UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended April 30, 1998 Commission file number 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.)
P. O. Box 639, Longview, Washington 98632
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (360) 425-1550
---------------------------------
Not Applicable
- -------------------------------------------------------------------------------
Former name, former address and former fiscal year,if changed since last report
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
----- -----
51,676,567 Common Shares were outstanding as of April 30, 1998
Page 1<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED BALANCE SHEET
- -------------------------- (000 Omitted)
Apr. 30 Oct. 31 Apr. 30
1998 1997 1997
(Unaudited) (Unaudited)
A S S E T S ----------- ----------- -----------
CURRENT ASSETS:
Accounts and notes receivable $85,802 $105,850 $84,118
Allowance for doubtful accounts 1,100 1,100 1,100
Inventories, at lower of cost or market; costs
are based on last-in, first-out method except
for supplies at current averages
Finished goods 25,445 24,832 18,408
Goods in process 19,220 13,868 14,969
Raw materials and supplies 48,192 45,802 52,530
Other 8,317 8,432 10,929
----------- ----------- -----------
Total current assets 185,876 197,684 179,854
----------- ----------- -----------
CAPITAL ASSETS:
Buildings, machinery and equipment at cost 1,611,987 1,572,089 1,519,949
Accumulated depreciation 813,392 774,852 747,837
----------- ----------- -----------
Costs to be depreciated in future years 798,595 797,237 772,112
Plant sites at cost 3,041 3,041 2,932
----------- ----------- -----------
801,636 800,278 775,044
Timber at cost less depletion 197,014 187,141 178,466
Roads at cost less amortization 8,601 8,866 8,593
Timberland at cost 18,486 17,076 16,248
----------- ----------- -----------
224,101 213,083 203,307
----------- ----------- -----------
Total capital assets 1,025,737 1,013,361 978,351
----------- ----------- -----------
OTHER ASSETS 57,028 49,858 45,641
----------- ----------- -----------
$1,268,641 $1,260,903 $1,203,846
=========== =========== ===========
L I A B I L I T I E S A N D S H A R E H O L D E R S ' E Q U I T Y
CURRENT LIABILITIES:
Payable to bank resulting from
checks in transit $11,072 $9,834 $8,768
Accounts payable 39,695 53,647 38,162
Short-term borrowings 59,000 56,000 57,000
Payrolls payable 14,376 13,206 14,338
Other taxes payable 10,201 10,498 11,306
Current installments of long-term debt 14,118 14,118 14,119
----------- ----------- -----------
Total current liabilities 148,462 157,303 143,693
----------- ----------- -----------
LONG-TERM DEBT 547,137 498,137 451,255
----------- ----------- -----------
DEFERRED TAXES - NET 136,528 141,623 136,822
----------- ----------- -----------
OTHER LIABILITIES 15,207 14,334 13,734
----------- ----------- -----------
SHAREHOLDERS' EQUITY:
Common stock, ascribed value $1.50 per share;
authorized 150,000,000 shares; issued
51,676,567; 51,676,567 and 51,694,912
shares respectively 77,515 77,515 77,542
Additional paid-in capital 3,306 3,306 3,306
Retained earnings 340,486 368,685 377,494
----------- ----------- -----------
Total shareholders' equity 421,307 449,506 458,342
----------- ----------- -----------
$1,268,641 $1,260,903 $1,203,846
=========== =========== ===========
The accompanying note is an integral part of these financial statements.
Page 2<PAGE>
CONSOLIDATED STATEMENT OF INCOME Unaudited)
- -------------------------------------------
(000 Omitted)
Three Months Ended Six Months Ended
April 30 April 30
--------------------- -----------------------
1998 1997 1998 1997
--------- ----------- ----------- -----------
Net sales:
Timber $43,650 $49,313 $79,045 $97,474
Paper and paperboard 45,609 46,668 92,433 83,783
Converted products 96,679 89,879 190,677 186,814
--------- ----------- ----------- -----------
185,938 185,860 362,155 368,071
--------- ----------- ----------- -----------
Cost of products sold, including
outward freight 167,565 156,185 329,748 315,879
--------- ----------- ----------- -----------
Gross profit 18,373 29,675 32,407 52,192
--------- ----------- ----------- -----------
Selling, administrative
and general expenses 16,325 15,530 32,313 30,976
--------- ----------- ----------- -----------
Operating profit (loss):
Timber 21,199 28,743 37,309 57,433
Paper and paperboard (6,119) (912) (11,842) (5,018)
Converted products (13,032) (13,686) (25,373) (31,199)
--------- ----------- ----------- -----------
2,048 14,145 94 21,216
--------- ----------- ----------- -----------
Other income (expense):
Interest income 185 128 337 274
Interest expensed (9,571) (7,247) (19,014) (14,689)
Miscellaneous 278 202 641 471
--------- ----------- ----------- -----------
(7,060) 7,228 (17,942) 7,272
Provision for taxes on income:
Current (467) 894 (1,185) 902
Deferred (2,004) 1,708 (5,095) 1,716
--------- ----------- ----------- -----------
(2,471) 2,602 (6,280) 2,618
--------- ----------- ----------- -----------
Net income (loss) ($4,589) $4,626 ($11,662) $4,654
========= =========== =========== ===========
Dollars per share:
Net income (loss) ($0.09) $0.09 ($0.23) $0.09
Dividends $0.16 $0.16 $0.32 $0.32
Average shares outstanding in the
hands of the public (000 omitted) 51,677 51,698 51,677 51,699
The accompanying note is an integral part of these financial statements.
Page 3<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
- ------------------------------------------------
(000 Omitted)
Three Months Ended Six Months Ended
April 30 April 30
--------------------- -----------------------
1998 1997 1998 1997
--------- ----------- ----------- -----------
Cash provided by (used for) operations:
Net income (loss) ($4,589) $4,626 ($11,662) $4,654
Charges to income not
requiring cash -
Depreciation 21,739 19,860 42,915 39,516
Depletion and amortization 1,507 930 2,737 2,244
Deferred taxes - net (2,004) 1,708 (5,095) 1,716
Loss on disposition of
capital assets 236 452 675 1,242
Change in:
Accounts and notes receivable (2,199) 3,644 20,048 15,029
Inventories 1,797 (485) (8,355) 7,811
Other 1,048 2,347 115 994
Other noncurrent assets (2,939) (836) (7,170) (3,186)
Accounts, payrolls and other
taxes payable 754 (682) (4,060) 1,632
Other noncurrent liabilities 437 470 873 941
--------- ----------- ----------- -----------
Cash provided by operations 15,787 32,034 31,021 72,593
--------- ----------- ----------- -----------
Cash provided by (used for) investing:
Additions to: Plant and equipment (24,908) (33,192) (47,108) (67,552)
Timber and timberlands (1,333) (1,826) (13,791) (2,847)
Proceeds from sale of
of capital assets 2,129 99 2,196 183
--------- ----------- ----------- -----------
Cash used for investing (24,112) (34,919) (58,703) (70,216)
--------- ----------- ----------- -----------
Cash provided by (used for) financing:
Long-term debt 18,000 10,000 49,000 5,000
Short-term borrowings -- 3,000 3,000 19,000
Payable to bank resulting from
checks in transit (147) 124 1,238 (4,263)
Accounts payable for construction (1,259) (1,922) (9,019) (5,390)
Cash dividends (8,269) (8,272) (16,537) (16,544)
Purchase of common stock -- (45) -- (180)
--------- ----------- ----------- -----------
Cash provided by (used for)
financing 8,325 2,885 27,682 (2,377)
--------- ----------- ----------- -----------
Change in cash position -- -- -- --
Cash position, beginning of period -- -- -- --
--------- ----------- ----------- -----------
Cash position, end of period $ -- $ -- $ -- $ --
========= =========== =========== ===========
Supplemental disclosures of
cash flow information:
Cash paid (received) during the year for:
Interest (net of amount
capitalized) $10,868 $6,392 $18,801 $15,115
Income taxes (1,292) 68 (1,949) (159)
The accompanying note is an integral part of these financial statements.
Page 4<PAGE>
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Unaudited)
- ----------------------------------------------------------
(000 Omitted)
Three Months Ended Six Months Ended
April 30 April 30
--------------------- -----------------------
1998 1997 1998 1997
--------- ----------- ----------- -----------
Common stock:
Balance at beginning of period $77,515 $77,547 $77,515 $77,558
Ascribed value of stock
purchased -- (5) -- (16)
--------- ----------- ----------- -----------
Balance at end of period $77,515 $77,542 $77,515 $77,542
========= =========== =========== ===========
Additional paid-in capital:
Balance at beginning of period $3,306 $3,306 $3,306 $3,306
--------- ----------- ----------- -----------
Balance at end of period $3,306 $3,306 $3,306 $3,306
========= =========== =========== ===========
Retained earnings:
Balance at beginning of period $353,344 $381,180 $368,685 $389,548
Net income (loss) (4,589) 4,626 (11,662) 4,654
Cash dividends on common stock (8,269) (8,272) (16,537) (16,544)
Purchases of common stock -- (40) -- (164)
--------- ----------- ----------- -----------
Balance at end of period $340,486 $377,494 $340,486 $377,494
========= =========== =========== ===========
Dividends paid per share $0.16 $0.16 $0.16 $0.32
========= =========== =========== ===========
Common shares:
Balance at beginning of period 51,677 51,698 51,677 51,706
Purchases -- (3) -- (11)
--------- ----------- ----------- -----------
Balance at end of period 51,677 51,695 51,677 51,695
========= =========== =========== ===========
The accompanying note is an integral part of these financial statements.
Page 5<PAGE>
NOTE 1: The consolidated interim financial statements have been prepared by
the company, without audit and subject to year-end adjustment, in accordance
with generally accepted accounting principles, except that certain
information and footnote disclosure made in the latest annual report have
been condensed or omitted for the interim statements. Accordingly, these
statements should be read in conjunction with the company's latest annual
report. Certain costs of a normal recurring nature are estimated for the
full year and allocated in interim periods based on estimates of operating
time expired, benefit received, or activity associated with the interim
period. The consolidated financial statements reflect all adjustments which
are, in the opinion of management, necessary for fair presentation.
Page 6<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Consolidated Statement of Income
--------------------------------
Three and Six Months Ended April 30, 1998 compared with
-------------------------------------------------------
Three and Six Months Ended April 30, 1997
-----------------------------------------
A net loss of $4.6 million was incurred in the second fiscal quarter of 1998
as compared with net income of $4.6 million in the second fiscal quarter of
1997. For the year-to-date periods, a net loss of $11.7 million was incurred
in 1998 versus net income of $4.7 million in 1997. The losses resulted from
a decrease in timber operating profits and continued operating losses in the
manufacturing segments of the business.
Timber
- ------
Second quarter 1998 and year-to-date 1998 operating profits deteriorated by
26% and 35%, respectively, as compared with like periods in 1997 due
primarily to lower log and lumber prices. Second quarter 1998 average log
and lumber prices decreased 19% and 25%, respectively, and year-to-date 1998
average log and lumber prices decreased 20% and 32%, respectively. Log
volume sold in the second quarter 1998 and year-to-date 1998 increased 7% and
1%, respectively, as compared with like periods in 1997.
The log export market deteriorated during the latter half of 1997 due to the
log supply in the market exceeding end user demand in Japan and the
strengthening of the US. dollar. Export log demand improved substantially
during the year-to-date period and is currently at adequate levels while
export log prices remain below peak levels. Demand in the domestic market is
at satisfactory levels but current prices have declined slightly.
Paper and Paperboard
- --------------------
Operating losses for paper and paperboard increased to $6.1 million from $0.9
million in the second quarter 1998 compared with the second quarter 1997.
The primary reasons for the increase in the operating loss were a 36%
increase in wood chip costs and an 8% decrease in average paper prices.
Average paperboard prices improved 18%. The volume of paper sold increased
17% while paperboard volume declined 34%. Second quarter costs were also
adversely affected by a seven-day mill shutdown, which was taken to improve
the balance between incoming orders and machine production, and by machine
rebuilds. The mill operated at 74% of capacity. Operating losses for
year-to-date 1998 were $11.8 million as compared with $5.0 million for the
year ago period. The increase in the operating loss was primarily caused by
higher wood chip costs and lower average paper prices.
The domestic market for paper and paperboard appears to have bottomed out.
Domestic demand continues to grow and additions to industry capacity are
expected to be modest, which may produce a more favorable pricing
environment. Export linerboard markets, particularly in Asia, have been slow.
Page 7<PAGE>
Converted Products
- ------------------
Operating results, compared with year ago levels, have been adversely
affected by the increased cost of containerboard used to manufacture boxes.
Increased costs were in part mitigated by average price increases of 5% and
2% for the second quarter 1998 and year-to-date 1998 as compared with like
periods in 1997. Volume sold during the second quarter 1998 increased 2% and
held steady for the year-to-date periods.
Demand was at satisfactory levels during the second quarter 1998, and average
prices for the second quarter have improved 10% from their recent low in the
fourth quarter 1997. The company continues to develop its specialty and
niche products which approximates 25% of sales.
Other
- -----
Interest expensed increased 32% for the second quarter 1998 and 29% for
year-to-date 1998 as compared with like periods in 1997 due primarily to a
higher level of borrowing and proportionately less interest capitalized for
uncompleted capital projects.
Income Taxes
- ------------
Taxes are approximately 35% and 36% of pretax income (loss) for fiscal 1998
and 1997, respectively.
Three Months Six Months
Ended April 30 Ended April 30
% %
Other Data 1998 1997 Change 1998 1997 Change
- ---------- ---------------------- ---------------------
Sales
Logs, thousands of board feet 60,000 56,000 + 7 107,000 106,000 + 1
Lumber, thousands of board feet 20,000 16,000 + 25 37,000 30,000 + 23
Paper, tons 54,000 46,000 + 17 103,000 87,000 + 18
Paperboard, tons 31,000 47,000 - 34 74,000 75,000 - 1
Converted products, tons 128,000 125,000 + 2 255,000 255,000 --
Logs, $/thousand board feet $ 610 $ 749 - 19 $ 621 $ 779 - 20
Lumber, $/thousand board feet 343 457 - 25 339 502 - 32
Paper, $/ton FOB mill equivalent 593 648 - 8 599 642 - 7
Paperboard, $/ton FOB mill equiv. 373 317 + 18 356 328 + 9
Converted products, $/ton 757 720 + 5 749 733 + 2
Liquidity and Capital Resources
-------------------------------
At April 30, 1998, the company had bank lines of credit totaling $380
million. Of this amount $260 million was under a credit agreement with a
group of banks expiring February 28, 2001. The agreement provides for
borrowings at the Offshore Rate (LIBOR based) plus a spread, currently 0.60%,
or the bank's Reference Rate. The credit agreement contains certain
financial covenants and provides for a facility fee, currently 0.275% per
year. At the end of the second fiscal quarter 1998, the company had
outstanding $210 million of notes payable under this agreement. At April 30,
1998, the company had an outstanding balance of $90 million under the
remaining $120 million lines of credit leaving $80 million of banks lines
available for future borrowing needs. Also outstanding at April 30, 1998,
were senior notes of $291 million and revenue bonds of $28.9 million.
Page 8<PAGE>
During the fiscal quarter ended April 30, 1998, the company completed private
placements of $13 million of notes due March 31, 2006, $24 million of notes
due March 31, 2008 and $15 million of notes due March 31, 2010; the
aforementioned $260 million credit agreement and a three year term loan in
the amount of $25 million with the same terms as the $260 million credit
agreement. The company intends to use the proceeds for general corporate
purposes and to repay short term borrowings.
Capital expenditures for plant and equipment and timberland purchases
exceeded available funds generated by operations and were funded by increased
borrowings. With reduced cash flow, capital expenditures are being reduced.
While much remains to be done to optimize our manufacturing capabilities, the
most urgent projects have been completed or will be completed in the near
future. Capital expenditures for plant and equipment are expected to be
approximately $75 million for fiscal 1998 of which $47 million was incurred
in the first six months of fiscal 1998. The current backlog of approved
projects is $34 million. During the quarter, the company did not purchase any
of its common stock. Cash dividends of $0.16 per share were declared and
paid in the second quarter in the aggregate of $8,269,000.
Forward Looking Statements
--------------------------
This Form 10-Q contains forward-looking statements concerning anticipated
pricing and market conditions for the company's products, the expected
results of planned paper mill improvement projects and anticipated cost of
and availability of financing for planned capital improvement projects.
Forward-looking statements are based on the company's estimates and
projections on the date when they are made, and are subject to a variety of
risks and uncertainties. Actual events could differ materially from those
anticipated by the company due to a variety of factors, including, among
others, developments in the world, national or regional economy or involving
the company's customers or competitors affecting supply of or demand for the
company's products or raw materials, changes in product or raw material
prices, changes in currency exchange rates between the US. dollar and the
currencies of important export markets, capital project delays or cost
overruns, weather, labor disputes, unforeseen adverse developments involving
environmental matters or other legal proceedings or the assertion of
additional claims, significant unforeseen developments in the company's
business, adverse changes in the capital markets or interest rates affecting
the cost or availability of financing or other unforeseen events.
Page 9<PAGE>
PART II - OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS.
Nothing to report.
ITEM 2 CHANGES IN SECURITIES.
Nothing to report.
ITEM 3 DEFAULTS UPON SENIOR SECURITIES.
Nothing to report.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Nothing to report.
ITEM 5 OTHER INFORMATION.
Nothing to report.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits required to be filed by Item 601 of Regulation S-K:
4.1 Credit Agreement Dated as of February 27, 1998
4.2 (a) Note Purchase Agreement dated March 31, 1998 and Notes
with respect to:
(i) $13 million in Notes due March 31, 2006
(ii) $24 million in Notes due March 31, 2008
(iii) $15 Million in Notes due March 31, 2010
(b) $25 million Term Loan Agreement Dated as of March 17,
1998
Agreements relating to the above-referenced indebtedness
(amounting in each case to less than 10% of the assets of
the Company) will be furnished to the Commission upon
request.
27 Financial Data Schedule.
(b) Reports of Form 8-K - Nothing to report.
Page 10<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LONGVIEW FIBRE COMPANY
---------------------------------------------
(Registrant)
Date 6-9-98 \s\ L. J. Holbrook
----------------------- ---------------------------------------------
L. J. Holbrook, Senior Vice President-Finance
Secretary and Treasurer
Date 6-9-98 \s\ A. G. Higgens
----------------------- ---------------------------------------------
A. G. Higgens, Assistant Treasurer
Page 11<PAGE>
CREDIT AGREEMENT
Dated as of February 27, 1998
among
LONGVIEW FIBRE COMPANY,
as Borrower
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Agent,
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
ABN AMRO BANK N.V.
THE BANK OF NOVA SCOTIA
FIRST UNION NATIONAL BANK
UNION BANK OF CALIFORNIA, N.A.
U.S. BANK NATIONAL ASSOCIATION
WELLS FARGO BANK, N.A.,
as Banks.
