Document:

Prepared by MERRILL CORPORATION

EXHIBIT 10.1

SECOND AMENDMENT

 

THIS SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT

AGREEMENT ("Second

Amendment"), dated as of November 7, 2001, is entered

into by and among CROWN PACIFIC LIMITED PARTNERSHIP, a Delaware limited

partnership (the "Company"), BANK OF AMERICA, N.A., as agent for

the Banks (the "Agent"), and those financial institutions parties

to the Agreement (collectively, the "Banks") signatory hereto.

 

RECITALS

 

A.            The

Company, the Banks, and the Agent are parties to an Amended and Restated Credit

Agreement dated as of December 1, 1999, pursuant to which the Agent and the

Banks have extended certain credit facilities to the Company, as amended by

that certain First Amendment to Amended and Restated Credit Agreement dated as

of April 20, 2001 and that certain Temporary Waiver to Amended and Restated

Credit Agreement (as so amended, the "Agreement").

 

B.            The

Company, the Banks, and the Agent now hereby wish to amend the Agreement in

certain respects, all as set forth in greater detail below.

 

NOW, THEREFORE, for valuable consideration, the

receipt and adequacy of which are hereby acknowledged, the parties hereto

hereby agree as follows:

 

1.             Defined

Terms.  Unless otherwise

defined herein, capitalized terms used herein shall have the meanings, if any,

assigned to them in the Agreement.

 

2.             Amendments

to the Agreement.

 

(a)           The definition of "Applicable

Margin" set forth in Section 1.1 of the Agreement is hereby deleted

in its entirety, and a new definition of "Applicable Margin" in the

form of the definition of "Applicable Margin" set forth on Exhibit A hereto

is substituted therefor.

 

(b)           The definition of "EBITDA"

set forth in Section 1.1 of the Agreement is hereby deleted in its

entirety, and a new definition of "EBITDA" in the form of the definition

of "EBITDA" set forth on Exhibit A hereto is substituted therefor.

 

(c)           The definition of "Loan"

set forth in Section 1.1 of the Agreement is hereby deleted in its

entirety, and a new definition of "Loan" in the form of the

definition of "Loan" set forth on Exhibit A hereto is substituted therefor.

 

(d)           The definition of "Maturity

Date" set forth in Section 1.1 of the Agreement is hereby deleted in

its entirety, and a new definition of "Maturity Date" in the form of

the definition of "Maturity Date" set forth on Exhibit A hereto is

substituted therefor.

 

(e)           The definition of "Net

Proceeds" set forth in Section 1.1 of the Agreement is hereby deleted

in its entirety, and a new definition of "Net Proceeds" in the form

of the definition of "Net Proceeds" set forth on Exhibit A hereto is

substituted therefor.

 

(f)            The definition of "Senior Note

Agreements" set forth in Section 1.1 of the Agreement is hereby

deleted in its entirety, and a new definition of "Senior Note

Agreements" in the form of the definition of "Senior Note

Agreements" set forth on Exhibit A hereto is substituted therefor.

 

(g)           The definition of "Senior

Notes" set forth in Section 1.1 of the Agreement is hereby deleted in

its entirety, and a new definition of "Senior Notes" in the form of

the definition of "Senior Notes" set forth on Exhibit A hereto is

substituted therefor.

 

(h)           A new definition of "Actual Cash

Flow" in the form of the definition of "Actual Cash Flow" set

forth on Exhibit

A hereto is added to Section 1.1 of the Agreement in

appropriate alphabetical order.

 

(i)            A new definition of "Forecasted

Cash Flow" in the form of the definition of "Forecasted Cash

Flow" set forth on Exhibit A hereto is added to

Section 1.1 of the Agreement in appropriate alphabetical order.

 

(j)            A new definition of "1997

Senior Note Agreement" in the form of the definition of "1997 Senior

Note Agreement" set forth on Exhibit A hereto is added to

Section 1.1 of the Agreement in appropriate alphabetical order.

 

(k)           A new definition of "1997 Senior

Notes" in the form of the definition of "1997 Senior Notes" set

forth on Exhibit

A hereto is added to Section 1.1 of the Agreement in

appropriate alphabetical order.

 

(l)            A new definition of "Qualifying Tree Farm Sale" in the

form of the definition of "Qualifying

Tree Farm Sale" set forth on Exhibit A hereto is added to

Section 1.1 of the Agreement in appropriate alphabetical order.

 

(m)          A new definition of "Restricted Subsidiary" in the form of

the definition of "Restricted

Subsidiary" set forth on Exhibit A hereto is added to

Section 1.1 of the Agreement in appropriate alphabetical order.

 

(n)           A new definition of "Second Amendment Effective Date" in

the form of the definition of "Second

Amendment Effective Date" set forth on Exhibit A hereto is added to

Section 1.1 of the Agreement in appropriate alphabetical order.

 

(o)           A new definition of "Senior Funded Debt" in the form of

the definition of "Senior Funded Debt"

set forth on Exhibit A hereto is added to Section 1.1 of the

Agreement in appropriate alphabetical order.

 

(p)           Section 2.7 of the Agreement is

hereby deleted in its entirety, and a new Section 2.7 in the form of the

Section 2.7 set forth on Exhibit A hereto is substituted therefor.

 

(q)           Section 2.8 of the Agreement is

hereby deleted in its entirety, and a new Section 2.8 in the form of the

Section 2.8 set forth on Exhibit A hereto is substituted therefor.

 

(r)            Section 7.2 of the Agreement is

hereby deleted in its entirety, and a new Section 7.2 in the form of the

Section 7.2 set forth on Exhibit A hereto is substituted therefor.

 

(s)           Section 7.4 of the Agreement is

hereby deleted in its entirety, and a new Section 7.4 in the form of the

Section 7.4 set forth on Exhibit A hereto is substituted therefor.

 

(t)            Section 7.15 of the Agreement

is hereby deleted in its entirety, and a new Section 7.15 in the form of

the Section 7.15 set forth on Exhibit A hereto is substituted therefor.

 

(u)           A new Section 7.17 in the form

of Section 7.17 set forth on Exhibit A hereto is added to the Agreement

immediately succeeding existing Section 7.16 thereof.

 

(v)           A new Schedule 1.1A in the

form of Schedule 1.1A hereto is added to the Agreement.

 

(w)          A new Schedule 2.7 in the form

of Schedule 2.7 hereto is added to the Agreement.

 

3.             Representations

and Warranties.  The

Company hereby represents and warrants to the Agent and the Banks, as of the

Second Amendment Effective Date (as defined below), as follows:

 

(a)           Upon giving effect to this Second

Amendment as of the Second Amendment Effective Date, no Default or Event of

Default has occurred and is continuing.

 

(b)           The execution, delivery and

performance by the Company of this Second Amendment have been duly authorized

by all necessary corporate and other action and do not and will not require any

registration with, consent or approval of, notice to or action by, any person

(including any Governmental Authority) in order to be effective and

enforceable.  The Agreement as amended

by this Second Amendment constitutes the legal, valid and binding obligations

of the Company, enforceable against it in accordance with its terms, without

defense, counterclaim or offset except as such enforcement may be limited by

applicable bankruptcy, insolvency, reorganization or other similar laws

relating to or limiting creditors' rights generally or by equitable principles

relating to enforceability whether enforcement is sought in a proceeding at law

or in equity.

