UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended October 31, 1993 Commission File No. 0-1370
LONGVIEW FIBRE COMPANY
(Exact name of registrant as specified in its charter)
Washington 91-0298760
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Longview, Washington 98632
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (206) 425-1550
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Stock, $1.50 Ascribed Value New York Stock Exchange
Rights to purchase Common Stock New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
(Title of Class)
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
State the aggregate market value of the voting stock held by non-affiliates of
the registrant. The aggregate market value shall be computed by reference to
the price at which the stock was sold, or the average bid and asked prices of
such stock, as of a specified date within 60 days prior to the date of filing.
Market value per share $ 22.625 as of December 31, 1993 Total $1,028,930,587
Indicate the number of shares outstanding of each of the issuer's class of
common stock as of December 31, 1993. 51,881,819 shares outstanding
DOCUMENTS INCORPORATED BY REFERENCE
PART III - NOTICE OF ANNUAL MEETING OF SHAREHOLDERS AND PROXY STATEMENT
dated December 15, 1993.
<PAGE> Page 1
PART I
ITEM 1. BUSINESS
(a) General Development of Business
Longview Fibre Company, was incorporated on November 17, 1989 in the
State of Washington as a successor to a company of the same name
incorporated in the State of Delaware on August 2, 1926. No general
development of material importance has occurred during the past fiscal
year.
(b) Financial Information about Industry Segments
This item is completed by reference to Note 12 of Item 8 of this Form
10-K.
(c) Narrative Description of Business
(1) Business Done and Intended to be Done
(i) Principal Products, Markets and Methods of Distribution
Logs - The company owns and operates tree farms in Oregon and
Washington which produce logs for sale in the domestic and
export market.
Paper and Paperboard - Its pulp and paper mill at Longview,
Washington produces pulp which is manufactured into kraft paper
and containerboard.
Wrapping paper and converting paper (paper in large rolls for
use by manufacturers of bags and other items) are sold by the
company's sales force working out of San Francisco, California;
Longview, Washington; Milwaukee, Wisconsin; and Atlanta, Georgia
or through paper merchants. Sales are made primarily in the
domestic market with some grades of paper sold in the export
market.
Containerboard is sold in the export market and in the Pacific
Coast states.
Converted Products - The company's fourteen converting plants in
ten states produce shipping containers and merchandise and
grocery bags. The tonnage of paper and containerboard used in
the converting plants equals approximately 66% of the Longview
mill production.
Bags are sold by the company's sales force working out of San
Francisco and Los Angeles, California; Longview, Washington; and
Waltham, Massachusetts. Sales are made directly or through
paper merchants.
<PAGE> Page 2
Corrugated and solid fibre boxes are sold by the company's
offices located at Longview, Seattle and Yakima, Washington;
Portland, Oregon; San Francisco and Oakland, California; Twin
Falls, Idaho; Spanish Fork, Utah; Milwaukee, Wisconsin;
Rockford, Illinois; Cedar Rapids, Iowa; Minneapolis, Minnesota;
Amsterdam, New York; and Springfield, Massachusetts.
The following table sets forth the contribution to sales by each
class of similar products which accounted for more than 10% of
sales.
1993 1992 1991
Logs 24% 17% 14%
Paper and Paperboard 28% 34% 35%
Converted Products 48% 49% 51%
(ii) There has been no public announcement, or information which has
become public, about a new product or line of business requiring
the investment of a material amount of total assets of the
company.
(iii) Wood Supply and Timberlands - The raw material fibers come
primarily from purchased wood chips and sawdust with important
contributions from fiber reclaimed from post-consumer and
post-industrial waste and augmented by log chipping operations
owned by the Company and others. Wood chip costs were about one
percent higher than in the prior year.
Lockup of federal and state timber for so-called threatened
species (spotted owls and marbled murrelets) continues with no
relief in sight. This keeps chip costs up, but enhances log
revenues. Any adverse effect on our ability to log our private
lands due to threatened species is presently estimated at under
six percent.
The Leavenworth sawmill is improving. Dry kilns are being
installed. When these are operative (estimated early 1994),
operations should be in the black.
The company operates its 529,730 acres of tree farms on a
sustained yield basis with rotations between 50 and 70 years; no
large inventory of mature trees is maintained.
(iv) Patents, trademarks, licenses, franchises and concessions held
do not play an important part in the business of the company.
(v) No material portion of the business of the company is seasonal.
(vi) The practice of the company and the industry does not require an
abnormal amount of working capital.
(vii) The loss of a single customer, or a few customers, would not
have a material effect on the business of the company.
(viii) The backlog of orders is not material to an understanding of the
business of the company.
<PAGE> Page 3
(ix) There is no material portion of the business subject to
renegotiation or termination of contracts at the election of the
Government.
(x) Practically all merchantable logs produced from the company's
timberlands are sold to independent sawmills and plywood plants
which purchase a substantial part of their log requirements, to
U. S. exporters or direct to foreign importers. The company
continues to emphasize quality, service, continuity and design
of products to meet customers special needs. Accordingly, the
company believes it is in an acceptable competitive posture as
to its primary products in spite of high wood fiber costs in the
region. As to converted products, the company believes it
competes on even terms in highly competitive markets avoiding
large accounts which have reached excessive loss levels.
(xi) The amount spent on research and development is completed by
reference to Note 11 of Item 8 of this Form 10-K.
(xii) Estimated capital expenditures for environmental protection are
$1,000,000 per year for 1994 and 1995.
(xiii) The company has approximately 3,500 employees.
(d) Financial Information about Foreign and Domestic Operations and Export
Sales
Segment information (including amount of export sales) is completed by
reference to Note 12 of Item 8 of this Form 10-K.
ITEM 2. PROPERTIES
The principal plants and important physical properties of the company are held
without any major encumbrances and their respective locations by industry
segment are as follows:
Logs - As of October 31, 1993 the company owned in fee 529,730 acres of tree
farms located in various counties of Washington and Oregon. The company as a
matter of policy has consistently acquired and intends to continue to acquire
more timberlands whenever purchasable at acceptable prices dependent on the
location and quality of the site involved and the species and quality of the
merchantable timber and growing stock thereon. The company operates its tree
farms on a sustained yield basis with rotations between 50 and 70 years. No
large inventory of mature trees is maintained.
Paper and Paperboard - At Longview, Washington on a site of approximately 350
acres owned by the company with deep water frontage on the Columbia River and
featuring connections with two transcontinental railroads and adequate highway
access, there is an integrated operation for producing pulp and delivering it
to twelve paper and/or containerboard machines with full supporting facilities.
Mill utilization was at 76% during fiscal 1993.
Converted Products - On the same site at Longview there is a box factory for
production of solid fibre and corrugated boxes.
<PAGE> Page 4
At each of the following twelve locations there are factories for the
production of converted products:
Oakland, California Corrugated Boxes Only
Twin Falls, Idaho " " "
Rockford, Illinois " " "
Cedar Rapids, Iowa " " "
Springfield, Massachusetts " " "
Minneapolis, Minnesota " " "
Amsterdam, New York " " "
Seattle, Washington " " "
Yakima, Washington " " "
Spanish Fork, Utah Corrugated Boxes, Grocery Bags and
Merchandise Bags
Milwaukee, Wisconsin Corrugated and Solid Fibre Boxes
Waltham, Massachusetts Merchandise Bags
The volume of converted products sold decreased during the past fiscal year.
Capacity is available for increased sales.
Other - The company owns mineral rights on the majority of its tree farm acres.
Revenues from minerals are immaterial. Natural gas from company lands in
Columbia County, Oregon produce some royalty income. These revenues make land
ownership more attractive, but to date have had an immaterial impact on overall
corporate results.
ITEM 3. LEGAL PROCEEDINGS
Nothing to report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Nothing was submitted during the fourth quarter of the fiscal year to a vote of
the Shareholders.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
(a)(1)(ii) Transaction prices per share as reported on the New York Stock
Exchange are reported below.
Fiscal 1993 1992
Quarter High Low High Low
1st $18.75 $15.88 $16.00 $10.38
2nd 20.25 16.00 18.75 14.75
3rd 18.25 15.75 17.25 14.63
4th 18.25 15.88 17.38 12.88
(b)(1) The company estimates it now has approximately 11,650 shareholders.
<PAGE> Page 5
(c)(1) Dividends per share paid in fiscal 1993, 1992 and 1991:
1993 1992 1991
January $0.10 $0.10 $0.13
April 0.10 0.10 0.13
July 0.10 0.10 0.13
October 0.22 0.22 0.13
$0.52 $0.52 $0.52
The Directors have declared a regular dividend of $0.13 per share to be
paid on January 10, 1994, to shareholders of record on December 24,
1993.
Restrictions on the company's ability to pay cash dividends are
completed by reference to Notes 5, 10 and 13 of Item 8 of this Form
10-K.
<PAGE> Page 6
ITEM 6. SELECTED FINANCIAL AND OTHER DATA
<TABLE>
LONGVIEW FIBRE COMPANY
SELECTED FINANCIAL AND OTHER DATA
<S> <C> <C> <C> <C> <C>
(dollars in thousands except per share) 1993 1992 1991 1990 1989
STATEMENT OF INCOME
Net sales. . . . . . . . . . . . . . . . . . . . $689,551 $690,998 $644,000 $685,473 $697,725
Logs . . . . . . . . . . . . . . . . . . . . . 166,822 114,944 90,785 94,615 80,113
Paper and paperboard . . . . . . . . . . . . . 189,787 234,119 223,260 241,974 256,167
Converted products . . . . . . . . . . . . . . 332,942 341,935 329,955 348,884 361,445
Cost of products sold, including outward freight 554,984 571,453 556,329 530,246 544,518
Gross profit . . . . . . . . . . . . . . . . . . 134,567 119,545 87,671 155,227 153,207
Selling, administrative and general expenses . . 49,994 48,971 46,737 46,752 43,461
Operating profit . . . . . . . . . . . . . . . . 84,573 70,574 40,934 108,475 109,746
Logs . . . . . . . . . . . . . . . . . . . . . 101,471 61,006 45,286 51,781 41,350
Paper and paperboard . . . . . . . . . . . . . (2,181) 14,398 15,183 42,483 46,334
Converted products . . . . . . . . . . . . . . (14,717) (4,830) (19,535) 14,211 22,062
Interest expensed. . . . . . . . . . . . . . . . (22,772) (24,356) (24,211) (17,056) (12,871)
Other income . . . . . . . . . . . . . . . . . . 1,287 1,169 5,780 1,422 3,544
Income before income taxes . . . . . . . . . . . 63,088 47,387 22,503 92,841 100,419
Provision for income taxes . . . . . . . . . . . 22,800 15,300 5,860 31,700 33,900
Net income . . . . . . . . . . . . . . . . . . . 40,288 32,087 16,643 61,141 66,519
PER SHARE
Net income . . . . . . . . . . . . . . . . . . . $ 0.78 $ 0.62 $ 0.32 $ 1.13 $ 1.21
Dividends. . . . . . . . . . . . . . . . . . . . 0.52 0.52 0.52 0.52 0.48
Earnings reinvested in the business. . . . . . . 0.26 0.10 (0.20) 0.61 0.73
Shareholders' equity at year-end . . . . . . . . 7.69 7.39 7.29 7.49 7.05
Average shares outstanding (thousands) . . . . . 51,785 51,688 51,698 54,309 55,075
Shares outstanding at year-end (thousands) . . . 51,882 51,685 51,693 51,710 54,681
BALANCE SHEET DATA
Total assets . . . . . . . . . . . . . . . . . . $944,373 $950,768 $926,852 $873,901 $738,924
Working capital. . . . . . . . . . . . . . . . . 34,308 30,119 27,791 26,578 31,356
Capital assets . . . . . . . . . . . . . . . . . 767,130 777,655 768,406 724,315 600,869
Deferred taxes . . . . . . . . . . . . . . . . . (97,693) (83,266) (79,569) (73,076) (61,950)
Long-term debt . . . . . . . . . . . . . . . . . 327,486 362,400 356,025 303,450 194,505
Shareholders' equity . . . . . . . . . . . . . . 398,795 382,117 377,035 387,478 385,396
OTHER DATA
Sales: Logs, thousands of board feet. . . . . . 237,000 243,000 218,000 224,000 212,000
Paper, tons. . . . . . . . . . . . . . . 226,000 253,000 249,000 273,000 294,000
Paperboard, tons . . . . . . . . . . . . 96,000 174,000 119,000 126,000 137,000
Converted products, tons . . . . . . . . 506,000 525,000 520,000 539,000 570,000
Logs, $/thousand board feet. . . . . . . $ 704 $ 474 $ 417 $ 423 $ 378
Paper, $/ton FOB mill equivalent . . . . 608 607 625 617 590
Paperboard, $/ton FOB mill equivalent. . 311 320 340 352 387
Converted products, $/ton. . . . . . . . 658 651 635 647 634
Primary production, tons . . . . . . . . . . . . 822,000 894,000 831,000 873,000 918,000
Employees. . . . . . . . . . . . . . . . . . . . 3,500 3,450 3,400 3,450 3,500
Funds: Used for plant and equipment . . . . . . $ 53,256 $ 66,744 $101,950 $133,088 $127,678
Used for timber and timberlands. . . . . 4,700 7,579 1,730 40,627 7,957
</TABLE>
<PAGE> Page 7
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS 1993 vs. 1992
1993 was the fifth unsatisfactory year in a row. While earnings improved by
26%, they are 58% below 1988 when shareholders' equity was 11% lower.
Log profits increased from $61,006,000 to $101,471,000 in fiscal 1993. The 66%
improvement was primarily due to a 49% increase in average price. Footage sold
decreased by 2%. Demand and prices remain at good levels in both the export
and domestic markets but are below peak 1993 levels.
The company operates its 529,730 acres of tree farms on a sustained yield basis
with rotations between 50 and 70 years. Based on recent purchases and sales,
we now estimate the value of the tree farms to be between six and nine times
book value. Substantial new acquisitions completed after the end of the fiscal
year are at market value; when they appear in subsequent balance sheets, the
multiplier to estimate market value will, of course, be lower.
The lockup of federal and state timber for so-called threatened species
(spotted owls and marbled murrelets) continues with no relief in sight. The
resulting reduced log supply in the marketplace keeps log prices at very good
levels. Any adverse effect on our ability to log our private lands is
presently estimated at under 6%.
For the year, sales of paper and paperboard decreased 19% while operating
results declined from $14,398,000 to $(2,181,000). Tonnage sold during the
year decreased 25% while the average prices for paper held steady at year ago
levels and the average price for paperboard declined 3%.
Slow recovery from the recession and intense competitive conditions have kept
mill production at about 76%. Chip costs were high and depreciation costs
increased. Aggressive recycling of old corrugated containers helped control
fiber costs and facilitated product marketing. An additional pulper will
shortly be installed which will permit utilization of purchased bleached pulp
in lieu of bleaching on-site. This will reduce chip demand and defer a
decision on how to replace our old bleach plants, which while they meet current
environmental rules could not meet proposed EPA rules to be effective in 1997
or 1998.
Labor costs in the Pacific Northwest paper industry were bargained to very high
levels when the region had low chip costs and could afford wages substantially
above typical manufacturing rates. But with the reduction of government timber
sales, chip costs in the region are now around two-thirds higher than those of
the South. The premium wage rates are now a severe penalty.
Current high chip costs, which are about 1% higher than in the prior year, put
the Pacific Northwest mills at a disadvantage in competing with mills in other
regions. Over time, one can expect this disadvantage to become less. Supply-
demand balance should be helped by reduced chip exports, increased imports,
more recycling, pulp mill closures, pulp wood plantations and the reduction in
diameter of logs sawn which increases the ratio of chips to lumber.
<PAGE> Page 8
Chip costs in other regions are likely to rise because of increased exports,
increased consumption and environmental constraints.
Converting results declined from $(4,830,000) in fiscal 1992 to $(14,717,000)
in fiscal 1993. Sales declined 3% due to a 4% decrease in tonnage sold.
Average price improved by 1%. Operating losses increased due to higher costs
of containerboard used to manufacture boxes.
Paper, paperboard and corrugated box demand remained below industry capacity.
Major competitors continue depressed price levels in the mistaken belief that
market share and full operation in weak markets are more desirable than
adequate margins.
The company continues to emphasize quality, service, continuity and the design
of products to meet customers special needs, avoiding large accounts which have
reached excessive loss levels.
Sale of power continues to make a substantial reduction in net cost of power
used.
Selling, administrative and general expenses were 7% of sales in fiscal 1993
and fiscal 1992. Interest expensed decreased 7% in fiscal 1993 as compared
with fiscal 1992 due to lower borrowing and lower interest rates.
A harsh governmental climate for business, especially for forest products and
manufacturing industries, plus a weak world economy, make the prospects for
recovery appear limited. If a sharp recovery should occur, the company's
ability to take full advantage thereof may be limited by raw material
availability. Should this happen, the company will move away from its lowest
margined sales and will thus materially improve results. A dawdling recovery
seem more likely, which would postpone any dramatic restoration of results to
the previous peak level.
RESULTS OF OPERATIONS 1992 vs. 1991
1992 was the fourth unsatisfactory year in a row. While earnings improved by
93%, they were 67% below 1988 when shareholders' equity was 8% lower.
Log profits increased from $45,286,000 in fiscal 1991 to $61,006,000 in fiscal
1992. The 35% improvement was due to an 11% increase in footage sold and a 14%
increase in average price. Demand and prices remain strong in both the export
and domestic markets.
The company operates its 527,800 acres of tree farms on a sustained yield basis
with rotations between 50 and 70 years. Based on recent purchases and sales,
we now estimate the value of the tree farms to be between five and seven times
book value.
Lockup of federal and state timber for so-called threatened species (spotted
owls and marbled murrelets) continues with no relief in sight. The resulting
reduced log supply in the marketplace keeps log prices at very good levels.
Any adverse effect on our ability to log our private lands is presently
estimated at under 3%.
<PAGE> Page 9
For the year, sales of paper and paperboard improved 5% while operating profits
declined from $15,183,000 in fiscal 1991 to $14,398,000 in fiscal 1992.
Tonnage sold during the year increased 16% while average prices for paper and
paperboard decreased 3% and 6% respectively.
Slow recovery from the recession and intense competitive conditions kept mill
production at about 85% of capacity. Depreciation and interest costs increased
due to the completion of major capital projects such as Number 22 recovery
furnace. Labor costs remain high as do chip costs which were about 1% higher
than the prior fiscal year.
Converting results improved from $(19,535,000) in fiscal 1991 to $(4,830,000)
in fiscal 1992. Sales improved 4% due to a 3% increase in average price and
modest increase in tonnage sold. Operating losses were reduced due to lower
costs of containerboard used to manufacture boxes and a better product mix.
Demand for paper, paperboard and corrugated boxes remained below industry
capacity. Product markets remain chaotic. Announced price increases are often
not implemented. Excessively leveraged competitors continue to dump products
in markets they do not customarily serve. Competitive earnings clearly show
the futility of such dumping. Any competitor who succeeds in remaining sold
out during slow business will inevitably disappoint some customers in a strong
market.
The company continues to try to earn sales by quality, service, continuity and
the design of custom grades and products, not by price cutting. The twelve
machines with varied but overlapping capabilities, and with considerable
flexibility in switching from paper to board or from liner to corrugating
medium, permit excellent response to customer needs.
Sale of power continues to make a substantial reduction in net cost of power
used.
Selling, administrative and general expenses were 7% of sales in fiscal 1992
and fiscal 1991. Interest expensed increased modestly due to increased
borrowing and proportionately less interest attributable to uncompleted capital
projects.
Short-term prospects continue to appear to be mediocre. Industry expansion
appears to be modest and if and when strong economic recovery occurs, earnings
should improve materially.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operations increased $22,161,000 in 1993 compared with 1992
due primarily to increased earnings and increases in noncash charges to
earnings such as depreciation, depletion and deferred taxes.
Working capital was $34,308,000 at October 31, 1993 compared to $30,119,000 at
October 31, 1992.
Long-term debt, current installments of long-term debt and short-term
borrowings decreased by $35,596,000 in 1993 due to reduced capital expenditures
and increased cash provided by operations.
<PAGE> Page 10
At October 31, 1993, the company had bank lines of credit totaling
$247,000,000. Of this amount, $170,000,000 was under a credit agreement with a
group of banks expiring February 28, 1995, with renewal provisions beyond that
date. The company had outstanding $150,000,000 of notes payable under this
agreement at October 31, 1993. Also available was $77,000,000 of bank credit
lines for additional borrowing needs. At October 31, 1993, the company had an
outstanding balance of $30,000,000 under these credit lines. The unused
portion of all bank lines of credit was $67,000,000 as of October 31, 1993,
which is adequate for anticipated future needs.
Also outstanding at October 31, 1993 were senior notes of $157,500,000 and
revenue bonds of $28,900,000.
Expenditures for fiscal 1993 for plant and equipment were $53,256,000 and for
timberland $4,700,000. Expenditures for fiscal 1992 for plant and equipment
were $66,744,000. The backlog of approved capital projects as of October 31,
1993 is $56,000,000. Timberland purchases of $26,000,000 closed after October
31, 1993.
Capital projects:
Capacity of the old corrugated container (OCC) recycling plant will be
increased by 33% in the first quarter of fiscal 1994.
The Leavenworth sawmill operation is improving. Dry kilns are being installed.
When these are operative (estimated early 1994), operations should be in the
black.
Engineering is proceeding on a 50,000 average kw cogeneration plant. When all
necessary permits are received, the project can proceed. Cost of the plant is
included in the capital backlog.
Capital investments in plant and equipment are expected to average $45,000,000
per year.
During fiscal 1993 the company purchased 17,973 shares of its stock for an
average price of $16.62 per share. During fiscal 1992, the company purchased
8,323 shares for an average price of $15.29 per share. Purchases began in
1964; the total number of shares acquired through fiscal 1993 is 21,198,381
shares for $93,518,674 at an average cost of $4.41 per share. Stock purchases
increase interest costs and thus reduce corporate earnings. In most years when
earnings are good, they increase earnings per share. In a bad year, the
interest cost can decrease earnings per share slightly.
Dividends of $.52 per share were paid in fiscal 1993 and 1992. Shareholders'
equity increased $16,678,000 in fiscal 1993 as compared with an increase of
$5,082,000 in fiscal 1992.
Due to timberland purchases of $26,000,000, total borrowing will increase
during the first fiscal quarter of 1994. It is expected that near-term capital
expenditures will be financed from internally generated funds.
OTHER
The company has in place a process of reviewing any known environmental
exposures which includes determining the costs of remediation. At the present
time, the company is not aware of any environmental liabilities that would have
a material impact on the consolidated financial statements.
<PAGE> Page 11
The company's consolidated financial statements are prepared based on
historical costs and do not portray the effects of inflation. The impact of
inflation is most noticeable for inventories and capital assete, although most
of the inflationary effect of inventories is already portrayed in the
consolidated income statement by the use of the LIFO method of inventory
valuation.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO FINANCIAL STATEMENTS
PAGE
Financial Statements:
Report of Independent Accountants . . . . . . . . . . . . . . . 13
Consolidated Statements of Income for the
three years ended October 31, 1993 . . . . . . . . . . . . . . 14
Consolidated Statements of Shareholders'
Equity for the three years ended October 31, 1993. . . . . . . 14
Consolidated Balance Sheets at October 31,
1993, 1992 and 1991. . . . . . . . . . . . . . . . . . . . . . 15
Consolidated Statements of Cash Flows for
the three years ended October 31, 1993 . . . . . . . . . . . . 16
Notes to Consolidated Financial Statements. . . . . . . . . . . 17
Financial Statement Schedules:
V - Property, Plant and Equipment. . . . . . . . . . . . . . . 26
VI - Accumulated Depreciation, Depletion and Amortization
of Property, Plant and Equipment . . . . . . . . . . . . . 28
Schedules not included with this additional financial data have been omitted
because they are not applicable or the required information is shown in the
consolidated financial statements or notes thereto.
<PAGE> Page 12
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Longview Fibre Company
In our opinion, the consolidated financial statements listed in the
accompanying index present fairly, in all material respects, the financial
position of Longview Fibre Company and its subsidiaries at October 31, 1993,
1992 and 1991, and the results of their operations and their cash flows for
each of the three years in the period ended October 31, 1993, in conformity
with generally accepted accounting principles. These financial statements are
the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
As discussed in Note 1 to the financial statements, the Company changed its
method of accounting for income taxes and for postretirement benefits other
than pensions.
\s\ Price Waterhouse
Price Waterhouse
Portland, Oregon
December 8, 1993
<PAGE> Page 13
CONSOLIDATED STATEMENT OF INCOME
Years Ended October 31
(thousands except per share) 1993 1992 1991
Net sales. . . . . . . . . . . . . . . . . . . $689,551 $690,998 $644,000
Logs . . . . . . . . . . . . . . . . . . 166,822 114,944 90,785
Paper and paperboard . . . . . . . . . . 189,787 234,119 223,260
Converted products . . . . . . . . . . . 332,942 341,935 329,955
Cost of products sold, including
outward freight . . . . . . . . . . . . . . . 554,984 571,453 556,329
Gross profit . . . . . . . . . . . . . . . . . 134,567 119,545 87,671
Selling, administrative and general expenses . 49,994 48,971 46,737
Operating profit . . . . . . . . . . . . . . . 84,573 70,574 40,934
Logs . . . . . . . . . . . . . . . . . . 101,471 61,006 45,286
Paper and paperboard . . . . . . . . . . (2,181) 14,398 15,183
Converted products . . . . . . . . . . . (14,717) (4,830) (19,535)
Interest income. . . . . . . . . . . . . . . . 329 357 1,290
Interest expensed. . . . . . . . . . . . . . . (22,772) (24,356) (24,211)
Miscellaneous. . . . . . . . . . . . . . . . . 958 812 4,490
Income before income taxes . . . . . . . . . . 63,088 47,387 22,503
Provision for taxes on income (see Note 9)
Current. . . . . . . . . . . . . . . . . . . . 13,055 11,603 (633)
Deferred . . . . . . . . . . . . . . . . . . . 9,745 3,697 6,493
22,800 15,300 5,860
Net income . . . . . . . . . . . . . . . . . . $ 40,288 $ 32,087 $ 16,643
Per share. . . . . . . . . . . . . . . . $ 0.78 $ 0.62 $ 0.32
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(thousands) 1993 1992 1991
Common stock:
Balance at beginning of year . . . . . . $ 77,527 $ 77,540 $ 77,565
Issued . . . . . . . . . . . . . . . . . 323 - -
Ascribed value of stock purchased. . . . (27) (13) (25)
Balance at end of year . . . . . . . . . $ 77,823 $ 77,527 $ 77,540
Additional paid-in capital:
Balance at beginning of year . . . . . . $ - $ - $ -
On common stock issued . . . . . . . . . 3,306 - -
Balance at end of year . . . . . . . . . $ 3,306 $ - $ -
Retained earnings:
Balance at beginning of year . . . . . . $304,590 $299,495 $309,913
Net income . . . . . . . . . . . . . . . 40,288 32,087 16,643
Less cash dividends on common stock
($0.52 per share). . . . . . . . . . . (26,940) (26,878) (26,883)
Less purchases of common stock . . . . . (272) (114) (178)
Balance at end of year . . . . . . . . . $317,666 $304,590 $299,495
Common shares:
Balance at beginning of year . . . . . . 51,685 51,693 51,710
Issued . . . . . . . . . . . . . . . . . 215 - -
Purchases. . . . . . . . . . . . . . . . (18) (8) (17)
Balance at end of year . . . . . . . . . 51,882 51,685 51,693
The accompanying notes are an integral part of these financial statements.
<PAGE> Page 14
CONSOLIDATED BALANCE SHEET
October 31
(dollars in thousands except per share) 1993 1992 1991
ASSETS
Current assets:
Accounts and notes receivable. . . . . . . . $ 82,563 $ 91,671 $ 84,121
Allowance for doubtful accounts. . . . . . (1,000) (750) (750)
Taxes on income, refundable. . . . . . . . . - - 3,620
Inventories (see Note 3) . . . . . . . . . . 59,674 55,741 48,390
Other. . . . . . . . . . . . . . . . . . . . 7,081 1,883 2,074
Total current assets . . . . . . 148,318 148,545 137,455
Capital assets:
Buildings, machinery and equipment at cost . 1,164,411 1,124,957 1,070,637
Accumulated depreciation . . . . . . . . . 548,538 499,228 452,619
Costs to be depreciated in future
years (see Note 2). . . . . . . . . . . 615,873 625,729 618,018
Plant sites at cost. . . . . . . . . . . . . 2,423 2,423 2,318
618,296 628,152 620,336
Timber at cost less depletion. . . . . . . . 129,372 129,206 127,431
Roads at cost less amortization. . . . . . . 9,198 10,628 12,184
Timberland at cost . . . . . . . . . . . . . 10,264 9,669 8,455
148,834 149,503 148,070
Total capital assets . . . . . 767,130 777,655 768,406
Other assets . . . . . . . . . . . . . . . . 28,925 24,568 20,991
$ 944,373 $ 950,768 $ 926,852
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Payable to bank resulting from
checks in transit . . . . . . . . . . . . . $ 8,363 $ 7,193 $ 9,022
Accounts payable . . . . . . . . . . . . . . 40,219 42,796 44,049
Short-term borrowings (see Note 4) . . . . . 20,000 35,000 9,000
Payrolls payable . . . . . . . . . . . . . . 8,973 8,431 7,054
Federal income taxes payable . . . . . . . . 1,502 4,057 -
Other taxes payable. . . . . . . . . . . . . 15,010 15,324 14,714
Current installments of long-term debt . . . 19,943 5,625 25,825
Total current liabilities . . . 114,010 118,426 109,664
Long-term debt (see Note 5) . . . . . . . . 327,486 362,400 356,025
Deferred taxes - net (see Note 9). . . . . . 97,693 83,266 79,569
Other liabilities. . . . . . . . . . . . . . 6,389 4,559 4,559
Commitments (see Note 10). . . . . . . . . . - - -
Shareholders' equity:
Preferred stock; authorized 2,000,000 shares - - -
Common stock, ascribed value $1.50 per share;
authorized 150,000,000 shares; issued
51,881,819, 51,684,792 and 51,693,115
shares respectively (see Note 13) . . . . . 77,823 77,527 77,540
Additional paid-in capital . . . . . . . . . 3,306 - -
Retained earnings. . . . . . . . . . . . . . 317,666 304,590 299,495
Total shareholders' equity. . . 398,795 382,117 377,035
$ 944,373 $ 950,768 $ 926,852
The accompanying notes are an integral part of these financial statements.
<PAGE> Page 15
CONSOLIDATED STATEMENT OF CASH FLOWS
Years Ended October 31
(thousands) 1993 1992 1991
Cash provided by (used for) operations:
Net income . . . . . . . . . . . . . . . . . $ 40,288 $ 32,087 $ 16,643
Charges to income not requiring cash -
Depreciation . . . . . . . . . . . . . . 60,859 57,371 52,396
Depletion and amortization . . . . . . . 8,166 6,036 5,600
Deferred taxes - net . . . . . . . . . . 9,745 3,697 6,493
(Gain) loss on disposition of
capital assets. . . . . . . . . . . . . 1,437 797 (1,285)
Change in:
Inventories . . . . . . . . . . . . . . . (3,190) (7,351) (353)
Taxes on income, refundable . . . . . . . - 3,620 (3,620)
Other . . . . . . . . . . . . . . . . . . (516) 191 (299)
Accounts and notes receivable . . . . . . 9,358 (7,550) (2,173)
Accounts, payrolls and other
taxes payable. . . . . . . . . . . . . . (3,049) 6,477 (271)
Federal income taxes payable. . . . . . . (2,555) 4,057 (1,769)
Other noncurrent assets . . . . . . . . . (4,357) (3,577) (3,321)
Other noncurrent liabilities. . . . . . . 1,830 - -
Cash provided by operations. . . . . . . . . 118,016 95,855 68,041
Cash provided by (used for) investing:
Additions to: Plant and equipment . . . . . (53,256) (66,744) (101,950)
Timber and timberlands. . . . (4,700) (7,579) (1,730)
Proceeds from sale of capital assets . . . . 905 871 2,878
Cash used for investing. . . . . . . . . . . (57,051) (73,452) (100,802)
Cash provided by (used for) financing:
Additions to long-term debt. . . . . . . . . 21,029 35,000 100,000
Reduction in long-term debt. . . . . . . . . (41,625) (48,825) (37,655)
Short-term borrowings. . . . . . . . . . . . (15,000) 26,000 (14,877)
Payable to bank resulting from
checks intransit. . . . . . . . . . . . . . 1,170 (1,829) 9,022
Accounts payable for construction. . . . . . 700 (5,744) 2,451
Cash dividends . . . . . . . . . . . . . . . (26,940) (26,878) (26,883)
Purchase of common stock . . . . . . . . . . (299) (127) (203)
Cash provided by (used for) financing. . . . (60,965) (22,403) 31,855
Decrease in cash position. . . . . . . . . . - - (906)
Cash position, beginning of year . . . . . . - - 906
Cash position, end of year . . . . . . . . . $ - $ - $ -
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest (net of amount capitalized) . . . . $ 23,231 $ 24,037 $ 23,484
Capitalized interest . . . . . . . . . . . . 548 2,670 4,192
Income taxes . . . . . . . . . . . . . . . . 16,134 9,727 5,061
The accompanying notes are an integral part of these financial statements.
