Fill and Sign the Credit Support Agreement Form

CREDIT SUPPORT AGREEMENT THIS CREDIT SUPPORT AGREEMENT is made as of the ______________ day of ______________ , between ______________ (hereinafter referred to as "the Partnership"), a ______________ General Partnership, whose ______________ address is ______________ ______________ , and ______________ (hereinafter referred to as " ______________ "), a ______________ Corporation, whose address is ______________ , ______________ , ______________ . WHEREAS, contemporaneously with the execution of this Agreement, ______________ is loaning the Partnership the sum of ______________ ($ ______________ ), said Loan being evidenced by a Promissory Note ("Note") dated on or about the date of this Agreement, and secured in part by a Deed of Trust and Security Agreement; and WHEREAS, in order to comply with one of the conditions to the making of said Loan to the Partnership, ______________ , and ______________ (the General Partners of the Partnership, hereinafter referred to as "General Partners") are furnishing with this Agreement, a "direct pay" Letter of Credit in favor of ______________ , in the sum of ______________ ($ ______________ ). (A copy of said Letter of Credit is attached hereto as Exhibit "A" and incorporated herein); NOW, THEREFORE, for and in consideration of the making of said Loan, and as additional security for said Loan, and in consideration of the mutual covenants and promises set forth herein, the receipt and sufciency of said consideration being hereby acknowledged, the undersigned ______________ and ______________ do hereby agree as follows: SECTION 1 ISSUANCE OF LETTERS OF CREDIT The ______________ hereby pledge, assign and grant unto ______________ said Letter of Credit, and ______________ shall have the right to draw down on said Letter of credit pursuant to this Agreement. Said Letter of Credit which is issued by ______________ (hereinafter the "Bank") or such other bank as is approved by ______________ in its sole discretion, is made payable to ______________ , and, pursuant to the terms of this Credit Support Agreement, shall remain in full force and efect for the term of this Loan, unless the Partnership transfers cash to the Custodial Account described in Section 4 in an amount equal to the Letter of Credit, or unless this Agreement is terminated pursuant to Section 7. ______________ reserves its right to demand that a diferent bank issue any future Letter or Letters of Credit, based on its sole discretion, issued after the initial Letter of Credit's expiration date of ______________ . Any such future Letters of Credit shall be in the amount of the Credit Support Amount, calculated using the formula contained in Section 6 of this Agreement. Furthermore, the General Partners shall have the right to have the initial Letter of Credit canceled and another Letter of Credit reissued in favor of ______________ , prior to ______________ , in the amount calculated under Section 6 of this Agreement, should said formula in Section 6 refect a Credit Support Amount that is less than $ ______________ . SECTION 2 RIGHT TO DRAW ON LETTER OF CREDIT ______________ shall have the right to draw on the Letter or Letters of Credit at any time there is a default in this Agreement or an Event of Default under the Security Documents (as defned in the Loan Agreement) and to apply the proceeds consistent with Section 12 of this Agreement. Should ______________ apply such proceeds to said debt, such payment will constitute a prepayment as provided in Paragraph 2.05 of the Loan Agreement dated this day between ______________ and Partnership ("Loan Agreement"); provided, however, the Partnership shall not be required to pay any prepayment premium as provided in said Loan Agreement or in the Note. SECTION 3 PAYMENT OF LETTER OF CREDIT Immediately upon ______________ making written demand for payment on the Bank, then the Bank shall pay the face amount of the Letter of Credit to ______________ within two (2) days of the sending of said notice. Such payment shall be made to ______________ at the address and in the manner set forth in said written demand. SECTION 4 PARTNERSHIP'S RIGHT TO CANCEL LETTER OF CREDIT The ______________ and ______________ shall cancel the Letter of Credit, upon the ______________ transferring cash, equal to the face amount of the Letter of Credit, to said Custodial Account which shall be subject to the terms of this Agreement, or pursuant to the terms of Section 7. SECTION 5 ESTABLISHMENT OF CUSTODIAL ACCOUNT; INVESTMENTS DEFINED A Custodial Account in the name of the ______________ shall be established at ______________ Bank in ______________ , _______________ , should the Partnership elect to substitute "excess cash" for the Letter of Credit issued or to be issued, or should additional contributions be required under Section 6 of this Agreement. Partnership hereby pledges, assigns and grants a security interest in favor of ______________ , in and to said Custodial Account and in and to any and all investments of the proceeds of the Custodial Account. Said investments are hereafter referred to as "investments" and shall be limited to investments in United States Government Securities maturing within one year or less from issuance, and/or Repurchase Agreements. As used herein, the term "United States Government Securities" shall mean and be limited to obligations backed by full faith and credit of the United States Government. As used