 

(c)           Upon giving effect to this Second

Amendment as of the Second Amendment Effective Date, all representations and

warranties of the Company contained in the Agreement are true and correct.

 

(d)           The Company is entering into this

Second Amendment on the basis of its own investigation and for its own reasons,

without reliance upon the Agent and the Banks or any other person.

 

4.             Certain Waivers.

 

The Banks hereby waive (i) compliance by the

Company with the Indebtedness Covenant for the fiscal quarter ended September

30, 2001 and (ii) the requirements of Section 2.7 of the Credit

Agreement with respect to any disposition of property prior to the Second

Amendment Effective Date other than in respect of the property described on Schedule 5(d)

to the Second Amendment to the Amended and Restated Facility B Credit Agreement

of even date herewith.  This is a one-time waiver and is granted

only for the limited purposes set forth herein and shall be effective only in

the specific circumstances provided for above and only for the purposes for

which given.

 

5.             Second

Amendment Effective Date.  This

Amendment will become effective on November 7, 2001 or the first

Business Day thereafter as of which each of the following conditions precedent

has been satisfied (the "Second Amendment Effective Date"):

 

(a)           The Agent has received from the

Company and the Required Banks a duly executed original or facsimile counterpart

of this Amendment (any such facsimiles to be promptly followed by the originals

thereof).

 

(b)           The "Second Amendment

Effective Date" as defined in the Second Amendment to the Amended and

Restated Facility B Credit Agreement of even date herewith has occurred or is

occurring contemporaneously as of the Second Amendment Effective Date

hereunder.

 

(c)           The Agent has received an opinion of

Andrews & Kurth LLP, as counsel to the Company and the Partner Entities

addressed to the Agent and the Banks, in form and substance reasonably

satisfactory to the Required Banks.

 

(d)            The Company shall have paid to the

Agent, for the account of each Bank that has executed a counterpart of this

Amendment and delivered (by hard copy or facsimile) the same to the Agent or its

counsel by 5:00 p.m. (Charlotte, North Carolina time) on the date hereof, a

nonrefundable amendment fee in an amount equal to such Bank's Commitment

multiplied by 0.50%; which amounts the Company hereby covenants to pay to the

Agent for the account of such Banks on demand.

 

(e)           The

Company shall have paid all of the fees and other amounts due and payable to

Banc of America Securities LLC ("BAS"), including, without

limitation, the fees set forth in that certain Engagement Letter dated as of

August 28, 2001, between the Company and BAS.

 

6.              Reservation of Rights.  The Company acknowledges and agrees that

the execution and delivery by the Agent and the Banks of this Second Amendment

shall not be deemed to create a course of dealing or otherwise obligate the

Agent or the Banks to enter into similar amendments under the same or similar

circumstances in the future.

 

7.             Miscellaneous.

 

(a)            Except as herein expressly amended

or waived, all terms, covenants and provisions of the Agreement are and shall

remain in full force and effect and all references therein to such Agreement

shall henceforth refer to the Agreement as amended or waived by this Second

Amendment.  This Second Amendment shall

be deemed incorporated into, and a part of, the Agreement.

 

(b)            This Second Amendment shall be

binding upon and inure to the benefit of the parties hereto and thereto and

their respective successors and assigns. 

No third party beneficiaries are intended in connection with this Second

Amendment.

 

(c)            This Second Amendment shall be

governed by and construed in accordance with the law of the State of

California.

 

(d)            This Second Amendment may be

executed in any number of counterparts, each of which shall be deemed an

original, but all such counterparts together shall constitute but one and the

same instrument.

 

(e)           This Second Amendment, together with

the Agreement, contains the entire and exclusive agreement of the parties

hereto with reference to the matters discussed herein and therein.  This Second Amendment supersedes all prior

drafts and communications with respect thereto.  This Second Amendment may not be amended except in accordance

with the provisions of Section 10.1 of the Agreement.

 

(f)            If any term or provision of this

Second Amendment shall be deemed prohibited by or invalid under any applicable

law, such provision shall be invalidated without affecting the remaining

provisions of this Second Amendment or the Agreement, respectively.

 

(g)           Company confirms its obligations

under Section 10.4(a) of the Agreement to reimburse the Agent for all

costs and expenses including reasonable attorneys' fees and expenses incurred

by the Agent in connection with this Second Amendment.

 

IN WITNESS WHEREOF, the parties hereto have executed

and delivered this Second Amendment as of the date first above written.

 

	

   

  	

  CROWN PACIFIC LIMITED PARTNERSHIP

  
	

   

  	

   

  
	

   

  	

  By:

  	

  CROWN PACIFIC MANAGEMENT LIMITED PARTNERSHIP,

  
	

   

  	

   

  	

  its General Partner

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  
	

   

  	

  BANK OF AMERICA, N.A.,

  
	

   

  	

  as Agent and as a Bank

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  
	

   

  	

   

  
	

   

  	

  UNION BANK OF CALIFORNIA, N.A.,

  
	

   

  	

  as Syndication Agent and as a Bank

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  BANK OF MONTREAL,

  
	

   

  	

  as Co-Agent and as a Bank

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  KEYBANK NATIONAL ASSOCIATION,

  
	

   

  	

  as Co-Agent and as a Bank

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
									

 

 

	

   

  	

  ABN AMRO BANK, N.V.

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  SUNTRUST BANK

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  	 

	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  WELLS FARGO BANK, N.A.

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  SUMITOMO MITSUI BANKING CORPORATION

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  BNP PARIBAS (Successor in Interest to

  Paribas)

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  FIRST UNION NATIONAL BANK

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  BANK HAPOALIM, B.M.

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  
											

 

 

Exhibit A

 

"Applicable

Margin" means, in respect of all Loans outstanding on any date,

a per annum rate equal to 3.50% for Offshore Rate Loans and 2.50% for Base Rate

Loans.

 

"Actual Cash Flow" means, with respect

to the Company and its Subsidiaries on a consolidated basis,

(A) for the three quarter period ending on June 30, 2002 and (B) for the four quarter period ending on

September 30, 2002, an amount equal to the sum of (i) EBITDA, plus/minus (ii) changes in

working capital, plus (iii) cash from asset sales, minus (iv) capital

expenditures, minus (v) Interest Expense, minus

(vi) scheduled payments of principal (including payments under

capital leases) on all Indebtedness, minus

(vii) mandatory prepayments of any term Indebtedness or, to the extent accompanied by a permanent

commitment reduction, any revolving Indebtedness, minus (viii) voluntary prepayments of Facility A Loans or, to the extent accompanied by a

permanent commitment reduction, the Facility B Loans and (ix) without duplication, plus/minus any other changes in long-term assets and liabilities; provided, however,

that Actual Cash Flow shall be computed for these purposes without giving

effect to extraordinary items.