<PAGE> Page 16
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF ACCOUNTING POLICIES:
Principles of consolidation
The financial statements include the accounts of the company and all
subsidiaries after elimination of intercompany balances and transactions.
Inventories
Inventories are stated at the lower of cost or market. Cost is determined on a
last-in, first-out method except for supplies at current averages.
Property and depreciation
Buildings, machinery and equipment are recorded at cost and include those
additions and improvements that add to production capacity or extend useful
life. Cost includes interest capitalized during the construction period on all
significant asset acquisitions. When properties are sold or otherwise
disposed, the cost and the related accumulated depreciation are removed from
the respective accounts and the resulting profit or loss is recorded in income.
The costs of maintenance and repairs are charged to income when incurred.
Depreciation for financial accounting purposes is computed on the straight-line
basis over the estimated useful lives of the assets. The estimated useful
lives of assets range from 20 to 60 years for buildings and principally from 12
to 16 years for machinery and equipment.
Timberlands, depletion and amortization
Timber, timberlands and timber roads are stated at cost. Provision for
depletion of timber and amortization of logging roads represents charges per
unit of production (footage cut) based on the estimated recoverable timber. No
gain or loss is recognized on timberland exchanges since the earnings process
is not considered complete until timber is harvested and marketed.
Earnings per share
Net income per common share is computed on the basis of weighted average shares
outstanding of 51,785,201, 51,688,336 and 51,697,653 for 1993, 1992 and 1991,
respectively.
Pension and other benefit plan costs
The company's policy is to accrue as cost an amount computed by the actuary and
to fund at least the minimum amount required by ERISA.
The Statement of Financial Accounting Standards No. 106 (FAS 106), "Employers'
Accounting for Postretirement Benefits Other Than Pensions," was adopted during
1993. FAS 106 requires the company to accrue the estimated cost of retiree
benefit payments, other than pensions, during the employees' active service
period. The company elected to amortize the unrecognized transition obligation
over 20 years. The transition obligation is $10 million as of November 1,
1992. The annual pretax costs for postretirement benefits other than pensions
are $2 million greater in 1993 under the provisions of FAS 106 than under the
company's prior "pay-as-you-go" method of accounting (see Note 7).
Income taxes
The Statement of Financial Accounting Standards No. 109 (FAS 109), "Accounting
for Income Taxes," was adopted during 1993. FAS 109 requires a change from the
deferred method to the asset and liability method of accounting for income
taxes.
<PAGE> Page 17
Under FAS 109, the effect on deferred taxes of a change in tax rates is
recognized in income in the period that includes the enactment date. Under the
deferred method, deferred taxes were recognized using the tax rate applicable
to the year of the calculation and were not adjusted for subsequent changes in
tax rates. The cumulative effect of the change in the method of accounting for
income taxes as of the beginning of fiscal 1993 was not material. Financial
statements for prior years have not been restated (see Note 9).
Revenue recognition
The company generally recognizes revenues when goods are shipped.
NOTE 2 - BUILDINGS, MACHINERY AND EQUIPMENT:
At Cost - net of accumulated depreciation consist of the following:
October 31
(thousands) 1993 1992 1991
Buildings - net . . . . . . . . $ 39,644 $ 38,726 $ 39,749
Machinery and equipment - net . 576,229 587,003 578,269
$615,873 $625,729 $618,018
NOTE 3 - INVENTORIES:
Inventories consist of the following:
October 31
(thousands) 1993 1992 1991
Finished goods. . . . . . . . . $14,977 $12,861 $10,261
Goods in process. . . . . . . . 11,231 11,024 9,043
Raw materials and supplies. . . 33,466 31,856 29,086
$59,674 $55,741 $48,390
The amounts included above for inventories valued by the LIFO method are less
than replacement or current cost by approximately $39,306,000, $41,331,000 and
$40,683,000 at October 31, 1993, 1992 and 1991, respectively.
NOTE 4 - SHORT-TERM BORROWINGS:
At October 31, 1993, the company had bank lines of credit totaling $247
million. Of this amount, $170 million was under a credit agreement with a
group of banks providing various methods of borrowing. The company can request
a "Competitive Bid" specifying dollar amounts and loan duration. The various
banks may then bid, specifying rates and amounts, which the company may accept
or reject. The agreement also provides for borrowings other than competitive
bids, at the Euro Dollar Rate plus 5/8% or the bank's prime rate, whichever the
company selects. The credit agreement contains certain financial covenants and
provides for a 1/4% facility fee and a 1/8% commitment fee on the unused
portion of the commitments. This agreement has an expiration date of February
28, 1995 with renewal provisions beyond that date. At October 31, 1993, the
company had loans of $150 million under the credit agreement.
The company also has an agreement whereby it can borrow money by issuing notes
in the commercial paper market. The $170 million credit agreement above
provides credit back-up for commercial paper issued, therefore the combined
borrowing under the credit agreement and the commercial paper agreement cannot
exceed $170 million. During the year no commercial paper was issued.
Also available was $77 million of bank credit lines for additional borrowing
needs. Of this amount, two $20 million agreements are committed lines of
<PAGE> Page 18
credit which are subject to a nominal commitment fee and expire March 31, 1995
and November 1, 1996, respectively. The other $37 million is uncommitted. At
October 31, 1993, the company had an outstanding balance of $30 million under
these credit lines.
Short-term borrowings of $160 million, $176 million and $199 million at October
31, 1993, 1992 and 1991, respectively, under the above agreements, have been
reclassified as long-term debt because they are to be renewed and replaced with
borrowings due beyond one year and into future periods.
Short-term borrowing activity including the amount reclassified as long-term is
summarized as follows:
(thousands) 1993 1992 1991
Notes payable October 31 . . . . $180,000 $211,000 $208,000
Interest rate October 31 . . . . 4.0% 4.3% 6.1%
Average daily amount of
notes payable outstanding
during year . . . . . . . . . . $179,601 $193,573 $186,476
Average* interest rate
during year . . . . . . . . . . 4.2% 5.0% 7.2%
Maximum amount of notes
payable at any month end. . . . $195,000 $211,000 $210,000
*Computed by dividing interest incurred by average notes payable outstanding.
NOTE 5 - LONG-TERM DEBT:
Long-term debt consists of the following:
October 31
(thousands) 1993 1992 1991
Senior notes due through 1999
(7.70%-10.13%) - Note (a). . . . $157,500 $163,125 $153,750
Revenue bonds payable through
2015 (floating rates, currently
2.55%-2.75%) - Note (b). . . . . 28,900 28,900 29,100
Other . . . . . . . . . . . . . . 1,029 - -
Notes payable - banks -
Note 4 above . . . . . . . . . . 160,000 176,000 199,000
347,429 368,025 381,850
Less current installments . . 19,943 5,625 25,825
Net long-term debt. . . . . . . . $327,486 $362,400 $356,025
Scheduled maturities
1995 $205,993
1996 34,119
1997 34,119
1998 14,119
1999-2015 39,136
$327,486
Note (a) Covenants of the senior notes include tests of minimum net worth,
short-term borrowing, long-term borrowing, current ratio and restrictions on
payments of dividends. Accordingly, at October 31, 1993, approximately $47
million of consolidated retained earnings was unrestricted as to the payment of
dividends.
<PAGE> Page 19
Note (b) Primarily incurred upon the purchase of manufacturing equipment. At
October 31, 1993 $23,900,000 was secured by liens on the equipment.
NOTE 6 - RETIREMENT AND SAVINGS PLANS:
The company has two trusteed defined benefit pension programs which cover a
majority of employees who have completed one year of continuous service. The
plans provide benefits of a stated amount for each year of service with an
option for some employees to receive benefits based on an average earnings
formula.
The weighted-average discount rate and rate of increase in the future
compensation levels used in determining the actuarial present value of the
projected benefit obligation were 7% and 5.25% for 1993, and 8% and 5.5% for
1992 and 1991, respectively. The expected long-term rate of return on assets
was 9%.
The following table sets forth the plans' funded status and amounts recognized
in the company's consolidated financial statements at October 31:
(thousands) 1993 1992 1991
Actuarial present value of benefit
obligations:
Vested . . . . . . . . . . . . . $132,030 $112,824 $106,879
Vested and nonvested . . . . . . $132,803 $113,429 $107,574
Projected for service
rendered . . . . . . . . . . . $147,395 $127,745 $121,149
Plan assets at fair value,
primarily listed stocks. . . . . . 235,763 197,524 187,911
Excess plan assets. . . . . . . . . 88,368 69,779 66,762
Items not recognized in earnings:
Net (asset) at adoption of FAS
No. 87 . . . . . . . . . . . . . (10,164) (11,534) (12,903)
Unrecognized prior service cost. . 7,487 8,925 9,847
Net (gain) subsequent to
adoption . . . . . . . . . . . . (63,095) (48,438) (47,740)
Pension asset recognized in the
consolidated balance sheet . . . . $ 22,596 $ 18,732 $ 15,966
Net pension (income) includes
the following:
Benefits earned during
period. . . . . . . . . . . . . $ 3,203 $ 3,258 $ 3,138
Interest cost on projected
benefit obligation. . . . . . . 9,770 9,451 8,951
Actual (return) on plan
assets. . . . . . . . . . . . . (45,229) (16,098) (60,191)
Net amortization and deferral
of items not recognized in
earnings. . . . . . . . . . . . 28,392 622 45,785
Net pension (income). . . . . . . . $ (3,864) $ (2,767) $ (2,317)
Voluntary savings plans are maintained for all employees who have completed one
year of continuous service. The plans allow salary deferrals in accordance
with IRC section 401(k) provisions. The company contribution as a matching
incentive during 1993, 1992 and 1991 was $857,000, $826,000 and $563,000,
respectively.
<PAGE> Page 20
NOTE 7 - POSTRETIREMENT BENEFITS OTHER THAN PENSIONS:
The company provides postretirement health care insurance benefits for all
salaried and certain non-salaried employees and their dependents. Individual
benefits generally continue until age 65. The company does not pre-fund these
benefits.
Postretirement benefit expense was $2,274,000, $390,000 and $382,000 in 1993,
1992 and 1991, respectively.
The components of expense in 1993 were as follows:
(thousands) 1993
Service cost . . . . . . . . . . . . . . . . . . . . . . . . $ 639
Interest cost. . . . . . . . . . . . . . . . . . . . . . . . 1,137
Amortization of unrecognized transition obligation . . . . . 498
Net periodic postretirement benefit cost . . . . . . . . . . $ 2,274
The accumulated postretirement benefit obligation,
comprises the following components:
(thousands) 1993
Retirees . . . . . . . . . . . . . . . . . . . . . . . . . . $ (2,245)
Fully eligible active plan participants. . . . . . . . . . . (3,025)
Other active plan participants . . . . . . . . . . . . . . . (11,268)
Total accumulated postretirement benefit obligation. . . . . (16,538)
Unrecognized net loss. . . . . . . . . . . . . . . . . . . . 677
Unrecognized transition obligation . . . . . . . . . . . . . 9,472
Accrued postretirement benefit cost. . . . . . . . . . . . . $ (6,389)
Future benefit costs were calculated using a health care cost trend rate of 16%
for the indemnity plan and 9% for the HMO plan. The trend rate declines each
year until the ultimate health care cost trend rate, 5.5%, is reached in the
year 2003 for the indemnity plan and the year 1999 for the HMO plan. A one
percent change in the health care cost trend rate assumption has a $2,029,000
effect on the accumulated postretirement benefit obligation as of October 31,
1993 and a $251,000 effect on the net periodic postretirement benefit cost. The
weighted-average discount rate used was 8% at November 1, 1992 and 7.5% at
October 31, 1993.
NOTE 8 - FAIR VALUE OF FINANCIAL INSTRUMENTS:
Accounts receivable, revenue bonds and notes payable to banks approximate fair
value as reported in the balance sheet. The fair value of senior notes is
estimated using discounted cash flow analyses, based on the company's
incremental borrowing rates for similar types of borrowing arrangements. The
fair value of the company's long-term debt at October 31, 1993 is approximately
$9 million more than the stated value.
<PAGE> Page 21
NOTE 9 - INCOME TAXES:
Provision (credit) for taxes on income is made up of the following components.
The 1993 amounts reflect use of the liability method under FAS 109 while the
1992 and 1991 amounts reflect accounting using the deferred method which was
required under previous rules.
(thousands) 1993 1992 1991
Current:
Federal. . . . . . . . . . . . . . $12,601 $10,720 $ (401)
State. . . . . . . . . . . . . . . 454 883 (232)
13,055 11,603 (633)
Deferred:
Federal. . . . . . . . . . . . . . 8,699 2,880 6,101
State. . . . . . . . . . . . . . . 1,046 817 392
9,745 3,697 6,493
$22,800 $15,300 $ 5,860
1992 and 1991 deferred income tax provision:
(thousands) 1992 1991
Depreciation . . . . . . . . . . . $13,642 $11,690
Alternative minimum tax. . . . . . (9,600) (5,652)
Other. . . . . . . . . . . . . . . (345) 455
$ 3,697 $ 6,493
An analysis of the effective income tax rate as compared to the expected
federal income tax rate is as follows:
1993 1992 1991
Expected federal income tax rate . . 35% 34% 34%
Foreign Sales Corporation. . . . . . (5) (4) (7)
State income taxes less
federal income tax benefit . . . . 1 2 1
Enacted rate change impacting
deferred taxes . . . . . . . . . . 5 - -
Other. . . . . . . . . . . . . . . . - - (2)
36% 32% 26%
The deferred income tax liabilities (assets) recorded in the Consolidated
Balance Sheet as of October 31, 1993, are as follows:
(thousands) Non-Current Current
Depreciation . . . . . . . . . . . . $119,667 $
Employee Benefit Plans . . . . . . . 8,363
Alternative Minimum Tax. . . . . . . (24,235)
Other. . . . . . . . . . . . . . . . (6,102)
Non-deductible accruals. . . . . . . (4,682)
Deferred tax liabilities (assets). . $ 97,693 $ (4,682)
Federal income tax returns through 1985 have been settled with the Internal
Revenue Service.
NOTE 10 - COMMITMENTS AND CONTINGENCIES:
Estimated costs to complete approved capital projects were approximately $56
million, $18 million and $47 million at October 31, 1993, 1992 and 1991,
respectively.
<PAGE> Page 22
NOTE 11 - SUPPLEMENTAL EXPENSE INFORMATION:
(thousands) 1993 1992 1991
Maintenance & repairs. . . . . . . . $63,556 $64,527 $70,297
Taxes, other than income taxes:
Payroll. . . . . . . . . . . . 10,206 10,156 9,319
Property . . . . . . . . . . . 10,689 10,763 11,295
Sales and use. . . . . . . . . 3,548 3,797 4,246
Other. . . . . . . . . . . . . 7,823 7,561 7,240
Research and development . . . . . . 462 725 788
NOTE 12 - SEGMENT INFORMATION:
The company owns and operates tree farms in Oregon and Washington which produce
logs for sale. Its pulp and paper mill at Longview, Washington produces pulp
which is manufactured into kraft paper and containerboard. The raw material
fibers come primarily from purchased wood chips and sawdust with important
contributions from fiber reclaimed from post-consumer and post-industrial
waste, and augmented by log chipping operations owned by the company and
others. The company's fourteen converting plants in ten states produce
shipping containers, and merchandise and grocery bags. The tonnage of paper
and containerboard used in the converting plants equals approximately 66% of
the Longview mill tonnage.
Included in sales to customers are export sales, principally to Japan, Hong
Kong, Taiwan and Southeast Asia in 1993, 1992 and 1991 of $124,195,000,
$123,604,000 and $89,588,000, respectively. All sales are made in U. S.
dollars.
There are no intersegment sales as all manufacturing operations to produce
primary or converted products for sale are considered integrated from the
purchased wood to the sale of the finished product.
Identifiable assets are segregated or allocated to segments as follows:
1. Assets used wholly within a segment are assigned to that segment.
2. Assets used jointly by two segments are allocated to each segment on a
percentage determined by dividing total cost of product into cost of
product produced for each segment. Paper and paperboard assets of
$275,417,000, $262,105,000 and $266,305,000 have been allocated to
converted products at October 31, 1993, 1992 and 1991, respectively.
Depreciation, depletion and amortization and additions to capital assets have
been segregated and allocated similarly to the method used for identifiable
assets.
(thousands) 1993 1992 1991
Sales to customers:
Logs . . . . . . . . . . . . . . . . $166,822 $114,944 $ 90,785
Paper and paperboard . . . . . . . . 189,787 234,119 223,260
Converted products . . . . . . . . . 332,942 341,935 329,955
Total. . . . . . . . . . . . . . . 689,551 690,998 644,000
<PAGE> Page 23
(thousands) 1993 1992 1991
Income (loss) on sales:
Logs . . . . . . . . . . . . . . . . 101,471 61,006 45,286
Paper and paperboard . . . . . . . . (2,181) 14,398 15,183
Converted products . . . . . . . . . (14,717) (4,830) (19,535)
Interest expensed and other. . . . . (21,485) (23,187) (18,431)
Income before income taxes . . . . 63,088 47,387 22,503
Identifiable assets at October 31:
Logs . . . . . . . . . . . . . . . . 188,450 190,041 180,337
Paper and paperboard . . . . . . . . 278,981 302,855 279,264
Converted products . . . . . . . . . 476,942 457,872 467,251
Total. . . . . . . . . . . . . . . 944,373 950,768 926,852
Depreciation, depletion and
amortization:
Logs . . . . . . . . . . . . . . . . 11,010 8,114 6,196
Paper and paperboard . . . . . . . . 19,907 20,225 17,533
Converted products . . . . . . . . . 38,108 35,068 34,267
Total. . . . . . . . . . . . . . . 69,025 63,407 57,996
Additions to capital assets:
Logs . . . . . . . . . . . . . . . . 5,453 12,797 17,714
Paper and paperboard . . . . . . . . 15,162 27,898 35,922
Converted products . . . . . . . . . 37,341 33,628 50,044
Total. . . . . . . . . . . . . . . $ 57,956 $ 74,323 $103,680
NOTE 13 - SHAREHOLDER RIGHTS PLAN:
A Shareholder Rights Plan provides one right for each share of common stock.
With certain exceptions, the rights will become exercisable only in the event
that an acquiring party accumulates 20% or more of the company's voting stock
or a party announces an offer to acquire 30% or more of the voting stock. The
rights expire on March 1, 1999, if not previously redeemed or exercised. Each
right entitles the holder to purchase one-tenth of one common share at a price
of $4.00 ($40 per whole share), subject to adjustment under certain
circumstances. In addition, upon the occurrence of certain events, holders of
the rights will be entitled to purchase a defined number of shares of an
acquiring entity or the company's common shares at half their then current
market value. The company will generally be entitled to redeem the rights at
$0.01 per right at any time until the tenth day following the acquisition of
20% or more, or an offer to acquire 30% or more, of the company's voting stock.
<PAGE> Page 24
QUARTERLY FINANCIAL DATA (UNAUDITED)
Fiscal Year Quarters Total
Fiscal
(thousands except per share) 1st 2nd 3rd 4th Year
1993
Net sales. . . . . . . . . . $155,873 $179,045 $175,826 $178,807 $689,551
Gross profit . . . . . . . . 25,026 37,916 40,380 31,245 134,567
Net income . . . . . . . . . 5,089 13,363 14,625 7,211 40,288
Net income per share (1) . . 0.10 0.26 0.28 0.14 0.78
1992
Net sales . . . . . . . . . $152,696 $172,868 $177,878 $187,556 $690,998
Gross profit . . . . . . . . 23,132 32,040 31,529 32,844 119,545
Net income . . . . . . . . . 3,904 9,679 8,689 9,815 32,087
Net income per share (1) . . 0.08 0.18 0.17 0.19 0.62
1991
Net sales . . . . . . . . . $152,355 $158,106 $161,320 $172,219 $644,000
Gross profit . . . . . . . . 16,770 22,295 22,880 25,726 87,671
Net income . . . . . . . . . 1,458 3,279 4,523 7,383 16,643
Net income per share (1) . . 0.03 0.06 0.09 0.14 0.32
(1) Per share statistics have been computed on the average of number of shares
outstanding in the hands of the public. Per share statistics for the first
three quarters may vary slightly from amounts reported on an interim basis due
to changes in the number of shares outstanding.
<PAGE> Page 25
SCHEDULE V
PROPERTY, PLANT AND EQUIPMENT
(thousands)
Balance at Other Balance
beginning Additions changes- at end
Description (7) of period at cost Retirements describe of period
For the Year Ended October 31, 1993
Buildings. . . $ 63,957 $ 2,504 $ 370 $ $ 66,091
Machinery and
equipment. . . 1,061,000 50,752 13,432 1,098,320
1,124,957 53,256 13,802 1,164,411
Plant sites. . 2,423 - - 2,423
1,127,380 53,256 13,802 1,166,834
Timber . . . . 129,206 3,377 718 (5,864) (1) 129,372
3,371 (5)
Timber Roads . 10,628 968 12 (2,303) (2) 9,198
(83) (3)
Timberland . . 9,669 355 18 258 (5) 10,264
149,503 4,700 748 (4,621) 148,834
$1,276,883 $ 57,956 $14,550 $(4,621) $1,315,668
For the Year Ended October 31, 1992
Buildings. . . $ 63,672 $ 539 $ 254 $ $ 63,957
Machinery and
equipment. . . 1,006,965 66,100 12,065 1,061,000
1,070,637 66,639 12,319 1,124,957
Plant sites. . 2,318 105 - 2,423
1,072,955 66,744 12,319 1,127,380
Timber . . . . 127,431 6,487 17 (3,769) (1) 129,206
(926) (4)
Timber Roads . 12,184 804 2 (2,267) (2) 10,628
(91) (3)
Timberland . . 8,455 288 - 926 (4) 9,669
148,070 7,579 19 (6,127) 149,503
$1,221,025 $ 74,323 $12,338 $(6,127) $1,276,883
<PAGE> Page 26
SCHEDULE V
PROPERTY, PLANT AND EQUIPMENT
(thousands)
Balance at Other Balance
beginning Additions changes- at end
Description (7) of period at cost Retirements describe of period
For the Year Ended October 31, 1991
Buildings. . . $ 63,568 $ 1,168 $ 1,055 $ (9) (6) $ 63,672
Machinery and
equipment. . . 932,167 100,763 24,930 (1,035) 1,006,965
995,735 101,931 25,985 (1,044) 1,070,637
Plant sites. . 2,017 19 - 282 2,318
997,752 101,950 25,985 (762) 1,072,955
Timber . . . . 127,651 1,519 6 (3,346) (1) 127,431
890 (4)
723 (6)
Timber Roads . 14,414 145 - (2,254) (2) 12,184
(94) (3)
(27) (4)
Timberland . . 9,215 66 2 (863) (4) 8,455
39 (6)
151,280 1,730 8 (4,932) 148,070
$1,149,032 $103,680 $25,993 $(5,694) $1,221,025
(1) Depletion of timber and amortization of aerial fertilization,
charged to income.
(2) Road amortization, charged to income.
(3) Depreciation on bridges, culverts, and fire roads, charged to
income.
(4) Effect of timber trades.
(5) Timber and timberland acquired through exchange of Longview Fibre
Company common stock.
(6) Effect of Los Angeles Box Plant exchange.
(7) The methods used in computing the annual provisions are completed
by reference to Item 8, Note 1 of this Form 10-K.
<PAGE> Page 27
SCHEDULE VI
ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
(thousands)
Additions Other
Balance at charged to changes - add Balance
beginning costs and (deduct) - at end
Description of period expenses Retirements describe of period
For the Year Ended October 31, 1993
Buildings. . . . $ 25,231 $ 1,524 $ 308 $ $ 26,447
Machinery and
equipment. . . 473,997 59,252 11,158 522,091
$499,228 $60,776 $11,466 $ $548,538
For the Year Ended October 31, 1992
Buildings. . . . $ 23,923 $ 1,496 $ 188 $ $ 25,231
Machinery and
equipment. . . 428,696 55,784 10,483 473,997
$452,619 $57,280 $10,671 $ $499,228
For the Year Ended October 31, 1991
Buildings. . . . $ 23,482 $ 1,492 $ 1,051 $ $ 23,923
Machinery and
equipment. . . 401,235 50,810 23,349 428,696
$424,717 $52,302 $24,400 $ $452,619
<PAGE> Page 28
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There has been no change of accountants or disagreements on any matter of
accounting principles, practices or financial statement disclosures required to
be reported under this item.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Item 10, with the exception of the following information regarding executive
officers of the company, is contained in the Notice of Annual Meeting of
Shareholders and Proxy Statement which is incorporated as part of this Form
10-K.
Executive Officers of the Company
Name Age Office and Year First Elected
R. P. Wollenberg 78 (1) Chairman of the Board, President and
Chief Executive Officer (1953)
R. E. Wertheimer 65 (2) Executive Vice President (1960)
W. H. Smith 65 (3) Vice President-Production (1992)
R. J. Parker 45 (4) Senior Vice President-Production (1994)
D. L. Bowden 58 (5) Senior Vice President-Timber (1989)
L. J. Holbrook 38 (6) Senior Vice President-Finance,
Secretary and Treasurer (1989)
D. C. Stibich 62 (7) Senior Vice President-Paper Sales (1981)
R. B. Arkell 62 (8) Vice President-Industrial Relations
and General Council (1986)
(1) R. P. Wollenberg
From 1985 Chairman, President and Chief Executive Officer
1978-1985 President and Chief Executive Officer
1969-1978 President
1960-1969 Executive Vice President
(2) R. E. Wertheimer
From 1985 Executive Vice President
1975-1985 Vice President-Container Division
1974-1975 Vice President-Production
1963-1974 Vice President-Container Sales
<PAGE> Page 29
(3) W. H. Smith
From 1992 Vice President-Production
1982-1992 Assistant Mill Manager
(4) R. J. Parker
From 1994 Senior Vice President-Production
1993-1994 Vice President and Assistant to the President
1992-1993 Pulp Mill Superintendant
1985-1992 Assistant Pulp Mill Superintendant
(5) D. L. Bowden
From 1992 Senior Vice President-Timber
1989-1992 Vice President-Timber
1980-1989 Assistant Timber Manager
(6) L. J. Holbrook
From 1992 Senior Vice President-Finance, Secretary and Treasurer
1991-1992 Vice President-Finance, Secretary and Treasurer
1989-1991 Assistant Secretary and Assistant Treasurer
(7) D. C. Stibich
From 1986 Senior Vice President Paper Sales
1981-1986 Vice President Paper Sales
1968-1981 Manager Paper Sales
(8) R. B. Arkell
From 1979 Vice President Industrial Relations and General Counsel
ITEM 11. EXECUTIVE COMPENSATION
This item is completed by reference to Notice of Annual Meeting of Shareholders
and Proxy Statement which is incorporated as part of this Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security ownership of certain beneficial owners. This item is completed
by reference to Notice of Annual Meeting of Shareholders and Proxy
Statement which is incorporated as part of this Form 10-K.
(b) Security ownership of management. This item is completed by reference to
Notice of Annual Meeting of Shareholders and Proxy Statement which is
incorporated as part of this Form 10-K.
(c) Changes in control. No known arrangements.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a) Transactions with management and others. There have been no known
transactions in an amount in excess of $60,000 involving any of the
specified persons.
<PAGE> Page 30
(b) Certain business relationships. No director or nominee for director is
known to be involved in any of the specified relationships with the
company.
(c) Indebtedness of management. None of the specified persons is indebted to
the company in an amount in excess of $60,000.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following financial statements, schedules and exhibits are filed as
part of this Form 10-K.
(1) Financial Statements:
The 1991, 1992 and 1993 consolidated financial statements are included
in Item 8 of this Form 10-K.
The individual financial statements of the company have been omitted
since the company is primarily an operating company and all
subsidiaries included in the consolidated financial statements, in the
aggregate, do not have minority equity interest and/or indebtedness to
any person other than the company or its consolidated subsidiaries
in amounts which together exceed 5% of total consolidated assets at
October 31, 1993.
(3) Exhibits required to be filed by Item 601 of Regulation S-K:
3.1 Articles of Incorporation of Longview Fibre Company ***
3.2 Bylaws of Longview Fibre Company ***
4.1 Commercial Paper Facility *
4.2 Rights Agreement **
4.3 $170,000,000 Credit Agreement
4.4 First Amendment to Credit Agreement
4.5 Loan Agreement
4.6 Other long-term debts that do not exceed 10% of the total assets
of the company, details of which will be supplied to the
Commission upon request:
Senior Notes due through 1999 (7.70% - 10.13%) $157,500,000
Revenue Bonds payable through 2015 (floating rates,
2.55% through 2.75% at October 31, 1993) $ 28,900,000
Other $ 1,029,000
<PAGE> Page 31
23. Consent of Independent Accountants
* Incorporated by reference to company's Annual Report on Form 10-K
for the year ended October 31, 1988.
** Incorporated by reference to company's Annual Report on Form 10-K
for the year ended October 31, 1989.
*** Incorporated by reference to company's Annual Report on Form 10-K
for the year ended October 31, 1990.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter ended October 31,
1993.
<PAGE> Page 32
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the company has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
LONGVIEW FIBRE COMPANY
Registrant
\s\ L. J. Holbrook 1-25-94
L. J. Holbrook, Vice President-Finance, Date
Secretary and Treasurer
Pursuant to the requirement of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the company and in
the capacities and on the dates indicated.
\s\ R. P. Wollenberg 1-25-94
R. P. Wollenberg, Chief Executive Officer Date
and Director
\s\ L. J. Holbrook 1-25-94
L. J. Holbrook, Chief Financial Officer Date
and Director
\s\ C. D. Norman 1-25-94
C. D. Norman, Chief Accounting Officer Date
\s\ R. B. Arkell 1-25-94
R. B. Arkell, Director Date
\s\ D. L. Bowden 1-25-94
D. L. Bowden, Director Date
\s\ M. A. Dow 1-25-94
M. A. Dow, Director Date
\s\ C. H. Monroe 1-25-94
C. H. Monroe, Director Date
\s\ G. E. Schwartz 1-25-94
G. E. Schwartz, Director Date
\s\ J. E. Wertheimer 1-25-94
J. E. Wertheimer, Director Date
\s\ D. A. Wollenberg 1-25-94
D. A. Wollenberg, Director Date
<PAGE> Page 33
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
LONGVIEW FIBRE COMPANY
LONGVIEW, WASHINGTON
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-14358) and the Registration Statement on Form S-8
(No. 33-37836) and the Registration Statement on Form S-8 (No. 33-56620) of
Longview Fibre Company of our report dated December 8, 1993, which appears at
Item 8 of Longview Fibre Company's Annual Report on Form 10-K.
