      36   

ARTICLE VII. NEGATIVE COVENANTS

     36   

Section 7.1.

  Indebtedness      36   

Section 7.2.

  Negative Pledge      37   

Section 7.3.

  Fundamental Changes      37   

Section 7.4.

  Investments, Loans, Etc.      38   

Section 7.5.

  Restricted Payments      39   

Section 7.6.

  Sale of Assets      39   

Section 7.7.

  Transactions with Affiliates      39   

Section 7.8.

  Restrictive Agreements      39   

Section 7.9.

  Sale and Leaseback Transactions      40   

Section 7.10.

  Hedging Agreements      40   

Section 7.11.

  Amendment to Material Documents      40   

Section 7.12.

  Accounting Changes      40   

Section 7.13.

  Government Regulations      40   

Section 7.14.

  ERISA      40   

ARTICLE VIII. EVENTS OF DEFAULT

     40   

Section 8.1.

  Events of Default      40   

ARTICLE IX. THE ADMINISTRATIVE AGENT

     43   

Section 9.1.

  Appointment of Administrative Agent      43   

Section 9.2.

  Nature of Duties of Administrative Agent      43   

Section 9.3.

  Lack of Reliance on the Administrative Agent      44   

Section 9.4.

  Certain Rights of the Administrative Agent      44   

Section 9.5.

  Reliance by Administrative Agent      44   

Section 9.6.

  The Administrative Agent in its Individual Capacity      44   

Section 9.7.

  Successor Administrative Agent      45   

Section 9.8.

  Authorization to Execute other Loan Documents      45   

Section 9.9.

  Withholding Tax      45   

Section 9.10.

  Administrative Agent May File Proofs of Claim      45   

ARTICLE X. MISCELLANEOUS

     46   

Section 10.1.

  Notices      46   

Section 10.2.

  Waiver; Amendments      47   

Section 10.3.

  Expenses; Indemnification      49   

 

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TABLE OF CONTENTS

(continued)

 

         Page  

Section 10.4.

  Successors and Assigns      50   

Section 10.5.

  Governing Law; Jurisdiction; Consent to Service of Process      54   

Section 10.6.

  WAIVER OF JURY TRIAL      54   

Section 10.7.

  Right of Setoff      55   

Section 10.8.

  Counterparts; Integration      55   

Section 10.9.

  Survival      55   

Section 10.10.

  Severability      55   

Section 10.11.

  Confidentiality      55   

Section 10.12.

  Interest Rate Limitation      56   

Section 10.13.

  Waiver of Effect of Corporate Seal      56   

Section 10.14.

  Independence of Covenants      56   

Section 10.15.

  Patriot Act      56   

Section 10.16.

  No Advisory or Fiduciary Relationship      56   

Section 10.17.

  Most Favored Lender Provisions      57   

 

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TABLE OF CONTENTS

(continued)

 

         Page SCHEDULES      Schedule I   Commitment Amounts    Schedule 4.14  
Subsidiaries    Schedule 7.1   Outstanding Indebtedness    Schedule 7.2  
Existing Liens    Schedule 7.4   Existing Investments    Schedule 10.4(f)  
Voting Participants    EXHIBITS      Exhibit A   Form of Note    Exhibit B  
Form of Notice of Borrowing    Exhibit C   Form of Assignment and Acceptance   
Exhibit D   Form of Subsidiary Guarantee Agreement    Exhibit E   Form of
Indemnity, Subrogation and Contribution Agreement    Exhibit F   Form of Voting
Participant Notification    Exhibit 2.19-1   Form of U.S. Tax Compliance
Certificate    Exhibit 2.19-2   Form of U.S. Tax Compliance Certificate   
Exhibit 2.19-3   Form of U.S. Tax Compliance Certificate    Exhibit 2.19-4  
Form of U.S. Tax Compliance Certificate    Exhibit 3.1(b)(v)   Form of
Secretary’s Certificate    Exhibit 3.1(b)(viii)   Form of Officer’s Certificate
  

 

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TERM LOAN CREDIT AGREEMENT

THIS TERM LOAN CREDIT AGREEMENT (this “Agreement”) is made and entered into as
of August 27, 2015, by and among DELTIC TIMBER CORPORATION, a Delaware
corporation (the “Borrower”), the several banks and other financial institutions
from time to time party hereto (the “Lenders”) and AMERICAN AGCREDIT, PCA, in
its capacity as Administrative Agent for the Lenders (the “Administrative
Agent”).

W I T N E S S E T H:

WHEREAS, the Borrower has requested that the Lenders agree to provide a term
loan credit facility in the initial aggregate principal amount of $100,000,000;

WHEREAS, subject to the terms and conditions of this Agreement, the Lenders have
agreed to provide such term loan credit facility in accordance with the terms,
conditions and provisions set forth herein;

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the Borrower, the Lenders and the Administrative Agent agree as
follows:

ARTICLE I.

DEFINITIONS; CONSTRUCTION

Section 1.1. Definitions. In addition to the other terms defined herein, the
following terms used herein shall have the meanings herein specified (to be
equally applicable to both the singular and plural forms of the terms defined):

“Acquisition” shall mean (a) any Investment by the Borrower or any of its
Subsidiaries in any other Person pursuant to which such Person shall become a
Subsidiary of the Borrower or any of its Subsidiaries or shall be merged with
the Borrower or any of its Subsidiaries or (b) any acquisition by the Borrower
or any of its Subsidiaries of the assets of any Person (other than an existing
Subsidiary of the Borrower) which constitutes all or substantially all of the
assets of such Person or which comprises a business unit of such Person.

“Administrative Agent” shall have the meaning assigned to such term in the
opening paragraph hereof.

“Administrative Questionnaire” shall mean, with respect to each Lender, an
administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent duly completed by such Lender.

“Affiliate” shall mean, as to any Person, any other Person that directly, or
indirectly through one or more intermediaries, Controls, is Controlled by, or is
under common Control with, such Person. For purposes of this definition, the
term “Control” shall mean the power, directly or indirectly, either to (i) vote
5% or more of securities having ordinary voting power for the election of
directors (or persons performing similar functions) of a Person or (ii) direct
or cause the direction of the management and policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise; the
terms “Controlling”, “Controlled by”, and “under common Control with” have
meanings correlative thereto.

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“Aggregate Term Loan Commitment Amount” shall mean the aggregate principal
amount of the Aggregate Term Loan Commitments from time to time. As of the
Closing Date, the Aggregate Term Loan Commitment Amount equals $100,000,000.

“Aggregate Term Loan Commitments” shall mean, collectively, all Term Loan
Commitments of all Lenders at any time outstanding with respect to the Term
Loans.

“Anti-Corruption Laws” shall mean all laws, rules, and regulations of any
jurisdiction applicable to the Borrower and its Affiliates from time to time
concerning or relating to bribery or corruption.

“Applicable Lending Office” shall mean, for each Lender, the “Lending Office” of
such Lender (or an Affiliate of such Lender) designated in the Administrative
Questionnaire submitted by such Lender or such other office of such Lender (or
an Affiliate of such Lender) as such Lender may from time to time specify to the
Administrative Agent and the Borrower as the office by which its Loans are to be
made and maintained.

“Arranger” shall mean American AgCredit, PCA.

“Asset Like Kind Exchange” shall mean a like kind exchange of timber or real
estate development assets of the Borrower or any of its Subsidiaries made in
accordance with Section 1031 and Section 1033 of the Code.

“Assignment and Acceptance” shall mean an assignment and acceptance entered into
by a Lender and an Eligible Assignee (with the consent of any party whose
consent is required by Section 10.4(b)) and accepted by the Administrative
Agent, in the form of Exhibit C attached hereto or any other form approved by
the Administrative Agent.

“Base Rate” shall mean the highest of (i) the Prime Rate (as defined below), as
in effect from time to time and (ii) the Federal Funds Rate, as in effect from
time to time, plus one-half of one percent (0.50%) per annum. Each change in any
of the rates described above in this definition shall be effective from and
including the date such change is announced as being effective. For purposes
hereof, “Prime Rate” means a variable rate of interest per annum equal to the
“U.S. prime rate” as reported on such day in the Money Rates Section of the
Eastern Edition of The Wall Street Journal as the average prime lending rate for
70% of the nation’s largest banks, or if the Eastern Edition of The Wall Street
Journal is not published on such day, such rate as last published in the Eastern
Edition of The Wall Street Journal. In the event the Eastern Edition of The Wall
Street Journal ceases to publish such rate or an equivalent on a regular basis,
the term “Prime Rate” shall be determined on any day by reference to such other
regularly published average prime rate for such date applicable to such
commercial bank as is acceptable to the Administrative Agent in its sole
discretion. Any change in Prime Rate shall be automatic, without the necessity
of notice provided to the Borrower or any other Loan Party.

“Borrower” shall have the meaning in the introductory paragraph hereof.

“Business Day” shall mean any day other than a Saturday, Sunday or other day on
which commercial banks in California are authorized or required by law to close.

“Capital Lease Obligations” of any Person shall mean all obligations of such
Person to pay rent or other amounts under any lease (or other arrangement
conveying the right to use) of real or personal property, or a combination
thereof, which obligations are required to be classified and accounted for as
capital leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in
accordance with GAAP.

 

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“Change in Control” shall mean the occurrence of one or more of the following
events: (a) any sale, lease, exchange or other transfer (in a single transaction
or a series of related transactions) of all or substantially all of the assets
of the Borrower to any Person or “group” (within the meaning of the Securities
Exchange Act of 1934 and the rules of the Securities and Exchange Commission
thereunder in effect on the date hereof), (b) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or “group”
(within the meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder as in effect on the date hereof)
other than the Murphy Family of 30% or more of the outstanding shares of the
voting stock of the Borrower; or (c) during any period of 24 consecutive months,
a majority of the members of the board of directors of the Borrower cease to be
composed of individuals who are Continuing Directors.

“Change in Law” means (i) the adoption of any applicable law, rule or regulation
after the date of this Agreement, (ii) any change in any applicable law, rule or
regulation, or any change in the interpretation, implementation or application
thereof, by any Governmental Authority after the date of this Agreement, or
(iii) compliance by any Lender (or its Applicable Lending Office) (or for
purposes of Section 2.17(b), by such Lender’s holding company, if applicable)
with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority made or issued after the date of this
Agreement; provided, however, 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 (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, and (z) all
requests, rules, guidelines or directives issued by a Governmental Authority in
connection with a Lender’s submission or re-submission of a capital plan under
12 C.F.R. § 225.8 or a Governmental Authority’s assessment thereof, shall in
each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted or issued.

“Closing Date” shall mean August 27, 2015.

“Code” shall mean the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, and any rule or regulation issued
thereunder.

“Commitment” shall mean a Term Loan Commitment.

“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 Net Worth” shall mean, as of any date, (i) the total assets of the
Borrower and its Subsidiaries that would be reflected on the Borrower’s
consolidated balance sheet as of such date prepared in accordance with GAAP,
after eliminating all amounts properly attributable to minority interests, if
any, in the stock and surplus of Subsidiaries, minus (ii) the sum of (x) the
total liabilities of the Borrower and its Subsidiaries that would be reflected
on the Borrower’s consolidated balance sheet as of such date prepared in
accordance with GAAP and (y) the amount of any write-up in the book value of any
assets resulting from a revaluation thereof or any write-up in excess of the
cost of such assets acquired reflected on the consolidated balance sheet of the
Borrower as of such date prepared in accordance with GAAP.

“Consolidated Total Capital” shall mean, as of any date, the sum of
(i) Consolidated Total Debt as of such date and (ii) Consolidated Net Worth as
of such date.

 

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“Consolidated Total Debt” shall mean, as of any date, all Indebtedness of the
Borrower and its Subsidiaries described in the definition of “Indebtedness”,
including, without limitation, the Loans, but excluding Indebtedness of the type
described in subsection (xi) of the definition thereof.

“Continuing Director” shall mean, with respect to any period, any individuals
(A) who were members of the board of directors of the Borrower on the first day
of such period, (B) whose election or nomination to that board or equivalent
governing body was approved by individuals referred to in clause (A) above
constituting at the time of such election or nomination at least a majority of
that board or equivalent governing body, or (C) whose election or nomination to
that board or other equivalent governing body was approved by individuals
referred to in clauses (A) and (B) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body.

“Default” shall mean any condition or event that, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.

“Default Interest” shall have the meaning set forth in Section 2.12(c).

“Del-Tin” shall mean Del-Tin Fiber L.L.C., an Arkansas limited liability
company.

“Del-Tin Credit Agreement” shall mean that certain Amended and Restated Letter
of Credit Agreement dated July 21, 2011 by and among Del-Tin, SunTrust Bank, as
administrative agent and the lenders named therein and any and all amendments
thereto, or refinancings or replacements thereof which do not increase the
principal amount thereof or the LC Commitment thereunder.

“Del-Tin Guarantee” shall mean that certain Guarantee Agreement dated April 1,
2013 executed by the Borrower in connection with the Del-Tin Credit Agreement,
pursuant to which the Borrower guarantees the principal amount not exceeding
$30,000,000 in favor of the lenders under the Del-Tin Credit Agreement.

“Dollar(s)” and the sign “$” shall mean lawful money of the United States of
America.

“Eligible Assignee” means any Person that meets the requirements to be an
assignee under Section 10.4(b)(iii), (v) and (vi) (subject to such consents, if
any, as may be required under Section 10.4(b)(iii)).

“Employee Benefit Plan” has that meaning as defined in Section 3(3) of ERISA and
for which the Borrower or an ERISA Affiliate maintains, contributes to or has an
obligation to contribute to on behalf of participants who are or were employed
by the Borrower or its ERISA Affiliates or on behalf of beneficiaries of such
participants.

“Environmental Laws” shall mean all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by or with any Governmental Authority, relating in
any way to the environment, preservation or reclamation of natural resources,
the management, Release or threatened Release of any Hazardous Material or to
health and safety matters.

“Environmental Liability” shall mean any liability, contingent or otherwise
(including any liability for damages, costs of environmental investigation and
remediation, costs of administrative oversight, fines, natural resource damages,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) any actual or alleged violation of
any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any

 

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Hazardous Materials, (c) any actual or alleged exposure to any Hazardous
Materials, (d) the Release or threatened Release of any Hazardous Materials or
(e) any contract, agreement or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor statute including any regulations
promulgated thereunder.

“ERISA Affiliate” means any trade or business (whether or not incorporated),
which, together with the Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for the purposes of Section 303 of
ERISA and Section 430 of the Code, is treated as a single employer under
Section 414 of the Code.

“ERISA Event” means with respect to the Borrower or any ERISA Affiliate, (i) any
“reportable event”, as defined in Section 4043 of ERISA with respect to a Plan
(other than an event for which the 30-day notice period is waived); (ii) the
failure to make required contributions when due to a Multiemployer Plan or Plan
or the imposition of a Lien in favor of a Plan under Section 430(k) of the Code
or Section 303(k) of ERISA; (iii) the filing pursuant to Section 412(c) of the
Code or Section 302(c) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan; (iv) the imposition of any liability
under Title IV of ERISA, other than for PBGC premiums due but not delinquent
under Section 4007 of ERISA, or the imposition of a Lien in favor of the PBGC
under Title IV of ERISA; (v) the receipt from the PBGC or a plan administrator
appointed by the PBGC of any notice relating to an intention to terminate any
Plan or Plans or to appoint a trustee to administer any Plan; (vi) any other
event or condition that might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan or Multiemployer Plan or for the imposition of liability
under Section 4069 or 4212(c) of ERISA; (vii) the incurrence of any liability
with respect to the withdrawal or partial withdrawal from any Plan including the
withdrawal from a 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; (viii) the incurrence of any Withdrawal Liability with
respect to any Multiemployer Plan; (ix) the receipt of any notice, concerning
the imposition of Withdrawal Liability or a determination that a Multiemployer
Plan is, or is expected to be, insolvent (within the meaning of Section 4245 of
ERISA) or in reorganization (within the meaning of Section 4241 of ERISA), or in
“critical” status (within the meaning of Section 432 of the Code or Section 305
of ERISA); or (x) a determination that a Plan is, or is reasonably expected to
be, in “at risk” status (within the meaning of Section 430 of the Code or
Section 303 of ERISA).

“Event of Default” shall have the meaning provided in Article VIII.

“Excluded Taxes” shall mean any of the following Taxes imposed on or with
respect to a 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 Applicable
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 Borrower under Section 2.22) or (ii) such Lender
changes its Applicable Lending Office, except in each case to the extent that,
pursuant to Section 2.19, 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 Applicable Lending Office,
(c) Taxes attributable to such Recipient’s failure to comply with
Section 2.19(g) and (d) any U.S. federal withholding Taxes imposed under FATCA.

 

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“Existing Revolving Credit Agreement” shall mean that certain Second Amended and
Restated Revolving Credit Agreement dated as of November 18, 2014 among the
Borrower, the lenders party thereto and SunTrust Bank, as administrative agent.

“Farm Credit Act” means the Farm Credit Act of 1971.

“Farm Credit Equities” shall have the meaning given such term in
Section 5.11(a).

“Farm Credit Equity Documents” shall have the meaning given such term in
Section 5.11(a).

“Farm Credit Lender” means a lending institution organized and existing pursuant
to the provisions of the Farm Credit Act and under the regulation of 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 and any agreements entered into
pursuant to Section 1471(b)(1) of the Code.

“Federal Funds Rate” shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the next 1/100th of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with member banks of the
Federal Reserve System arranged by Federal funds brokers, as published by the
Federal Reserve Bank of New York on the next succeeding Business Day or if such
rate is not so published for any Business Day, the Federal Funds Rate for such
day shall be the average rounded upwards, if necessary, to the next 1/100th of
1% of the quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by the Administrative Agent.

“Fee Letter” shall mean that certain letter agreement dated as of the date
hereof between the Borrower and the Arranger.

“Foreign Lender” shall mean any Lender that is not a United States person under
Section 7701(a)(3) of the Code.

“GAAP” shall mean generally accepted accounting principles in the United States
applied on a consistent basis and subject to the terms of Section 1.3.

“Governmental Authority” shall mean the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government including any supra-national body exercising such powers or
functions, such as the European Union or the European Central Bank.

 

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“Guarantee” of or by any Person (the “guarantor”) shall mean any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly and
including any obligation, direct or indirect, of the guarantor (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued in support of such Indebtedness or
obligation; provided, that the term “Guarantee” shall not include endorsements
for collection or deposits in the ordinary course of business. The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which Guarantee is made or, if
not so stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith. The term “Guarantee” used as a verb has
a corresponding meaning.

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

“Hedging Agreements” shall mean interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts, commodity agreements and other similar agreements or
arrangements designed to protect against fluctuations in interest rates,
currency values or commodity values, in each case to which any Borrower or any
Subsidiary is a party.

“Indebtedness” of any Person shall mean, without duplication (i) all obligations
of such Person for borrowed money, (ii) all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments, (iii) all obligations
of such Person in respect of the deferred purchase price of property or services
(other than trade payables incurred in the ordinary course of business;
provided, that for purposes of Section 8.1(f), trade payables overdue by more
than 120 days shall be included in this definition except to the extent that any
of such trade payables are being disputed in good faith and by appropriate
measures), (iv) all obligations of such Person under any conditional sale or
other title retention agreement(s) relating to property acquired by such Person,
(v) all Capital Lease Obligations of such Person, (vi) all obligations,
contingent or otherwise, of such Person in respect of letters of credit,
acceptances or similar extensions of credit, (vii) all Guarantees of such Person
of the type of Indebtedness described in clauses (i) through (vi) above and
clause (xi) below, (viii) all Indebtedness of a third party secured by any Lien
on property owned by such Person, whether or not such Indebtedness has been
assumed by such Person, (ix) all obligations of such Person, contingent or
otherwise, to purchase, redeem, retire or otherwise acquire for value any
capital stock of such Person, (x) Off-Balance Sheet Liabilities, and (xi) all
obligations of such Person under Hedging Agreements. The Indebtedness of any
Person shall include the Indebtedness of any partnership or joint venture in
which such Person is a general partner or a joint venturer, except to the extent
that the terms of such Indebtedness provide that such Person is not liable
therefor. For purposes of determining the amount of attributed Indebtedness from
Hedging Agreements, the “principal amount” of the obligations of the Borrower or
any Subsidiary in respect to any Hedging Agreement at any time shall be the
maximum aggregate amount (giving effect to any netting agreements) that the
Borrower or such Subsidiary would be required to pay if such Hedging Agreement
were terminated at such time.

 

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“Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on
or with respect to any payment made by or on account of any obligation of the
Borrower under any Loan Document and (b) to the extent not otherwise described
in (a), Other Taxes.

“Indemnity and Contribution Agreement” shall mean the Indemnity, Subrogation and
Contribution Agreement, substantially in the form of Exhibit E, among the
Borrower, the Subsidiary Loan Parties and the Administrative Agent, as amended,
restated, supplemented or otherwise modified from time to time.

“Investments” shall have the meaning as set forth in Section 7.4.

“IRS” shall mean the Internal Revenue Service.

“Lenders” shall have the meaning assigned to such term in the opening paragraph
of this Agreement.

“Leverage Ratio” shall mean, as of any date of determination with respect to the
Borrower, the ratio of (i) Consolidated Total Debt as of such date to
(ii) Consolidated Total Capital.

“Lien” shall mean any mortgage, pledge, security interest, lien (statutory or
otherwise), charge, encumbrance, hypothecation, assignment, deposit arrangement,
or other arrangement having the practical effect of the foregoing or any
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement and any capital lease having the same economic effect as any
of the foregoing).

“Loan Documents” shall mean, collectively, this Agreement, the Notes, the
Subsidiary Guarantee Agreement, the Indemnity and Contribution Agreement, the
Notice of Borrowing, the Fee Letter and any and all other instruments,
agreements, documents and writings executed in connection with any of the
foregoing.

“Loan Parties” shall mean the Borrower and the Subsidiary Loan Parties.

“Loans” shall mean all Term Loans in the aggregate or any of them, as the
context shall require.

“Material Adverse Effect” shall mean, with respect to any event, act, condition
or occurrence of whatever nature (including any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding), whether
singularly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences whether or not related,
resulting in a material adverse change in, or a material adverse effect on,
(i) the business, results of operations, financial condition, assets,
liabilities or prospects of the Borrower or of the Borrower and its Subsidiaries
taken as a whole, (ii) the ability of the Loan Parties to perform any of their
respective obligations under the Loan Documents, (iii) the rights and remedies
of the Administrative Agent and the Lenders under any of the Loan Documents or
(iv) the legality, validity or enforceability of any of the Loan Documents.

“Material Indebtedness” shall mean Indebtedness (other than the Loans),
commitments for Indebtedness or obligations in respect of one or more Hedging
Agreements, of any one or more of the Borrower and the Subsidiaries in an
aggregate principal amount exceeding $1,000,000. For purposes of determining
Material Indebtedness, the “principal amount” of the obligations of the Borrower
or any Subsidiary in respect to any Hedging Agreement at any time shall be the
maximum aggregate amount (giving effect to any netting agreements) that the
Borrower or such Subsidiary would be required to pay if such Hedging Agreement
were terminated at such time. For the avoidance of doubt, Material Indebtedness
shall include the Existing Revolving Credit Agreement (and any replacement
credit agreement).

 

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“Maturity Date” shall mean August 27, 2025.

“Moody’s” shall mean Moody’s Investors Service, Inc.

“Multiemployer Plan” shall have the meaning set forth in Section 4001(a)(3) of
ERISA.

“Murphy Family” shall mean, collectively, estates and descendants of C.H.
Murphy, Jr., his sisters, any of their spouses or descendants or persons married
to their descendants and any investment entity that is controlled by any of the
foregoing.

“Note” a promissory note of the Borrower payable to the order of a requesting
Lender in the principal amount of such Lender’s Term Loan Commitment, in
substantially the form of Exhibit A.

“Note Purchase Agreement” shall mean that certain Amended and Restated Note
Purchase Agreement, dated as of March 30, 2007, by and between the Borrower and
American AgCredit, PCA, relating to $40,000,000 Series A Senior Notes due
December 18, 2016, as the same may be amended or otherwise modified and in
effect from time to time.

“Notice of Borrowing” shall mean a notice of borrowing substantially in the form
of Exhibit B.

“Obligations” shall mean all amounts owing by the Borrower to the Administrative
Agent or any Lender pursuant to or in connection with this Agreement or any
other Loan Document or otherwise with respect to any Loan, including without
limitation, all principal, interest (including any interest accruing after the
filing of any petition in bankruptcy or the commencement of any insolvency,
reorganization or like proceeding relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding),
all reimbursement obligations, fees, expenses, indemnification and reimbursement
payments, costs and expenses (including all fees and expenses of counsel to the
Administrative Agent and any Lender incurred, or required to be reimbursed, by
the Borrower, in each case, pursuant to this Agreement or any other Loan
Document), whether direct or indirect, absolute or contingent, liquidated or
unliquidated, now existing or hereafter arising hereunder or thereunder, and all
obligations arising under Hedging Agreements relating to the foregoing to the
extent permitted hereunder, and all obligations and liabilities incurred in
connection with collecting and enforcing the foregoing, together with all
renewals, extensions, modifications or refinancings thereof.