herein, "Repurchase Agreement" shall refer to Repurchase Agreements between the ______________ hip and the Bank, relating to United States Government Securities whereby Partnership buys a security from said Bank, with the understanding that said Bank will repurchase the security at a higher price at a later date. All investments shall continue to be held in said Custodial Account from the inception of said account and throughout the term of this Agreement unless ______________ shall agree, in writing, that said funds shall be held by another bank in a diferent custodial account. SECTION 6 YEARLY REVIEWS TO DETERMINE INCREASE OR DECREASE IN LEVEL OF CREDIT SUPPORT Partnership shall send to ______________ its Audited Financial Statements within ninety (90) days of the end of each fscal year, commencing with the fscal year ending ______________ . Upon receipt of said Statements, ______________ shall perform the following calculations: ______________ shall add the Subordinated Debt (including accrued but unpaid interest on the Subordinated Debt) and Net Worth (as defned in the Loan Agreement) and both of which are hereinafter referred to as "said items," subtract the total of said items from the total outstanding Debt owed to ______________ , and, if a positive fgure results, then divide that fgure by two (2). Any such positive fgure, calculated on an annual basis, shall be known as the "Credit Support Amount" for the following fscal year. Should the Credit Support Amount for any fscal year refect an increase over the immediately preceding fscal year's Credit Support Amount, then within thirty (30) days of notice given to the ______________ , the ______________ shall provide ______________ with additional Letters of Credit and/or transfer cash to the Custodial Account equal to the amount that the new fscal year's Credit Support Amount exceeds the immediately preceding fscal year's Credit Support Amount. Any such Letters of Credit shall be in favor of ______________ , who shall have the same rights in said Letters of Credit as it has in the original Letter of Credit attached hereto. It is the intent of the parties that this determination of the Credit Support Amount shall be made each fscal year within thirty (30) days after receipt of the Partnership's Audited Financial Statements. Should the Credit Support Amount for any fscal year be calculated to be less than the prior fscal year's Credit Support Amount, then within thirty (30) days of notice given to ______________ , ______________ will do anything administratively necessary to allow the balance of the Letters of Credit and/or the balance in the Custodial Account to be reduced to the new Credit Support Amount. SECTION 7 TERMINATION OF AGREEMENT Should any year's Audited Financial Statement reveal that the Credit Support Amount equals to zero or is a negative fgure, then this Agreement shall immediately terminate; any Letters of Credit then outstanding shall be cancelled, and the balance in the Custodial Account shall be paid over to the Partnership. SECTION 8 PERMITTED INVESTMENTS No part of the proceeds of the Custodial Account shall be invested in any investments other than such United States Government Securities or Repurchase Agreements relating to such United States Government Securities. ______________ will supply to ______________ each month copies of confrmations from said ______________ Bank of such investments held in said Custodial Account. SECTION 9 TERM OF AGREEMENT This Credit Support Agreement is made to secure the payment of the Loan and interest and costs that may accrue thereon, and the full payment of said Loan will render this Agreement void; other wise, this Agreement will remain in full force and efect unless terminated under Section 7. SECTION 10 TRANSFER OF INVESTMENTS AND GRANTING OF POWER OF ATTORNEY ______________ hereby appoints ______________ as its attorney-in-fact efective upon an Event of Default, to arrange for the transfer of any and all investments in the Custodial Account, and ______________ may exercise all of the rights and privileges in connection with any of said investments to which ______________ may be entitled as the owner of said Custodial Account and/or the investments held in such account. ______________ shall be under no obligation to exercise any of such rights or privileges. Without limiting the foregoing authority given ______________ , said ______________ as such attorney-in-fact shall have full power, right and authority to sell, assign, and transfer any and all investments which are Government Securities, and which stand in ______________ name in the Custodial Account, and to make, indorse, execute, and deliver any certifcates evidencing Partnership's ownership in such Government Securities or Repurchase Agreements and to perform all other necessary acts of assignment and transfer. Only with respect to the matters described in the frst two paragraphs of Section 10, ______________ hereby grants ______________ , as its attorney-in-fact, full power and authority to do and perform all and every act and thing whatsoever requisite, necessary and proper to be done in the exercise of any of the powers and rights herein granted, as fully to all intents and purposes as ______________ might or could do if personally present, with full power of substitution or revocation, hereby ratifying and confrming all that said attorney-in-fact, or its substitute or substitutes, shall lawfully do or cause to be done by virtue of this