\s\ Price Waterhouse
Price Waterhouse
Portland, Oregon
January 25, 1994
<PAGE> Page 37
EXHIBIT 4.3
$170,000,000
CREDIT AGREEMENT
dated as of
February 26, 1993
among
Longview Fibre Company,
The Banks Listed Herein,
and
Seattle-First National Bank, as Agent
TABLE OF CONTENTS
<PAGE> Page 34
Page
ARTICLE 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . 1
SECTION 1.2 Accounting Terms and Determinations . . . . 8
SECTION 1.3 Types of Borrowings . . . . . . . . . . . . 9
ARTICLE 2 THE CREDITS . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.1 Pro Rata Commitments to Lend. . . . . . . . 9
SECTION 2.2 Notice of Pro Rata Borrowings . . . . . . . 9
SECTION 2.3 Competitive Bid Borrowings. . . . . . . . . 10
(a) The Competitive Bid Option . . . . . . . . . . . 10
(b) Competitive Bid Quote Request. . . . . . . . . . 10
(c) Invitation for Competitive Bid Quotes. . . . . . 11
(d) Submission and Contents of Competitive Bid Quotes 11
(e) Notice to Borrower . . . . . . . . . . . . . . . 12
(f) Acceptance and Notice by Borrower. . . . . . . . 13
(g) Allocation by Agent. . . . . . . . . . . . . . . 13
SECTION 2.4 Notice to Banks; Funding of Loans . . . . . 14
SECTION 2.5 Notes . . . . . . . . . . . . . . . . . . . 14
SECTION 2.6 Maturity of Loans . . . . . . . . . . . . . 15
SECTION 2.7 Interest Rates. . . . . . . . . . . . . . . 15
SECTION 2.8 Fees. . . . . . . . . . . . . . . . . . . . 18
(a) Facility Fee. . . . . . . . . . . . . . . . . . 18
(b) Commitment Fee . . . . . . . . . . . . . . . . . 18
(c) Agency Fee. . . . . . . . . . . . . . . . . . . 18
(d) Payments. . . . . . . . . . . . . . . . . . . . 18
SECTION 2.9 Optional Termination or Reduction of Commitments 18
SECTION 2.10 Mandatory Termination. . . . . . . . . . . 18
SECTION 2.11 Optional Prepayments . . . . . . . . . . . 18
SECTION 2.12 General Provisions as to Payments. . . . . 19
SECTION 2.13 Funding Losses . . . . . . . . . . . . . . 20
SECTION 2.14 Computation of Interest and Fees . . . . . 20
SECTION 2.15 Maximum Interest Rate. . . . . . . . . . . 20
SECTION 2.16 Taxes. . . . . . . . . . . . . . . . . . . 21
SECTION 2.17 Termination Date Extension . . . . . . . . 22
ARTICLE 3 THE EFFECTIVE DATE; CONDITIONS TO BORROWINGS. . . . 23
SECTION 3.1 Conditions Precedent to Effective Date. . . 23
SECTION 3.2 Effective Date Events . . . . . . . . . . . 24
SECTION 3.3 Carryover Interest and Fees . . . . . . . . 24
SECTION 3.4 Conditions to All Borrowings. . . . . . . . 25
ARTICLE 4 REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . 25
SECTION 4.1 Corporate Existence 25
SECTION 4.2 Corporate Qualifications. . . . . . . . . . 25
SECTION 4.3 Authorization to Borrow . . . . . . . . . . 26
SECTION 4.4 Enforceability. . . . . . . . . . . . . . . 26
SECTION 4.5 No Legal Bar. . . . . . . . . . . . . . . . 26
SECTION 4.6 Financial Information . . . . . . . . . . . 26
SECTION 4.7 Litigation. . . . . . . . . . . . . . . . . 27
SECTION 4.8 Payment of Taxes. . . . . . . . . . . . . . 27
SECTION 4.9 Employee Benefit Plan . . . . . . . . . . . 27
SECTION 4.10 Misrepresentations . . . . . . . . . . . . 28
SECTION 4.11 No Default . . . . . . . . . . . . . . . . 28
SECTION 4.12 No Burdensome Restrictions . . . . . . . . 28
SECTION 4.13 Regulations. . . . . . . . . . . . . . . . 28
SECTION 4.14 Environmental Regulations. . . . . . . . . 29
SECTION 4.15 Title to Properties and Assets . . . . . . 29
SECTION 4.16 Subsidiaries . . . . . . . . . . . . . . . 29
ARTICLE 5 COVENANTS . . . . . . . . . . . . . . . . . . . . . 29
SECTION 5.1 Financial Information . . . . . . . . . . . 29
(a) Quarterly Financial Statements . . . . . . . . . 29
(b) Annual Financial Statements. . . . . . . . . . . 30
(c) Other Borrower Certificates. . . . . . . . . . . 30
(d) Notice of Default. . . . . . . . . . . . . . . . 31
(e) Shareholder Materials. . . . . . . . . . . . . . 31
(f) SEC Reports. . . . . . . . . . . . . . . . . . . 31
(g) ERISA Information. . . . . . . . . . . . . . . . 31
(h) Additional Information . . . . . . . . . . . . . 31
SECTION 5.2 Use of Proceeds . . . . . . . . . . . . . . 31
SECTION 5.3 Current Ratio . . . . . . . . . . . . . . . 32
SECTION 5.4 Tangible Net Worth. . . . . . . . . . . . . 32
SECTION 5.5 Ratio of Indebtedness to Tangible Net Worth. 32
SECTION 5.6 Debt Service Coverage Ratio . . . . . . . . 32
SECTION 5.7 Maintenance of Property; Insurance. . . . . 33
SECTION 5.8 Inspection of Property, Books and Records . 33
SECTION 5.9 Consolidations, Mergers and Sales of Assets 33
ARTICLE 6 DEFAULTS. . . . . . . . . . . . . . . . . . . . . . 34
SECTION 6.1 Events of Default . . . . . . . . . . . . . 34
(a) Nonpayment . . . . . . . . . . . . . . . . . . . 34
(b) Failure to Perform . . . . . . . . . . . . . . . 34
(c) Breach of Representation . . . . . . . . . . . . 34
(d) Defaults on Other Obligations. . . . . . . . . . 34
(e) Loss, Destruction or Condemnation of Property. . 34
(f) Attachment Proceedings . . . . . . . . . . . . . 35
(g) Insolvency . . . . . . . . . . . . . . . . . . . 35
(h) Judgments. . . . . . . . . . . . . . . . . . . . 35
(i) Government Approvals . . . . . . . . . . . . . . 35
(j) Other Governmental Action. . . . . . . . . . . . 35
(k) Change of Affairs. . . . . . . . . . . . . . . . 36
(l) ERISA Defaults . . . . . . . . . . . . . . . . . 36
SECTION 6.2 Notice of Default . . . . . . . . . . . . . 36
ARTICLE 7 THE AGENT . . . . . . . . . . . . . . . . . . . . . 37
SECTION 7.1 Appointment and Authorization . . . . . . . 37
SECTION 7.2 Agent, and Affiliates . . . . . . . . . . . 37
SECTION 7.3 Action by Agent . . . . . . . . . . . . . . 37
SECTION 7.4 Consultation with Experts . . . . . . . . . 37
SECTION 7.5 Liability of Agent. . . . . . . . . . . . 37
SECTION 7.6 Indemnification . . . . . . . . . . . . . . 38
SECTION 7.7 Credit Decision . . . . . . . . . . . . . . 38
SECTION 7.8 Successor Agent . . . . . . . . . . . . . . 38
ARTICLE 8 CHANGE IN CIRCUMSTANCES . . . . . . . . . . . . . . 39
SECTION 8.1 Basis for Determining Interest Rate Inadequate or Unfair 39
SECTION 8.2 Illegality. . . . . . . . . . . . . . . . . 39
SECTION 8.3 Increased Cost and Reduced Return . . . . . 40
SECTION 8.4 Prime Loans Substituted for Affected Euro-Dollar Loans 42
ARTICLE 9 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 42
SECTION 9.1 Notices . . . . . . . . . . . . . . . . . . 42
SECTION 9.2 No Waivers. . . . . . . . . . . . . . . . . 43
SECTION 9.3 Expenses; Documentary Taxes . . . . . . . . 43
SECTION 9.4 Indemnifications. . . . . . . . . . . . . . 43
SECTION 9.5 Sharing of Set-Offs . . . . . . . . . . . . 44
SECTION 9.6 Amendments and Waivers. . . . . . . . . . . 44
SECTION 9.7 Successors and Assigns. . . . . . . . . . . 45
SECTION 9.8 Collateral. . . . . . . . . . . . . . . . . 45
SECTION 9.9 Governing Law . . . . . . . . . . . . . . . 45
SECTION 9.10 Counterparts; Effectiveness. . . . . . . . 46
SECTION 9.11 Concerning Oral Agreements . . . . . . . . 46
CREDIT AGREEMENT
AGREEMENT dated as of February 26, 1993, among Longview Fibre
Company, the Banks listed on the signature pages hereof, and Seattle-First
National Bank as Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions. The following terms, as used herein, have
the following meanings:
"Absolute Rate Auction" means a solicitation of Competitive Bid
Quotes setting forth Competitive Bid Rates pursuant to Section 2.3.
"Adjusted Euro-Dollar Rate" has the meaning set forth in Section
2.7(b).
"Agent" means Seattle-First National Bank in its capacity as agent
for the Banks hereunder, and its successors in such capacity.
"Applicable Lending Office" means, with respect to each Bank, such
Bank's Domestic Lending Office in the case of a Prime Loan, such Bank's
Euro-Dollar Lending Office in the case of a Euro-Dollar Loan and such Bank's
Competitive Bid Lending Office in the case of a Competitive Bid Loan.
"Bank" means each bank listed on the signature pages hereof as having
a Commitment, and its successors and assigns.
"Borrower" means Longview Fibre Company, a Washington corporation,
and its successors.
"Borrowing" has the meaning set forth in Section 1.3.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute.
"Commercial Paper Rating" is the rating given to the Borrower's
outstanding commercial paper, without third-party credit enhancement, by
Standard and Poor's Corporation and/or Moody's Investor's Service Inc.
"Commitment" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the signature pages hereof as its
Commitment.
"Competitive Bid Lending Office" means, as to each Bank, its
Domestic Lending Office or such other office, branch or affiliate of such Bank
as it may hereafter designate as its Competitive Bid Lending Office by notice
to the Borrower, and the Agent; provided that any Bank may from time to time
by notice to the Borrower, and the Agent designate separate Competitive Bid
Lending Offices for its Competitive Bid LIBOR Loans, and/or its Competitive
Bid Rate Loans, in which case all references herein to the Competitive Bid
Lending Office of such Bank shall be deemed to refer to any one or more of
such offices, as the context may require.
"Competitive Bid LIBOR Loan" means a Loan to be made by a Bank
pursuant to a LIBOR Auction (including a Prime Loan made in substitution
therefor pursuant to Section 8.1, 8.2 or 8.3).
"Competitive Bid Loan" means a Competitive Bid LIBOR Loan or a
Competitive Bid Rate Loan.
"Competitive Bid Margin" has the meaning set forth in Section 2.3(d).
"Competitive Bid Notes" means promissory notes of the Borrower,
substantially in the form of Exhibit C hereto, evidencing the obligation of
the Borrower to repay the Competitive Bid Loans.
"Competitive Bid Quote" means an offer by a Bank to make a
Competitive Bid Loan in accordance with Section 2.3.
"Competitive Bid Rate" has the meaning set forth in Section 2.3(d).
"Competitive Bid Rate Loan" means a Loan to be made by a Bank
pursuant to an Absolute Rate Auction.
"Current Assets" means all assets of Borrower and its Subsidiaries,
on a GAAP consolidated basis, which may be properly classified as current
assets in accordance with GAAP; provided short-term investments shall be
valued at cost or market, whichever is lower.
"Current Liabilities" means all indebtedness of Borrower and its
Subsidiaries, on a GAAP consolidated basis, maturing on demand or within one
(l) year from the date when Borrower's current liabilities are determined and
which may be properly classified as current liabilities in accordance with
GAAP.
"Default" means any condition, circumstance, or event which
constitutes an Event of Default or which with the giving of notice or lapse
of time or both would become an Event of Default.
"Domestic Business Day" means any day except a Saturday, Sunday, or
other day on which commercial banks in New York City or Seattle, Washington
are authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its office located
at its address set forth on the signature pages hereof (or identified on the
signature pages hereof as its Domestic Lending Office) or such other office
as such Bank may hereafter designate as its Domestic Lending Office by notice
to the Borrower and the Agent.
"Effective Date" means that day on which the conditions precedent set
out in Section 3.1 have been satisfied and the events described in Section 3.2
have occurred.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office,
branch or affiliate located at its address set forth on the signature pages
hereof (or identified on the signature pages hereof as its Euro-Dollar Lending
Office) or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Euro-Dollar Lending Office by notice to the
Borrower and the Agent.
"Euro-Dollar Loan" means a Loan to be made by a Bank pursuant to
Section 2.1 as a Euro-Dollar Loan in accordance with the applicable Notice of
Borrowing, and each Replacement Loan made by a Bank pursuant to Section 3.2.
"Euro-Dollar Margin" has the meaning set forth in Section 2.7(b).
"Euro-Dollar Notes" means promissory notes of the Borrower,
substantially in the form of Exhibit B hereto, evidencing the obligation of
the Borrower to repay the Euro-Dollar Loans.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.7(b).
"Event of Default" has the meaning set forth in Section 6.1.
"Existing Loan" shall have the meaning set forth in Section 3.2.
"Fixed Rate Loans" means Euro-Dollar Loans or Competitive Bid Loans
(excluding Prime Loans made in substitution therefor pursuant to Section 8.1,
8.2 or 8.3) or any combination of the foregoing.
"GAAP" shall mean generally accepted accounting principles as in
effect from time to time in the United States and as consistently applied by
the Borrower and its Subsidiaries.
"Indebtedness" means all obligations of the Borrower and its
Subsidiaries on a GAAP consolidated basis, included in the liability section
of the balance sheet of the Borrower including, without limitation and without
duplication of such amounts, and regardless of whether such items would
otherwise not be shown on the liability side of a balance sheet:
(a) All obligations guaranteed or assumed by the Borrower
or any of its Subsidiaries, directly or indirectly in any manner, or endorsed
(other than for collection and deposit in the ordinary course of business) or
discounted by the Borrower or any of its Subsidiaries with recourse, including
all obligations guaranteed by the Borrower or any of its Subsidiaries through
any agreement, contingent or otherwise, or secured by a Lien on any asset of
the Borrower or any of its Subsidiaries;
(b) The aggregate amount of reserves established on the
books of the Borrower with respect to contingent liabilities and other
contingencies (except reserves which are properly treated as deductions from
assets);
(c) All obligations for the payment of money or other
property pursuant to leases under which the Borrower is leasing real or
personal property. The total minimum lease payments under operating leases
shall be calculated at the end of each fiscal year and carried forward to the
next fiscal year;
(d) All accrued taxes, whether or not such taxes are due
and payable; and
(e) All obligations of any partnership or joint venture
of which the Borrower is a member, but only to the extent the Borrower is
legally liable therefor.
"Interest Period" means:
(1) Euro-Dollar Borrowing. With respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing and ending one
(1), two (2), three (3) or six (6) months thereafter, as the Borrower may
elect in the applicable Notice of Borrowing; provided that (subject to the
proviso set forth below):
(a) any Interest Period which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls
in another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Euro-Dollar Business Day of a calendar
month; and
(c) the Interest Periods of the Replacement Loans shall
be as determined pursuant to Section 3.2.
(2) Prime Borrowing. With respect to each Prime Borrowing, the
period commencing on the date of such Borrowing and ending thirty (30) days
thereafter; provided that (subject to the proviso set forth below) any
Interest Period (other than an Interest Period determined pursuant to the
proviso set forth below) which would otherwise end on a day which is not a
Domestic Business Day shall be extended to the next succeeding Domestic
Business Day;
(3) Competitive Bid LIBOR Borrowing. With respect to each
Competitive Bid LIBOR Borrowing, the period commencing on the date of such
Borrowing and ending one (l), two (2), three (3) or six (6) months thereafter,
as the Borrower may elect in accordance with Section 2.3; provided that
(subject to the proviso set forth below):
(a) any Interest Period which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls
in another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day; and
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Euro-Dollar Business Day of a calendar
month;
(4) Competitive Bid Rate Borrowing. With respect to each
Competitive Bid Rate Borrowing, the period commencing on the date of such
Borrowing and ending such number of days thereafter (but in no event earlier
than seven (7) days or later than one (1) year thereafter), as the Borrower
may elect in accordance with Section 2.3; provided that (subject to the
proviso set forth below) any Interest Period which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day;
Provided that with respect to each Borrowing set forth above, if any
Interest Period includes a date on which a payment of principal of the Loans
is required to be made under Section 2.10 but does not end on such date, then
the principal amount (if any) of each such Loan required to be repaid on such
date shall have an Interest Period ending on such date.
"LIBOR Auction" means a solicitation of Competitive Bid Quotes
setting forth Competitive Bid Margins based on the London Interbank Offered
Rate pursuant to Section 2.3.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance with respect to such asset.
"Loan" means a Prime Loan or a Euro-Dollar Loan or a Competitive Bid
Loan and "Loans" means Prime Loans or Euro-Dollar Loans or Competitive Bid
Loans or any combination of the foregoing.
"Loan Documents" shall mean collectively this Agreement, the Notes,
and all other documents, instruments and agreements now or hereafter executed
in connection with this Agreement.
"London Interbank Offered Rate" has the meaning set forth in Section
2.7(b).
"Note" means a Prime Note or a Euro-Dollar Note or a Competitive Bid
Note, and "Notes" means the Prime Notes or the Euro-Dollar Notes or the
Competitive Bid Notes or any combination of the foregoing.
"Notice of Borrowing" means a Notice of Pro Rata Borrowing (as
defined in Section 2.2) or a Notice of Competitive Bid Borrowing (as defined
in Section 2.3(f)).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by the Borrower or (ii)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to
which Borrower is then making or accruing an obligation to make contributions
or has within the preceding five (5) plan years made contributions.
"Prime Loan" means a Loan to be made by a Bank pursuant to Section
2.1 as a Prime Loan in accordance with the applicable Notice of Borrowing or
pursuant to Article 8.
"Prime Notes" means promissory notes of the Borrower, substantially
in the form of Exhibit A hereto, evidencing the obligation of the Borrower to
repay the Prime Loans.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by Seattle-First National Bank at its principal office in
Seattle, Washington as its prime rate.
"Prior Credit Agreement" means that certain Credit Agreement dated
as of December 30, 1987, among Borrower, the banks listed therein, Rainier
National Bank, as Agent, and Security Pacific National Bank, as Administrative
Agent, as such Credit Agreement has been subsequently amended to the date
hereof.
"Pro Rata Loan" means a Prime Loan or a Euro-Dollar Loan.
"Reference Banks" means the principal New York office of ABN AMRO
Bank N.V. and Continental Bank N.A. and the principal San Francisco office of
Bank of America National Trust and Savings Association and each such other
bank as may be appointed as a replacement pursuant to Section 9.7(c) and
"Reference Bank" means any one of such Reference Banks.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Replacement Loan" shall have the meaning set forth in Section 3.2.
"Reportable Event" means any of the events set forth in Section 4043
of ERISA or the regulations thereunder (or any successor statute or
regulations thereunder).
"Required Banks" means at any time Banks having at least 66-2/3% of
the aggregate amount of the Commitments.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect
a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by the Borrower.
"Tangible Net Worth" means all assets appearing on the balance sheet
of the Borrower and its Subsidiaries, on a GAAP consolidated basis, less,
without limitation and without duplication of deductions, the sum of:
(a) Indebtedness;
(b) All reserves established by Borrower and its
Subsidiaries for anticipated losses and expenses; and
(c) Net book value of all assets of Borrower and its
Subsidiaries which are treated as intangibles in accordance with GAAP,
including, without limitation, all trademarks, trademark rights, trade names,
copyrights, patents, patent applications, franchise rights, goodwill,
royalties, licenses, permits, claims, causes of action, marketing expenses,
and deferred research and development costs.
"Termination Date" means February 28, 1995 (or February 28 of such
subsequent year to which the Termination Date may have been extended in
accordance with Section 2.17 hereof) or, if such day is not a Euro-Dollar
Business Day, the next preceding Euro-Dollar Business Day.
"Unfunded Vested Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the present value of all vested
nonforfeitable benefits under such Plan exceeds (ii) the fair market value of
all Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan, but only to the extent that such excess
represents a potential liability of the Borrower to the PBGC or the Plan under
Title IV of ERISA.
SECTION 1.2 Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared on a GAAP
basis applied on a basis consistent (except for changes concurred in by the
Borrower's independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its consolidated
Subsidiaries (consolidated on a GAAP basis) delivered to the Banks.
SECTION 1.3 Types of Borrowings. The term "Borrowing" denotes the
aggregation of Loans of one or more Banks to be made to the Borrower pursuant
to Article 2 or Section 3.2 on a single date and for a single Interest Period.
Borrowings are classified for purposes of this Agreement either by reference
to the pricing of Loans comprising such Borrowing (e.g., a "Euro-Dollar
Borrowing" is a Borrowing comprised of Euro-Dollar Loans) or by reference to
the provisions of Article 2 or Section 3.2 under which participation therein
is determined (i.e., a "Pro Rata Borrowing" is a Borrowing under Section 2.1
in which all Banks participate in proportion to their Commitments, while a
"Competitive Bid Borrowing" is a Borrowing under Section 2.3 in which the Bank
participants are determined by the Agent in accordance therewith).
ARTICLE 2
THE CREDITS
SECTION 2.1 Pro Rata Commitments to Lend. Each Bank severally
agrees, on the terms and conditions set forth in this Agreement, to lend to
the Borrower pursuant to this Section from time to time amounts in the form
of Pro Rata Loans, such amounts not to exceed in the aggregate at any one time
outstanding the amount of its Commitment; provided, however, that the
aggregate amount of the Commitments of the Banks shall be deemed to be used
from time to time to the extent of the aggregate amount of the Competitive Bid
Loans then outstanding. Such deemed use of the aggregate amount of the
Commitments shall be applied to the Banks ratably according to their
respective Commitments. Each Borrowing under this Section shall be in an
aggregate principal amount of Five Million Dollars ($5,000,000) or any larger
multiple of One Million Dollars ($1,000,000) (except that any such Borrowing
may be in the aggregate amount of the unused Commitments) and shall be made
from the several Banks ratably in proportion to their respective Commitments.
Within the foregoing limits, the Borrower may borrow under this Section,
repay, or to the extent permitted by Section 2.11, prepay Loans and reborrow
at any time under this Section.
SECTION 2.2 Notice of Pro Rata Borrowings. The Borrower shall give
the Agent notice (a "Notice of Pro Rata Borrowing") not later than 9:00 a.m.
(Seattle time) on (x) the date of each Prime Borrowing and (y) the fourth
Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:
(a) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Prime Borrowing or a Euro-Dollar Business Day
in the case of a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing, and
(c) whether the Loans comprising such Borrowing are to
be Prime Loans or Euro-Dollar Loans, and
(d) in the case of a Euro-Dollar Borrowing, the duration
of the Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.
SECTION 2.3 Competitive Bid Borrowings.
(a) The Competitive Bid Option. In addition to Pro Rata
Borrowings pursuant to Section 2.1, the Borrower may, as set forth in this
Section, request the Banks to make offers to make Competitive Bid Loans to the
Borrower; provided that following the making of each Competitive Bid
Borrowing, the aggregate amount of the Loans then outstanding shall not exceed
the aggregate Commitments of the Banks. The Banks may, but shall have no
obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this Section.
(b) Competitive Bid Quote Request. When the Borrower
wishes to request offers to make Competitive Bid Loans under this Section, it
shall transmit to the Agent by telex a Competitive Bid Quote Request
substantially in the form of Exhibit D hereto so as to be received no later
than 9:00 a.m. (Seattle time) on (x) the fifth Euro-Dollar Business Day prior
to the date of Borrowing proposed therein, in the case of a LIBOR Auction, or
(y) the second Domestic Business Day prior to the date of Borrowing proposed
therein, in the case of an Absolute Rate Auction, specifying:
(i) the proposed date of Borrowing, which shall be
a Euro-Dollar Business Day in the case of a LIBOR Auction or a Domestic
Business Day in the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which
shall be Five Million Dollars ($5,000,000) or a larger multiple of One Million
Dollars ($1,000,000) (subject to the limitation specified in the proviso of
the first sentence of Section 2.3(a)),
(iii) the duration of the Interest Period applicable
thereto, subject to the provisions of the definition of Interest Period, and
(iv) whether the Competitive Bid Quotes requested are
to set forth a Competitive Bid Margin or a Competitive Bid Rate.
The Borrower may request offers to make Competitive Bid Loans for more than
one Interest Period in a single Competitive Bid Quote Request.
(c) Invitation for Competitive Bid Quotes. Promptly upon
receipt of a Competitive Bid Quote Request, the Agent shall send to the Banks
by telex or telefax, at the specific request of each Bank, an Invitation for
Competitive Bid Quotes substantially in the form of Exhibit E hereto, which
shall constitute an invitation by the Borrower to each Bank to submit
Competitive Bid Quotes offering to make the Competitive Bid Loans to which
such Competitive Bid Quote Request relates in accordance with this Section.
(d) Submission and Contents of Competitive Bid Quotes.
(i) Each Bank may submit (or cause to be submitted
on its behalf) a Competitive Bid Quote containing an offer or offers to make
Competitive Bid Loans in response to any Invitation for Competitive Bid
Quotes. Each Competitive Bid Quote must comply with the requirements of this
subsection (d) and must be submitted to the Agent by telex or facsimile at its
offices specified in or pursuant to Section 9.1 not later than (x) 10:00 a.m.
(Seattle time) on the fourth Euro-Dollar Business Day prior to the proposed
date of Borrowing, in the case of a LIBOR Auction, (y) 8:30 a.m. (Seattle
time) on the proposed date of Borrowing, in the case of an Absolute Rate
Auction (or, in any such case, such other time and date as the Borrower and
the Agent may agree). Subject to Articles 3 and 6, any Competitive Bid Quote
so made shall be irrevocable except with the written consent of the Agent
given on the instructions of the Borrower.
(ii) Each Competitive Bid Quote shall be in
substantially the form of Exhibit F hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the
Competitive Bid Loan for which each such offer is being made, which principal
amount (x) may be greater than or less than the Commitment of the quoting
Bank, (y) must be One Million Dollars ($1,000,000) or a larger multiple of
Five Hundred Thousand Dollars ($500,000), and (z) may not exceed the principal
amount of Competitive Bid Loans for which offers were requested,
(C) in the case of a LIBOR Auction,
the margin above or below the applicable London Interbank Offered Rate (the
"Competitive Bid Margin") offered for each such Competitive Bid Loan,
expressed as a percentage (rounded to the nearest 1/10,000th of 1%) to be
added to or subtracted from such applicable base rate,
(D) in the case of an Absolute Rate
Auction, the fixed rate of interest per annum (rounded to the nearest 1/100th
of 1%) (the "Competitive Bid Rate") offered for each such Competitive Bid
Loan,
(E) the identity of the quoting
Bank, and
(F) the minimum amount of principal
(if any) which must be allocated to the quoting Bank in accordance with
Section 2.3(g) in order for the Borrower to accept the quoting Bank's offer
(no minimum amount to be assumed or required unless such amount is expressly
stated in the Competitive Bid Quote).
(iii) Any Competitive Bid Quote shall be disregarded
that:
(A) is not substantially in the form
of Exhibit F hereto or does not specify all of the information required by
subsection (d)(ii);
(B) contains qualifying,
conditional or similar language;
(C) proposes terms other than or in
addition to those set forth in the applicable Invitation for Competitive Bid
Quotes; or
(D) arrives after the time set
forth in subsection (d)(i).
(e) Notice to Borrower. The Agent shall promptly notify
the Borrower of the terms (x) of any Competitive Bid Quote submitted by a Bank
and (y) of any Competitive Bid Quote that amends, modifies or is otherwise
inconsistent with a previous Competitive Bid Quote submitted by such Bank with
respect to the same Competitive Bid Quote Request. Any such subsequent
Competitive Bid Quote shall be disregarded by the Agent unless (i) the Agent
is otherwise instructed by the Borrower or (ii) such subsequent Competitive
Bid Quote is submitted solely to correct a manifest error in such former
Competitive Bid Quote. The Agent's notice to the Borrower shall
specify (A) the aggregate principal amount of Competitive Bid Loans for which
offers have been received for each Interest Period specified in the related
Competitive Bid Quote Request and (B) the respective principal amounts and
Competitive Bid Margins or Competitive Bid Rates, as the case may be, so
offered.
(f) Acceptance and Notice by Borrower. Not later than
10:00 a.m. (Seattle time) on (x) the third Euro-Dollar Business Day prior to
the proposed date of Borrowing, in the case of a LIBOR Auction, (y) the
proposed date of Borrowing in the case of an Absolute Rate Auction, the
Borrower shall notify the Agent of its acceptance or nonacceptance of the
offers so notified to it pursuant to subsection (e). In the case of
acceptance, such notice (a "Notice of Competitive Bid Borrowing") shall
specify the aggregate principal amount of offers for each Interest Period that
are accepted. Subject to minimum amounts specified pursuant to Section
2.3(d)(ii)(F), the Borrower may accept any Competitive Bid Quote in whole or
in part; provided that:
(i) the aggregate principal amount of each Competitive
Bid Borrowing may not exceed the applicable amount set forth in the related
Competitive Bid Quote Request,
(ii) the principal amount of each Competitive Bid
Borrowing must be Five Million Dollars ($5,000,000) or a larger multiple of
One Million Dollars ($1,000,000),
(iii) acceptance of offers may only be made on the basis
of ascending Competitive Bid Margins or Competitive Bid Rates from lowest to
highest, as the case may be (provided that the Borrower may reject any offer
that is subject to a minimum amount pursuant to Section 2.3(d)(ii)(F) and such
rejection shall not affect Borrower's rights to accept any other offers
pursuant to the terms hereof), and
(iv) the Borrower may not accept any offer that
is described in subsection (d)(iii) or that otherwise fails to comply with the
requirements of this Agreement.
(g) Allocation by Agent. If offers are made by two or
more Banks with the same Competitive Bid Margins or Competitive Bid Rates, as
the case may be, for a greater aggregate principal amount than the amount in
respect of which offers are accepted for the related Interest Period, the
Borrower (subject to minimum amounts specified pursuant to Section
2.3(d)(ii)(F)) may specify in its Notice of Competitive Bid Borrowing the
allocation among such Banks of the principal amount of Competitive Bid Loans
in respect of which such offers are accepted. If such allocation is not
specified by the Borrower, the principal amount of Competitive Bid
Loans in respect of which such offers are accepted shall be allocated by the
Agent among such Banks as nearly as possible (in such multiples, not greater
than One Hundred Thousand Dollars ($100,000), as the Agent may deem
appropriate) in proportion to the aggregate principal amount of such offers.
In the event that such proportion to be allocated to any offer shall be less
than the minimum amount specified for such offer pursuant to Section
2.3(d)(ii)(F), then such offer shall be rejected and allocations shall
be made among the remaining Banks with the same Competitive Bid Margins or
Competitive Bid Rates, as the case may be. Determinations by the Agent of the
amounts of Competitive Bid Loans shall be conclusive in the absence of
manifest error.
SECTION 2.4 Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the Agent
shall promptly notify, each Bank of the contents thereof and, in the case of
Competitive Bid Borrowings, shall also notify each Bank which has made a
Competitive Bid Quote in connection with such Borrowing of such Bank's ratable
share of such Borrowing, and such Notice of Borrowing shall not hereafter be
revocable by the Borrower.
(b) Not later than 12:00 noon (Seattle time) on the date
of each Borrowing, each Bank participating therein shall (except as provided
in subsection (c) of this Section) make available its ratable share of such
Borrowing, in Federal or other funds immediately available in Seattle, to the
Agent at its address specified in or pursuant to Section 9.1. Unless the
Agent determines that any applicable condition specified in Article 3 has not
been satisfied, the Agent will make the funds so received from the Banks
available to the Borrower at the Agent's aforesaid address.