“OFAC” shall mean the U.S. Department of the Treasury’s Office of Foreign Assets
Control.

“Off-Balance Sheet Liabilities” of any Person shall mean (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability of such Person under any sale
and leaseback transactions which do not create a liability on the balance sheet
of such Person, (iii) any liability of such Person under any so-called
“synthetic” lease transaction or (iv) any obligation arising with respect to any
other transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheet of such
Person.

“Other 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).

 

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“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 2.22).

“Participant” shall have the meaning set forth in Section 10.4(d).

“Participant Register” shall have the meaning set forth in Section 10.4(e).

“Patriot Act” shall have the meaning set forth in Section 3.1(b)(xiii).

“Payment Office” shall mean the office of the Administrative Agent located at
200 Concourse Boulevard, Santa Rosa, California 95402, or such other location as
to which the Administrative Agent shall have given written notice to the
Borrower and the other Lenders.

“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA, and any successor entity performing similar functions.

“Permitted Encumbrances” shall mean

(i) Liens imposed by law for taxes or special assessments not yet due or which
are being contested in good faith by appropriate proceedings and with respect to
which adequate reserves are being maintained in accordance with GAAP;

(ii) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other Liens imposed by law created in the ordinary
course of business for amounts not yet due or which are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves are
being maintained in accordance with GAAP;

(iii) pledges and deposits made in the ordinary course of business in compliance
with workers’ compensation, unemployment insurance and other social security
laws or regulations;

(iv) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;

(v) judgment and attachment liens not giving rise to an Event of Default or
Liens created by or existing from any litigation or legal proceeding that are
currently being contested in good faith by appropriate proceedings and with
respect to which adequate reserves are being maintained in accordance with GAAP;

(vi) easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not secure any monetary obligations and do not materially detract from the
value of the affected property or materially interfere with the ordinary conduct
of business of the Borrower and its Subsidiaries taken as a whole; and

 

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(vii) statutory liens in favor of a Farm Credit Lender or its Affiliate pursuant
to the Farm Credit Act on all Farm Credit Equities of such Farm Credit Lender or
its Affiliate that the Borrower may now own or hereafter acquire;

provided, that, except with respect to clause (vii) above, the term “Permitted
Encumbrances” shall not include any Lien securing Indebtedness.

“Permitted Investments” shall mean:

(i) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States (or by any agency thereof
to the extent such obligations are backed by the full faith and credit of the
United States), in each case maturing within one year from the date of
acquisition thereof;

(ii) commercial paper having the highest rating, at the time of acquisition
thereof, of S&P or Moody’s and in either case maturing within six months from
the date of acquisition thereof;

(iii) certificates of deposit, bankers’ acceptances and time deposits maturing
within 180 days of the date of acquisition thereof issued or guaranteed by or
placed with, and money market deposit accounts issued or offered by, any
domestic office of any commercial bank organized under the laws of the United
States or any state thereof which has a combined capital and surplus and
undivided profits of not less than $500,000,000;

(iv) fully collateralized repurchase agreements with a term of not more than 30
days for securities described in clause (i) above and entered into with a
financial institution satisfying the criteria described in clause (iii) above;
and

(v) mutual funds investing solely in any one or more of the Permitted
Investments described in clauses (i) through (iv) above.

“Person” shall mean any individual, partnership, firm, corporation, association,
joint venture, limited liability company, trust or other entity, or any
Governmental Authority.

“Plan” means any Employee Benefit Plan (other than a Multiemployer Plan) subject
to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302
of ERISA, and in respect of which the Borrower or any ERISA Affiliate either
(i) maintains, contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any of them (or on behalf of
beneficiaries of such participants) or (ii) is (or, if such plan were
terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as
defined in Section 3(5) of ERISA or a “contributing sponsor” (as defined in
ERISA Section 4001(a)(13)).

“Pro Forma Basis” means, for purposes of calculating compliance with respect to
a proposed Acquisition, 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 effective date of such Acquisition. For
purposes of any such calculation in respect of any Acquisition as referred to in
Section 7.4(g): (a) any Indebtedness incurred or assumed in connection with such
transaction which is not retired in connection with such transaction (i) shall
be deemed to have been incurred as of the first day of the applicable period,
and (ii) 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;

 

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(b) income statement items (whether positive or negative) and capital
expenditures attributable to the Person or property acquired in such
Acquisition, shall be included beginning as of the first day of the applicable
period; and (c) pro forma adjustments may be included to the extent that such
adjustments are calculated in a manner not inconsistent with GAAP and would give
effect to events that are: (y) directly attributable to such transaction and
(z) expected to have a continuing impact on the Borrower and its Subsidiaries.

“Pro Forma Compliance Certificate” means a certificate of a Responsible Officer
of the Borrower delivered to the Administrative Agent in connection with any
Acquisition referred to in Section 7.4(g), which shall contain a reasonably
detailed calculation of compliance with the ratio requirements of
Section 7.4(g), upon giving effect to the applicable transaction on a Pro Forma
Basis, as of the most recent fiscal quarter end preceding the date of the
applicable Acquisition.

“Pro Rata Share” shall mean with respect to any Term Loan Commitment or Term
Loan of any Lender at any time, a percentage, the numerator of which shall be
such Lender’s relevant Term Loan Commitment or Term Loan, as applicable, and the
denominator of which shall be the sum of the relevant Term Loan Commitments or
Term Loans of all Lenders, as applicable.

“Qualified Plan” means an Employee Benefit Plan that is intended to be
tax-qualified under Section 401(a) of the Code.

“Recipient” means (a) the Administrative Agent and (b) any Lender, as
applicable.

“Register” shall have the meaning set forth in Section 10.4(c).

“Regulation D, T, U, X and Y” shall mean Regulation D, T, U, X and Y,
respectively, of the Board of Governors of the Federal Reserve System, as the
same may be in effect from time to time, and any successor regulations.

“Related Parties” shall mean, with respect to any specified Person, such
Person’s Affiliates and the respective managers, administrators, trustees,
partners, directors, officers, employees, agents, advisors or other
representatives of such Person and such Person’s Affiliates.

“Release” means any release, spill, emission, leaking, dumping, injection,
pouring, deposit, disposal, discharge, dispersal, leaching or migration into the
environment (including ambient air, surface water, groundwater, land surface or
subsurface strata) or within any building, structure, facility or fixture.

“Required Lenders” shall mean, at any time, Lenders holding more than 50% of the
sum of (a) the aggregate outstanding Commitments at such time and (b) the
principal amount of the Term Loans outstanding at such time. With respect to any
matter requiring the approval of the Required Lenders, it is understood that
Voting Participants shall have the voting rights specified in Section 10.4(f) as
to such matter.

“Requirement of Law” for any Person shall mean the articles or certificate of
incorporation, bylaws, partnership certificate and agreement, or limited
liability company certificate of organization and agreement, as the case may be,
and other organizational and governing documents of such Person, and any law,
treaty, rule or regulation, or determination of a Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.

 

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“Responsible Officer” shall mean any of the president, the chief executive
officer, the chief operating officer, the chief financial officer, the treasurer
or a vice president of the Borrower or such other representative of the Borrower
as may be designated in writing by any one of the foregoing with the consent of
the Administrative Agent; and, with respect to the financial covenants and
compliance certificates only, the chief financial officer or the treasurer of
the Borrower.

“Restricted Payment” shall have the meaning set forth in Section 7.5.

“S&P” shall mean Standard & Poor’s Financial Services LLC, a subsidiary of The
McGraw-Hill Companies, Inc., and any successor thereto.

“Sanctioned Country” shall mean, at any time, a country or territory which is
itself the subject or target of any Sanctions.

“Sanctioned Person” shall mean, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by the Office of Foreign
Assets Control of the U.S. Department of the Treasury, the U.S. Department of
State, the or by the United Nations Security Council, the European Union or any
European Union member state, (b) any Person operating, organized or resident in
a Sanctioned Country or (c) any Person owned or controlled by any such Person or
Persons described in the foregoing clauses (a) and/or (b).

“Sanctions” shall mean economic or financial sanctions or trade embargoes
imposed, administered or enforced from time to time by (a) the U.S. government,
including those administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury or the U.S. Department of State, or (b) the United
Nations Security Council, the European Union, any European Union member state or
Her Majesty’s Treasury of the United Kingdom.

“Subsidiary” shall mean, with respect to any Person (the “parent”), any
corporation, partnership, joint venture, limited liability company, association
or other entity the accounts of which would be consolidated with those of the
parent in the parent’s consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, partnership, joint venture, limited liability company,
association or other entity (i) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power, or in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (ii) that is, as
of such date, otherwise controlled, by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent. Unless
otherwise indicated, all references to “Subsidiary” hereunder shall mean a
Subsidiary of the Borrower.

“Subsidiary Guarantee Agreement” shall mean the Subsidiary Guarantee Agreement,
substantially in the form of Exhibit D, made by the Subsidiary Loan Parties in
favor of the Administrative Agent for the benefit of the Lenders, as amended,
restated, supplemented or otherwise modified from time to time.

“Subsidiary Loan Party” shall mean any Subsidiary.

“Taxes” shall mean any and all present or future taxes, levies, imposts, duties,
deductions, charges, assessments or withholdings imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.

“Term Loan” shall mean a loan made by a Lender to the Borrower under its Term
Loan Commitment.

 

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“Term Loan Commitment” shall mean, with respect to each Lender, the obligation
of such Lender to make a Term Loan to the Borrower in an aggregate principal
amount not exceeding the amount set forth with respect to such Lender on
Schedule I, or in the case of a Person becoming a Lender after the Closing Date
through an assignment of an existing Term Loan Commitment, the amount of the
assigned “Term Loan Commitment” as provided in the Assignment and Acceptance
Agreement executed by such Person as an assignee, as the same may be increased
or decreased pursuant to terms hereof.

“Timber Market Value” shall mean the lessor of (i) the fair market value of all
timber owned by the Borrower or any of its Subsidiaries as determined by
reference to the average price received by Borrower or any of its Subsidiaries
for their sales of timber for the preceding four quarters multiplied by the
current quarter’s ending inventory of timber, or (ii) if an appraisal is
requested by the Administrative Agent, the appraised value of all timber owned
by the Borrower or any of its Subsidiaries as determined in accordance with
Section 5.7.

“Total Senior Indebtedness” shall mean the Aggregate Term Loan Commitments
outstanding plus the aggregate outstanding principal amount of the Term Loans
plus the outstanding Indebtedness evidenced by the Note Purchase Agreement plus
the aggregate amount, without duplication, of the outstanding commitments and
Indebtedness under the Existing Revolving Credit Agreement (or any replacement
credit agreement).

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in
Section 2.19(g).

“Voting Participant” shall have the meaning given such term in Section 10.4(f).

“Voting Participant Notification” shall have the meaning given such term in
Section 10.4(f).

“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.

“Withholding Agent” means the Borrower and the Administrative Agent.

Section 1.2. [Reserved].

Section 1.3. Accounting Terms and Determination. Unless otherwise defined or
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared, in accordance with GAAP as
in effect from time to time, applied on a basis consistent with the most recent
audited consolidated financial statements of the Borrower and its Subsidiaries
delivered pursuant to Section 5.1(a); provided, that if the Borrower notifies
the Administrative Agent that the Borrower wishes to amend any covenant in
Article VI to eliminate the effect of any change in GAAP on the operation of
such covenant (or if the Administrative Agent notifies the Borrower that the
Required Lenders wish to amend Article VI for such purpose), then the Borrower’s
compliance with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory to
the Borrower and the Required Lenders. Furthermore, the Borrower hereby agrees
that any election pursuant to FASB ASC 825 shall be disregarded for all purposes
of this Agreement, including, without limitation, for calculating financial
ratios herein and determining compliance with the financial covenants herein.

 

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Section 1.4. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”. In
the computation of periods of time from a specified date to a later specified
date, the word “from” means “from and including” and the word “to” means “to but
excluding”. Unless the context requires otherwise (i) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as it was
originally executed or as it may from time to time be amended, restated,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (ii) any reference
herein to any Person shall be construed to include such Person’s successors and
permitted assigns, (iii) the words “hereof”, “herein” and “hereunder” and words
of similar import shall be construed to refer to this Agreement as a whole and
not to any particular provision hereof, (iv) all references to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles,
Sections, Exhibits and Schedules to this Agreement, (v) any reference to any law
or regulation herein 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. To the
extent that any of the representations and warranties contained in Article IV
under this Agreement is qualified by “Material Adverse Effect”, then the
qualifier “in all material respects” contained in Section 3.1(d) and the
qualifier “in any material respect” contained in Section 8.1(c) shall not apply.
Unless otherwise indicated, all references to time are references to Pacific
Standard Time or Pacific Daylight Savings Time, as the case may be. Unless
otherwise expressly provided herein, all references to dollar amounts shall mean
Dollars.

ARTICLE II.

AMOUNT AND TERMS OF THE COMMITMENTS

Section 2.1. General Description of Facility. Subject to and upon the terms and
conditions herein set forth, the Lenders hereby establish in favor of the
Borrower a term loan credit facility pursuant to which the Lenders severally
agree (to the extent of such Lender’s Term Loan Commitment) to make Term Loans
to the Borrower in accordance with Section 2.2; provided, that in no event shall
the aggregate principal amount of all outstanding Term Loans exceed at any time
the Aggregate Term Loan Commitments from time to time in effect.

Section 2.2. Term Loans. Subject to the terms and conditions set forth herein,
each Lender severally agrees to make a Term Loan, ratably in proportion to its
Pro Rata Share of the Aggregate Term Loan Commitments, to the Borrower on the
Closing Date in the aggregate principal amount of $100,000,000; provided that
the aggregate principal amount of the Term Loans outstanding at any time shall
not result in (i) such Lender’s Term Loan exceeding such Lender’s Term Loan
Commitment or (ii) the sum of the aggregate Term Loans of all Lenders exceeding
the Aggregate Term Loan Commitments. The Term Loan Commitments are not revolving
commitments, and the Borrower shall not be entitled to borrow, prepay and
reborrow Term Loans.

Section 2.3. [Reserved].

Section 2.4. [Reserved].

Section 2.5. [Reserved].

 

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Section 2.6. Fundings.

(a) Each Lender will make available the Term Loan to be made by it hereunder on
the Closing Date by wire transfer in immediately available funds to the
Administrative Agent at the Payment Office. The Administrative Agent will make
such Loans available to the Borrower by effecting a wire transfer of such
amounts to an account designated by the Borrower to the Administrative Agent.

(b) Unless the Administrative Agent shall have been notified by any Lender prior
to the Closing Date that such Lender will not make available to the
Administrative Agent such Lender’s Term Loan, the Administrative Agent may
assume that such Lender has made such amount available to the Administrative
Agent on such date, and the Administrative Agent, in reliance on such
assumption, may make available to the Borrower on such date a corresponding
amount. If such corresponding amount is not in fact made available to the
Administrative Agent by such Lender on the Closing Date, the Administrative
Agent shall be entitled to recover such corresponding amount on demand from such
Lender together with interest at the Federal Funds Rate for up to two (2) days
and thereafter at the rate specified for such Term Loan. If such Lender does not
pay such corresponding amount forthwith upon the Administrative Agent’s demand
therefor, the Administrative Agent shall promptly notify the Borrower, and the
Borrower shall immediately pay such corresponding amount to the Administrative
Agent together with interest at the rate specified for such Term Loan. Nothing
in this subsection shall be deemed to relieve any Lender from its obligation to
fund its Pro Rata Share of the Term Loans hereunder or to prejudice any rights
which the Borrower may have against any Lender as a result of any default by
such Lender hereunder.

(c) The funding of the Term Loans on the Closing Date shall be made by the
Lenders on the basis of their respective Pro Rata Shares. No Lender shall be
responsible for any default by any other Lender in its obligations hereunder,
and each Lender shall be obligated to make its Loans provided to be made by it
hereunder, regardless of the failure of any other Lender to make its Loans
hereunder.

Section 2.7. [Reserved].

Section 2.8. Reduction and Termination of Commitments. All Term Loan Commitments
shall terminate upon the funding of the Term Loans on the Closing Date.

Section 2.9. Repayment of Loans. The outstanding principal amount of all Term
Loans shall be due and payable (together with accrued and unpaid interest
thereon) on the Maturity Date.

Section 2.10. Evidence of Indebtedness.

(a) Each Lender shall maintain in accordance with its usual practice appropriate
records evidencing the indebtedness of the Borrower to such Lender resulting
from each Loan made by such Lender from time to time, including the amounts of
principal and interest payable thereon and paid to such Lender from time to time
under this Agreement. The Administrative Agent shall maintain appropriate
records in which shall be recorded (i) the Term Loan Commitment of each Lender,
(ii) the amount of each Loan made hereunder by each Lender, (iii) the date and
amount of any principal or interest due and payable or to become due and payable
from the Borrower to each Lender hereunder in respect of such Loans and
(iv) both the date and amount of any sum received by the Administrative Agent
hereunder from the Borrower in respect of the Loans and each Lender’s Pro Rata
Share thereof. The entries made in such

 

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records shall be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, that the failure or
delay of any Lender or the Administrative Agent in maintaining or making entries
into any such record or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Loans (both principal and unpaid accrued
interest) of such Lender in accordance with the terms of this Agreement.

(b) The Borrower will, upon a Lender’s request, execute and deliver to such
Lender a Note, payable to the order of such Lender.

Section 2.11. Prepayments.

The Borrower shall have the right at any time and from time to time to prepay
the Term Loans, in whole or in part, without premium or penalty, by giving
irrevocable written notice (or telephonic notice promptly confirmed in writing)
to the Administrative Agent no later than 11:00 a.m. not less than five
(5) Business Days prior to any such prepayment. Each such notice shall be
irrevocable and shall specify the proposed date of such prepayment and the
principal amount of the Term Loans to be prepaid. Upon receipt of any such
notice, the Administrative Agent shall promptly notify each affected Lender of
the contents thereof and of such Lender’s Pro Rata Share of any such prepayment.
If such notice is given, the aggregate amount specified in such notice shall be
due and payable on the date designated in such notice, together with accrued
interest to such date on the amount so prepaid in accordance with
Section 2.12(d); provided, that the Borrower shall also pay all amounts required
pursuant to Section 2.18.

Section 2.12. Interest on Loans.

(a) The Borrower shall pay interest on the Term Loans at a per annum rate equal
to 4.05%.

(b) [Reserved.]

(c) While an Event of Default exists or after acceleration, at the option of the
Required Lenders, the Borrower shall pay interest (“Default Interest”) at the
rate otherwise applicable, plus an additional 2% per annum, and with respect to
all other Obligations hereunder (other than Loans), at an all-in rate equal to
the Base Rate, plus an additional 2% per annum.

(d) Interest on the principal amount of all Loans shall accrue from and
including the date such Loans are made to but excluding the date of any
repayment thereof. Commencing on March 1, 2016, interest on all outstanding
Loans shall be payable semi-annually in arrears on each March 1 and September 1
and on the Maturity Date. All Default Interest shall be payable on demand.

Section 2.13. Fees. The Borrower shall pay to the Administrative Agent for its
own account fees in the amounts and at the times previously agreed upon by the
Borrower and the Administrative Agent and set forth in the Fee Letter.

Section 2.14. Computation of Interest and Fees. All computations of interest
hereunder shall be made on the basis of a year of 360 days consisting of twelve
30-day months. Each determination by the Administrative Agent of an interest
amount or fee hereunder shall be made in good faith and, except for manifest
error, shall be final, conclusive and binding for all purposes.

 

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Section 2.15. [Reserved].

Section 2.16. [Reserved].

Section 2.17. Increased Costs

(a) If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender; or

(ii) 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

(iii) impose on any Lender any other condition, cost or expense (other than
Taxes) affecting this Agreement or any Loans made by such Lender;

and the result of any of the foregoing shall be to increase the cost to such
Lender or such other Recipient of making, converting to, continuing or
maintaining any Loan or of maintaining its obligation to make any such Loan, or
to reduce the amount of any sum received or receivable by such Lender or other
Recipient hereunder (whether of principal, interest or any other amount) then,
upon request of such Lender or other Recipient, the Borrower will pay to such
Lender or other Recipient, as the case may be, such additional amount or amounts
as will compensate such Lender or other Recipient, as the case may be, for such
additional costs incurred or reduction suffered.

(b) If any Lender determines that any Change in Law affecting such Lender or any
lending office of such Lender or such Lender’s holding company, if any,
regarding capital or liquidity ratios or requirements, has or would have the
effect of reducing the rate of return on such Lender’s capital or on the capital
of such Lender’s holding company, if any, as a consequence of this Agreement,
the Commitments of such Lender or the Loans made by such Lender to a level below
that which such Lender or such Lender’s holding company could have achieved but
for such Change in Law (taking into consideration such Lender’s policies and the
policies of such Lender’s holding company with respect to capital adequacy),
then from time to time, the Borrower will pay to such Lender such additional
amount or amounts as will compensate such Lender or such Lender’s holding
company for any such reduction suffered.

(c) A certificate of a Lender setting forth the amount or amounts necessary to
compensate such Lender or such Lender’s holding company, as the case may be,
specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrower (with a copy to the Administrative Agent) and shall be conclusive,
absent manifest error. The Borrower shall pay any such Lender such amount or
amounts within 10 days after receipt thereof.

(d) Failure or delay on the part of any Lender to demand compensation pursuant
to this Section shall not constitute a waiver of such Lender’s right to demand
such compensation.

 

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Section 2.18. Funding Indemnity. In the event of (a) the prepayment of any
principal of a Loan other than on the Maturity Date (including as a result of an
Event of Default) or (b) the failure by the Borrower to borrow or prepay any
Loan on the date specified in any applicable notice (regardless of whether such
notice is withdrawn or revoked), then, in any such event, the Borrower shall
compensate each Lender, within five (5) Business Days after written demand from
such Lender, for any loss, cost or expense attributable to such event. Such
loss, cost or expense shall be deemed to include any applicable prepayment cost
as set forth below in this Section 2.18 (“Prepayment Cost”). A certificate as to
any additional amount payable under this Section 2.18 submitted to the Borrower
by any Lender (with a copy to the Administrative Agent) shall be conclusive,
absent manifest error.

The amount of any applicable Prepayment Cost due to a Lender shall equal the
aggregate amount (without markup) charged by the applicable funding bank(s) for
such Lender and its Participants with respect to the prepayment (or failure to
borrow) funds as a result of the relevant action (or inaction) of the Borrower
described in clause (a) or (b) above in this Section 2.18; provided that if a
Lender or its Participant ceases to have a funding bank, the Prepayment Cost of
such Lender or Participant shall be a “make-whole” amount calculated according
to any reasonable methodology established by such Lender or Participant. The
Borrower acknowledges that the Prepayment Cost is not a penalty, does not
constitute damages for Borrower’s breach of this Agreement, and does not
constitute payment of unmatured interest; instead, it is a fee payable by the
Borrower to a Lender if a Loan is repaid prior to its scheduled due date. The
Borrower acknowledges that the Lenders made available to the Borrower a variety
of interest rate options. Some of those options included prepayment premiums and
some did not. Those options that included a prepayment premium were available at
a lower cost than those options that did not. In the case of the Term Loans, the
Borrower selected an interest rate option that included a prepayment premium and
as a result obtained a lower rate of interest than would otherwise have been
available. The Borrower acknowledges that the Prepayment Cost is a reasonable
fee and charge of a Lender and reflects a fair and reasonable return to such
Lender for the consideration advanced to the Borrower.

Section 2.19. Taxes.

(a) For purposes of this Section, the term “applicable law” includes FATCA.

(b) Any and all payments by or on account of any obligation of the Borrower
under any Loan Document shall be made without deduction or withholding for any
Taxes, except as required by applicable law. If any applicable law (as
determined in the good faith discretion of an applicable Withholding Agent)
requires the deduction or withholding of any Tax from any such payment by a
Withholding Agent, then the applicable Withholding Agent shall be entitled to
make such deduction or withholding and shall timely pay the full amount deducted
or withheld to the relevant Governmental Authority in accordance with applicable
law and, if such Tax is an Indemnified Tax, then the sum payable by the Borrower
shall be increased as necessary so that after such deduction or withholding has
been made (including such deductions and withholdings applicable to additional
sums payable under this Section) the applicable Recipient receives an amount
equal to the sum it would have received had no such deduction or withholding
been made.

(c) The Borrower shall timely pay to the relevant Governmental Authority in
accordance with applicable law, or at the option of the Administrative Agent
timely reimburse it for the payment of, any Other Taxes.

(d) The Borrower shall indemnify each Recipient, 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) payable or paid by such Recipient or required to be withheld or
deducted from a payment to such Recipient and any

 

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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 Borrower by a Lender (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.