power of attorney and the rights and powers herein granted. SECTION 11 RIGHTS UPON DEFAULT Upon any default in this Agreement or an Event of Default under the Security Documents (as defned in the Loan Agreement), the unpaid principal and interest of said Loan shall, at the option of ______________ , become immediately due and payable, and ______________ shall have all the rights and remedies of a secured party under Articles 8 and 9of the Uniform Commercial Code of ________________ . ______________ shall also have the right to transfer, without any previous demand or demands for performance on Partnership, all or part of any investments in such Custodial Account to ______________ own name as is necessary to repay the unpaid indebtedness of said Loan, together with the expenses incurred in connection with any transfer, assignment, or delivery of said investments. Without limiting any of the foregoing, ______________ may sell, without any previous demand or demands for performance on Partnership, all or any investments either at public or private sale. No advertisement or notice of sale shall be required regarding investments of a type customarily sold on a recognized market. ______________ shall have the right to purchase any or all of such investments, whether such sale is public or private. ______________ may transfer, assign, or sell such investments, or any portion thereof, covered by this Agreement without frst resorting to any other property of the Partnership. Partnership waives any right of redemption with respect to any such investments sold. SECTION 12 APPLICATION OF PROCEEDS FROM SALE OF INVESTMENTS The proceeds from the sale of such investments or any part thereof, upon default, shall be applied by ______________ as follows: A. First, to the payment of the costs and expenses of collection incurred by ______________ , including, but not limited to, costs of any public or private sale, attorneys' fees, and other reasonable expenses. B. Second, to the payment of the entire amount of the interest due and owed upon the Note evidencing said Loan. C. Third, to the payment of the entire amount of the principal due and owed upon the Note evidencing said Loan. D. Any remaining proceeds from the sale shall be delivered to the Partnership. SECTION 13 NON-WAIVER OF RIGHTS OF ________________ No renewal or extension of the Loan, and no delay in the enforcement or exercise of the rights granted ______________ under this Agreement shall constitute a waiver or afect the rights of ______________ with respect to the investments in such Custodial Account or any part thereof. SECTION 14 NOTICES All notices, consents, approvals, or other communications required or permitted to be given pursuant to this Credit Support Agreement shall be in writing and shall either be (a) mailed by frst-class United States mail, postage prepaid, registered or certifed with return receipt requested, (b) delivered in person to the intended addressee, (c) sent by telecopy, or (d) sent by express mail (such as Federal Express or United States Express Mail). Notice mailed pursuant to alternative (a) shall be efective three days after deposit in the United States mail. Notice given in any other manner shall be efective only on the date actually received by the addressee. For purposes of notice, the addresses of ______________ , General Partners, and Partnership shall be as follows: If to ______________ ______________ ______________ ______________ ______________ ______________ Attn: ______________ . Telecopy No.: ______________ With a Copy to: ______________ ______________ ______________ ______________ Attention: ______________ Telecopy No.: ______________ If to ______________ ______________ ______________ ______________ ______________ Attn: ______________ Telecopy No.: ______________ and to: ______________ . ______________ ______________ ______________ Telecopy No.: ______________ Each party shall have the right to change its address for notice to any other location within the North American continent by the giving of 30 days' notice to the other party in the manner set forth in this Section. SECTION 15 AMENDMENTS This Agreement may not be amended or modifed except in writing, duly executed and signed by the parties hereto, and this Agreement shall be binding upon the parties hereto and their respective heirs, successors, and assigns. ______________ stipulates that it will execute and deliver to ______________ any and all additional documents which may be necessary to perfect the security interest given to ______________ under this Agreement. ______________ and ______________ further agree to execute such agreements or documents required by ______________ , with regard to said Bank's honoring this Agreement. SECTION 16 LAWS TO GOVERN This Credit Support Agreement shall be construed in accordance with, and governed by, the laws of the State of ____________ and of the United States of America. SECTION 17 HEADINGS The Section Headings are inserted for convenience of reference only and shall in now way alter, modify or defne, or to be used in construing, the text of said sections. IN WITNESS WHEREOF, the undersigned have duly executed this Credit Support Agreement on the day and year frst written above. ______________ , A ______________ General Partnership By: ______________ General Partner By:___________________________ ______________ , President By: ______________ . General Partner By: ___________________________ __________________ Vice