(c) If any Bank makes a new Loan hereunder on a day on
which the Borrower is to repay all or any part of an outstanding Loan from
such Bank, such Bank shall apply the proceeds of its new Loan to make such
repayment and only an amount equal to the difference (if any) between the
amount being borrowed and the amount being repaid shall be made available by
such Bank to the Agent as provided in subsection (b), or remitted by the
Borrower to the Agent as provided in Section 2.12 as the case may be.
SECTION 2.5 Notes.
(a) The Prime Loans of each Bank shall be evidenced by a
single Prime Note payable to the order of such Bank for the account of its
Domestic Lending Office in an amount equal to the aggregate unpaid principal
amount of such Bank's Prime Loans.
(b) The Euro-Dollar Loans of each Bank shall be evidenced
by a single Euro-Dollar Note payable to the order of such Bank for the account
of its Euro-Dollar Lending Office in an amount equal to the aggregate unpaid
principal amount of such Bank's Euro-Dollar Loans.
(c) The Competitive Bid Loans of each Bank shall be
evidenced by a single Competitive Bid Note payable to the order of such Bank
for the account of its Competitive Bid Lending Office in an amount equal to
the aggregate unpaid principal amount of such Bank's Competitive Bid Loans.
(d) Each Bank may, by notice to the Borrower, and the Agent
(to be given not later than two (2) Domestic Business Days prior to the first
Borrowing) request that its Prime Loans be evidenced by separate Prime Notes
and/or that its Competitive Bid LIBOR Loans and Competitive Bid Rate Loans be
evidenced by separate Competitive Bid Notes, in each case in an amount equal
to the aggregate unpaid principal amount of such Loans. Each such Note shall
be in substantially the form of Exhibit A or C hereto, as the case may be,
with appropriate modifications to reflect the fact that it evidences solely
Loans of the relevant type. Each reference in this Agreement to the "Notes,"
"Prime Note," "Euro-Dollar Note,"or "Competitive Bid Note" of such Bank shall
be deemed to refer to and include any or all of such Notes, as the context may
require.
(e) Upon receipt of each Bank's Notes pursuant to Section
3.2(a), the Agent shall mail such Notes to such Bank or shall otherwise
deliver such Notes as such Bank shall direct. Each Bank shall record or cause
to be recorded, and prior to any transfer of its Notes shall endorse on the
schedules forming a part thereof appropriate notations to evidence, the date,
amount and maturity of each Loan made by it and the date and amount of each
payment of principal made by the Borrower with respect thereto; provided that
the failure of any Bank to make any such recordation or endorsement shall not
affect the obligations of the Borrower hereunder or under the Notes. Each
Bank is hereby irrevocably authorized by the Borrower so to endorse its Notes
and to attach to and make a part of any Note a continuation of any such
schedule as and when required.
SECTION 2.6 Maturity of Loans. Each Loan included in any Borrowing
shall mature, and the principal amount thereof shall be due and payable, on
the last day of the Interest Period applicable to such Borrowing.
SECTION 2.7 Interest Rates.
(a) Each Prime Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is made until
it becomes due, at a rate per annum equal to the greater of (i) the Prime Rate
for such day, or (ii) the sum of the Adjusted Euro-Dollar Rate and the
Euro-Dollar Margin. Such interest shall be payable for each Interest Period
on the last day thereof. Any overdue principal of and, to the extent
permitted by law, overdue interest on any Prime Loan shall bear interest,
payable on demand, for each day until paid, at a rate per annum equal to the
sum of one percent (1%) plus the greater of (i) the Prime Rate for such day,
or (ii) the sum of the Adjusted Euro-Dollar Rate and the Euro-Dollar Margin.
(b) Each Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof, for the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin plus
the applicable Adjusted Euro-Dollar Rate. Such interest shall be payable for
each Interest Period on the last day thereof and, if such Interest Period is
longer than three (3) months, at intervals of three (3) months after the first
day thereof.
"Euro-Dollar Margin," during fiscal quarter of Borrower,
means: (a) .625%, if the ratio of Indebtedness to Tangible Net Worth (as
determined pursuant to Section 5.5 hereof) as of the end of the preceding
fiscal quarter was equal to or less than 1.25 to 1.0, and (b) if such ratio
was then greater than 1.25 to 1.0, shall mean .75%.
The "Adjusted Euro-Dollar Rate" applicable to any Interest
Period means a rate per annum equal to the quotient obtained (rounded upwards,
if necessary, to the next higher 1/100 of 1%) by dividing (i) the applicable
London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve
Percentage.
The "London Interbank Offered Rate" applicable to any
Interest Period means the average (rounded upward, if necessary, to the next
higher 1/16 of 1%) of the respective rates per annum at which deposits in
dollars are offered to each of the Reference Banks in the London inter-bank
market at approximately 11:00 a.m. (London time) two Euro-Dollar Business Days
before the first day of such Interest Period in an amount approximately equal
to the principal amount of the Euro-Dollar Loan of such Reference Bank to
which such Interest Period is to apply and for a period of time comparable to
such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement including, without
limitation, basic, supplemental, marginal and emergency reserves) for a member
bank of the Federal Reserve System in respect of "Eurocurrency liabilities"
(or in respect of any other category of liabilities which includes deposits
by reference to which tile interest rate on Euro-Dollar Loans is determined
or any category of extensions of credit or other assets which includes loans
by a non-United States office of any Bank to United States residents). The
Adjusted Euro-Dollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Euro-Dollar Reserve Percentage.
(c) Any overdue principal of and, to the extent permitted by
law, overdue interest on any Euro-Dollar Loan shall bear interest, payable on
demand, for each day from and including the date payment thereof was due to
but excluding the date of actual payment, at a rate per annum equal to the sum
of l% plus the Euro-Dollar Margin plus the quotient obtained (rounded upwards,
if necessary, to the next higher 1/100 of 1%) by dividing (i) the rate per
annum at which one day (or, if such amount due remains unpaid more than three
Euro-Dollar Business Days, then for such other period of time not longer than
three months as the Agent may elect) deposits n dollars in an amount
approximately equal to such overdue payment due to each of the Reference Banks
are offered to such Reference Bank in the London interbank market for the
applicable period determined as provided above by (ii) 1.00 minus the
Euro-Dollar Reserve Percentage (or, if the circumstances described in clause
(a) or (b) of Section 8.1 shall exist, at a rate per annum equal to the sum
of 1% plus the rate applicable to Prime Loans for such day).
(d) Subject to Section 8.1(a), each Competitive Bid LIBOR
Loan shall bear interest on the outstanding principal amount thereof, for the
Interest Period applicable thereto, at a rate per annum equal to the sum of
the London Interbank Offered Rate for such Interest Period (determined in
accordance with Section 2.7(b) as if each Euro-Dollar Reference Bank were to
participate in the related Competitive Bid Borrowing ratably in proportion to
its Commitment) plus (or minus) the Competitive Bid Margin quoted by the Bank
making such Loan in accordance with Section 2.3. Each Competitive Bid Rate
Loan shall bear interest on the outstanding principal amount thereof, for the
Interest Period applicable thereto, at a rate per annum equal to the
Competitive Bid Rate quoted by the Bank making such Loan in accordance with
Section 2.3. Such interest shall be payable for each Interest Period on the
last day thereof. Any overdue principal of and, to the extent permitted by
law, overdue interest on any Competitive Bid Loan shall bear interest, payable
on demand, for each day until paid at a rate per annum equal to the sum of l%
plus the Prime Rate for such day.
(e) The Agent shall determine each interest rate applicable
to the Loans hereunder. The Agent shall give prompt notice to the Borrower
and the participating Banks by telex or cable of each rate of interest so
determined, and its determination thereof shall be conclusive in the absence
of manifest error.
(f) Each Reference Bank agrees to use its best efforts to
furnish quotations to the Agent as contemplated by this Section. If any
Reference Bank does not furnish a timely quotation, the Agent shall determine
the relevant interest rate on the basis of the quotation or quotations
furnished by the remaining Reference Bank or Banks or, if none of such
quotations is available on a timely basis, the provisions of Section 8.1 shall
apply.
SECTION 2.8 Fees.
(a) Facility Fee. Borrower shall pay to the Agent quarterly
in arrears, for the account of the Banks ratably in proportion to their
Commitments, a facility fee equal to 1/4 of 1% per annum of the aggregate
Commitments.
(b) Commitment Fee. Borrower shall pay to the Agent
quarterly in arrears, for the account of the Banks ratably in proportion to
their Commitments, a commitment fee equal to 1/8 of 1% per annum on the daily
difference between (i) the aggregate of all Commitments, and (ii) the
aggregate daily outstanding principal balance of all Notes.
(c) Agency Fee. Borrower shall pay to the Agent, for its
own account, an agency fee as may be negotiated from time to time between
Borrower and Agent.
(d) Payments. Accrued commitment fees and facility fees
under this Section shall be payable at the end of every calendar quarter after
the date hereof and upon the Termination Date or, if earlier, the date of
termination of the Commitments in their entirety. The Agency fee under this
Section shall be payable as of the effective date of this Agreement.
SECTION 2.9 Optional Termination or Reduction of Commitments. On
any Domestic Business Day the Borrower may, upon at least five (5) Domestic
Business Days' notice to the Agent terminate at any time, or reduce from time
to time by an aggregate amount of Five Million Dollars ($5,000,000) or any
larger multiple thereof, the aggregate amount of the Commitments in excess of
the aggregate outstanding principal amount of the loans. Any terminations
shall reduce ratably the respective Commitments of the Banks.
SECTION 2.10 Mandatory Termination. The Commitments shall terminate
on the Termination Date, and any Loans then outstanding (together with accrued
interest thereon) shall be due and payable on such date.
SECTION 2.11 Optional Prepayments. (a) The Borrower may, upon at
least two Domestic Business Days' notice to the Agent prepay any Prime
Borrowing in whole at any time, or from time to time in part in amounts
aggregating Five Million Dollars ($5,000,000) or a larger multiple of One
Million Dollars ($1,000,000), by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment. Each
such optional prepayment shall be applied to prepay ratably the Prime Loans
of the everal Banks included in such Borrowing.
(b) Except as provided in Sections 8.2 and 8.3, the Borrower
may not prepay all or any portion of the principal amount of any Fixed Rate
Loan prior to the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to this
Section, the Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
SECTION 2.12 General Provisions as to Payments. The Borrower shall
make each payment of principal of, and interest on, the Loans and of
additional compensation hereunder, not later than 12:00 Noon (Seattle time)
on the date when due, in Federal or other funds immediately available in
Seattle, to the Agent at its address referred to in Section 9.1. The Agent
will promptly distribute to each Bank its ratable share of each such payment
received by the Agent for the account of the Banks. Whenever any payment of
principal of, or interest on, the Prime Loans or of additional compensation
shall be due on a day which is not a Domestic Business Day, the date for
payment thereof shall be extended to the next succeeding Domestic Business
Day. Whenever any payment of principal of, or interest on, the Euro-Dollar
Loans shall be due on a day which is not a Euro-Dollar Business Day, the date
for payment thereof shall be extended to the next succeeding Euro-Dollar
Business Day unless such Euro-Dollar Business Day falls in another calendar
month, in which case the date for payment thereof shall be the next preceding
Euro-Dollar Business Day. Whenever any payment of principal of, or
interest on, the Competitive Bid Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to
the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case the date for payment
thereof shall be the next preceding Euro-Dollar Business Day. If the date for
any payment of principal is extended by operation of law or otherwise,
interest thereon shall be payable for such extended time. The Borrower's
obligations for payment hereunder and under the Notes and the other
Loan Documents shall be absolute and unconditional under any and all
circumstances, whether now foreseen or unforeseen, and shall not be affected
by any setoff, counterclaim, recoupment, defense or other right which the
Borrower may have against the Agent, any Bank or any other Person for any
reason whatsoever.
SECTION 2.13 Funding Losses. If the Borrower makes any payment of
principal with respect to any Fixed Rate Loan (pursuant to this Article 2,
Article 6, Article 8 or otherwise) on any day other than the last day of the
Interest Period applicable thereto, or the end of an applicable period fixed
pursuant to Section 2.7(c), or if the Borrower fails to borrow any Fixed Rate
Loans after notice has been given to any Bank in accordance with Section 2.4,
the Borrower shall reimburse each Bank on demand for any resulting loss
(including loss of anticipated profits, provided that in the case of
substitution of a Prime Loan pursuant to Section 8.2 or 8.3(d) hereof, such
lost profits shall be included only to the extent such loss is not mitigated
by profit the affected Bank reasonably expects to enjoy under such Prime Loan,
loss of anticipated profits, or expense incurred by it (or by an existing or
prospective participant in the related Loan), including, without limitation,
any loss incurred in obtaining, liquidating or employing deposits from third
parties, provided that such Bank shall have delivered to the Borrower a
certificate as to the amount of such loss or expense, which certificate shall
be conclusive in the absence of manifest error.
SECTION 2.14 Computation of Interest and Fees. Interest rates,
commitment fees, facility fees, and all other fees shall be computed on the
basis of a year of three hundred sixty (360) days and paid for the actual
number of days elapsed (including the first day but excluding the last day).
SECTION 2.15 Maximum Interest Rate.
(a) Nothing contained in this Agreement or the Notes shall
require the Borrower to pay interest at a rate exceeding the maximum rate
permitted by applicable law.
(b) If the amount of interest payable for the account of any
Bank on any interest payment date in respect of the immediately preceding
interest computation period, computed pursuant to Section 2.7, would exceed
the maximum amount permitted by applicable law to be charged by such Bank, the
amount of interest payable for its account on such interest payment date shall
be automatically reduced to such maximum permissible amount.
(c) If the amount of interest payable for the account of any
Bank in respect of any interest computation period is reduced pursuant to
clause (b) of this Section and the amount of interest payable for its account
in respect of any subsequent interest computation period, computed pursuant
to Section 2.7, would be less than the maximum amount permitted by applicable
law to be charged to such Bank, then the amount of interest payable for its
account in respect of such subsequent interest computation period shall be
automatically increased to such maximum permissible amount; provided that at
no time shall the aggregate amount by which interest paid for the account of
any Bank has been increased pursuant to this clause (c) exceed the aggregate
amount by which interest paid for its account has theretofore been reduced
pursuant to clause (b) of this Section.
SECTION 2.16 Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made free and clear of and without
deduction for any and all present or future income, stamp and other taxes,
levies, imposts, duties, deductions, charges, fees, or withholdings, and all
liabilities with respect thereto, now or hereafter imposed, levied, collected,
withheld or assessed by the United States (or by any political subdivision or
taxing authority thereof or therein) excluding, in the case of each Bank and
the Agent, net income and franchise taxes imposed on it, by the jurisdiction
under the laws of which such Bank or the Agent (as the case may be) is
organized or any political subdivision thereof and, in the case of each Bank,
net income and franchise taxes imposed on it, by the jurisdiction of such
Bank's Applicable Lending Office or any political subdivision thereof (all
such non-excluded taxes, deductions, charges, withholdings and liabilities
being hereinafter referred to as "Taxes"). If the Borrower shall be required
by law to deduct any Taxes from or in respect of any sum payable hereunder or
under any Note to any Bank or the Agent, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.16) such Bank or the Agent (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law. The Borrower will indemnify each Bank and the
Agent for the full amount of any Taxes (including, without limitation, any
Taxes imposed by any jurisdiction on amounts payable under this Section 2.16)
paid by such Bank or the Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally asserted. This
indemnification shall be made within thirty (30) days from the date such Bank
or the Agent (as the case may be)) makes written demand therefore. Within
thirty (30) days after the date of any payment of Taxes, the Borrower will
furnish to the Agent the original or a certified copy of a receipt evidencing
payment thereof. Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 2.16 shall survive the payment in full of
principal and interest hereunder and under the Notes.
(b) Any Bank changing the jurisdiction of its Applicable
Lending Office or claiming any additional amounts payable pursuant to this
Section 2.16 shall use its best efforts (consistent with its internal policies
and legal regulatory restrictions) to select a jurisdiction for its Applicable
Lending Office or change the jurisdiction of its Applicable Lending Office,
as the case may be, so as to avoid the imposition of any Taxes or to eliminate
the amount of any such additional amounts which may thereafter accrue;
provided that no such selection or change of the jurisdiction for its
Applicable Lending Office shall be made if, in the reasonable judgment of such
Bank, such selection or change would be disadvantageous to such Bank. Any
Bank changing the jurisdiction of its Applicable Lending Office agrees to use
its best efforts to give the Borrower and the Agent thirty (30) days' prior
notice thereof (or such lesser period as such Bank can reasonably provide);
provided that the failure to give such notice shall not affect the rights of
the Bank under this Section.
(c) Prior to the date of the initial Borrowing hereunder, and
from time to time thereafter if requested by the Borrower or the Agent, each
Bank organized under the laws of a jurisdiction outside the United States
shall provide the Agent and the Borrower with the forms prescribed by the
Internal Revenue Service of the United States certifying such Bank's exemption
from United States withholding taxes with respect to all payments to be made
to such Bank hereunder and under the Notes. Unless the Borrower and the Agent
have received forms or other documents satisfactory to them indicating that
payments hereunder orunder any Note are not subject to United States
withholding tax or are subject to such tax at a rate reduced by an applicable
tax treaty, the Borrower or the Agent shall withhold taxes from such payments
at the applicable statutory rate in the case of payments to or for any Bank
organized under the laws of a jurisdiction outside the United States.
SECTION 2.17 Termination Date Extension. If the Borrower shall give
to the Agent written notice during December, 1993, of Borrower's desire to
extend the Termination Date for one additional year, then such Termination
Date shall be so extended if each Bank by February 28, 1994, shall have
provided its written consent to such extension and Borrower shall have paid
such appropriate fees and expenses as may be required by the Banks. In the
event that any Bank shall decline such consent or Borrower desires to
substitute any bank for another Bank at this time, Borrower shall have the
right to replace such Bank or Banks with such successor bank or banks as shall
be satisfactory to the Agent; provided, that any such bank shall, pursuant to
a written instrument in form and substance satisfactory to the Agent
effectively agree to become a party hereto and a "Bank" hereunder and be bound
by the terms hereof. Any such replacement or substitution of Banks shall be
effective as of the close of business on the then-current Termination Date.
ARTICLE 3
THE EFFECTIVE DATE; CONDITIONS TO BORROWINGS
SECTION 3.1 Conditions Precedent to Effective Date. On the
Effective Date, the Agent shall have received the following in form and
substance satisfactory to the Agent and (except for the Notes) in sufficient
copies for each Bank:
(a) for the account of each Bank a duly executed Prime Note,
Euro-Dollar Note and Competitive Bid Note, each dated the Effective Date,
complying with the provisions of Section 2.5;
(b) an opinion of Bogle & Gates, legal counsel to the
Borrower, substantially in the form of Exhibit G hereto and covering such
additional matters relating to the transactions contemplated hereby as the
Required Banks may reasonably request;
(c) an opinion of Davis Wright Tremaine, special counsel for
the Banks and the Agent, substantially in the form of Exhibit H hereto and
covering such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(d) a certificate signed by the Senior Vice President of the
Borrower, to the effect set forth in clause (f) of this Section 3.1 and
clauses (c) and (d) of Section 3.4;
(e) all documents it may reasonably request relating to the
existence of the Borrower, the corporate authority for and the validity of
this Agreement and the Notes, and any other matters relevant hereto, all in
form and substance satisfactory to the Agent, and including, without
limitation, a certified copy of the resolutions of Borrower's Board of
Directors authorizing generally the transactions contemplated herein and the
execution, delivery and performance of this Agreement and all Loan Documents
in substantially the same form as Exhibit I attached hereto and a certificate
of incumbency as to the corporate titles and signatures of those people
executing the Loan Documents on behalf of the Borrower; and
(f) confirmation of Borrower's current Commercial Paper
Rating. The documents and opinions referred to in this Section shall be
delivered to the Agent no later than the Effective Date. The certificate and
opinions referred to in clauses (b), (c) and (d) above shall be dated the
Effective Date.
SECTION 3.2 Effective Date Events. On the Effective Date, the
following events will occur:
(a) The outstanding principal balance of each loan then
outstanding under Prior Credit Agreement (an "Existing Loan") made by a Bank
shall be renewed and replaced by a Loan hereunder (a "Replacement Loan") in
the same amount. Each Replacement Loan shall bear interest at the same rate
as did the replaced Existing Loan and have an Interest Period ending on the
last day of the Interest Period (as defined in the Prior Credit Agreement) of
the replaced Existing Loan.
(b) Borrower shall pay to Agent for distribution to Royal
Bank of Canada ("Royal Bank") the outstanding principal balance of all
Existing Loans made by it, plus all accrued and unpaid interest thereon and
all fees and other amounts accrued for the account of Royal Bank through the
Effective Date under the Prior Credit Agreement. The Bank of Nova Scotia
("Nova Scotia") shall make Loans to Borrower in the principal balance of such
repaid Existing Loans of Royal Bank. Such initial Loans made by Nova Scotia
shall be deemed Replacement Loans for the repaid Existing Loans of Royal Bank
and shall have interest rates and Interest Periods determined pursuant to
Section 3.2(b) above.
(c) Each Bank (other than Nova Scotia) shall mark the
promissory notes executed and delivered to it by Borrower pursuant to the
Prior Credit Agreement "Renewed" and shall return same to Agent for delivery
to the Borrower.
(d) The Prior Credit Agreement shall be deemed replaced and
superseded by this Agreement.
SECTION 3.3 Carryover Interest and Fees. Interest on each Existing
Loan made by a Bank that is accrued but unpaid as of the Effective Date
("Carryover Interest") will be paid by Borrower concurrently with its payment
of interest on the Replacement Loan made to replace such Existing Loan.
Facility fees and commitment fees accrued under the Prior Credit Agreement in
respect of the Commitments (as defined therein) of the Banks that are unpaid
as of the Effective Date ("Carryover Fees") shall be paid by Borrower on March
31, 1993, concurrently with the first payment pursuant to Section 2.8 of
facility fees and commitments fees accrued hereunder. Borrower shall be
obligated under this Credit Agreement to make such payments of Carryover
Interest and Carryover Fees to the same extent and with the same effect as
Borrower is obligated hereunder to pay interest and fees accruing hereunder.
On receipt of payments of Carryover Interest and Carryover Fees, Agent
shall distribute same to the Banks (other than Nova Scotia) ratably in
proportion to their Commitments.
SECTION 3.4 Conditions to All Borrowings. In the case of each
Borrowing (including the Borrowings comprised of Replacement Loans made
pursuant to Section 3.2 hereof), the obligation of any Bank to make a Loan on
the occasion of any Borrowing is subject to the satisfaction of the following
conditions:
(a) receipt by the Agent of a Notice of Borrowing as required
by Section 2.2 or 2.3, as the case may be;
(b) the fact that, immediately after such Borrowing, the
aggregate outstanding principal amount of the Loans will not exceed the
aggregate amount of the Commitments;
(c) the fact that, immediately after such Borrowing, no
Default shall have occurred and be continuing; and
(d) the fact that the representations and warranties of the
Borrower contained in this Agreement, any of the Loan Documents, or any
certificate, document, or financial statement furnished at any time in
connection herewith shall be true and correct on and as of the date of such
Borrowing with the same effect as though such representations and warranties
are made on or as of such date, except to the extent such representations and
warranties expressly relate to an earlier date.
Each Borrowing hereunder shall be deemed to be a representation and
warranty by the Borrower on the date of such Borrowing as to the facts
specified in clauses (b), (c) and (d) of this Section.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.1 Corporate Existence. The Borrower is duly organized,
validly existing and in good standing as a corporation under the laws of the
State of Washington and has the corporate power, authority and legal right,
including, without limitation, adequate franchises, permits, licenses and
rights, to own or operate its property or lease the property it operates and
to conduct the business in which it is currently engaged.
SECTION 4.2 Corporate Qualifications. The Borrower is duly
qualified as a corporation in good standing under the laws of the State of
Washington and each other jurisdiction where its ownership, lease or operation
of its property or the conduct of its business requires such qualification;
except in those jurisdictions where the failure to so qualify would not have
a materially adverse effect upon its financial condition.
SECTION 4.3 Authorization to Borrow. The Borrower possesses all
requisite corporate power, authority and legal right to execute, deliver and
perform all of its obligations under this Agreement and all other Loan
Documents evidencing or otherwise relating to the obligations herein or
therein, and has taken all necessary corporate action to authorize its
execution, delivery and performance of this Agreement, the Notes and all other
Loan Documents, and the execution, delivery and performance of this Agreement,
the Notes and all other Loan Documents do not require any action by or in
respect of, or filing with, any governmental body, agency or official.
SECTION 4.4 Enforceability. This Agreement constitutes and the
Notes, when executed and delivered by Borrower pursuant to the terms of this
Agreement or otherwise, shall constitute legal, valid and binding obligations
of the Borrower which are enforceable against the Borrower in accordance with
their respective terms.
SECTION 4.5 No Legal Bar. The execution, delivery and performance
of this Agreement, the Notes or any other Loan Document by Borrower, and the
use of the proceeds thereof shall not violate any provision of any existing
law or regulation applicable to Borrower; any decree, judgment, order,
injunction, finding or determination applicable to Borrower of any court,
arbitrator or governmental agency or body of any kind; Borrower's articles of
incorporation or bylaws; any security issued by Borrower, or any material
mortgage, indenture, lease, contract, undertaking or other agreement
or instrument to which Borrower is a party or by which Borrower or any of its
property may be bound; and shall not result in the creation or imposition of
any Lien on any material asset of Borrower or any of its Subsidiaries.
SECTION 4.6 Financial Information. All financial statements, annual
reports, filings with the Securities and Exchange Commission and related
schedules furnished by Borrower to the Agent or the Banks in connection with
Borrower's application for credit hereunder or any Borrowing (including,
without limitation, the balance sheet dated as of October 31, 1992,
and the related consolidated statements of income, shareholders' equity and
changes in financial position for the fiscal year then ended as set forth in
the Borrower's annual report on Form 10-K for 1992, as filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934) have been prepared on a GAAP consolidated basis, and fully and
accurately represent the financial condition of Borrower and its Subsidiaries
and the results of their operation as of the dates and for the periods
indicated. Since October 31, 1992, there has not been any materially adverse
change in Borrower's business, property, operations or condition (financial
or otherwise) sufficient to impair Borrower's ability to repay the Loans.
SECTION 4.7 Litigation. Except as disclosed in writing to the
Banks, there is no threatened (to Borrower's knowledge), or pending action,
proceeding, investigation or claim against or affecting the Borrower before
any court, arbitrator or governmental agency or body which, if adversely
determined to Borrower, would have a materially adverse effect on its
business, property, operations or condition (financial or otherwise), or would
question the enforceability or validity of this Agreement or the Notes or
seeks to enjoin the consummation of any of the transactions contemplated
herein.
SECTION 4.8 Payment of Taxes. Borrower has filed or caused to be
filed (i) all United States Federal income tax returns when required to be
filed and (ii) all other tax returns when required to be filed other than such
returns for which the filing requirement is being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP are provided on Borrower's books or for which the failure to file could
not have a material adverse effect on the Borrower's financial condition,
property or ability to conduct its business or perform its obligations.
Borrower has promptly paid all United States Federal income taxes and all
other taxes, assessments, fees, licenses, excise taxes, franchise taxes,
governmental liens, penalties and other charges levied or assessed against
Borrower or any of its property imposed on it by any governmental authority,
agency or instrumentality which are due and payable, other than those payments
for which (i) the amount, enforceability or validity thereof are being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP are provided on Borrower's books or (ii) the
failure to pay could not have a material adverse effect on the Borrower's
financial condition, property or ability to conduct its business or perform
its obligations.
SECTION 4.9 Employee Benefit Plan. Borrower is in compliance in all
material respects with the applicable provisions of ERISA, and the regulations
and interpretations published thereunder. No Reportable Event exists with
respect to any Plan administered by Borrower or any administrator designated
by Borrower. Borrower has not, with respect to any of its Plans, engaged in
any prohibited transaction set forth in section 406 of ERISA or Section
4975(c) of the Code that would permit the institutIon of proceedings to
terminate any Plan under section 4042 of ERISA. The estimated current value
of the benefits vested under each Plan does not and, upon termination of any
Plan, shall not exceed the estimated current value of any of such Plan's
assets. Borrower is in compliance with all of the funding standards
applicable to each Plan, and there is no material "accumulated funding
deficiency" as defined by section 302 of ERISA under any Plan administered by
Borrower or any administrator designated by Borrower. The Borrower has not
incurred any withdrawal liability with respect to any Plan.
SECTION 4.10 Misrepresentations. No information, exhibits, data or
reports furnished by Borrower or delivered to the Agent, or any of the Banks
in connection with Borrower's application for credit hereunder contain any
material misstatement of fact or omits to state a material fact or any fact
necessary to make the statements contained therein not misleading.
SECTION 4.11 No Default. Borrower is not in default under or with
respect to any contract, agreement or instrument to which it is a party or by
which it or its assets may be bound; and is not in default under any order,
award or decree of any court, arbitrator or other governmental authority
binding upon or affecting it or by which any of its assets may be bound or
affected, which default in either case could have a materially adverse effect
on Borrower's financial condition, property, or ability to conduct its
business or perform its obligations. Borrower is not subject to any order,
award or decree which materially and adversely affects its financial
condition, property, or ability to conduct its business or perform its
obligations.
SECTION 4.12 No Burdensome Restrictions. No contract or other
instrument to which Borrower may be bound and no legislative, charter or other
corporate restriction to which Borrower may be subject materially and
adversely affects or, insofar as Borrower may reasonably foresee based upon
its present knowledge, may so affect its business, property, operations or
condition (financial or otherwise).
SECTION 4.13 Regulations. Borrower is not engaged, nor shall it
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" margin stock
under Regulation U of the Board of Governors of the Federal Reserve System.
Borrower shall not use, directly or indirectly, any part of the proceeds of
any Loan for any purpose which violates or is inconsistent with the provisions
of Regulation G, T, U or X of such Board of Governors, as the same may be
amended, supplemented or modified from time to time. Borrower is not an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Act of 1940, as amended.
SECTION 4.14 Environmental Regulations. Borrower is in compliance
in all material respects with all applicable federal and state environmental
statutes, and the regulations and interpretations published thereunder.
SECTION 4.15 Title to Properties and Assets. The Borrower has
marketable title to its material properties and assets reflected in the
balance sheet as of October 31, 1992, referred to in Section 4.6, except as
disposed of since that date in the ordinary course of business; and to all of
its material properties and assets now owned.
SECTION 4.16 Subsidiaries. Each of the Borrower's corporate
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
The Borrower owns, directly or indirectly through one or more Subsidiaries,
all the shares of all Subsidiaries (other than directors' qualifying shares,
if any); and all such shares owned by the Borrower are validly issued, fully
paid, non-assessable (except for statutory rights of assessment for wages
owed) and free and clear of all Liens.