(e) Each Lender shall severally indemnify the Administrative Agent, within 10
days after demand therefor, for (i) any Indemnified Taxes attributable to such
Lender (but only to the extent that the Borrower has not already indemnified the
Administrative Agent for such Indemnified Taxes and without limiting the
obligation of the Borrower to do so), (ii) any Taxes attributable to such
Lender’s failure to comply with the provisions of Section 10.4(d) relating to
the maintenance of a Participant Register and (iii) any Excluded Taxes
attributable to such Lender, in each case, that are payable or paid by the
Administrative Agent 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 hereby authorizes the Administrative Agent to set off and
apply any and all amounts at any time owing to such Lender under any Loan
Document or otherwise payable by the Administrative Agent to the Lender from any
other source against any amount due to the Administrative Agent under this
clause (e).

(f) As soon as practicable after any payment of Taxes by the Borrower to a
Governmental Authority pursuant to this Section, the Borrower shall deliver to
the Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.

(g) (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 Borrower and the Administrative Agent, at the time or times
reasonably requested by the Borrower or the Administrative Agent, such properly
completed and executed documentation reasonably requested by the 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 Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrower or the Administrative Agent as will enable the Borrower 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 clauses (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.

 

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(ii) Without limiting the generality of the foregoing, in the event that the
Borrower is a U.S. Person:

(A) any Lender that is a U.S. Person shall deliver to the 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 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 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 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 2.19-1 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 the 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 2.19-2 or
Exhibit 2.19-3, 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 2.19-4 on
behalf of each such direct and indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the 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

 

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time thereafter upon the reasonable request of the 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 Borrower 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 Borrower and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the 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 Borrower or the
Administrative Agent as may be necessary for the Borrower 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 Closing
Date.

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower and the Administrative
Agent in writing of its legal inability to do so.

Section 2.20. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

(a) The Borrower shall make each payment required to be made by it hereunder
(whether of principal, interest, fees, or of amounts payable under Section 2.17,
2.18 or 2.19, or otherwise) prior to 1:00 p.m., on the date when due, in
immediately available funds, without set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at the Payment Office, except that
payments pursuant to Sections 2.17, 2.18 and 2.19 and 10.3 shall be made
directly to the Persons entitled thereto. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be made payable for the period
of such extension. All payments hereunder shall be made in Dollars.

(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, interest and fees
then due hereunder, such funds shall be applied (i) first, to the fees and
reimbursable expenses of the Administrative Agent then due and payable pursuant
to any of the Loan Documents, (ii) second, towards payment of interest and fees
then due hereunder, ratably among the parties entitled thereto in accordance
with the amounts of interest and fees then due to such parties, (iii) third,
towards payment of principal then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal then due to such
parties, and (iv) fourth, towards payment of all other Obligations then due,
ratably among the parties entitled thereto in accordance with the amounts of
such Obligations then due to such parties.

 

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(c) If any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans that would result in such Lender receiving payment of a greater
proportion of the aggregate amount of its Loans and accrued interest thereon
than the proportion received by any other Lender, then the Lender receiving such
greater proportion shall purchase (for cash at face value) participations in the
Loans of other Lenders to the extent necessary so that the benefit of all such
payments shall be shared by the Lenders ratably in accordance with the aggregate
amount of principal of and accrued interest on their respective Term Loans;
provided, that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this paragraph shall not
be construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans to any assignee or participant, other than to the Borrower or any
Subsidiary or Affiliate thereof (as to which the provisions of this paragraph
shall apply). The Borrower consents to the foregoing and agrees, to the extent
it may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation. For the avoidance of doubt, the parties acknowledge that
this Section 2.20(c) shall not apply to any action taken or proceeds received by
any Farm Credit Lender with respect to any of its Farm Credit Equities held by
any Borrower.

(d) Unless the Administrative Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Administrative Agent for
the account of the Lenders hereunder that the Borrower will not make such
payment, the Administrative Agent may assume that the Borrower has made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders, the amount or amounts due. In such event,
if the Borrower has not in fact made such payment, then each of the Lenders
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender with interest thereon, for each day from
and including the date such amount is distributed to it to but excluding the
date of payment to the Administrative Agent, at the greater of the Federal Funds
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation.

(e) If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.20(c) or (d), 10.3(d), then the Administrative Agent may,
in its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender’s obligations under such Sections until all such
unsatisfied obligations are fully paid.

Section 2.21. Mitigation of Obligations. If any Lender requests compensation
under Section 2.17, or if the Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.19, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the sole judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable under
Section 2.17 or Section 2.19, as the case may be, in the future and (ii) would
not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay
all costs and expenses incurred by any Lender in connection with such
designation or assignment.

 

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Section 2.22. Replacement of Lenders. If (a) any Lender requests compensation
under Section 2.17, (b) the Borrower is required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 2.19, or (c) in connection with any proposed amendment, waiver, or
consent, the consent of all of the Lenders, or all of the Lenders directly
affected thereby, is required pursuant to Section 10.2, and any such Lender
refuses to consent to such amendment, waiver or consent as to which the Required
Lenders have consented, then, in each case, the Borrower may, at its sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance with
and subject to the restrictions set forth in Section 10.4(b)) all its interests,
rights and obligations under this Agreement to an assignee that shall assume
such obligations (which assignee may be another Lender); provided, that (i) the
Borrower shall have received the prior written consent of the Administrative
Agent, which consent shall not be unreasonably withheld, (ii) prior to, or
contemporaneous with, the replacement of such Lender, such Lender shall have
received payment of an amount equal to the outstanding principal amount of all
Loans owed to it, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder (including, without limitation, any amounts then due and
owing under Section 2.17 and/or Section 2.19), from the assignee (in the case of
such outstanding principal and accrued interest) and from the Borrower (in the
case of all other amounts) and (iii) in the case of a claim for compensation
under Section 2.17 or payments required to be made pursuant to Section 2.19,
such assignment will result in a reduction in such compensation or payments.

ARTICLE III.

CONDITIONS PRECEDENT TO LOANS

Section 3.1. Conditions To Effectiveness. The obligations of the Lenders to make
Loans hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 10.2).

(a) The Administrative Agent shall have received all fees and other amounts due
and payable on or prior to the Closing Date, including reimbursement or payment
of all out-of-pocket expenses (including reasonable fees, charges and
disbursements of counsel to the Administrative Agent) required to be reimbursed
or paid by the Borrower hereunder, under any other Loan Document and under any
agreement with the Administrative Agent or the Arranger.

(b) The Administrative Agent (or its counsel) shall have received the following:

(i) a counterpart of this Agreement signed by or on behalf of each party thereto
or written evidence satisfactory to the Administrative Agent (which may include
telecopy transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement;

(ii) a duly executed Note payable to each Lender;

(iii) a duly executed Subsidiary Guarantee Agreement and Indemnity and
Contribution Agreement;

(iv) [intentionally omitted];

 

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(v) a certificate of the Secretary or Assistant Secretary of each Loan Party,
substantially in the form of Exhibit 3.1(b)(v), attaching and certifying copies
of its bylaws and of the resolutions of its board of directors, or partnership
agreement or limited liability company agreement, or comparable organizational
documents and authorizations, authorizing the execution, delivery and
performance of the Loan Documents to which it is a party and certifying the
name, title and true signature of each officer of such Loan Party executing the
Loan Documents to which it is a party;

(vi) certified copies of the articles or certificate of incorporation,
certificate of organization or limited partnership, or other registered
organizational documents of each Loan Party, together with certificates of good
standing or existence, as may be available from the Secretary of State of the
jurisdiction of organization of such Loan Party and each other jurisdiction
where such Loan Party is required to be qualified to do business as a foreign
entity;

(vii) a favorable written opinion of (x) Jim F. Andrews, Jr., General Counsel of
the Loan Parties or (y) outside counsel to the Loan Parties, addressed to the
Administrative Agent and each of the Lenders, and covering such matters relating
to the Loan Parties, the Loan Documents and the transactions contemplated
therein as the Administrative Agent or the Required Lenders shall reasonably
request;

(viii) a certificate, substantially in the form of Exhibit 3.1(b)(viii), dated
the Closing Date and signed by a Responsible Officer, confirming compliance with
the conditions set forth in paragraphs (c), (d) and (e) of this Section 3.1
including a representation that no event or condition has occurred since the
last audited financial statements which would have a Material Adverse Effect;

(ix) a duly executed Notice of Borrowing with respect to the Term Loans;

(x) certified copies of all consents, approvals, authorizations, registrations
and filings and orders required or advisable to be made or obtained under any
Requirement of Law, or by any contractual obligation of each Loan Party, in
connection with the execution, delivery, performance, validity and
enforceability of the Loan Documents or any of the transactions contemplated
thereby, and such consents, approvals, authorizations, registrations, filings
and orders shall be in full force and effect and all applicable waiting periods
shall have expired;

(xi) copies of the consolidated financial statements of the Borrower and its
Subsidiaries for the fiscal years ended 2012, 2013, and 2014, including balance
sheets, income and cash flow statements audited by independent public
accountants of recognized national standing and prepared in conformity with
GAAP, and such other financial information as the Administrative Agent may
reasonably request;

(xii) confirmation that no litigation, investigation or proceeding of or before
any arbitrators or Governmental Authorities is pending against or, to the
knowledge of the Borrower, threatened against the Borrower or any of its
Subsidiaries that could reasonably be expected to have a Material Adverse
Effect;

 

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(xiii) all information the Administrative Agent and each Lender may request with
respect to the Borrower and its Subsidiaries in order to comply with the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Patriot Act”) and any other “know your customer” or similar laws or
regulations;

(xiv) certificates of insurance issued on behalf of insurers of the Borrower and
all guarantors, describing in reasonable detail the types and amounts of
insurance (property and liability) maintained by the Borrower and all
guarantors, naming the Administrative Agent as additional insured in the case of
liability insurance;

(xv) a duly executed amendment to the Existing Revolving Credit Agreement
permitting the Commitments and Indebtedness under this Agreement, together with
evidence that such amendment has (or, concurrently with the effectiveness of
this Agreement, will) become effective; and

(xvi) evidence that, consistent with Section 5.11, the Borrower has purchased
Farm Credit Equities in American AgCredit, PCA and executed American AgCredit,
PCA’s standard Membership Agreement;

(c) at the time of and immediately after giving effect to the funding of the
Term Loans, no Default or Event of Default shall exist;

(d) at the time of and immediately after giving effect to the funding of the
Term Loans, all representations and warranties of each Loan Party set forth in
the Loan Documents shall be true and correct in all material respects (other
than those representations and warranties that are expressly qualified by a
Material Adverse Effect or other materiality, in which case such representations
and warranties shall be true and correct in all respects) on and as of the date
of such funding, before and after giving effect thereto;

(e) since the date of the audited financial statements of the Borrower described
in Section 4.4, there shall have been no change which has had or could
reasonably be expected to have a Material Adverse Effect; and

(f) the Administrative Agent shall have received such other documents,
certificates, information or legal opinions as the Administrative Agent or the
Required Lenders may reasonably request, all in form and substance reasonably
satisfactory to the Administrative Agent or the Required Lenders.

Without limiting the generality of the provisions of this Section, for purposes
of determining compliance with the conditions specified in this Section, each
Lender that has signed this Agreement shall be deemed to have consented to,
approved of, accepted or been satisfied with each document or other matter
required thereunder to be consented to, 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.

The funding of the Term Loans shall be deemed to constitute a representation and
warranty by the Borrower on the date thereof as to the matters specified in
paragraphs (c), (d) and (e) of this Section 3.1.

Section 3.2. Delivery of Documents. All of the Loan Documents, certificates,
legal opinions and other documents and papers referred to in this Article III,
unless otherwise specified, shall be delivered to the Administrative Agent for
the account of each of the Lenders and, except for the Notes, in sufficient
counterparts or copies for each of the Lenders and shall be in form and
substance satisfactory in all respects to the Administrative Agent.

 

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ARTICLE IV.

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Administrative Agent and each Lender
as follows:

Section 4.1. Existence; Power. The Borrower and each of its Subsidiaries (i) is
duly organized, validly existing and in good standing as a corporation,
partnership or limited liability company under the laws of the jurisdiction of
its organization, (ii) has all requisite power and authority to carry on its
business as now conducted, and (iii) is duly qualified to do business, and is in
good standing, in each jurisdiction where such qualification is required, except
where a failure to be so qualified could not reasonably be expected to result in
a Material Adverse Effect.

Section 4.2. Organizational Power; Authorization. The execution, delivery and
performance by each Loan Party of the Loan Documents to which it is a party are
within such Loan Party’s organizational powers and have been duly authorized by
all necessary organizational, and if required, shareholder, partner or member,
action. This Agreement has been duly executed and delivered by the Borrower, and
constitutes, and each other Loan Document to which any Loan Party is a party,
when executed and delivered by such Loan Party, will constitute, valid and
binding obligations of the Borrower or such Loan Party (as the case may be),
enforceable against it in accordance with their respective terms, except as may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws affecting the enforcement of creditors’ rights generally and by
general principles of equity.

Section 4.3. Governmental Approvals; No Conflicts. The execution, delivery and
performance by the Borrower of this Agreement, and by each Loan Party of the
other Loan Documents to which it is a party (a) do not require any consent or
approval of, registration or filing with, or any action by, any Governmental
Authority, except those as have been obtained or made and are in full force and
effect, (b) will not violate any applicable law or regulation or the charter,
by-laws or other organizational documents of the Borrower or any of its
Subsidiaries or any judgment or order of any Governmental Authority, (c) will
not violate or result in a default under any indenture, material agreement or
other material instrument binding on the Borrower or any of its Subsidiaries or
any of its assets or give rise to a right thereunder to require any payment to
be made by the Borrower or any of its Subsidiaries and (d) will not result in
the creation or imposition of any Lien on any asset of the Borrower or any of
its Subsidiaries.

Section 4.4. Financial Statements. The Borrower has furnished to each Lender
(i) the audited consolidated balance sheet of the Borrower and its Subsidiaries
as of December 31, 2014 and the related consolidated statements of income,
shareholders’ equity and cash flows for the fiscal year then ended reported on
by KPMG, LLP and (ii) the unaudited consolidated balance sheet of the Borrower
and its Subsidiaries as at the end of June 30, 2015, and the related unaudited
consolidated statements of income and cash flows for the fiscal quarter and
year-to-date period then ending, certified by a Responsible Officer. Such
financial statements fairly present the consolidated financial condition of the
Borrower and its Subsidiaries as of such dates and the consolidated results of
operations for such periods in conformity with GAAP consistently applied,
subject to year-end audit adjustments and the absence of footnotes in the case
of the statements referred to in clause (ii). Since December 31, 2014, there
have been no changes with respect to the Borrower and its Subsidiaries which
have had or could reasonably be expected to have, singly or in the aggregate, a
Material Adverse Effect.

 

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Section 4.5. Litigation and Environmental Matters.

(a) No litigation, investigation or proceeding of or before any arbitrators or
Governmental Authorities is pending against or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or any of its
Subsidiaries (i) as to which there is a reasonable possibility of an adverse
determination that could reasonably be expected to have, either individually or
in the aggregate, a Material Adverse Effect or (ii) which in any manner draws
into question the validity or enforceability of this Agreement or any other Loan
Document.

(b) Neither the Borrower nor any of its Subsidiaries (i) has failed to comply
with any Environmental Law or to obtain, maintain or comply with any permit,
license or other approval required under any Environmental Law, (ii) has become
subject to any Environmental Liability, (iii) has received notice of any claim
with respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability, in each case which could reasonably be expected to have
a Material Adverse Effect.

Section 4.6. Compliance with Laws and Agreements. The Borrower and each
Subsidiary is in compliance with (a) all applicable laws, rules, regulations and
orders of any Governmental Authority, and (b) all indentures, agreements or
other instruments binding upon it or its properties, except where
non-compliance, either singly or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

Section 4.7. Investment Company Act, Etc. Neither the Borrower nor any of its
Subsidiaries is (a) an “investment company,” as defined in, or subject to
regulation under, the Investment Company Act of 1940, as amended, or
(b) otherwise subject to any other regulatory scheme limiting its ability to
incur debt or requiring any approval or consent from or registration or filing
with, any Governmental Authority in connection therewith.

Section 4.8. Taxes. The Borrower and its Subsidiaries and each other Person for
whose taxes the Borrower or any Subsidiary could become liable have timely filed
or caused to be filed all Federal income tax returns and all other material tax
returns that are required to be filed by them, and have paid all taxes shown to
be due and payable on such returns or on any assessments made against it or its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority, except (i) to the extent the failure to
do so would not have a Material Adverse Effect or (ii) where the same are
currently being contested in good faith by appropriate proceedings and for which
the Borrower or such Subsidiary, as the case may be, has set aside on its books
adequate reserves. The charges, accruals and reserves on the books of the
Borrower and its Subsidiaries in respect of such taxes are adequate, and no tax
liabilities that could be materially in excess of the amount so provided are
anticipated.

Section 4.9. Margin Regulations. None of the proceeds of any of the Loans will
be used, (i) directly or indirectly, for “purchasing” or “carrying” any “margin
stock” with the respective meanings of each of such terms under Regulation U or
for any purpose that violates the provisions of the Regulation T, U or X or
(ii) to finance or refinance any (A) commercial paper issued by the Borrower or
(B) any other Indebtedness, except for Indebtedness that the Borrower incurred
for general corporate or working capital purposes. Neither the Borrower nor its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
“margin stock” (as defined in Regulation U). Following the application of the
proceeds of any Loan, less than 25% of the value of the assets of the Borrower
and its Subsidiaries which are subject to any limitation on sale, pledge or
other restriction hereunder taken as a whole have been, and will continue to be,
represented by “margin stock” (as defined in Regulation U).

 

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Section 4.10. ERISA.

(a) No ERISA Event has occurred or is reasonably expected to occur that, when
taken together with all other such ERISA Events for which liability is
reasonably expected to occur, could reasonably be expected to result in a
Material Adverse Effect. The “benefit obligations” of all Plans did not, as of
the date of the most recent financial statements reflecting such amounts, exceed
the “fair market value of the assets” of such Plans by more than $10,000,000. No
event has occurred since the issuance of such financial statements that would
cause the “benefit obligations” of all Plans to exceed the “fair market value of
the assets” of such Plans by the dollar amount specified in the previous
sentence. The terms “benefit obligations” and “fair market value of assets”
shall be determined by and with such terms defined in accordance with FASB ASC
715.

(b) Each Employee Benefit Plan is in compliance in all material respects with
the applicable provisions ERISA, the Code and other Requirements of Law. Except
with respect to Multiemployer Plans, each Qualified Plan (I) has received a
favorable determination from the IRS applicable to the Qualified Plan’s current
remedial amendment cycle (as described in Revenue Procedure 2007-44 or “2007-44”
for short), (II) has timely filed for a favorable determination letter from the
IRS during its staggered remedial amendment cycle (as defined in 2007-44) and
such application is currently being processed by the IRS, (III) has filed for a
determination letter prior to its “GUST remedial amendment period” (as defined
in 2007-44) and received such determination letter and the staggered remedial
amendment cycle first following the GUST remedial amendment period for such
Qualified Plan has not yet expired or (IV) is maintained under a prototype or
volume submitter plan and may rely upon a favorable opinion or letter issued by
the IRS with respect to such prototype or volume submitter plan. No event has
occurred which would cause the loss of the Borrower’s or any ERISA Affiliate’s
reliance on the Qualified Plan’s favorable determination letter or opinion or
advisory letter.

(c) With respect to any Employee Benefit Plan that is a retiree welfare benefit
arrangement, all amounts have been accrued on the Borrower’s financial
statements in accordance with Statement of FASB ASC 715.

(d) Except as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect: (i) there are no pending or to the
best of the Borrower’s knowledge, threatened claims, actions or lawsuits or
action by any Governmental Authority, participant or beneficiary with respect to
an Employee Benefit Plan; (ii) there are no violations of the fiduciary
responsibility rules with respect to any Employee Benefit Plan; and
(iii) neither the Borrower nor ERISA Affiliate has engaged in a non-exempt
“prohibited transaction,” as defined in Section 406 of ERISA and Section 4975 of
the Code, in connection with any Employee Benefit Plan, that would subject the
Borrower to a tax on prohibited transactions imposed by Section 502(i) of ERISA
or Section 4975 of the Code.

Section 4.11. Ownership of Property.

(a) Each of the Borrower and its Subsidiaries has good title to, or valid
leasehold interests in, all of its real and personal property material to the
operation of its business.

(b) Each of the Borrower and its Subsidiaries owns, or is licensed, or otherwise
has the right, to use, all patents, trademarks, service marks, tradenames,
copyrights and other intellectual property material to its business, and the use
thereof by the Borrower and its Subsidiaries does not infringe on the rights of
any other Person, except for any such infringements that, individually or in the
aggregate, would not have a Material Adverse Effect.

 

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(c) The properties of the Borrower and its Subsidiaries are insured with
financially sound and reputable insurance companies which are not Affiliates of
the Borrower, 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 Borrower or any applicable Subsidiary
operates (it being acknowledged and agreed by the parties hereto that the
insurance coverage maintained by the Borrower and its Subsidiaries as of the
Closing Date satisfies the requirements of this clause (c)).

Section 4.12. Disclosure. The Borrower has disclosed to the Lenders all
agreements, instruments, and corporate or other restrictions to which the
Borrower or any of its Subsidiaries is subject, and all other matters known to
any of them, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. None of the reports (including
without limitation all reports that the Borrower is required to file with the
Securities and Exchange Commission), financial statements, certificates or other
information furnished by or on behalf of the Borrower to the Administrative
Agent or any Lender in connection with the negotiation or syndication of this
Agreement or any other Loan Document or delivered hereunder or thereunder (as
modified or supplemented by any other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, taken as a whole, in light of the circumstances
under which they were made, not misleading.

Section 4.13. Labor Relations. There are no strikes, lockouts or other material
labor disputes or grievances against the Borrower or any of its Subsidiaries,
or, to the Borrower’s knowledge, threatened against or affecting the Borrower or
any of its Subsidiaries, and no significant unfair labor practice, charges or
grievances are pending against the Borrower or any of its Subsidiaries, or to
the Borrower’s knowledge, threatened against any of them before any Governmental
Authority, which could reasonably be expected to have a Material Adverse Effect.
All payments due from the Borrower or any of its Subsidiaries pursuant to the
provisions of any collective bargaining agreement have been paid or accrued as a
liability on the books of the Borrower or any such Subsidiary, except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.

Section 4.14. Subsidiaries. Schedule 4.14 sets forth the name of, the ownership
interest of the Borrower in, the jurisdiction of incorporation or organization
of, and the type of, each Subsidiary as of the Closing Date.

Section 4.15. Foreign Assets Control Regulations, Etc. Neither the making of any
Loan nor the use of the proceeds thereof will violate (a) the Trading with the
Enemy Act, as amended, or any of the foreign assets control regulations of the
United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or
any enabling legislation or executive order relating thereto, (b) the Patriot
Act or (c) Executive Order No. 13,224, 66 Fed. Reg. 49,079 (2001), issued by the
President of the United States (Executive Order Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support
Terrorism). Without limiting the foregoing, neither Borrower nor any of its
Subsidiaries is or will become a “blocked person” as described in Section 1 of
such Executive Order or engages or will engage in any dealings or transactions
with, or is otherwise associated with, any such blocked person.

 

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Section 4.16. Anti-Corruption Laws and Sanctions. The Borrower has implemented
and maintains in effect policies and procedures designed to ensure compliance by
the Borrower, its Subsidiaries and their respective directors, officers,
employees and agents with Anti-Corruption Laws and applicable Sanctions, and the
Borrower, its Subsidiaries and their respective officers and employees and, to
the knowledge of the Borrower, its directors and agents, are in compliance with
Anti-Corruption Laws and applicable Sanctions in all material respects. None of
(a) the Borrower, any Subsidiary or any of their respective directors, officers
or employees, or (b) to the knowledge of the Borrower, any agent of the Borrower
or any Subsidiary that will act in any capacity in connection with or benefit
from the credit facility established hereby, is a Sanctioned Person. No Loan,
use of proceeds or other transaction contemplated hereby will violate
Anti-Corruption Laws or applicable Sanctions.

ARTICLE V.