 

"EBITDA"

means, for any period, and determined in accordance with GAAP for the Company

and its Subsidiaries on a consolidated basis, an amount equal to the sum of

(i) consolidated net income (or net loss) for such period, plus (ii) all

amounts treated as expenses for depreciation, depletion and interest and the

amortization of intangibles of any kind to the extent included in the

determination of such consolidated net income (or loss) for such period, plus

(iii) all accrued taxes on or measured by income to the extent included in

the determination of such consolidated net income (or loss) for such period; provided, however,

that EBITDA shall be computed for these purposes without giving effect to

extraordinary items.

 

"Forecasted

Cash Flow" means, with respect to the three fiscal quarters of

the Company and its Subsidiaries ending on June 30, 2002 and the four fiscal

quarters of the Company and its Subsidiaries ending on September 30, 2002, the

amount set forth on Schedule 1.1A.

 

"Loan"

has the meaning specified in subsection 2.1 and may be a Base Rate Loan or

an Offshore Rate Loan (each a "Type" of Loan).  The term "Loan" and "Facility

A Loan" are used herein interchangeably.

 

"Maturity Date"

means the Revolving Termination Date.

 

"Net Proceeds"

means the gross proceeds of the disposition or sale of property, less

(i) all reasonable expenses incurred in connection with such disposition

or sale of such property and (ii) with respect to the harvesting of excess

timber by the Company or any of its Subsidiaries pursuant to Section 8.4,

all reasonable expenses properly allocable to such harvesting of excess timber

and other costs incidental thereto.

 

"1997 Senior

Note Agreement" means the Note Agreement dated as of

December 15, 1997, providing for the issuance and sale by the Company

of the 1997 Senior Notes to the purchasers listed in the schedule of purchasers

attached thereto as Schedule I.

 

"1997 Senior Notes" means

those certain senior promissory notes in the aggregate principal amount of

$91,000,000 issued and sold pursuant to the 1997 Senior Note Agreement.

 

"Qualifying

Tree Farm Sale"

means the sale, in a single transaction or in a series of related or unrelated

transactions, of all of the land, timber, improvements and other assets constituting (i) the Inland Tree Farm, (ii) the

Oregon Tree Farm or (iii) the Olympic and Hamilton Tree Farms located in Washington State.

 

"Restricted Subsidiary" shall have the

meaning assigned to such term in the Senior Note Agreements as in effect on the

Second Amendment Effective Date.

 

"Second Amendment

Effective Date" shall have the meaning assigned to such term in

Section 5 of the Second Amendment to the Agreement dated as of

November 7, 2001.

 

"Senior Funded Debt" shall have the meaning

assigned to such term in the Senior Note Agreements as in effect on the Second

Amendment Effective Date.

 

"Senior Note

Agreements" means the 1994 Senior Note Agreement, the 1995

Senior Note Agreement, the 1996 Senior Note Agreement and the 1997 Senior Note

Agreement.

 

"Senior Notes"

means the 1994 Senior Notes, the 1995 Senior Notes, the 1996 Senior Notes and

the 1997 Senior Notes.

 

2.7           Mandatory

Prepayments of Loans; Mandatory Commitment Reductions.

 

(a)           Mandatory Prepayments.

 

(i)            (A)          Promptly

following the consummation of a

disposition of property permitted by subsection 7.2(f), the Company shall

prepay the Facility A Loans in an amount equal to the sum of (1) 100% of

the Net Proceeds from such disposition minus (2) the sum, without

duplication, of (x) the portion, if any, of such Net Proceeds that is

required to be applied to the prepayment of the Facility B Loans in accordance

with the terms of Section 2.7(a)(i) of the Facility B Credit Agreement and

(y) the portion, if any, of such Net Proceeds that is required to be

applied to the prepayment of Senior Notes, the Facility B Loans and other

Senior Funded Debt (other than the Facility A Loans) in accordance with the

terms of Section 4.10(a)(2)(iii)(A)(y) of the Senior Note Agreements as in

effect on the Second Amendment Effective Date.

 

(B)           Promptly following the harvesting of

excess timber by the Company or any of its Subsidiaries pursuant to

Section 7.4, the Company shall prepay the Facility A Loans in an amount

equal to the sum of (1) 100% of the Net Proceeds of such excess harvest, minus

(2) the portion, if any, of such Net Proceeds that is required to be

applied to the prepayment of Senior Notes, the Facility B Loans and other

Senior Funded Debt (other than the Facility A Loans) in accordance with the

terms of Section 4.12(ii)(A) of the Senior Note Agreements as in effect on

the Second Amendment Effective Date.

 

(C)           Unless a Qualifying Tree Farm Sale

shall have been consummated, (1) within 30 days following

June 30, 2002, the Company shall prepay the Facility A Loans by an amount equal to the amount in which

Actual Cash Flow exceeds Forecasted Cash Flow for the three quarter period

ending on June 30, 2002 and (2) within 30 days following

September 30, 2002, the Company shall prepay the Facility A Loans by an amount equal to the amount in which Actual Cash Flow exceeds

Forecasted Cash Flow for the four quarter period ending on September 30, 2002.

 

(D)          Prepayments to be made pursuant to

this subsection 2.7(a)(i) shall be applied, first, to prepay any Base

Rate Syndicated Loans and, second, at the Company's option, to Cash

Collateralize (which cash collateral shall be applied on the maturity date of

their Interest Periods to prepay then outstanding Offshore Rate Loans in the

order of their maturities) or to prepay any Offshore Rate Loans then

outstanding (in the order of the maturity of their Interest Periods).

 

(E)           Notwithstanding any provision to the

contrary contained in this Agreement, no prepayment of the Facility

A Loans shall be required if and to

the extent that a different application of the net proceeds of any such

disposition of property is required under the terms of Section 4.10 or

Section 4.12, as applicable, of the Senior Note Agreements as in effect on

the Second Amendment

Effective Date.

 

*****

 

(b)           Mandatory Commitment Reductions.  The Aggregate Commitment shall be

permanently reduced from time to time by the amount of any mandatory prepayment

of Facility A Loans required by subsection 2.7(a)(i).  Such permanent reduction shall take effect

upon the date the corresponding mandatory prepayment is or would (if Facility A

Loans were outstanding) be required by subsections 2.7(a)(i) or

2.7(a)(iii) or, in the case of funds actually deposited as cash collateral

under those subsections, upon the application of such cash collateral to the

Facility A Loans.  Upon any such

permanent reduction in the Aggregate Commitment, the Commitment of each Bank

shall automatically be reduced by an amount equal to such Bank's ratable share

of the reduction, effective as of the earlier of the date that any

corresponding prepayment is made or the date by which such prepayment is due

and payable hereunder.

 

(c)           General.  The Company shall pay, together with each prepayment under this

Section 2.7, accrued interest on the amount prepaid and any amounts

required pursuant to Section 3.4.

 

2.8           Repayment.

 

(a)           Repayment

on Revolving Termination Date.   The Company shall repay to the Banks in full on the Revolving

Termination Date the aggregate principal amount of any Loans outstanding on the

Revolving Termination Date.