ARTICLE 5
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable hereunder or under any Note remains unpaid:
SECTION 5.1 Financial Information. The Borrower shall maintain a
standard system of accounting in accordance with GAAP and deliver to each of
the Banks the following;
(a) Quarterly Financial Statements. As soon as available
and, in any event within sixty (60) days after the end of each of the first
three (3) calendar quarters of each fiscal year, a copy of the unaudited
consolidated balance sheet of Borrower and its Subsidiaries as at the end of
each such quarter, together with the related unaudited statement of
consolidated earnings, retained earnings and consolidated changes in financial
position for each such quarter, all in reasonable detail and satisfactory in
scope to the Banks, and certified by the chief financial officer of Borrower
as to fairness of presentation, generally accepted accounting principles and
consistency, which certification shall be in such form and substance as is
satisfactory to the Banks;
(b) Annual Financial Statements. As soon as available
and, in any event within ninety (90) days after the end of each fiscal year,
a copy of its annual report to shareholders which includes the consolidated
balance sheet of Borrower and its Subsidiaries as at the end of each such
year, together with the related statement of consolidated earnings, retained
earnings and consolidated changes in financial position for each such year,
all in reasonable detail and satisfactory in scope to the Banks and certified
by independent certified public accountants of recognized standing selected
by Borrower and satisfactory to the Banks, which certification shall be an
unqualified opinion;
(c) Other Borrower Certificates. Together with the
delivery of the financial statements required by clauses (a) and (b) above,
a compliance certificate of the chief financial officer of Borrower which sets
forth in reasonable detail the calculations required to establish whether the
Borrower was in compliance with the requirements of Sections 5.3, 5.4 and 5.5,
inclusive, on the date of such financial statements and which certifies that:
(i) The financial statements, while not examined by
an independent public accountant, reflect fully and accurately represent the
financial condition of Borrower and its Subsidiaries and the results of their
operations as of the end of each fiscal quarter;
(ii) Borrower is in compliance with all conditions
precedent set forth herein;
(iii) All warranties and representations herein are
true and correct as of the date thereof;
(iv) There exists no known condition, event or act
which constitutes a Default, or if any Default shall exist, the certificate
shall specify the details thereof, the period of existence thereof and what
action Borrower has taken or proposes to take with respect thereto;
(v) There is no judicial proceeding or regulatory
action instituted by or against Borrower or its Subsidiaries, or any
proceeding or action threatened in writing which (so far as the Borrower can
now foresee in the exercise of its reasonable best knowledge) would have a
materially adverse effect upon the business, property, operation or condition
(financial or otherwise) of Borrower; and
(vi) There is no condition, event or action of any
nature which, based upon the Borrower's present knowledge of such condition,
event or action, can reasonably be expected (so far as the Borrower can now
foresee in the exercise of its reasonable best knowledge) to result in or have
a materially adverse effect upon the business, property, operation, or
condition (financial or otherwise) of Borrower, or Borrower's ability to
perform or observe in the ordinary course its obligations under this Agreement
or any other Loan Document;
(d) Notice of Default. Forthwith upon the occurrence of
any Default, a certificate of the chief financial officer or the chief
accounting officer of the Borrower setting forth the details thereof, the
period of existence thereof, and what action the Borrower has taken or
proposes to take with respect thereto;
(e) Shareholder Materials. Promptly upon the mailing
thereof to the shareholders of the Borrower generally, copies of all reports,
proxy statements and other materials so mailed;
(f) SEC Reports. Promptly upon the filing thereof,
copies of all registration statements (other than the exhibits thereto and,
unless the securities covered thereby are held or distributed by the Borrower,
any registration statement on Form S-3 to the extent that they relate to
secondary offerings or Form S-8 or their equivalents) and annual, quarterly
or current reports which the Borrower shall have filed with the Securities and
Exchange Commission;
(g) ERISA Information. If and when the Borrower (i)
gives or is required to give notice to the PBGC of any "reportable event" (as
defined in Section 4043 of ERISA) with respect to any Plan which might
constitute grounds for a termination of such Plan under Title IV of ERISA, or
knows that the plan administrator of any Plan has given or is required to give
notice of any such reportable event, a copy of the notice of such reportable
event given or required to be given to the PBGC; (ii) receives notice of
complete or partial withdrawal liability under Title IV of ERISA, a copy of
such notice; or (iii) receives notice from the PBGC under Title IV of ERISA
of an intent to terminate or appoint a trustee to administer any Plan, a copy
of such notice; and
(h) Additional Information. From time to time, as soon
asavailable to the Borrower (the Borrower in any event to take all steps
necessary to ensure prompt and expeditious availability within ten (10) days
if possible), such additional data, information or documentation regarding the
financial position or business of the Borrower as the Agent, at the request
of any Bank, may reasonably request.
SECTION 5.2 Use of Proceeds. The proceeds of the Loans made under
this Agreement will be used by the Borrower for working capital and to provide
interim funds for capital expansion or other general corporate purposes. No
portion of the loan proceeds shall be used, directly or indirectly, in
connection with the acquisition of five percent (5%) or more of the voting
interest of any corporation or other entity if such acquisition is opposed by
the board of directors or management of such corporation or entity. None of
such proceeds will be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of purchasing or carrying any "margin
stock" within the meaning of Regulation U.
SECTION 5.3 Current Ratio. The Borrower shall at all times maintain
a ratio of Current Assets to Current Liabilities of not less than 1.25 to 1.0
as determined as at the end of each of Borrower's fiscal quarters.
SECTION 5.4 Tangible Net Worth. The Borrower shall at all times
maintain a minimum Tangible Net Worth of not less than Two Hundred and
Seventy-Five Million Dollars ($275,000,000) as determined as at the end of
each of Borrower's fiscal quarters.
SECTION 5.5 Ratio of Indebtedness to Tangible Net Worth. The
Borrower shall at all times maintain a ratio of Indebtedness to Tangible Net
Worth of not more than 1.5 to 1.0 as determined as at the end of each
Borrower's fiscal quarters. For purposes of this Section only, "Indebtedness"
shall not include guaranties entered into by Borrower with regard to "Safe
Harbor Leases" to Heinz Company, Baugh Construction and others, as described
in the letter of Price Waterhouse to Borrower dated December 17, 1991.
SECTION 5.6 Debt Service Coverage Ratio. The Borrower shall
maintain the following totals in a minimum ratio of 1.25 to 1, measured
annually, beginning as of fiscal year end October 31, 1992:
(a) net income plus depreciation plus depletion plus amortization
plus-or-minus changes in deferred taxes minus dividends minus stock
repurchases minus non-financed capital expenditures and timberland purchases;
to
(b) total current principal payments due on all long-term
Indebtedness.
"Non-financed capital expenditures and timberland purchases" shall be
calculated by subtracting from "additions to plant and equipment and
timberland" on Borrower's annual audited statement "additions to long term
debt" (but excluding the Notes and any facilities of a term of two years or
less extended by Agent) on Borrower's annual audited statement.
SECTION 5.7 Maintenance of Property; Insurance. The Borrower shall
maintain all property materially useful and necessary in its business in good
working order and condition and shall maintain with financially sound and
reputable insurance companies insurance on all its property in at least such
amounts and against at least such risks as are usually insured against in the
same general area by companies of established repute engaged in the same or
a similar business.
SECTION 5.8 Inspection of Property, Books and Records. The Borrower
will permit representatives of any Bank at such Bank's expense to visit and
inspect any of its properties, to examine and make abstracts and copies from
any of its books and records, and to discuss its affairs, finances and
accounts with its officers, employees and independent public accountants, all
at such reasonable times and as often as may reasonably be desired.
SECTION 5.9 Consolidations, Mergers and Sales of Assets. The
Borrower will not (i) sell, lease or otherwise transfer or dispose of all or
any substantial part of its assets to any other Person, (ii) consolidate or
merge with or into any Person or permit any Person to merge with or into the
Borrower, (iii) make any substantial transfer or contribution to, or material
investment in stock, shares or licenses of any Person, (iv) effect any change
in Borrower's capital structure, except for the issuance of additional shares
of stock and the retirement or redemption of its stock, (v) adopt any
agreement or resolution for dissolving, terminating or substantially altering
Borrower's present business activities, or (vi) engage or enter into any
materially new or different activity which is unusual to Borrower's existing
business and which would have a materially adverse impact upon the financial
condition of Borrower; provided that the Borrower may consolidate with or
merge into another corporation, or permit one or more corporations to
consolidate with or merge into it, or sell, lease or transfer all or
substantially all of its assets to another corporation (and thereafter
dissolve or not dissolve as Borrower may elect) if: (a) the corporation
surviving such merger or resulting from such consolidation, or the corporation
to which all or substantially all of Borrower's assets are sold, leased or
transferred, as the case may be (1) expressly assumes in writing all of
Borrower's obligations under this Agreement, the Notes, and the other Loan
Documents, (2) qualifies to do business within the State of Washington, (3)
has a Tangible Net Worth equal to or greater than Borrower's Tangible Net
Worth immediately prior to such consolidation, merger, sale, lease or
transfer, and (4) immediately after consummation of such transaction, no
condition or event shall exist which constitutes a Default; and, (b) if
Borrower will not be the surviving corporation after any such merger or
consolidation or continue as "Borrower" after any such asset disposition, each
Bank shall have consented to such consolidation, merger or asset disposition
(with such consent not to be unreasonably withheld).
ARTICLE 6
DEFAULTS
SECTION 6.1 Events of Default. If one or more of the
following events ("Events of Default") shall have occurred and be continuing:
(a) Nonpayment. Any payment of principal or interest on
or in connection with any Loan (including any mandatory prepayment) or any
fees or other amount payable hereunder is not made when due;
(b) Failure to Perform. The Borrower shall fail to
observe or perform any covenant or agreement contained in this Agreement
(other than those covered by clause (a) above), the Notes, or any other Loan
Document for thirty (30) days after written notice thereof has been given to
the Borrower by the Agent at the request of any Bank;
(c) Breach of Representation. Any representation,
warranty, certification or statement made by the Borrower in this Agreement,
the Notes, any other Loan Document, or in any certificate, financial statement
or other document delivered pursuant to this Agreement is determined by the
Required Banks to have been incorrect, false or misleading in any respect when
made (or deemed made);
(d) Defaults on Other Obligations. There shall exist a
material default in the performance of any other material agreement or
obligation for the payment of borrowed money, for the deferred purchase price
of property or services, or for the payment of rent under any lease, and such
default shall have continued for thirty (30) days after Borrower has become
aware of such default;
(e) Loss, Destruction or Condemnation of Property. A
material portion of Borrower's property, in the sole opinion of the Required
Banks, is affected by any significant uninsured loss, damage, destruction,
theft, or is condemned, seized or appropriated and, in the sole opinion of the
Required Banks, such loss, damage, destruction, theft, condemnation, seizure
or appropriateness has a material adverse effect on the condition (financial
or otherwise) of Borrower or its ability to conduct its business or perform
its obligations;
(f) Attachment Proceedings. Borrower or any of
Borrower's material property is materially adversely affected by any:
(i) Judgment, lien, execution, attachment or garnishment;
(ii) General assignment for the benefit of creditors; or
(iii) Sequestration or forfeiture;
(g) Insolvency. Borrower or any of Borrower's material
property is affected by any proceeding under the laws of any jurisdiction
relating to receivership, liquidation, reorganization, insolvency or
bankruptcy, whether voluntarily or involuntarily instituted or brought by or
against Borrower, including, without limitation, any reorganization of assets,
deferment or arrangement of debts or any similar proceeding, unless, in the
case of any proceeding involuntarily brought against Borrower, Borrower is
diligently and in good faith contesting such proceeding and such proceeding
is dismissed within sixty (60) days after commencement thereof;
(h) Judgments. Final judgment on claims not covered by
insurance which, together with other outstanding final judgments against
Borrower, exceeds One Million Dollars ($1,000,000), is rendered against
Borrower and is not discharged, vacated or reversed, or the execution thereof
stayed pending appeal, within sixty (60) days after entry thereof or is not
discharged within sixty (60) days after the expiration of such stay;
(i) Government Approvals. Any governmental approval,
registration or filing with any governmental authority, now or hereafter
required in connection with the performance by Borrower of its obligations
under this Agreement or any Note is revoked, withdrawn or withheld, or fails
to remain in full force and effect, except Borrower shall have thirty (30)
days after notice of any such event by the Agent (at the request of any Bank)
to take whatever action is necessary to obtain all necessary approvals,
registrations and filings;
(j) Other Governmental Action. Any action by any
governmental authority shall, in the opinion of the Required Banks, deprive
Borrower of any substantial right, privilege or franchise, or substantially
restrict the exercise thereof, and such action is not revoked or rescinded
within sixty (60) days after it becomes effective or within thirty (30) days
after notice from the Agent at the request of any Bank, whichever occurs
first;
(k) Change of Affairs. There is a material change in the
condition or affairs (business, financial or otherwise) of Borrower or any
co-maker, endorser, surety or guarantor of the Notes which gives the Required
Banks reasonable grounds to believe that Borrower may not be able to perform
or observe in the ordinary course its obligations under this Agreement,
the Notes or any other Loan Document and such change continues for thirty (30)
days after written notice thereof has been given to Borrower by the Agent at
the request of any Bank; or
(l) ERISA Defaults. The Borrower shall fail to pay when
due an amount or amounts aggregating in excess of One Million Dollars
($1,000,000) which itshall have become liable to pay to the PBGC or to a Plan
under Title IV of ERISA; or notice of intent to terminate a Plan or Plans
having aggregate Unfunded Vested Liabilities in excess of One Million Dollars
($1,000,000) (collectively, a "Material Plan") shall be filed under Title IV
of ERISA by the Borrower or any plan administrator; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate or to cause a
trustee to be appointed to administer any Material Plan or a proceeding shall
be instituted by a fiduciary of any Material Plan against the Borrower to
enforce Section 515 of ERISA and such proceeding shall not have been dismissed
within thirty (30) days thereafter; or a condition shall exist by reason of
which the PBGC would be entitled to obtain a decree adjudicating that any
Material Plan must be terminated; then, without regard to any previous
knowledge of any of the Banks, or the Agent and in every such event, the Agent
shall (i) if requested by Banks having more than sixty-six and two-thirds
percent (66-2/3%) in aggregate amount of the Commitments, by notice to the
Borrower terminate the Commitments and they shall thereupon terminate and (ii)
if requested by Banks holding Notes evidencing more than sixty-six and
two-thirds percent (66-2/3%) in aggregate principal amount of the Loans, by
notice to the Borrower declare the Notes (together with accrued interest
thereon) to be, and the Notes shall thereupon become, immediately due and
payable without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by the Borrower; provided that in the case of the
Event of Default specified in paragraph (g) above with respect to the
Borrower, without any notice to the Borrower or any other act by the Agent or
the Banks, the Commitments shall thereupon terminate and the Notes (together
with accrued interest thereon) shall become immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower.
SECTION 6.2 Notice of Default. The Agent shall give notice to the
Borrower under Sections 6.1(b), (j) and (k) promptly upon being requested to
do so by any Bank and shall thereupon notify all the Banks thereof.
ARTICLE 7
THE AGENT
SECTION 7.1 Appointment and Authorization. Each Bank irrevocably
appoints and authorizes the Agent to take such action as agent, on its behalf
and to exercise such powers under this Agreement and the Notes as are
delegated to the Agent by the terms hereof or thereof, together with all such
powers as are reasonably incidental thereto.
SECTION 7.2 Agent, and Affiliates. Seattle-First National Bank
shall have the same rights and powers under this Agreement as any other Bank
and may exercise or refrain from exercising the same as though it were not the
Agent and Seattle-First National Bank and its affiliates each may accept
deposits from, lend money to, and generally engage in any kind of business
with the Borrower or any Subsidiary or affiliate of the Borrower as if it were
not the Agent hereunder.
SECTION 7.3 Action by Agent The obligations of the Agent hereunder
are only those expressly set forth herein. Without limiting the generality
of the foregoing, the Agent shall not be required to take any action with
respect to any Default, except as expressly provided in Article 6.
SECTION 7.4 Consultation with Experts. The Agent may consult with
legal counsel (who may be counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
SECTION 7.5 Liability of Agent. Neither the Agent nor any of its
directors, officers, agents, or employees shall be liable for any action taken
or not taken by it in connection herewith (i) with the consent or at the
request of the Required Banks or (ii) in the absence of their respective own
gross negligence or willful misconduct. Neither the Agent nor any of its
respective directors, officers, agents or employees shall be responsible for
or have any duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with this Agreement or any
borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of the Borrower; (iii) the satisfaction of any
condition specified in Article 3, except receipt of items required to be
delivered to the Agent; or (iv) the due execution, legality, validity,
enforceability, effectiveness, genuineness, sufficiency or value of this
Agreement, the Notes or any other instrument or writing furnished in
connection herewith. The Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, statement, or other writing
(which may be a bank wire, telex or similar writing) believed by it to be
genuine or to be signed by the proper party or parties.
SECTION 7.6 Indemnification. Each Bank shall, ratably in accordance
with its Commitment, indemnify the Agent (to the extent not reimbursed by the
Borrower) against any cost, expense (including counsel fees and
disbursements), claim, demand, action, loss or liability (except such as
result from the Agent's gross negligence or willful misconduct) that the Agent
may suffer or incur in connection with this Agreement or any otherLoan
Document or any action taken or omitted by the Agent hereunder. The agreement
of the Banks contained in this Section 7.6 shall survive the Termination Date.
SECTION 7.7 Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent
or any other Bank, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking any action under this Agreement.
SECTION 7.8 Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Banks and the Borrower. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent provided such successor has a combined capital and surplus of at least
Fifty Million Dollars ($50,000,000). If no successor Agent shall have been so
appointed by the Required Banks, and shall have accepted such appointment,
within thirty (30) days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent (as the case may be), which shall be a commercial bank
organized under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least Fifty Million
Dollars ($50,000,000). Upon the acceptance of its appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed
to and become vested with all the rights and duties of the retiring Agent, and
the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.1 Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any Fixed
Rate Borrowing (other than a Competitive Bid Rate Borrowing):
(a) the Agent is advised by the Reference Banks that
deposits in dollars (in the applicable amounts) are not being offered to the
Reference Banks in the relevant market for such Interest Period, or
(b) Banks having 50% or more of the aggregate amount of
the Commitments advise the Agent that the relevant Adjusted Euro-Dollar Rate,
as determined by the Agent will not adequately and fairly reflect the cost to
such banks of funding their Fixed Rate Loans for such Interest Period, the
Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, the obligations of the Banks to make
such Euro-Dollar Loans or Competitive Bid LIBOR Loans shall be suspended, and,
unless the Borrower notifies the Agent at least two (2) Domestic Business Days
before the date of such Fixed Rate Borrowing for which a Notice of Borrowing
has previously been given that it elects not to borrow on such date, such
Borrowing shall instead be made as a Prime Borrowing.
SECTION 8.2 Illegality. If, after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by any Bank (or its Applicable
Lending Office) with any request or directive (whether or not having the force
of law) of any such authority, central bank or comparable agency shall make
it unlawful or impossible for any Bank (or its Applicable Lending Office) to
make, maintain or fund any of its Fixed Rate Loans, and such Bank shall so
notify the Agent, the Agent shall forthwith give notice thereof to the other
Banks and the Borrower, whereupon until such Bank notifies the Borrower and
the Agent that the circumstances giving rise to such suspension no longer
exist, the obligation of such Bank to make such Fixed Rate Loans shall be
suspended. Before giving any notice to the Agent pursuant to this Section,
such Bank shall designate a different Applicable Lending Office if such
designation will avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. If such
Bank shall determine that it may not lawfully continue to maintain and fund
any of its outstanding Fixed Rate Loans to maturity and shall so specify in
such notice, the Borrower shall immediately prepay in full the then
outstanding principal amount of each, such Fixed Rate Loan, together with
accrued interest thereon. Concurrently with prepaying each such Fixed Rate
Loan, the Borrower shall borrow a Prime Loan in an equal principal amount from
such Bank (on which interest and principal shall be payable contemporaneously
with the related Fixed Rate Loans of the other Banks), and such Bank shall
make such a Prime Loan.
SECTION 8.3 Increased Cost and Reduced Return.
(a) If after the date hereof, the adoption of any applicable law,
rule or regulation, or any change therein, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof,
or compliance by any Bank (or its Applicable Lending Office) with any request
or directive (whether or not having the force of law) of any such authority,
central bank or comparable agency:
(i) shall subject any Bank (or its Applicable Lending Office)
to any tax, duty or other charge with respect to any of its Fixed Rate Loans,
its Notes or its obligation to make any Fixed Rate Loans, or shall change the
basis of taxation of payments to any Bank (or its Applicable Lending Office)
of the principal of or interest on any of its Fixed Rate Loans or any other
amounts due under this Agreement in respect of any of its Fixed Rate Loans or
its obligation to make any Fixed Rate Loans (except for changes in the rate
of tax on the overall net income of such Bank or its Applicable Lending Office
imposed by the jurisdiction in which such Bank's principal executive office
or Applicable Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without limitation, any
such requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding with respect to any Euro-Dollar Loan or Competitive Bid
LIBOR Loan any such requirement included in an applicable Euro-Dollar Reserve
Percentage, against assets of, deposits with or for the account of, or credit
extended by, any Bank (or its Applicable Lending Office) or shall impose on
any Bank (or its Applicable Lending Office) or on the United States market for
certificates of deposit or the London interbank market any other condition
affecting any of its Fixed Rate Loans, its Notes or its obligation to make any
Fixed Rate Loans; and the result of any of the foregoing is to increase the
cost to such Bank (or its Applicable Lending Office) of making or maintaining
any Fixed Rate Loan, or to reduce the amount of any sum received or receivable
by such Bank (or its Applicable Lending Office) under this Agreement or under
its Notes with respect thereto, by an amount deemed by such Bank to be
material, then, within fifteen (15) days after written demand by such Bank
(with a copy to the Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such increased
cost or reduction.
(b) If after the date hereof, any Bank shall have determined
that the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof,
or compliance by any Bank (or its Applicable Lending Office) with any request
or directive regarding capital adequacy (whether or not having the force of
law) of any such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on such Bank's capital as a
consequence of its obligations hereunder (including without limitation its
Commitment) to a level below that which such Bank could have achieved but for
such adoption, change or compliance (taking into consideration such Bank's
policies with respect to capital adequacy) by an amount deemed by such Bank
to be material, then from time to time, within fifteen (15) days after written
demand by such Bank (with a copy to the Agent), the Borrower shall pay to such
Bank such additional amount or amounts as will compensate such Bank for such
reduction.
(c) Each Bank will promptly notify the Borrower and the
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Bank to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. A
certificate of any Bank delivered to Borrower pursuant to paragraph (a) or (b)
of this Section that demands compensation under this Section and sets forth
the additional amount or amounts to be paid to it hereunder and the basis for
the determination thereof shall be conclusive in the absence of manifest
error. In determining such amount, such Bank may use any reasonable averaging
and attribution methods.
(d) If the Borrower shall become obligated to make any
payment to any Bank under this Section 8.3, then the Borrower shall be
entitled, on giving to the Agent, and such Bank not less than four (4)
Euro-Dollar Business Days' prior notice, to repay the outstanding principal
amount of the relevant Fixed Rate Loans held by such Bank, together with
interest accrued thereon, and concurrently with prepaying each such Fixed Rate
Loan the Borrower shall borrow a Prime Loan in an equal principal amount from
such Bank (on which interest and principal shall be payable contemporaneously
with the related Fixed Rate Loans of the other Banks), and such Bank shall
make such a Prime Loan.
SECTION 8.4 Prime Loans Substituted for Affected Euro-Dollar Loans.
If (a) either (i) the obligation of any Bank to make Euro-Dollar Loans has
been suspended pursuant to Section 8.2 or (ii) any Bank has demanded
compensation with respect to Euro-Dollar Loans under Section 8.3 and (b) the
Borrower shall, by at least five (5) Euro-Dollar Business Days' prior notice
to such Bank through the Agent have elected that the provisions of this
Section shall apply to such Bank, then, unless and until such Bank notifies
the Borrower and the Agent that the circumstances giving rise to such
suspension or demand for compensation no longer apply:
(a) all Loans which would otherwise be made by such Bank
as Euro-Dollar Loans shall be made instead as Prime Loans (on which interest
and principal shall be payable contemporaneously with the related Euro-Dollar
Loans of the other Banks), and
(b) after each of its Euro-Dollar Loans has been repaid,
all payments of principal which would otherwise be applied to repay such
Euro-Dollar Loans shall be applied to repay its Prime Loans instead.
ARTICLE 9
MISCELLANEOUS
SECTION 9.1 Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, telex or
similar writing) and shall be given to such party at its address or telex
number set forth on the signature pages hereof or such other address or telex
number as such party may hereafter specify for the purpose by notice to the
Agent and the Borrower. Each such notice, request or other communication
shall be effective (i) if given by telex, when such telex is transmitted to
the telex number specified in this Section and the appropriate answerback is
received, (ii) if given by mail, seventy-two (72) hours after such
communication is deposited in the mails with first class postage prepaid,
registered or certified, return receipt requested, addressed as aforesaid or
(iii) if given by any other means, when delivered at the address specified in
this Section; provided that notices to the Agent under Article 2 or Article
8 shall not be effective until received.
SECTION 9.2 No Waivers. No failure or delay by the Agent or any
Bank in exercising any right, power or privilege hereunder or under any Note
or other Loan Document shall operate as a waiver thereof nor shall any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 9.3 Expenses; Documentary Taxes. The Borrower shall pay (i)
all out-of-pocket expenses of the Agent, including reasonable fees and
disbursements of special counsel for the Banks and the Agent, in connection
with any waiver or consent under this Agreement or any other Loan Document or
any amendment hereof or thereof or any Default or alleged Default hereunder
(except, in the case of an alleged Default, when the Required Banks knew or
reasonably should have known that no Default actually existed) and (ii) if an
Event of Default occurs, all out-of-pocket expenses incurred by the Agent or
any Bank, including reasonable fees and disbursements of counsel, in
connection with such Event of Default and collection and other enforcement
proceedings resulting therefrom. The Borrower agrees to pay, and shall
indemnify each Bank against, any present or future stamp, transfer, or
documentary taxes or any other excise or property taxes, charges, assessments,
or similar levies which arise from any payment made hereunder or under the
Notes or any other Loan Document or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement, the Notes or
any other Loan Document. The Borrower's obligations under this Section 9.3
shall survive the Termination Date.
SECTION 9.4 Indemnifications. The Borrower agrees to indemnify and
hold harmless the Agent and each Bank and each of their respective directors,
officers, employees and agents from and against any and all claims, damages,
liabilities and expenses (including, without limitation, fees and
disbursements of counsel) which may be incurred by or asserted against the
Agent or such Bank or any such director, officer, employee or agent which
would not have been incurred by or asserted against such Person but for the
Agent or such Bank being a party to this Agreement in connection with or
arising out of any investigation, litigation, or proceeding (i) related to any
transaction or proposed transaction (whether or not consummated) in which any
proceeds of any Borrowing are applied or proposed to be applied, directly or
indirectly, by the Borrower (including, without limitation, any such
application or proposed application by the Borrower related to any acquisition
or proposed acquisition by the Borrower or any subsidiary or affiliate of the
Borrower of all or any portion of the stock or substantially all of the assets
of any Person), whether or not the Agent or such Bank or any such director,
officer, employee or agent is a party to such transaction or (ii) related to
the Borrower's entering into this Agreement or any other Loan Document, or to
any actions or omissions of the Borrower, any of its respective subsidiaries
or affiliates or any of its or their respective directors, officers, employees
or agents in connection herewith or therewith, unless (but only to the extent)
such claim, damage, liability or expense was attributable to such indemnified
party's gross negligence or wilful misconduct or (iii) related to any claim
that Borrower's property or operations do not comply with, or do require
remedial activity pursuant to, applicable governmental requirements, including
environmental laws and regulations. The Borrower's obligations under this
Section 9.4 shall survive the Termination Date.
SECTION 9.5 Sharing of Set-Offs. Each Bank agrees that if it shall,
by exercising any right of set-off or counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest due
with respect to any Note held by it which is greater than the proportion
received by any other Bank in respect of the aggregate amount of principal and
interest due with respect to any Note held by such other Bank, the Bank
receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other banks, and such other
adjustments shall be made, as may be required so that all such payments of
principal and interest with respect to the Notes held by the Banks shall be
shared by the Banks pro rata; provided that nothing in this Section shall
impair the right of any Bank to exercise any right of set-off or counterclaim
it may have and to apply the amount subject to such exercise to the payment
of indebtedness of the Borrower other than its indebtedness under the Notes.
The Borrower agrees, to the fullest extent it may effectively do so under
applicable law, that any holder of a participation in a Note whether or not
acquired pursuant to the foregoing arrangements, may exercise rights of
set-off or counterclaim and other rights with respect to such participation
as fully if such holder of a participation were a direct creditor of the
Borrower in the amount of such participation.
SECTION 9.6 Amendments and Waivers. Any provision of this Agreement
or the Notes may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Borrower and the Required Banks
(and, if the rights or duties of the Agent are affected thereby, by the
Agent); provided that the Agent may, with the consent of the Borrower (which
shall not be unreasonably withheld), specify by notice to the Banks
modifications in the procedures set forth in Section 2.3; and provided further
that no such amendment, waiver or modification shall, unless signed by all the
Banks, (i) increase the Commitment of any Bank or subject any Bank to any
additional obligation, (ii) reduce the principal of or rate of interest on any
Loan or any fees hereunder, (iii) postpone the date fixed for any payment of
principal of or interest on any Loan or any fees hereunder, or (iv) change the
percentage of the Commitments or of the aggregate unpaid principal amount of
the Notes, or the number of Banks, which shall be required for the Banks or
any of them to take any action under this Section 9.6 or any other provision
of this Agreement.
SECTION 9.7 Successors and Assigns.
(a) The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Borrower may not assign or otherwise
transfer any of its rights or obligations under this Agreement. A Bank may
assign its Notes and its rights and obligations under this Agreement with the
consent of the Borrower and Agent.
(b) The Agent, and the Borrower may, for all purposes of
this Agreement, treat any Bank as the holder of any Note drawn to its order
(and owner of the Loans evidenced thereby) until written notice of assignment,
participation or other transfer shall have been received by them.
(c) If any Reference Bank assigns its Notes to an
unaffiliated institution, the Agent shall, in consultation with the Borrower
and with the consent of the Required Banks, appoint another bank to act as
such Reference Bank hereunder.
SECTION 9.8 Collateral. Each of the Banks represents to the Agent
and each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided in this Agreement.
SECTION 9.9 Governing Law. This Agreement and each Note, including
all matters of construction, validity and performance, shall be governed by
and construed in accordance with the laws of the State of Washington, as
applied to contracts executed and to be fully performed in such State by
citizens of such State. In the event that suit is instituted to enforce this
Agreement or any Note or other Loan Document, venue of any such suit may be
laid in King County, Washington.
SECTION 9.10 Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when the Agent shall have
received counterparts hereof signed by all of the parties hereto.
SECTION 9.11 Concerning Oral Agreements. ORAL AGREEMENTS OR
ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
LONGVIEW FIBRE COMPANY
By \s\ L. J. Holbrook
L. J. Holbrook
Senior Vice President-Finance
Mailing Address:
Longview Fibre Company
P. O. Box 639
Longview, Washington 98632
Attention: Lisa J. Holbrook
Senior Vice President-Finance
Courier Address:
Longview Fibre Company
End of Fibre Way
Longview, Washington 98632
Attention: Lisa J. Holbrook
Senior Vice President-Finance
Telephone: (206) 425-1550
Facsimile: (206) 425-3116
Percent of
Aggregate
Commitments Commitment
16.469% $28,000,000 SEATTLE-FIRST NATIONAL BANK
By \s\ Robert M. Ingram, III
Robert M. Ingram, III
Vice President
701 Fifth Avenue,
Floor 12
Seattle, WA 98104
Attention: Robert M. Ingram, III
Vice President
Telephone: (206) 358-3601
Facsimile: (206) 358-3113
Percent of
Aggregate
Commitments Commitment
14.824% $25,200,000 BANK OF AMERICA NATIONAL
TRUST & SAVINGS ASSOCIATION
By \s\ Michael J. Balok
Michael J. Balok
Vice President
U.S. Division, 41st Floor
555 California Street
San Francisco, CA 94104
Attention: Michael J. Balok
Vice President
Telephone: (415) 622-2018
Facsimile: (415) 622-4585
Percent of
Aggregate
Commitments Commitment
14.824% $25,200,000 ABN AMRO BANK N.V.
By \s\ Paul A. Calderon
Paul A. Calderon
Vice President
One Union Square
Suite 2323
Seattle, WA 98101
Attention: Walter Euyang
Vice President
Telephone: (206) 587-2360
Facsimile: (206) 682-5641
Percent of
Aggregate
Commitments Commitment
14.824% $25,200,000 NATIONAL WESTMINSTER BANK PLC
By \s\ Gary A. Miller
Gary A. Miller
Vice President
Los Angeles Overseas Branch
400 South Hope Street
Suite 1000
Los Angeles, CA 90071
Attention: Michael E. Keating
Vice President
Telephone: (213) 624-8555
Facsimile: (213) 623-6540
Percent of
Aggregate
Commitments Commitment
14.824% $25,200,000 CONTINENTAL BANK N.A.