AFFIRMATIVE COVENANTS

The Borrower covenants and agrees that so long as any Lender has a Commitment
hereunder or the principal of and interest on any Loan or any fee remains
unpaid:

Section 5.1. Financial Statements and Other Information. The Borrower will
deliver to the Administrative Agent and each Lender:

(a) as soon as available and in any event within 90 days after the end of each
fiscal year of Borrower, a copy of the annual audited report for such fiscal
year for the Borrower and its Subsidiaries, containing a consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of such fiscal year and
the related consolidated statements of income, shareholders’ equity and cash
flows (together with all footnotes thereto) of the Borrower and its Subsidiaries
for such fiscal year, setting forth in each case in comparative form the figures
for the previous fiscal year, all in reasonable detail and reported on by KPMG,
LLP or other independent public accountants of nationally recognized standing
(without a “going concern” or like qualification, exception or explanation and
without any qualification or exception as to scope of such audit) to the effect
that such financial statements present fairly in all material respects the
financial condition and the results of operations of the Borrower and its
Subsidiaries for such fiscal year on a consolidated and consolidating basis in
accordance with GAAP and that the examination by such accountants in connection
with such consolidated financial statements has been made in accordance with
generally accepted auditing standards;

(b) as soon as available and in any event within 45 days after the end of each
of the first three fiscal quarters of each fiscal year of the Borrower, an
unaudited consolidated balance sheet of the Borrower and its Subsidiaries as of
the end of such fiscal quarter and the related unaudited consolidated statements
of income and cash flows of the Borrower and its Subsidiaries for such fiscal
quarter and the then elapsed portion of such fiscal year, setting forth in each
case in comparative form the figures for the corresponding quarter and the
corresponding portion of Borrower’s previous fiscal year, all certified by the
chief financial officer or treasurer of the Borrower as presenting fairly in all
material respects the financial condition and results of operations of the
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP,
subject to normal year-end audit adjustments and the absence of footnotes;

(c) concurrently with the delivery of the financial statements referred to in
clauses (a) and (b) above, a certificate of a Responsible Officer,
(i) certifying as to whether there exists a Default or Event of Default on the
date of such certificate, and if a Default or an Event of Default then exists,
specifying the details thereof and the action which the Borrower has taken or
proposes to take with respect thereto, (ii) setting forth in reasonable detail
calculations demonstrating compliance with Article VI including calculations
demonstrating Borrower’s Minimum Timber Market Value for each month, and
(iii) stating whether any change in GAAP or the application thereof has occurred
since the date of the Borrower’s audited financial statements referred to in
Section 4.4 and, if any change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate;

 

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(d) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed with the
Securities and Exchange Commission, or any Governmental Authority succeeding to
any or all functions of said Commission, or with any national securities
exchange, or distributed by the Borrower to its shareholders generally, as the
case may be;

(e) promptly upon the consummation of any offering of common or preferred stock
of the Borrower, notice thereof and the aggregate amount of proceeds raised
therefrom; and

(f) promptly following any request therefor, such other information regarding
the results of operations, business affairs and financial condition of the
Borrower or any Subsidiary as the Administrative Agent or any Lender may
reasonably request.

Documents and notices required to be delivered pursuant to Section 5.01(a), (b),
or (d), (to the extent any such documents are included in materials otherwise
filed with the Securities and Exchange Commission) may be delivered
electronically and if so delivered, shall be deemed to have been delivered on
the date (i) on which the Borrower posts such documents or notices, or provides
a link thereto on the Borrower’s website on the Internet; or (ii) on which such
documents or notices are posted on the Borrower’s behalf on an Internet or
intranet 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) the Borrower shall deliver paper
copies of such documents or notices to the Administrative Agent or any Lender
that requests the Borrower to deliver such paper copies until a written request
to cease delivering paper copies is given by the Administrative Agent or such
Lender and (ii) the Borrower shall notify the Administrative Agent and each
Lender (by telecopy or electronic mail) of the posting of any such documents.
The Administrative Agent shall have no obligation to request the delivery or to
maintain copies of the documents or notices referred to above, and in any event
shall have no responsibility to monitor compliance by the Loan Parties 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 or
notices.

Section 5.2. Notices of Material Events. The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:

(a) the occurrence of any Default or Event of Default;

(b) the filing or commencement of any action, suit or proceeding by or before
any arbitrator or Governmental Authority against or, to the knowledge of the
Borrower, affecting the Borrower or any Subsidiary which, if adversely
determined, could reasonably be expected to result in a Material Adverse Effect;

(c) the occurrence of any event or any other development by which the Borrower
or any of its Subsidiaries (i) fails to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) becomes subject to any Environmental
Liability, (iii) receives notice of any claim with respect to any Environmental
Liability, or (iv) becomes aware of any basis for any Environmental Liability
and in each of the preceding clauses, which individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect;

 

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(d) the occurrence of any ERISA Event that alone, or together with any other
ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrower and its Subsidiaries in an aggregate amount exceeding
$5,000,000; and

(e) any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect.

(f) Each notice delivered under this Section shall be accompanied by a written
statement of a Responsible Officer setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.

Section 5.3. Existence; Conduct of Business. The Borrower will, and will cause
each of its Subsidiaries to, do or cause to be done all things necessary to
preserve, renew and maintain in full force and effect its legal existence and
its respective rights, licenses, permits, privileges, franchises, patents,
copyrights, trademarks and trade names material to the conduct of its business;
provided, that nothing in this Section shall prohibit any merger, consolidation,
liquidation or dissolution permitted under Section 7.3.

Section 5.4. Compliance with Laws, Etc. The Borrower will, and will cause each
of its Subsidiaries to, comply with all laws, rules, regulations and
requirements of any Governmental Authority applicable to its properties, except
where the failure to do so, either individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. The Borrower will
maintain in effect and enforce policies and procedures designed to ensure
compliance by the Borrower, its Subsidiaries and their respective directors,
officers, employees and agents with Anti-Corruption Laws and applicable
Sanctions.

Section 5.5. Payment of Obligations. The Borrower will, and will cause each of
its Subsidiaries to, pay and discharge at or before maturity, all of its
obligations and liabilities (including without limitation all tax liabilities
and claims that could result in a statutory Lien) before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) the Borrower or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP and (c) the failure to make payment pending such
contest could not reasonably be expected to result in a Material Adverse Effect.

Section 5.6. Books and Records. The Borrower will, and will cause each of its
Subsidiaries to, keep proper books of record and account in which full, true and
correct entries shall be made of all dealings and transactions in relation to
its business and activities to the extent necessary to prepare the consolidated
financial statements of Borrower in conformity with GAAP.

Section 5.7. Visitation, Inspection, Appraisals Etc.

(a) The Borrower will, and will cause each of its Subsidiaries to, permit any
representative of the Administrative Agent or any Lender, to visit and inspect
its properties, to examine its books and records and to make copies and take
extracts therefrom, and to discuss its affairs, finances and accounts with any
of its officers and with its independent certified public accountants, all at
such reasonable times and as often as the Administrative Agent or any Lender may
reasonably request after reasonable prior notice to the Borrower; provided,
however, if an Event of Default has occurred and is continuing, no prior notice
shall be required.

 

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(b) The Borrower will, and will cause each of its Subsidiaries to, deliver to
the Lenders such appraisals of the timber land of the Loan Parties as the
Administrative Agent may reasonably request at any time and from time to time,
such appraisals to be conducted by an appraiser, and in form and substance,
reasonably satisfactory to the Administrative Agent conducted at the expense of
the Lenders, unless an Event of Default has occurred and is continuing, at which
time such appraisals shall be conducted at the expense of the Borrower as
frequently as the Required Lenders shall request.

Section 5.8. Maintenance of Properties; Insurance. The Borrower will, and will
cause each of its Subsidiaries to, (a) keep and maintain all property material
to the conduct of its business in good working order and condition, ordinary
wear and tear except where the failure to do so, either individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect and (b) maintain with financially sound and reputable insurance
companies, insurance with respect to its properties and business, and the
properties and business of its Subsidiaries, against loss or damage of the kinds
customarily insured against by companies in the same or similar businesses
operating in the same or similar locations.

Section 5.9. Use of Proceeds. The Borrower will use the proceeds of the Term
Loans to refinance existing Indebtedness, to finance working capital needs, to
finance acquisitions and for other general corporate purposes of the Borrower
and its Subsidiaries. No part of the proceeds of any Loan will be used, whether
directly or indirectly, for any purpose that would violate any rule or
regulation of the Board of Governors of the Federal Reserve System, including
Regulations T, U or X.

Section 5.10. Additional Subsidiaries. If any additional Subsidiary is acquired
or formed after the Closing Date, the Borrower will, within ten (10) Business
Days after such Subsidiary is acquired or formed, notify the Administrative
Agent and the Lenders thereof and will cause such Subsidiary to become a
Subsidiary Loan Party by executing agreements in the form of Annex I to the
Subsidiary Guarantee Agreement and Annex I to the Indemnity and Contribution
Agreement in form and substance satisfactory to the Administrative Agent and the
Required Lenders and will cause such Subsidiary to deliver simultaneously
therewith similar documents applicable to such Subsidiary required under
Section 3.1 as reasonably requested by the Administrative Agent.

Section 5.11. Farm Credit Equities.

(a) So long as (i) a Farm Credit Lender is a Lender or Voting Participant
hereunder and (ii) such Farm Credit Lender has notified the Borrower that it is
eligible to receive patronage distributions directly from such Farm Credit
Lender or one of its Affiliates on account of the Term Loans made (or
participated in) by such Farm Credit Lender hereunder, the Borrower will, as a
condition to receiving such patronage distributions, acquire equity in such Farm
Credit Lender or one of its Affiliates in such amounts and at such times as such
Farm Credit Lender may require in accordance with such Farm Credit Lender’s or
its Affiliate’s bylaws and capital plan or similar documents (as each may be
amended from time to time); provided, however, that, notwithstanding anything to
the contrary contained herein, the maximum amount of equity that the Borrower
may be required to purchase in such Farm Credit Lender or one of its Affiliates
in connection with the Loans made by such Farm Credit Lender hereunder shall not
exceed the maximum amount required by the applicable bylaws, capital plan and
related documents, in each case, (x) as in effect (and in the form provided to
the Borrower) on the Closing Date or (y) in the case of a Farm Credit Lender
that becomes a Lender or Voting Participant as a result of an assignment or sale
of a participation or sub-participation, as in effect (and in the form provided
to the Borrower) at the time of the closing of the related assignment or sale of
participation or sub-participation. The Borrower acknowledges receipt of the
documents from American AgCredit, PCA (together with any similar documents
delivered to the Borrower in connection with a Farm Credit Lender that becomes a
Lender or Voting Participant as a result of an assignment or sale of

 

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a participation or sub-participation after the Closing Date, the “Farm Credit
Equity Documents”), which describe the nature of the stock and/or other equities
in a Farm Credit Lender or its Affiliate required to be acquired by the Borrower
in connection with the Term Loans made (or participated in) by such Farm Credit
Lender (the “Farm Credit Equities”), as well as applicable capitalization
requirements, and the Borrower agrees to be bound by the terms thereof.

(b) Each party hereto acknowledges that (i) the Farm Credit Equity Documents
shall govern (x) the rights and obligations of the parties with respect to the
Farm Credit Equities and any patronage refunds or other distributions made on
account thereof or on account of the Borrower’s patronage with the respective
Farm Credit Lenders, (y) the Borrower’s eligibility for patronage distributions
from the respective Farm Credit Lenders or their Affiliates (in the form of Farm
Credit Equities and/or cash) and (z) patronage distributions, if any, in the
event of a sale by a Farm Credit Lender of participations or sub-participations
in the Term Loans made (or participated in) by such Farm Credit Lender,
(ii) patronage refunds or other distributions by each Farm Credit Lender or one
of its Affiliates are subject to various conditions, including approval by the
applicable board of directors of such Farm Credit Lender or Affiliate with
respect to each such refund or other distribution and (iii) the Borrower (and
not an Affiliate of the Borrower) will be the owner of the Farm Credit Equities
issued by the applicable Farm Credit Lender or an Affiliate thereof. Each Farm
Credit Lender reserves the right to assign or sell participations or
sub-participations in all or any part of its Commitments or outstanding Loans
hereunder on a non-patronage basis (and/or to a Lender that pays no patronage or
pays patronage that is lower than the patronage paid by the transferring Farm
Credit Lender) in accordance with Section 10.4.

(c) Each party hereto acknowledges that each Farm Credit Lender (or its
Affiliate) has a statutory first lien pursuant to the Farm Credit Act on all
Farm Credit Equities of such Farm Credit Lender (or its Affiliate) that the
Borrower may now own or hereafter acquire, which statutory lien shall be for
such Farm Credit Lender’s (or its Affiliate’s) sole and exclusive benefit. The
Farm Credit Equities of a particular Farm Credit Lender (or its Affiliate) shall
not constitute security for the Obligations due to any other Lender. To the
extent that any of the Loan Documents create a Lien on the Farm Credit Equities
of a Farm Credit Lender (or its Affiliate) or on patronage accrued by such Farm
Credit Lender (or its Affiliate) for the account of the Borrower (including, in
each case, proceeds thereof), such Lien shall be for such Farm Credit Lender’s
sole and exclusive benefit and shall not be subject to pro rata sharing
hereunder. Neither the Farm Credit Equities nor any accrued patronage shall be
offset against the Obligations except that, in the event of an Event of Default,
a Farm Credit Lender may elect, solely at its discretion, to apply the cash
portion of any patronage distribution or retirement of equity to amounts due
under this Agreement. The Borrower acknowledges that any corresponding tax
liability associated with such application is the sole responsibility of the
Borrower. No Farm Credit Lender shall have an obligation to retire the Farm
Credit Equities of such Farm Credit Lender upon any Event of Default, Default or
any other default by the Borrower, or at any other time, either for application
to the Obligations or otherwise.

ARTICLE VI.

FINANCIAL COVENANTS

The Borrower covenants and agrees that so long as any Lender has a Commitment
hereunder or the principal of or interest on or any Loan remains unpaid or any
fee remains unpaid:

Section 6.1. Leverage Ratio. The Borrower and its Subsidiaries shall maintain as
of the last day of each fiscal quarter of the Borrower, a Leverage Ratio of not
greater than 0.65:1.00.

 

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Section 6.2. Minimum Timber Market Value. The Borrower and its Subsidiaries
shall maintain a Timber Market Value greater than 175% of outstanding Total
Senior Indebtedness.

ARTICLE VII.

NEGATIVE COVENANTS

The Borrower covenants and agrees that so long as any Lender has a Commitment
hereunder or the principal of or interest on any Loan remains unpaid or any fee
remains unpaid:

Section 7.1. Indebtedness. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness,
except:

(a) Indebtedness of the Borrower and its Subsidiaries under the Loan Documents;

(b) Indebtedness of the Borrower or any Subsidiary existing on the date hereof
and set forth on Schedule 7.1 and extensions, renewals and replacements of any
such Indebtedness that do not increase the outstanding principal amount thereof
(immediately prior to giving effect to such extension, renewal or replacement)
or shorten the maturity or the weighted average life thereof;

(c) Indebtedness of the Borrower or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets,
including Capital Lease Obligations and any Indebtedness assumed in connection
with the acquisition of any such assets if secured by a Lien on any such assets
prior to the acquisition thereof; provided, that such Indebtedness is incurred
prior to or within 90 days after such acquisition or the completion of such
construction or improvements or extensions, renewals, and replacements of any
such Indebtedness that do not increase the outstanding principal amount thereof
(immediately prior to giving effect to such extension, renewal or replacement)
or shorten the maturity or the weighted average life thereof; provided further,
that the aggregate principal amount of such Indebtedness does not exceed
$2,000,000 at any time outstanding;

(d) Indebtedness of the Borrower owing to any Subsidiary Loan Party and of any
Subsidiary Loan Party owing to the Borrower or any other Subsidiary Loan Party;

(e) Guarantees by the Borrower of Indebtedness of any Subsidiary Loan Party and
by any Subsidiary of Indebtedness of the Borrower or any other Subsidiary Loan
Party;

(f) Indebtedness of any Person which becomes a Subsidiary after the date of this
Agreement; provided, that such Indebtedness exists at the time that such Person
becomes a Subsidiary and is not created in contemplation of or in connection
with such Person becoming a Subsidiary and the aggregate principal amount of
such Indebtedness permitted hereunder shall not exceed $5,000,000 outstanding at
any time;

(g) the Del-Tin Guarantee;

(h) Indebtedness in respect of obligations under Hedging Agreements permitted by
Section 7.10;

(i) Indebtedness incurred under a line of credit with BancorpSouth in an amount
not to exceed $1,000,000;

 

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(j) Letters of credit (which are not issued pursuant to this Agreement) which
are issued in the ordinary course of business of the Borrower in an aggregate
stated amount not to exceed $5,000,000;

(k) other unsecured Indebtedness in an aggregate principal amount not to exceed
$5,000,000 at any time outstanding; and

(l) Indebtedness under the Existing Revolving Credit Agreement (or any
replacement credit agreement) in an aggregate principal amount not to exceed
$480,000,000 at any time outstanding.

Section 7.2. Negative Pledge. The Borrower will not, and will not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien on any of
its assets or property now owned or hereafter acquired or, except:

(a) Permitted Encumbrances;

(b) any Liens on any property or asset of the Borrower or any Subsidiary
existing on the Closing Date set forth on Schedule 7.2; provided, that such Lien
shall not apply to any other property or asset of the Borrower or any
Subsidiary;

(c) purchase money Liens upon or in any fixed or capital assets to secure the
purchase price or the cost of construction or improvement of such fixed or
capital assets or to secure Indebtedness incurred solely for the purpose of
financing the acquisition, construction or improvement of such fixed or capital
assets (including Liens securing any Capital Lease Obligations); provided, that
(i) such Lien secures Indebtedness permitted by Section 7.1 (c), (ii) such Lien
attaches to such asset concurrently or within 90 days after the acquisition,
improvement or completion of the construction thereof; (iii) such Lien does not
extend to any other asset; and (iv) the Indebtedness secured thereby does not
exceed the cost of acquiring, constructing or improving such fixed or capital
assets;

(d) any Lien (i) existing on any asset of any Person at the time such Person
becomes a Subsidiary of the Borrower, (ii) existing on any asset of any Person
at the time such Person is merged with or into the Borrower or any Subsidiary of
the Borrower or (iii) existing on any asset prior to the acquisition thereof by
the Borrower or any Subsidiary of the Borrower; provided, that any such Lien was
not created in the contemplation of any of the foregoing and any such Lien
secures only those obligations which it secures on the date that such Person
becomes a Subsidiary or the date of such merger or the date of such acquisition;
and

(e) extensions, renewals, or replacements of any Lien referred to in paragraphs
(a) through (d) of this Section; provided, that the principal amount of the
Indebtedness secured thereby is not increased and that any such extension,
renewal or replacement is limited to the assets originally encumbered thereby.

Section 7.3. Fundamental Changes.

(a) The Borrower will not, and will not permit any Subsidiary to, merge into or
consolidate into any other Person, or permit any other Person to merge into or
consolidate with it or liquidate or dissolve; provided, that if at the time
thereof and immediately after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing (i) the Borrower or any Subsidiary
may merge with a Person if the Borrower (or such Subsidiary if the Borrower is

 

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not a party to such merger) is the surviving Person, (ii) any Subsidiary may
merge into another Subsidiary; provided, that if any party to such merger is a
Subsidiary Loan Party, the Subsidiary Loan Party shall be the surviving Person
and (iii) any Subsidiary (other than a Subsidiary Loan Party) may liquidate or
dissolve if the Borrower determines in good faith that such liquidation or
dissolution is in the best interests of the Borrower and is not materially
disadvantageous to the Lenders; provided, that any such merger involving a
Person that is not a wholly-owned Subsidiary immediately prior to such merger
shall not be permitted unless also permitted by Section 7.4.

(b) The Borrower will not, and will not permit any of its Subsidiaries to,
engage in any business other than businesses of the type conducted by the
Borrower and its Subsidiaries on the date hereof and businesses reasonably
related thereto.

Section 7.4. Investments, Loans, Etc. The Borrower will not, and will not permit
any of its Subsidiaries to, purchase, hold or acquire (including pursuant to any
merger with any Person that was not a wholly-owned Subsidiary prior to such
merger), any capital stock, evidence of indebtedness or other securities
(including any option, warrant, or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, Guarantee any obligations
of, or make or permit to exist any investment or any other interest in, any
other Person, or purchase or otherwise acquire (in one transaction or a series
of transactions) all or substantially all of the assets of a Person, or any
assets of any other Person that constitute a business unit or division of any
other Person, or create or form any Subsidiary (all of the foregoing being
collectively called “Investments”), except:

(a) Investments (other than Permitted Investments) existing on the date hereof
and set forth on Schedule 7.4 (including Investments in Subsidiaries);

(b) Permitted Investments;

(c) Guarantees constituting Indebtedness permitted by Section 7.1;

(d) Investments made by the Borrower in or to any Subsidiary Loan Party and by
any Subsidiary to the Borrower or in or to another Subsidiary Loan Party;

(e) Loans or advances to employees, officers or directors of the Borrower or any
Subsidiary in the ordinary course of business for travel, relocation and related
expenses; provided, however, that the aggregate amount of all such loans and
advances does not exceed $500,000 at any time;

(f) Hedging Agreements permitted by Section 7.10;

(g) Investments consisting of the Acquisition of assets of or equity interests
in a Person provided: (i) such Acquisition would not cause the Leverage Ratio or
the Minimum Timber Market Value covenants (each calculated on a Pro Forma Basis
taking into account such Acquisition) to be violated; (ii) no Default or Event
of Default exists or would exist taking into account such Acquisition; and
(iii) the Administrative Agent has received prior to such Acquisition, a Pro
Forma Compliance Certificate demonstrating compliance with clause (ii) of this
subsection; and

(h) Investments in Farm Credit Equities.

 

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Section 7.5. Restricted Payments. The Borrower will not, and will not permit its
Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any dividend or distribution on any class of its stock, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, retirement, defeasance or other acquisition of,
any shares of stock or Indebtedness subordinated to the Obligations of the
Borrower or any options, warrants, or other rights to purchase such stock or
such Indebtedness, whether now or hereafter outstanding (each, a “Restricted
Payment”), except for (i) dividends payable by the Borrower in shares of any
class of its common stock, (ii) Restricted Payments made by any Subsidiary to
the Borrower or to another Subsidiary and (iii) cash dividends paid on, and cash
redemptions of, the common stock or preferred stock of the Borrower; provided,
that no Default or Event of Default has occurred and is continuing at the time
such dividend is paid or redemption is made.

Section 7.6. Sale of Assets. The Borrower will not, and will not permit any of
its Subsidiaries to, convey, sell, lease, assign, transfer or otherwise dispose
of, any of its assets, business or property, whether now owned or hereafter
acquired, or, in the case of any Subsidiary, issue or sell any shares of such
Subsidiary’s capital stock to any Person other than the Borrower (or to qualify
directors if required by applicable law), except (i) the sale of or other
disposition for fair market value of obsolete or worn out property, or other
property which is not necessary for strategic purposes or for operations, which
is disposed of in the ordinary course of business, (ii) the sale of inventory
and Permitted Investments in the ordinary course of business, (iii) the sale of
timber land and real estate in connection with any Asset Like Kind Exchange,
(iv) other sales of assets not to exceed $5,000,000 in the aggregate in any
fiscal year of the Borrower or (v) the sale of assets in the ordinary course of
business not to exceed $1,000,000 at any one time.

Section 7.7. Transactions with Affiliates. The Borrower will not, and will not
permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) in the ordinary course of business at prices and on terms
and conditions not less favorable to the Borrower or such Subsidiary than could
be obtained on an arm’s-length basis from unrelated third parties,
(b) transactions between or among the Borrower and its wholly-owned Subsidiaries
not involving any other Affiliates and (c) any Restricted Payment permitted by
Section 7.5.

Section 7.8. Restrictive Agreements. The Borrower will not, and will not permit
any Subsidiary to, directly or indirectly, enter into, incur or permit to exist
any agreement that prohibits, restricts or imposes any condition upon (a) the
ability of the Borrower or any Subsidiary to create, incur or permit any Lien
upon any of its assets or properties, whether now owned or hereafter acquired,
or (b) the ability of any Subsidiary to pay dividends or other distributions
with respect to its common stock, to make or repay loans or advances to the
Borrower or any other Subsidiary, to Guarantee Indebtedness of the Borrower or
any other Subsidiary or to transfer any of its property or assets to the
Borrower or any Subsidiary of the Borrower; provided, that (i) the foregoing
shall not apply to restrictions or conditions imposed by law or by this
Agreement or any other Loan Document, the Existing Revolving Credit Agreement
(or any replacement credit agreement) or the Note Purchase Agreement, (ii) the
foregoing shall not apply to customary restrictions and conditions contained in
agreements relating to the sale of a Subsidiary pending such sale, provided such
restrictions and conditions apply only to the Subsidiary that is sold and such
sale is permitted hereunder, (iii) clause (a) shall not apply to restrictions or
conditions imposed by any agreement relating to secured Indebtedness permitted
by this Agreement if such restrictions and conditions apply only to the property
or assets securing such Indebtedness and (iv) clause (a) shall not apply to
customary provisions in leases restricting the assignment thereof.

 

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Section 7.9. Sale and Leaseback Transactions. The Borrower will not, and will
not permit any of the Subsidiaries to, enter into any arrangement, directly or
indirectly, whereby it shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereinafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property sold or
transferred.