 

7.2           Asset Dispositions.

 

The Company will not, and

will not permit any of its Subsidiaries to, sell, transfer, lease, contribute

or otherwise convey, or grant options, warrants or other rights with respect

to, all or any part of its assets (including accounts receivable and capital

stock of Subsidiaries) to any Person, other than:

 

(a)           sales of timber, logs, lumber and

other inventory in the ordinary course of business for fair market value;

 

(b)           sales for fair market value of

equipment, which is surplus, worn-out or obsolete or no longer useful in the

ordinary course of business;

 

(c)           [Intentionally omitted];

 

(d)           [Intentionally omitted];

 

(e)           exchanges of timberland for other

timberland in the ordinary course of business with Persons who are not

Affiliates of the Company, if:

 

(i)            the

timberland to be received in exchange is of at least an equivalent fair market

value to the timberland to be exchanged;

 

(ii)           the timberland to be received in

exchange is located in the United States; and

 

(iii)          the

aggregate fair market value of all such timberlands exchanged shall not exceed

$50 million in the aggregate.

 

provided, however,

that any exchange permitted by this subsection 7.2(e) may be in the form

of a tax deferred exchange so long as such tax deferred exchange is completed

within 180 days;

 

(f)            dispositions for fair market value

thereof of assets not otherwise permitted hereunder to Persons who are not

Affiliates of the Company if:

 

(i)            at the time of such disposition no

Default or Event of Default exists or shall result from such disposition;

 

(ii)           the Agent shall have received a

certificate from a Responsible Officer in substantially the form of Schedule

7.2(f)(ii); and

 

(iii)          the Company shall comply with the

requirements of Section 2.7(a)(i) in respect of the Net Proceeds of such

disposition;

 

provided, however,

that no disposition of assets which would cause the aggregate amount of timber

owned by the Company and its Restricted Subsidiaries to be less than 3.2

billion board feet shall be permitted under this subsection 7.2(f) unless

the aggregate amount of timber owned by the Company and its Restricted

Subsidiaries immediately prior to giving effect to such disposition is less

than 3.3 billion board feet; and

 

(g)           [Intentionally omitted].

 

7.4           Harvesting Restrictions.

 

The

Company shall not, and shall not suffer or permit any of its Subsidiaries to,

in any calendar year, commencing with 2001, harvest timber or sell standing

timber on its or any Subsidiary's timberlands in excess of Planned Volume for

that year unless, within ten Business Days after the end of such period,

(i) the Company shall comply with the requirements of

Section 2.7(a)(i)(B) in respect of the Net Proceeds from such excess harvest (which shall be

determined based upon the average prices received on the sale of all timber

harvested during such period and a reasonable allocation of direct cash

expenses incurred in connection with the harvesting and sale of timber during

such period) and (ii) the Agent shall have received a certificate

from a Responsible Officer in substantially the form of Schedule 7.4.  "Planned

Volume" shall mean for each calendar year 340,000,000 board

feet of timber, as decreased for any year in which there is an Annual Timber

Decrease effective upon the Effective Date for such Annual Timber Decrease by

the same percentage that such Annual Timber Decrease represents as a percentage

of the inventory of standing timber owned by the Company and its Subsidiaries

at the end of the prior calendar year. 

For purposes of the foregoing:

 

"Annual Timber Decrease"

shall mean, for any calendar year, the amount, in board feet, by which the

number of board feet of timber sold by the Company and its Subsidiaries during

such calendar year shall exceed the number of board feet of timber acquired by

the Company and its Subsidiaries during such calendar year.

 

"Effective Date" for any

Annual Timber Decrease shall be July 1 of the calendar year for which such

Annual Timber Decrease occurs.

 

7.15         Minimum

Cash Flow.

 

The Company shall not

permit Cash Flow on the last day of any fiscal quarter specified below to be

less than the corresponding amount set forth below:

 

	

  Fiscal

  Quarter End

  	

   

  	

  Amount

  
	

  December 31, 2001

  	

   

  	

  $

  	

  45,000,000

  
	

  March 31, 2002

  	

   

  	

  $

  	

  47,500,000

  
	

  June 30, 2002

  	

   

  	

  $

  	

  47,500,000

  
	

  September 30, 2002

  	

   

  	

  $

  	

  55,000,000

  
					

 

7.17         Additional Restrictions.

 

Notwithstanding

any provision to the contrary contained in the Agreement (including, without

limitation, the definition of "Operating Capacity Acquisitions",

"Capital Additions and Improvements", "Interim Capital

Transactions" and "Permitted

Liens" appearing in Section 1.1 of the Agreement and

Sections 7.1, 7.3, 7.5, 7.6 and 7.16 of the Agreement), the Company shall

not and shall not permit any of its Subsidiaries to:

 

(a)           consummate any Operating Capacity

Acquisitions or Acquisition otherwise permitted by Section 7.1(f) or (g);

 

(b)           directly or indirectly,

make, create, incur, assume or suffer to exist any Lien upon or with respect to

any part of its

property, whether now owned or hereafter acquired, other than (i) Liens

existing on property of such Person on the Second Amendment Effective Date and

(ii) Liens permitted by Section 7.1(b), (c), (d), (e), (f), (g), (h) and

(k);

 

(c)           merge, consolidate with

or into, or convey, transfer, lease or otherwise dispose of (whether in one

transaction or in a series of transactions) all or substantially all of its

assets (whether now owned or hereafter acquired) to or in favor of any Person;

 

(d)           purchase or acquire, or suffer, or

make any commitment therefor, any capital stock, equity interest, or any obligations or other

securities of, or any interest in, any Person, or make or commit to make any

Acquisitions, or make or commit to make any advance, loan, extension of credit

or capital contribution to or any other investment in, any Person including any

Affiliate of the Company, other than (i) loans and investments existing on

the Second Amendment Effective Date and (ii) loans and investments

permitted by Section 7.5(a), (c) and (d);

 

(e)           create, incur assume, suffer to exist

or otherwise become or remain directly or indirectly liable with respect to any Indebtedness

other than (i) Indebtedness existing on the Second Amendment Effective Date and

(ii) obligations consisting

of trade payables entered into in the ordinary course of business on ordinary

terms;

 

(f)            make any voluntary or optional

payment or prepayment on or redemption or acquisition for value of (including,

without limitation, by way of depositing with respect thereto money or

securities before due for the purpose of paying when due) the Senior Notes

other than pro rata prepayments thereof with the Loans and the Facility B Loans

as permitted by

subsection 2.7(a); or

 

(g)           amend, modify, supplement, waive or

otherwise modify any of the terms or provisions contained in the Senior Note Agreements.Prepared by MERRILL CORPORATION

EXHIBIT 10.2

SECOND AMENDMENT

 

THIS SECOND AMENDMENT TO

AMENDED AND RESTATED FACILITY B CREDIT AGREEMENT ("Second Amendment"),

dated as of November 7, 2001, is entered into by and among CROWN

PACIFIC LIMITED PARTNERSHIP, a Delaware limited partnership (the "Company"),

BANK OF AMERICA, N.A., as letter of credit issuing bank and agent for itself

and the Banks (the "Agent"), and those financial

institutions parties to the Agreement (collectively, the "Banks") signatory

hereto.