By \s\ R. Guy Stapleton
R. Guy Stapleton
Vice President
231 South La Salle
Chicago, Illinois 60697
Attention: Elizabeth M. Nolan
Vice President
Telephone: (312) 828-1292
Facsimile: (312) 765-2080
Percent of
Aggregate
Commitments Commitment
14.824% $25,200,000 NATIONSBANK OF NORTH CAROLINA,
N.A.
By \s\ Michael O. Lincoln
Michael O. Lincoln
Vice President
Forest Products Group
Nationsbank Corporate Center
100 North Tryon Street
8th Floor
Charlotte, NC 28255
Attention: Michael O. Lincoln
Vice President
Telephone: (704) 386-5960
Facsimile: (704) 386-3271
Percent of
Aggregate
Commitments Commitment
9.411% $16,000,000 THE BANK OF NOVA SCOTIA
By \s\ Michael Brown
Michael Brown
Vice President
Attention: Michael Brown
Vice President and
Manager
Portland Branch
56 S.W. Salmon Street
Portland, Oregon 97204
Telephone: (503) 222-5233
Facsimile: (503) 222-5502
Total
Commitment
$170,000,000
SEATTLE-FIRST NATIONAL BANK,
as Agent
By \s\ Robert M. Ingram III
Robert M. Ingram III
Vice President
701 Fifth Avenue, Floor 12
Seattle, WA 98104
Attention: Robert M. Ingram III
Vice President
Telephone: (206) 358-3601
Facsimile: (206) 358-3113
EXHIBIT A
PRIME NOTE
_______________, 1993
For value received, Longview Fibre Company, a Washington
corporation (the "Borrower"), promises to pay to the order of
____________________________________________________________(the
"Bank"), for the account of its Domestic Lending Office, the
unpaid principal amount of each Prime Loan made by the Bank to the
Borrower pursuant to the Credit Agreement referred to below on the
last day of the Interest Period relating to such Loan. The
Borrower promises to pay interest on the unpaid principal amount
of each such Prime Loan on the dates and at the rate or rates
provided for in the Credit Agreement. All such payments of
principal and interest shall be made in lawful money of the United
States in Federal or other immediately available funds at the
office of Seattle-First National Bank, Columbia Seafirst Center,
701 Fifth Avenue, Seattle, Washington.
All Prime Loans made by the Bank, the respective maturities
thereof and all repayments of the principal thereof shall be
recorded by the Bank and, prior to any transfer hereof, endorsed
by the Bank on the schedule attached hereto, or on a continuation
of such schedule attached to and made a part hereof; provided,
that the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the Prime Notes referred to in the Credit
Agreement dated as of February 26, 1993, among the Borrower, the
banks listed on the signature pages thereof, and Seattle-First
National Bank, as Agent (as the same may be amended or
supplemented from time to time, the "Credit Agreement"). Terms
defined in the Credit Agreement are used herein with the same
meanings. Reference is made to the Credit Agreement for
provisions for the prepayment hereof and the acceleration of the
maturity hereof. This Note, including all matters of construc
tion, validity and performance, shall be governed by and construed
in accordance with the laws of the State of Washington, as applied
to contracts executed and to be fully performed in such State by
citizens of such State. In the event that suit is instituted to
enforce this Note, venue of any such suit may be laid in King
County, Washington.
LONGVIEW FIBRE COMPANY
By_______________________
Its______________________
By_______________________
Its______________________
LOANS AND PAYMENTS OF PRINCIPAL
Date Amount
of
Loan Amount of
Principal
Repaid Maturity
Date Notation
Made by
EXHIBIT B
EURO-DOLLAR NOTE
_______________, 1993
For value received, Longview Fibre Company, a Washington
corporation (the "Borrower"), promises to pay to the order of
______________________________________________________________ (the
"Bank"), for the account of its Euro-Dollar Lending Office, the unpaid
principal amount of each Euro-Dollar Loan made by the Bank to the
Borrower pursuant to the Credit Agreement referred to below on the
last day of the Interest Period relating to such Loan. The Borrower
promises to pay interest on the unpaid principal amount of each such
Euro-Dollar Loan on the dates and at the rate or rates provided for in
the Credit Agreement. All such payments of principal and interest
shall be made in lawful money of the United States in Federal or other
immediately available funds at the office of Seattle-First National
Bank, Columbia Seafirst Center, 701 Fifth Avenue, Seattle, Washington.
All Euro-Dollar Loans made by the Bank, the respective maturities
thereof and all repayments of the principal thereof shall be recorded
by the Bank and, prior to any transfer hereof, endorsed by the Bank on
the schedule attached hereto, or on a continuation of such schedule
attached to and made a part hereof; provided that the failure of the
Bank to make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Credit Agreement.
This note is one of the Euro-Dollar Notes referred to in
the Credit Agreement dated as of February 26, 1993, among the
Borrower, the banks listed on the signature pages thereof, and
Seattle-First National Bank, as Agent (as the same may be amended or
supplemented from time to time, the "Credit Agreement"). Terms
defined in the Credit Agreement are used herein with the same
meanings. Reference is made to the Credit Agreement for provisions
for the prepayment hereof and the acceleration of the maturity hereof.
This Note, including all matters of construction, validity and
performance, shall be governed by and construed in accordance with the
laws of the State of Washington, as applied to contracts executed and
to be fully performed in such State by citizens of such State. In the
event that suit is instituted to enforce this Note, venue of any such
suit may be laid in King County, Washington.
LONGVIEW FIBRE COMPANY
By________________________
Its_______________________
By________________________
Its_______________________
LOANS AND PAYMENTS OF PRINCIPAL
Date Amount
of
Loan Amount of
Principal
Repaid Maturity
Date Notation
Made by
EXHIBIT C
COMPETITIVE BID NOTE
_______________, 1993
For value received, Longview Fibre Company, a Washington
corporation (the "Borrower"), promises to pay to the order of
_____________________________________________________________ (the
"Bank"), for the account of its Competitive Bid Lending Office, the
aggregate unpaid principal amount of each Competitive Bid Loan made by
the Bank to the Borrower pursuant to the Credit Agreement referred to
below on the last day of the Interest Period relating to such Loan.
The Borrower promises to pay interest on the unpaid principal amount
of each such Competitive Bid Loan on the dates and at the rate or
rates provided for in the Credit Agreement. All such payments of
principal and interest shall be made in lawful money of the United
States in federal or other immediately available funds at the office
of Seattle-First National Bank, Columbia Seafirst Center, 701 Fifth
Avenue, Seattle, Washington.
All Competitive Bid Loans made by the Bank, the respective
maturities thereof and all repayments of the principal thereof shall
be recorded by the Bank and, prior to any transfer hereof, endorsed by
the Bank on the schedule attached hereto, or on a continuation of such
schedule attached to and made a part hereof; provided that the failure
of the Bank to make any such recordation or endorsement shall not
affect the obligations of the Borrower hereunder or under the Credit
Agreement.
This Note is one of the Competitive Bid Notes referred to in the
Credit Agreement dated as of February 26, 1993, among the Borrower,
the banks listed on the signature pages thereof, and Seattle-First
National Bank, as Agent (as the same may be amended or supplemented
from time to time, the "Credit Agreement"). Terms defined in the
Credit Agreement are used herein with the same meanings. Reference is
made to the Credit Agreement for provisions for the prepayment hereof
and the acceleration of the maturity hereof. This Note, including all
matters of construction, validity and performance, shall be governed
by and construed in accordance with the laws of the State of
Washington, as applied to contracts executed and to be fully performed
in such State by citizens of such State. In the event that such suit
is instituted to enforce this Note, venue of any such may be laid in
King County, Washington.
LONGVIEW FIBRE COMPANY
By________________________
Its_______________________
By________________________
Its_______________________
LOANS AND PAYMENTS OF PRINCIPAL
Date Amount
of
Loan Amount of
Principal
Repaid Maturity
Date Notation
Made by
EXHIBIT D
FORM OF COMPETITIVE BID QUOTE REQUEST
[Date]
TO: Seattle-First National Bank (the "Agent")
FROM: Longview Fibre Company
RE: Credit Agreement (the "Credit Agreement") dated as of
February 26, 1993, among the Borrower, the Banks
parties thereto, and the Agent.
We hereby give notice pursuant to Section 2.3 of the Credit
Agreement that we request Competitive Bid Quotes for the
following proposed Competitive Bid Borrowing(s):
Date of Borrowing: _______________
Principal Amount1 Interest Period1
$
Such Competitive Bid Quotes should offer a Competitive Bid
[Margin] [Rate].
Terms used herein have the meanings assigned to them in the
Credit Agreement.
LONGVIEW FIBRE COMPANY
By______________________
Its_____________________
- ---------------
1 Amount must be $5,000,000 or a larger multiple of $1,000,000.
2 One (1), two (2), three (3) or six (6) months (LIBOR Auction);
or a number of days not earlier than seven (7) days nor later
than one (1) year (Absolute Rate Auction), subject in each case
to the provisions of the definition of Interest Period.
EXHIBIT E
FORM OF INVITATION FOR COMPETITIVE BID QUOTES
TO: [Name of Bank]
RE: Invitation for Competitive Bid Quotes to Longview Fibre
Company (the "Borrower")
Pursuant to Section 2.3 of the Credit Agreement dated as of
February 26, 1993 among the Borrower, the Banks parties thereto,
and the undersigned, as Agent, we are pleased on behalf of the
Borrower to invite you to submit Competitive Bid Quotes to the
Borrower for the following proposed Competitive Bid Borrowing(s):
Date of Borrowing: _______________
Principal Amount Interest Period
$
Such Competitive Bid Quotes should offer a Competitive Bid
[Margin] [Rate].
Please respond to this invitation by no later than
[10:00 a.m.] [8:30 a.m.] (Seattle time) on [date].
SEATTLE-FIRST NATIONAL BANK,
as Agent
By
Authorized Officer
EXHIBIT F
FORM OF COMPETITIVE BID QUOTE
SEATTLE-FIRST NATIONAL BANK,
as Agent
Columbia Seafirst Center
701 Fifth Avenue
Seattle, Washington 98104
Attention:
Re: Competitive Bid Quote to Longview Fibre Company (the
"Borrower")
In response to your invitation on behalf of the Borrower
dated _______________, 19__, we hereby make the following
Competitive Bid Quote on the following terms:
1. Quoting Bank:
2. Person to contact at Quoting Bank:
3. Date of Borrowing: 1
[4. Base rate: ]*
5. We hereby offer to make Competitive Bid Loan(s) in the
following principal amounts, for the following Interest
Periods and at the following rates:
Principal
Amount1 Minimum
Principal
Amount (if any) Interest
Period1 Competitive Bid
[Margin]1
[Rate]1
We understand and agree that the offer(s) set forth above,
subject to the satisfaction of the applicable conditions set
forth in the Credit Agreement dated as of February 26, 1993 among
the Borrower, the Banks parties thereto, and yourself, as Agent,
irrevocably obligates us to make the Competitive Bid Loan(s) for
which any offer(s) are accepted, in whole or in part.
Very truly yours,
[Name of Bank]
Dated: _______________ By
Authorized Officer
1 As specified in the related Invitation.
2 Principal amount bid for each Interest Period may not exceed
principal amount requested. Bids must be made for $500,000 or a
larger multiple thereof.
3 One (1), two (2), three (3) or six (6) months; or such number
of days not earlier than seven (7) days nor later than one (1)
year, in each case as specified in the related Invitation.
4 Margin over or under the London Interbank Offered Rate
determined for the applicable Interest Period. Specify
percentage (rounded to the nearest 1/10,000 of 1%) and specify
whether "PLUS" or "MINUS."
5 Specify rate of interest per annum (rounded to the nearest
1/100th of 1%).
EXHIBIT G
OPINION OF
COUNSEL FOR THE BORROWER
[Dated as provided in Section 3.2 of the
Credit Agreement]
To the Banks, and the Agent
Referred to Below
c/o Seattle-First National Bank,
as Agent
Columbia Seafirst Center
701 Fifth Avenue
Seattle, Washington 98104
Dear Sirs:
We have acted as counsel for Longview Fibre Company, a Washington
corporation (the "Borrower") in connection with the execution and delivery of
that certain Credit Agreement (the "Credit Agreement") dated as of February
26, 1993 amount the Borrower, the banks listed on the signature pages thereof,
and Seattle-First National Bank, as Agent. Terms defined in the Credit
Agreement are used herein as therein defined.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
officers of the Borrower or its Subsidiaries, certificates of public officials
and other instruments as we have deemed necessary or advisable for purposes
of this opinion. As to questions of fact material to the opinions set forth
below, we have relied upon all of the foregoing documents, certificates and
statements, and we have not independently verified the accuracy of factual
matters except as set forth herein.
We have assumed that the Agent and the Banks have all requisite power and
authority to enter into and perform under the Credit Agreement, and that such
document has been duly authorized, executed and delivered by and constitutes
the legal, valid and binding obligation of the Agent and the Banks.
We are qualified to practice law only in the State of Washington. The
opinions expressed herein are limited in all respects to the laws of the State
of Washington and the federal laws of the United States, and no opinion is
being rendered herein with respect to the effect, if any, which the laws of
any other jurisdiction may have on the opinions rendered herein.
1. The Borrower is a corporation duly incorporated, validly existing
and in good standing under the laws of Washington and has all corporate powers
required to carry on its business as now conducted.
2. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes are within the Borrower's corporate powers,
have been duly authorized by all necessary corporate action, and require no
action by or in respect of, or filing with, any governmental body, agency or
official.
3. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes do not contravene, or constitute a default
under (a) any provision of applicable law or regulation, (b) the certificate
of incorporation or by-laws of the Borrower, or (c) any agreement or other
instrument governing Indebtedness or any other agreement, judgment,
injunction, order, decree or other instrument binding upon the Borrower, and
identified for us by the Borrower after due inquiry as an agreement, judgment
injunction, order, decree or other instrument binding upon the Borrower, the
contravention or default under which would have a material adverse effect on
the Borrower, and to the best of our knowledge, the execution, delivery and
performance by the Borrower of the Credit Agreement and the Notes
do not result in the creation or imposition of any Lien on any material asset
of the Borrower or any of its Subsidiaries.
4. The Credit Agreement and the Notes each constitute legal, valid and
binding obligations of the Borrower, enforceable against the Borrower in
accordance with their respective terms, except with respect to Section 2.15(c)
of the Credit Agreement as to which we specifically express no opinion.
5. Except as disclosed by the Borrower to the Banks in writing, to the
best of our knowledge, there is no action, suit or proceeding pending against
or threatened against (or any basis therefore known to us) the Borrower or any
of its Subsidiaries before any court or arbitrator or any governmental body,
agency or official, which might result in an adverse decision which
could materially adversely affect the business, financial position or results
of operations of the Borrower or which in any manner draws into question the
validity or enforceability of the Credit Agreement or the Notes.
6. The payment obligations of the Borrower under the Credit Agreement
and the Notes are direct, unsecured general obligations of the Borrower,
ranking pari passu in right of payment with all other unsecured and
unsubordinated indebtedness for money borrowed or raised by the Borrower.
7. The Credit Agreement and the Notes are in proper form acceptable for
enforcement in Federal and State courts in Washington and may be so enforced
without the payment of any court, documentary, stamp or other similar tax
(other than customary filing fees and court costs applicable generally to
litigation in such courts).
8. The Borrower is not engaged principally or as one of its important
activities, in the business of extending credit for the purpose of
"purchasing" or "carrying" margin stock as defined in Regulation U of the
Board of Governors of the Federal Reserve System, as amended. The Borrower
is not an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
In giving the foregoing opinions we express no opinion as to the
enforceability of the Credit Agreement, any Note, or any other document to the
extent that the enforceability thereof may be effected by bankruptcy,
insolvency, moratorium, or other similar laws relating to or limiting
creditor's rights generally and by general principles of equity, including
without limitation concepts of materiality, reasonableness, good faith and
fair dealing and the possible unavailability of specific performance
or injunctive relief, whether applied by a court of law or equity.
Very truly yours,
EXHIBIT H
OPINION OF DAVIS WRIGHT TREMAINE, SPECIAL COUNSEL
FOR THE BANKS AND THE AGENT
[Dated as provided in Section 3.2 of the Credit Agreement]
To Each of the Parties Named
on Schedule A Hereto
Re: Credit Agreement, dated as of February 26, 1993, among
Longview Fibre Company, the banks listed on the
signature pages thereof, and Seattle-First National
Bank
Dear Sirs:
Reference is made to that certain Credit Agreement dated as of February
26, 1993 (the "Credit Agreement"), among Longview Fibre Company (the
"Borrower"), the banks listed on the signature pages thereof (the "Banks"),
and Seattle-First National Bank, as Agent (the "Agent"). Unless otherwise
defined herein, capitalized terms used herein shall have the respective
meanings set forth in the Credit Agreement.
We have acted as your special counsel in the preparation of the Credit
Agreement and the Notes. As such counsel, we have made such investigations
of law as we have deemed necessary as a basis for the opinion hereinafter set
forth. As to any matters of fact bearing upon such opinion we have relied
upon the representations and warranties the accuracy of which we have not
independently verified set forth in the Credit Agreement (except to the extent
that the representations and warranties of the Borrower by their terms cover
the matters set forth in paragraphs l and 2 below) and in certain certificates
of public officials and of officers of the Borrower. In rendering such
opinion, we have relied upon the following assumptions, the accuracy of which
we have not independently verified:
(i) each of the Banks, the Agent and the Borrower is a corporation
or banking association, as the case may be, duly organized and validly
existing in good standing under the laws of the jurisdiction of its
organization and has full power, authority and legal right to execute and
deliver, and to perform its obligations under, the Credit Agreement;
provided, however, that we have not relied on such
assumption to the extent such matters are covered in
paragraph 1 below;
(ii) each of the Banks and the Agent has duly authorized the
execution and delivery of, and the performance of its obligations under, the
Credit Agreement;
(iii) each of the Banks and the Agent has duly executed and
delivered the Credit Agreement, and the Credit Agreement constitutes the
legal, valid and binding obligation of the Banks and the Agent;
(iv) the Borrower has duly executed and delivered the Credit
Agreement and the Notes; and
(v) all documents and other materials submitted to us as originals
are authentic, and all documents and other materials submitted to us as copies
of the originals conform to the originals.
Based upon and subject to the foregoing, and subject further to the
limitations stated below it is our opinion that:
(1) the execution and delivery by the Borrower of, and the
performance of its obligations under, the Credit Agreement and the Notes are
within the Borrower's corporate powers and to our knowledge based solely upon
our examination of the resolutions of the Board of Directors of the Borrower,
have been duly authorized by all necessary corporate action on the part of the
Borrower; and
(2) the Credit Agreement and the Notes constitute legal, valid and
binding obligations of the Borrower.
Our opinion set forth above is subject to the following additional
limitations:
(i) we express no opinion as to any laws other than the laws of the
State of Washington and the federal laws of the United States; and
(ii) we express no opinion as to the legality, validity or binding
effect of any right or obligation to the extent that such right or obligation
(A) may be limited by (x) applicable bankruptcy, insolvency, reorganization,
moratorium, or other laws relating to or limiting creditor's rights generally
or (y) general principles of equity (regardless of whether considered in a
proceeding in equity or at law), or (B) purports to authorize or permit any
person to act in a manner which is not in good faith, diligent or commercially
reasonable, or purports to waive any rights of any person with respect to such
actions, or (C) purports to waive or require the waiver of, or to limit
the applicability or effect of, any statute or governmental rule or
regulation. Without limiting the generality of the foregoing clause (C), we
express no opinion as to the effect (if any) of any law of any jurisdiction
(other than the State of Washington) in which any Bank is located which may
limit the rate of interest that such Bank may charge or collect.
The opinion set forth above is given as of the date hereof and we disavow
any undertaking or obligation to advise you of any changes in law or any facts
or circumstances that may hereafter occur or come to our attention that could
affect such opinion. This opinion letter is delivered to you pursuant to
Section 3.1(c) of the Credit Agreement solely for your use in connection with
the transactions contemplated therein, and may not be used by you for any
other purpose and may not be relied upon by any other person without our prior
written consent.
Very truly yours,
SCHEDULE A
ABN AMRO BANK N.V.
One Union Square
Suite 2323
Seattle, Washington 98101
Attention: Walter Euyang
Vice President
BANK OF AMERICA NATIONAL TRUST
& SAVINGS ASSOCIATION
U.S. Division, 41st Floor
555 California
San Francisco, California 94104
Attention: Michael J. Balok
Vice President
THE BANK OF NOVA SCOTIA
Portland Branch
56 S.W. Salmon Street
Portland, OR 97204
Attention: Michael Brown
Vice President and Manager
CONTINENTAL BANK N.A.
231 South LaSalle
Chicago, Illinois 60697
Attention: Elizabeth M. Nolan
Vice President
NATIONAL WESTMINSTER BANK PLC
Los Angeles Overseas Branch
400 South Hope Street
Suite 1000
Los Angeles, CA 90071
Attention: Michael E. Keating
Vice President
NATIONSBANK OF NORTH CAROLINA, N.A.
Forest Products Group
Nationsbank Corporate Center
100 North Tryon Street, 8th Floor
Charlotte, N. Carolina 28255
Attention: Michael O. Lincoln
Vice President
SEATTLE-FIRST NATIONAL BANK
Columbia Seafirst Center
701 Fifth Avenue, 12th Floor
Seattle, Washington 98104
Attention: Robert M. Ingram, III
Vice President
EXHIBIT I
LONGVIEW FIBRE COMPANY
BOARD OF DIRECTORS RESOLUTIONS
RESOLVED, it is hereby authorized and approved that this Corporation
negotiate and enter into a Credit Agreement with Seattle-First National Bank,
for itself and as agent for a syndicate of domestic and international banks
to be mutually agreed to by the Corporation and Seattle-First National Bank
(the "Bank") to provide for the establishment of a revolving credit
facility for the purposes of general working capital or other corporate
purposes, in the aggregate principal amount of up to $170,000,000, the summary
of principal terms of which has been furnished to each of the directors of
this Corporation, is hereby authorized and approved in such form and with such
changes in the terms, conditions or other provisions thereof as the President
or the Vice President-Finance of this Corporation may approve and
that the President or any Vice President of the Corporation is hereby
authorized to execute and deliver to the Bank all necessary agreements,
instruments and documents, the execution and delivery of which shall be
conclusive evidence of proper authorization; and
FURTHER RESOLVED, that the proper officers of this Corporation are hereby
authorized to deliver to the Bank such corporate papers, certificates and
other instruments and documents as may be requested or required by or on
behalf of the Bank and to take such other action as may be deemed necessary
or proper in order to consummate the transactions contemplated by
these resolutions; and
FURTHER RESOLVED, that all actions taken by officers of this Corporation
in connection with the transactions contemplated by these resolutions are
hereby ratified, confirmed and approved in all respects.
EXHIBIT 4.4
FIRST AMENDMENT TO CREDIT AGREEMENT
This First Amendment amends that certain Credit Agreement dated as of
February 26, 1993, among Longview Fibre Company as "Borrower," Seattle-First
National Bank as "Agent," and the undersigned banks as "Banks" ("Agreement"),
and all terms defined in the Agreement shall have the same meaning when used in
this First Amendment, except as maybe otherwise provided in this First
Amendment. For mutual consideration, receipt of which is hereby acknowledged,
Borrower, Agent, and Banks agree as follows:
1. Euro-Dollar Margin. The second paragraph of Subsection 2.7(b) of the
Agreement, defining "Euro-Dollar Margin", is amended to read: "Euro-Dollar
Margin" means .625%.
2. Other Terms. Except as specifically amended by this First Amendment,
all other terms, conditions, and definitions of the Agreement and the other
Loan Documents shall remain in full force and effect, and are ratified by each
of the undersigned.
3. Counterparts. This First Amendment may be signed in any numberof
counterparts, each of which shall be an original, with the same effect as if
the signatures to each counterparts were upon the same instrument. This First
Amendment shall become effective when the Agent shall have received
counterparts of this First Amendment signed by Borrower, Agent,and all Banks.
Borrower Agent
LONGVIEW FIBRE COMPANY SEATTLE-FIRST NATIONAL BANK
By \s\ L. J. Holbrook By \s\ Robert M. Ingram III
L. J. Holbrook Robert M. Ingram III
Title Sr. V.P. Finance Title Vice President
Banks ------------------------------------------------------------
SEATTLE-FIRST NATIONAL BANK BANK OF AMERICA NATIONAL
TRUST & SAVINGS ASSOCIATION
By \s\ Robert M. Ingram III By \s\ Michael J. Balok
Robert M. Ingram III Michael J. Balok
Title Vice President Title Vice President
<PAGE> Page 35
ABN AMRO BANK N.V. NATIONAL WESTMINSTER BANK PLC
By \s\ Walter Euyang By \s\ Gary A. Miller
Walter Euyang Gary A. Miller
Title Vice President Title Senior Vice President
CONTINENTAL BANK N.A. NATIONSBANK OF NORTH CAROLINA, A.A.
By \s\ R. Guy Stapleton By \s\ Michael Tousignant
R. Guy Stapleton Michael Tousignant
Title Vice President Title Assistant Vice President
THE BANK OF NOVA SCOTIA
By \s\ Michael Brown
Michael Brown
Title Vice President
EXHIBIT 4.5
LOAN AGREEMENT
Between
LONGVIEW FIBRE COMPANY
and
FIRST INTERSTATE BANK OF WASHINGTON, N.A.
Dated as of October 25, 1993
<PAGE> Page 36
TABLE OF CONTENTS
Section 1. DEFINITIONS . . . . . . . . . . . . . . . . 1
1.1 Terms Defined . . . . . . . . . . . . . . . 1
1.2 Other Accounting Terms; Interpretations . . 5
1.2.1 Accounting . . . . . . . . . . . . . 5
1.2.2 Successors and Assigns . . . . . . . 5
1.2.3 References . . . . . . . . . . . . . 5
1.2.4 Legal References . . . . . . . . . . 6
1.2.5 Gender and Number . . . . . . . . . 6
1.2.6 Headings . . . . . . . . . . . . . . 6
1.2.7 Time . . . . . . . . . . . . . . . . 6
Section 2. THE LINE . . . . . . . . . . . . . . . . . . 6
2.1 Agreement to Lend . . . . . . . . . . . . . 6
2.2 Method of Borrowing . . . . . . . . . . . . 6
2.2.1 Amount . . . . . . . . . . . . . . . 6
2.2.2 Notice of Borrowing . . . . . . . . 6
2.3 Note . . . . . . . . . . . . . . . . . . 7
2.3.1 Interest Payments . . . . . . . . . 7
2.3.2 Optional Repayment of Principal . . 8
2.3.3 Maturity . . . . . . . . . . . . . . 8
2.4 Interest Periods . . . . . . . . . . . . . . 8
2.4.1 Election of Interest Period . . . . 8
2.4.2 Failure to Elect . . . . . . . . . . 8
2.4.3 Limitations . . . . . . . . . . . . 8
2.5 Interest Rates . . . . . . . . . . . . . . . 8
2.5.1 Floating Rate Borrowing . . . . . . 8
2.5.2 Euro-Dollar Borrowing . . . . . . . 9
2.5.3 Default Rates . . . . . . . . . . . 9
2.5.4 Determination of Interest Rates . . 10
2.5.5 Computation . . . . . . . . . . . . 10
2.6 Adjustments to Interest Rates . . . . . . . 10
2.6.1 Basis for Determining Interest Rate
Inadequate or Unfair . . . . . . . . . . . . 10
2.6.2 Illegality . . . . . . . . . . . . . 12
2.6.3 Increased Cost and Reduced Returns . 12
2.6.4 Floating Rate Borrowings Substituted for
Affected Euro-Dollar Borrowings . . 14
2.7 Fees . . . . . . . . . . . . . . . . . . 14
2.7.1 Acceptance Fee . . . . . . . . . . . 14
2.7.2 Facility Fee . . . . . . . . . . . . 14
2.7.3 Unused Portion Fee . . . . . . . . . 14
2.8 Termination or Reduction of Commitments . . 15
2.9 General Provisions as to Payments . . . . . 15
2.9.1 Payment and Distribution . . . . . . 15
2.9.2 Adjusted Payment Date . . . . . . . 15
2.10 Funding Losses . . . . . . . . . . . . . . . 15
Section 3. CONDITIONS PRECEDENT . . . . . . . . . . . . 15
3.1 Conditions Precedent to Borrowing. . . . . . 15
3.1.1 Agreement and Note . . . . . . . . . 15
3.1.2 Opinion of Counsel . . . . . . . . . 15
3.1.3 Certificate of Incumbency; Resolution 16
3.1.4 Acceptance Fee . . . . . . . . . . . 17
3.1.5 Other Evidence . . . . . . . . . . . 17
3.2 Conditions Precedent to Each Borrowing . . . 17
3.2.1 Notice of Borrowing . . . . . . . . 17
3.2.2 Representations and Warranties . . . 17
3.2.3 No Default . . . . . . . . . . . . . 17
Section 4. REPRESENTATIONS AND WARRANTIES 17
4.1 Organization and Good Standing . . . . . . . 17
4.2 Validity of Agreement . . . . . . . . . . . 17
4.3 Validity of Note . . . . . . . . . . . . . . 17
4.4 Existing Defaults . . . . . . . . . . . . . 18
4.5 No Default in Other Agreement . . . . . . . 18
4.6 No Consents or Approvals . . . . . . . . . . 18
4.7 Litigation . . . . . . . . . . . . . . . . . 18
4.8 Compliance with ERISA . . . . . . . . . . . 18
4.9 Taxes . . . . . . . . . . . . . . . . . . . 18
4.10 Not an Investment Company . . . . . . . . . 18
4.11 Full Disclosure; No Material Change . . . . 18
Section 5. NEGATIVE COVENANTS . . . . . . . . . . . . . 19
5.1 Other Activities . . . . . . . . . . . . . . 19
5.2 Sale of Assets . . . . . . . . . . . . . . . 19
5.3 Liquidation, Merger, Dissolution . . . . . . 19
5.4 Extension of Credit . . . . . . . . . . . . 19
5.5 Liens and Encumbrances . . . . . . . . . . . 19
5.6 Regulation U . . . . . . . . . . . . . . . . 20
5.7 Change of Control. . . . . . . . . . . . . . 20
Section 6. AFFIRMATIVE COVENANTS . . . . . . . . . . . 20
6.1 Current Ratio . . . . . . . . . . . . . . . 20
6.2 Long Term Debt and Current Liabilities to
Tangible Net Worth Ratio . . . . . . . . . . 20
6.3 Earnings Before Interest and Taxes Ratio . . 20
6.4 Financial Information . . . . . . . . . . . 20
6.5 Accounting . . . . . . . . . . . . . . . . . 22
6.6 Insurance . . . . . . . . . . . . . . . . . 22
6.7 Maintenance of Property . . . . . . . . . . 22
6.8 Taxes; Legal Compliance . . . . . . . . . . 22
6.9 Legal Existence . . . . . . . . . . . . . . 22
6.10 Inspection . . . . . . . . . . . . . . . . . 22
6.11 Lawsuits . . . . . . . . . . . . . . . . . . 22
6.12 Principal Executive Office . . . . . . . . . 23
6.13 Costs and Attorneys' Fees . . . . . . . . . 23
6.14 Other Documents . . . . . . . . . . . . . . 23
Section 7. EXTENSION . . . . . . . . . . . . . . . . . 23
7.1 Request to Extend . . . . . . . . . . . . . 23
7.2 Notification of Extension . . . . . . . . . 23
7.3 No Obligation . . . . . . . . . . . . . . . 23
Section 8. EVENTS OF DEFAULT; REMEDIES . . . . . . . . 23
8.1 Nonpayment . . . . . . . . . . . . . . . . . 23
8.2 Covenants; Agreements . . . . . . . . . . . 23
8.3 Representations and Warranties . . . . . . . 24
8.4 Other Default . . . . . . . . . . . . . . . 24
8.5 Bankruptcy; Insolvency . . . . . . . . . . . 24
8.5.1 Voluntary Action . . . . . . . . . . 24
8.5.2 Involuntary Action . . . . . . . . . 24
8.6 ERISA . . . . . . . . . . . . . . . . . . . 24
8.7 Judgments . . . . . . . . . . . . . . . . . 24
Section 9. MISCELLANEOUS . . . . . . . . . . . . . . . 25
9.1 Notices . . . . . . . . . . . . . . . . . . 25
9.2 No Waivers . . . . . . . . . . . . . . . . . 25
9.3 Expenses; Documentary Taxes . . . . . . . . 25
9.4 Amendments and Waivers . . . . . . . . . . . 26
9.5 Successors and Assigns . . . . . . . . . . . 26
9.5.1 Binding Effect . . . . . . . . . . . 26
9.5.2 Participations and Assignment . . . 26
9.6 Washington Law; Jurisdiction . . . . . . . . 26
9.7 Counterparts . . . . . . . . . . . . . . . . 26
9.8 Oral Agreements . . . . . . . . . . . . . . 27
Exhibit Title Paragraph
A Promissory Note 1.1, 2.3
LOAN AGREEMENT
THIS AGREEMENT is entered into as of this 25 th day of
October, 1993 by and between LONGVIEW FIBRE COMPANY and FIRST
INTERSTATE BANK OF WASHINGTON, N.A.