Section 7.10. Hedging Agreements. The Borrower will not, and will not permit any
of the Subsidiaries to, enter into any Hedging Agreement other than Hedging
Agreements entered into in the ordinary course of business to hedge or mitigate
risks to which the Borrower or any Subsidiary is exposed in the conduct of its
business or the management of its liabilities. Solely for the avoidance of
doubt, the Borrower acknowledges that a Hedging Agreement entered into for
speculative purposes or of a speculative nature (which shall be deemed to
include any Hedging Agreement under which the Borrower or any of the
Subsidiaries is or may become obliged to make any payment (i) in connection with
the purchase by any third party of any capital stock or any Indebtedness or
(ii) as a result of changes in the market value of any capital stock or any
Indebtedness) is not a Hedging Agreement entered into in the ordinary course of
business to hedge or mitigate risks.

Section 7.11. Amendment to Material Documents. The Borrower will not, and will
not permit any Subsidiary to, amend, modify or waive any of its rights in a
manner materially adverse to the Lenders under (a) its certificate of
incorporation, bylaws or other organizational documents or (b) the Note Purchase
Agreement.

Section 7.12. Accounting Changes. The Borrower will not, and will not permit any
Subsidiary to, make any significant change in accounting treatment or reporting
practices, except as required or permitted by GAAP, or change the fiscal year of
the Borrower or of any Subsidiary, except to change the fiscal year of a
Subsidiary to conform its fiscal year to that of the Borrower.

Section 7.13. Government Regulations. Neither the Borrower nor any of its
Subsidiaries will (a) be or become subject at any time to any law, regulation,
or list of any Governmental Authority of the United States (including, without
limitation, the U.S. Office of Foreign Asset Control list) that prohibits or
limits the Lenders or the Administrative Agent from making any advance or
extension of credit to the Borrower or from otherwise conducting business with
the Loan Parties, or (b) fail to provide documentary and other evidence of the
identity of the Loan Parties as may be requested by the Lenders or the
Administrative Agent at any time to enable the Lenders or the Administrative
Agent to verify the identity of the Loan Parties or to comply with any
applicable law or regulation, including, without limitation, Section 326 of the
Patriot Act. The Borrower will not request any Loan, and the Borrower shall not
use, and shall not permit its Subsidiaries and its and their respective
directors, officers, employees and agents to use, the proceeds of any Loan
(A) in furtherance of an offer, payment, promise to pay, or authorization of the
payment or giving of money, or anything else of value, to any Person in
violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing
or facilitating any activities, business or transaction of or with any
Sanctioned Person, or in any Sanctioned Country, or (C) in any manner that would
result in the violation of any Sanctions applicable to any party hereto.

Section 7.14. ERISA. The Borrower will not cause or permit to occur, and will
not cause or permit any ERISA Affiliate to cause or permit to occur, an ERISA
Event to the extent such ERISA Event could reasonably be expected to have a
Material Adverse Effect.

ARTICLE VIII.

EVENTS OF DEFAULT

Section 8.1. Events of Default. If any of the following events (each an “Event
of Default”) shall occur:

 

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(a) the Borrower shall fail to pay any principal of any Loan when and as the
same shall become due and payable, whether at the due date thereof or at a date
fixed for prepayment or otherwise; or

(b) the Borrower shall fail to pay any interest on any Loan or any fee or any
other amount (other than an amount payable under clause (a) of this Article)
payable under this Agreement or any other Loan Document, when and as the same
shall become due and payable, and such failure shall continue unremedied for a
period of three (3) Business Days; or

(c) any representation or warranty made or deemed made by or on behalf of the
Borrower or any Subsidiary in or in connection with this Agreement or any other
Loan Document (including the Schedules attached thereto) and any amendments or
modifications hereof or waivers hereunder, or in any certificate, report,
financial statement or other document submitted to the Administrative Agent or
the Lenders by any Loan Party or any representative of any Loan Party pursuant
to or in connection with this Agreement or any other Loan Document shall prove
to be incorrect in any material respect (other than any representation or
warranty that is expressly qualified by a Material Adverse Effect or other
materiality, in which case such representation or warranty shall prove to be
incorrect in any respect) when made or deemed made or submitted; or

(d) the Borrower shall fail to observe or perform any covenant or agreement
contained in Sections 5.1, 5.2, 5.3 (with respect to the Borrower’s existence)
or Articles VI or VII; or

(e) any Loan Party shall fail to observe or perform any covenant or agreement
contained in this Agreement (other than those referred to in clauses (a),
(b) and (d) above), and such failure shall remain unremedied for 30 days after
the earlier of (i) any officer of the Borrower becomes aware of such failure, or
(ii) notice thereof shall have been given to the Borrower by the Administrative
Agent or any Lender; or

(f) the Borrower or any Subsidiary (whether as primary obligor or as guarantor
or other surety) shall fail to pay any principal of or premium or interest on
any Material Indebtedness that is outstanding, when and as the same shall become
due and payable (whether at scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
evidencing such Indebtedness; or any other event shall occur or condition shall
exist under any agreement or instrument relating to such Indebtedness and shall
continue after the applicable grace period, if any, specified in such agreement
or instrument, if the effect of such event or condition is to accelerate, or
permit the acceleration of, the maturity of such Indebtedness; or any such
Indebtedness shall be declared to be due and payable; or required to be prepaid
or redeemed (other than by a regularly scheduled required prepayment or
redemption), purchased or defeased, or any offer to prepay, redeem, purchase or
defease such Indebtedness shall be required to be made, in each case prior to
the stated maturity thereof; or

(g) the Borrower or any Subsidiary Loan Party shall (i) commence a voluntary
case or other proceeding or file any petition seeking liquidation,
reorganization or other relief under any federal, state or foreign bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a custodian, trustee, receiver, liquidator or other similar
official of it or any substantial part of its property, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (i) of this Section, (iii) apply for
or consent to the appointment of a custodian, trustee, receiver, liquidator or
other similar official for the Borrower or any such Subsidiary Loan Party or for
a substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors, or (vi) take any action for the
purpose of effecting any of the foregoing; or

 

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(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Borrower or any Subsidiary Loan Party or its debts, or any
substantial part of its assets, under any federal, state or foreign bankruptcy,
insolvency or other similar law now or hereafter in effect or (ii) the
appointment of a custodian, trustee, receiver, liquidator or other similar
official for the Borrower or any Subsidiary Loan Party or for a substantial part
of its assets, and in any such case, such proceeding or petition shall remain
undismissed for a period of 60 days or an order or decree approving or ordering
any of the foregoing shall be entered; or

(i) the Borrower or any Subsidiary Loan Party shall become unable to pay, shall
admit in writing its inability to pay, or shall fail to pay, its debts as they
become due; or

(j) an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with other ERISA Events that have occurred, could
reasonably be expected to result in liability to the Borrower and the
Subsidiaries in an aggregate amount exceeding $5,000,000; or

(k) Borrower shall fail to observe or perform any covenant or agreement in the
Del-Tin Guarantee and such failure shall remain unremedied after any cure period
or grace period therein; or

(l) any judgment or order for the payment of money in excess of $5,000,000 in
the aggregate shall be rendered against the Borrower or any Subsidiary, and
either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be a period of 30 consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or

(m) any non-monetary judgment or order shall be rendered against the Borrower or
any Subsidiary that could reasonably be expected to have a Material Adverse
Effect, and there shall be a period of 30 consecutive days during which a stay
of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or

(n) a Change in Control shall occur or exist; or

(o) any provision of any Subsidiary Guarantee Agreement shall for any reason
cease to be valid and binding on, or enforceable against, any Subsidiary Loan
Party, or any Subsidiary Loan Party shall so state in writing, or any Subsidiary
Loan Party shall seek to terminate its Subsidiary Guarantee Agreement; or

(p) an “Event of Default” shall occur under any other Loan Document;

then, and in every such event (other than an event with respect to the Borrower
described in clause (g) or (h) of this Section) and at any time thereafter
during the continuance of such event, the Administrative Agent may, and upon the
written request of the Required Lenders shall, by notice to the Borrower, take
any or all of the following actions, at the same or different times:
(i) terminate the Commitments, whereupon the Commitment of each Lender shall
terminate immediately; (ii) declare the principal of and any accrued interest on
the Loans, and all other Obligations owing hereunder, to be, whereupon the same

 

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shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower and
(iii) exercise all remedies contained in any other Loan Document; and that, if
an Event of Default specified in either clause (g) or (h) shall occur, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon, and all fees, and all other
Obligations shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower.

ARTICLE IX.

THE ADMINISTRATIVE AGENT

Section 9.1. Appointment of Administrative Agent. Each Lender irrevocably
appoints American AgCredit, PCA as the Administrative Agent and authorizes it to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent under this Agreement and the other Loan Documents,
together with all such actions and powers that are reasonably incidental
thereto. The Administrative Agent may perform any of its duties hereunder or
under the other Loan Documents by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all of its duties and exercise its rights and
powers through their respective Related Parties. The exculpatory provisions set
forth in this Article shall apply to any such sub-agent and the Related Parties
of the Administrative Agent and any such sub-agent and shall apply to their
respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.

Section 9.2. Nature of Duties of Administrative Agent. The Administrative Agent
shall not have any duties or obligations except those expressly set forth in
this Agreement and the other Loan Documents. Without limiting the generality of
the foregoing, (a) the Administrative Agent shall not be subject to any
fiduciary or other implied duties, regardless of whether a Default or an Event
of Default has occurred and is continuing, (b) the Administrative Agent shall
not have any duty to take any discretionary action or exercise any discretionary
powers, except those discretionary rights and powers expressly contemplated by
the Loan Documents that the Administrative Agent is required to exercise in
writing by the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in
Section 10.2); 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 the Bankruptcy Code of the United
States of America (or similar debtor relief laws of the United States of America
or other applicable jurisdictions); and (c) except as expressly set forth in the
Loan Documents, the Administrative Agent shall not have any duty to disclose,
and shall not be liable for the failure to disclose, any information relating to
the Borrower or any of its Subsidiaries that is communicated to or obtained by
the Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 10.2) or in the absence of its own gross negligence or
willful misconduct as determined by a final, non-appealable judgment by a court
of competent jurisdiction. The Administrative Agent shall not be deemed to have
knowledge of any Default or Event of Default unless and until written notice
thereof (which notice shall include an express reference to such event being a
“Default” or an “Event of Default” hereunder) is given to the Administrative
Agent by the Borrower or any Lender, and the Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with any Loan Document,
(ii) the contents of any certificate, report or other document delivered
hereunder or thereunder or in connection herewith or therewith,

 

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(iii) the performance or observance of any of the covenants, agreements, or
other terms and conditions set forth in any Loan Document, (iv) the validity,
enforceability, effectiveness or genuineness of any Loan Document or any other
agreement, instrument or document, or (v) the satisfaction of any condition set
forth in Article III or elsewhere in any Loan Document, other than to confirm
receipt of items expressly required to be delivered to the Administrative Agent.
The Administrative Agent may consult with legal counsel (including counsel for
the Borrower) concerning all matters pertaining to such duties.

Section 9.3. Lack of Reliance on the Administrative Agent. Each of the Lenders
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each of the Lenders also acknowledges
that it will, independently and without reliance upon the Administrative Agent
or any other Lender and based on such documents and information as it has deemed
appropriate, continue to make its own decisions in taking or not taking of any
action under or based on this Agreement, any related agreement or any document
furnished hereunder or thereunder. Each of the Lenders acknowledges and agrees
that outside legal counsel to the Administrative Agent in connection with the
preparation, negotiation, execution, delivery and administration (including any
amendments, waivers and consents) of this Agreement and the other Loan Documents
is acting solely as counsel to the Administrative Agent and is not acting as
counsel to any Lender (other than the Administrative Agent and its Affiliates)
in connection with this Agreement, the other Loan Documents or any of the
transactions contemplated hereby or thereby.

Section 9.4. Certain Rights of the Administrative Agent. If the Administrative
Agent shall request instructions from the Required Lenders with respect to any
action or actions (including the failure to act) in connection with this
Agreement, the Administrative Agent shall be entitled to refrain from such act
or taking such act, unless and until it shall have received instructions from
such Lenders; and the Administrative Agent shall not incur liability to any
Person by reason of so refraining. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against the Administrative Agent as a
result of the Administrative Agent acting or refraining from acting hereunder in
accordance with the instructions of the Required Lenders where required by the
terms of this Agreement.

Section 9.5. Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message, posting or other distribution)
believed by it to be genuine and to have been signed, sent or made by the proper
Person. The Administrative Agent may also rely upon any statement made to it
orally or by telephone and believed by it to be made by the proper Person and
shall not incur any liability for relying thereon. The Administrative Agent may
consult with legal counsel (including counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or not taken by it in accordance with the advice of such
counsel, accountants or experts.

Section 9.6. The Administrative Agent in its Individual Capacity. The bank
serving as the Administrative Agent shall have the same rights and powers under
this Agreement and any other Loan Document in its capacity as a Lender as any
other Lender and may exercise or refrain from exercising the same as though it
were not the Administrative Agent; and the terms “Lenders”, “Required Lenders”,
“holders of Notes”, or any similar terms shall, unless the context clearly
otherwise indicates, include the Administrative Agent in its individual
capacity. The bank acting as the Administrative Agent and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Subsidiary or Affiliate of the Borrower as if
it were not the Administrative Agent hereunder.

 

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Section 9.7. Successor Administrative Agent.

(a) The Administrative Agent may resign at any time by giving notice thereof to
the Lenders and the Borrower. Upon any such resignation, the Required Lenders
shall have the right to appoint a successor Administrative Agent, subject to the
approval by the Borrower provided that no Default or Event of Default shall
exist at such time. If no successor Administrative Agent shall have been so
appointed, and shall have accepted such appointment within 30 days after the
retiring Administrative Agent gives notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a Farm Credit Lender or commercial bank
organized under the laws of the United States of America or any state thereof or
a bank which maintains an office in the United States, having a combined capital
and surplus of at least $500,000,000.

(b) Upon the acceptance of its appointment as the Administrative Agent hereunder
by a successor, such successor Administrative Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations under this Agreement and the other
Loan Documents. If within 45 days after written notice is given of the retiring
Administrative Agent’s resignation under this Section 9.7 no successor
Administrative Agent shall have been appointed and shall have accepted such
appointment, then on such 45th day (i) the retiring Administrative Agent’s
resignation shall become effective, (ii) the retiring Administrative Agent shall
thereupon be discharged from its duties and obligations under the Loan Documents
and (iii) the Required Lenders shall thereafter perform all duties of the
retiring Administrative Agent under the Loan Documents until such time as the
Required Lenders appoint a successor Administrative Agent as provided above.
After any retiring Administrative Agent’s resignation hereunder, the provisions
of this Article IX shall continue in effect for the benefit of such retiring
Administrative Agent and its representatives and agents in respect of any
actions taken or not taken by any of them while it was serving as the
Administrative Agent.

Section 9.8. Authorization to Execute other Loan Documents. Each Lender hereby
authorizes the Administrative Agent to execute on behalf of all Lenders all Loan
Documents other than this Agreement.

Section 9.9. Withholding Tax. To the extent required by any applicable law, the
Administrative Agent may withhold from any interest payment to any Lender an
amount equivalent to any applicable withholding tax. If the Internal Revenue
Service or any authority of the United States or other jurisdiction asserts a
claim that the Administrative Agent did not properly withhold tax from amounts
paid to or for the account of any Lender (because the appropriate form was not
delivered, was not properly executed, or because such Lender failed to notify
the Administrative Agent of a change in circumstances that rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason), such Lender shall indemnify the Administrative Agent (to the extent
that the Administrative Agent has not already been reimbursed by the Borrower
and without limiting the obligation of the Borrower to do so) fully for all
amounts paid, directly or indirectly, by the Administrative Agent as tax or
otherwise, including penalties and interest, together with all expenses
incurred, including legal expenses, allocated staff costs and any out of pocket
expenses.

Section 9.10. Administrative Agent May File Proofs of Claim.

(a) In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to any Loan Party, the Administrative Agent
(irrespective of whether the principal of any Loan 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 Borrower) shall be
entitled and empowered, by intervention in such proceeding or otherwise:

 

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(i) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans 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 and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and its
agents and counsel and all other amounts due the Lenders and the Administrative
Agent under Section 10.3) allowed in such judicial proceeding; and

(ii) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same; and

(b) Any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, if the
Administrative Agent shall consent to the making of such payments directly to
the Lenders, 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 10.3.

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 any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.

ARTICLE X.

MISCELLANEOUS

Section 10.1. Notices.

(a) Except in the case of notices and other communications expressly permitted
to be given by telephone, all notices and other communications to any party
herein to be effective shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:

 

To the Borrower:    Deltic Timber Corporation    210 East Elm Street    El
Dorado, Arkansas 71730    Attention: Ken Mann, Vice President, CFO & Treasurer
   Telecopy Number: (870) 881-6457

 

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To the Administrative    Agent:    American AgCredit, PCA    Suite 320    5000
Meadows Road    Lake Oswego, Oregon 97035    Attention: Ms. Janice T. Thede,
Vice President    and    American AgCredit, PCA    5560 South Broadway   
Eureka, California 95503    Attention: Deltic Servicing Agent    Telecopy
Number: (707) 442-1268 To any other Lender:    the address set forth in the
Administrative    Questionnaire or the Assignment and Acceptance    Agreement
executed by such Lender

Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All such notices
and other communications shall, when transmitted by overnight delivery, or
faxed, be effective when delivered for overnight (next-day) delivery, or
transmitted in legible form by facsimile machine, respectively, or if mailed,
upon the third Business Day after the date deposited into the mails or if
delivered, upon receipt; provided, that notices delivered to the Administrative
Agent shall not be effective until actually received by such Person at its
address specified in this Section 10.1.

(b) Any agreement of the Administrative Agent and the Lenders herein to receive
certain notices by telephone, facsimile or other electronic transmission is
solely for the convenience and at the request of the Borrower. The
Administrative Agent and the Lenders shall be entitled to rely on the authority
of any Person purporting to be a Person authorized by the Borrower to give such
notice and the Administrative Agent and the Lenders shall not have any liability
to the Borrower or other Person on account of any action taken or not taken by
the Administrative Agent and the Lenders in reliance upon such telephonic or
facsimile notice. The obligation of the Borrower to repay the Loans and all
other Obligations hereunder shall not be affected in any way or to any extent by
any failure of the Administrative Agent and the Lenders to receive written
confirmation of any telephonic or facsimile notice or the receipt by the
Administrative Agent and the Lenders of a confirmation which is at variance with
the terms understood by the Administrative Agent and the Lenders to be contained
in any such telephonic or facsimile notice.

Section 10.2. Waiver; Amendments.

(a) No failure or delay by the Administrative Agent or any Lender in exercising
any right or power hereunder or any other Loan Document, and no course of
dealing between the Borrower and the Administrative Agent or any Lender, shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power or any abandonment or discontinuance of steps to enforce
such right or power, preclude any other or further exercise thereof or the
exercise of any other right or power hereunder or thereunder. The rights and
remedies of the Administrative Agent and the Lenders hereunder and under the
other Loan Documents are cumulative and are not exclusive of any rights or
remedies provided by law. No waiver of any

 

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provision of this Agreement or any other Loan Document or consent to any
departure by the Borrower therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) of this Section, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. Without limiting the generality of the foregoing, the making of
a Loan shall not be construed as a waiver of any Default or Event of Default,
regardless of whether the Administrative Agent or any Lender may have had notice
or knowledge of such Default or Event of Default at the time.

(b) No amendment or waiver of any provision of this Agreement or the other Loan
Documents, nor consent to any departure by the Borrower therefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Borrower and the Required Lenders or the Borrower and the Administrative Agent
with the consent of the Required Lenders and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, that no amendment or waiver shall: (i) increase the
Commitment of any Lender without the written consent of such Lender, (ii) reduce
the principal amount of any Loan or reduce the rate of interest thereon, or
reduce any fees payable hereunder, without the written consent of each Lender
directly adversely affected thereby, (iii) postpone the date fixed for any
scheduled payment of any principal (excluding any mandatory prepayment) of, or
interest on, any Loan or any fees hereunder or reduce the amount of, waive or
excuse any such payment, or postpone the scheduled date for the termination or
reduction of any Commitment, without the written consent of each Lender directly
adversely affected thereby, (iv) change Section 2.8(b) or Section 2.20(b) or
(c) in a manner that would alter the pro rata sharing of payments required
thereby, without the written consent of each Lender directly adversely affected
thereby, (v) change any of the provisions of this Section or the definition of
“Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders which are required to waive, amend or modify any rights
hereunder or make any determination or grant any consent hereunder, without the
consent of each Lender; (vi) release the Borrower or any guarantor or limit the
liability of the Borrower under the Loan Documents or any such guarantor under
any guaranty agreement, without the written consent of each Lender;
(vii) release all or substantially all collateral (if any) securing any of the
Obligations, without the written consent of each Lender; provided further, that
no such agreement shall amend, modify or otherwise affect the rights, duties or
obligations of the Administrative Agent without the prior written consent of
such Person. Notwithstanding anything contained herein to the contrary, this
Agreement may be amended and restated without the consent of any Lender (but
with the consent of the Borrower and the Administrative Agent) if, upon giving
effect to such amendment and restatement, such Lender shall no longer be a party
to this Agreement (as so amended and restated), the Term Loan Commitments of
such Lender shall have terminated (but such Lender shall continue to be entitled
to the benefits of Section 2.18, Section 2.19, Section 2.20 and Section 10.3,
such Lender shall have no other commitment or other obligation hereunder and
shall have been paid in full all principal, interest and other amounts owing to
it or accrued for its account under this Agreement. Notwithstanding anything
herein or otherwise to the contrary, any Event of Default occurring hereunder
shall continue to exist (and shall be deemed to be continuing) until such time
as such Event of Default is waived in writing in accordance with the terms of
this Section notwithstanding (i) any attempted cure or other action taken by the
Borrower or any other Person subsequent to the occurrence of such Event of
Default or (ii) any action taken or omitted to be taken by the Administrative
Agent or any Lender prior to or subsequent to the occurrence of such Event of
Default (other than the granting of a waiver in writing in accordance with the
terms of this Section). With respect to any matter requiring the approval of
each Lender, each Lender directly and adversely affected thereby or other
specified Lenders, it is understood that Voting Participants shall have the
voting rights specified in Section 10.4(f) as to such matter.

 

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Section 10.3. Expenses; Indemnification

(a) The Borrower shall pay (i) all reasonable and documented, out-of-pocket
costs and expenses of the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent and its Affiliates, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of the Loan
Documents and any amendments, modifications or waivers thereof (whether or not
the transactions contemplated in this Agreement or any other Loan Document shall
be consummated), (ii) [reserved] and (iii) all reasonable and documented
out-of-pocket costs and expenses (including, without limitation, the reasonable
and documented fees, charges and disbursements of outside counsel) incurred by
the Administrative Agent or any Lender in connection with the enforcement or
protection of its rights in connection with this Agreement and the other Loan
Documents, including its rights under this Section, or in connection with the
Loans made hereunder, including all such reasonable and documented out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect
of such Loans.

(b) The Borrower shall indemnify the Administrative Agent (and any sub-agent
thereof), each Lender, 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 reasonable losses, claims, damages,
liabilities and related expenses (including the reasonable and documented fees,
charges and disbursements of any outside counsel for any Indemnitee), incurred
by any Indemnitee or asserted against any Indemnitee by any third party or by
the Borrower or any other Loan Party 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 or the consummation of the transactions contemplated hereby or
thereby, (ii) any Loan or the use or proposed use of the proceeds therefrom,
(iii) any actual or alleged presence or Release of Hazardous Materials on or
from any property owned or operated by the Borrower or any of its Subsidiaries,
or any Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory, whether brought by a third party or by the Borrower 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 the 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 the
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.

(c) The Borrower shall pay, and hold the Administrative Agent and each of the
Lenders harmless from and against, any and all stamp, documentary, and other
similar filing fees or taxes with respect to the perfection or maintenance of
any Lien, if any, in favor of the Administrative Agent granted under any Loan
Documents and save the Administrative Agent and each Lender harmless from and
against any and all liabilities with respect to or resulting from any delay or
omission to pay such fees or taxes.

 

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(d) To the extent that the Borrower fails to pay any amount required to be paid
to the Administrative Agent under clauses (a), (b) or (c) hereof, each Lender
severally agrees to pay to the Administrative Agent, such Lender’s pro rata
share (determined as of the time that the unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided, that the unreimbursed
expense or indemnified payment, claim, damage, liability or related expense, as
the case may be, was incurred by or asserted against the Administrative Agent in
its capacity as such.

(e) To the extent permitted by applicable law, neither the Borrower nor any
other Loan Party shall assert, and each Loan Party hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to actual or direct damages)
arising out of, in connection with or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the transactions contemplated
therein, any Loan or the use of proceeds thereof. To the extent permitted by
applicable law, neither the Administrative Agent nor any Lender will assert, and
each Lender and the Administrative Agent hereby waives, any claim against
Borrower or any Loan Party, on any theory of liability, for consequential or
punitive damages (as opposed to actual or direct damages) arising out of, in
connection with or as a result of, this Agreement or any agreement or instrument
contemplated hereby or the transactions contemplated therein.