 

RECITALS

 

A.            The Company, the Banks, and the Agent are parties to an

Amended and Restated Credit Agreement dated as of December 1, 1999, pursuant to

which the Agent and the Banks have extended certain credit facilities to the

Company, as amended by that certain First Amendment to Amended and Restated

Facility B Credit Agreement dated as of April 20, 2001 and that certain

Temporary Waiver to Amended and Restated Facility B Credit Agreement (as so

amended, the "Agreement").

 

B.            The Company, the Banks, and the Agent now hereby wish to

amend the Agreement in certain respects, all as set forth in greater detail

below.

 

NOW, THEREFORE, for

valuable consideration, the receipt and adequacy of which are hereby

acknowledged, the parties hereto hereby agree as follows:

 

1.             Defined Terms.  Unless otherwise defined herein, capitalized terms used

herein shall have the meanings, if any, assigned to them in the Agreement.

 

2.             Amendments to the Agreement.

 

(a)           The definition of "Applicable

Margin" set forth in Section 1.1 of the Agreement is hereby deleted

in its entirety, and a new definition of "Applicable Margin" in the

form of the definition of "Applicable Margin" set forth on Exhibit A hereto

is substituted therefor.

 

(b)           The definition of "EBITDA"

set forth in Section 1.1 of the Agreement is hereby deleted in its

entirety, and a new definition of "EBITDA" in the form of the

definition of "EBITDA" set forth on Exhibit A hereto is

substituted therefor.

 

(c)           The definition of "Loan"

set forth in Section 1.1 of the Agreement is hereby deleted in its

entirety, and a new definition of "Loan" in the form of the

definition of "Loan" set forth on Exhibit A hereto is substituted therefor.

 

(d)           The definition of "Net

Proceeds" set forth in Section 1.1 of the Agreement is hereby deleted

in its entirety, and a new definition of "Net Proceeds" in the form

of the definition of "Net Proceeds" set forth on Exhibit A hereto is

substituted therefor.

 

(e)           The definition of "Senior Note

Agreements" set forth in Section 1.1 of the Agreement is hereby

deleted in its entirety, and a new definition of "Senior Note Agreements"

in the form of the definition of "Senior Note Agreements" set forth

on Exhibit

A hereto is substituted therefor.

 

(f)            The definition of "Senior

Notes" set forth in Section 1.1 of the Agreement is hereby deleted in

its entirety, and a new definition of "Senior Notes" in the form of

the definition of "Senior Notes" set forth on Exhibit A hereto is

substituted therefor.

 

(g)           A new definition of "Collateral

Base" in the form of the definition of "Collateral Base" set

forth on Exhibit

A hereto is added to Section 1.1 of the Agreement in

appropriate alphabetical order.

 

(h)           A new definition of "Make–Whole

Amount" in the form of the definition of "Make–Whole

Amount" set forth on Exhibit A hereto is added to

Section 1.1 of the Agreement in appropriate alphabetical order.

 

(i)            A new definition of "1997

Senior Note Agreement" in the form of the definition of "1997 Senior

Note Agreement" set forth on Exhibit A hereto is added to

Section 1.1 of the Agreement in appropriate alphabetical order.

 

(j)            A new definition of "1997

Senior Notes" in the form of the definition of "1997 Senior

Notes" set forth on Exhibit A hereto is added to

Section 1.1 of the Agreement in appropriate alphabetical order.

 

(k)           A new definition of "Restricted Subsidiary" in the form of

the definition of "Restricted

Subsidiary" set forth on Exhibit A hereto is added to

Section 1.1 of the Agreement in appropriate alphabetical order.

 

(l)            A new definition of "Second Amendment Effective Date" in

the form of the definition of "Second

Amendment Effective Date" set forth on Exhibit A hereto is added to

Section 1.1 of the Agreement in appropriate alphabetical order.

 

(m)          A new definition of "Senior Funded Debt" in the form of the

definition of "Senior Funded Debt"

set forth on Exhibit A hereto is added to Section 1.1 of the

Agreement in appropriate alphabetical order.

 

(n)           Subsection (a) of Section 2.1 of

the Agreement is hereby deleted in its entirety, and a new subsection (a)

of Section 2.1 in the form of the subsection (a) of Section 2.1

set forth on Exhibit A hereto are substituted therefor.

 

(o)           Subsections (a) and (b) of

Section 2.7 of the Agreement are hereby deleted in their entireties, and

new subsections (a) and (b) of Section 2.7 in the form of the

subsections (a) and (b) of Section 2.7 set forth on Exhibit A hereto

are substituted therefor.

 

(p)           Section 8.2 of the Agreement is

hereby deleted in its entirety, and a new Section 8.2 in the form of the

Section 8.2 set forth on Exhibit A hereto is substituted therefor.

 

(q)           Section 8.4 of the Agreement is

hereby deleted in its entirety, and a new Section 8.4 in the form of the

Section 8.4 set forth on Exhibit A hereto is substituted therefor.

 

(r)            Section 8.15 of the Agreement

is hereby deleted in its entirety, and a new Section 8.15 in the form of

the Section 8.15 set forth on Exhibit A hereto is substituted therefor.

 

(s)           A new Section 8.17 in the form

of Section 8.17 set forth on Exhibit A hereto is added to the Agreement

immediately succeeding existing Section 8.16 thereof.

 

(t)            A new Schedule 2.7 in the

form of Schedule 2.7 hereto is added to the Agreement.

 

(u)           A new Schedule 8.2(f)(ii) in

the form of Schedule 8.2(f)(ii) hereto is added to the Agreement.

3.             Representations and Warranties.  The Company hereby represents and

warrants to the Agent and the Banks, as of the Second Amendment Effective Date

(as defined below), as follows:

 

(a)           Upon

giving effect to this Second Amendment as of the Second Amendment Effective

Date, no Default or Event of Default has occurred and is continuing.

 

(b)           The

execution, delivery and performance by the Company of this Second Amendment

have been duly authorized by all necessary corporate and other action and do

not and will not require any registration with, consent or approval of, notice

to or action by, any person (including any Governmental Authority) in order to

be effective and enforceable.  The

Agreement as amended by this Second Amendment constitutes the legal, valid and

binding obligations of the Company, enforceable against it in accordance with

its terms, without defense, counterclaim or offset except as such enforcement

may be limited by applicable bankruptcy, insolvency, reorganization or other

similar laws relating to or limiting creditors' rights generally or by

equitable principles relating to enforceability whether enforcement is sought

in a proceeding at law or in equity.

 

(c)           Upon giving effect to this Second

Amendment as of the Second Amendment Effective Date, all representations and

warranties of the Company contained in the Agreement and the Security Agreement

(including those made only as of the occurrence of the Collateral Event) are

true and correct.

 

(d)           The Company is entering into this

Second Amendment on the basis of its own investigation and for its own reasons,

without reliance upon the Agent and the Banks or any other person.