TABLE OF CONTENTS
Section Page
ARTICLE I DEFINITIONS 1
1.01 Certain Defined Terms 1
1.02 Other Interpretive Provisions 16
1.03 Accounting Principles 17
ARTICLE II THE CREDITS 17
2.01 Amounts and Terms of Commitments 17
2.02 Loan Accounts 18
2.03 Procedure for Borrowing 18
2.04 Conversion and Continuation Elections 19
2.05 Voluntary Termination or Reduction of Commitments 20
2.06 Optional Prepayments 21
2.07 Repayment 21
2.08 Interest 21
2.09 Fees 22
(a) Agency Fees 22
(b) Facility Fees 22
2.10 Computation of Fees and Interest 22
2.11 Payments by the Company 23
2.12 Payments by the Banks to the Agent 23
2.13 Sharing of Payments, Etc. 24
2.14 Extension of Revolving Termination Date 25
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY 25
3.01 Taxes 25
3.02 Illegality 27
3.03 Increased Costs and Reduction of Return 28
3.04 Funding Losses 28
3.05 Inability to Determine Rates 29
3.06 Reserves on Offshore Rate Loans 29
3.07 Certificates of Banks 30
3.08 Substitution of Banks 30
3.09 Survival 30
ARTICLE IV CONDITIONS PRECEDENT 30
4.01 Conditions of Initial Loans 30
(a) Credit Agreement and Notes 30
(b) Resolutions; Incumbency 31
(c) Organization Documents; Good Standing 31
(d) Legal Opinion 31
(e) Payment of Fees 31
(f) Certificate 31
(g) Prior Credit Agreement 32
(h) Other Documents 32
4.02 Conditions to All Borrowings 32
(a) Notice of Borrowing or Conversion/Continuation 32
(b) Continuation of Representations and Warranties 32
(c) No Existing Default 32
ARTICLE V REPRESENTATIONS AND WARRANTIES 33
5.01 Corporate Existence and Power 33
5.02 Corporate Authorization; No Contravention 33
5.03 Governmental Authorization 33
5.04 Binding Effect 34
5.05 Litigation 34
5.06 No Default 34
5.07 ERISA Compliance 34
5.08 Use of Proceeds; Margin Regulations 35
5.09 Title to Properties 35
5.10 Taxes 35
5.11 Financial Condition 36
5.12 Environmental Matters 36
5.13 Regulated Entities 36
5.14 No Burdensome Restrictions 36
5.15 Copyrights, Patents, Trademarks and Licenses, etc. 37
5.16 Subsidiaries 37
5.17 Insurance 37
5.18 Swap Obligations 37
5.19 Full Disclosure 37
5.20 Year 2000 Compliance 38
ARTICLE VI AFFIRMATIVE COVENANTS 38
6.01 Financial Statements 38
6.02 Certificates; Other Information 39
6.03 Notices 39
6.04 Preservation of Corporate Existence, Etc. 41
6.05 Maintenance of Property 41
6.06 Insurance 41
6.07 Payment of Obligations 41
6.08 Compliance with Laws 42
6.09 Compliance with ERISA 42
6.10 Inspection of Property and Books and Records 42
6.11 Environmental Laws 42
6.12 Use of Proceeds 43
6.13 Tangible Net Worth 43
6.14 Maximum Capitaliz 43
6.15 Interest Coverage Ratio 43
ARTICLE VII NEGATIVE COVENANTS 43
7.01 Limitation on Liens 44
7.02 Disposition of Assets 46
7.03 Consolidations and Mergers 47
7.04 Loans and Investments 47
7.05 Transactions with Affiliates 48
7.06 Use of Proceeds 49
7.07 Joint Ventures 49
7.08 Lease Obligations 49
7.09 ERISA 50
7.10 Change in Business 50
7.11 Accounting Changes 50
ARTICLE VIII EVENTS OF DEFAULT 50
8.01 Event of Default 50
(a) Non-Payment 50
(b) Representation or Warranty 50
(c) Specific Defaults 50
(d) Other Defaults 50
(e) Cross-Default 51
(f) Insolvency; Voluntary Proceedings 51
(g) Involuntary Proceedings 51
(h) ERISA 52
(i) Monetary Judgments 52
(j) Non-Monetary Judgments 52
(k) Change of Control 52
(l) Year 2000 Concerns 52
8.02 Remedies 53
8.03 Rights Not Exclusive 53
8.04 Certain Financial Covenant Defaults 53
ARTICLE IX THE AGENT 54
9.01 Appointment and Authorization; "Agent" 54
9.02 Delegation of Duties 54
9.03 Liability of Agent 54
9.04 Reliance by Agent 55
9.05 Notice of Default 55
9.06 Credit Decision 56
9.07 Indemnification of Agent 56
9.08 Agent in Individual Capacity 57
9.09 Successor Agent 57
9.10 Withholding Tax 57
ARTICLE X MISCELLANEOUS 59
10.01 Amendments and Waivers 59
10.02 Notices 60
10.03 No Waiver; Cumulative Remedies 61
10.04 Costs and Expenses 61
10.05 Company Indemnification 61
10.06 Payments Set Aside 62
10.07 Successors and Assigns 62
10.08 Assignments, Participations, etc. 62
10.09 Confidentiality 64
10.10 Set-off 65
10.11 Automatic Debits of Fees 65
10.12 Notification of Addresses, Lending Offices, Etc. 66
10.13 Counterparts 66
10.14 Severability 66
10.15 No Third Parties Benefited 66
10.16 Governing Law and Jurisdiction 66
10.17 Waiver of Jury Trial 67
10.18 Entire Agreement 67
SCHEDULES
Schedule 2.01 Commitments
Schedule 2.08 Applicable Margin and Facility Fee
Schedule 5.05 Litigation
Schedule 5.07 ERISA
Schedule 5.11 Permitted Liabilities
Schedule 5.12 Environmental Matters
Schedule 5.16 Subsidiaries and Minority Interests
Schedule 5.17 Insurance Matters
Schedule 7.01 Permitted Liens
Schedule 7.05 Permitted Indebtedness
Schedule 7.08 Contingent Obligations
Schedule 10.02 Lending Offices; Addresses for Notices
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D Form of Legal Opinion of Company's Counsel
Exhibit E Form of Assignment and Acceptance
Exhibit F Form of Promissory Note
CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of February 27,
1998, among LONGVIEW FIBRE COMPANY, a Washington corporation (the
"Company"), Bank of America National Trust and Savings
Association, ABN AMRO Bank N.V., The Bank of Nova Scotia, First
Union National Bank, Union Bank of California, N.A., U.S. Bank
National Association, and Wells Fargo Bank, N.A. (together with
any permitted successors and assigns, collectively the "Banks";
individually, a "Bank"), and Bank of America National Trust and
Savings Association ("BofA"), as agent for the Banks.
WHEREAS, the Banks have agreed to make available to the
Company a revolving credit facility upon the terms and conditions
set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained herein, the parties agree as
follows:
ARTICLE I
DEFINITIONS
1.01 Certain Defined Terms. The following terms have the
following meanings:
"Acquisition" means any transaction or series of
related transactions for the purpose of or resulting,
directly or indirectly, in (a) the acquisition of all or
substantially all of the assets of a Person, or of any
business or division of a Person, (b) the acquisition of in
excess of 50% of the capital stock, partnership interests,
membership interests or equity of any Person, or otherwise
causing any Person to become a Subsidiary, or (c) a merger
or consolidation or any other combination with another
Person (other than a Person that is a Subsidiary) provided
that the Company or the Subsidiary is the surviving entity.
"Affiliate" means, as to any Person, any other Person
which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person.
A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and
policies of the other Person, whether through the ownership
of voting securities, membership interests, by contract, or
otherwise.
"Agent" means BofA in its capacity as agent for the
Banks hereunder, and any successor agent arising under
Section 9.09.
"Agent-Related Persons" means BofA and any successor
agent arising under Section 9.09, together with their
respective Affiliates, and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Agent's Payment Office" means the address for payments
set forth on Schedule 10.02 or such other address as the
Agent may from time to time specify.
"Agreement" means this Credit Agreement.
"Applicable Margin" means the incremental per annum
rates applicable to Offshore Rate Loans, as determined in
accordance with Schedule 2.08.
"Assignee" has the meaning specified in subsection
10.08(a).
"Attorney Costs" means and includes all fees and
disbursements of any law firm or other external counsel, the
allocated cost of internal legal services and all
disbursements of internal counsel.
"Bank" has the meaning specified in the introductory
clause hereto.
"Bankruptcy Code" means the Federal Bankruptcy Reform
Act of 1978 (11 U.S.C. #101, et seq.).
"Base Rate" means, for any day, the higher of:
(a) 0.50% per annum above the latest Federal Funds Rate; and
(b) the rate of interest in effect for such day as publicly
announced from time to time by BofA in San Francisco,
California, as its "reference rate." (The "reference rate"
is a rate set by BofA based upon various factors including
BofA's costs and desired return, general economic conditions
and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below
such announced rate.)
Any change in the reference rate announced by BofA
shall take effect at the opening of business on the day
specified in the public announcement of such change.
"Base Rate Loan" means a Loan that bears interest at
the Base Rate.
"BofA" means Bank of America National Trust and Savings
Association, a national banking association.
"Borrowing" means a borrowing hereunder consisting of
Loans of the same Type made to the Company on the same day
by the Banks under Article II and, other than in the case of
Base Rate Loans, having the same Interest Period.
"Borrowing Date" means any date on which a Borrowing
occurs under Section 2.03.
"Business Day" means any day other than a Saturday,
Sunday or other day on which commercial banks in Seattle,
Washington are authorized or required by law to close and,
if the applicable Business Day relates to any Offshore Rate
Loan means such a day on which commercial banks are open for
international business (including dealings in dollar
deposits) in London.
"Capital Adequacy Regulation" means any guideline,
request or directive of any central bank or other
Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each
case, regarding capital adequacy of any bank or of any
corporation controlling a bank.
"Capitalization Ratio" means, as of the end of each of
the Company's fiscal quarters, the ratio of (i) Funded Debt
to (ii) the sum of Funded Debt and the Company's shareholder
equity calculated in accordance with GAAP.
"Change of Control" means that any of the following
shall have occurred: (i) any Person or Group becomes
beneficial owner of 50% or more of the equity interests of
the Company, on a fully diluted basis; or (ii) any Person or
Group acquires the voting power necessary to elect a
majority of the board of directors of the Company; or (iii)
individuals who, as of the date hereof, constitute the Board
of Directors of Company (the "Incumbent Board") shall cease
to constitute at least a majority of such Board, provided
that any individual becoming a director subsequent to the
date hereof whose election or nomination for election by
Company's stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a
member of the Incumbent Board. As used herein, "Group"
shall have the meaning ascribed to such term in
Section 13(d)(3) of the Exchange Act as in effect on the
date hereof.
"Closing Date" means the date on which all conditions
precedent set forth in Section 4.01 are satisfied or waived
by all Banks (or, in the case of subsection 4.01(e), waived
by the Person entitled to receive such payment).
"Code" means the Internal Revenue Code of 1986, and
regulations promulgated thereunder.
"Commitment", as to each Bank, has the meaning
specified in Section 2.01.
"Compliance Certificate" means a certificate
substantially in the form of Exhibit C.
"Contingent Obligation" means, as to any Person, any
direct or indirect liability of that Person, whether or not
contingent, with or without recourse, (a) with respect to
any Indebtedness, lease, dividend, letter of credit or other
obligation (the "primary obligations") of another Person
(the "primary obligor"), including any obligation of that
Person (i) to purchase, repurchase or otherwise acquire such
primary obligations or any security therefor, (ii) to
advance or provide funds for the payment or discharge of any
such primary obligation, or to maintain working capital or
equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet
item, level of income or financial condition of the primary
obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor to
make payment of such primary obligation, or (iv) otherwise
to assure or hold harmless the holder of any such primary
obligation against loss in respect thereof (each, a
"Guaranty Obligation"); (b) with respect to any Surety
Instrument issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of
drawings or payments; (c) to purchase any materials,
supplies or other property from, or to obtain the services
of, another Person if the relevant contract or other related
document or obligation requires that payment for such
materials, supplies or other property, or for such services,
shall be made regardless of whether delivery of such
materials, supplies or other property is ever made or
tendered, or such services are ever performed or tendered,
or (d) in respect of any Swap Contract. The amount of any
Contingent Obligation shall, in the case of Guaranty
Obligations, be deemed equal to the stated or determinable
amount of the primary obligation in respect of which such
Guaranty Obligation is made or, if not stated or if
indeterminable, the maximum reasonably anticipated liability
in respect thereof, and in the case of other Contingent
Obligations other than in respect of Swap Contracts, shall
be equal to the maximum reasonably anticipated liability in
respect thereof and, in the case of Contingent Obligations
in respect of Swap Contracts, shall be equal to the Swap
Termination Value.
"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any
agreement, undertaking, contract, indenture, mortgage, deed
of trust or other instrument, document or agreement to which
such Person is a party or by which it or any of its property
is bound.
"Conversion/Continuation Date" means any date on which,
under Section 2.04, the Company (a) converts Loans of one
Type to another Type, or (b) continues as Loans of the same
Type, but with a new Interest Period, Loans having Interest
Periods expiring on such date.
"Default" means any event or circumstance which, with
the giving of notice, the lapse of time, or both, would (if
not cured or otherwise remedied during such time) constitute
an Event of Default.
"Dollars", "dollars" and "$" each mean lawful money of
the United States.
"Eligible Assignee" means (a) a commercial bank
organized under the laws of the United States, or any state
thereof, and having a combined capital and surplus of at
least $500,000,000; (b) a commercial bank organized under
the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the
"OECD"), or a political subdivision of any such country, and
having a combined capital and surplus of at least
$500,000,000, provided that such bank is acting through a
branch or agency located in the United States; and (c) a
Person that is primarily engaged in the business of
commercial banking and that is (i) a Subsidiary of a Bank,
(ii) a Subsidiary of a Person of which a Bank is a
Subsidiary, or (iii) a Person of which a Bank is a
Subsidiary.
"Environmental Claims" means all claims, however
asserted, by any Governmental Authority or other Person
alleging potential liability or responsibility for violation
of any Environmental Law, or for release or injury to the
environment.
"Environmental Laws" means all federal, state or local
laws, statutes, common law duties, rules, regulations,
ordinances and codes, together with all administrative
orders, directed duties, requests, licenses, authorizations
and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health,
safety and land use matters.
"ERISA" means the Employee Retirement Income Security
Act of 1974, and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether
or not incorporated) under common control with the Company
within the meaning of Section 414(b) or (c) of the Code (and
Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect
to a Pension Plan; (b) a withdrawal by the Company or any
ERISA Affiliate from a Pension Plan subject to Section 4063
of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations which is treated as such a
withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Company or any ERISA Affiliate
from a Multiemployer Plan or notification that a
Multiemployer Plan is in reorganization; (d) the filing of a
notice of intent to terminate, the treatment of a Plan
amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) an event
or condition which might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to
administer, any Pension Plan or Multiemployer Plan; or
(f) the imposition of any liability under Title IV of ERISA,
other than PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon the Company or any ERISA
Affiliate.
"Eurodollar Reserve Percentage" has the meaning
specified in the definition of "Offshore Rate".
"Event of Default" means any of the events or
circumstances specified in Section 8.01.
"Exchange Act" means the Securities Exchange Act of
1934, and regulations promulgated thereunder.
"Facility Fee" has the meaning set forth in Section
2.09(b).
"FDIC" means the Federal Deposit Insurance Corporation,
and any Governmental Authority succeeding to any of its
principal functions.
"Federal Funds Rate" means, for any day, the rate set
forth in the weekly statistical release designated as
H.15(519), or any successor publication, published by the
Federal Reserve Bank of New York (including any such
successor, "H.15(519)") on the preceding Business Day
opposite the caption "Federal Funds (Effective)"; or, if for
any relevant day such rate is not so published on any such
preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for
the last transaction in overnight Federal funds arranged
prior to 9:00 a.m. (New York City time) on that day by each
of three leading brokers of Federal funds transactions in
New York City selected by the Agent.
"Fee Letter" has the meaning specified in subsection
2.09(a).
"FRB" means the Board of Governors of the Federal
Reserve System, and any Governmental Authority succeeding to
any of its principal functions.
"Funded Debt" means all interest-bearing Indebtedness
of the Company and its subsidiaries and all interest-bearing
Indebtedness guaranteed (in whole or in part) by the Company
or any Subsidiary. As used in this definition "interest-
bearing Indebtedness" shall include capital lease
obligations.
"Further Taxes" means any and all present or future
taxes, levies, assessments, imposts, duties, deductions,
fees, withholdings or similar charges (including, without
limitation, net income taxes and franchise taxes), and all
liabilities with respect thereto, imposed by any
jurisdiction on account of amounts payable or paid pursuant
to Section 3.01.
"GAAP" means generally accepted accounting principles
set forth from time to time in the opinions and
pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of
the date of determination.
"Governmental Authority" means any nation or
government, any state or other political subdivision
thereof, any central bank (or similar monetary or regulatory
authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any
corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the
foregoing.
"Guaranty Obligation" has the meaning specified in the
definition of "Contingent Obligation."
"Indebtedness" of any Person means, without
duplication, (a) all indebtedness for borrowed money; (b)
all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (other than
trade payables entered into in the ordinary course of
business on ordinary terms); (c) all non-contingent
reimbursement or payment obligations with respect to Surety
Instruments; (d) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of
property, assets or businesses; (e) all indebtedness created
or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either
case with respect to property acquired by the Person (even
though the rights and remedies of the seller or bank under
such agreement in the event of default are limited to
repossession or sale of such property); (f) all obligations
with respect to capital leases; (g) all indebtedness
referred to in clauses (a) through (f) above secured by (or
for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien
upon or in property (including accounts and contracts
rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such
Indebtedness; and (h) all Guaranty Obligations in respect of
indebtedness or obligations of others of the kinds referred
to in clauses (a) through (g) above. For all purposes of
this Agreement, the Indebtedness of any Person shall include
all recourse Indebtedness of any partnership or joint
venture or limited liability company in which such Person is
a general partner or a joint venturer or a member.
"Indemnified Liabilities" has the meaning specified in
Section 10.05.
"Indemnified Person" has the meaning specified in
Section 10.05.
"Independent Auditor" has the meaning specified in
subsection 6.01(a).
"Insolvency Proceeding" means, with respect to any
Person, (a) any case, action or proceeding with respect to
such Person before any court or other Governmental Authority
relating to bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding-up or relief
of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors,
or other, similar arrangement in respect of its creditors
generally or any substantial portion of its creditors;
undertaken under U.S. Federal, state or foreign law,
including the Bankruptcy Code.
"Interest Payment Date" means, as to any Loan other
than a Base Rate Loan, the last day of each Interest Period
applicable to such Loan and, as to any Base Rate Loan, the
last Business Day of each calendar month and each date such
Loan is converted into another Type of Loan, and the
Revolving Termination Date provided, however, that if any
Interest Period for an Offshore Rate Loan exceeds three
months, the date that falls three months after the beginning
of such Interest Period and after each Interest Payment Date
thereafter also is an Interest Payment Date.