The parties hereto agree as follows:
Section 1. DEFINITIONS.
1.1 Terms Defined. As used herein, the following terms
have the meanings set forth below.
- "Adjusted Fixed CD Reference Rate" has the
meaning set forth in paragraph 2.6.1(i) below.
- "Adjusted LIBOR Rate" has the meaning set forth
in paragraph 2.5.2 below.
- "Agreement" or "Loan Agreement" means this Loan
Agreement as amended from time to time.
- "Assessment Rate" has the meaning set forth in
paragraph 2.6.1(i) below.
- "Bank" means First Interstate Bank of
Washington, N.A. and its successors and assigns.
- "Base Rate" means, for any day, a rate per
annum equal to the higher of (i) the Prime Rate for such day or
(ii) the Federal Funds Rate for such day plus one-quarter of one
percent (0.25%).
- "Borrower" means Longview Fibre Company, a
Washington corporation, and its successors.
- "Borrowing" means a borrowing under this
Agreement consisting of funds advanced at the same time, with the
same interest rate and for the same Interest Period. A Borrowing
may include an Initial Borrowing under which additional funds are
advanced by Bank or a Subsequent Borrowing.
- "Business Day" means any day except a Saturday,
Sunday or day on which commercial banks in the State of
Washington are authorized by law to close, and with reference to
a Euro-Dollar Borrowing, on which commercial banks in London,
England, are authorized by law to close.
- "CD Rate Borrowing" means a Borrowing to be
made by Bank bearing interest based on the Adjusted CD Reference
Rate pursuant to the terms of paragraph 2.6.1(i) below.
- "Code" means the Internal Revenue Code of 1986,
as amended.
- "Controlled Group" means all members of a
controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which,
together with Borrower, are treated as a single employer under
Section 414(b) or 414(c) of the Code.
- "Default" means any condition or event which
constitutes an Event of Default or which with the giving of
notice or lapse of time or both would, unless cured or waived,
become an Event of Default.
- "Dollars" means United States Dollars unless
otherwise specified.
- "Effective Date" means the first date upon
which counterparts hereof shall have been signed by all parties
hereto and delivered to the Bank.
- "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
- "Euro-Dollar Borrowing" means a Borrowing to
be made by Bank bearing interest based on the Adjusted LIBOR Rate
pursuant to the terms of this Agreement.
- "Euro-Dollar Reserve Percentage" has the
meaning set forth in paragraph 2.5.2 below.
- "Event of Default" has the meaning set forth in
Section 8.
- "Federal Funds Rate" means the Fed Funds
Offered Rate appearing on Telerate at any time between 6:30 a.m.
and 7:30 a.m..
- "Fixed CD Base Reference Rate" has the meaning
set forth in paragraph 2.6.1(i) below.
- "Fixed Rate Borrowing" means a Euro-Dollar
Borrowing or a CD Rate Borrowing, as the case may be.
- "Floating Rate Borrowing" means a Borrowing to
be made bearing interest based on the Base Rate pursuant to the
terms of this Agreement.
- "Initial Borrowing" means a Borrowing under
which additional funds are advanced by Bank hereunder.
- "Interest Period" means,
(A) with respect to each Euro-Dollar Borrowing, the period
commencing on the date of such Borrowing and ending one (1), two
(2) three (3) or six (6) months thereafter, as Borrower may elect
in the applicable Notice of Borrowing; provided that the first
day of any such Interest Period shall be (i) for an Initial
Borrowing, the date new funds are advanced; (ii) for a Subsequent
Borrowing, the last day of the next preceding Interest Period
applicable to such Borrowing, which day shall also be a Business
Day; and provided further that in determining the Interest Period
for each Euro-Dollar Borrowing:
(a) any Interest Period which would otherwise end on
a day which is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in another
calendar month, in which case such Interest Period shall end on
the next preceding Business Day;
(b) any Interest Period which begins on the last
Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of
a calendar month; and
(c) in no event shall Borrower elect any Interest
Period ending later than Maturity of the Note; and
(B) with respect to each Floating Rate Borrowing, the period
commencing on the date of such Borrowing and on the date of
repayment thereof; provided that the first day of any such
Interest Period shall be (i) for an Initial Borrowing, the date
new funds are advanced; (ii) for a Subsequent Borrowing, the last
day of the next preceding Interest Period applicable to such
Borrowing, which day shall also be a Business Day; and provided
further that in determining the Interest Period for each Floating
Rate Borrowing:
(a) any Interest Period which would otherwise end
on a day which is not a Business Day shall be extended to the
next succeeding Business Day; and
(b) in no event shall any Interest Period end later
than Maturity of the Note.
(C) with respect to each CD Rate Borrowing (to the extent such
Borrowings are permitted in substitution for Euro-Dollar
Borrowings), the period commencing on the date of such Borrowing
and ending thirty (30), sixty (60), ninety (90) or one hundred
eighty (180) days thereafter, as Borrower may elect in the
applicable Notice of Borrowing; provided that the first day of
any such Interest Period shall be (i) for an Initial Borrowing,
the date new funds are advanced; (ii) for a Subsequent Borrowing,
the last day of the next preceding Interest Period applicable to
such Borrowing, which day shall also be a Business Day; and
provided further that in determining the Interest Period for each
such substitute Borrowing:
(a) any Interest Period which would otherwise end
on a day which is not a Business Day shall be extended to the
next succeeding Business Day; and
(b) in no event shall Borrower elect any Interest
Period ending later than Maturity of the Note.
- "Line" means the revolving line of credit
available to Borrower pursuant to the terms and conditions of
this Agreement.
- "London Interbank Offered Reference Rate" has
the meaning set forth in paragraph 2.5.2 below.
- "Margin" means:
(a) with respect to Euro-Dollar Borrowings,
(i) if Borrower's commercial paper is rated at least A2 by
Standard & Poor's Corporation and at least P3 by Moody's
Investors' Service Inc., 37.50 basis points (0.375%); or (ii) if
Borrower's commercial paper is rated lower than as set forth in
the immediately preceding clause, 62.50 basis points (0.625%);
(b) with respect to the facility fee described
in paragraph 2.7.2 below, (i) if Borrower's commercial paper is
rated at least A2 by Standard & Poor's Corporation and at least
P3 by Moody's Investors' Service Inc., 18.75 basis points
(0.1875%); or (ii) if Borrower's commercial paper is rated lower
than as set forth in the immediately preceding clause, 25.00
basis points (0.250%);
(c) with respect to the unused portion fee
described in paragraph 2.7.3 below, (i) if Borrower's commercial
paper is rated at least A2 by Standard & Poor's Corporation and
at least P3 by Moody's Investors' Service Inc., 7.50 basis points
(0.075%); or (ii) if Borrower's commercial paper is rated lower
than as set forthin the immediately preceding clause, 10.00 basis
points (0.100%);
and
(d) with respect to CD Rate Borrowings, (i) if
Borrower's commercial paper is rated at least A2 by Standard &
Poor's Corporation and at least P3 by Moody's Investors' Service
Inc., 50 basis points (0.50%); or (ii) if Borrower's commercial
paper is rated lower than as set forth in the immediately
preceding clause, 75 basis points (0.75%).
- "Maturity of the Note" means the date on which
all principal and interest of the Note is fully due and payable,
in no event later than November 1, 1996 or such later date as may
be agreed upon pursuant to Section 7 below.
- "Note" means the master promissory note of
Borrower, substantially in the form of Exhibit A hereto,
evidencing the obligation of Borrower to repay the Borrowings as
more fully described in paragraph 2.3 below.
- "Notice of Borrowing" has the meaning set forth
in paragraph 2.2.2 below.
- "PBGC" means the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its
functions under ERISA.
- "Plan" means at any time an employee pension
benefit plan which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Code and
is either (i) maintained by Borrower or any member of a
Controlled Group for employees of Borrower or any member of such
Controlled Group or (ii) maintained pursuant to a collective
bargaining agreement or any other arrangement under which more
than one employer makes contributions and to which Borrower or
any member of such Controlled Group is then making or accruing an
obligation to make contributions or has within the preceding five
(5) plan years made contributions.
- "Prime Rate" means the rate of interest
publicly announced or published by Bank from time to time as its
Prime Rate, and is not necessarily its lowest rate.
- "Reserve Percentage" has the meaning set forth
in paragraph 2.6.1(i) below.
- "Subsequent Borrowing" means a Borrowing which
results in no net increase in the aggregate outstanding principal
amount of all Borrowings hereunder and for which Borrower elects
a new or different Interest Period or interest rate election.
- "Subsidiary" means a corporation fifty percent
(50%) or more of the outstanding voting stock of which is owned,
directly or indirectly, by Borrower or by one or more other
Subsidiaries, or by Borrower and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock
which originally has voting power for the election of directors,
whether at all times or only so long as no senior class of stock
has such voting power by reason of any contingency.
- "Telerate" means an automated rate quotation
service provided by Telerate, Inc. or its successors or some
similar rate quotation service to which Bank or one of its
affiliates subscribes.
- "Unfunded Vested Liabilities" means, with
respect to any Plan at any time, the amount (if any) by which (i)
the present value of all vested nonforfeitable benefits under
such Plan exceeds (ii) the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most
recent valuation date for such Plan, but only to the extent that
such excess represents a potential liability of Borrower or any
member of the Controlled Group to the PBGC or the Plan under
Title IV of ERISA.
1.2 Other Accounting Terms; Interpretations. In this
Agreement, except as otherwise expressly provided:
1.2.1 Accounting. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted,
all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be
prepared in accordance with generally accepted accounting
principles as in effect from time to time, applied on a basis
consistent with the most recent audited consolidated financial
statements of Borrower and its Subsidiaries delivered to Bank.
1.2.2 Successors and Assigns. Subject to
paragraph 9.5.1, references to any party shall, where relevant,
be deemed to be references to or to include, as appropriate,
their respective successors or assigns;
1.2.3 References. References to paragraphs, secti
ons and Exhibits are to be construed as references to paragraphs
and sections of, and Exhibits to, this Agreement;
1.2.4 Legal References. References to any statute,
regulation or enactment shall be deemed to include references to
such statute, regulation or enactment as re-enacted, amended or
extended;
1.2.5 Gender and Number. References to the masculine
gender shall included the feminine and neuter genders and vice
versa, and references to the singular shall include the plural
and vice versa;
1.2.6 Headings. Headings are inserted for
convenience only and shall be ignored in construing this
Agreement; and
1.2.7 Time. All references to times of the day are
references to time in Seattle, Washington.
Section 2. THE LINE.
2.1 Agreement to Lend. Subject to the terms and
conditions of this Agreement, Bank agrees to lend to Borrower and
Borrower may borrow amounts not to exceed in the aggregate at any
one time outstanding twenty million Dollars ($20,000,000) to be
used for general corporate purposes, including commercial paper
back-up. The Line shall be a revolving line of credit under
which Borrower may borrow, repay and reborrow from time to time
pursuant to the terms and conditions hereof.
The making of Borrowings to Borrower may be suspended
or terminated at any time in the discretion of Bank upon the
occurrence of a Default.
2.2 Method of Borrowing.
2.2.1 Amount. Each Fixed Rate Borrowing shall be
in a minimum principal amount of one million Dollars ($1,000,000)
or any larger multiple of one hundred thousand Dollars
($100,000); a Floating Rate Borrowing may be of any amount of
even one hundred thousand Dollar ($100,000) increments; provided
that in no event may any Borrowing be in excess of the unused
amount of the Line as set forth above.
2.2.2 Notice of Borrowing.
(i) Borrower shall give Bank (a) a written
notice signed by an authorized officer of Borrower or (b)
telephonic notice from an authorized officer of Borrower or a
representative designated by an authorized officer of Borrower
(a "Notice of Borrowing") not later than 10:00 a.m. on the date
of the Borrowing for Floating Rate Borrowings or not later than
10:00 a.m. at least two (2) Business Days before each Fixed
Rate Borrowing, specifying:
(a) the date of such Borrowing (which shall
be a Business Day) and, to the extent that the Borrowing is a
Subsequent Borrowing, shall be no sooner than the last day of
the Interest Period applicable to such previous Borrowing(s);
(b) the aggregate amount of such Borrowing;
(c) whether such Borrowing is to be a
Floating Rate Borrowing or a Fixed Rate Borrowing;
(d) in the case of a Fixed Rate Borrowing,
the duration of the Interest Period applicable thereto, subject
to the provisions of the definition of Interest Period; and
(e) that all of the conditions precedent to
such Borrowing set forth in Section 3 have been met, including
but not limited to all representations and warranties of Borrower
hereunder being true on and as of such date and no Default
having occurred and continuing.
(ii) Upon receipt of a Notice of Borrowing (written
or telephonic), Bank, such Notice of Borrowing shall not
thereafter be revocable by Borrower.
(iii) If Bank makes a Borrowing on a day on which
Borrower is to repay all or any part of an outstanding
Borrowing, Bank shall apply the proceeds to make such
repayment, and only an amount equal to the difference (if
any) between the amount being borrowed and the amount being
repaid shall be made available by Bank to Borrower, or remitted by
Borrower to Bank, as the case may be. For purposes of this
subsection (iii), "a day on which Borrower is to repay all
or any part of an outstanding Borrowing" shall include the
last day of each Interest Period.
2.3 Note. The obligation of Borrower to repay the
Borrowings made pursuant to this Agreement shall be evidenced by a master
promissory note payable to the order of Bank, in the form of
Exhibit A, properly completed.
Bank shall record in its books and records, electronic or
otherwise, and prior to any transfer of the Note shall endorse on the
appropriate schedules forming a part thereof appropriate notations to evidence
the date and amount of each Borrowing and the date and amount of each payment
of principal made by Borrower with respect thereto. Bank is hereby irrevocably
authorized by Borrower so to endorse the Note and to attach to and make a part
of it a continuation of any such schedule as and when required; provided, that
the failure of Bank to do so shall not affect the obligations
of Borrower hereunder or under the Note.
Bank's records and/or such endorsement on the Note
shall constitute prima facie evidence of the amount of indebtedness
under such Note.
2.3.1 Interest Payments. Interest accrued on the
outstanding principal balance of each Borrowing shall be payable
as follows:
(i) for Floating Rate Borrowings, on the last day
of each calendar month; or
(ii) for Fixed Rate Borrowings, on the last day of
each Interest Period, and in the event that such Interest Period
is outstanding in more than three months, on the three-month
anniversary of the making of such Borrowing;
provided that in any event, all accrued interest shall be fully
due and payable on Maturity of the Note.
2.3.2 Optional Repayment of Principal.
(i) Borrower may repay any Floating Rate Borrowing
in whole at any time by paying the principal amount to be
repaid not later than 10:00 a.m. on the date of repayment; accrued
interest on such Borrowing shall be payable on the regularly
scheduled interest payment date.
(ii) Borrower may, in the case of any Fixed Rate
Borrowing (a) repay on the last day of any Interest Period the full
principal amount of any Fixed Rate Borrowing to which such
Interest Period applies, or (b) upon at least five (5)
Business Days' written notice to Bank (such notice in each case to
be received prior to 10:00 a.m. on the day such notice is
given) repay such Borrowing as is described in the notice, in
either case by paying the principal amount to be repaid together
with accrued interest thereon to the date of repayment plus any
losses under paragraph 2.10. Upon receipt of a notice of
repayment pursuant to this subsection 2.3.2(ii), such
notice shall not thereafter be revocable by Borrower.
2.3.3 Maturity. All outstanding principal and
accrued but unpaid interest of each Fixed Rate Borrowing shall be fully
due and payable on the last day of the Interest Period for such
Borrowing (in addition to any payments required under paragraph
2.3.1 above), and in any event all outstanding principal and
accrued but unpaid interest of all Borrowings shall be fully due and
payable at Maturity of the Note.
2.4 Interest Periods.
2.4.1 Election of Interest Period. The duration of the
Interest Period for each Fixed Rate Borrowing shall be as specified in the
applicable Notice of Borrowing as set forth in paragraph 2.2.2.
2.4.2 Failure to Elect. If Bank does not receive a Notice of
Borrowing for any Subsequent Borrowing or a notice of optional repayment
pursuant to paragraph 2.3.2 above within the applicable time limits specified
therein, Borrower shall be deemed to have given a Notice of Borrowing
requesting that a Floating Rate Borrowing be made on the last day of the
current Interest Period, and shall be deemed to have made the statements,
representations and warranties contained in paragraph 2.2.2(e).
2.4.3 Limitations. Notwithstanding any ability of Borrower to
elect Interest Periods and/or repay principal, the duration of each Interest
Period shall be subject to the provisions of the definition of Interest
Period.
2.5 Interest Rates. From the date of this Agreement to and including
Maturity of the Note:
2.5.1 Floating Rate Borrowing. Each Floating Rate Borrowing
shall bear interest on the outstanding principal amount thereof, for each day
from the date such Borrowing is made until paid, at a rate per annum equal to
the Base Rate in effect for such day; the interest rate shall change
concurrently with each change in the Base Rate.
2.5.2 Euro-Dollar Borrowing. Each Euro-Dollar Borrowing shall
bear interest on the outstanding principal amount thereof, for each Interest
Period applicable thereto, at a rate per annum equal to the sum of the
applicable Margin plus the applicable Adjusted LIBOR Rate.
The "Adjusted LIBOR Rate" applicable to any Interest Period means
a rate per annum determined pursuant to the following formula:
[ LIBOR ]*
ALR = [ -------------- ]
[ 1.00 - ERP ]
ALR = Adjusted LIBOR Rate
LIBOR = London Interbank Offered
Reference Rate
ERP = Euro-Dollar Reserve
Percentage
______________________
* The amount in brackets being rounded upwards, if
necessary, to the next higher 1/16 of 1%
The "London Interbank Offered Reference Rate" applicable to any
Interest Period means the per annum rate of interest determined by Bank to be
the rate at which deposits in Dollars are offered in the London interbank
market appearing on Telerate at any time between 6:30 a.m. and 7:30 a.m. two
(2) Business Days before the first day of such Interest Period for a period of
time comparable to such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in San Francisco in respect of "Eurocurrency liabilities" (or
in respect of any other category of liabilities which includes deposits by
reference to which the interest rate on Euro-Dollar Borrowings is determined
or any category of extensions of credit or other assets which includes loans
by a non-United States office of any Bank to United States residents). The
Adjusted LIBOR Rate shall be adjusted automatically on and as of the effective
date of any change in the Euro-Dollar Reserve Percentage.
2.5.3 Default Rates.
(i) Notwithstanding the foregoing, if any principal or interest
payment on any Fixed Rate Borrowing is not made within five (5) days
after the date on which it was due (notwithstanding any grace period
permitted under Section 8), the Borrowing on which such interest payment
is delinquent and, to the extent permitted by law, any overdue interest,
shall bear interest, payable on demand, for each day until paid at a per
annum rate equal to the sum of two percent (2%) plus the interest rate
then applicable to such Borrowing until the earlier of the end of (a) the
applicable Interest Period or (b) acceleration of the Borrowing pursuant
to Section 8, at which time the principal amount of such Borrowing shall
be due and owing and shall thereafter bear interest for each day until
paid at a per annum rate equal to the sum of two percent (2%) plus the
Base Rate for such day; all such interest shall be payable on demand.
(ii) If any principal or interest payment on any Floating Rate
Borrowing is not made within five (5) days after the date on which it was
due (notwithstanding any grace period permitted under Section 8), the
principal amount, and to the extent permitted by law, any overdue
interest, shall bear interest for each day until paid at a per annum rate
equal to the sum of two percent (2%) plus the Base Rate for such day; all
such interest shall be payable on demand.
2.5.4 Determination of Interest Rates.
(i) Bank shall determine each interest rate applicable to the
Borrowings hereunder and shall give prompt notice to Borrower by
telephone or telecopy of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest
error.
(ii) In the event that the use of the procedure described in
paragraph 2.5.2 for computation of the London Interbank Offered Rate is
precluded for any reason, including but not limited to Bank's
determination that the information required to compute the effective
interest rate is not available through Telerate or similar service for
more than one (1) Business Day, Bank will use as the London Interbank
Offered Rate the rate determined by Bank to be the arithmetic average
(rounded upward, if necessary, to the next higher 1/16 of 1%) of the
rates quoted by two (2) or more New York dealers in Euro-Dollar funds of
recognized standing determined to most closely approximate the Telerate
quote specified for determination of such rate in paragraph 2.5.2 having
a maturity comparable to the applicable Interest Period and in an amount
approximately equal to the Euro-Dollar Borrowing to be made. Such
procedure changes will be communicated to the Borrower. If no such
quotation is available on a timely basis, the provisions of paragraph
2.6.1 shall apply.
2.5.5 Computation. Interest on all Borrowings shall be
computed on the basis of a year of three hundred sixty (360) days and paid for
the actual number of days elapsed, calculated as to each Interest Period or
period during which the Borrowing is outstanding from and including the first
day of such period to but excluding the last day thereof or the date of
repayment.
2.6 Adjustments to Interest Rates.
2.6.1 Basis for Determining Interest Rate Inadequate or Unfair.
(i) If with respect to any Interest Period for a Euro-Dollar
borrowing, Bank determines that the information required to
compute the effective interest rate is not available through
Telerate or some similar service because deposits in Dollars (in
the applicable amounts) are not being offered to or by (as the
case may be) a sufficient number of banks in the relevant market for such
Interest Period Bank shall forthwith give notice thereof to Borrower,
whereupon until Bank notifies Borrower that the circumstances giving rise
to such suspension no longer exist, (A) the obligations of the Bank to
make Euro-Dollar Borrowings shall be suspended, and (B) Borrower shall
repay in full the then-outstanding principal amount of each affected
Euro-Dollar Borrowing together with accrued interest thereon, on the
last day of the then-current Interest Period applicable to such
Borrowing; provided, however, that unless such rate is similarly
unavailable to Bank, Bank shall make available to Borrower during the
period of suspension of Euro-Dollar Borrowings, CD Rate Borrowings.
Concurrently with repaying each such Euro-Dollar Borrowing pursuant to
this paragraph, Borrower may borrow a CD Rate Borrowing or a Floating
Rate Borrowing in an equal principal amount from Bank, and Bank shall
make such a Borrowing, and Borrower shall be able to borrow CD Rate
Borrowings (if available) only until such time as the condition(s)
described above no longer exist.
As used in this Agreement, each CD Rate Borrowing shall bear interest on the
outstanding principal amount thereof, for each Interest Period applicable
thereto, at a rate per annum equal to the sum of the applicable Margin plus
the applicable Adjusted Fixed CD Reference Rate.
The "Adjusted Fixed CD Reference Rate" applicable to any
Interest Period means a rate per annum determined pursuant to the following
formula:
[ CDBR ]*
ACDR = [--------------] + AR
[ 1.00 - RP ]
ACDR = Adjusted Fixed CD Reference Rate
CDBR = Fixed CD Base Reference Rate
RP = Reserve Percentage
AR = Assessment Rate
_____________________
* The amount in brackets being rounded upwards, if necessary, to
the next higher 1/100 of 1%.
The "Fixed CD Base Reference Rate" applicable to any Interest
Period is the rate of interest determined by Bank to be the secondary market
bid quote for top-tier U.S. bank certificates of deposit having a maturity
comparable to such Interest Period appearing on Telerate at any time between
6:30 a.m. and 7:30 a.m. one (1) Business Day before the first day of such
Interest Period. The "early" certificate of deposit bid quote is used for
Borrowings funded on or between the first and fifteenth days of the month
and the "late" CD bid quote is used for Borrowings funded on or between
the sixteenth and last days of the month.
"Reserve Percentage" means for any day that percentage (including
any supplemental percentage applied on a marginal basis or any other reserve
requirement having a similar effect), expressed as a decimal, which is in
effect on such day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the reserve requirement
(including without limitation any basic, supplemental or emergency reserves)
for a member bank of the Federal Reserve System in respect of new non-personal
time deposits in Dollars having a maturity comparable to the related Interest
Period, and in an amount of one hundred thousand Dollars ($100,000) or more.
"Assessment Rate" means for any Interest Period the gross
annual assessment rate (rounded upwards, if necessary, to the next higher
1/100 of 1%) incurred by Bank to the Federal Deposit Insurance Corporation (or
any successor) for such Corporation's (or such successor's) insuring time
deposits at offices of Bank in the United States during the most recent period
for which such rate has been determined prior to the commencement of such
Interest Period.
(ii) If with respect to any Interest Period for a Fixed Rate
Borrowing, Bank provides reasonable proof to Borrower that the Telerate
quote for the London Interbank Offered Reference Rate or the Fixed CD
Base Reference Rate, as applicable, does not adequately and fairly
reflect the cost to such Bank of maintaining or funding such Fixed Rate
Borrowings by Bank for such Interest Period in an amount deemed by such
Bank to be material, then within fifteen (15) days after demand by
Bank to Borrower accompanied by a certificate of Bank claiming
compensation under this paragraph and setting forth the additional
amounts to be paid to it hereunder, Borrower shall pay to Bank such
additional amount or amounts as will compensate Bank for such increased
cost. Such certificate shall be conclusive in the absence of manifest
error.
2.6.2 Illegality. If, after the date of this Agreement,
the adoption of any applicable law, rule or regulation, or any change therein,
or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Bank with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall make it unlawful or
impossible for Bank to make, maintain or fund its Euro-Dollar Borrowings
and/or CD Rate Borrowings and Bank shall so notify Borrower, Borrower shall
repay in full the then-outstanding principal amount of each Fixed Rate
Borrowing so affected, together with accrued interest thereon, on either (i)
the last day of the then-current Interest Period applicable to such Fixed Rate
Borrowing if Bank may lawfully continue to maintain and fund such Fixed
Rate Borrowing to such day or (ii) immediately if Bank may not lawfully
continue to fund and maintain such Fixed Rate Borrowing to such day.
Concurrently with repaying each affected Fixed Rate Borrowing, Borrower shall
borrow a CD Rate Borrowing (if then available) or a Floating Rate Borrowing in
an equal principal amount from Bank, and Bank shall make such a Borrowing, and
Borrower shall be able to borrow CD Rate Borrowings (if available) only until
such time as the condition(s) described above no longer exist.
2.6.3 Increased Cost and Reduced Returns.
(i) If after the date hereof, the adoption of any applicable
law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by Bank with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency:
(a) shall subject Bank to any tax, duty, or other
charge with respect to its Borrowings, its Note or its obligation to
make Borrowings, or shall change the basis of taxation of payments to
Bank of the principal of or interest on Borrowings or any other amount
due under this Agreement in respect of its Borrowings or its obligation
to make Borrowings (except for changes in the rate of tax on the overall
net income of Bank imposed by the jurisdiction in which Bank's
principal executive office is located); or (b) shall impose, modify or
deem applicable any reserve, special deposit or similar requirement
(including, without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, but excluding,
with respect to any Fixed Rate Borrowing, any such requirement already
included in an applicable Euro-Dollar Reserve Percentage or Assessment
Rate, as applicable, or shall impose on Bank or on the London interbank
market any other condition affecting its Borrowings, its Note or its
obligation to make Borrowings; and the result of any of the foregoing is
to increase the cost to Bank of making or maintaining any Borrowing, or
to reduce the amount of any sum received or receivable by Bank under this
Agreement or under its Note by an amount deemed by Bank to be material,
then within fifteen (15) days after demand by Bank to Borrower, Borrower
shall pay to Bank such additional amount or amounts as will compensate
Bank for such increased cost or reduction. If Bank demands compensation
under this paragraph 2.6.3(i) with respect to Euro-Dollar Borrowings,
Borrower may at any time, upon at least five (5) Business Days' prior
notice to Bank, repay to Bank the full amount of the then-outstanding
Euro-Dollar Borrowings, together with a) accrued interest thereon to the
date of prepayment and b) the compensation requested. Concurrently with
repaying such Euro-Dollar Borrowings, Borrower shall borrow a CD Rate
Borrowing (if available) or a Floating Rate Borrowing in an amount equal
to the aggregate principal amount of such Euro-Dollar Borrowings, and
Bank shall make such a substitute Borrowing, and Borrower shall be able
to borrow CD Rate Borrowings (if available) only until such time as the
condition(s) described above no longer exist.
(ii) If after the date hereof, Bank shall have determined
that the adoption of or compliance with any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any
change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by Bank with
any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of
return on Bank's capital as a consequence of its obligations hereunder
to a level below that which Bank could have achieved but for such
adoption, change or compliance (taking into consideration Bank's policies
with respect to capital adequacy) by an amount deemed by Bank to be
material, then from time to time, within fifteen (15) days after demand
by Bank, Borrower shall pay to Bank such additional amount or amounts as
will compensate Bank for such reduction.
(iii) Bank will promptly notify Borrower of any event of
which it has knowledge, occurring after the date hereof, which will
entitle Bank to compensation pursuant to this paragraph. A certificate
of Bank claiming compensation under this paragraph and setting forth the
additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of manifest error. In determining such amount,
Bank may use any reasonable averaging and attribution methods.
2.6.4 Floating Rate Borrowings Substituted for Affected
Euro-Dollar Borrowings. If notice has been given by Bank pursuant to
paragraph 2.6.2 or by Borrower pursuant to paragraph 2.6.3 requiring
Euro-Dollar Borrowings to be repaid or by Bank under paragraph 2.6.1 that the
interest rate on Euro-Dollar Borrowings is inadequate, then, unless and until
Bank notifies Borrower that the circumstances giving rise to such repayment no
longer apply:
(i) all Borrowings which would otherwise be made as Euro-Dollar
Borrowings shall be made instead as either CD Rate Borrowings (to the
extent such Borrowings are available) or Floating Rate Borrowings, and
(ii) after Euro-Dollar Borrowings have been so repaid,
all payments and prepayments of principal which would otherwise be
applied to repay such Euro-Dollar Borrowings shall be applied to the
Borrowings made in substitution instead.
If Bank notifies Borrower that the circumstances giving rise to such
repayment or discontinuance of interest rate no longer apply, Borrower may
thereafter borrow Euro-Dollar Borrowings and may not thereafter borrow CD Rate
Borrowings. Notwithstanding anything else contained in this Agreement,
Borrower may not borrow CD Rate Borrowings so long as Euro-Dollar Borrowings
are available. Additionally, in the event that the use of the procedure
described in paragraph 2.6.1(i) for determining the Adjusted Fixed CD
Reference Rate is precluded for any reason, including but not limited to
Bank's determination that the information required to compute the effective
interest rate is not available through Telerate or similar service for more
than one (1) Business Day, CD Rate Borrowings shall be deemed not to be
available for any purpose hereunder.
2.7 Fees.
2.7.1 Acceptance Fee. On or before the Effective Date,
Borrower shall have paid to Bank an acceptance fee of fifteen thousand Dollars
($15,000).
2.7.2 Facility Fee. Borrower shall pay to Bank a facility fee at
the rate of the applicable Margin per annum on the total amount of the Line.
Such facility fee shall accrue from and including the date of this Agreement
through the Maturity of the Note, and shall be payable in arrears on the last
Business Day of each calendar quarter for the immediately preceding quarter or
portion thereof beginning December 31, 1993. Such fee shall be based on the
actual number of days elapsed divided by three hundred sixty (360).