 

4.             Certain Waivers.

 

The Banks hereby

waive (i) compliance by the Company with the Indebtedness Covenant for the

fiscal quarter ended September 30, 2001 and (ii) the requirements of

Section 2.7 of the Credit Agreement with respect to any disposition of

property prior to the Second Amendment Effective Date other than in respect of

the property described on Schedule 5(d).  This is a one-time

waiver and is granted only for the limited purposes set forth herein and shall

be effective only in the specific circumstances provided for above and only for

the purposes for which given.

 

5.             Second Amendment Effective Date.  This Amendment will become effective on

November 7, 2001 or the first Business Day thereafter as of which

each of the following conditions precedent has been satisfied (the "Second

Amendment Effective Date"):

 

(a)           The Agent has received from the

Company and the Required Banks a duly executed original or facsimile

counterpart of this Amendment (any such facsimiles to be promptly followed by

the originals thereof).

 

(b)           The "Second Amendment

Effective Date" as defined in the Second Amendment to the Amended and

Restated Credit Agreement of even date herewith has occurred or is occurring

contemporaneously as of the Second Amendment Effective Date hereunder.

 

(c)           The Agent has received an opinion of

Andrews & Kurth LLP, as counsel to the Company and the Partner Entities

addressed to the Agent and the Banks, in form and substance reasonably satisfactory

to the Required Banks.

 

(d)           The Company shall have paid to the

Agent an amount equal to $8,000,000 representing the aggregate Net Proceeds

received by the Company and its Subsidiaries prior to the Second Amendment

Effective Date from the dispositions of property described on Schedule 5(d),

such Net Proceeds to be applied to the prepayment of the Facility B Loans in

the manner described in Section 2.7(a) of the Agreement, as amended by this

Second Amendment.

 

(e)           The Company shall have paid to the

Agent, for the account of each Bank that has executed a counterpart of this

Amendment and delivered (by hard copy or facsimile) the same to the Agent or

its counsel by 5:00 p.m. (Charlotte, North Carolina time) on the date hereof, a

nonrefundable amendment fee in an amount equal to such Bank's Commitment

multiplied by 0.50%; which amounts the Company hereby covenants to pay to the

Agent for the account of such Banks on demand.

 

(f)            The Company shall have paid all of

the fees and other amounts due and payable to Banc of America Securities LLC

("BAS"), including, without limitation, the fees set forth in that

certain Engagement Letter dated as of August 28, 2001, between the Company and

BAS.

6.             Reservation of Rights.  The Company acknowledges and agrees that

the execution and delivery by the Agent and the Banks of this Second Amendment

shall not be deemed to create a course of dealing or otherwise obligate the

Agent or the Banks to enter into similar amendments under the same or similar

circumstances in the future.

 

7.             Miscellaneous.

 

(a)           Except as herein expressly amended or

waived, all terms, covenants and provisions of the Agreement are and shall

remain in full force and effect and all references therein to such Agreement

shall henceforth refer to the Agreement as amended or waived by this Second

Amendment.  This Second Amendment shall

be deemed incorporated into, and a part of, the Agreement.

 

(b)           This Second Amendment shall be

binding upon and inure to the benefit of the parties hereto and thereto and

their respective successors and assigns. 

No third party beneficiaries are intended in connection with this Second

Amendment.

 

(c)           This Second Amendment shall be

governed by and construed in accordance with the law of the State of

California.

 

(d)           This Second Amendment may be executed

in any number of counterparts, each of which shall be deemed an original, but

all such counterparts together shall constitute but one and the same

instrument.

 

(e)           This Second Amendment, together with

the Agreement, contains the entire and exclusive agreement of the parties

hereto with reference to the matters discussed herein and therein.  This Second Amendment supersedes all prior

drafts and communications with respect thereto.  This Second Amendment may not be amended except in accordance

with the provisions of Section 11.1 of the Agreement.

 

(f)            If any term or provision of this

Second Amendment shall be deemed prohibited by or invalid under any applicable

law, such provision shall be invalidated without affecting the remaining

provisions of this Second Amendment or the Agreement, respectively.

 

(g)           Company confirms its obligations

under Section 11.4(a) of the Agreement to reimburse the Agent for all

costs and expenses including reasonable attorneys' fees and expenses incurred

by the Agent in connection with this Second Amendment.

 

IN WITNESS WHEREOF, the

parties hereto have executed and delivered this Second Amendment as of the date

first above written.

 

 

 

 

	

   

  	

  CROWN

  PACIFIC LIMITED PARTNERSHIP

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  CROWN

  PACIFIC MANAGEMENT 

  LIMITED PARTNERSHIP,

  
	

   

  	

   

  	

  its

  General Partner

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  	

   

  
	

   

  	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  BANK

  OF AMERICA, N.A.,

  	

   

  
	

   

  	

  as

  Agent, a Bank, the Swingline Bank and the Issuing Bank

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  UNION

  BANK OF CALIFORNIA, N.A.,

  	

   

  
	

   

  	

  as

  Syndication Agent and as a Bank

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  ,

  	

  BANK

  OF MONTREAL

  	

   

  
	

   

  	

  as

  Co-Agent and as a Bank

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  KEYBANK

  NATIONAL ASSOCIATION,

  	

   

  
	

   

  	

  as

  Co-Agent and as a Bank

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  ABN

  AMRO BANK, N.V.

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  SUNTRUST

  BANK

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  WELLS

  FARGO BANK, N.A.

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  SUMITOMO

  MITSUI BANKING CORPORATION

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  BNP

  PARIBAS (Successor in Interest to Paribas)

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  FIRST

  UNION NATIONAL BANK

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  BANK HAPOALIM, B.M.

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  
							

 

 

Exhibit

A

 

                                "Applicable Margin" means, in respect of all Loans

outstanding on any date, a per annum rate equal to 3.50% for Offshore Rate

Loans and 2.50% for Base Rate Loans.

 

"Collateral

Base" means, at any time, the sum of (i) 85% of the

aggregate book value of accounts receivable (other than stumpage receivables)

of the Company and its Subsidiaries on a consolidated basis plus

(ii) 60% of the aggregate book value of inventory of the Company and its

Subsidiaries on a consolidated basis, all as determined in accordance with GAAP

applied on a basis consistent with the Company's consolidated financial statements as at

December 31, 2000.

 

"EBITDA"

means, for any period, and determined in accordance with GAAP for the Company

and its Subsidiaries on a consolidated basis, an amount equal to the sum of

(i) consolidated net income (or net loss) for such period, plus (ii) all

amounts treated as expenses for depreciation, depletion and interest and the

amortization of intangibles of any kind to the extent included in the

determination of such consolidated net income (or loss) for such period, plus

(iii) all accrued taxes on or measured by income to the extent included in

the determination of such consolidated net income (or loss) for such period; provided, however,

that EBITDA shall be computed for these purposes without giving effect to

extraordinary items.

 

"Loan"

has the meaning specified in subsection 2.1 and may be a Base Rate Loan or

an Offshore Rate Loan (each a "Type" of Loan).  The term "Loan" and "Facility

B Loan" are used herein interchangeably.