"Interest Period" means, as to any Offshore Rate Loan,
the period commencing on the Borrowing Date of such Loan or
on the Conversion/Continuation Date on which the Loan is
converted into or continued as a Offshore Rate Loan, and
ending on the date one, two, three or six months thereafter
as selected by the Company in its Notice of Borrowing or
Notice of Conversion/Continuation;
provided that:
(i) if any Interest Period would otherwise end on
a day that is not a Business Day, that Interest Period
shall be extended to the following Business Day unless,
in the case of a Offshore Rate Loan, the result of such
extension would be to carry such Interest Period into
another calendar month, in which event such Interest
Period shall end on the preceding Business Day;
(ii) any Interest Period pertaining to an
Offshore Rate Loan that 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 the calendar month at the end of such
Interest Period; and
(iii) no Interest Period for any Loan shall
extend beyond the Revolving Termination Date.
"IRS" means the Internal Revenue Service, and any
Governmental Authority succeeding to any of its principal
functions under the Code.
"Joint Venture" means a single-purpose corporation,
partnership, limited liability company, joint venture or
other similar legal arrangement (whether created by contract
or conducted through a separate legal entity) now or
hereafter formed by the Company or any of its Subsidiaries
with another Person in order to conduct a common venture or
enterprise with such Person.
"Lending Office" means, as to any Bank, the office or
offices of such Bank specified as its "Lending Office" or
"Domestic Lending Office" or "Offshore Lending Office," as
the case may be, on Schedule 10.02, or such other office or
offices as such Bank may from time to time notify the
Company and the Agent.
"Lien" means any security interest, mortgage, deed of
trust, pledge, hypothecation, assignment, charge or deposit
arrangement, encumbrance, lien (statutory or other) or
preferential arrangement of any kind or nature whatsoever in
respect of any property (including those created by, arising
under or evidenced by any conditional sale or other title
retention agreement, the interest of a lessor under a
capital lease, any financing lease having substantially the
same economic effect as any of the foregoing, or the filing
of any financing statement naming the owner of the asset to
which such lien relates as debtor, under the Uniform
Commercial Code or any comparable law) and any contingent or
other agreement to provide any of the foregoing, but not
including the interest of a lessor under an operating lease.
"Loan" means an extension of credit by a Bank to the
Company under Article II, and may be a Base Rate Loan or an
Offshore Rate Loan (each, a "Type" of Loan).
"Loan Documents" means this Agreement, any Notes, the
Fee Letters and all other documents delivered to the Agent
or any Bank in connection herewith.
"Majority Banks" means at any time Banks then holding
at least 66-2/3% of the then aggregate unpaid principal
amount of the Loans or, if no such principal amount is then
outstanding, Banks then having at least 66-2/3% of the
Commitments.
"Margin Stock" means "margin stock" as such term is
defined in Regulation G, T, U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse
change in, or a material adverse effect upon, the
operations, business, properties, condition (financial or
otherwise) or prospects of the Company, any Subsidiary or
the Company and its Subsidiaries taken as a whole; (b) a
material impairment of the ability of the Company or any
Subsidiary to perform under any Loan Document and to avoid
any Event of Default; or (c) a material adverse effect upon
the legality, validity, binding effect or enforceability
against the Company of any Loan Document.
"Multiemployer Plan" means a "multiemployer plan",
within the meaning of Section 4001(a)(3) of ERISA, to which
the Company or any ERISA Affiliate makes, is making, or is
obligated to make contributions or, during the preceding
three calendar years, has made, or been obligated to make,
contributions.
"Note" means a promissory note executed by the Company
in favor of a Bank pursuant to subsection 2.02(b), in
substantially the form of Exhibit F.
"Notice of Borrowing" means a notice in substantially
the form of Exhibit A.
"Notice of Conversion/Continuation" means a notice in
substantially the form of Exhibit B.
"Obligations" means all advances, debts, liabilities,
obligations, covenants and duties arising under any Loan
Document owing by the Company to any Bank, the Agent, or any
Indemnified Person, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due
or to become due, now existing or hereafter arising.
"Offshore Rate" means, for any Interest Period, with
respect to Offshore Rate Loans comprising part of the same
Borrowing, the rate of interest per annum (rounded upward to
the next 1/16th of 1%) determined by the Agent as follows:
Offshore Rate = LIBOR
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day
for any Interest Period the maximum reserve percentage
(expressed as a decimal, rounded upward to the next
1/100th of 1%) in effect on such day (whether or not
applicable to any Bank) under regulations issued from
time to time by the FRB for determining the maximum
reserve requirement (including any emergency,
supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities");
"LIBOR" means the rate of interest per annum
determined by the Agent by reference to that rate
(rounded upward, if necessary, to the next one-
sixteenth of one percent (.0625%)) which appears on the
display designated as "Page 3750" on the Telerate
Service (or on such other page on that service or such
other service designated by the British Banker's
Association for the display of that Association's
Interest Settlement Rates for U.S. Dollar deposits) as
of 11:00 a.m., London time, on the day that is two (2)
Business Days prior to the first date of the proposed
Interest Period. If there are no applicable quotes
available through Telerate Service, LIBOR will be
determined by reference to that rate (rounded upward,
if necessary, to the next one-sixteenth of one percent
(.0625%)) notified to the Agent by BofA as the rate of
interest at which dollar deposits in the approximate
amount of the amount of the Loan to be made or
continued as, or converted into, an Offshore Rate Loan
by BofA and having a maturity comparable to such
Interest Period would be offered to major banks in the
London interbank market at their request at
approximately 11:00 a.m. (London time) two Business
Days prior to the commencement of such Interest Period.
"Offshore Rate Loan" means a Loan that bears interest
based on the Offshore Rate.
"Organization Documents" means, for any corporation,
the certificate or articles of incorporation, the bylaws,
any certificate of determination or instrument relating to
the rights of preferred shareholders of such corporation,
any shareholder rights agreement, and all applicable
resolutions of the board of directors (or any committee
thereof) of such corporation.
"Other Taxes" means any present or future stamp, court
or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made
hereunder or from the execution, delivery, performance,
enforcement or registration of, or otherwise with respect
to, this Agreement or any other Loan Documents.
"Participant" has the meaning specified in subsection
10.08(d).
"PBGC" means the Pension Benefit Guaranty Corporation,
or any Governmental Authority succeeding to any of its
principal functions under ERISA.
"Pension Plan" means a pension plan (as defined in
Section 3(2) of ERISA) subject to Title IV of ERISA which
the Company sponsors, maintains, or to which it makes, is
making, or is obligated to make contributions, or in the
case of a multiple employer plan (as described in Section
4064(a) of ERISA) has made contributions at any time during
the immediately preceding five (5) plan years.
"Permitted Liens" has the meaning specified in Section
7.01.
"Permitted Swap Obligations" means all obligations
(contingent or otherwise) of the Company or any Subsidiary
existing or arising under Swap Contracts, provided that each
of the following criteria is satisfied: (a) such
obligations are (or were) entered into by such Person in the
ordinary course of business for the purpose of directly
mitigating risks associated with liabilities, commitments or
assets held or reasonably anticipated by such Person, or
changes in the value of securities issued by such Person in
conjunction with a securities repurchase program not
otherwise prohibited hereunder, and not for purposes of
speculation or taking a "market view;" and (b) such Swap
Contracts do not contain (i) any provision ("walk-away"
provision) exonerating the non-defaulting party from its
obligation to make payments on outstanding transactions to
the defaulting party, or (ii) any provision creating or
permitting the declaration of an event of default,
termination event or similar event upon the occurrence of an
Event of Default hereunder (other than an Event of Default
under subsection 8.01(a)).
"Person" means an individual, partnership, corporation,
limited liability company, business trust, joint stock
company, trust, unincorporated association, joint venture or
Governmental Authority.
"Plan" means an employee benefit plan (as defined in
Section 3(3) of ERISA) which the Company sponsors or
maintains or to which the Company makes, is making, or is
obligated to make contributions and includes any Pension
Plan.
"Prior Credit Agreement" means that certain Credit
Agreement dated as of February 26, 1993, among the Company,
the banks listed therein, and Seattle-First National Bank,
as Agent, as such Credit Agreement has been subsequently
amended to the date hereof.
"Pro Rata Share" means, as to any Bank at any time, the
percentage equivalent (expressed as a decimal, rounded to
the ninth decimal place) at such time of such Bank's
Commitment divided by the combined Commitments of all Banks.
"Replacement Bank" has the meaning specified in
Section 3.08.
"Replacement Loan" has the meaning specified in
Section 4.03.
"Reportable Event" means, any of the events set forth
in Section 4043(c) of ERISA or the regulations thereunder,
other than any such event for which the 30-day notice
requirement under ERISA has been waived in regulations
issued by the PBGC.
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or
determination of an arbitrator or of a Governmental
Authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any
of its property is subject.
"Responsible Officer" means the chief executive officer
or the president of the Company, or any other officer having
substantially the same authority and responsibility; or,
with respect to compliance with financial covenants, the
chief financial officer or the treasurer of the Company, or
any other officer having substantially the same authority
and responsibility.
"Revolving Loan" has the meaning specified in
Section 2.01.
"Revolving Termination Date" means the earlier to occur
of:
(a) February 28, 2001; and
(b) the date on which the Commitments terminate
in accordance with the provisions of this Agreement.
"SEC" means the Securities and Exchange Commission, or
any Governmental Authority succeeding to any of its
principal functions.
"Subsidiary" of a Person means any corporation,
association, partnership, limited liability company, joint
venture or other business entity of which more than 50% of
the voting stock, membership interests or other equity
interests (in the case of Persons other than corporations),
is owned or controlled directly or indirectly by the Person,
or one or more of the Subsidiaries of the Person, or a
combination thereof. Unless the context otherwise clearly
requires, references herein to a "Subsidiary" refer to a
Subsidiary of the Company.
"Surety Instruments" means all letters of credit
(including standby and commercial), banker's acceptances,
bank guaranties, shipside bonds, surety bonds and similar
instruments.
"Swap Contract" means any agreement, whether or not in
writing, relating to any transaction that is a rate swap,
basis swap, forward rate transaction, commodity swap,
commodity option, equity or equity index swap or option,
bond, note or bill option, interest rate option, forward
foreign exchange transaction, cap, collar or floor trans-
action, currency swap, cross-currency rate swap, swaption,
currency option or any other, similar transaction (including
any option to enter into any of the foregoing) or any
combination of the foregoing and, unless the context other-
wise clearly requires, any master agreement relating to or
governing any or all of the foregoing.
"Swap Termination Value" means, in respect of any one
or more Swap Contracts, after taking into account the effect
of any legally enforceable netting agreement relating to
such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination
value(s) determined in accordance therewith, such
termination value(s), and (b) for any date prior to the date
referenced in clause (a) the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as
determined by the Company based upon one or more mid-market
or other readily available quotations provided by any
recognized dealer in such Swap Contracts (which may include
any Bank).
"Tangible Net Worth" means the excess of the Company's
total assets over total liabilities determined on a
consolidated basis, excluding, however, from the
determination of total assets (i) all assets which should be
classified as intangible assets (such as goodwill, patents,
trademarks, copyrights, franchises, and deferred charges,
including unamortized debt discount and research and
development costs), (ii) cash held in a sinking or other
similar fund established for the purpose of redemption or
other retirement of capital stock, (iii) to the extent not
already deducted from total assets, reserves for
depreciation, depletion, obsolescence, or amortization of
properties and other reserves or appropriations of retained
earnings which have been or should be established in
connection with the business conducted by the Company or its
Subsidiaries, and (iv) any reevaluation or other write-up in
book value of assets subsequent to the fiscal year of the
Company last ended at the date of this Agreement.
"Taxes" means any and all present or future taxes,
levies, assessments, imposts, duties, deductions, fees,
withholdings or similar charges, and all liabilities with
respect thereto, excluding, (i) in the case of each Bank and
the Agent, respectively, taxes imposed on or measured by its
net income by the jurisdiction (or any political subdivision
thereof) under the laws of which such Bank or the Agent, as
the case may be, is organized or maintains a lending office;
and (ii) in the case of the Agent and each Bank which is
organized or maintains a lending office in the State of
Washington, taxes imposed on or measured by its gross
receipts by the State of Washington.
"Type" has the meaning specified in the definition of
"Loan."
"Unfunded Pension Liability" means the excess of a
Plan's benefit liabilities under Section 4001(a)(16) of
ERISA, over the current value of that Plan's assets,
determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code
for the applicable plan year.
"United States" and "U.S." each means the United States
of America.
"Wholly-Owned Subsidiary" means any corporation in
which (other than directors' qualifying shares required by
law) 100% of the capital stock of each class having ordinary
voting power, and 100% of the capital stock of every other
class, in each case, at the time as of which any
determination is being made, is owned, beneficially and of
record, by the Company, or by one or more other Wholly-Owned
Subsidiaries, or both.
1.02 Other Interpretive Provisions. (a) The meanings of
defined terms are equally applicable to the singular and plural
forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and
similar words refer to this Agreement as a whole and not to any
particular provision of this Agreement; and subsection, Section,
Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(c) (i) The term "documents" includes any and all
instruments, documents, agreements, certificates,
indentures, notices and other writings, however evidenced.
(ii) The term "including" is not limiting and
means "including without limitation."
(iii) In the computation of periods of time from
a specified date to a later specified date, the word "from"
means "from and including"; the words "to" and "until" each
mean "to but excluding", and the word "through" means "to
and including."
(d) Unless otherwise expressly provided herein, (i)
references to agreements (including this Agreement) and other
contractual instruments shall be deemed to include all subsequent
amendments and other modifications thereto, but only to the
extent such amendments and other modifications are not prohibited
by the terms of any Loan Document, and (ii) references to any
statute or regulation are to be construed as including all
statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or
regulation.
(e) The captions and headings of this Agreement are
for convenience of reference only and shall not affect the
interpretation of this Agreement.
(f) This Agreement and the other Loan Documents may
use several different limitations, tests or measurements to
regulate the same or similar matters. All such limitations,
tests and measurements are cumulative and shall each be performed
in accordance with their terms. Unless otherwise expressly
provided, any reference to any action of the Agent or the Banks
by way of consent, approval or waiver shall be deemed modified by
the phrase "in its/their sole discretion."
(g) This Agreement and the other Loan Documents are
the result of negotiations among and have been reviewed by
counsel to the Agent, the Company and the other parties, and are
the products of all parties. Accordingly, they shall not be
construed against the Banks or the Agent merely because of the
Agent's or Banks' involvement in their preparation.
1.03 Accounting Principles. (a) Unless the context
otherwise clearly requires, all accounting terms not expressly
defined herein shall be construed, and all financial computations
required under this Agreement shall be made, in accordance with
GAAP, consistently applied.
(b) References herein to "fiscal year" and "fiscal
quarter" refer to such fiscal periods of the Company.
ARTICLE II
THE CREDITS
2.01 Amounts and Terms of Commitments. Each Bank severally
agrees, on the terms and conditions set forth herein, to make
loans to the Company from time to time on any Business Day during
the period from the Closing Date to the Revolving Termination
Date, in an aggregate amount not to exceed at any time
outstanding, the amount set forth on Schedule 2.01 (such amount,
as the same may be reduced under Section 2.05 or as a result of
one or more assignments under Section 10.08, the Bank's
"Commitment"); provided, however, that, after giving effect to
any Borrowing, the aggregate principal amount of all outstanding
Loans, shall not at any time exceed the combined Commitments.
Within the limits of each Bank's Commitment, and subject to the
other terms and conditions hereof, the Company may borrow under
this Section 2.01, prepay under Section 2.06, and reborrow under
this Section 2.01.
2.02 Loan Accounts. (a) The Loans made by each Bank shall
be evidenced by one or more loan accounts or records maintained
by such Bank in the ordinary course of business. The loan
accounts or records maintained by the Agent and each Bank shall
be rebuttable presumptive evidence of the amount of the Loans
made by the Banks to the Company and the interest and payments
thereon. Any failure to so record, or any error in doing so,
shall not, however, limit or otherwise affect the obligation of
the Company hereunder to pay any amount owing with respect to the
Loans.
(b) Upon the request of any Bank made through the
Agent, the Loans made by such Bank may be evidenced by one or
more Notes, instead of or in addition to loan accounts. Each
such Bank shall endorse on the schedules annexed to its Note(s)
the date, amount and maturity of each Loan made by it and the
amount of each payment of principal made by the Company with
respect thereto. Each such Bank is irrevocably authorized by the
Company to endorse its Note(s) and each Bank's record shall be
rebuttable presumptive evidence; provided, however, that the
failure of a Bank to make, or an error in making, a notation
thereon with respect to any Loan shall not limit or otherwise
affect the obligations of the Company hereunder or under any such
Note to such Bank.
2.03 Procedure for Borrowing. (a) Each Borrowing shall be
made upon the Company's irrevocable written notice delivered to
the Agent in the form of a Notice of Borrowing (which notice must
be received by the Agent prior to 9:00 a.m. (Seattle time) (i)
four Business Days prior to the requested Borrowing Date, in the
case of Offshore Rate Loans; and (ii) on the requested Borrowing
Date, in the case of Base Rate Loans, specifying:
(A) the amount of the Borrowing, which shall
be in an aggregate minimum amount of $5,000,000 or any
multiple of $1,000,000 in excess thereof;
(B) the requested Borrowing Date, which
shall be a Business Day;
(C) the Type of Loans comprising the
Borrowing; and
(D) in the case of Offshore Rate Loans, the
duration of the Interest Period applicable to such
Loans included in such notice. If the Notice of
Borrowing fails to specify the duration of the Interest
Period for any Borrowing comprised of Offshore Rate
Loans, such Interest Period shall be one month.
(b) The Agent will promptly notify each Bank of its
receipt of any Notice of Borrowing and of the amount of such
Bank's Pro Rata Share of that Borrowing.
(c) Each Bank will make the amount of its Pro Rata
Share of each Borrowing available to the Agent for the account of
the Company at the Agent's Payment Office by 12:00 noon (Seattle
time) on the Borrowing Date requested by the Company in funds
immediately available to the Agent. The proceeds of all such
Loans will then be made available to the Company by the Agent at
such office by crediting the account of the Company on the books
of BofA with the aggregate of the amounts made available to the
Agent by the Banks and in like funds as received by the Agent.
(d) After giving effect to any Borrowing, unless the
Agent shall otherwise consent, there may not be more than twelve
different Interest Periods in effect.
2.04 Conversion and Continuation Elections. (a) The
Company may, upon irrevocable written notice to the Agent in
accordance with subsection 2.04(b):
(i) elect, as of any Business Day, in the case of
Base Rate Loans, or as of the last day of the applicable
Interest Period, in the case of Offshore Rate Loans, to
convert any such Loans (or any part thereof in an amount not
less than $5,000,000, or that is in an integral multiple of
$1,000,000 in excess thereof) into Loans of any other Type;
or
(ii) in the case of Offshore Rate Loans, elect,
as of the last day of the applicable Interest Period, to
continue any Loans having Interest Periods expiring on such
day (or any part thereof in an amount not less than
$5,000,000, or that is in an integral multiple of $1,000,000
in excess thereof);
provided, that if at any time the aggregate amount of Offshore
Rate Loans in respect of any Borrowing is reduced, by payment,
prepayment, or conversion of part thereof to be less than
$5,000,000, such Offshore Rate Loans shall automatically convert
into Base Rate Loans, and on and after such date the right of the
Company to continue such Loans as, and convert such Loans into,
Offshore Rate Loans shall terminate.