(f) All amounts due under this Section shall be payable on the Closing Date if
due on such date or, with respect to any other amounts, within ten (10) Business
Days after Borrower’s receipt of written demand therefor.

Section 10.4. Successors and Assigns.

(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not 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 the provisions of paragraph (b) of this Section, (ii) by way of
participation in accordance with the provisions of paragraph (d) of this Section
or (iii) by way of pledge or assignment of a security interest subject to the
restrictions of paragraph (f) of this Section (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 paragraph (d) of this
Section and, to the extent expressly contemplated hereby, the Related Parties of
each of the Administrative Agent and the Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement.

(b) 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 and the 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 in the case of
an assignment to a Lender or an Affiliate of a Lender, no minimum amount need be
assigned; and

 

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(B) in any case not described in Section 10.4(b)(i)(A), the aggregate amount of
the Commitment (which for this purpose includes Loans outstanding thereunder)
or, if the applicable 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 Acceptance with respect
to such assignment is delivered to the Administrative Agent or, if “Trade Date”
is specified in the Assignment and Acceptance, as of the Trade Date) shall not
be less than $1,000,000, unless each of the Administrative Agent and, so long as
no Event of Default has occurred and is continuing, the Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed);
provided that the Borrower shall be deemed to have consented to any such lower
amount unless it shall object thereto by written notice to the Administrative
Agent within five (5) Business Days after having received notice thereof.

(ii) Proportionate Amounts. 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 Commitments
assigned, except that this clause (ii) shall not prohibit any Lender from
assigning all or a portion of its rights and obligations on a non-pro rata
basis.

(iii) Required Consents. No consent shall be required for any assignment except
to the extent required by Section 10.4(b)(i)(B) and, in addition:

(A) the consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (x) an Event of Default has occurred and is
continuing at the time of such assignment or (y) such assignment is to a Lender
or an Affiliate of a Lender; provided that the Borrower shall be deemed to have
consented to any such assignment unless it shall object thereto by written
notice to the Administrative Agent within 5 Business Days after having received
notice thereof; and

(B) the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments if such assignment is to
a Person that is not a Lender or an Affiliate of such Lender.

(iv) Assignment and Acceptance. The parties to each assignment shall deliver to
the Administrative Agent (A) a duly executed Assignment and Acceptance, (B) a
processing and recordation fee of $3,500; provided that the Administrative Agent
may, in its sole discretion, elect to waive such processing and recordation fee
in the case of any assignment, (C) an Administrative Questionnaire unless the
assignee is already a Lender and (D) the documents required under Section 2.19
if such assignee is a Foreign Lender.

(v) No Assignment to Borrower. No such assignment shall be made to the Borrower
or any of the Borrower’s Affiliates or Subsidiaries.

(vi) No Assignment to Natural Persons. No such assignment shall be made to a
natural person.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to paragraph (c) of this Section 10.4, from and after the effective date
specified in each Assignment and Acceptance, the assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Acceptance, have the rights and obligations of a Lender

 

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under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 2.17, 2.18, 2.19 and 10.3) with
respect to facts and circumstances occurring prior to the effective date of such
assignment. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this paragraph shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with paragraph (d) of this
Section 10.4. If the consent of the Borrower to an assignment is required
hereunder (including a consent to an assignment which does not meet the minimum
assignment thresholds specified above), the Borrower shall be deemed to have
given its consent five (5) Business Days after the date notice thereof has
actually been delivered by the assigning Lender (through the Administrative
Agent) to the Borrower, unless such consent is expressly refused by the Borrower
prior to such fifth Business Day.

(c) The Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at its office in Eureka, California a copy of each
Assignment and Acceptance delivered to it 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 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 Borrower, 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 any Lender at
any reasonable time and from time to time upon reasonable prior notice;
information contained in the Register shall also be available for inspection by
the Borrower at any reasonable time and from time to time upon reasonable prior
notice. In establishing and maintaining the Register, the Administrative Agent
shall serve as the Borrower’s agent solely for tax purposes and solely with
respect to the actions described in this Section, and the Borrower hereby agrees
that, to the extent American AgCredit, PCA serves in such capacity, American
AgCredit, PCA and its officers, directors, employees, agents, sub-agents and
affiliates shall constitute an “Indemnitee” for purposes of Section 10.3.

(d) Any Lender may at any time, without the consent of, or notice to, the
Borrower or the Administrative Agent sell participations to any Person (other
than a natural person, the Borrower or any of the Borrower’s 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 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 Borrower, the Administrative Agent and the
Lenders 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 2.19(e) with respect to any payments made by such Lender to its
Participant(s).

(e) 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 that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in Section 10.2(b) that
affects such Participant. The Borrower agrees that each Participant shall be

 

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entitled to the benefits of Sections 2.17, 2.18 and 2.19 (subject to the
requirements and limitations therein, including the requirements under
Section 2.19(g) (it being understood that the documentation required under
Section 2.19(g) shall be delivered to the participating Lender)) to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section; provided that such Participant
(A) agrees to be subject to the provisions of Sections 2.21 and 2.22 as if it
were an assignee under clause (b) of this Section; and (B) shall not be entitled
to receive any greater payment under Sections 2.17 and 2.19, with respect to any
participation, than its participating Lender 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
Borrower’s request and expense, to use reasonable efforts to cooperate with the
Borrower to effectuate the provisions of Section 2.22 with respect to any
Participant. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.7 as though it were a Lender; provided
that such Participant agrees to be subject to Section 2.20(c) as though it were
a Lender. Each Lender that sells a participation shall, acting solely for this
purpose as a non-fiduciary agent of the Borrower, 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 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
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 avoidance of doubt, the Administrative Agent (in its
capacity as Administrative Agent) shall have no responsibility for maintaining a
Participant Register.

(f) Notwithstanding anything in Section 10.4 to the contrary, any Farm Credit
Lender that (i) has purchased a participation or sub-participation in the Term
Loans in the minimum amount of $5,000,000 on or after the Closing Date, (ii) is,
by written notice to the Borrower and the Administrative Agent in substantially
the form of Exhibit F hereto (“Voting Participant Notification”), designated by
the selling Lender as being entitled to be accorded the rights of a Voting
Participant hereunder (any Farm Credit Lender so designated being called a
“Voting Participant”) and (iii) receives the prior written consent of the
Borrower and the Administrative Agent to become a Voting Participant (to the
extent such consent would be required pursuant to Section 10.4(b)(iii) if such
transfer were an assignment rather than a sale of a participation or
sub-participation), shall be entitled to vote (and the voting rights of the
selling Lender shall be correspondingly reduced), on a dollar for dollar basis,
as if such 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 any Voting Participant, (i) state the full name, as well as all
contact information required of an assignee as set forth in Exhibit C hereto and
(ii) state the dollar amount of the participation or sub-participation
purchased. The Borrower and the Administrative Agent shall be entitled to
conclusively rely on information contained in notices delivered pursuant to this
paragraph. Notwithstanding the foregoing, each Farm Credit Lender designated as
a Voting Participant in Schedule 10.4(f) hereto shall be a Voting Participant
without delivery of a Voting Participant Notification and without the prior
written consent of the Borrower and the Administrative Agent.

 

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(g) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

Section 10.5. Governing Law; Jurisdiction; Consent to Service of Process.

(a) This Agreement and the other Loan Documents shall be construed in accordance
with and be governed by the law (without giving effect to the conflict of law
principles thereof) of the State of New York.

(b) The Borrower hereby irrevocably and unconditionally submits to the
non-exclusive jurisdiction of the United States District Court of the Southern
District of New York, and of any state court of the State of New York located in
New York County and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any other Loan
Document or the transactions contemplated hereby or thereby, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York state court
or, to the extent permitted by applicable law, such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement or
any other Loan Document shall affect any right that the Administrative Agent or
any Lender may otherwise have to bring any action or proceeding relating to this
Agreement or any other Loan Document against the Borrower in the courts of any
jurisdiction.

(c) The Borrower irrevocably and unconditionally waives any objection which it
may now or hereafter have to the laying of venue of any such suit, action or
proceeding described in paragraph (b) of this Section and brought in any court
referred to in paragraph (b) of this Section. Each of the parties hereto
irrevocably waives, to the fullest extent permitted by applicable law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.

(d) Each party to this Agreement irrevocably consents to the service of process
in the manner provided for notices in Section 10.1. Nothing in this Agreement or
in any other Loan Document will affect the right of any party hereto to serve
process in any other manner permitted by law.

Section 10.6. WAIVER OF JURY TRIAL. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) 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.

 

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Section 10.7. Right of Setoff. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
each Lender shall have the right, at any time or from time to time upon the
occurrence and during the continuance of an Event of Default, without prior
notice to the Borrower, any such notice being expressly waived by the Borrower
to the extent permitted by applicable law, to set off and apply against all
deposits (general or special, time or demand, provisional or final) of the
Borrower at any time held or other obligations at any time owing by such Lender
to or for the credit or the account of the Borrower against any and all
Obligations held by such Lender irrespective of whether such Lender shall have
made demand hereunder and although such Obligations may be unmatured. Each
Lender agrees promptly to notify the Administrative Agent and the Borrower after
any such set-off and any application made by such Lender; provided, that the
failure to give such notice shall not affect the validity of such set-off and
application.

Section 10.8. Counterparts; Integration. This Agreement may be executed by one
or more of the parties to this Agreement on any number of separate counterparts
(including by telecopy or by email, in.pdf format), and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. This
Agreement, the other Loan Documents, and any separate letter agreement(s)
relating to any fees payable to the Administrative Agent constitute the entire
agreement among the parties hereto and thereto regarding the subject matters
hereof and thereof and supersede all prior agreements and understandings, oral
or written, regarding such subject matters. Delivery of an executed counterpart
of a signature page of this Agreement and any other Loan Document by telecopy or
by email, in pdf format, shall be effective as delivery of a manually executed
counterpart of this Agreement or such other Loan Document.

Section 10.9. Survival. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under this Agreement is outstanding and
unpaid, and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.17, 2.18, 2.19, and 10.3 and Article IX shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans and, the
Commitments or the termination of this Agreement or any provision hereof. All
representations and warranties made herein, in the certificates, reports,
notices, and other documents delivered pursuant to this Agreement shall survive
the execution and delivery of this Agreement and the other Loan Documents, the
making of the Loans.

Section 10.10. Severability. Any provision of this Agreement or any other Loan
Document held to be illegal, invalid or unenforceable in any jurisdiction,
shall, as to such jurisdiction, be ineffective to the extent of such illegality,
invalidity or unenforceability without affecting the legality, validity or
enforceability of the remaining provisions hereof or thereof.

Section 10.11. Confidentiality. The Administrative Agent and each Lender agrees
to take normal and reasonable precautions to maintain the confidentiality of any
information designated in writing as confidential and provided to it by the
Borrower or any Subsidiary, except that such information may be disclosed (i) to
any Related Party of the Administrative Agent or any such Lender, including
without limitation accountants, legal counsel and other advisors, (ii) to the
extent required by applicable laws or regulations or by any subpoena or similar
legal process, (iii) to the extent requested by any regulatory agency or
authority, (iv) to the extent that such information becomes publicly available
other

 

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than as a result of a breach of this Section, or which becomes available to the
Administrative Agent any Lender or any Related Party of any of the foregoing on
a nonconfidential basis from a source other than the Borrower, (v) in connection
with the exercise of any remedy hereunder or any suit, action or proceeding
relating to this Agreement or the enforcement of rights hereunder, and
(ix) subject to provisions substantially similar to this Section 10.11, to any
actual or prospective assignee or Participant, or (vi) with the consent of the
Borrower. Any Person required to maintain the confidentiality of any information
as provided for in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such information as such Person would accord its
own confidential information.

Section 10.12. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which may be treated as interest on such
Loan under applicable law (collectively, the “Charges”), shall exceed the
maximum lawful rate of interest (the “Maximum Rate”) which may be contracted
for, charged, taken, received or reserved by a Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Rate to the date of
repayment, shall have been received by such Lender.

Section 10.13. Waiver of Effect of Corporate Seal. The Borrower represents and
warrants that neither it nor any other Loan Party is required to affix its
corporate or company seal to this Agreement or any other Loan Document pursuant
to any requirement of law or regulation, and waives any shortening of the
statute of limitations that may result from not affixing the corporate seal to
this Agreement or such other Loan Documents.

Section 10.14. Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is taken
or condition exists.

Section 10.15. Patriot Act. The Administrative Agent and each Lender hereby
notifies the Loan Parties that pursuant to the requirements of the Patriot Act,
it is required to obtain, verify and record information that identifies each
Loan Party, which information includes the name and address of such Loan Party
and other information that will allow such Lender or the Administrative Agent,
as applicable, to identify such Loan Party in accordance with the Patriot Act.
Each Loan Party shall, and shall cause each of its Subsidiaries to, provide to
the extent commercially reasonable, such information and take such other actions
as are reasonably requested by the Administrative Agent or any Lender in order
to assist the Administrative Agent and the Lenders in maintaining compliance
with the Patriot Act.

Section 10.16. No Advisory or Fiduciary Relationship. In connection with all
aspects of the transactions contemplated hereby (including in connection with
any amendment, waiver or other modification hereof or of any other Loan
Document), the Borrower 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 Lenders and
the Arranger are arm’s-length commercial transactions between the Borrower and
its Affiliates, on the one hand, and the Administrative Agent, the Lenders and
the Arranger, on the other hand, (B) the Borrower has consulted its own legal,

 

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accounting, regulatory and tax advisors to the extent it has deemed appropriate,
and (C) the Borrower 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) each of the Administrative Agent, the Lenders and
the Arranger 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 Borrower or any of
its Affiliates, or any other Person and (B) neither the Administrative Agent nor
any Lender or the Arranger has any obligation to the Borrower or any of its
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, each Lender and the Arranger and their
respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Borrower and its Affiliates, and
neither the Administrative Agent nor any Lender or the Arranger has any
obligation to disclose any of such interests to the Borrower or any of its
Affiliates. To the fullest extent permitted by law, the Borrower hereby waives
and releases any claims that it may have against the Administrative Agent or any
Lender or the Arranger with respect to any breach or alleged breach of agency or
fiduciary duty in connection with any aspect of any transaction contemplated
hereby.

Section 10.17. Most Favored Lender Provisions. If at any time the Existing
Revolving Credit Agreement or any other Loan Document (as defined in the
Existing Revolving Credit Agreement), or the documentation for any replacement
credit facility(ies) therefor, includes (a) representations and warranties,
covenants or events of default (including related definitions) in favor of a
Lender (as defined in the Existing Revolving Credit Agreement), or lender under
any such replacement credit facility(ies), that are not provided for in this
Agreement or the other Loan Documents, (b) representations and warranties,
covenants or events of default (including related definitions) in favor of a
Lender (as defined in the Existing Revolving Credit Agreement), or lender under
any such replacement credit facility(ies), that are more restrictive than the
same or similar provisions provided for in this Agreement and the other Loan
Documents and/or (c) requirements for the credit facility(ies) evidenced by the
Existing Revolving Credit Agreement, or any replacement credit facility(ies), to
be secured by collateral or guaranteed by Subsidiaries that are not already Loan
Parties (any or all of the foregoing, collectively, the “Most Favored Lender
Provisions”) (in the case of each of the Most Favored Lender Provisions, other
than any differences between the Existing Revolving Credit Agreement and the
other Loan Documents (as defined in the Existing Revolving Credit Agreement), on
the one hand, and this Agreement and the other Loan Documents, on the other
hand, existing as of the Closing Date (or otherwise consistent with such
differences)), then (i) such Most Favored Lender Provisions shall immediately
and automatically be deemed incorporated into this Agreement and the other Loan
Documents as if set forth fully herein and therein, mutatis mutandis, and no
such incorporated provision may thereafter be waived, amended or modified except
pursuant to the provisions of Section 10.2, and (ii) the Borrower and the other
Loan Parties shall promptly, and in any event within five (5) days after
entering into any such Most Favored Lender Provisions, so advise the
Administrative Agent in writing. Thereafter, upon the request of the Required
Lenders, the Borrower and the other Loan Parties shall enter into an amendment
to this Agreement and, if applicable, the other Loan Documents evidencing the
incorporation of such Most Favored Lender Provisions, it being agreed that any
failure to make such request or to enter into any such amendment shall in no way
qualify or limit the incorporation described in clause (i) of the immediately
preceding sentence.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

DELTIC TIMBER CORPORATION By:  

/s/ Ray C. Dillon

Name:   Ray C. Dillon Title:   President & CEO

[Signature page to Deltic Timber Term Loan Credit Agreement]

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AMERICAN AGCREDIT, PCA, as Administrative Agent and a Lender By:  

/s/ Janice T. Thede

Name:   Janice T. Thede Title:   Vice President

[Signature page to Deltic Timber Term Loan Credit Agreement]

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Schedule I

TERM LOAN COMMITMENT AMOUNTS

 

Lender

   Term Loan Commitment  

American AgCredit, PCA

   $ 100,000,000   

Total:

   $ 100,000,000   

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SCHEDULE 4.14

SUBSIDIARIES

 

    

State of

Incorporation

    

Type

Deltic Timber Purchasers, Inc.    Arkansas      C-Corp Chenal Properties, Inc.
   Arkansas      C-Corp Chenal Country Club, Inc.    Arkansas      C-Corp
Del-Tin Fiber L.L.C.    Arkansas      LLC

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SCHEDULE 7.1

OUTSTANDING INDEBTEDNESS

Letters of Credit

 

Issuing Bank

  

Beneficiary

   Amount      Expiry
Date     

Description

BancorpSouth

   US Forest Service    $ 66,000         11/1/2015       Timber Contract    US
Forest Service      97,000         11/17/2016       Timber Contract    US Forest
Service      53,000         11/1/2016       Timber Contract    US Forest Service
     40,000         6/12/2017       Timber Contract    US Forest Service     
54,000         6/24/2018       Timber Contract    US Forest Service      32,000
        11/3/2016       Timber Contract    US Forest Service      91,000        
11/25/2018       Timber Contract    US Forest Service      17,000        
6/29/2019       Timber Contract    US Forest Service      66,000        
9/30/2019       Timber Contract    US Forest Service      41,000        
5/18/2019       Timber Contract      

 

 

       

Total Letters of Credit

   $ 557,000               

 

 

       

Notes Payable

 

Beneficiary

   Amount      Interest Rate     Due Date  

SunTrust Bank (Revolver)

   $ 128,000,000         Various        11/17/2019   

American AgCredit

     40,000,000         6.10 %      12/18/2016      

 

 

      

Total Notes Payable

   $ 168,000,000           

 

 

      

 

Del-Tin Taxable Bonds

 

       

Letter of Credit Guaranty—Del-Tin Bonds

   $ 29,688,750           

 

 

      

Total Outstanding Indebtedness

   $ 198,245,750           

 

 

      

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SCHEDULE 7.2

EXISTING LIENS

UCC-1 Financing Statement filed on July 07, 2011 with the Arkansas Secretary of
State naming Del-Tin Fiber L.L.C. (“Del-Tin”), as debtor, and SunTrust Bank, as
Administrative Agent, as Secured Party, and listing all assets of Del-Tin. The
foregoing Financing Statement relates to a Lien granted by Del-Tin in connection
with obligations under that certain Amended and Restated Letter of Credit
Agreement dated as of July 21, 2011 by and among Del-Tin, the lenders from time
to time a party thereto and SunTrust Bank, as Administrative Agent.

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SCHEDULE 7.4

EXISTING INVESTMENTS

None

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

SCHEDULE 10.4(f)

VOTING PARTICIPANTS

 

Lender

  

Voting Participant

   Initial Term
Loan
Commitment      Resulting
Term Loan
Commitment/
Participation*  

American AgCredit, PCA

      $ 100,000,000       $ 25,000,000       AgriBank, FCB       $ 25,000,000   
   CoBank, FCB       $ 25,000,000       Northwest Farm Credit Services, FLCA   
   $ 17,000,000       Farm Credit of Western Arkansas, FLCA       $ 8,000,000   

TOTAL

      $ 100,000,000       $ 100,000,000   

 

* For voting purposes only. Gives effect to all sales of participations to
Voting Participants as of the Closing Date.

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EXHIBIT A

FORM OF NOTE

 

[$                  ]                       , 20[            ]

FOR VALUE RECEIVED, the undersigned, Deltic Timber Corporation, a Delaware
corporation (the “Borrower”), hereby promises to pay to [name of Lender] (the
“Lender”) or its registered assigns, at the office of American AgCredit, PCA
(“AAC”) at 200 Concourse Boulevard, Santa Rosa, California 95402, on the
Maturity Date (as defined in the Term Loan Credit Agreement dated as of
August 27, 2015 (as the same may be amended, supplemented, or otherwise modified
from time to time, the “Credit Agreement”), among the Borrower, the Lenders from
time to time party thereto and AAC, as Administrative Agent for the Lenders),
the lesser of the principal sum of [amount of such Lender’s Term Loan
Commitment] and the aggregate unpaid principal amount of all Term Loans made by
the Lender to the Borrower pursuant to the Credit Agreement, in lawful money of
the United States of America in immediately available funds, and to pay interest
from the date hereof on the principal amount thereof from time to time
outstanding, in like funds, at said office, at the rate or rates per annum and
payable on such dates as provided in the Credit Agreement. In addition, should
legal action or an attorney-at-law be utilized to collect any amount due
hereunder, the Borrower further promises to pay all costs of collection,
including the reasonable attorneys’ fees of the Lender. Terms not defined herein
shall have the meanings ascribed to such terms in the Credit Agreement.

The Borrower promises to pay Default Interest, on demand, on the terms and
conditions set forth in the Credit Agreement.

All borrowings evidenced by this Note and all payments and prepayments of the
principal hereof and the date thereof shall be endorsed by the holder hereof on
the schedule attached hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof, or otherwise recorded by
such holder in its internal records; provided, that the failure of the holder
hereof to make such a notation or any error in such notation shall not affect
the obligations of the Borrower to make the payments of principal and interest
in accordance with the terms of this Note and the Credit Agreement.

This Note is issued in connection with, and is entitled to the benefits of, the
Credit Agreement which, among other things, contains provisions for the
acceleration of the maturity hereof upon the happening of certain events, for
prepayment of the principal hereof prior to the maturity hereof and for the
amendment or waiver of certain provisions of the Credit Agreement, all upon the
terms and conditions therein specified. THIS NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

 

Exhibit A - 1

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DELTIC TIMBER CORPORATION

By:

     

Name:

Title:

 

Exhibit A - 2

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

LOANS AND PAYMENTS

 

Date

   Amount and
Type of Loan    Payments of
Principal    Unpaid
Principal
Balance of
Note    Name of Person
Making
Notation

 

Exhibit A - 3

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

EXHIBIT B

FORM OF NOTICE OF BORROWING

[Date]

American AgCredit, PCA,

as Administrative Agent

for the Lenders referred to below

5560 South Broadway

Eureka, CA 95503

Attention: Servicing

Ladies and Gentlemen:

Reference is made to the Term Loan Credit Agreement dated as of August 27, 2015
(as in effect on the date hereof, the “Credit Agreement”), among the
undersigned, as Borrower, the Lenders named therein, and American AgCredit, PCA,
as Administrative Agent. Terms defined in the Credit Agreement are used herein
with the same meanings. This notice constitutes a Notice of Borrowing, and the
Borrower hereby requests a Borrowing under the Credit Agreement, and in that
connection the Borrower specifies the following information with respect to the
Borrowing requested hereby:

(A) Aggregate principal amount of Borrowing: $100,000,000.00

(B) Date of Borrowing (which is a Business Day): August 27, 2015

(C) Location and number of Borrower’s account to which proceeds of Borrowing are
to be disbursed:

 

Exhibit B - 1

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

The Borrower hereby represents and warrants that the conditions specified in
paragraphs (c), (d) and (e) of Section 3.1 of the Credit Agreement are
satisfied.