 

"Make–Whole

Amount" shall have the meaning assigned to such term in the

Senior Note Agreements as in effect on the Second Amendment Effective Date.

 

"Net Proceeds"

means the gross proceeds of the disposition or sale of property, less

(i) all reasonable expenses incurred in connection with such disposition

or sale of such property and (ii) with respect to the harvesting of excess

timber by the Company or any of its Subsidiaries pursuant to Section 8.4,

all reasonable expenses properly allocable to the such harvesting of excess

timber and other costs incidental thereto.

 

"1997 Senior

Note Agreement" means the Note Agreement dated as of

December 15, 1997, providing for the issuance and sale by the Company

of the 1997 Senior Notes to the purchasers listed in the schedule of purchasers

attached thereto as Schedule I.

 

"1997 Senior

Notes" means those certain senior promissory notes in the

aggregate principal amount of $91,000,000 issued and sold pursuant to the 1997

Senior Note Agreement.

 

"Restricted Subsidiary" shall have the

meaning assigned to such term in the Senior Note Agreements as in effect on the

Second Amendment Effective Date.

 

"Second Amendment Effective Date" shall have

the meaning assigned to such term in Section 5 of the Second Amendment to

the Agreement dated as of November 7, 2001.

 

"Senior Funded Debt" shall have the meaning

assigned to such term in the Senior Note Agreements as in effect on the Second

Amendment Effective Date.

 

"Senior Note

Agreements" means the 1994 Senior Note Agreement, the 1995

Senior Note Agreement, the 1996 Senior Note Agreement and the 1997 Senior Note

Agreement.

 

"Senior Notes"

means the 1994 Senior Notes, the 1995 Senior Notes, the 1996 Senior Notes and

the 1997 Senior Notes.

 

2.1           Amounts and Terms of Commitments.

 

(a)           Each Bank severally agrees, on the

terms and conditions set forth herein, to make loans to the Company (each such

loan, a "Syndicated Loan") from time to time on any Business Day

during the period from the Closing Date to the Revolving Termination Date, in

an aggregate amount not to exceed at any time outstanding the amount set forth

on Schedule

2.1 under the heading "Commitment" (such amount, as the same

may be reduced under Sections 2.5 or 2.7 or as a result of one or more

assignments under Section 11.8, the Bank's "Commitment"); provided,

however, that, after giving effect to any Borrowing of Syndicated

Loans, the Effective Amount of all outstanding Syndicated Loans and Swingline

Loans and the Effective Amount of all L/C Obligations (1) shall not exceed

$40,000,000 and (2) shall not at any time exceed the Aggregate Commitment;

and

provided further, that the Effective Amount of the Syndicated Loans

of any Bank plus such Bank's participation in the Effective Amount of all

Swingline Loans, if any, and all L/C Obligations shall not at any time exceed

such Bank's Commitment.  Within the

limits of each Bank's Commitment, and subject to the other terms and conditions

hereof, the Company may borrow under this Section 2.1, prepay under

Section 2.6 and reborrow under this Section 2.1.  This amendment and restatement of the 1996

Facility B Credit Agreement shall not be deemed a repayment, satisfaction,

cancellation, or novation of the loans outstanding thereunder or any other

obligations of the Company under the 1996 Facility B Credit Agreement or any of

the "Loan Documents" (as defined therein), which shall instead

continue and constitute Obligations hereunder and under the other Loan

Documents; provided,

however, that upon the Closing Date, all outstanding

"Loans" under and as defined in the 1996 Facility B Credit Agreement,

subject to Section 4.4 thereof, shall be prepaid in full with the proceeds of

Loans hereunder or from other funds.

 

2.7           Mandatory Prepayments of Loans; Mandatory Commitment

Reductions.

 

(a)           Mandatory

Prepayments.

 

(i)            (A)          Promptly

following receipt thereof, the Company shall prepay the Facility B Loans with

the first $27,500,000 (including, without limitation, the $8,000,000 payment

required by Section 5(d) of the Second Amendment to the Agreement dated as

of November 7, 2001) of Net Proceeds not subject to ratable sharing

with the holders of Senior Notes and other Senior Funded Debt (other than the

Facility A Loans and the Facility B Loans) in accordance with the terms of

Section 4.10(a)(2)(iii)(A)(y) of the Senior Note Agreements as in effect

on the Second Amendment Effective Date and received by the Company or any of

its Subsidiaries from the disposition of any property described on Schedule 2.7

in a transaction permitted by subsection 8.2(f).

 

(B)           Promptly following the consummation

of a disposition of property permitted by subsection 8.2(f) or the

harvesting of excess timber by the Company or any of its Subsidiaries pursuant

to Section 8.4, the Company shall prepay the Facility B Loans with the

portion, if any, of the Net Proceeds of such disposition or such excess harvest

that is required to be applied to the prepayment of the Facility B Loans in

accordance with the terms of Section 4.10(a)(2)(iii)(A)(y) or

Section 4.12(ii)(A)(y), as applicable, of the Senior Note Agreements as in

effect on the Second Amendment Effective Date.

 

(C)           Prepayments to be made pursuant to

this subsection 2.7(a)(i) shall be applied, first, to prepay any Base

Rate Syndicated Loans, second, to prepay Swingline Loans, and, third,

at the Company's option, to Cash Collateralize (which cash collateral shall be

applied on the maturity date of their Interest Periods to prepay then

outstanding Offshore Rate Loans in the order of their maturities) or to prepay

any Offshore Rate Loans then outstanding (in the order of the maturity of their

Interest Periods).

 

(D)          Notwithstanding

any provision to the contrary contained in this Agreement, no prepayment of the

Facility B Loans shall

be required if and to the extent that a different application of the net

proceeds of any such disposition of property is required under the terms of

Section 4.10 or Section 4.12, as applicable, of the Senior Note

Agreements as in effect on the Second Amendment Effective Date.

 

*****

 

(b)           Mandatory Commitment Reductions.

 

(i)            On each

occasion that the Company or any of its Subsidiaries shall be required to

prepay the Facility B Loans pursuant to subsection 2.7(a)(i)(B), the

Aggregate Commitment shall be permanently reduced by an amount equal to the

lesser of (A) the amount by which the Aggregate Commitment exceeds the

Collateral Base at the time of such prepayment and (B) the amount of such

prepayment pursuant to subsection 2.7(a)(i)(B) minus the amount of

any Make–Whole Amount required to be paid to the holders of Senior Notes

pursuant to Section 5.2 of the Senior Note Agreements as in effect on the

Second Amendment Effective Date in connection with any related prepayment of

Senior Notes.

 

(ii)           No reduction in the Aggregate

Commitment pursuant to Section 2.5 or subsection 2.7(b)(i) shall

reduce the L/C Commitment unless and until the Aggregate Commitment has been

reduced to $10,000,000; thereafter, any reduction in the Aggregate Commitment

pursuant to Section 2.5 shall equally reduce the L/C Commitment.