(b) The Company shall deliver a Notice of
Conversion/Continuation to be received by the Agent not later
than 9:00 a.m. Seattle time) at least (i) four Business Days in
advance of the Conversion/Continuation Date, if the Loans are to
be converted into or continued as Offshore Rate Loans; and (ii)
on the Conversion/Continuation Date, if the Loans are to be
converted into Base Rate Loans, specifying:
(A) the proposed Conversion/Continuation
Date;
(B) the aggregate amount of Loans to be
converted or continued;
(C) the Type of Loans resulting from the
proposed conversion or continuation; and
(D) other than in the case of conversions
into Base Rate Loans, the duration of the requested
Interest Period.
(c) If upon the expiration of any Interest Period
applicable to Offshore Rate Loans, the Company has failed to
timely select a new Interest Period to be applicable to such
Offshore Rate Loans, or if any Default or Event of Default then
exists, the Company shall be deemed to have elected to convert
such Offshore Rate Loans into Base Rate Loans effective as of the
expiration date of such Interest Period.
(d) The Agent will promptly notify each Bank of its
receipt of a Notice of Conversion/Continuation or, if no timely
notice is provided by the Company, the Agent will promptly notify
each Bank of the details of any automatic conversion. All
conversions and continuations shall be made ratably according to
the respective outstanding principal amounts of the Loans with
respect to which the notice was given held by each Bank.
(e) Unless the Majority Banks otherwise consent,
during the existence of a Default or Event of Default, the
Company may not elect to have a Loan converted into or continued
as an Offshore Rate Loan.
(f) After giving effect to any conversion or
continuation of Loans, unless the Agent shall otherwise consent,
there may not be more than twelve different Interest Periods in
effect.
2.05 Voluntary Termination or Reduction of Commitments. The
Company may, upon not less than five Business Days' prior notice
to the Agent, terminate the Commitments, or permanently reduce
the Commitments by an aggregate minimum amount of $5,000,000 or
any larger multiple thereof; unless, after giving effect thereto
and to any prepayments of Loans made on the effective date
thereof, the then-outstanding principal amount of the Loans
would exceed the amount of the combined Commitments then in
effect. Once reduced in accordance with this Section, the
Commitments may not be increased. Any reduction of the
Commitments shall be applied to each Bank according to its Pro
Rata Share. All accrued commitment fees to, but not including
the effective date of any reduction or termination of
Commitments, shall be paid on the effective date of such
reduction or termination.
2.06 Optional Prepayments. Subject to Section 3.04, the
Company may, at any time or from time to time, upon not less
than two Business Days' irrevocable notice to the Agent, ratably
prepay Base Rate Loans in whole or in part, in minimum amounts
of $5,000,000 or any multiple of $1,000,000 in excess thereof.
Such notice of prepayment shall specify the date and amount of
such prepayment. The Agent will notify promptly each Bank of
its receipt of any such notice, and of such Bank's Pro Rata
Share of such prepayment. If such notice is given by the
Company, the Company shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the
date specified therein, together with accrued interest to each
such date on the amount prepaid and any amounts required
pursuant to Section 3.04.
2.07 Repayment. The Company shall repay to the Banks on the
Revolving Termination Date the aggregate principal amount of
Loans outstanding on such date.
2.08 Interest. (a) Each Loan shall bear interest on the
outstanding principal amount thereof from the applicable
Borrowing Date at a rate per annum equal to: (i) the sum of the
Offshore Rate plus the Applicable Margin, as set forth in
Schedule 2.08, in the case of Offshore Rate Loans, or (ii) the
Base Rate, in the case of Base Rate Loans.
(b) Interest on each Loan shall be paid in arrears
on each Interest Payment Date. Interest also shall be paid on
the date of any prepayment of Loans for the portion of the Loans
so prepaid and upon payment (including prepayment) in full
thereof and, during the existence of any Event of Default,
interest shall be paid on demand of the Agent at the request or
with the consent of the Majority Banks.
(c) Notwithstanding subsection (a) of this Section,
while any Event of Default exists or after acceleration, the
Company shall pay interest (after as well as before entry of
judgment thereon to the extent permitted by law) on the
principal amount of all outstanding Obligations, at a rate per
annum which is determined by adding 2% per annum to the
Applicable Margin then in effect for such Loans and, in the case
of Obligations not subject to an Applicable Margin, at a rate
per annum equal to the Base Rate plus 2%; provided, however,
that, on and after the expiration of any Interest Period
applicable to any Offshore Rate Loan outstanding on the date of
occurrence of such Event of Default or acceleration, the
principal amount of such Loan shall, during the continuation of
such Event of Default or after acceleration, bear interest at a
rate per annum equal to the Base Rate plus 2%.
(d) Anything herein to the contrary notwithstanding,
the obligations of the Company to any Bank hereunder shall be
subject to the limitation that payments of interest shall not be
required for any period for which interest is computed
hereunder, to the extent (but only to the extent) that
contracting for or receiving such payment by such Bank would be
contrary to the provisions of any law applicable to such Bank
limiting the highest rate of interest that may be lawfully
contracted for, charged or received by such Bank, and in such
event the Company shall pay such Bank interest at the highest
rate permitted by applicable law.
2.09 Fees. (a) Agency Fees. The Company shall pay an
agency fee to the Agent for the Agent's own account, as required
by that certain letter agreement ("Fee Letter") between the
Company and the Agent dated as of February 22, 1998.
(b) Facility Fees. The Company shall pay to the Agent
for the account of each Bank a facility fee on such Bank's
Commitment (the "Facility Fee"). The Facility Fees shall be
computed daily at the applicable per annum rate set forth on
Schedule 2.08 on such Bank's Commitment. Such Facility Fees
shall accrue from the date of this Agreement to the Revolving
Termination Date and shall be due and payable quarterly in
arrears on the last Business Day of each calendar quarter
commencing on March 31, 1998 through the Revolving Termination
Date, with the final payment to be made on the Revolving
Termination Date; provided that, in connection with any
reduction or termination of Commitments under Section 2.05, the
accrued Facility Fees calculated for the period ending on such
date also shall be paid on the date of such reduction or
termination, with the following quarterly payment being
calculated on the basis of the period from such reduction or
termination date to such quarterly payment date. The Facility
Fees provided in this subsection shall accrue at all times after
the Closing Date, including at any time during which one or more
conditions in Article IV are not met.
2.10 Computation of Fees and Interest. (a) All
computations of interest for Base Rate Loans shall be made on
the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All other computations of fees and
interest shall be made on the basis of a 360-day year and actual
days elapsed (which results in more interest being paid than if
computed on the basis of a 365-day year). Interest and fees
shall accrue during each period during which interest or such
fees are computed from the first day thereof to the last day
thereof.
(b) The interest rate applicable to Offshore Rate
Loans shall be adjusted automatically as to all Offshore Rate
Loans then outstanding as of the opening of business on each day
on which a change in either the Applicable Margin or the
Eurodollar Reserve Percentage first becomes effective.
(c) Each determination of an interest rate by the
Agent shall be conclusive and binding on the Company and the
Banks in the absence of manifest error.
2.11 Payments by the Company. (a) All payments to be made
by the Company shall be made without set-off, recoupment or
counterclaim. Except as otherwise expressly provided herein,
all payments by the Company shall be made to the Agent for the
account of the Banks at the Agent's Payment Office, and shall be
made in dollars and in immediately available funds, no later
than 12:00 noon (Seattle time) on the date specified herein.
The Agent will promptly distribute to each Bank its Pro Rata
Share (or other applicable share as expressly provided herein)
of such payment in like funds as received. Any payment received
by the Agent later than 12:00 noon (Seattle time) shall be
deemed to have been received on the following Business Day and
any applicable interest or fee shall continue to accrue.
(b) Subject to the provisions set forth in the
definition of "Interest Period" herein, whenever any payment is
due on a day other than a Business Day, such payment shall be
made on the following Business Day, and such extension of time
shall in such case be included in the computation of interest or
fees, as the case may be.
(c) Unless the Agent receives notice from the
Company prior to the date on which any payment is due to the
Banks that the Company will not make such payment in full as and
when required, the Agent may assume that the Company has made
such payment in full to the Agent on such date in immediately
available funds and the Agent may (but shall not be so
required), in reliance upon such assumption, distribute to each
Bank on such due date an amount equal to the amount then due
such Bank. If and to the extent the Company has not made such
payment in full to the Agent, each Bank shall repay to the Agent
on demand such amount distributed to such Bank, together with
interest thereon at the Federal Funds Rate for each day from the
date such amount is distributed to such Bank until the date
repaid.
2.12 Payments by the Banks to the Agent. (a) Unless the
Agent receives notice from a Bank on or prior to the Closing
Date or, with respect to any Borrowing after the Closing Date,
at least one Business Day prior to the date of such Borrowing,
that such Bank will not make available as and when required
hereunder to the Agent for the account of the Company the amount
of that Bank's Pro Rata Share of the Borrowing, the Agent may
assume that each Bank has made such amount available to the
Agent in immediately available funds on the Borrowing Date and
the Agent may (but shall not be so required), in reliance upon
such assumption, make available to the Company on such date a
corresponding amount. If and to the extent any Bank shall not
have made its full amount available to the Agent in immediately
available funds and the Agent in such circumstances has made
available to the Company such amount, that Bank shall on the
Business Day following such Borrowing Date make such amount
available to the Agent, together with interest at the Federal
Funds Rate for each day during such period. A notice of the
Agent submitted to any Bank with respect to amounts owing under
this subsection (a) shall be conclusive, absent manifest error.
If such amount is so made available, such payment to the Agent
shall constitute such Bank's Loan on the date of Borrowing for
all purposes of this Agreement. If such amount is not made
available to the Agent on the Business Day following the
Borrowing Date, the Agent will notify the Company of such
failure to fund and, upon demand by the Agent, the Company shall
pay such amount to the Agent for the Agent's account, together
with interest thereon for each day elapsed since the date of
such Borrowing, at a rate per annum equal to the interest rate
applicable at the time to the Loans comprising such Borrowing.
(b) The failure of any Bank to make any Loan on any
Borrowing Date shall not relieve any other Bank of any
obligation hereunder to make a Loan on such Borrowing Date, but
no Bank shall be responsible for the failure of any other Bank
to make the Loan to be made by such other Bank on any Borrowing
Date.
2.13 Sharing of Payments, Etc. If, other than as expressly
provided elsewhere herein, any Bank shall obtain on account of
the Loans made by it any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or
otherwise) in excess of its ratable share (or other share
contemplated hereunder), such Bank shall immediately (a) notify
the Agent of such fact, and (b) purchase from the other Banks
such participations in the Loans made by them as shall be
necessary to cause such purchasing Bank to share the excess
payment pro rata with each of them; provided, however, that if
all or any portion of such excess payment is thereafter
recovered from the purchasing Bank, such purchase shall to that
extent be rescinded and each other Bank shall repay to the
purchasing Bank the purchase price paid therefor, together with
an amount equal to such paying Bank's ratable share (according
to the proportion of (i) the amount of such paying Bank's
required repayment to (ii) the total amount so recovered from
the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so
recovered. The Company agrees that any Bank so purchasing a
participation from another Bank may, to the fullest extent
permitted by law, exercise all its rights of payment (including
the right of set-off, but subject to Section 10.10) with respect
to such participation as fully as if such Bank were the direct
creditor of the Company in the amount of such participation.
The Agent will keep records (which shall be rebuttable
presumptive evidence) of participations purchased under this
Section and will in each case notify the Banks following any
such purchases or repayments.
2.14 Extension of Revolving Termination Date .
(a) The Company may request that the Banks extend
the Revolving Termination Date for successive one-year periods
by notifying the Banks and the Agent in writing on a day not
more than two years and thirty (30) days and not less than two
years prior to the then-existing Revolving Termination Date. If
all Banks consent to such an extension, the Banks shall so
notify the Company and the Agent in writing no later than one
year and two hundred twenty-five (225) days prior to the then-
existing Revolving Termination Date. If all Lenders provide the
Company and Agent with such a written notice the Revolving
Termination Date shall be extended for an additional one-year
period. If any Bank in its sole discretion does not provide the
written notice evidencing its consent as herein provided, the
request for extension shall be deemed denied by all Banks.
(b) If any Bank shall fail to consent to an
extension as provided in Section 2.14(a) above (a "Dissenting
Bank"), the Company may: (i) request the Dissenting Bank to use
its best efforts to obtain a replacement bank or financial
institution satisfactory to the Company to acquire and assume
all of such Dissenting Bank's Loans and Commitment which
replacement Bank would consent to the requested extension (a
"Replacement Bank"); (ii) request one more of the other Banks to
acquire and assume all or part of such Dissenting Bank's Loans
and Commitment; or (iii) designate a Replacement Bank. Any such
designation of a Replacement Bank under clause (i) or (iii)
shall be subject to the prior written consent of the Agent
(which consent shall not be unreasonably withheld). Upon the
designation and acceptance of a Replacement Bank, the Dissenting
Bank agrees to assign all of its interest in the Loans and its
Commitment to the Replacement Bank pursuant to documentation
reasonably acceptable to the Dissenting Bank and the Replacement
Bank. Upon the consummation of any such assignment, if all
other Banks have previously provided the written notice agreeing
to extend the Revolving Termination Date as contemplated by
Section 2.14(a) above and have not revoked such notice in a
writing delivered to the Agent and the Company, the Revolving
Termination Date shall be automatically extended for an
additional one-year period.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes. (a) Any and all payments by the Company to
each Bank or the Agent under this Agreement and any other Loan
Document shall be made free and clear of, and without deduction
or withholding for, any Taxes. In addition, the Company shall
pay all Other Taxes.
(b) If the Company shall be required by law to
deduct or withhold any Taxes, Other Taxes or Further Taxes from
or in respect of any sum payable hereunder to any Bank or the
Agent, then:
(i) the sum payable shall be increased as
necessary so that, after making all required deductions and
withholdings (including deductions and withholdings
applicable to additional sums payable under this Section),
such Bank or the Agent, as the case may be, receives and
retains an amount equal to the sum it would have received
and retained had no such deductions or withholdings been
made;
(ii) the Company shall make such deductions and
withholdings;
(iii) the Company shall pay the full amount
deducted or withheld to the relevant taxing authority or
other authority in accordance with applicable law; and
(iv) the Company shall also pay to each Bank or
the Agent for the account of such Bank, at the time interest
is paid, Further Taxes in the amount that the respective
Bank specifies as necessary to preserve the after-tax yield
the Bank would have received if such Taxes, Other Taxes or
Further Taxes had not been imposed.
Notwithstanding anything in this Section 3.01(b) to the
contrary, however, the terms of this Section 3.01(b) shall not
be applicable to a Bank if, on the date of this Agreement, a
payment made by Agent to such Bank would be subject to any U.S.
withholding tax.
(c) The Company agrees to indemnify and hold
harmless each Bank and the Agent for the full amount of i)
Taxes, ii) Other Taxes, and iii) Further Taxes in the amount
that the respective Bank specifies as necessary to preserve the
after-tax yield the Bank would have received if such Taxes,
Other Taxes or Further Taxes had not been imposed, and any
liability (including penalties, interest, additions to tax and
expenses) arising therefrom or with respect thereto, whether or
not such Taxes, Other Taxes or Further Taxes were correctly or
legally asserted. Payment under this indemnification shall be
made within 30 days after the date the Bank or the Agent makes
written demand therefor.
(d) Within 30 days after the date of any payment by
the Company of Taxes, Other Taxes or Further Taxes, the Company
shall furnish to each Bank or the Agent the original or a
certified copy of a receipt evidencing payment thereof, or other
evidence of payment satisfactory to such Bank or the Agent.
(e) If the Company is required to pay any amount to
any Bank or the Agent pursuant to subsection (b) or (c) of this
Section, then such Bank shall use reasonable efforts (consistent
with legal and regulatory restrictions) to change the
jurisdiction of its Lending Office so as to eliminate any such
additional payment by the Company which may thereafter accrue,
if such change in the sole judgment of such Bank is not
otherwise disadvantageous to such Bank.
3.02 Illegality. (a) If any Bank determines that the
introduction of any Requirement of Law, or any change in any
Requirement of Law, or in the interpretation or administration
of any Requirement of Law, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that
it is unlawful, for any Bank or its applicable Lending Office to
make Offshore Rate Loans, then, on notice thereof by the Bank to
the Company through the Agent, any obligation of that Bank to
make Offshore Rate Loans shall be suspended until the Bank
notifies the Agent and the Company that the circumstances giving
rise to such determination no longer exist.
(b) If a Bank determines that it is unlawful to
maintain any Offshore Rate Loan, the Company shall, upon its
receipt of notice of such fact and demand from such Bank (with a
copy to the Agent), prepay in full such Offshore Rate Loans of
that Bank then outstanding, together with interest accrued
thereon and amounts required under Section 3.04, either on the
last day of the Interest Period thereof, if the Bank may
lawfully continue to maintain such Offshore Rate Loans to such
day, or immediately, if the Bank may not lawfully continue to
maintain such Offshore Rate Loan. If the Company is required to
so prepay any Offshore Rate Loan, then concurrently with such
prepayment, the Company shall borrow from the affected Bank, in
the amount of such repayment, a Base Rate Loan.
(c) If the obligation of any Bank to make or
maintain Offshore Rate Loans has been so terminated or
suspended, the Company may elect, by giving notice to the Bank
through the Agent that all Loans which would otherwise be made
by the Bank as Offshore Rate Loans shall be instead Base Rate
Loans.
(d) Before giving any notice to the Agent under this
Section, the affected Bank shall designate a different Lending
Office with respect to its Offshore Rate Loans if such desig-
nation will avoid the need for giving such notice or making such
demand and will not, in the judgment of the Bank, be illegal or
otherwise disadvantageous to the Bank.
3.03 Increased Costs and Reduction of Return. (a) If any
Bank determines that, due to either (i) the introduction of or
any change (other than any change by way of imposition of or
increase in reserve requirements included in the calculation of
the Offshore Rate or in respect of the assessment rate payable
by any Bank to the FDIC for insuring U.S. deposits) in or in the
interpretation of any law or regulation or (ii) the compliance
by that Bank with any guideline or request from any central bank
or other Governmental Authority (whether or not having the force
of law), there shall be any increase in the cost to such Bank of
agreeing to make or making, funding or maintaining any Offshore
Rate Loans, then the Company shall be liable for, and shall from
time to time, upon demand (with a copy of such demand to be sent
to the Agent), pay to the Agent for the account of such Bank,
additional amounts as are sufficient to compensate such Bank for
such increased costs.