President and Treasurer ______________ BY:____________________________ ______________ , President J ______________ . By:_____________________________ ______________ By:______________________________ Name:____________________________ Title:_________________ Vice President STATE OF __________________ COUNTY OF ______________ Personally appeared before me, the undersigned notary public in and for the jurisdiction aforesaid, ______________ r, personally known to me to be President of Van Paper Company, one of the ______________ , a ______________ General Partnership and whose name is subscribed to the foregoing instrument, and who acknowledged to me that he signed, executed and delivered the above and foregoing instrument on the day and date therein stated for the purposes and consideration therein expressed in the name of, and for and on behalf of and as the act and deed of said ______________ , having frst been duly authorized so to do by both ______________ . GIVEN under my hand and seal of ofce this ______________ day of ______________ . ___________________________ NOTARY PUBLIC My Commission Expires: _____________________ STATE OF _______________ COUNTY OF ______________ Personally appeared before me, the undersigned notary public in and for the jurisdiction aforesaid, ______________ , personally known to me to be Vice President & Treasurer of ______________ ., one of the ______________ of ______________ , a ______________ General Partnership and whose name is subscribed to the foregoing instrument, and who acknowledged to me that he signed, executed and delivered the above and foregoing instrument on the day and date therein stated for the purposes and consideration therein expressed in the name of, and for and on behalf of and as the act and deed of said ______________ , having frst been duly authorized so to do by both ______________ . GIVEN under my hand and seal of ofce this ______________ day of ______________ . ___________________________ NOTARY PUBLIC My Commission Expires: _____________________ STATE OF _________________ COUNTY OF ______________ Personally appeared before me, the undersigned notary public in and for the jurisdiction aforesaid, ______________ , personally known to me to be President of ______________ , a ______________ Corporation, and whose name is subscribed to the foregoing instrument, and who acknowledged to me that he signed, executed and delivered the above and foregoing instrument on the day and date therein stated for the purposes and consideration therein expressed in the name of, and for and on behalf of and as the act and deed of said corporation, having frst been duly authorized so to do by said Corporation. GIVEN under my hand and seal of ofce this ______________ day of ______________ . ________________________ NOTARY PUBLIC My Commission Expires: _____________________ STATE OF _______________ COUNTY OF ______________ Personally appeared before me, the undersigned notary public in and for the jurisdiction aforesaid, ______________ , personally known to me to be Vice President & Treasurer of ______________ , a ______________ Corporation and whose name is subscribed to the foregoing instrument, and who acknowledged to me that he signed, executed and delivered the above and foregoing instrument on the day and date therein stated for the purposes and consideration therein expressed in the name of, and for and on behalf of and as the act and deed of said Corporation, having frst been duly authorized so to do by said Corporation. GIVEN under my hand and seal of ofce this ______________ day of ______________ . _________________________ NOTARY PUBLIC My Commission Expires: _____________________ STATE OF ______________ COUNTY OF ______________ Personally appeared before me, the undersigned notary public in and for the jurisdiction aforesaid, ______________ , personally known to me to be ______________ ,Vice President of ______________ , a ______________ Corporation, and whose name is subscribed to the foregoing instrument, and who acknowledged to me that he signed, executed and delivered the above and foregoing instrument on the day and date therein stated for the purposes and consideration therein expressed in the name of, and for and on behalf of and as the act and deed of said Corporation, having frst been duly authorized so to do by said corporation. GIVEN under my hand and seal of ofce this ______________ day of ______________ . ____________________________ NOTARY PUBLIC My Commission Expires: _____________________ ACKNOWLEDGMENT OF CREDIT SUPPORT AGREEMENT Receipt is hereby acknowledged of a copy of the foregoing Credit Support Agreement between ______________ , referred to therein as " ______________ ," ______________ , therein referred to as " ______________ ," and ______________ ., and ______________ , therein referred to as the " ______________ ," said Agreement being dated the ______________ day of ______________ , and covering all right, title and interest in and to all investments now or hereafter held in Custodial Account No. ______________ of the undersigned Bank, together with all moneys and claims for money now or hereinafter due or payable thereon or in respect thereof. The undersigned hereby agrees to honor said Credit Support Agreement until said Partnership'sobligations under this Agreement are released in writing by ______________ WITNESS OUR SIGNATURE, this the ______________ day of ______________ ______________ By: ________________________________ (Title)