 

(iii)          At no time shall the Swingline

Commitment exceed the Aggregate Commitment, and any reduction of the Aggregate

Commitment which reduces the Aggregate Commitment below the then current amount

of the Swingline Commitment shall result in an automatic corresponding

reduction of the Swingline Commitment to the amount of the Aggregate

Commitment, as so reduced, without any action on the part of the Swingline

Bank.

 

*****

 

8.2           Asset Dispositions.

 

The Company will

not, and will not permit any of its Subsidiaries to, sell, transfer, lease,

contribute or otherwise convey, or grant options, warrants or other rights with

respect to, all or any part of its assets (including accounts receivable and

capital stock of Subsidiaries) to any Person, other than:

 

(a)           sales of timber, logs, lumber and

other inventory in the ordinary course of business for fair market value;

 

(b)           sales for fair market value of

equipment, which is surplus, worn-out or obsolete or no longer useful in the

ordinary course of business;

 

(c)           [Intentionally omitted];

 

(d)           [Intentionally omitted];

 

(e)           exchanges of timberland for other

timberland in the ordinary course of business with Persons who are not

Affiliates of the Company, if:

 

(i)            the

timberland to be received in exchange is of at least an equivalent fair market

value to the timberland to be exchanged; and

(ii)           the timberland to be

received in exchange is located in the United States; and

 

(iii)          the aggregate fair market value of all

such timberlands exchanged shall not exceed $50 million in the aggregate.

 

provided, however,

that any exchange permitted by this subsection 8.2(e) may be in the form

of a tax deferred exchange so long as such tax deferred exchange is completed

within 180 days;

 

(f)            dispositions for fair market value

thereof of assets not otherwise permitted hereunder to Persons who are not

Affiliates of the Company if:

 

(i)            at the time of such disposition no

Default or Event of Default exists or shall result from such disposition;

 

(ii)           the Agent shall have received a

certificate from a Responsible Officer in substantially the form of Schedule

8.2(f)(ii); and

 

(iii)          the Company shall comply with the

requirements of Section 2.7(a)(i) in respect of the Net Proceeds of such

disposition;

 

provided, however,

that no disposition of assets which would cause the aggregate amount of timber

owned by the Company and its Restricted Subsidiaries to be less than 3.2

billion board feet shall be permitted under this subsection 8.2(f) unless

the aggregate amount of timber owned by the Company and its Restricted

Subsidiaries immediately prior to giving effect to such disposition is less

than 3.3 billion board feet; and

 

(g)           [Intentionally omitted].

 

8.4           Harvesting Restrictions.

 

                The

Company shall not, and shall not suffer or permit any of its Subsidiaries to,

in any calendar year, commencing with 2001, harvest timber or sell standing

timber on its or any Subsidiary's timberlands in excess of Planned Volume for

that year unless, within ten Business Days after the end of such period,

(i) the Company shall comply with the requirements of

Section 2.7(a)(i)(B) of the Facility A Credit Agreement in respect of the

Net Proceeds from such excess harvest (which shall be determined based upon the

average prices received on the sale of all timber harvested during such period

and a reasonable allocation of direct cash expenses incurred in connection with

the harvesting and sale of timber during such period) and (ii) the Agent

shall have received a certificate from a Responsible Officer in substantially

the form of Schedule 8.4.  "Planned Volume" shall mean for each

calendar year 340,000,000 board feet of timber, as decreased for any year in

which there is an Annual Timber Decrease effective upon the Effective Date for

such Annual Timber Decrease by the same percentage that such Annual Timber

Decrease represents as a percentage of the inventory of standing timber owned

by the Company and its Subsidiaries at the end of the prior calendar year.  For purposes of the foregoing:

 

"Annual

Timber Decrease" shall mean, for any calendar year, the amount,

in board feet, by which the number of board feet of timber sold by the Company

and its Subsidiaries during such calendar year shall exceed the number of board

feet of timber acquired by the Company and its Subsidiaries during such

calendar year.

 

"Effective

Date" for any Annual Timber Decrease shall be July 1 of the

calendar year for which such Annual Timber Decrease occurs.

 

8.15         Minimum Cash Flow.

 

The Company shall

not permit Cash Flow on the last day of any fiscal quarter specified below to

be less than the corresponding amount set forth below:

 

	

  Fiscal

  Quarter End

  	

   

  	

  Amount

  
	

  December 31, 2001

  	

   

  	

  $

  	

  45,000,000

  
	

  March 31, 2002

  	

   

  	

  $

  	

  47,500,000

  
	

  June 30, 2002

  	

   

  	

  $

  	

  47,500,000

  
	

  September 30, 2002

  	

   

  	

  $

  	

  55,000,000

  

 

8.17         Additional Restrictions.

 

Notwithstanding any provision to the contrary contained in

the Agreement (including, without limitation, the definition of "Operating

Capacity Acquisitions", "Capital Additions and

Improvements", "Interim Capital Transactions" and "Permitted Liens" appearing in

Section 1.1 of the Agreement and Sections 8.1, 8.3, 8.5, 8.6 and 8.16

of the Agreement), until the Facility A Loans shall have been repaid in full

and the Commitments under and as defined in Facility A Credit Facility shall

expired or been terminated:

 

(a)           consummate

any Operating Capacity Acquisitions or Acquisition otherwise permitted by

Section 8.1(f) or (g);

 

(b)           directly

or indirectly, make, create, incur, assume or suffer to exist any Lien upon or

with respect to any part of its property, whether now owned or hereafter

acquired, other than (i) Liens existing on property of such Person on the

Second Amendment Effective Date and (ii) Liens permitted by Section

8.1(b), (c), (d), (e), (f), (g), (h) and (k);

 

(c)           merge,

consolidate with or into, or convey, transfer, lease or otherwise dispose of

(whether in one transaction or in a series of transactions) all or

substantially all of its assets (whether now owned or hereafter acquired) to or

in favor of any Person; 

 

(d)           purchase or acquire, or suffer, or

make any commitment therefor, any capital stock, equity interest, or any

obligations or other securities of, or any interest in, any Person, or make or

commit to make any Acquisitions, or make or commit to make any advance, loan,

extension of credit or capital contribution to or any other investment in, any

Person including any Affiliate of the Company, other than (i) loans and

investments existing on the Second Amendment Effective Date and (ii) loans

and investments permitted by Section 8.5(a), (c) and (d);

 

(e)           create, incur assume, suffer to exist

or otherwise become or remain directly or indirectly liable with respect to any

Indebtedness other than (i) Indebtedness existing on the Second Amendment

Effective Date and (ii) obligations consisting of trade payables entered into

in the ordinary course of business on ordinary terms;

 

(f)            make any voluntary or optional

payment or prepayment on or redemption or acquisition for value of (including,

without limitation, by way of depositing with respect thereto money or

securities before due for the purpose of paying when due) the Senior Notes

other than pro rata prepaymentsthereof with the Loans and the Facility B

Loans as permitted by subsection 2.7(a); or

 

(g)           amend, modify, supplement, waive or

otherwise modify any of the terms or provisions contained in the Senior Note

Agreements.

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