(b) If any Bank shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change
in any Capital Adequacy Regulation, (iii) any change in the
interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority
charged with the interpretation or administration thereof, or
(iv) compliance by the Bank (or its Lending Office) or any
corporation controlling the Bank with any Capital Adequacy
Regulation, affects or would affect the amount of capital
required or expected to be maintained by the Bank or any
corporation controlling the Bank and (taking into consideration
such Bank's or such corporation's policies with respect to
capital adequacy and such Bank's desired return on capital)
determines that the amount of such capital is increased as a
consequence of its Commitment, loans, credits or obligations
under this Agreement, then, upon demand of such Bank to the
Company through the Agent, the Company shall pay to the Bank,
from time to time as specified by the Bank, additional amounts
sufficient to compensate the Bank for such increase.
3.04 Funding Losses. The Company shall reimburse each Bank
and hold each Bank harmless from any loss or expense which the
Bank may sustain or incur as a consequence of:
(a) the failure of the Company to make on a timely
basis any payment of principal of any Offshore Rate Loan;
(b) the failure of the Company to borrow, continue
or convert a Loan after the Company has given (or is deemed to
have given) a Notice of Borrowing or a Notice of Conversion/
Continuation;
(c) the failure of the Company to make any
prepayment in accordance with any notice under Section 2.06;
(d) the prepayment (including pursuant to Section
2.07) or other payment (including after acceleration thereof) of
an Offshore Rate Loan on a day that is not the last day of the
relevant Interest Period; or
(e) the automatic conversion under Section 2.04 of
any Offshore Rate Loan to a Base Rate Loan on a day that is not
the last day of the relevant Interest Period;
including any such loss or expense arising from the liquidation
or reemployment of funds obtained by it to maintain its Offshore
Rate Loans or from fees payable to terminate the deposits from
which such funds were obtained. For purposes of calculating
amounts payable by the Company to the Banks under this Section
and under subsection 3.03(a), each Offshore Rate Loan made by a
Bank (and each related reserve, special deposit or similar
requirement) shall be conclusively deemed to have been funded at
the LIBOR used in determining the Offshore Rate for such
Offshore Rate Loan by a matching deposit or other borrowing in
the interbank eurodollar market for a comparable amount and for
a comparable period, whether or not such Offshore Rate Loan is
in fact so funded.
3.05 Inability to Determine Rates. If the Majority Banks
determine that for any reason adequate and reasonable means do
not exist for determining the Offshore Rate for any requested
Interest Period with respect to a proposed Offshore Rate Loan,
or that the Offshore Rate applicable pursuant to subsection
2.09(a) for any requested Interest Period with respect to a
proposed Offshore Rate Loan does not adequately and fairly
reflect the cost to the Banks of funding such Loan, the Agent
will promptly so notify the Company and each Bank. Thereafter,
the obligation of the Banks to make or maintain Offshore Rate
Loans hereunder shall be suspended until the Agent, upon the
instruction of the Majority Banks revokes such notice in
writing. Upon receipt of such notice, the Company may revoke
any Notice of Borrowing or Notice of Conversion/Continuation
then submitted by it. If the Company does not revoke such
Notice, the Banks shall make, convert or continue the Loans, as
proposed by the Company, in the amount specified in the
applicable notice submitted by the Company, but such Loans shall
be made, converted or continued as Base Rate Loans instead of
Offshore Rate Loans.
3.06 Reserves on Offshore Rate Loans. The Company shall pay
to each Bank, as long as such Bank shall be required under
regulations of the FRB to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency
funds or deposits (currently known as "Eurocurrency
liabilities"), additional costs on the unpaid principal amount
of each Offshore Rate Loan equal to the actual costs of such
reserves allocated to such Loan by the Bank (as determined by
the Bank in good faith, which determination shall be
conclusive), payable on each date on which interest is payable
on such Loan, provided the Company shall have received at least
15 days' prior written notice (with a copy to the Agent) of such
additional interest from the Bank. If a Bank fails to give
notice 15 days prior to the relevant Interest Payment Date, such
additional interest shall be payable 15 days from receipt of
such notice.
3.07 Certificates of Banks. Any Bank claiming reimbursement
or compensation under this Article III shall deliver to the
Company (with a copy to the Agent) a certificate setting forth
in reasonable detail the amount payable to the Bank hereunder
and such certificate shall be conclusive and binding on the
Company in the absence of manifest error.
3.08 Substitution of Banks. Upon the receipt by the Company
from any Bank (an "Affected Bank") of a claim for compensation
under Section 3.03, the Company may: (i) request the Affected
Bank to use its best efforts to obtain a replacement bank or
financial institution satisfactory to the Company to acquire and
assume all or a ratable part of all of such Affected Bank's
Loans and Commitment (a "Replacement Bank"); (ii) request one
more of the other Banks to acquire and assume all or part of
such Affected Bank's Loans and Commitment; or (iii) designate a
Replacement Bank. Any such designation of a Replacement Bank
under clause (i) or (iii) shall be subject to the prior written
consent of the Agent (which consent shall not be unreasonably
withheld). Upon the designation and acceptance of a Replacement
Bank, the Affected Bank agrees to assign all of its interest in
the Loans and its Commitment to the Replacement Bank pursuant to
documentation reasonably acceptable to the Affected Bank and the
Replacement Bank.
3.09 Survival. The agreements and obligations of the
Company in this Article III shall survive the payment of all
other Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.01 Conditions of Initial Loans. The obligation of each
Bank to make its initial Loan hereunder is subject to the
condition that the Agent shall have received on or before the
Closing Date all of the following, in form and substance
satisfactory to the Agent and each Bank:
(a) Credit Agreement and Notes . This Agreement and
the Notes executed by each party thereto;
(b) Resolutions; Incumbency.
(i) Copies of the resolutions of the board of
directors of the Company authorizing the transactions
contemplated hereby, certified as of the Closing Date by the
Secretary or an Assistant Secretary of the Company; and
(ii) A certificate of the Secretary or
Assistant Secretary of the Company, certifying the names and
true signatures of the officers of the Company authorized to
execute, deliver and perform, as applicable, this Agreement,
and all other Loan Documents to be delivered by it
hereunder;
(c) Organization Documents; Good Standing. Each of
the following documents:
(i) the articles or certificate of
incorporation and the bylaws of the Company as in effect on
the Closing Date, certified by the Secretary or Assistant
Secretary of the Company as of the Closing Date; and
(ii) a good standing or existence certificate
for the Company from the Secretary of State (or similar,
applicable Governmental Authority) of its state of
incorporation and each state where the Company is qualified
to do business as a foreign corporation as of a recent date;
(d) Legal Opinion. An opinion of Bogle & Gates,
counsel to the Company and addressed to the Agent and the Banks,
substantially in the form of Exhibit D;
(e) Payment of Fees. Evidence of payment by the
Company of all accrued and unpaid fees, costs and expenses to
the extent then due and payable on the Closing Date, together
with Attorney Costs of BofA to the extent invoiced prior to or
on the Closing Date, plus such additional amounts of Attorney
Costs as shall constitute BofA's reasonable estimate of Attorney
Costs incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter
preclude final settling of accounts between the Company and
BofA); including any such costs, fees and expenses arising under
or referenced in Sections 2.09 and 10.04;
(f) Certificate. A certificate signed by a
Responsible Officer, dated as of the Closing Date, stating that:
(i) the representations and warranties
contained in Article V are true and correct on and as of
such date, as though made on and as of such date;
(ii) no Default or Event of Default exists or
would result from the initial Borrowing; and
(iii) there has occurred since October 31,
1997, no event or circumstance that has resulted or could
reasonably be expected to result in a Material Adverse
Effect; and
(g) Prior Credit Agreement. Evidence satisfactory
to Agent and Banks that (i) all amounts owing and all
obligations required to be performed under the Prior Credit
Agreement including the payment of all accrued interest, fees,
costs and other expenses (whether or not then due under the
Prior Credit Agreement) shall have been fully paid and
performed; and (ii) the commitments of any lender under the
Prior Credit Agreement to make additional loans or other
advances shall have been terminated.
(h) Other Documents. Such other approvals,
opinions, documents or materials as the Agent or any Bank may
request.
4.02 Conditions to All Borrowings. The obligation of each
Bank to make any Loan to be made by it (including its initial
Loan) or to continue or convert any Loan under Section 2.04 is
subject to the satisfaction of the following conditions
precedent on the relevant Borrowing Date or Conversion/
Continuation Date:
(a) Notice of Borrowing or Conversion/Continuation.
The Agent shall have received (with, in the case of the initial
Loan only, a copy for each Bank) a Notice of Borrowing or a
Notice of Conversion/Continuation, as applicable;
(b) Continuation of Representations and Warranties.
The representations and warranties in Article V shall be true
and correct on and as of such Borrowing Date or Conversion/
Continuation Date with the same effect as if made on and as of
such Borrowing Date or Conversion/Continuation Date (except to
the extent such representations and warranties expressly refer
to an earlier date, in which case they shall be true and correct
as of such earlier date); and
(c) No Existing Default. No Default or Event of
Default shall exist or shall result from such Borrowing or
continuation or conversion.
Each Notice of Borrowing and Notice of Conversion/Continuation
submitted by the Company hereunder shall constitute a
representation and warranty by the Company hereunder, as of the
date of each such notice and as of each Borrowing Date or
Conversion/Continuation Date, as applicable, that the conditions
in this Section 4.02 are satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each
Bank that:
5.01 Corporate Existence and Power. The Company and each of
its Subsidiaries:
(a) is a corporation duly organized and validly
existing under the laws of the jurisdiction of its
incorporation;
(b) has the power and authority and all governmental
licenses, authorizations, consents and approvals to own its
assets, carry on its business and to execute, deliver, and
perform its obligations under the Loan Documents;
(c) is duly qualified as a foreign corporation and
is licensed and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property
or the conduct of its business requires such qualification or
license; and
(d) is in compliance with all Requirements of Law;
except, in each case referred to in clause (c) or clause (d) of
this Section 5.01, to the extent that the failure to do so could
not reasonably be expected to have a Material Adverse Effect.
5.02 Corporate Authorization; No Contravention. The
execution, delivery and performance by the Company of this
Agreement and each other Loan Document to which the Company is
party, have been duly authorized by all necessary corporate
action, and do not and will not:
(a) contravene the terms of any of the Company's
Organization Documents;
(b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, any
document evidencing any Contractual Obligation to which the
Company is a party or any order, injunction, writ or decree of
any Governmental Authority to which the Company or its property
is subject; or
(c) violate any Requirement of Law.
5.03 Governmental Authorization. No approval, consent,
exemption, authorization, or other action by, or notice to, or
filing with, any Governmental Authority is necessary or required
in connection with the execution, delivery or performance by, or
enforcement against the Company of this Agreement or any other
Loan Document.
5.04 Binding Effect. This Agreement and each other Loan
Document to which the Company is a party constitute the legal,
valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms,
except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally or by equitable
principles relating to enforceability.
5.05 Litigation. Except as specifically disclosed in
Schedule 5.05, there are no actions, suits, proceedings, claims
or disputes pending, or to the best knowledge of the Company,
threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, against the Company, or its
Subsidiaries or any of their respective properties which:
(a) purport to affect or pertain to this Agreement
or any other Loan Document, or any of the transactions
contemplated hereby or thereby; or
(b) if determined adversely to the Company or its
Subsidiaries, would reasonably be expected to have a Material
Adverse Effect.
No injunction, writ, temporary restraining order or any order of
any nature has been issued by any court or other Governmental
Authority purporting to enjoin or restrain the execution,
delivery or performance of this Agreement or any other Loan
Document, or directing that the transactions provided for herein
or therein not be consummated as herein or therein provided.
5.06 No Default. No Default or Event of Default exists or
would result from the incurring of any Obligations by the
Company. As of the Closing Date, neither the Company nor any
Subsidiary is in default under or with respect to any
Contractual Obligation in any respect which, individually or
together with all other such defaults, could reasonably be
expected to have a Material Adverse Effect, or that would, if
such default had occurred after the Closing Date, create an
Event of Default under subsection 8.01(e).
5.07 ERISA Compliance. Except as specifically disclosed in
Schedule 5.07:
(a) Each Plan is in compliance in all material
respects with the applicable provisions of ERISA, the Code and
other federal and state laws. Each Plan which is intended to
qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS and to the best
knowledge of the Company, nothing has occurred which would cause
the loss of such qualification. The Company and each ERISA
Affiliate has made all required contributions to any Plan
subject to Section 412 of the Code, and no application for a
funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect
to any Plan.
(b) There are no pending or, to the best knowledge
of Company, threatened claims, actions or lawsuits, or action by
any Governmental Authority, with respect to any Plan which has
resulted or could reasonably be expected to result in a Material
Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to
any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably
expected to occur; (ii) no Pension Plan has any Unfunded Pension
Liability; (iii) neither the Company nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under
Title IV of ERISA with respect to any Pension Plan (other than
premiums due and not delinquent under Section 4007 of ERISA);
(iv) neither the Company nor any ERISA Affiliate has incurred,
or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of
ERISA, would result in such liability) under Section 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and
(v) neither the Company nor any ERISA Affiliate has engaged in a
transaction that could be subject to Section 4069 or 4212(c) of
ERISA.
5.08 Use of Proceeds; Margin Regulations. The proceeds of
the Loans are to be used solely for the purposes set forth in
and permitted by Section 6.12 and Section 7.07. Neither the
Company nor any Subsidiary is generally engaged in the business
of purchasing or selling Margin Stock or extending credit for
the purpose of purchasing or carrying Margin Stock.
5.09 Title to Properties. The Company and each Subsidiary
have good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in
the ordinary conduct of their respective businesses, except for
such defects in title as could not, individually or in the
aggregate, have a Material Adverse Effect. As of the Closing
Date, the property of the Company and its Subsidiaries is
subject to no Liens, other than Permitted Liens.
5.10 Taxes. The Company and its Subsidiaries have filed all
Federal and other material tax returns and reports required to
be filed, and have paid all Federal and other material taxes,
assessments, fees and other governmental charges levied or
imposed upon them or their properties, income or assets
otherwise due and payable, except those which are being
contested in good faith by appropriate proceedings and for which
adequate reserves have been provided in accordance with GAAP.
There is no proposed tax assessment against the Company or any
Subsidiary that would, if made, have a Material Adverse Effect.
5.11 Financial Condition. (a) The audited consolidated
financial statements of the Company and its Subsidiaries for the
year ended October 31, 1997, and the related consolidated
statements of income or operations, shareholders' equity and
cash flows for the fiscal year ended on that date:
(i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein;
(ii) fairly present the financial condition of
the Company and its Subsidiaries as of the date thereof and
results of operations for the period covered thereby; and
(iii) except as specifically disclosed in
Schedule 5.11, show all material indebtedness and other
liabilities, direct or contingent, of the Company and its
consolidated Subsidiaries as of the date thereof, including
liabilities for taxes, material commitments and Contingent
Obligations.
(b) Since October 31, 1997, there has been no event
or condition which has resulted in a Material Adverse Effect.
5.12 Environmental Matters. The Company conducts in the
ordinary course of business a review of the effect of existing
Environmental Laws and existing Environmental Claims on its
business, operations and properties, and as a result thereof the
Company has reasonably concluded that, except as specifically
disclosed in Schedule 5.12, such Environmental Laws and
Environmental Claims could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
5.13 Regulated Entities. None of the Company, any Person
controlling the Company, or any Subsidiary, is an "Investment
Company" within the meaning of the Investment Company Act of
1940. The Company is not subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code, or any
other Federal or state statute or regulation limiting its
ability to incur Indebtedness.
5.14 No Burdensome Restrictions. Neither the Company nor
any Subsidiary is subject to any restriction in any Organization
Document or to any Requirement of Law, which could reasonably be
expected to have a Material Adverse Effect. Neither the Company
nor any Subsidiary is a party to or bound by any Contractual
Obligation which the Company reasonably anticipates may have a
Material Adverse Effect.
5.15 Copyrights, Patents, Trademarks and Licenses, etc.
The Company and its Subsidiaries own or are licensed or
otherwise have the right to use all of the patents, trademarks,
service marks, trade names, copyrights, contractual franchises,
authorizations and other rights that are reasonably necessary
for the operation of their respective businesses, without
conflict with the rights of any other Person. To the best
knowledge of the Company, no slogan or other advertising device,
product, process, method, substance, part or other material now
employed, or now contemplated to be employed, by the Company or
any Subsidiary infringes upon any rights held by any other
Person. Except as specifically disclosed in Schedule 5.05, no
claim or litigation regarding any of the foregoing is pending or
threatened, and no patent, invention, device, application,
principle or any statute, law, rule, regulation, standard or
code is pending or, to the knowledge of the Company, proposed,
which, in either case, could reasonably be expected to have a
Material Adverse Effect.
5.16 Subsidiaries. As of the Closing Date, the Company has
no Subsidiaries other than those specifically disclosed in part
(a) of Schedule 5.16 hereto and has no equity investments in any
other corporation or entity other than those specifically
disclosed in part (b) of Schedule 5.16.
5.17 Insurance. Except as specifically disclosed in
Schedule 5.17, the properties of the Company and its
Subsidiaries are insured with financially sound and reputable
insurance companies not Affiliates of the Company, in such
amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses
and owning similar properties in localities where the Company or
such Subsidiary operates.
5.18 Swap Obligations. Neither the Company nor any of its
Subsidiaries has incurred any outstanding obligations under any
Swap Contracts, other than Permitted Swap Obligations. The
Company has undertaken its own independent assessment of its
consolidated assets, liabilities and commitments and has
considered appropriate means of mitigating and managing risks
associated with such matters and has not relied on any swap
counterparty or any Affiliate of any swap counterparty in
determining whether to enter into any Swap Contract.
5.19 Full Disclosure. None of the representations or
warranties made by the Company or any Subsidiary in the Loan
Documents as of the date such representations and warranties are
made or deemed made, and none of the statements contained in any
exhibit, report, statement or certificate furnished by or on
behalf of the Company or any Subsidiary in connection with the
Loan Documents (including the offering and disclosure materials
delivered by or on behalf of the Company to the Banks prior to
the Closing Date), contains any untrue statement of a material
fact or omits any material fact required to be stated therein or
necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of
the time when made or delivered.
