Consent and Modification to Credit Agreement between Potlatch Corporation and Lenders (September 11, 2002)

 

 

 

September 11, 2002

 

Potlatch Corporation

601 West Riverside Avenue, Suite 1100

Spokane, WA 99201

Attn: Gerald L. Zuehlke, Vice President and Chief Financial Officer

 

 

Ladies and Gentlemen:

 

Reference is hereby made to the above-referenced Credit Agreement. Capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Credit Agreement.

 

You have asked Bank of America, as Issuing Lender for all new Letters of Credit under the Credit Agreement, to issue one or more Letters of Credit under the Credit Agreement in euro (the “Euro Letters of Credit”). Pursuant to the terms of Section 2.2(a) of the Credit Agreement, the Issuing Lender may only issue Letters of Credit denominated in Dollars. Accordingly, you have requested that, notwithstanding the terms of Section 2.2(a) of the Credit Agreement, the Required Lenders, the Agent and the Issuing Lender consent to the issuance of one or more Euro Letters of Credit under the Credit Agreement.

 

The Required Lenders, the Agent and the Issuing Lender hereby consent to (a) the issuance of one or more Euro Letters of Credit, subject to the other terms and conditions set forth in the Credit Agreement relating to Letters of Credit, and (b) in order to facilitate the issuance of Euro Letters of Credit, the following modifications to the Credit Agreement:

 

The Dollar Equivalent (as defined below) shall be determined with respect to each Euro Letter of Credit (i) as of any date on which the Borrower or the Lenders (to the extent such drawing has not been reimbursed directly by the Borrower) are to reimburse the Issuing Lender for a drawing under a Euro Letter of Credit, (ii) as of the last Business Day of each month, and, during the occurrence and continuation of an Event of Default, such other dates as may be requested in writing by the Required Lenders (but in any event no more than once a week, unless consented to by the Agent and Issuing Lender), and (iii) as of any other date as the Agent may elect (each such date under clauses (i), (ii) and (iii), a “Determination Date”). For the purposes hereof “Dollar Equivalent” shall mean, as of any Determination Date, (i) with respect to the amount of any drawing that has been honored by the Issuing Lender under a Euro Letter of Credit, the amount actually paid by the Issuing Lender in Dollars to purchase euro through its foreign exchange office in order to honor such drawing under a Euro Letter of Credit, and (ii) as to any other amount denominated in euro, the equivalent amount in Dollars as determined by the Agent at such time on the basis of the rate quoted by the Agent as the spot rate for the purchase by the Agent of euro with Dollars through its foreign exchange trading office at approximately 11:00 a.m. (San Francisco time) on the date one Business Day prior to the date as of which the foreign exchange computation is made.

 

Notwithstanding anything to the contrary contained in the Credit Agreement, (a) to the extent the Borrower is reimbursing the Issuing Lender directly (as opposed to with the proceeds of a Revolving Loan requested under the Credit Agreement) for a drawing under a Euro Letter of Credit, such reimbursement shall be made in Dollars, (b) to the extent the Lenders are reimbursing the Issuing Lender for a drawing under a Euro Letter of Credit (i.e., through the funding by the Lenders of (x) a Revolving Loan, the proceeds of which will reimburse the Issuing Lender for a drawing under a Euro Letter of Credit or (y) Participation Interests in a Euro Letter of Credit), such reimbursement shall be made in Dollars and (c) for all purposes under the Credit Agreement, the Agent shall calculate the Dollar Equivalent of drawings under, and LOC Obligations outstanding with respect to, Euro Letters of Credit. Without limiting the forgoing, the Dollar Equivalent amount of drawings under, the LOC Obligations outstanding with respect to, Euro Letters of Credit shall be used for purposes of determining (i) the availability of additional Revolving Loans under Section 2.1(a); (ii) the availability of additional Letters of Credit under Section 2.2(a); (iii) the outstanding LOC Obligations under Section 3.3(b)(i); (iv) the Unused Fee under Section 3.5(a); (v) the Letter of Credit Fee under Section 3.5(b); (vi) the Issuing Lender fees under Section 3.5(c); and (vii) the amount of unreimbursed drawings and outstanding LOC Obligations under Sections 2.2(c), (d) and (e), 3.14, 3.15 and 9.2.

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Except to the extent specifically provided to the contrary in this letter, all terms and conditions of the Credit Agreement shall remain in full force and effect, without modification or limitation. This consent and modification shall not operate as a consent to any other action or inaction by the Borrower or any of the Guarantors, or as a waiver of any right, power, or remedy of any Lender or the Agent under, or any provision contained in, the Credit Agreement except as specifically provided herein. This consent and may be executed in two or more counterparts, each of which shall be deemed an original, and all of which taken together shall be deemed to constitute one and the same instrument. This letter shall constitute a Credit Document.

 

 

						Very truly yours,
LENDERS:						BANK OF AMERICA, N.A., in its capacity as Administrative Agent
						By:		/s/    KEVIN F. SULLIVAN         Kevin F. Sullivan Managing Director

 

						BANK OF AMERICA, N.A., individually in its capacity as Issuing Lender and a Lender
						By:		/s/    KEVIN F. SULLIVAN         Kevin F. Sullivan Managing Director

 

						BANK OF NOVA SCOTIA
						By:		/s/    PATRICK G. NORRIS          Patrick G. Norris Director

 

						COBANK, ACB
						By:		/s/    S. RICHARD DILL          S. Richard Dill Vice President ***@***

 

						WELLS FARGO BANK, N.A.
						By:		/s/    STEVEN J. ANDERSON          Steven J. Anderson Senior Vice President

 

[Lender Signatures Continue]

 

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WACHIVIA BANK, NATIONAL ASSOCIATION (F/K/A WACHOVIA BANK, N.A.)
By:		/s/    SHAWN JANKO
		Shawn Janko Vice President

 

NORTHWEST FARM CREDIT SERVICES, PCA
By:		/S/    JIM D. ALLEN
		Jim D. Allen Vice President

 

TRANSAMERICA BUSINESS CAPITAL CORPORATION
By:
		Name:
		Title:

 

CAPITAL FARM CREDIT
By:		/S/    ROBERT P. ABBOTT
		Robert P. Abbott VP Commercial Loans

 

U.S. BANK NATIONAL ASSOCIATION
By:
		Name:
		Title:

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The terms of the foregoing Consent and Modification dated as of September 11, 2002 and hereby acknowledged and agreed to:

 

BORROWER:						POTLATCH CORPORATION
						By:		/s/    GERALD L. ZUEHLKE
								Gerald L. Zuehlke VP Finance, CFO

 

SUBSIDIARY GUARANTORS:						THE PRESCOTT AND NORTHWESTERN RAILROAD COMPANY
						By:		/s/    MALCOLM A. RYERSE
								Malcolm A. Ryerse         Secretary and Asst. Treasurer

 

ST. MARIES RIVER RAILROAD COMPANY
By:		/s/    MALCOLM A. RYERSE
		Malcolm A. Ryerse         Secretary and Asst. Treasurer

 

WARREN AND SALINE RIVER RAILROAD COMPANY
By:		/s/    MALCOLM A. RYERSE
		Malcolm A. Ryerse         Secretary and Asst. Treasurer

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