SECOND AMENDMENT TO AMENDED AND RESTATED
CREDIT AGREEMENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (the
"Amendment") dated as of October 9, 1997, is entered into by and between
THE PACIFIC LUMBER COMPANY (the "Company") and BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION (the "Bank").
RECITALS
A. The Bank and the Company are parties to an Amended and Restated
Credit Agreement dated as of November 10, 1995 pursuant to which the Bank
has extended certain credit facilities to the Company. This Credit
Agreement, as amended by a First Amendment to Amended and Restated Credit
Agreement dated as of February 10, 1997 and as in effect as of the opening
of business on the date of this Amendment is referred to in this amendment
as the "Credit Agreement".
B. The Company has requested that the Bank agree to certain
amendments of the Credit Agreement.
C. The Bank is willing to amend the Credit Agreement as set forth and
subject to the terms and conditions of this Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as follows:
1. Defined terms. Unless otherwise defined in this Agreement,
capitalized terms shall have the meanings (if any) assigned to them in
the Credit Agreement.
2. Amendments to Article I and II.
(a) Section 1.01 of the Credit Agreement is amended as follows:
(1) The last paragraph of the definition of "Acceptable
Inventory" is amended in its entirety to provide as follows:
"The value of Acceptable Inventory shall be the lesser of
the Company's cost (determined under GAAP) or the Bank's
independent determination of the resale value of such
inventory in such quantities and on such terms as the Bank
may reasonably deem appropriate. Until further written
notice from the Bank to the Company, the Bank agrees that
the value (y) of the lumber component of Acceptable
Inventory shall be determined by the resale value of such
inventory in such quantities and on such terms as the Bank
may reasonably deem appropriate and (z) of the log
component of such Acceptable Inventory shall be determined
by the Company's cost (determined under GAAP) of such
inventory."
(2) Clause (a) of the definition of "Acceptable Receivable" is
amended by deleting "$500,000" in the two places in which
such amount appears and replacing it with "$2,000,000".
(3) Clause (a) of the definition of "Revolving Termination Date"
is amended in its entirety to provide as follows:
"(a) May 31, 2000; and"
(4) Clause (a) of the definition of "Term Credit Termination
Date" is amended in its entirety to provide as follows:
"(a) June 30, 1999; or"
(b) Subsection 2.01(b)(2) of the Credit Agreement is amended in its
entirety to provide as follows:
"(2) After the issuance or amendment of a Standby Letter of
Credit, the aggregate of (y) the Outstanding Letters of Credit
and (z) the Letter of Credit Obligations shall not exceed
$20,000,000."
(c) Subsection 2.08(a) of the Credit Agreement is amended by
replacing "June 30, 1998" in clause (1) and clause (2) of such
subsection with "June 30, 1999".
3. Representations and Warranties. The Company hereby represents and
warrants to the Bank as follows:
(a) No Default or Event of Default has occurred and is continuing.
(b) The execution, delivery and performance by the Company of this
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 Credit Agreement as amended by this
Amendment constitutes the legal, valid and binding obligations of
the Company, enforceable against it in accordance with its
respective terms, without defense, counterclaim or offset.
(c) All representations and warranties of the Company contained in
the Credit Agreement are true and correct.
(d) The Company is entering into this Amendment on the basis of its
own investigation and for its own reasons, without reliance upon
the Bank or any other Person.
4. Effective Date. This Amendment will become effective as of October
9, 1997 (the "Effective Date"); provided that each of the following
conditions precedents is satisfied on or before such date:
(a) The Bank has received from the Company a duly executed original
of this Amendment.
(b) The Bank has received from the Company a copy of a resolution
passed by the board of directors of the Company, certified by the
Secretary or an Assistant Secretary of the Company as being in
full force and effect on the date hereof, authorizing the
execution, delivery and performance of this Amendment.
(c) The Bank has received from counsel to the Company an opinion in
form and substance satisfactory to the Bank stating, among other
matters, that this Amendment and the Credit Agreement as amended
by this Amendment is a legal and binding obligation of the
Company, enforceable against the Company in accordance with its
terms.
(d) All representations and warranties contained herein are true and
correct as of the Effective Date.
5. Miscellaneous.
(a) All terms, covenants and provisions of the Credit Agreement as
amended by this Amendment are and shall remain in full force and
effect and all references therein to such Credit Agreement shall
henceforth refer to the Credit Agreement as amended by this
Amendment. This Amendment shall be deemed incorporated into, and
a part of, the Credit Agreement.
(b) This 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 Amendment.
(c) This Amendment shall be governed by and construed in accordance
with the law of the State of California.
(d) This 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. Each of the parties hereto understands and agrees
that this document (and any other document required herein) may
be delivered by any party thereto either in the form of an
executed original or an executed original sent by facsimile
transmission to be followed promptly by mailing of a hard copy
original, and that receipt by the Bank of a facsimile transmitted
document purportedly bearing the signature of the Company shall
bind the Company, with the same force and effect as the delivery
of a hard copy original. Any failure by the Bank to receive the
hard copy executed original of such document shall not diminish
the binding effect of receipt of the facsimile transmitted
executed original of such document which hard copy page was not
received by the Bank.
(e) This Amendment may not be amended except in accordance with the
provisions of Section 9.01 of the Credit Agreement.
(f) If any term or provision of this Amendment shall be deemed
prohibited by or invalid under any applicable law, such provision
shall be invalidated without affecting the remaining provisions
of this Amendment or the Credit Agreement, respectively.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Amendment as of the date first above written.
THE PACIFIC LUMBER COMPANY BANK OF AMERICA NATIONAL
TRUST AND SAVINGS
ASSOCIATION
By: /S/ XXXX X. XXXXX By: /S/ XXXXXXX X. XXXXX
Name: Xxxx X. Xxxxx Name: Xxxxxxx X. Xxxxx
Title: Vice President--Finance Title: Managing Director
and Administration