5.20 Year 2000 Compliance. The Company has conducted a
comprehensive review and assessment of the Company's computer
applications and made inquiry of the Company's key suppliers,
vendors, and customers with respect to the "year 2000 problem"
(that is, the risk that computer applications may not be able to
properly perform date-sensitive functions after December 31,
1999) and based on that review and inquiry, the Company does not
believe that the year 2000 problem will have a Material Adverse
Effect.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or
any Loan or other Obligation shall remain unpaid or unsatisfied,
unless the Majority Banks waive compliance in writing:
6.01 Financial Statements. The Company shall deliver to the
Agent, in form and detail satisfactory to the Agent and the
Majority Banks, with sufficient copies for each Bank:
(a) as soon as available, but not later than 90 days
after the end of each fiscal year (commencing with the fiscal
year ended October 31, 1998), a copy of the audited consolidated
balance sheet of the Company and its Subsidiaries as at the end
of such year and the related consolidated statements of income
or operations, shareholders' equity and cash flows for such
year, setting forth in each case in comparative form the figures
for the previous fiscal year, and accompanied by the opinion of
a nationally-recognized independent public accounting firm
("Independent Auditor") selected by the Company which report
shall state that such consolidated financial statements present
fairly the financial position for the periods indicated in
conformity with GAAP applied on a basis consistent with prior
years. Such opinion shall not be qualified or limited because
of a restricted or limited examination by the Independent
Auditor of any material portion of the Company's or any
Subsidiary's records and shall be delivered to the Agent
pursuant to a reliance agreement between the Agent and Banks and
such Independent Auditor in form and substance satisfactory to
the Agent;
(b) as soon as available, but not later than 60 days
after the end of each of the first three fiscal quarters of
each fiscal year (commencing with the fiscal quarter ended
January 31, 1998), a copy of the unaudited consolidated balance
sheet of the Company and its Subsidiaries as of the end of such
quarter and the related consolidated statements of income,
shareholders' equity and cash flows for the period commencing on
the first day and ending on the last day of such quarter, and
certified by a Responsible Officer as fairly presenting, in
accordance with GAAP (subject to ordinary, good faith year-end
audit adjustments), the financial position and the results of
operations of the Company and the Subsidiaries; and
(c) promptly upon receipt by Company of a request
therefor from Agent (acting on instructions from Majority
Lenders), a copy of an unaudited consolidating balance sheet of
the Company and its Subsidiaries and the related consolidating
statement of income, shareholders' equity and cash flows for the
most recent fiscal quarter or year then ended, as the case may
be, certified by a Responsible Officer as having been developed
and used in connection with the preparation of the financial
statements referred to in subsections 6.01(a) or (b).
6.02 Certificates; Other Information. The Company shall
furnish to the Agent, with sufficient copies for each Bank:
(a) concurrently with the delivery of the financial
statements referred to in subsection 6.01(a), a certificate of
the Independent Auditor stating that as of the end of such
fiscal year Company was in compliance with the terms of Sections
6.13, 6.14, and 6.15 hereof;
(b) concurrently with the delivery of the financial
statements referred to in subsections 6.01(a) and (b), a
Compliance Certificate executed by a Responsible Officer;
(c) promptly, copies of all financial statements and
reports that the Company sends to its shareholders, and copies
of all financial statements and regular, periodical or special
reports (including Forms 10K, 10Q and 8K) that the Company or
any Subsidiary may make to, or file with, the SEC; and
(d) promptly, such additional information regarding
the business, financial or corporate affairs of the Company or
any Subsidiary as the Agent, at the request of any Bank, may
from time to time request.
6.03 Notices. The Company shall promptly notify the Agent
and each Bank:
(a) of the occurrence of any Default or Event of
Default, and of the occurrence or existence of any event or
circumstance that foreseeably will become a Default or Event of
Default;
(b) of any matter that has resulted or may result in
a Material Adverse Effect, including (i) breach or
non-performance of, or any default under, a Contractual
Obligation of the Company or any Subsidiary; (ii) any dispute,
litigation, investigation, proceeding or suspension between the
Company or any Subsidiary and any Governmental Authority; or
(iii) the commencement of, or any material development in, any
litigation or proceeding affecting the Company or any
Subsidiary, including pursuant to any applicable Environmental
Laws;
(c) of the occurrence of any of the following events
affecting the Company or any ERISA Affiliate (but in no event
more than 10 days after such event), and deliver to the Agent
and each Bank a copy of any notice with respect to such event
that is filed with a Governmental Authority and any notice
delivered by a Governmental Authority to the Company or any
ERISA Affiliate with respect to such event:
(i) an ERISA Event;
(ii) a material increase in the Unfunded
Pension Liability of any Pension Plan;
(iii) the adoption of, or the commencement of
contributions to, any Plan subject to Section 412 of the
Code by the Company or any ERISA Affiliate; or
(iv) the adoption of any amendment to a Plan
subject to Section 412 of the Code, if such amendment
results in a material increase in contributions or Unfunded
Pension Liability.
(d) of any material change in accounting policies or
financial reporting practices by the Company or any of its
consolidated Subsidiaries;
(e) upon the request from time to time of the Agent,
the Swap Termination Values, together with a description of the
method by which such values were determined, relating to any
then-outstanding Swap Contracts to which the Company or any of
its Subsidiaries is party.
Each notice under this Section shall be accompanied by
a written statement by a Responsible Officer setting forth
details of the occurrence referred to therein, and stating what
action the Company or any affected Subsidiary proposes to take
with respect thereto and at what time. Each notice under
subsection 6.03(a) shall describe with particularity any and all
clauses or provisions of this Agreement or other Loan Document
that have been (or foreseeably will be) breached or violated.
6.04 Preservation of Corporate Existence, Etc. The Company
shall, and shall cause each Subsidiary to:
(a) preserve and maintain in full force and effect
its corporate existence and good standing under the laws of its
state or jurisdiction of incorporation;
(b) preserve and maintain in full force and effect
all governmental rights, privileges, qualifications, permits,
licenses and franchises necessary or desirable in the normal
conduct of its business, except in connection with transactions
permitted by Section 7.03 and sales of assets permitted by
Section 7.02;
(c) use reasonable efforts, in the ordinary course
of business, to preserve its business organization and goodwill;
and
(d) preserve or renew all of its registered patents,
copyrights, trademarks, trade names and service marks, the
non-preservation of which could reasonably be expected to have a
Material Adverse Effect.
6.05 Maintenance of Property. The Company shall maintain,
and shall cause each Subsidiary to maintain, and preserve all
its property which is used or useful in its business in good
working order and condition, ordinary wear and tear excepted and
make all necessary repairs thereto and renewals and replacements
thereof, except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect and is permitted
by Section 7.02. The Company and each Subsidiary shall use the
standard of care typical in the industry in the operation and
maintenance of its facilities.
6.06 Insurance. The Company shall maintain, and shall cause
each Subsidiary to maintain, with financially sound and
reputable independent insurers, insurance with respect to its
properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or
similar business, of such types and in such amounts as are
customarily carried under similar circumstances by such other
Persons.
6.07 Payment of Obligations. The Company shall, and shall
cause each Subsidiary to, pay and discharge as the same shall
become due and payable, all their respective obligations and
liabilities, including:
(a) all tax liabilities, assessments and
governmental charges or levies upon it or its properties or
assets, unless the same are being contested in good faith by
appropriate proceedings and adequate reserves in accordance with
GAAP are being maintained by the Company or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law
become a Lien upon its property, unless the same are being
contested in good faith by appropriate proceedings and adequate
reserves in accordance with GAAP are being maintained by the
Company or such Subsidiary; and
(c) all indebtedness, as and when due and payable,
but subject to any subordination provisions contained in any
instrument or agreement evidencing such Indebtedness.
6.08 Compliance with Laws. The Company shall comply, and
shall cause each Subsidiary to comply, in all material respects
with all Requirements of Law of any Governmental Authority
having jurisdiction over it or its business (including the
Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may
exist.
6.09 Compliance with ERISA. The Company shall, and shall
cause each of its ERISA Affiliates to: (a) maintain each Plan
in compliance in all material respects with the applicable
provisions of ERISA, the Code and other federal or state law;
(b) cause each Plan which is qualified under Section 401(a) of
the Code to maintain such qualification; and (c) make all
required contributions to any Plan subject to Section 412 of the
Code.
6.10 Inspection of Property and Books and Records. The
Company shall maintain and shall cause each Subsidiary to
maintain proper books of record and account, in which full, true
and correct entries in conformity with GAAP consistently applied
shall be made of all financial transactions and matters
involving the assets and business of the Company and such
Subsidiary. The Company shall permit, and shall cause each
Subsidiary to permit, representatives and independent
contractors of the Agent or any Bank to visit and inspect any of
their respective properties, to examine their respective
corporate, financial and operating records, and make copies
thereof or abstracts therefrom, and to discuss their respective
affairs, finances and accounts with their respective directors,
officers, and independent public accountants, all at the expense
of the Company and at such reasonable times during normal
business hours and as often as may be reasonably desired, upon
reasonable advance notice to the Company; provided, however,
when an Event of Default exists, the Agent or any Bank may do
any of the foregoing at the expense of the Company at any time
during normal business hours and without advance notice.
6.11 Environmental Laws. The Company shall, and shall cause
each Subsidiary to, conduct its operations and keep and maintain
its property in compliance with all Environmental Laws where the
failure to comply with such laws would have a Material Adverse
Effect.
6.12 Use of Proceeds. The Company shall use the proceeds of
the Loans for working capital and other general corporate
purposes, not in contravention of any Requirement of Law or of
any Loan Document; provided however, that the proceeds of the
Loans shall not be used for purposes of undertaking an
Acquisition or the acquisition of 5% 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.
6.13 Tangible Net Worth. The Company shall maintain a
Tangible Net Worth of not less than Three Hundred Eighty Million
Dollars ($380,000,000) as determined as of the end of each of
the Company's fiscal quarters, beginning April 30, 1998.
6.14 Maximum Capitaliz. The Company shall maintain a
Capitalization Ratio of not more than .60 to 1.0 (60%) as
determined as of the end of each of the Company's fiscal
quarters, beginning April 30, 1998.
6.15 Interest Coverage Ratio. The Company shall maintain
an Interest Coverage Ratio of not less than 3.0 to 1.0 as
determined as of the end of each of the Company's fiscal
quarters, beginning April 30, 1998. As used herein "Interest
Coverage Ratio" means, as measured quarterly on the last day of
each fiscal quarter for the Optimal Four Fiscal Quarter Period
then-ending, the ratio of (i) EBITDDA to (ii) the combined
interest expenses (including capitalized interest and the
interest portion of capital lease obligations) of the Company
and its Subsidiaries for such Optimal Four Fiscal Quarter
Period. As used herein, "Optimal Four Fiscal Quarter Period"
shall mean any four fiscal quarters selected by the Company in
the five consecutive fiscal quarter period ending on the date of
calculation. As used herein "EBITDDA" means for any period, the
net income (or net loss) for such period, excluding any
extraordinary gains or losses and taxes associated therewith,
plus, to the extent deducted in the determination of net income,
the sum of (a) interest expense, (b) income tax expense, (c)
depreciation expense, (d) depletion expense, and (e)
amortization expense, in each case determined for the Company
and its consolidated Subsidiaries on a combined basis in
accordance with GAAP for such period.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or
any Loan or other Obligation shall remain unpaid or unsatisfied,
unless the Majority Banks waive compliance in writing:
7.01 Limitation on Liens. The Company shall not, and shall
not suffer or permit any Subsidiary to, directly or indirectly,
make, create, incur, assume or suffer to exist any Lien upon or
with respect to any part of its property, including without
limitation, its timber and timberlands, whether now owned or
hereafter acquired, other than the following ("Permitted
Liens"):
(a) any Lien existing on property of the Company or
any Subsidiary on the Closing Date and set forth in Schedule
7.01 securing Indebtedness outstanding on such date and any
subsequent Lien replacing any such Lien provided that (i) such
replacement Lien shall not be extended to any other property of
the Company or any Subsidiary other than the property covered by
the original Lien, (ii) the amount of the Indebtedness secured
by such replacement Lien is not increased, and (iii) the
Indebtedness secured by such replacement Lien shall not exceed
100% of the fair market value of the related property;
(b) any Lien created under any of the Loan
Documents;
(c) Liens for taxes, fees, assessments or other
governmental charges which are not delinquent or remain payable
without penalty, or to the extent that non-payment thereof is
permitted by Section 6.07, provided that no notice of lien has
been filed or recorded under the Code;
(d) carriers', warehousemen's, mechanics',
landlords', materialmen's, repairmen's or other similar Liens
arising in the ordinary course of business which are not
delinquent or remain payable without penalty or which are being
contested in good faith and by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale
of the property subject thereto;
(e) Liens (other than any Lien imposed by ERISA)
consisting of pledges or deposits required in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other social security legislation;
(f) Liens on the property of the Company or its
Subsidiary securing (i) the non-delinquent performance of bids,
trade contracts (other than for borrowed money), leases,
statutory obligations, (ii) contingent obligations on surety and
appeal bonds, and (iii) other non-delinquent obligations of a
like nature; in each case, incurred in the ordinary course of
business, provided all such Liens in the aggregate would not
(even if enforced) cause a Material Adverse Effect;
(g) Liens consisting of judgment or judicial
attachment liens, provided that the enforcement of such Liens is
either effectively stayed or all such liens in the aggregate at
any time outstanding for the Company and its Subsidiaries do not
secure obligations which in the aggregate exceed $5,000,000;
(h) with respect to timberland now or hereafter owned,
leased, or otherwise acquired by the Company or any Subsidiary,
Liens consisting of encumbrances in the nature of leases or
subleases granted to others, easements, rights-of-way,
restrictions, reservations of mineral, oil and gas, water or
other similar rights existing on the date of acquisition of any
property by the Company or any Subsidiary, encroachments or
questions of location, boundary and area which an accurate
survey may disclose, exceptions and reservations in United
States patents or state deeds, any prohibition or limitation on
the use, occupancy or improvement of land resulting from the
rights of the public or riparian owners to use any waters which
may cover the land and other similar charges or encumbrances, in
each case incidental to, and not interfering with, the ordinary
conduct of the business of the Company or any Subsidiary;
(i) Liens on assets of corporations which become
Subsidiaries after the date of this Agreement, provided,
however, that such Liens existed at the time the respective
corporations became Subsidiaries and were not created in
anticipation thereof and any subsequent Lien replacing any such
Lien provided that (i) such replacement Lien shall not be
extended to any other property of the Company or any Subsidiary
other than the property covered by the original Lien, (ii) the
amount of the Indebtedness secured by such replacement Lien is
not increased, and (iii) the Indebtedness secured by such
replacement Lien shall not exceed 100% of the fair market value
of the related property;
(j) purchase money security interests on any property
acquired or held by the Company or its Subsidiaries in the
ordinary course of business, securing Indebtedness incurred or
assumed for the purpose of financing all or any part of the cost
of acquiring such property; provided that (i) any such Lien
attaches to such property concurrently with or within 20 days
after the acquisition thereof, (ii) such Lien attaches solely to
the property so acquired in such transaction (together with the
proceeds thereof and any accessions thereto), and (iii) the
principal amount of the debt secured thereby does not exceed
100% of the cost of such property;
(k) Liens securing obligations in respect of capital
leases on assets subject to such leases, provided that such
capital leases are otherwise permitted hereunder;
(l) Liens arising solely by virtue of any statutory or
common law provision relating to banker's liens, rights of set-
off or similar rights and remedies as to deposit accounts or
other funds maintained with a creditor depository institution;
provided that (i) such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by
regulations promulgated by the FRB, and (ii) such deposit
account is not intended by the Company or any Subsidiary to
provide collateral to the depository institution; and
(m) Any other Liens, provided that the aggregate
amount of Indebtedness secured by such Liens does not exceed an
amount equal to ten percent (10%) of the book value of the
Company's assets as reflected on its most recent financial
statements provided to the Agent pursuant to Section 6.01
hereof, or, if no such financial statements have yet been
required under Section 6.01, the financial statements referenced
in Section 5.11 hereof.
7.02 Disposition of Assets. The Company shall not, and
shall not suffer or permit any Subsidiary to, directly or
indirectly, sell, assign, lease, convey, transfer or otherwise
dispose of (whether in one or a series of transactions) any
property (including accounts and notes receivable, with or
without recourse) or enter into any agreement to do any of the
foregoing, except:
(a) dispositions of inventory, or used, worn-out or
surplus equipment, all in the ordinary course of business;
(b) the sale of equipment to the extent that such
equipment is exchanged for credit against the purchase price of
similar replacement equipment, or the proceeds of such sale are
reasonably promptly applied to the purchase price of such
replacement equipment;
(c) dispositions of assets by the Company or any
Subsidiary to the Company or any Subsidiary pursuant to
reasonable business requirements provided, that the Company may
not transfer any assets other than timber and timberlands to any
Subsidiary if the fair market value of the transferred assets,
in the aggregate, taken together with the fair market value of
all other assets (other than timber or timberlands) transferred
by the Company to any Subsidiary at any time after the date of
this Agreement would exceed at the time of such proposed
transfer an amount equal to five percent (5%) of the book value
of the Company's assets as reflected on its most recent
financial statements provided to the Agent pursuant to
Section 6.01 hereof, or, if no such financial statements have
yet been required under Section 6.01, the financial statements
referenced in Section 5.11 hereof, and provided, further, that
the Company may not transfer any timber and timberlands to any
Subsidiary if the fair market value of such timber and
timberlands, in the aggregate, taken together with the fair
market value of all other timber or timberlands transferred by
the Company to any Subsidiary at any time after the date of this
Agreement would exceed the sum of $60,000,000;
(d) dispositions consisting of the exchange of assets
for assets of an equivalent value and of a similar nature to be
used in the business of the Company or any Subsidiary to any
Person; and
(e) dispositions not otherwise prohibited hereunder;
provided, that such dispositions are made for fair market value;
and provided further, that (i) at the time of any such
disposition, no Event of Default shall exist or shall result
from such disposition and (ii) the aggregate value of all assets
so sold by the Company and its Subsidiaries, together, shall not
exceed in any fiscal year $60,000,000.
7.03 Consolidations and Mergers. The Company shall not, and
shall not suffer or permit any Subsidiary to, merge, consolidate
with or into, or convey, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all
or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except:
(a) any Subsidiary may merge with the Company,
provided that the Company shall be the continuing or surviving
corporation, or with any one or more Subsidiaries, provided that
if any transaction shall be between a Subsidiary and a
Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary shall be
the continuing or surviving corporation; and
(b) any Subsidiary may sell all or substantially all
of its assets (upon voluntary liquidation or otherwise), to the
Company or another Wholly-Owned Subsidiary.
