RFFI will own the forest at close. However, like an individual that borrows money to buy a house, they will be required to pay back their lenders or forfeit their ownership.

In this case, the Bank of America has provided patient capital over a 20 year period. The bank is partnering with RFFI in its fiduciary responsibility to the forest. RFFI at a minimum must adhere to the base conservation plan that was set up by RFFI or be in default of the loan. In other words, RFFI can't log at a rate higher than this plan.

The Foundation expects to service its debt primarily through sustainable timber harvest and the sale of conservation easements. In addition, the Foundation will aggressively pursue alternative revenue sources such as carbon credits, conservation banking and other ecosystem services.

RFFI is acquiring the property to assure the long-term conservation of a large working forest where sustainable forest management will provide environmental, social and economic benefits. Nonetheless, there are a number of coastal acres that hold important ecological, scenic and recreation value that could be managed as a park. RFFI would welcome a land sale of this important area where it would not materially impact their core tenets and operations.

Because of the current condition of the property and the need to restore its ecological attributes, timber harvests are projected to be insignificant in the first 5 to 7 years. It is the Foundation's intent to implement FSC type forestry practices during this initial period and obtain FSC certification by the end of this period, before harvest levels increase.

The Usal Redwood Forest transaction will be 100 percent privately financed through loans from Bank of America to the Redwood Forest Foundation. Like any loan agreement there is some risk that the borrower may not be able to meet its financial commitments over time. For this reason, both RFFI and the Bank have agreed that they would like to sell a conservation easement to The Conservation Fund. The sale of this easement has the added benefit of assisting RFFI in paying down the loans.

There is no known opposition to this transaction, however, it has been negotiated under a confidentiality agreement. Current supporters include individuals who fought each other during the timber wars of the last three decades. While we cannot guarantee that everybody will support this deal, we believe that opposition, if there is any, will be limited given the fact that:

• The buyer is comprised of business and environmental representatives who used to "war in the woods;"
• The property will remain in open space and be managed under sustainable forest practices;
• Private financing is being used; and,
• Mills will continue to have access to forest products supplied by the property.

Bank of America is proud to provide the Redwood Forest Foundation with financing that respects the conservation attributes of the property. More specifically, the bank will provide three types of loan that are in line with the cash flow from management of the property after base conservation practices have been put in place. The bank believes this is good business because they receive a financial return. The Redwood Forest Foundation believes this is good business because the Bank is providing them with patient capital that will allow them to restore a forest that is in mediocre ecological and financial shape, which is a good investment in the community's future.

The Redwood Forest Foundation will aggressively pursue registering the carbon that is stored on this property as a result of their management. The property is ideally situated to provide such credits as its current inventory is low and the Foundation's management will grow this inventory over time.

The Redwood Forest Foundation will continue to have active forestry operations. A public access program will be developed to provide public safety and limit liability so that people can enjoy this magnificent forest and associated coastal property.

No, while their "cost of capital" may be lower, they will not be maximizing economic returns.

See: Transaction Participants

See: Transaction Participants

See: Location Maps

See: Transaction Summary

See: Community Forestry: Sustains communities

See: Standing Timber

See: Projected Harvest

See: Description of the Usal Redwood Forest

See: RFFI FAQ