2.7.3 Unused Portion Fee. Borrower shall pay Bank a fee
for the Line at the rate of the applicable Margin per annum on the daily
average unused portion of the Line then-available. Such unused portion fee
shall accrue from and including the date of this Agreement through the
Maturity of the Note, and shall be payable in arrears on the last Business Day
of each calendar quarter for the immediately preceding quarter or portion
thereof beginning December 31, 1993. Such fee shall be based on the actual
number of days elapsed divided by three hundred sixty (360).
2.8 Termination or Reduction of Commitments. Borrower may, upon at
least thirty (30) days' notice to Bank, terminate entirely at any time, or
proportionately and permanently reduce from time to time by an aggregate
amount of one million Dollars ($1,000,000) or any larger multiple of one
million Dollars ($1,000,000), the aggregate unused portion of the Line. If
the Line is terminated in part or in its entirety, all accrued fees on the
terminated portion shall be payable on the effective date of such termination.
2.9 General Provisions as to Payments.
2.9.1 Payment and Distribution. Borrower shall make each
payment of principal of, and interest on, the Borrowings and of all fees and
any other amounts due hereunder, not later than 10:00 a.m. on the date when
due, in federal or other Dollar funds immediately available in Seattle,
Washington at Bank's address specified on the signature page hereof or such
other address pursuant to paragraph 9.1.
2.9.2 Adjusted Payment Date. Whenever any payment of principal
of, or interest on, the Borrowings or of fees shall be due on a day which is
not a Business Day, the date for payment thereof shall be extended to the next
succeeding Business Day unless such payment is with respect to a Euro-Dollar
Borrowing and such day falls in the next calendar month, in which case the
payment shall be made on the previous Business Day. If the date for any
payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
2.10 Funding Losses. (i) If Borrower makes any payment of principal
with respect to any Fixed Rate Borrowing (pursuant to Section 8 or paragraphs
2.6.1(i), 2.6.2 or 2.6.3 or otherwise) on any day other than the last day of
an Interest Period applicable thereto or (ii) if Borrower fails to repay any
Fixed Rate Borrowing after notice has been given to Bank in accordance with
paragraph 2.3.2(ii), or (iii) if Borrower fails to borrow after notice has
been given to Bank in accordance with paragraph 2.2.2(ii), Borrower shall
reimburse Bank on demand for any resulting loss or expense incurred by Bank,
including (without limitation) any loss incurred in obtaining, liquidating or
employing deposits from third parties, including loss of margin for the period
after, but excluding loss of margin for the period before, any such payment;
provided that Bank shall have delivered to Borrower a certificate as to the
amount of such loss or expense, which certificate shall be conclusive in
the absence of manifest error.
Section 3. CONDITIONS PRECEDENT.
3.1 Conditions Precedent to Borrowing. The obligation of the
Bank to make any Borrowing is subject to satisfaction of the following
conditions before the first Borrowing:
3.1.1 Agreement and Note. Borrower shall have executed
and delivered to Bank this Loan Agreement and the Note, such Note dated on or
before the date of the first Borrowing.
3.1.2 Opinion of Counsel. Borrower shall have delivered
to Bank, on or before the date of the first Borrowing, an opinion of
Borrower's counsel stating that:
(i) Borrower is a corporation duly organized, validly existing and
in good standing under the laws of Washington, and Borrower and each of
its Subsidiaries have all corporate power required to carry on its
business as now conducted, and is duly qualified to do business and is in
good standing in each jurisdiction in which the character of the
properties owned or leased by it, or in which the transaction of its
business, makes such qualification necessary.
(ii) The execution, delivery and performance by Borrower of this
Agreement and the Note are within Borrower's corporate powers, have been
duly authorized by all necessary corporate action, require no action by
or in respect of, or filing with, any governmental body, agency or
official, and do not contravene or constitute a default under any
provision of applicable law or regulation or of the certificate of
incorporation or by-laws of Borrower or to the best of such counsel's
knowledge of any agreement, bond, debenture, note, contract, indenture,
judgment, injunction, order, decree or other instrument binding upon
Borrower, or result in the creation or imposition of any lien on any
asset of Borrower.
(iii) This Agreement and the Note each constitutes a valid and
binding agreement of Borrower, each enforceable in accordance with its
terms subject to bankruptcy and insolvency laws and enforceability of
creditor's rights generally.
(iv) There is no action, suit or proceeding pending against,
or to the best of counsel's knowledge threatened against or affecting,
Borrower or any of its Subsidiaries before any court or arbitrator or
any governmental body, agency or official in which there is a reasonable
possibility of an adverse decision which could materially adversely
affect the business, financial position or results of operations of
Borrower or which in any manner questions the validity of the Loan
Agreement or the Note.
(v) To the best of counsel's knowledge, Borrower and all
members of the Controlled Group have fulfilled their obligations under
the minimum funding standards of ERISA with respect to each Plan to
which it is a party, and have not incurred any liability to the PBGC in
connection with any Plan established or maintained by Borrower or any
member of the Controlled Group.
(vi) Borrower is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
3.1.3 Certificate of Incumbency; Resolution. Bank shall have
received:
(i) a certificate signed by the Secretary of Borrower and dated
the Effective Date as to the incumbency of the person or persons
authorized to execute and deliver this Agreement, the Note, Notices of
Borrowing, and all other documents or instruments required hereunder,
and to give telephonic Notices of Borrowing; and
(ii) certified copies of resolutions adopted by the Board of
Directors of Borrower authorizing execution, delivery and performance
of this Agreement, the Note and all other instruments or agreements
required hereunder, each of which shall affirmatively permit Bank to
rely thereon until Bank has received a certified copy of a resolution or
incumbency certificate revoking or modifying the previous certificate or
resolution.
3.1.4 Acceptance Fee. Bank shall have received from
Borrower the acceptance fee described in paragraph 2.7.1 above.
3.1.5 Other Evidence. Bank shall have received all documents
and other evidence it may reasonably request relating to the existence of
Borrower, the corporate authority for and the validity of this Agreement and
the Note, and any other matters relevant hereto, all in form and substance
satisfactory to Bank.
3.2 Conditions Precedent to Each Borrowing. The obligation of Bank to
make each Borrowing or to make any such Borrowing is subject to satisfaction
of the conditions stated in paragraph 3.1 above and the following additional
conditions:
3.2.1 Notice of Borrowing. Bank shall have received a Notice
of Borrowing as required by paragraph 2.2.2 or shall be deemed to have
received such Notice of Borrowing under paragraph 2.4.2.
3.2.2 Representations and Warranties. All representations and
warranties set forth in Section 4 below shall be true as of the date of any
Borrowing with the same effect as if those such representations and warranties
were made on and as of that date.
3.2.3 No Default. No Default hereunder shall be caused by such
Borrowing or shall have occurred and be continuing. Each Notice of Borrowing
pursuant to paragraph 2.2.2 and each Borrowing hereunder shall be deemed to be
a representation and warranty by Borrower on the date of such notice or
Borrowing, as the case may be, as to the facts specified in paragraphs 3.2.2
and 3.2.3 above.
Section 4. REPRESENTATIONS AND WARRANTIES. Borrower hereby
represents and warrants that:
4.1 Organization and Good Standing. It is a corporation duly
organized and validly existing in good standing under the laws of the State of
Washington with corporate and other power and authority to own its properties
and conduct its business as presently conducted; it and each of its
Subsidiaries is duly licensed and qualified as a foreign corporation in good
standing in all jurisdictions in which the character of the property owned or
leased or the nature of the business conducted by it requires such licensing
or qualification.
4.2 Validity of Agreement. This Agreement has been duly authorized,
executed and delivered by it and constitutes its valid and binding agreement,
enforceable in accordance with its terms.
4.3 Validity of Note. The Note has been duly and validly authorized
by all necessary corporate action, and having been executed and delivered
pursuant to the provisions of this Agreement, constitutes Borrower's valid and
binding obligation enforceable in accordance with its terms and the terms of
this Agreement.
4.4 Existing Defaults. It is not in violation of its articles
of incorporation or by-laws or in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any bond,
debenture, note, contract, indenture, mortgage, loan agreement, lease or any
other evidence of indebtedness, agreement or instrument to which it is a party
or by which it or any of its properties may be bound.
4.5 No Default in Other Agreement. The execution, delivery and
performance of this Agreement, the incurrence of the obligations herein set
forth and the consummation of the transactions herein contemplated will not
result in the creation of a lien on any of its property and will not conflict
with, result in a breach of any of the terms, conditions or provisions of, or
constitute a default under its articles of incorporation or by-laws or any
bond, debenture, note, contract, indenture, mortgage, loan agreement, lease
or any other evidence of indebtedness, agreement or instrument to which
it is a party or by which it or any of its properties may be bound, or result
in violation by it of any law, order, rule or regulation of any court or
governmental agency or body having jurisdiction over it or any of its
properties.
4.6 No Consents or Approvals. No consent, approval, authorization or
order of any court or governmental agency or body is required for the
consummation by it of the transactions contemplated by this Agreement.
4.7 Litigation. There is no material litigation at law or in
equity and no proceedings before any commission or other administrative
authority pending or to its knowledge threatened against or affecting it or
its Subsidiaries other than as disclosed pursuant to paragraph 6.11, and there
is no such matter which constitutes a Default hereunder.
4.8 Compliance With ERISA. Borrower and all members of the Controlled
Group have fulfilled their obligations under the minimum funding standards of
ERISA with respect to each Plan to which it is a party and have not incurred
any liability to the PBGC in connection with any Plan established or
maintained by Borrower or any member of the Controlled Group.
4.9 Taxes. It has filed (or has obtained extensions of the time by
which it is required to file) all United States federal income tax returns and
all other material tax returns required to be filed by it and has paid all
taxes shown due on the returns so filed as well as all other material taxes,
assessments and governmental charges which have become due, except such taxes,
if any, as are being contested in good faith and as to which adequate
reserves have been provided.
4.10 Not an Investment Company. It is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
4.11 Full Disclosure; No Material Change. All information heretofore
furnished by it to Bank for purposes of or in connection with this Agreement
or any transaction contemplated hereby is, and all such information hereafter
furnished by it to Bank will be, true and accurate in every material respect
or based on reasonable estimates on the date as of which such information is
stated or certified, including but not limited to its financial statements
dated as of July 31, 1993. It has disclosed to Bank in writing any and all
facts which materially and adversely affect or may affect (to the extent
Borrower can reasonably foresee), its business, operations, prospects or
condition, financial or otherwise, and its Subsidiaries or its ability to
perform its obligations under this Agreement. There has been no material
adverse change in Borrower's financial condition since its financial
statements dated July 31, 1993.
Section 5. NEGATIVE COVENANTS. Borrower hereby covenants and agrees
that so long as any amount under the Line shall remain available to
borrow and until full and final payment of all indebtedness incurred
hereunder, it will not without the prior written consent of Bank:
5.1 Other Activities. Change the general character of its
business as conducted at the date hereof or engage, directly or through a
Subsidiary, in any type of business not reasonably related to its business as
normally conducted.
5.2 Sale of Assets. Sell, lease or otherwise dispose of (or
allow any Subsidiary to do any of the foregoing) such property as in the
opinion of Bank constitutes a material portion of its assets except in the
ordinary course of business and for full, fair and reasonable consideration;
as used in this paragraph, an exchange of property of Borrower and/or its
Subsidiaries for property of a like-kind and like value shall not be counted
as a sale or other disposition under this provision so long as the exchange is
for full, fair and reasonable consideration and such consideration is received
within a reasonable time. For purposes of this paragraph, assets constituting
either (i) ten percent (10%) or more of the book value of Borrower's and its
Subsidiaries' assets, measured on a consolidated basis, in any fiscal year,
non-cumulative from year to year, or (ii) fifty percent (50%) or more of the
book value of all of Borrower's and its Subsidiaries' inventory of standing
timber in the aggregate from and after the date of this Agreement shall be
presumptively deemed "material" although a lesser amount may constitute "a
material portion" in the proper circumstances.
5.3 Liquidation, Merger, Dissolution. (i) Liquidate or dissolve or
enter into any consolidation, merger, pool, joint venture, syndicate or other
combination unless Borrower is the surviving corporation and no Default would
be caused thereby, or (ii) sell, lease or dispose of its business or assets as
a whole.
5.4 Extension of Credit. Purchase or otherwise acquire, hold or
invest in the securities of or make any loans or advances to any other person
or entity except in the ordinary course of Borrower's business and which do
not involve more than normal risk of repayment or present other unfavorable
features.
5.5 Liens and Encumbrances. Create or suffer to exist any security
interest, lien or other encumbrance on any of its or its Subsidiaries'
property or assets of any kind or nature except those that exist at the date
of this Agreement, exist on such property at the date of its purchase by
Borrower or its Subsidiary or are valid purchase money security interests in
such property; provided that liens are allowed for taxes, assessments,
governmental charges, materialman's liens or mechanic's liens not yet due or
which are being contested in good faith by appropriate proceedings.
5.6 Regulation U. Use any proceeds of the Borrowings, directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
purchasing or carrying any "margin stock", within the meaning of Regulation U
of the Board of Governors of the Federal Reserve System. Neither Borrower nor
any Subsidiary will engage principally, or as one of its important activities,
in the business of extending credit for the purpose of purchasing or carrying
any such margin stock within the meaning of such Regulation U.
5.7 Change of Control. Permit or suffer to exist a change in voting
control of Borrower. For purposes of this paragraph, a "change in voting
control" shall mean creation of a concentration of voting shares of Borrower
after the date of this Agreement in a person that directly or indirectly, or
acting through or in concert with one or more persons, owns, controls or has
the power to vote more than twenty percent (20%) of any class of voting
securities of Borrower. Shares owned or controlled by a member of an
individual's immediate family are considered to be held by the individual;
shares owned or controlled by a member of a group of companies owned or
controlled by the same company or person are considered to be held by that
company or person. For purposes of this paragraph, "immediate family" means
the spouse of an individual, the individual's minor children and any of the
individual's children (including adults) residing in the individual's home.
Section 6. AFFIRMATIVE COVENANTS. In addition to other terms and conditions
under this Agreement and the Note, Borrower agrees with Bank that so long as
any unpaid balance of any Borrowing or any commitment of Bank to lend under
this Agreement shall be outstanding, Borrower will:
6.1 Current Ratio. Maintain for itself and its Subsidiaries on a
consolidated basis as at the end of each fiscal quarter a ratio of current
assets divided by current liabilities of not less than 1.1 to 1.
6.2 Long Term Debt and Current Liabilities to Tangible Net Worth
Ratio. Maintain for itself and its Subsidiaries on a consolidated basis as at
the end of each fiscal quarter a ratio of (i) long term debt plus current
liabilities to (ii) tangible net worth of not more than 1.5 to 1.
6.3 Earnings Before Interest and Taxes Ratio. Maintain for itself and
its Subsidiaries on a consolidated basis at the end of each fiscal quarter a
ratio of earnings before interest and taxes to interest expense, in each case
based on the results of the four fiscal quarters then-ended, of not less than
1.5 to 1.
6.4 Financial Information. Deliver to Bank:
(i) as soon as practicable but in no event later than
forty-five (45) days after the close of each of the first three
(3) quarters of each fiscal year a consolidated financial statement for
Borrower and any Subsidiaries (including at least a consolidated balance
sheet as of the close of such quarter, and consolidated statement of
income and cash flow statement for each such quarter and for that part of
the fiscal year ending with the last day of each such quarter), each
prepared by Borrower's chief accounting or chief financial officer
in accordance with generally accepted accounting principles consistently
applied;
(ii) as soon as practicable but in no event later than ninety
(90) days after the close of each fiscal year, a consolidated financial
statement for Borrower and any Subsidiaries (including at least a
consolidated balance sheet as of the close of each such fiscal year and a
consolidated statement of income, shareholders' equity and cash flow
statement for each such fiscal year as at the end thereof, each setting
forth the same data for the immediately preceding fiscal year) prepared
and audited by an independent certified public accountant acceptable to
Bank in accordance with generally accepted accounting principles
consistently applied;
(iii) simultaneously with the delivery of each set of financial
statements referred to in clauses (i) and (ii) above, a certificate of
the president, chief financial officer or the chief accounting officer of
Borrower (a) setting forth in reasonable detail the calculations required
to establish whether Borrower was in compliance with the requirements of
paragraphs 6.1 through 6.3 inclusive, on the date of such financial
statements and (b) stating whether there exists on the date of such
certificate any Default and, if any Default then exists, setting forth
the details thereof and the action which Borrower is taking or proposes
to take with respect thereto;
(iv) simultaneously with the delivery of each set of financial
statements referred to in clause (ii) above, a statement of the firm of
independent public accountants which reported on such statements stating
whether anything has come to their attention to cause them to believe
that there existed on the date of such statements any Default;
(v) not later than the date of delivery of each set of financial
statements referred to in clause (ii) above, Borrower's annual
projections for the following fiscal year, in form no less detailed than
provided to Borrower's other lenders;
(vi) forthwith upon the occurrence of any Default, a certificate
of the chief financial officer or the chief accounting officer of
Borrower setting forth the details thereof and the action which Borrower
is taking or proposes to take with respect thereto;
(vii) promptly upon the mailing thereof to the shareholders of
Borrower, copies of all financial statements, reports and proxy
statements so mailed;
(viii) promptly upon the filing thereof, copies of all
registration statements and annual, quarterly or monthly financial
eports which Borrower shall have filed with the Securities and Exchange
Commission;
(ix) if and when Borrower or any member of the Controlled
Group gives or is required to give notice to the PBGC of any "reportable
event" (as defined in Section 4043 of ERISA) with respect to any Plan
which might constitute grounds for a termination of such Plan under Title
IV of ERISA, or knows that the plan administrator of any Plan has given
or is required to give notice of any such reportable event, a copy of the
notice of such reportable event given or required to be given to the
PBGC; and
(x) from time to time such additional information regarding the
operation, financial position or business of Borrower and/or any of its
Subsidiaries as Bank may reasonably request.
6.5 Accounting. Keep, and cause each Subsidiary to keep, its
books of account in accordance with generally accepted accounting principles
consistently applied.
6.6 Insurance. Maintain, and cause each Subsidiary to maintain,
insurance with financially sound and reputable insurance companies or
associations (or provide adequate self-insurance) of the kinds covering the
risks and in such amounts usually carried by companies engaged in businesses
similar to that of Borrower, and further agrees to provide to Bank evidence of
said insurance as Bank may, from time to time, request.
6.7 Maintenance of Property. Maintain, preserve and keep its
buildings, machinery, equipment and other property in good condition, repair
and working order for the proper and efficient operation of its business, take
all such actions as are necessary and reasonable to prevent offsets or
defenses to assets which represent a right to payment, and cause each
Subsidiary to similarly maintain and preserve its assets.
6.8 Taxes; Legal Compliance. Pay all taxes, assessments or
governmental charges levied, assessed or imposed against it or its
income or its properties, real, personal or mixed, or arising out of
its operations promptly as they become due and payable; comply promptly with
all laws and regulations of the federal government and of any state of the
United States or of any foreign jurisdiction in which it transacts business or
owns property, or any of their subdivisions, departments or agencies
applicable to the business; and cause each Subsidiary to similarly pay and
comply. Borrower will (and will cause each Subsidiary to) promptly pay and
discharge all claims of any kind (including claims for labor, material and
supplies) which, if unpaid, might by law become a lien or charge upon its
property; provided, however, that neither Borrower nor any Subsidiary shall be
required to pay any such tax, assessment, charge, levy or claim as long as the
amount, applicability or validity thereof shall be contested in good faith by
appropriate proceeding.
6.9 Legal Existence. Maintain, and cause each Subsidiary to
maintain, its legal existence and its right to carry on business in
any jurisdiction where it is doing business and remain in and continuously
operate the same lines of business presently engaged in except for periodic
shut-down in the ordinary course of business and interruptions caused by
strike, labor dispute, catastrophe or any other events over which it has no
control.
6.10 Inspection. Permit Bank at any reasonable time, and from
time to time, to visit and inspect its and its Subsidiaries' properties and
offices and to examine such books of account and to conduct such investigation
as Bank may deem appropriate.
6.11 Lawsuits. Promptly notify Bank of any lawsuit, claim,
proceeding or action of any kind, including any such action threatened but not
yet instituted, against Borrower or its Subsidiaries which, if successful,
would have a material adverse effect on the business, financial condition or
results of operations of Borrower and its Subsidiaries, taken as a whole, or
the ability of Borrower to perform its obligations under this Agreement or
the Note.
6.12 Principal Executive Office. Promptly notify Bank of any
move or contemplated move of its principal executive office from the State of
Washington.
6.13 Costs and Attorneys' Fees. Promptly upon demand by Bank pay to
and reimburse Bank for the account of each Bank for all costs and expenses,
which Bank may expend or incur in the enforcement of any of the terms or
provisions of this Agreement, the Note, any security agreements or any other
documents pertaining to or arising from the Borrowings or any of them. In the
event any obligation of Borrower is referred to an attorney for protecting or
defending Bank's interest hereunder or for collection or realization
procedures, Borrower agrees to pay to Bank on demand all attorney's fees,
including allocated costs or fees of in-house counsel, fees, incurred in both
trial and appellate courts, or fees incurred without suit, and expenses of
title search and all court costs and costs of public officials. The sums
agreed to be paid in this paragraph shall be deducted from any remittance or
collection prior to application to principal or interest of the Borrowings as
applicable.
6.14 Other Documents. Execute and deliver to Bank all documents and
instruments deemed necessary by Bank to carry out this Agreement.
Section 7 EXTENSION.
7.1 Request to Extend. Not earlier than January 1 and not later than
March 31, 1995, and if the Line is extended pursuant to this Section 7, not
later than January 1 nor later than March 31 of each calendar year prior to
Maturity of the Note, Borrower may request that Bank extend the Line and the
Maturity of the Note for an additional one year period.
7.2 Notification of Extension. If Bank agrees to Borrower's
request for extension, it shall notify Borrower accordingly not less than
ninety (90) days after receipt of Borrower's request in accordance with
paragraph 7.1 above and the Line and the Maturity of the Note shall be
extended accordingly.
7.3 No Obligation. Bank shall not be obligated in any way to
agree to any extension of the Line.
Section 8. EVENTS OF DEFAULT; REMEDIES. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
8.1 Nonpayment. Borrower shall fail to pay when due or within
thirty (30) days thereof any principal or interest on the Note, any fees or
any other amount payable hereunder;
8.2 Covenants; Agreements. Borrower shall fail to observe or
perform any covenant or agreement contained in this Agreement; provided,
however that failure to comply with paragraphs 6.1 through 6.3 inclusive shall
constitute an Event of Default hereunder only in the event Borrower shall have
failed to cure such breach within thirty (30) days from the date compliance
was required under the terms of the relevant paragraph;
8.3 Representations and Warranties. Any representation, warranty,
certification or statement made by Borrower in this Agreement or in any
certificate, financial statement or other document delivered pursuant to this
Agreement shall prove to have been incorrect in any material respect when made
(or deemed made);
8.4 Other Default. The occurrence of an event of default or an event
which with the lapse of time or notice or both would (i) (a) become an event
of default under or in respect of any agreement or agreements by which
Borrower or any Subsidiary is bound relating to obligations exceeding five
million Dollars ($5,000,000) in the aggregate or (b) cause a breach of any
indenture of any kind to which Borrower or any Subsidiary is a party; and
(ii) causes or permits acceleration of any obligation of Borrower or any
Subsidiary under or in respect of any such agreement(s);;
8.5 Bankruptcy; Insolvency.
8.5.1 Voluntary Action. Borrower or any Subsidiary shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official for it or any substantial part of its property, or shall
consent to any such relief or to the appointment of or taking possession by
any such official in an involuntary case or other proceeding commenced
against it, or shall make a general assignment for the benefit of creditors,
or shall fail generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing;
8.5.2 Involuntary Action. An involuntary case or other
proceeding shall be commenced against Borrower or any Subsidiary seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official for it or any substantial part of its
property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of sixty (60) days; or an order for
relief shall be entered against Borrower or any Subsidiary of Borrower
under the federal bankruptcy laws as now or hereafter in effect;
8.6 ERISA. Borrower or any member of the Controlled Group
shall fail to pay when due an amount or amounts which it shall have become
liable to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of
intent to terminate a Plan or Plans having Unfunded Vested Liabilities shall
be filed under Title IV of ERISA by Borrower, any member of the Controlled
Group, any plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate or to
cause a trustee to be appointed to administer any such plan or Plans or a
proceeding shall be instituted by a fiduciary of any such plan or Plans
against Borrower or any member of the Controlled Group to enforce Section 515
of ERISA; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any such Plan or Plans must be
terminated; or
8.7 Judgments. A judgment or order for the payment of money
individually or in the aggregate in excess of ten million Dollars
($10,000,000) shall be rendered against Borrower or any Subsidiary, and such
judgment(s) or order(s) shall continue unsatisfied or unstayed for a period of
twenty (20) days;
then, and in every such event, Bank may (i) by notice to Borrower
terminate the Line and it shall thereupon terminate, and/or (ii) by notice to
Borrower declare the Note (together with accrued interest thereon) to be, and
it shall thereupon become, immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
Borrower; provided that in the case of any of the Events of Default specified
in paragraphs 8.5.1 or 8.5.2 above, without any notice to Borrower or any
other act by Bank, the Line shall thereupon terminate and the Note (together
with accrued interest thereon) shall become immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by Borrower.
Section 9. MISCELLANEOUS.
9.1 Notices. Except as expressly set forth herein, all notices,
requests and other communications to any party hereunder shall be in writing
(including bank wire, telex, telecopy or similar writing) and shall be given
to such party at its applicable address or telecopy number set forth on the
signature pages hereof or such other address or telecopy number as such party
may hereafter specify for the purpose by notice to the other party. Each such
notice, request or other communication shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified
in this paragraph and verification of receipt received, (ii) if given by mail,
seventy-two (72) hours after such communication is deposited in the mails with
first-class postage prepaid, addressed as aforesaid or (iii) if given by any
other means, when delivered at the address specified in this Section; provided
that notices to Bank under paragraphs 2.2.2, 2.3.2, 2.6
or 2.8 shall not be effective until received.
9.2 No Waivers. No failure or delay by Bank in exercising any
right, power or privilege hereunder or under the Note shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law.
9.3 Expenses; Documentary Taxes. Borrower shall pay on demand
(i) all out-of-pocket expenses and other reasonable charges of Bank,
including fees and disbursements or allocated costs of counsel for Bank,
whether in-house or otherwise, in connection with any extension or amendment
of this Agreement, any waiver or consent hereunder or any amendment hereof or
any Default or alleged Default by Borrower hereunder; and (ii) if an Event of
Default occurs, all out-of-pocket expenses incurred by Bank, including fees and
disbursements or allocated costs of counsel, whether in-house or otherwise, in
connection with such Event of Default and collection and other enforcement
proceedings resulting therefrom. Borrower shall indemnify Bank against any
transfer taxes, documentary taxes, assessments or charges made by any
governmental authority by reason of the execution and delivery of this
Agreement or the Note.
9.4 Amendments and Waivers. Any provision of this Agreement or the
Note may be amended or waived if, but only if, such amendment or waiver is in
writing and is signed by the party waiving compliance or against whom the
amendment is to be charged.
9.5 Successors and Assigns.
9.5.1 Binding Effect. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that Borrower may not assign or
otherwise transfer any of its rights or obligations under this Agreement.
9.5.2 Participations and Assignment. Bank may at any
time sell, assign, transfer, negotiate, grant participation in or otherwise
dispose of to any other financial institution (which term does not include an
insurance company) all or part of the indebtedness and obligations of Borrower
under this Agreement or any instrument, note, draft or document referred to
herein as allowed by law; provided, however, that such disposition will not be
in such form as to require registration under the Federal Securities Act
of 1933 as amended or the applicable corporate securities law of any state;
provided further, that Bank may so dispose of any part of such indebtedness or
obligations to any other member of the First Interstate system without
Borrower's prior consent, but shall request Borrower's consent prior to any
such disposition to any other financial institution, which consent shall not
be unreasonably withheld. (Notwithstanding the foregoing, Bank's interest in
such indebtedness may pass by operation of law or as part of any sale of
Bank's assets generally without the prior consent of Borrower.) Borrower here
acknowledges and agrees that any such disposition other than a participation
will give rise to a direct obligation of Borrower, as applicable, to the
transferee and the transferee will for all purposes hereof be considered to
be, and have the same rights and remedies as, Bank; provided, however, that
all such transferees or participants shall deal with Borrower or either of
them through Bank as agent for such transferees or participants, and Borrower
shall be entitled to deal solely with Bank, as agent, and not directly with
such transferees or participants, and Borrower shall have no obligation to
honor any request made by any person or entity other than Bank. Appointment of
Bank as agent shall be a condition precedent to the exercise of the rights of
such transferees or participants hereunder. Bank shall provide notice of such
transfer or assignment to Borrower but failure to provide such notice shall
not invalidate or otherwise impair the effectiveness of such assignment or
transfer. As part of and following any such sale, assignment or
participation, Bank shall be authorized to disclose to such purchaser,
assignee or participant all relevant information in Bank's possession
concerning Borrower.
9.6 Washington Law; Jurisdiction. This Agreement and the Note
shall be construed in accordance with and governed by the law of the State of
Washington; and each party hereto irrevocably agrees that the proper
jurisdiction and venue for any cause of action hereunder or relating hereto
shall be Seattle, King County, Washington.
9.7 Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
9.8 Oral Agreements
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
LONGVIEW FIBRE COMPANY
By \s\ L. J. Holbrook
L. J. Holbrook
Its Senior V. P. Finance
Secratary and Treasurer
Longview Fibre Company
P.O. Box 639
Longview, WA 98632
Attention: Chief Financial Officer
Telecopy No.: (206) 425-3116
FIRST INTERSTATE BANK OF
WASHINGTON, N.A.
By \s\ Adrienne Stone
Adrienne Stone
Its Vice President
First Interstate Bank of
Washington, N.A.
999 Third Avenue
Seattle, WA 98104
Attention: Adrienne Stone
MS 984
Telecopy No.: (206) 292-3120
jer-p057.doc
Exhibit A
PROMISSORY NOTE
Longview, Washington
October ___, 1993
On Maturity of the Note (as defined in the Loan Agreement referred to below),
for value received, Longview Fibre Company, a Washington corporation (the
"Borrower"), promises to pay to the order of First Interstate Bank of
Washington N.A. (the "Bank") the aggregate unpaid principal amount of all
Borrowings made by the Bank to the Borrower pursuant to the Loan Agreement
referred to below. The Borrower promises to pay interest on the aggregate
unpaid principal amount of such Borrowings on the dates and at the rate or
rates provided for in the Loan Agreement. All such payments of principal and
interest shall be made in lawful money of the United States in Federal or
other immediately available funds at the office of First Interstate Bank of
Washington, N.A., 999 Third Avenue, Seattle, Washington.
All Borrowings made by the Bank and all repayments of the principal thereof
shall be recorded by the Bank and, prior to any transfer hereof, endorsed by
the Bank on its books and records, and/or endorsed by the holder hereof on one
or more of the grids attached to this note, such books and records or grid(s)
being incorporated as a part hereof.
The makers, endorsers, sureties and guarantors hereof hereby agree to be
jointly and severally bound, and jointly and severally waive presentment,
demand, protest and notice of dishonor and agree to remain bound for payment
of this obligation notwithstanding any and all renewals and extensions of time
of payment hereof, hereby waiving notice of such renewals, extensions or other
indulgences.
This note is made with reference to and is to be construed in accordance with
the laws of the State of Washington. Jurisdiction over and venue of any action
to enforce, interpret, construe or otherwise in connection herewith shall be
had in the United States District Court or Superior Court of King County,
Washington.
This note is one of the Notes referred to in the Loan Agreement dated as of
October ___, 1993 between the Borrower and the Bank (as the same has been and
may be amended from time to time, the "Loan Agreement"). Terms defined in the
Loan Agreement are used herein with the same meanings. Reference is made to
the Loan Agreement for provisions for the repayment hereof and the
acceleration of the maturity hereof.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR
TO FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.
LONGVIEW FIBRE COMPANY
By_____________________________
Its__________________________