7.04 Loans and Investments. The Company shall not purchase
or acquire, or suffer or permit any Subsidiary to purchase or
acquire, or make any commitment therefor, any capital stock,
equity interest, or any obligations or other securities of, or
any interest in, any Person, or make or commit to make any
Acquisitions, or make or commit to make any advance, loan,
extension of credit or capital contribution to or any other
investment in, any Person including any Affiliate of the Company
(together, "Investments"), except for:
(a) Investments held by the Company or a Subsidiary
in the form of cash equivalents or short term marketable
securities;
(b) extensions of credit in the nature of accounts
receivable or notes receivable arising from the sale or lease of
goods or services in the ordinary course of business;
(c) extensions of credit by the Company to any of
its Wholly-Owned Subsidiaries or by any of its Wholly-Owned
Subsidiaries to another of its Wholly-Owned Subsidiaries;
(d) Investments incurred in order to consummate
Acquisitions otherwise permitted herein, provided that (i) the
book value (as to the purchaser) of any such Acquisition,
together with such value of all prior Acquisitions undertaken by
the Company and its Subsidiaries after the Closing Date, shall
not exceed at the time of such Investment ten percent (10%) of
consolidated Tangible Net Worth as calculated immediately prior
to such Acquisition, (ii) such Acquisitions are undertaken in
accordance with all applicable Requirements of Law; and (iii)
the prior, effective written consent or approval to such
Acquisition of the board of directors or equivalent governing
body of the acquiree is obtained;
(e) Investments in Joint Ventures not exceeding
Fifty Million Dollars ($50,000,000) in any fiscal year as to all
such Investments in the aggregate;
(f) Investments in any Person supplying labor or
materials for the conversion, maintenance, harvesting, selling
and other operations relating to the Company's timber and
timberland, Persons who provide the Company with woodproducts
(or the handling thereof) used as a raw material or supply by
the Company in the manufacture of its products and customers
using products sold by the Company, provided that the aggregate
amount of all such Investments (including, without limitation,
any such Investments owned on the date hereof) shall not exceed
$25,000,000 at any one time outstanding;
(g) Investments constituting Permitted Swap
Obligations or payments or advances under Swap Contracts
relating to Permitted Swap Obligations;
(h) Investments in a special purpose entity where
the fair market values of the real property (including
improvements and timberlands), standing timber, plant and
equipment, inventory and receivables owned by such entity is not
less than ninety-five percent (95%) of the aggregate amount paid
by the Company for such special purpose entity; provided
however, that after giving effect to any such investment, the
special purpose entity purchased pursuant to this paragraph
7.04(h) shall be a Wholly-Owned Subsidiary, and; provided
further, that such Wholly-Owned Subsidiary is merged with the
Company in a transaction in which the Company is the surviving
entity within thirty (30) days of the making of such investment.
(i) Advances, loans or extensions of credit pursuant
to the Company's Employee Relocation Plan.
7.05 Transactions with Affiliates. The Company shall not,
and shall not suffer or permit any Subsidiary to, enter into any
transaction with any Affiliate of the Company, except upon fair
and reasonable terms no less favorable to the Company or such
Subsidiary than would obtain in a comparable arm's-length
transaction with a Person not an Affiliate of the Company or
such Subsidiary.
7.06 Use of Proceeds. (a) The Company shall not, and shall
not suffer or permit any Subsidiary to, use any portion of the
Loan proceeds, directly or indirectly, (i) to purchase or carry
Margin Stock, (ii) to repay or otherwise refinance indebtedness
of the Company or others incurred to purchase or carry Margin
Stock, (iii) to extend credit for the purpose of purchasing or
carrying any Margin Stock, or (iv) to acquire any security in
any transaction that is subject to Section 13 or 14 of the
Exchange Act.
(b) The Company shall not, directly or indirectly, use
any portion of the Loan proceeds (i) knowingly to purchase
Ineligible Securities from BancAmerica Robertson Stephens, a
Delaware corporation, (the "Arranger") during any period in
which the Arranger makes a market in such Ineligible Securities,
(ii) knowingly to purchase during the underwriting or placement
period Ineligible Securities being underwritten or privately
placed by the Arranger, or (iii) to make payments of principal
or interest on Ineligible Securities underwritten or privately
placed by the Arranger and issued by or for the benefit of the
Company or any Affiliate of the Company. The Arranger is a
registered broker-dealer and permitted to underwrite and deal in
certain Ineligible Securities; and "Ineligible Securities" means
securities which may not be underwritten or dealt in by member
banks of the Federal Reserve System under Section 16 of the
Banking Act of 1933 (12 U.S.C. #24, Seventh), as amended.
7.07 Joint Ventures. The Company shall not, and shall not
suffer or permit any Subsidiary to, enter into any Joint
Venture, other than in the ordinary course of business and in
compliance with Section 7.04(e).
7.08 Lease Obligations. The Company shall not, and shall
not suffer or permit any Subsidiary to, create or suffer to
exist any obligations for the payment of rent for any property
under lease or agreement to lease, except for:
(a) leases of the Company and of Subsidiaries in
existence on the Closing Date and any renewal, extension or
refinancing thereof;
(b) operating leases entered into by the Company or
any Subsidiary after the Closing Date in the ordinary course of
business;
(c) leases entered into by the Company or any
Subsidiary after the Closing Date pursuant to sale-leaseback
transactions permitted under subsection 7.02(d); and
(d) capital leases not otherwise precluded by the
terms of this Agreement.
7.09 ERISA. The Company shall not, and shall not suffer
or permit any of its ERISA Affiliates to: (a) engage in a
prohibited transaction or violation of the fiduciary responsi-
bility rules with respect to any Plan which has resulted or
could reasonably expected to result in liability of the Company
in an aggregate amount in excess of $5,000,000; or (b) engage in
a transaction that could be subject to Section 4069 or 4212(c)
of ERISA.
7.10 Change in Business. The Company shall not, and shall
not suffer or permit any Subsidiary to, engage in any material
line of business substantially different from those lines of
business carried on by the Company and its Subsidiaries on the
date hereof.
7.11 Accounting Changes. The Company shall not, and shall
not suffer or permit any Subsidiary to, make any material change
in accounting treatment or reporting practices, except as
required by GAAP, or change the fiscal year of the Company or of
any Subsidiary.
ARTICLE VIII
EVENTS OF DEFAULT
8.01 Event of Default. Any of the following shall
constitute an "Event of Default":
(a) Non-Payment. The Company fails to pay, when and
as required to be paid herein, any amount of principal of any
Loan, or any interest, fee or any other amount payable hereunder
or under any other Loan Document; or
(b) Representation or Warranty. Any representation
or warranty by the Company or any Subsidiary made or deemed made
herein or in any other Loan Document, or any representation or
warranty which is contained in any certificate, document or
financial or other statement by the Company, any Subsidiary, or
any Responsible Officer, furnished at any time under this
Agreement, or under any other Loan Document, is incorrect in any
material respect on or as of the date made or deemed made; or
(c) Specific Defaults. The Company fails to perform
or observe any term, covenant or agreement contained in any of
Sections 6.03, 6.13, 6.14, or 6.15 or in Article VII; or
(d) Other Defaults. The Company or any Subsidiary
party thereto fails to perform or observe any other term or
covenant contained in this Agreement or any other Loan Document,
and such default shall continue unremedied or unwaived for a
period of 20 days after the date upon which written notice
thereof is given to the Company by the Agent or any Bank; or
(e) Cross-Default. (i) The Company or any
Subsidiary (A) fails to make any payment in respect of any
Indebtedness or Contingent Obligation (other than in respect of
Swap Contracts), when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise); or
(B) fails to perform or observe any other condition or covenant,
or any other event shall occur or condition exist, under any
agreement or instrument relating to any such Indebtedness or
Contingent Obligation, and such failure described in (A) or (B)
above (x) continues unremedied and unwaived after the applicable
grace or notice period, if any, specified in the relevant
document on the date of such failure, if the effect of such
failure, event or condition is to cause, or to permit the holder
or holders of such Indebtedness or beneficiary or beneficiaries
of such Indebtedness (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause such
Indebtedness to be declared to be due and payable prior to its
stated maturity, or such Contingent Obligation to become payable
or cash collateral in respect thereof to be demanded or, (y) if
the relevant document contains no grace period or notice period
and the holder or holders or beneficiary or beneficiaries have
not declared a default or caused such indebtedness to be
declared due and payable prior to its stated maturity, such
failure continues unremedied and unwaived for a period of twenty
(20) days after the Company or the holder or holders or
beneficiary or beneficiaries first learn of such failure; or
(ii) there occurs under any Swap Contract an Early Termination
Date (as defined in such Swap Contract) resulting from (1) any
event of default under such Swap Contract as to which the
Company or any Subsidiary is the Defaulting Party (as defined in
such Swap Contract) or (2) any Termination Event (as so defined)
as to which the Company or any Subsidiary is an Affected Party
(as so defined) and, in either event, the Swap Termination Value
owed by the Company or such Subsidiary as a result thereof is
greater than $5,000,000; or
(f) Insolvency; Voluntary Proceedings. The Company
or any Subsidiary (i) ceases or fails to be solvent, or
generally fails to pay, or admits in writing its inability to
pay, its debts as they become due, subject to applicable grace
periods, if any, whether at stated maturity or otherwise; (ii)
voluntarily ceases to conduct its business in the ordinary
course; (iii) commences any Insolvency Proceeding with respect
to itself; or (iv) takes any action to effectuate or authorize
any of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary
Insolvency Proceeding is commenced or filed against the Company
or any Subsidiary, or any writ, judgment, warrant of attachment,
execution or similar process, is issued or levied against a
substantial part of the Company's or any Subsidiary's
properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment,
execution or similar process shall not be released, vacated or
fully bonded within 60 days after commencement, filing or levy;
(ii) the Company or any Subsidiary admits the material
allegations of a petition against it in any Insolvency
Proceeding, or an order for relief (or similar order under non-
U.S. law) is ordered in any Insolvency Proceeding; or (iii) the
Company or any Subsidiary acquiesces in the appointment of a
receiver, trustee, custodian, conservator, liquidator, mortgagee
in possession (or agent therefor), or other similar Person for
itself or a substantial portion of its property or business; or
(h) ERISA. (i) An ERISA Event shall occur with
respect to a Pension Plan or Multiemployer Plan which has
resulted or could reasonably be expected to result in liability
of the Company under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess
of $5,000,000; (ii) the aggregate amount of Unfunded Pension
Liability among all Pension Plans at any time exceeds
$5,000,000; or (iii) the Company or any ERISA Affiliate shall
fail to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of
$5,000,000; or
(i) Monetary Judgments. One or more non-
interlocutory judgments, non-interlocutory orders, decrees or
arbitration awards is entered against the Company or any
Subsidiary involving in the aggregate a liability (to the extent
not covered by independent third-party insurance as to which the
insurer does not dispute coverage) as to any single or related
series of transactions, incidents or conditions, of $5,000,000
or more, and the same shall remain unvacated and unstayed
pending appeal for a period of 10 days after the entry thereof;
or
(j) Non-Monetary Judgments. Any non-monetary
judgment, order or decree is entered against the Company or any
Subsidiary which does or would reasonably be expected to have a
Material Adverse Effect, and there shall be any period of 30
consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect; or
(k) Change of Control. There occurs any Change of
Control; or
(l) Year 2000 Concerns. The matters represented and
warranted in Section 5.20 shall cease to be true at any time,
(whether or not such representation was true at all times when
made or deemed made hereunder), and as a result thereof,
Majority Banks conclude that a Material Adverse Effect has
occurred or will occur in calendar year 2000.
8.02 Remedies. If any Event of Default occurs, the Agent
shall, at the request of, or may, with the consent of, the
Majority Banks,
(a) declare the Commitment of each Bank to make
Loans to be terminated, whereupon such Commitments shall be
terminated;
(b) declare the unpaid principal amount of all
outstanding Loans, all interest accrued and unpaid thereon, and
all other amounts owing or payable hereunder or under any other
Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived by the Company; and
(c) exercise on behalf of itself and the Banks all
rights and remedies available to it and the Banks under the Loan
Documents or applicable law;
provided, however, that upon the occurrence of any event
specified in subsection (f) or (g) of Section 8.01 (in the case
of clause (i) of subsection (g) upon the expiration of the 60-
day period mentioned therein), the obligation of each Bank to
make Loans shall automatically terminate and the unpaid
principal amount of all outstanding Loans and all interest and
other amounts as aforesaid shall automatically become due and
payable without further act of the Agent or any Bank.
8.03 Rights Not Exclusive. The rights provided for in this
Agreement and the other Loan Documents are cumulative and are
not exclusive of any other rights, powers, privileges or
remedies provided by law or in equity, or under any other
instrument, document or agreement now existing or hereafter
arising.
8.04 Certain Financial Covenant Defaults. In the event that,
after taking into account any extraordinary charge to earnings
taken or to be taken as of the end of any fiscal period of the
Company (a "Charge"), and if solely by virtue of such Charge,
there would exist an Event of Default due to the breach of
Sections 6.13, 6.14 or 6.15 as of such fiscal period end date,
such Event of Default shall be deemed to arise upon the earlier
of (a) the date after such fiscal period end date on which the
Company announces publicly it will take, is taking or has taken
such Charge (including an announcement in the form of a
statement in a report filed with the SEC) or, if such
announcement is made prior to such fiscal period end date, the
date that is such fiscal period end date, and (b) the date the
Company delivers to the Agent its audited annual or unaudited
quarterly financial statements in respect of such fiscal period
reflecting such Charge as taken.
ARTICLE IX
THE AGENT
9.01 Appointment and Authorization; "Agent". Each Bank
hereby irrevocably (subject to Section 9.09) appoints,
designates and authorizes the Agent to take such action on its
behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such
duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers
as are reasonably incidental thereto. Notwithstanding any
provision to the contrary contained elsewhere in this Agreement
or in any other Loan Document, the Agent shall not have any
duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any
fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent. Without limiting the
generality of the foregoing sentence, the use of the term
"agent" in this Agreement with reference to the Agent is not
intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative
relationship between independent contracting parties.
9.02 Delegation of Duties. The Agent may execute any of its
duties under this Agreement or any other Loan Document by or
through agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining
to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that
it selects with reasonable care.
9.03 Liability of Agent. None of the Agent-Related Persons
shall (i) be liable for any action taken or omitted to be taken
by any of them under or in connection with this Agreement or any
other Loan Document or the transactions contemplated hereby
(except for its own gross negligence or willful misconduct), or
(ii) be responsible in any manner to any of the Banks for any
recital, statement, representation or warranty made by the
Company or any Subsidiary or Affiliate of the Company, or any
officer thereof, contained in this Agreement or in any other
Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other
Loan Document, or for any failure of the Company or any other
party to any Loan Document to perform its obligations hereunder
or thereunder. No Agent-Related Person shall be under any
obligation to any Bank to ascertain or to inquire as to the
observance or performance of any of the agreements contained in,
or conditions of, this Agreement or any other Loan Document, or
to inspect the properties, books or records of the Company or
any of the Company's Subsidiaries or Affiliates.
9.04 Reliance by Agent.(a) The Agent shall be entitled to
rely, and shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, statement or
other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal
counsel (including counsel to the Company), independent
accountants and other experts selected by the Agent. The Agent
shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it
shall first receive such advice or concurrence of the Majority
Banks as it deems appropriate and, if it so requests, it shall
first be indemnified to its satisfaction by the Banks against
any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan
Document in accordance with a request or consent of the Majority
Banks and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the
conditions specified in Section 4.01, each Bank that has
executed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or
other matter either sent by the Agent to such Bank for consent,
approval, acceptance or satisfaction, or required thereunder to
be consented to or approved by or acceptable or satisfactory to
the Bank.
9.05 Notice of Default. The Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or
Event of Default, except with respect to defaults in the payment
of principal, interest and fees required to be paid to the Agent
for the account of the Banks, unless the Agent shall have
received written notice from a Bank or the Company referring to
this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". The Agent
will notify the Banks of its receipt of any such notice. The
Agent shall take such action with respect to such Default or
Event of Default as may be requested by the Majority Banks in
accordance with Article VIII; provided, however, that unless and
until the Agent has received any such request, the Agent may
(but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default or Event
of Default as it shall deem advisable or in the best interest of
the Banks.
9.06 Credit Decision. Each Bank acknowledges that none of
the Agent-Related Persons has made any representation or
warranty to it, and that no act by the Agent hereinafter taken,
including any review of the affairs of the Company and its
Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Bank. Each Bank
represents to the Agent that it has, independently and without
reliance upon any Agent-Related Person and based on such
documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and credit
worthiness of the Company and its Subsidiaries, and all
applicable bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Company hereunder.
Each Bank also represents that it will, independently and
without reliance upon any Agent-Related Person and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and
decisions in taking or not taking action under this Agreement
and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition
and credit worthiness of the Company. Except for notices,
reports and other documents expressly herein required to be
furnished to the Banks by the Agent, the Agent shall not have
any duty or responsibility to provide any Bank with any credit
or other information concerning the business, prospects,
operations, property, financial and other condition or credit
worthiness of the Company which may come into the possession of
any of the Agent-Related Persons.
9.07 Indemnification of Agent. Whether or not the
transactions contemplated hereby are consummated, the Banks
shall indemnify upon demand the Agent-Related Persons (to the
extent not reimbursed by or on behalf of the Company and without
limiting the obligation of the Company to do so), pro rata, from
and against any and all Indemnified Liabilities; provided,
however, that no Bank shall be liable for the payment to the
Agent-Related Persons of any portion of such Indemnified
Liabilities resulting solely from such Person's gross negligence
or willful misconduct. Without limitation of the foregoing,
each Bank shall reimburse the Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney
Costs) incurred by the Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document,
or any document contemplated by or referred to herein, to the
extent that the Agent is not reimbursed for such expenses by or
on behalf of the Company. The undertaking in this Section shall
survive the payment of all Obligations hereunder and the
resignation or replacement of the Agent.
9.08 Agent in Individual Capacity. BofA and its Affiliates
may make loans to, issue letters of credit for the account of,
accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory,
underwriting or other business with the Company and its
Subsidiaries and Affiliates as though BofA were not the Agent
hereunder and without notice to or consent of the Banks. The
Banks acknowledge that, pursuant to such activities, BofA or its
Affiliates may receive information regarding the Company or its
Affiliates (including information that may be subject to
confidentiality obligations in favor of the Company or such
Subsidiary) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With respect to
its Loans, BofA shall have the same rights and powers under this
Agreement as any other Bank and may exercise the same as though
it were not the Agent, and the terms "Bank" and "Banks" include
BofA in its individual capacity.
9.09 Successor Agent. The Agent may, and at the request of
the Majority Banks shall, resign as Agent upon 30 days' notice
to the Banks. If the Agent resigns under this Agreement, the
Majority Banks shall appoint from among the Banks a successor
agent for the Banks. If no successor agent is appointed prior
to the effective date of the resignation of the Agent, the Agent
may appoint, after consulting with the Banks and the Company, a
successor agent from among the Banks. Upon the acceptance of
its appointment as successor agent hereunder, such successor
agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term "Agent" shall mean such successor
agent and the retiring Agent's appointment, powers and duties as
Agent shall be terminated. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article
IX and Sections 10.04 and 10.05 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was
Agent under this Agreement. If no successor agent has accepted
appointment as Agent by the date which is 30 days following a
retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and
the Banks shall perform all of the duties of the Agent hereunder
until such time, if any, as the Majority Banks appoint a
successor agent as provided for above.
9.10 Withholding Tax. (a) If any Bank is a "foreign
corporation, partnership or trust" within the meaning of the
Code and such Bank claims exemption from, or a reduction of,
U.S. withholding tax under Sections 1441 or 1442 of the Code,
such Bank agrees with and in favor of the Agent, to deliver to
the Agent:
(i) if such Bank claims an exemption from, or a
reduction of, withholding tax under a United States tax
treaty, two properly completed and executed copies of IRS
Form 1001 before the payment of any interest in the first
calendar year and before the payment of any interest in each
third succeeding calendar year during which interest may be
paid under this Agreement;
(ii) if such Bank claims that interest paid
under this Agreement is exempt from United States
withholding tax because it is effectively connected with a
United States trade or business of such Bank, two properly
completed and executed copies of IRS Form 4224 before the
payment of any interest is due in the first taxable year of
such Bank and in each succeeding taxable year of such Bank
during which interest may be paid under this Agreement; and
(iii) such other form or forms as may be
required under the Code or other laws of the United States
as a condition to exemption from, or reduction of, United
States withholding tax.