 

Very truly yours,

 

DELTIC TIMBER CORPORATION

By:

     

Name:

Title:

 

Exhibit B - 2

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EXHIBIT C

FORM OF ASSIGNMENT AND ACCEPTANCE

_____ ____, 20[        ]

This Assignment and Acceptance (the “Assignment and Acceptance”) is dated as of
the Effective Date set forth below and is entered into by and between
[the][each]1 Assignor identified in item 1 below ([the][each, an] “Assignor”)
and [the][each]2 Assignee identified in item 2 below ([the][each, an]
“Assignee”). [It is understood and agreed that the rights and obligations of
[the Assignors][the Assignees]3 hereunder are several and not joint.]4
Capitalized terms used but not defined herein shall have the meanings given to
them in the Credit Agreement identified below (as amended, the “Credit
Agreement”), receipt of a copy of which is hereby acknowledged by [the][each]
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and
assigns to [the Assignee][the respective Assignees], and [the][each] Assignee
hereby irrevocably purchases and assumes from [the Assignor][the respective
Assignors], subject to and in accordance with the Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of [the Assignor’s][the
respective Assignors’] rights and obligations in [its capacity as a
Lender][their respective capacities as Lenders] under the Credit Agreement and
any other documents or instruments delivered pursuant thereto to the extent
related to the amount and percentage interest identified below of all of such
outstanding rights and obligations of [the Assignor][the respective Assignors]
under the respective facilities identified below (including without limitation
any guarantees included in such facilities), and (ii) to the extent permitted to
be assigned under applicable law, all claims, suits, causes of action and any
other right of [the Assignor (in its capacity as a Lender)][the respective
Assignors (in their respective capacities as Lenders)] against any Person,
whether known or unknown, arising under or in connection with the Credit
Agreement, any other documents or instruments delivered pursuant thereto or the
loan transactions governed thereby or in any way based on or related to any of
the foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause
(i) above (the rights and obligations sold and assigned by [the][any] Assignor
to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to
herein collectively as [the][an] “Assigned Interest”). Each such sale and
assignment is without recourse to [the][any] Assignor and, except as expressly
provided in this Assignment and Assumption, without representation or warranty
by [the][any] Assignor.

 

1. Assignor[s]:

 

1  For bracketed language here and elsewhere in this form relating to the
Assignor(s), if the assignment is from a single Assignor, choose the first
bracketed language. If the assignment is from multiple Assignors, choose the
second bracketed language.

2  For bracketed language here and elsewhere in this form relating to the
Assignee(s), if the assignment is to a single Assignee, choose the first
bracketed language. If the assignment is to multiple Assignees, choose the
second bracketed language.

3  Select as appropriate.

4  Include bracketed language if there are either multiple Assignors or multiple
Assignees.

 

Exhibit C - 1

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

1.    Assignor[s]:   

 

     

 

2.    Assignee[s]:   

 

     

 

   [for each Assignee, indicate [Affiliate] of [ identify Lender ] 3.   
Borrower(s):    Deltic Timber Corporation 4.    Administrative Agent:   
American AgCredit, PCA, as the administrative agent under the Credit Agreement
5.    Credit Agreement:    The Term Loan Credit Agreement dated as of August 27,
2015, among Deltic Timber Corporation, the Lenders parties thereto, and American
AgCredit, PCA, as Administrative Agent 6.    Assigned Interest[s]:   

 

Assignor[s]5    Assignee[s]6    Aggregate
Amount of
Commitment/
Loans for all
Lenders7      Amount of
Commitment/
Loans
Assigned8      Percentage
Assigned of
Commitment/
Loans8         $         $           %          $         $           %         
$         $           %   

 

7.    Trade Date:                                          ]9

 

5  List each Assignor, as appropriate.

6  List each Assignee, as appropriate.

7  Amount to be adjusted by the counterparties to take into account any payments
or prepayments made between the Trade Date and the Effective Date.

8  Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

9  To be completed if the Assignor(s) and the Assignee(s) intend that the
minimum assignment amount is to be determined as of the Trade Date.

 

Exhibit C - 2

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

Effective Date:                     , 20         [TO BE INSERTED BY
ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF
TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

ASSIGNOR[S]10 [NAME OF ASSIGNOR] By:    

 

  Title [NAME OF ASSIGNOR] By:    

 

  Title ASSIGNEE[S]11 [NAME OF ASSIGNEE] By:    

 

  Title ASSIGNEE[S] [NAME OF ASSIGNEE] By:    

 

  Title

 

10  Add additional signature blocks as needed.

11  Add additional signature blocks as needed.

 

Exhibit C - 3

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

[Consented to and]12 Accepted:

 

AMERICAN AGCREDIT, PCA, as     Administrative Agent By:    

 

  Title [Consented to:]13 [DELTIC TIMBER CORPORATION] By:    

 

  Title

 

12  To be added only if the consent of the Administrative Agent is required by
the terms of the Credit Agreement.

13  To be added only if the consent of the Borrower is required by the terms of
the credit Agreement.

 

Exhibit C - 4

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

ANNEX 1

DELTIC TIMBER CORPORATION

TERM LOAN CREDIT AGREEMENT

STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

Assignor[s]. [The][Each] Assignor (a) represents and warrants that (i) it is the
legal and beneficial owner of [the][the relevant] Assigned Interest,
(ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or
other adverse claim and (iii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Loan Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other
Person obligated in respect of any Loan Document, or (iv) the performance or
observance by the Borrower, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document.

Assignee[s]. [The][Each] Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all the requirements to be an assignee under Section 10.4(b)(iii), (v) and
(vi) of the Credit Agreement (subject to such consents, if any, as may be
required under Section 10.4(b)(iii) of the Credit Agreement), (iii) from and
after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of [the][the relevant]
Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is
sophisticated with respect to decisions to acquire assets of the type
represented by the Assigned Interest and either it, or the Person exercising
discretion in making its decision to acquire the Assigned Interest, is
experienced in acquiring assets of such type, (v) it has received a copy of the
Credit Agreement, and has received or has been accorded the opportunity to
receive copies of the most recent financial statements delivered pursuant to
Section 5.1 thereof, as applicable, and such other documents and information as
it deems appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase [the][such] Assigned Interest,
(vi) it has, independently and without reliance upon the Administrative Agent or
any other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase [the][such] Assigned Interest, and
(vii) if it is a Foreign Lender attached to the Assignment and Assumption is any
documentation required to be delivered by it pursuant to the terms of the Credit
Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees
that (i) it will, independently and without reliance on the Administrative
Agent, [the][any] Assignor or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan Documents, and
(ii) it will perform in accordance with their terms all of the obligations which
by the terms of the Loan Documents are required to be performed by it as a
Lender.

 

Exhibit C - 5

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

2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of [the][each] Assigned Interest (including
payments of principal, interest, fees and other amounts) to [the][the relevant]
Assignor for amounts which have accrued to but excluding the Effective Date and
to [the][the relevant] Assignee for amounts which have accrued from and after
the Effective Date. Notwithstanding the foregoing, the Administrative Agent
shall make all payments of interest, fees or other amounts paid or payable in
kind from and after the Effective Date to [the][the relevant] Assignee.

3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.

 

Exhibit C - 6

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

EXHIBIT D

[FORM OF] SUBSIDIARY GUARANTEE AGREEMENT

SUBSIDIARY GUARANTEE AGREEMENT dated as of August 27, 2015, among each of the
Subsidiaries listed on Schedule I hereto (each such subsidiary individually, a
“Guarantor” and collectively, the “Guarantors”) of DELTIC TIMBER CORPORATION, a
Delaware corporation (the “Borrower”), and AMERICAN AGCREDIT, PCA, as
administrative agent (the “Administrative Agent”) for the Lenders (as defined in
the Credit Agreement referred to below).

Reference is made to the Term Loan Credit Agreement dated as of the date hereof
(as the same may be amended, supplemented, or otherwise modified from time to
time, the “Credit Agreement”), among the Borrower, the lenders from time to time
party thereto (the “Lenders”) and American AgCredit, PCA, as administrative
agent for the Lenders (in such capacity, the “Administrative Agent”).
Capitalized terms used herein and not defined herein shall have the meanings
assigned to such terms in the Credit Agreement.

The Lenders have agreed to make Loans to the Borrower pursuant to, and upon the
terms and subject to the conditions specified in, the Credit Agreement. Each of
the Guarantors is a direct or indirect wholly-owned Subsidiary of the Borrower
and acknowledges that it will derive substantial benefit from the making of the
Loans by the Lenders. The obligations of the Lenders to make Loans are
conditioned on, among other things, the execution and delivery by the Guarantors
of a Subsidiary Guarantee Agreement in the form hereof. As consideration
therefor and in order to induce the Lenders to make Loans, the Guarantors are
willing to execute this Subsidiary Guarantee Agreement.

For purposes of this Agreement, the following terms when used in this Agreement
shall have the meanings assigned to them below:

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.

“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap
Obligation if, and to the extent that, all or a portion of the Obligations (as
defined below) of such Guarantor is or becomes illegal under the Commodity
Exchange Act or any rule, regulation or order of the Commodity Futures Trading
Commission (or the application or official interpretation of any thereof) by
virtue of such Guarantor’s failure for any reason to constitute an “eligible
contract participant” as defined in the Commodity Exchange Act at the time the
Obligations of such Guarantor becomes effective with respect to such related
Swap Obligation. If a Swap Obligation arises under a master agreement governing
more than one swap, such exclusion shall apply only to the portion of such Swap
Obligation that is attributable to swaps for which such Obligations are or
become illegal.

“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or
perform under any agreement, contract or transaction that constitutes a “swap”
within the meaning of Section 1a(47) of the Commodity Exchange Act.

 

Exhibit D - 1

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

Accordingly, the parties hereto agree as follows:

SECTION 1. Guarantee. Each Guarantor unconditionally guarantees, jointly with
the other Guarantors and severally, as a primary obligor and not merely as a
surety, (a) the due and punctual payment of (i) the principal of and premium, if
any, and interest (including interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding) on the Loans, when and as due,
whether at maturity, by acceleration, upon one or more dates set for prepayment
or otherwise, and (ii) all other monetary obligations, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), of the Loan Parties to the
Administrative Agent and the Lenders under the Credit Agreement and the other
Loan Documents, (b) the due and punctual performance of all covenants,
agreements, obligations and liabilities of the Loan Parties under or pursuant to
the Credit Agreement and the other Loan Documents; and (c) the due and punctual
payment and performance of all obligations of the Borrower, monetary or
otherwise, under each Hedging Agreement entered into with a counterparty that
was a Lender or an Affiliate of a Lender at the time such Hedging Agreement was
entered into (all the monetary and other obligations referred to in the
preceding clauses (a) through (c) being collectively called the “Obligations”;
provided, that “Obligations” shall not include any Excluded Swap Obligations).
Each Guarantor further agrees that the Obligations may be extended or renewed,
in whole or in part, without notice to or further assent from it, and that it
will remain bound upon its guarantee notwithstanding any extension or renewal of
any Obligation.

SECTION 2. Obligations Not Waived. To the fullest extent permitted by applicable
law, each Guarantor waives presentment to, demand of payment from and protest to
the Borrower of any of the Obligations, and also waives notice of acceptance of
its guarantee and notice of protest for nonpayment. To the fullest extent
permitted by applicable law, the obligations of each Guarantor hereunder shall
not be affected by (a) the failure of the Administrative Agent or any Lender to
assert any claim or demand or to enforce or exercise any right or remedy against
the Borrower or any other Guarantor under the provisions of the Credit
Agreement, any other Loan Document or otherwise, (b) any rescission, waiver,
amendment or modification of, or any release from any of the terms or provisions
of, this Agreement, any other Loan Document, any Guarantee or any other
agreement, including with respect to any other Guarantor under this Agreement,
or (c) the failure to perfect any security interest in, or the release of, any
of the security held by or on behalf of the Administrative Agent or any Lender.

SECTION 3. Guarantee of Payment. Each Guarantor further agrees that its
guarantee constitutes a guarantee of payment when due and not of collection, and
waives any right to require that any resort be had by the Administrative Agent
or any Lender to any of the security held for payment of the Obligations or to
any balance of any deposit account or credit on the books of the Administrative
Agent or any Lender in favor of the Borrower or any other person.

SECTION 4. No Discharge or Diminishment of Guarantee. The obligations of each
Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in
full in cash of the Obligations), including any claim of waiver, release,
surrender, alteration or compromise of any of the Obligations, and shall not be
subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Guarantor hereunder shall not be discharged or impaired or
otherwise affected by the failure of the Administrative Agent or any Lender to
assert any claim or demand or to enforce any remedy under the Credit Agreement,
any other Loan Document or any other agreement, by any waiver or modification of
any provision of any thereof, by any default, failure or delay, willful or

 

Exhibit D - 2

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

otherwise, in the performance of the Obligations, or by any other act or
omission that may or might in any manner or to the extent vary the risk of any
Guarantor or that would otherwise operate as a discharge of each Guarantor as a
matter of law or equity (other than the indefeasible payment in full in cash of
all the Obligations).

SECTION 5. Defenses of Borrower Waived. To the fullest extent permitted by
applicable law, each Guarantor waives any defense based on or arising out of any
defense of the Borrower or the unenforceability of the Obligations or any part
thereof from any cause, or the cessation from any cause of the liability of the
Borrower, other than the final and indefeasible payment in full in cash of the
Obligations. The Administrative Agent and the Lenders may, at their election,
foreclose on any security held by one or more of them by one or more judicial or
nonjudicial sales, accept an assignment of any such security in lieu of
foreclosure, compromise or adjust any part of the Obligations, make any other
accommodation with the Borrower or any other guarantor, without affecting or
impairing in any way the liability of any Guarantor hereunder except to the
extent the Obligations have been fully, finally and indefeasibly paid in cash.
Pursuant to applicable law, each Guarantor waives any defense arising out of any
such election even though such election operates, pursuant to applicable law, to
impair or to extinguish any right of reimbursement or subrogation or other right
or remedy of such Guarantor against the Borrower or any other Guarantor or
guarantor, as the case may be, or any security.

SECTION 6. Agreement to Pay; Subordination. In furtherance of the foregoing and
not in limitation of any other right that the Administrative Agent or any Lender
has at law or in equity against any Guarantor by virtue hereof, upon the failure
of the Borrower or any other Loan Party to pay any Obligation when and as the
same shall become due, whether at maturity, by acceleration, after notice of
prepayment or otherwise, each Guarantor hereby promises to and will forthwith
pay, or cause to be paid, to the Administrative Agent for the benefit of the
Lenders in cash the amount of such unpaid Obligations. Upon payment by any
Guarantor of any sums to the Administrative Agent, all rights of such Guarantor
against the Borrower arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be
subordinate and junior in right of payment to the prior indefeasible payment in
full in cash of all the Obligations. In addition, any indebtedness of the
Borrower now or hereafter held by any Guarantor is hereby subordinated in right
of payment to the prior payment in full in cash of the Obligations. If any
amount shall erroneously be paid to any Guarantor on account of (i) such
subrogation, contribution, reimbursement, indemnity or similar right or (ii) any
such indebtedness of the Borrower, such amount shall be held in trust for the
benefit of the Administrative Agent and the Lenders and shall forthwith be paid
to the Administrative Agent to be credited against the payment of the
Obligations, whether matured or unmatured, in accordance with the terms of the
Loan Documents.

SECTION 7. Information. Each Guarantor assumes all responsibility for being and
keeping itself informed of the Borrower’s financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Obligations
and the nature, scope and extent of the risks that such Guarantor assumes and
incurs hereunder, and agrees that none of the Administrative Agent or the
Lenders will have any duty to advise any of the Guarantors of information known
to it or any of them regarding such circumstances or risks.

SECTION 8. Representations and Warranties. Each Guarantor represents and
warrants as to itself that all representations and warranties relating to it (as
a Subsidiary of the Borrower) contained in the Credit Agreement are true and
correct.

SECTION 9. Termination. The guarantees made hereunder (a) shall terminate when
all the Obligations have been paid in full in cash and the Lenders have no
further commitment to lend under the Credit Agreement and (b) shall continue to
be effective or be reinstated, as the case may be, if at any time

 

Exhibit D - 3

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

payment, or any part thereof, of any Obligation is rescinded or must otherwise
be restored by any Lender or any Guarantor upon the bankruptcy or reorganization
of the Borrower, any Guarantor or otherwise. In connection with the foregoing,
the Administrative Agent shall execute and deliver to such Guarantor or
Guarantor’s designee, at such Guarantor’s expense, any documents or instruments
which such Guarantor shall reasonably request from time to time to evidence such
termination and release.

SECTION 10. Reinstatement. This Agreement shall remain in full force and effect
and continue to be effective should any petition be filed by or against the
Borrower or any Guarantor for liquidation or reorganization, should the Borrower
or any Guarantor become insolvent or make an assignment for the benefit of any
creditor or creditors or should a receiver or trustee be appointed for all or
any significant part of the Borrower’s or any Guarantor’s assets, and shall
continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Obligations, or any part thereof, is rescinded or
reduced in amount, or must otherwise be restored or returned by any obligee of
the Obligations, whether as a “voidable preference,” “fraudulent conveyance,”
“fraudulent transfer” or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned for any reason, the Obligations shall
be reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.

SECTION 11. Binding Effect; Several Agreement; Assignments. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Guarantors that are contained in
this Agreement shall bind and inure to the benefit of each party hereto and
their respective successors and assigns. This Agreement shall become effective
as to any Guarantor when a counterpart hereof executed on behalf of such
Guarantor shall have been delivered to the Administrative Agent, and a
counterpart hereof shall have been executed on behalf of the Administrative
Agent, and thereafter shall be binding upon such Guarantor and the
Administrative Agent and their respective successors and assigns, and shall
inure to the benefit of such Guarantor, the Administrative Agent and the
Lenders, and their respective successors and assigns, except that no Guarantor
shall have the right to assign its rights or obligations hereunder or any
interest herein (and any such attempted assignment shall be void). If all of the
capital stock of a Guarantor is sold, transferred or otherwise disposed of
pursuant to a transaction permitted by the Credit Agreement, such Guarantor
shall be released from its obligations under this Agreement without further
action. This Agreement shall be construed as a separate agreement with respect
to each Guarantor and may be amended, modified, supplemented, waived or released
with respect to any Guarantor without the approval of any other Guarantor and
without affecting the obligations of any other Guarantor hereunder.

SECTION 12. Waivers; Amendment.

(a) No failure or delay of the Administrative Agent of any in exercising any
power or right hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and of the Administrative Agent hereunder and of the Lenders under the other
Loan Documents are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by any Guarantor therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) below, and then
such waiver and consent shall be effective only in the specific instance and for
the purpose for which given. No notice or demand on any Guarantor in any case
shall entitle such Guarantor to any other or further notice in similar or other
circumstances.

 

Exhibit D - 4

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

(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to a written agreement entered into between the
Guarantors with respect to which such waiver, amendment or modification relates
and the Administrative Agent, with the prior written consent of the Required
Lenders (except as otherwise provided in the Credit Agreement).

SECTION 13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 14. Notices. All communications and notices hereunder shall be in
writing and given as provided in Section 10.1 of the Credit Agreement. All
communications and notices hereunder to each Guarantor shall be given to it at
its address set forth on Schedule I attached hereto.

SECTION 15. Survival of Agreement; Severability.

(a) All covenants, agreements representations and warranties made by the
Guarantors herein and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or the other Loan
Document shall be considered to have been relied upon by the Administrative
Agent and the Lenders and shall survive the making by the Lenders of the Loans
regardless of any investigation made by any of them or on their behalf, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any other fee or amount payable under this
Agreement or any other Loan Document is outstanding and unpaid and as long as
the Commitments have not been terminated.

(b) In the event one or more of the provisions contained in this Agreement or in
any other Loan Document should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or impaired
thereby (it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.

SECTION 16. Counterparts. This Agreement may be executed in counterparts, each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract (subject to Section 11), and shall become
effective as provided in Section 11. Delivery of an executed signature page to
this Agreement by facsimile transmission shall be as effective as delivery of a
manually executed counterpart of this Agreement.

SECTION 17. Rules of Interpretation. The rules of interpretation specified in
Section 1.3 of the Credit Agreement shall be applicable to this Agreement.

SECTION 18. Jurisdiction; Consent to Service of Process.

(a) Each Guarantor hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any New York State court
or Federal court of the United States of America sitting in New York, New York,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State
court or, to the extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in

 

Exhibit D - 5

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

other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement shall affect any right that the Administrative
Agent or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against any Guarantor or
its properties in the courts of any jurisdiction.

(b) Each Guarantor hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or the other Loan Documents in any New York
State or Federal court. Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

(c) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 14. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

SECTION 19. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS. EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 19.

SECTION 20. Additional Guarantors. Pursuant to Section 5.10 of the Credit
Agreement, each Subsidiary Loan Party that was not in existence on the date of
the Credit Agreement is required to enter into this Agreement as a Guarantor
upon becoming Subsidiary Loan Party. Upon execution and delivery after the date
hereof by the Administrative Agent and such Subsidiary of an instrument in the
form of Annex 1, such Subsidiary shall become a Guarantor hereunder with the
same force and effect as if originally named as a Guarantor herein. The
execution and delivery of any instrument adding an additional Guarantor as a
party to this Agreement shall not require the consent of any other Guarantor
hereunder. The rights and obligations of each Guarantor hereunder shall remain
in full force and effect notwithstanding the addition of any new Guarantor as a
party to this Agreement.

SECTION 21. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other Indebtedness at any time owing by such Lender to or for the
credit or the account of any Guarantor against any or all the obligations of
such Guarantor now or hereafter existing under this Agreement and the other Loan
Documents held by such Lender, irrespective of whether or not such Person shall
have made any demand under this Agreement or any other Loan Document and
although such obligations may be unmatured. The rights of each Lender under this
Section 21 are in addition to other rights and remedies (including other rights
of setoff) which such Lender may have.

 

Exhibit D - 6

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

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

 

DELTIC TIMBER PURCHASERS, INC. By:    

 

  Name:   Title: CHENAL PROPERTIES, INC. By:    

 

  Name:   Title: CHENAL COUNTRY CLUB, INC. By:    

 

  Name:   Title: DEL-TIN FIBER L.L.C By:    

 

  Name:   Title: AMERICAN AGCREDIT, PCA, as Administrative Agent By:    

 

  Name:   Title:

 

Exhibit D - 7

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

SCHEDULE I TO THE

SUBSIDIARY GUARANTEE AGREEMENT

 

Guarantor(s)

  

Address

Deltic Timber Purchasers, Inc.    For all Guarantors :

Chenal Properties, Inc.

   210 East Elm Street

Chenal Country Club, Inc.

   El Dorado, Arkansas 71730

Del-Tin Fiber L.L.C.

  

[Borrower to confirm scheduled information remains correct].

 

Exhibit D - 8

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

ANNEX 1 TO THE

SUBSIDIARY GUARANTEE AGREEMENT

SUPPLEMENT NO. [            ] dated as of [            ], to the Subsidiary
Guarantee Agreement (the “Guarantee Agreement”) dated as of August 27, 2015,
among each of the subsidiaries listed on Schedule I thereto (each such
Subsidiary individually, a “Guarantor” and collectively, the “Guarantors”) of
DELTIC TIMBER CORPORATION, a Delaware corporation (the “Borrower”), and AMERICAN
AGCREDIT, PCA, as Administrative Agent (the “Administrative Agent”) for the
Lenders (as defined in the Credit Agreement referred to below).

A. Reference is made to the Term Loan Credit Agreement dated as of August 27,
2015 (as the same may be amended, supplemented, or otherwise modified from time
to time, the “Credit Agreement”), among the Borrower, the lenders from time to
time party thereto (the “Lenders”) and American AgCredit, PCA, as Administrative
Agent. Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to such terms in the Credit Agreement.

B. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Guarantee Agreement and the Credit
Agreement.

C. The Guarantors have entered into the Guarantee Agreement in order to induce
the Lenders to make Loans. Pursuant to Section 5.10 of the Credit Agreement,
each Subsidiary Loan Party that was not in existence or not a Subsidiary Loan
Party on the date of the Credit Agreement is required to enter into the
Guarantee Agreement as a Guarantor upon becoming a Subsidiary Loan Party.
Section 20 of the Guarantee Agreement provides that additional Subsidiaries of
the Borrower may become Guarantors under the Guarantee Agreement by execution
and delivery of an instrument in the form of this Supplement. The undersigned
Subsidiary of the Borrower (the “New Guarantor”) is executing this Supplement in
accordance with the requirements of the Credit Agreement to become a Guarantor
under the Guarantee Agreement in order to induce the Lenders to make additional
Loans and as consideration for Loans previously made.

Accordingly, the Administrative Agent and the New Guarantor agree as follows:

SECTION 1. In accordance with Section 20 of the Guarantee Agreement, the New
Guarantor by its signature below becomes a Guarantor under the Guarantee
Agreement with the same force and effect as if originally named therein as a
Guarantor and the New Guarantor hereby (a) agrees to all the terms and
provisions of the Guarantee Agreement applicable to it as Guarantor thereunder
and (b) represents and warrants that the representations and warranties made by
it as a Guarantor thereunder are true and correct on and as of the date hereof.
Each reference to a Guarantor in the Guarantee Agreement shall be deemed to
include the New Guarantor. The Guarantee Agreement is hereby incorporated herein
by reference.

SECTION 2. The New Guarantor represents and warrants to the Administrative Agent
and the Lenders that this Supplement has been duly authorized, executed and
delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms.

SECTION 3. This Supplement may be executed in counterparts each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Administrative
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Guarantor and the Administrative Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.

 

Exhibit D - 9

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

SECTION 4. Except as expressly supplemented hereby, the Guarantee Agreement
shall remain in full force and effect.

SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Guarantee Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision hereof in a particular jurisdiction shall not in and of itself affect
the validity of such provision in any other jurisdiction). The parties hereto
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

SECTION 7. All communications and notices hereunder shall be in writing and
given as provided in Section 14 of the Guarantee Agreement. All communications
and notices hereunder to the New Guarantor shall be given to it at the address
set forth under its signature below, with a copy to the Borrower.

SECTION 8. The New Guarantor agrees to reimburse the Administrative Agent for
its out-of-pocket expenses in connection with this Supplement, including the
fees, disbursements and other charges of counsel for the Administrative Agent.

IN WITNESS WHEREOF, the New Guarantor and the Administrative Agent have duly
executed this Supplement to the Guarantee Agreement as of the day and year first
above written.

 

[Name of New Guarantor]

By:

 

 

  Name:   Title:   Address:

AMERICAN AGCREDIT, PCA, as

Administrative Agent

By:

 

 

  Name:  

Title:

 

Exhibit D - 10

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

EXHIBIT E

[FORM OF] INDEMNITY, SUBROGATION AND CONTRIBUTION AGREEMENT

INDEMNITY, SUBROGATION and CONTRIBUTION AGREEMENT dated as of August 27, 2015,
among DELTIC TIMBER CORPORATION, a Delaware corporation (the “Borrower”), each
Subsidiary listed on Schedule I hereto (the “Guarantors”), AMERICAN AGCREDIT,
PCA, as administrative agent (in such capacity, the “Administrative Agent”) for
the Lenders (as defined in the Credit Agreement referred to below).

Reference is made to (a) the Term Loan Credit Agreement dated as of August 27,
2015 (as the same may be amended, supplemented, or otherwise modified from time
to time, the “Credit Agreement”), among the Borrower, the lenders from time to
time party thereto (the “Lenders”) and American AgCredit, PCA, as Administrative
Agent, and (b) the Subsidiary Guarantee Agreement dated as August 27, 2015,
among the Guarantors and the Administrative Agent (as amended, supplemented or
otherwise modified from time to time, the “Guarantee Agreement”). Capitalized
terms used herein and not defined herein shall have the meanings assigned to
such terms in the Credit Agreement.

The Lenders have agreed to make Loans to the Borrower pursuant to, and upon the
terms and subject to the conditions specified in, the Credit Agreement. The
Guarantors have guaranteed such Loans and the other Obligations (as defined in
the Guarantee Agreement) of the Borrower under the Credit Agreement pursuant to
the Guarantee Agreement. The obligations of the Lenders to make Loans are
conditioned on, among other things, the execution and delivery by the Borrower
and the Guarantors of an agreement in the form hereof.

Accordingly, the Borrower, each Guarantor and the Administrative Agent agree as
follows:

SECTION 1. Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 3), the Borrower agrees that, in the event a payment shall be
made by any Guarantor under the Guarantee Agreement, the Borrower shall
indemnify such Guarantor for the full amount of such payment and such Guarantor
shall be subrogated to the rights of the person to whom such payment shall have
been made to the extent of such payment.

SECTION 2. Contribution and Subrogation. Each Guarantor (a “Contributing
Guarantor”) agrees (subject to Section 3) that, in the event a payment shall be
made by any other Guarantor under the Guarantee Agreement and such other
Guarantor (the “Claiming Guarantor”) shall not have been fully indemnified by
the Borrower as provided in Section 1, the Contributing Guarantor shall
indemnify the Claiming Guarantor in an amount equal to the amount of such
payment or the greater of the book value or the fair market value of such
assets, as the case may be, in each case multiplied by a fraction of which the
numerator shall be the net worth of the Contributing Guarantor on the date
hereof and the denominator shall be the aggregate net worth of all the
Guarantors on the date hereof (or, in the case of any Guarantor becoming a party
hereto pursuant to Section 12, the date of the Supplement hereto executed and
delivered by such Guarantor). Any Contributing Guarantor making any payment to a
Claiming Guarantor pursuant to this Section 2 shall be subrogated to the rights
of such Claiming Guarantor under Section 1 to the extent of such payment.

SECTION 3. Subordination. Notwithstanding any provision of this Agreement to the
contrary, all rights of the Guarantors under Sections 1 and 2 and all other
rights of indemnity, contribution or subrogation under applicable law or
otherwise shall be fully subordinated to the indefeasible payment in full in
cash of the Obligations. No failure on the part of the Borrower or any Guarantor
to make the

 

Exhibit E - 1

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

payments required under applicable law or otherwise shall in any respect limit
the obligations and liabilities of any Guarantor with respect to its obligations
hereunder, and each Guarantor shall remain liable for the full amount of the
obligations of such Guarantor hereunder.

SECTION 4. Termination. This Agreement shall survive and be in full force and
effect so long as any Obligation is outstanding and has not been indefeasibly
paid in full in cash, and so long as any of the Commitments under the Credit
Agreement have not been terminated, and shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any Obligation is rescinded or must otherwise be restored by any Lender or any
Guarantor upon the bankruptcy or reorganization of the Borrower, any Guarantor
or otherwise.

SECTION 5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 6. No Waiver; Amendment.

(a) No failure on the part of the Administrative Agent or any Guarantor to
exercise, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy by the Administrative Agent or any Guarantor
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law. None of the Administrative
Agent and the Guarantors shall be deemed to have waived any rights hereunder
unless such waiver shall be in writing and signed by such parties.

(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to a written agreement entered into between the
Borrower, the Guarantors and the Administrative Agent, with the prior written
consent of the Required Lenders (except as otherwise provided in the Credit
Agreement).

SECTION 7. Notices. All communications and notices hereunder shall be in writing
and given as provided in the Guarantee Agreement and addressed as specified
therein.

SECTION 8. Binding Agreement; Assignments. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of the parties that are contained in this Agreement shall bind
and inure to the benefit of their respective successors and assigns. Neither the
Borrower nor any Guarantor may assign or transfer any of its rights or
obligations hereunder (and any such attempted assignment or transfer shall be
void) without the prior written consent of the Required Lenders. Notwithstanding
the foregoing, at the time any Guarantor is released from its obligations under
the Guarantee Agreement in accordance with such Guarantee Agreement and the
Credit Agreement, such Guarantor will cease to have any rights or obligations
under this Agreement.

SECTION 9. Survival of Agreement; Severability.

(a) All covenants and agreements made by the Borrower and each Guarantor herein
and in the certificates or other instruments prepared or delivered in connection
with this Agreement or the other Loan Documents shall be considered to have been
relied upon by the Administrative Agent, the Lenders and each Guarantor and
shall survive the making by the Lenders of the Loans, and shall continue in full
force and effect as long as the principal of or any accrued interest on any
Loans or any other fee or amount payable under the Credit Agreement or this
Agreement or under any of the other Loan Documents is outstanding and unpaid and
as long as the Commitments have not been terminated.

 

Exhibit E - 2

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

(b) In case one or more of the provisions contained in this Agreement should be
held invalid, illegal or unenforceable in any respect, no party hereto shall be
required to comply with such provision for so long as such provision is held to
be invalid, illegal or unenforceable, but the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.

SECTION 10. Counterparts. This Agreement may be executed in counterparts (and by
different parties hereto on different counterparts) each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Agreement shall be effective with respect to any Guarantor
when a counterpart bearing the signature of such Guarantor shall have been
delivered to the Administrative Agent. Delivery of an executed signature page to
this Agreement by facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Agreement.

SECTION 11. Rules of Interpretation. The rules of interpretation specified in
Section 1.03 of the Credit Agreement shall be applicable to this Agreement.

SECTION 12. Additional Guarantors. Pursuant to Section 5.10 of the Credit
Agreement, each Subsidiary Loan Party of the Borrower that was not in existence
or not such a Subsidiary Loan Party on the date of the Credit Agreement is
required to enter into the Guarantee Agreement as Guarantor upon becoming such a
Subsidiary Loan Party. Upon the execution and delivery, after the date hereof,
by the Administrative Agent and such Subsidiary of an instrument in the form of
Annex I hereto, such Subsidiary shall become a Guarantor hereunder with the same
force and effect as if originally named as a Guarantor hereunder. The execution
and delivery of any instrument adding an additional Guarantor as a party to this
Agreement shall not require the consent of any Guarantor hereunder. The rights
and obligations of each Guarantor hereunder shall remain in full force and
effect notwithstanding the addition of any new Guarantor as a party to this
Agreement.

 

Exhibit E - 3

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

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized officers as of the date first appearing above.

 

DELTIC TIMBER CORPORATION By:    

 

  Name:   Title: DELTIC TIMBER PURCHASERS, INC. By:    

 

  Name:   Title: CHENAL PROPERTIES, INC. By:    

 

  Name:   Title: CHENAL COUNTRY CLUB, INC. By:    

 

  Name:   Title: DEL-TIN FIBER L.L.C By:    

 

  Name:   Title: AMERICAN AGCREDIT, PCA, as Administrative Agent By:    

 

  Name:   Title:

 

Exhibit E - 4

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

SCHEDULE I

TO THE INDEMNITY, SUBROGATION

AND CONTRIBUTION AGREEMENT

 

Guarantor(s)

  

Address

Deltic Timber Purchasers, Inc.

   For all Guarantors :

Chenal Properties, Inc.

   210 East Elm Street

Chenal Country Club, Inc.

   El Dorado, Arkansas 71730

Del-Tin Fiber L.L.C.

  

[Borrower to confirm scheduled information remains correct].

 

Exhibit E - 5

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

ANNEX I TO

THE INDEMNITY, SUBROGATION AND

CONTRIBUTION AGREEMENT

SUPPLEMENT NO. [            ] dated as of [            ], to the Indemnity,
Subrogation and Contribution Agreement dated as of August 27, 2015 (as the same
may be amended, supplemented or otherwise modified from time to time, the
“Indemnity, Subrogation and Contribution Agreement”) among DELTIC TIMBER
CORPORATION, a Delaware corporation (the “Borrower”), each Subsidiary listed on
Schedule I thereto (the “Guarantors”) and AMERICAN AGCREDIT, PCA, as
administrative agent (the “Administrative Agent”) for the Lenders (as defined in
the Credit Agreement referred to below).

A. Reference is made to (a) the Term Loan Credit Agreement dated as of
August 27, 2015 (as the same may be amended, supplemented, or otherwise modified
from time to time, the “Credit Agreement”), among the Borrower, the lenders from
time to time party thereto (the “Lenders”) and American AgCredit, PCA, as the
Administrative Agent, and (b) the Subsidiary Guarantee Agreement dated as
August 27, 2015, among the Guarantors and the Administrative Agent (as amended,
supplemented or otherwise modified from time to time, the “Guarantee
Agreement”).

B. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Indemnity, Subrogation and Contribution
Agreement and the Credit Agreement.

C. The Borrower and the Guarantors have entered into the Indemnity, Subrogation
and Contribution Agreement in order to induce the Lenders to make Loans.
Pursuant to Section 5.10 of the Credit Agreement, each Subsidiary Loan Party
that was not in existence or not such a Subsidiary Loan Party on the date of the
Credit Agreement is required to enter into the Guarantee Agreement as a
Guarantor upon becoming a Subsidiary Loan Party. Section 12 of the Indemnity,
Subrogation and Contribution Agreement provides that additional Subsidiaries may
become Guarantors under the Indemnity, Subrogation and Contribution Agreement by
execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary (the “New Guarantor”) is executing this Supplement in
accordance with the requirements of the Credit Agreement to become a Guarantor
under the Indemnity, Subrogation and Contribution Agreement in order to induce
the Lenders to make additional Loans and as consideration for Loans previously
made.

Accordingly, the Administrative Agent and the New Guarantor agree as follows:

SECTION 1. In accordance with Section 12 of the Indemnity, Subrogation and
Contribution Agreement, the New Guarantor by its signature below becomes a
Guarantor under the Indemnity, Subrogation and Contribution Agreement with the
same force and effect as if originally named therein as a Guarantor and the New
Guarantor hereby agrees to all the terms and provisions of the Indemnity,
Subrogation and Contribution Agreement applicable to it as Guarantor thereunder.
Each reference to a Guarantor in the Indemnity, Subrogation and Contribution
Agreement shall be deemed to include the New Guarantor. The Indemnity,
Subrogation and Contribution Agreement is hereby incorporated herein by
reference.

SECTION 2. The New Guarantor represents and warrants to the Administrative Agent
and the Lenders that this Supplement has been duly authorized, executed and
delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms.

 

Exhibit E - 6

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

SECTION 3. This Supplement may be executed in counterparts (and by different
parties hereto on different counterparts) each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Supplement shall become effective when the Administrative Agent
shall have received counterparts of this Supplement that, when taken together,
bear the signature of the New Guarantor and the Administrative Agent. Delivery
of an executed signature page to this Supplement by facsimile transmission shall
be as effective as delivery of a manually signed counterpart of this Supplement.

SECTION 4. Except as expressly supplemented hereby, the Indemnity, Subrogation
and Contribution Agreement shall remain in full force and effect.

SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect,
neither party hereto shall be required to comply with such provision for so long
as such provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions contained
herein and in the Indemnity, Subrogation and Contribution Agreement shall not in
any way be affected or impaired. The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.

SECTION 7. All communications and notices hereunder shall be in writing and
given as provided in Section 7 of the Indemnity, Subrogation and Contribution
Agreement. All communications and notices hereunder to the New Guarantor shall
be given to it at the address set forth under its signature.

SECTION 8. The New Guarantor agrees to reimburse the Administrative Agent for
its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Administrative Agent.

 

Exhibit E - 7

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

IN WITNESS WHEREOF, the New Guarantor and the Administrative Agent have duly
executed this Supplement to the Indemnity, Subrogation and Contribution
Agreement as of the day and year first above written.

 

[Name of New Guarantor] By:  

 

  Name:   Title:   Address: AMERICAN AGCREDIT, PCA, as Administrative Agent By:
 

 

  Name:   Title:

 

Exhibit E - 8

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

SCHEDULE I

TO SUPPLEMENT NO.         TO THE INDEMNITY,

SUBROGATION AND CONTRIBUTION AGREEMENT

Guarantors

 

Name

   Address

 

Exhibit E - 9

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

EXHIBIT F

[FORM OF] VOTING PARTICIPANT NOTIFICATION

Date: ___________, 201__

 

To: American AgCredit, PCA, as Administrative Agent

     Deltic Timber Corporation, as Borrower

Ladies and Gentlemen:

Reference is made to that certain Term Loan Credit Agreement dated as of
August 27, 2015 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the “Credit Agreement”; the terms defined
therein being used herein as therein defined), among Deltic Timber Corporation,
a Delaware corporation (the “Borrower”), the Lenders from time to time party
thereto, and American AgCredit, PCA, as Administrative Agent.

Pursuant to Section 10.4(f) of the Credit Agreement, the Lender or Voting
Participant identified below hereby notifies the Borrower and the Administrative
Agent that it is selling a participation or sub-participation and is designating
the purchasing Participant identified below as being entitled to be accorded the
rights of a Voting Participant under the Credit Agreement.

Selling Lender/Voting Participant:                                          
                                            

New Voting Participant1

Full Legal Name:   

 

Amount of Participation    Purchased:   

 

Date of Notification:   

 

Notice Address for    Voting Participant:   

 

  

 

  

 

Effective Date: _____________ ___, 201___ [TO BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]

 

1  Voting Participants must be Farm Credit Lenders, have purchased one or more
participations or sub-participations in the minimum aggregate amount of
$5,000,000 as of the Effective Date and have received the written consent of the
Borrower and the Administrative Agent, to the extent required under the Credit
Agreement.

 

Exhibit F - 1

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This Voting Participant Notice is hereby agreed to:

 

SELLING LENDER/VOTING PARTICIPANT:    [FULL LEGAL NAME]    By:   

 

      Name:       Title: NEW VOTING PARTICIPANT:    [FULL LEGAL NAME]    By:   

 

      Name:       Title:

 

[Consented to and]2 Accepted:

AMERICAN AGCREDIT, PCA

as Administrative Agent

  By:  

 

Name:   Title:     [Consented to:  

DELTIC TIMBER CORPORATION

a Delaware corporation

 

 

            By:  

 

            Name:               Title:       ]3

 

 

2  To be added only if the consent of the Administrative Agent is required by
the terms of the Credit Agreement.

3  To be added only if the consent of the Borrower is required by the terms of
the Credit Agreement.

 

F - 2

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EXHIBIT 2.19-1

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For

U.S. Federal Income Tax Purposes)

Reference is hereby made to the Term Loan Credit Agreement dated as of
August 27, 2015 (as the same may be amended, supplemented, or otherwise modified
from time to time, the “Credit Agreement”), among Deltic Timber Corporation,
each lender from time to time party thereto and American AgCredit, PCA, as
Administrative Agent.

Pursuant to the provisions of Section 2.19 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of
which it is providing this certificate, (ii) it is not a bank within the meaning
of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder
of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and
(iv) it is not a controlled foreign corporation related to the Borrower as
described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with a
certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this
certificate, the undersigned agrees that (1) if the information provided on this
certificate changes, the undersigned shall promptly so inform the Borrower and
the Administrative Agent, and (2) the undersigned shall have at all times
furnished the Borrower and the Administrative Agent with a properly completed
and currently effective certificate in either the calendar year in which each
payment is to be made to the undersigned, or in either of the two calendar years
preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

[NAME OF LENDER]

 

By:  

 

  Name:   Title:

Date:                     , 20[    ]

 

Exhibit 2.19-1 - 1

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EXHIBIT 2.19-2

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For

U.S. Federal Income Tax Purposes)

Reference is hereby made to the Term Loan Credit Agreement dated as of
August 27, 2015 (as the same may be amended, supplemented, or otherwise modified
from time to time, the “Credit Agreement”), among Deltic Timber Corporation,
each lender from time to time party thereto and American AgCredit, PCA, as
Administrative Agent.

Pursuant to the provisions of Section 2.19 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the participation in respect of which it is providing this certificate,
(ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code,
(iii) it is not a ten percent shareholder of the Borrower within the meaning of
Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign
corporation related to the Borrower as described in Section 881(c)(3)(C) of the
Code.

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate
changes, the undersigned shall promptly so inform such Lender in writing, and
(2) the undersigned shall have at all times furnished such Lender with a
properly completed and currently effective certificate in either the calendar
year in which each payment is to be made to the undersigned, or in either of the
two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

[NAME OF PARTICIPANT]

 

By:  

 

  Name:   Title:

Date:                     , 20[    ]

 

Exhibit 2.19-2 - 1

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EXHIBIT 2.19-3

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For

U.S. Federal Income Tax Purposes)

Reference is hereby made to the Term Loan Credit Agreement dated as of
August 27, 2015 (as the same may be amended, supplemented, or otherwise modified
from time to time, the “Credit Agreement”), among Deltic Timber Corporation,
each lender from time to time party thereto and American AgCredit, PCA, as
Administrative Agent.

Pursuant to the provisions of Section 2.19 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the
participation in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole beneficial owners of such
participation, (iii) with respect such participation, neither the undersigned
nor any of its direct or indirect partners/members is a bank extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of
its direct or indirect partners/members is a ten percent shareholder of the
Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of
its direct or indirect partners/members is a controlled foreign corporation
related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an
IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such
partner’s/member’s beneficial owners that is claiming the portfolio interest
exemption. By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform such Lender and (2) the undersigned shall have at all times furnished
such Lender with a properly completed and currently effective certificate in
either the calendar year in which each payment is to be made to the undersigned,
or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

[NAME OF PARTICIPANT]

 

By:  

 

  Name:   Title:

Date:                     , 20[    ]

 

Exhibit 2.19-3 - 1

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

EXHIBIT 2.19-4

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships For

U.S. Federal Income Tax Purposes)

Reference is hereby made to the Term Loan Credit Agreement dated as of
August 27, 2015 (as the same may be amended, supplemented, or otherwise modified
from time to time, the “Credit Agreement”), among Deltic Timber Corporation,
each lender from time to time party thereto and American AgCredit, PCA, as
Administrative Agent.

Pursuant to the provisions of Section 2.19 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the Loan(s)
(as well as any Note(s) evidencing such Loan(s)) in respect of which it is
providing this certificate, (ii) its direct or indirect partners/members are the
sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such
Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit
Agreement or any other Loan Document, neither the undersigned nor any of its
direct or indirect partners/members is a bank extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct
or indirect partners/members is a ten percent shareholder of the Borrower within
the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or
indirect partners/members is a controlled foreign corporation related to the
Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with IRS
Form W-8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio interest exemption: (i) an IRS
Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from
each of such partner’s/member’s beneficial owners that is claiming the portfolio
interest exemption. By executing this certificate, the undersigned agrees that
(1) if the information provided on this certificate changes, the undersigned
shall promptly so inform the Borrower and the Administrative Agent, and (2) the
undersigned shall have at all times furnished the Borrower and the
Administrative Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

[NAME OF LENDER]

 

By:  

 

  Name:   Title:

Date:                     , 20[    ]

 

Exhibit 2.19-4 - 1

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

EXHIBIT 3.1(B)(V)

FORM OF SECRETARY’S CERTIFICATE OF DELTIC TIMBER CORPORATION

Reference is made to the Term Loan Credit Agreement dated as of August 27, 2015
(the “Credit Agreement”), among Deltic Timber Corporation (the “Borrower”), the
lenders named therein, and American AgCredit, PCA, as Administrative Agent.
Terms defined in the Credit Agreement are used herein with the same meanings.
This certificate is being delivered pursuant to Section 3.1 of the Credit
Agreement.

I, [            ], Secretary of the Borrower, DO HEREBY CERTIFY that:

(b) there have been no amendments or supplements to, or restatements of, the
articles of incorporation of the Borrower delivered pursuant to Section 3.1 of
the Credit Agreement;

(c) no proceeding have been instituted or are pending or contemplated with
respect to the dissolution, liquidation or sale of all or substantially all the
assets of the Borrower or threatening its existence or the forfeiture or any of
its corporate rights;

(d) annexed hereto as Exhibit A is a true and correct copy of the Bylaws of the
Borrower as in effect on [Date]/ and at all times thereafter through the date
hereof;

(e) annexed hereto as Exhibit B is a true and correct copy of certain
resolutions duly adopted by the Board of Directors of the Borrower at a meeting
of said Board of Directors duly called and held on [Date], which resolutions are
the only resolutions adopted by the Board of Directors of the Borrower or any
committee thereof relating to the Credit Agreement and the other Loan Documents
to which the Borrower is a party and the transactions contemplated therein and
have not been revoked, amended, supplemented or modified and are in full force
and effect on the date hereof; and

(f) each of the persons named below is and has been at all times since [date] a
duly elected and qualified officer of the Borrower holding the respective office
set forth opposite his or her name and the signature set forth opposite of each
such person is his or her genuine signature:

 

Name

  

Title

  

Specimen Signature

[Include all officers who are

signing the Credit Agreement

or any other Loan Documents.]

     

 

Exhibit 3.1(B)(V) - 1

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

IN WITNESS WHEREOF, I have hereunto signed my name this              day of
August, 2015.

  

 

   Secretary   

I, [            ], [            ] of the Borrower, do hereby certify that
[            ] has been duly elected, is duly qualified and is the [Assistant]
Secretary of the Borrower, that the signature set forth above is [his/her]
genuine signature and that [he/she] has held such office at all times since
[            ].

IN WITNESS WHEREOF, I have hereunto signed my name this             day of
August, 2015.

 

DELTIC TIMBER CORPORATION

 

Title:

 

Exhibit 3.1(B)(V) - 2

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

EXHIBIT 3.1(B)(VIII)

FORM OF OFFICER’S CERTIFICATE

Reference is made to the Term Loan Credit Agreement dated as of August 27, 2015
(the “Credit Agreement”), among Deltic Timber Corporation (the “Borrower”), the
lenders named therein, and American AgCredit, PCA, as Administrative Agent.
Terms defined in the Credit Agreement are used herein with the same meanings.
This certificate is being delivered pursuant to Section 3.1(b)(viii) of the
Credit Agreement.

I, [            ], [            ] of the Borrower, DO HEREBY CERTIFY that:

(a) the representations and warranties of the Borrower set forth in the Credit
Agreement are true and correct on and as of the date hereof; and

(b) no Default or Event of Default has occurred and is continuing at the date
hereof; and

(c) since December 31, 2014, which is the date of the most recent financial
statements described in Section 5.1(a) of the Credit Agreement, there has been
no change which has had or could reasonably be expected to have a Material
Adverse Effect; and

(d) no litigation, investigation or proceeding of or before any arbitrators or
Governmental Authorities is pending against or, to the knowledge of the
Borrower, threatened against the Borrower or any of its Subsidiaries that could
reasonably be expected to have a Material Adverse Effect.

IN WITNESS WHEREOF, I have hereunto signed my name this          day of August,
2015.

 

DELTIC TIMBER CORPORATION

 

 

Name: Title:

 

Exhibit 3.1(B)(VIII) - 1