Such Bank agrees to promptly notify the Agent of any change in
circumstances which would modify or render invalid any claimed
exemption or reduction.
(b) If any Bank claims exemption from, or reduction
of, withholding tax under a United States tax treaty by
providing IRS Form 1001 and such Bank sells, assigns, grants a
participation in, or otherwise transfers all or part of the
Obligations of the Company to such Bank, such Bank agrees to
notify the Agent of the percentage amount in which it is no
longer the beneficial owner of Obligations of the Company to
such Bank. To the extent of such percentage amount, the Agent
will treat such Bank's IRS Form 1001 as no longer valid.
(c) If any Bank claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells,
assigns, grants a participation in, or otherwise transfers all
or part of the Obligations of the Company to such Bank, such
Bank agrees to undertake sole responsibility for complying with
the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
(d) If any Bank is entitled to a reduction in the
applicable withholding tax, the Agent may withhold from any
interest payment to such Bank an amount equivalent to the
applicable withholding tax after taking into account such
reduction. However, if the forms or other documentation
required by subsection (a) of this Section are not delivered to
the Agent, then the Agent may withhold from any interest payment
to such Bank not providing such forms or other documentation an
amount equivalent to the applicable withholding tax imposed by
Sections 1441 and 1442 of the Code, without reduction.
(e) If the IRS or any other Governmental Authority
of the United States or other jurisdiction asserts a claim that
the Agent did not properly withhold tax from amounts paid to or
for the account of any Bank (because the appropriate form was
not delivered or was not properly executed, or because such Bank
failed to notify the Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax
ineffective, or for any other reason) such Bank shall indemnify
the Agent fully for all amounts paid, directly or indirectly, by
the Agent as tax or otherwise, including penalties and interest,
and including any taxes imposed by any jurisdiction on the
amounts payable to the Agent under this Section, together with
all costs and expenses (including Attorney Costs). The
obligation of the Banks under this subsection shall survive the
payment of all Obligations and the resignation or replacement of
the Agent.
ARTICLE X
MISCELLANEOUS
10.01 Amendments and Waivers. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no
consent with respect to any departure by the Company or any
applicable Subsidiary therefrom, shall be effective unless the
same shall be in writing and signed by the Majority Banks (or by
the Agent at the written request of the Majority Banks) and the
Company and acknowledged by the Agent, and then any such waiver
or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however,
that no such waiver, amendment, or consent shall, unless in
writing and signed by all the Banks and the Company and
acknowledged by the Agent, do any of the following:
(a) increase or extend the Commitment of any Bank
(or reinstate any Commitment terminated pursuant to Section
8.02);
(b) postpone or delay any date fixed by this
Agreement or any other Loan Document for any payment of
principal, interest, fees or other amounts due to the Banks (or
any of them) hereunder or under any other Loan Document;
(c) reduce the principal of, or the rate of interest
specified herein on any Loan, or (subject to clause (ii) below)
any fees or other amounts payable hereunder or under any other
Loan Document;
(d) change the percentage of the Commitments or of
the aggregate unpaid principal amount of the Loans which is
required for the Banks or any of them to take any action
hereunder; or
(e) amend this Section or Section 2.13, or any
provision herein providing for consent or other action by all
Banks;
and, provided further, that (i) no amendment, waiver or consent
shall, unless in writing and signed by the Agent, acting for its
own account, in addition to the Majority Banks or all the Banks,
as the case may be, affect the rights or duties of the Agent
under this Agreement or any other Loan Document, and (ii) the
Fee Letters may be amended, or rights or privileges thereunder
waived, in a writing executed by the parties thereto.
10.02 Notices. (a) All notices, requests, consents,
approvals, waivers and other communications shall be in writing
(including, unless the context expressly otherwise provides, by
facsimile transmission, provided that any matter transmitted by
the Company by facsimile (i) shall be immediately confirmed by a
telephone call to the recipient at the number specified on
Schedule 10.02, and (ii) shall be followed promptly by delivery
of a hard copy original thereof) and mailed, faxed or delivered,
to the address or facsimile number specified for notices on
Schedule 10.02; or, as directed to the Company or the Agent, to
such other address as shall be designated by such party in a
written notice to the other parties, and as directed to any
other party, at such other address as shall be designated by
such party in a written notice to the Company and the Agent.
(b) All such notices, requests and communications
shall, when transmitted by overnight delivery, or faxed, be
effective when delivered for overnight (next-day) delivery, or
transmitted in legible form by facsimile machine, respectively,
or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery;
except that notices pursuant to Article II or IX to the Agent
shall not be effective until actually received by the Agent.
(c) Any agreement of the Agent and the Banks herein
to receive certain notices by telephone or facsimile is solely
for the convenience and at the request of the Company. The
Agent and the Banks shall be entitled to rely on the authority
of any Person purporting to be a Person authorized by the
Company to give such notice and the Agent and the Banks shall
not have any liability to the Company or other Person on account
of any action taken or not taken by the Agent or the Banks in
reliance upon such telephonic or facsimile notice. The
obligation of the Company to repay the Loans shall not be
affected in any way or to any extent by any failure by the Agent
and the Banks to receive written confirmation of any telephonic
or facsimile notice or the receipt by the Agent and the Banks of
a confirmation which is at variance with the terms understood by
the Agent and the Banks to be contained in the telephonic or
facsimile notice.
10.03 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Agent or
any Bank, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise
of any other right, remedy, power or privilege.
10.04 Costs and Expenses. The Company shall:
(a) whether or not the transactions contemplated
hereby are consummated, pay or reimburse BofA (including in its
capacity as Agent) and each Bank within 5 Business Days after
demand (subject to subsection 4.01(e)) for all costs and
expenses incurred by BofA (including in its capacity as Agent)
and each Bank in connection with the development, preparation,
delivery, administration and execution of, and any amendment,
supplement, waiver or modification to (in each case, whether or
not consummated), this Agreement, any Loan Document and any
other documents prepared in connection herewith or therewith,
and the consummation of the transactions contemplated hereby and
thereby, including reasonable Attorney Costs incurred by BofA
(including in its capacity as Agent) and any Bank with respect
thereto; and
(b) pay or reimburse the Agent and each Bank within
five Business Days after demand (subject to subsection 4.01(e))
for all costs and expenses (including Attorney Costs) incurred
by them in connection with the enforcement, attempted
enforcement, or preservation of any rights or remedies under
this Agreement or any other Loan Document during the existence
of an Event of Default or after acceleration of the Loans
(including in connection with any "workout" or restructuring
regarding the Loans, and including in any Insolvency Proceeding
or appellate proceeding).
10.05 Company Indemnification. Whether or not the
transactions contemplated hereby are consummated, the Company
shall indemnify, defend and hold the Agent-Related Persons, each
Bank and each of its respective officers, directors, employees,
counsel, agents and attorneys-in-fact (each, an "Indemnified
Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, charges, expenses and disbursements (including
Attorney Costs) of any kind or nature whatsoever which may at
any time (including at any time following repayment of the Loans
and the termination, resignation or replacement of the Agent or
replacement of any Bank) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of
this Agreement or any document contemplated by or referred to
herein, or the transactions contemplated hereby, or any action
taken or omitted by any such Person under or in connection with
any of the foregoing, including with respect to any
investigation, litigation or proceeding (including any
Insolvency Proceeding or appellate proceeding) related to or
arising out of this Agreement or the Loans or the use of the
proceeds thereof, whether or not any Indemnified Person is a
party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"); provided, that the Company shall have no
obligation hereunder to any Indemnified Person with respect to
Indemnified Liabilities resulting solely from the gross
negligence or willful misconduct of such Indemnified Person. The
agreements in this Section shall survive payment of all other
Obligations.
10.06 Payments Set Aside. To the extent that the Company
makes a payment to the Agent or the Banks, or the Agent or the
Banks exercise their right of set-off, and such payment or the
proceeds of such set-off or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered
into by the Agent or such Bank in its discretion) to be repaid
to a trustee, receiver or any other party, in connection with
any Insolvency Proceeding or otherwise, then (a) to the extent
of such recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full
force and effect as if such payment had not been made or such
set-off had not occurred, and (b) each Bank severally agrees to
pay to the Agent upon demand its pro rata share of any amount so
recovered from or repaid by the Agent.
10.07 Successors and Assigns. 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 Company may not assign or transfer any of its
rights or obligations under this Agreement without the prior
written consent of the Agent and each Bank.
10.08 Assignments, Participations, etc. (a) Any Bank may,
with the written consent of the Agent, and unless an Event of
Default shall have occurred and be continuing, with the written
consent of the Company, at any time assign and delegate to one
or more Eligible Assignees (provided that no written consent of
the Company or the Agent shall be required in connection with
any assignment and delegation by a Bank to an Eligible Assignee
that is an Affiliate of such Bank) (each an "Assignee") all, or
any ratable part of all, of the Loans, the Commitments and the
other rights and obligations of such Bank hereunder, in a
minimum amount of $10,000,000; provided, however, that the
Company and the Agent may continue to deal solely and directly
with such Bank in connection with the interest so assigned to an
Assignee until (i) written notice of such assignment, together
with payment instructions, addresses and related information
with respect to the Assignee, shall have been given to the
Company and the Agent by such Bank and the Assignee; (ii) such
Bank and its Assignee shall have delivered to the Company and
the Agent an Assignment and Acceptance in the form of Exhibit E
("Assignment and Acceptance") together with any Note or Notes
subject to such assignment and (iii) the assignor Bank or
Assignee has paid to the Agent a processing fee in the amount of
$3,500 and provided, further, that notwithstanding anything in
this Section 10.08(a) to the contrary, so long as no Event of
Default shall have occurred and be continuing, no Bank may
assign all or any portion of its interests hereunder to any
Assignee if, on the date the assignment is to become effective,
a payment made by Agent to such Assignee would be subject to any
U.S. withholding tax. Any consent to assignment required of the
Agent or of the Company pursuant to this Section 10.08 shall not
be unreasonably withheld.
(b) From and after the date that the Agent notifies
the assignor Bank that it has received (and provided its consent
with respect to) an executed Assignment and Acceptance and
payment of the above-referenced processing fee, (i) the Assignee
thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, shall have the
rights and obligations of a Bank under the Loan Documents, and
(ii) the assignor Bank shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have
been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under
the Loan Documents.
(c) Within five Business Days after its receipt of
notice by the Agent that it has received an executed Assignment
and Acceptance and payment of the processing fee, (and provided
that it consents to such assignment in accordance with
subsection 10.08(a)), the Company shall execute and deliver to
the Agent, new Notes evidencing such Assignee's assigned Loans
and Commitment and, if the assignor Bank has retained a portion
of its Loans and its Commitment, replacement Notes in the
principal amount of the Loans retained by the assignor Bank
(such Notes to be in exchange for, but not in payment of, the
Notes held by such Bank). Immediately upon each Assignee's
making its processing fee payment under the Assignment and
Acceptance, this Agreement shall be deemed to be amended to the
extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the
Commitments arising therefrom. The Commitment allocated to each
Assignee shall reduce such Commitments of the assigning Bank pro
tanto.
(d) Any Bank may at any time sell to one or more
commercial banks or other Persons not Affiliates of the Company
(a "Participant") participating interests in any Loans, the
Commitment of that Bank and the other interests of that Bank
(the "originating Bank") hereunder and under the other Loan
Documents; provided, however, that (i) the originating Bank's
obligations under this Agreement shall remain unchanged,
(ii) the originating Bank shall remain solely responsible for
the performance of such obligations, (iii) the Company and the
Agent shall continue to deal solely and directly with the
originating Bank in connection with the originating Bank's
rights and obligations under this Agreement and the other Loan
Documents, and (iv) no Bank shall transfer or grant any
participating interest under which the Participant has rights to
approve any amendment to, or any consent or waiver with respect
to, this Agreement or any other Loan Document, except to the
extent such amendment, consent or waiver would require unanimous
consent of the Banks as described in the first proviso to
Section 10.01. In the case of any such participation, the
Participant shall be entitled to the benefit of Sections 3.01,
3.03 and 10.05 as though it were also a Bank hereunder and, if
amounts outstanding under this Agreement are due and unpaid, or
shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest
were owing directly to it as a Bank under this Agreement.
(e) Notwithstanding any other provision in this
Agreement, any Bank may at any time create a security interest
in, or pledge, all or any portion of its rights under and
interest in this Agreement and the Note held by it in favor of
any Federal Reserve Bank in accordance with Regulation A of the
FRB or U.S. Treasury Regulation 31 CFR #203.14, and such Federal
Reserve Bank may enforce such pledge or security interest in any
manner permitted under applicable law.
10.09 Confidentiality. Each Bank agrees to take and to
cause its Affiliates to take normal and reasonable precautions
and exercise due care to maintain the confidentiality of all
information identified as "confidential" or "secret" by the
Company and provided to it by the Company or any Subsidiary, or
by the Agent on the Company's or such Subsidiary's behalf, under
this Agreement or any other Loan Document, and neither it nor
any of its Affiliates shall use any such information other than
in connection with or in enforcement of this Agreement and the
other Loan Documents or in connection with other business now or
hereafter existing or contemplated with the Company or any
Subsidiary; except to the extent such information (i) was or
becomes generally available to the public other than as a result
of disclosure by the Bank, or (ii) was or becomes available on a
non-confidential basis from a source other than the Company,
provided that such source is not bound by a confidentiality
agreement with the Company known to the Bank; provided, however,
that any Bank may disclose such information (A) at the request
or pursuant to any requirement of any Governmental Authority to
which the Bank is subject or in connection with an examination
of such Bank by any such authority; (B) pursuant to subpoena or
other court process; (C) when required to do so in accordance
with the provisions of any applicable Requirement of Law; (D) to
the extent reasonably required in connection with any litigation
or proceeding to which the Agent, any Bank or their respective
Affiliates may be party; (E) to the extent reasonably required
in connection with the exercise of any remedy hereunder or under
any other Loan Document; (F) to such Bank's independent auditors
and other professional advisors; (G) to any Participant or
Assignee, actual or potential, provided that such Person agrees
in writing to keep such information confidential to the same
extent required of the Banks hereunder; (H) as to any Bank or
its Affiliate, as expressly permitted under the terms of any
other document or agreement regarding confidentiality to which
the Company or any Subsidiary is party or is deemed party with
such Bank or such Affiliate; and (I) to its Affiliates.
10.10 Set-off. In addition to any rights and remedies of
the Banks provided by law, if an Event of Default exists or the
Loans have been accelerated, each Bank is authorized at any time
and from time to time, without prior notice to the Company, any
such notice being waived by the Company to the fullest extent
permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at
any time held by, and other indebtedness at any time owing by,
such Bank to or for the credit or the account of the Company
against any and all Obligations owing to such Bank, now or
hereafter existing, irrespective of whether or not the Agent or
such Bank shall have made demand under this Agreement or any
Loan Document and although such Obligations may be contingent or
unmatured. Each Bank agrees promptly to notify the Company and
the Agent after any such set-off and application made by such
Bank; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application.
10.11 Automatic Debits of Fees. With respect to any fee, or
any other cost or expense (including Attorney Costs) due and
payable to the Agent or BofA under the Loan Documents, the
Company hereby irrevocably authorizes BofA to debit any deposit
account of the Company with BofA in an amount such that the
aggregate amount debited from all such deposit accounts does not
exceed such fee or other cost or expense. If there are
insufficient funds in such deposit accounts to cover the amount
of the fee or other cost or expense then due, such debits will
be reversed (in whole or in part, in BofA's sole discretion) and
such amount not debited shall be deemed to be unpaid. No such
debit under this Section shall be deemed a set-off. BofA or the
Agent, as applicable, agrees promptly to notify the Company and
after any such debit; provided, however, that the failure to
give such notice shall not affect the validity of such debit.
10.12 Notification of Addresses, Lending Offices, Etc.
Each Bank shall notify the Agent in writing of any changes in
the address to which notices to the Bank should be directed, of
addresses of any Lending Office, of payment instructions in
respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably
request.
10.13 Counterparts. This Agreement may be executed in any
number of separate counterparts, each of which, when so
executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but
one and the same instrument.
10.14 Severability. The illegality or unenforceability of
any provision of this Agreement or any instrument or agreement
required hereunder shall not in any way affect or impair the
legality or enforceability of the remaining provisions of this
Agreement or any instrument or agreement required hereunder.
10.15 No Third Parties Benefited. This Agreement is made
and entered into for the sole protection and legal benefit of
the Company, the Banks, the Agent and the Agent-Related Persons,
and their permitted successors and assigns, and no other Person
shall be a direct or indirect legal beneficiary of, or have any
direct or indirect cause of action or claim in connection with,
this Agreement or any of the other Loan Documents.
10.16 Governing Law and Jurisdiction. (a) THIS AGREEMENT
AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF WASHINGTON; PROVIDED THAT THE
AGENT AND THE BANKS SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE
COURTS OF THE STATE OF WASHINGTON OR OF THE UNITED STATES FOR
THE WESTERN DISTRICT OF WASHINGTON, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE AGENT AND
THE BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE
COMPANY, THE AGENT AND THE BANKS IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR
BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN
SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. THE COMPANY, THE AGENT AND THE BANKS EACH WAIVE
PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS,
WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY WASHINGTON
LAW.
10.17 Waiver of Jury Trial. THE COMPANY, THE BANKS AND THE
AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR
RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON,
PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT
CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY, THE BANKS AND
THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION
SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, EACH OF THE PARTIES FURTHER AGREES THAT
ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION
OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE
VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
10.18 Entire Agreement. This Agreement, together with the
other Loan Documents, embodies the entire agreement and
understanding among the Company, the Banks and the Agent, and
supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to
the subject matter hereof and thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered in Seattle by their
proper and duly authorized officers as of the day and year first
above written.
LONGVIEW FIBRE COMPANY
By: \s\ L. J. Holbrook
Title: Sr. Vice President-Finance
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS, ASSOCIATION,
as Agent
By: \s\ Dora A. Brown
Title: Vice President
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS, ASSOCIATION,
as Agent
By: \s\ Robert M. Ingram
Title: Vice President
ABN AMRO BANK N.V.,
as Bank
By: \s\ James J. Rice
Its: Vice President
ABN AMRO BANK N.V.,
as Bank
By: \s\ Leif H. Olsson
Its: Sr. Vice President
THE BANK OF NOVA SCOTIA,
as Bank
By: \s\ Patrick Norris
Its: Officer
FIRST UNION NATIONAL BANK
as Bank
By: \s\ Tom James
Its: Sr. Vice President
UNION BANK OF CALIFORNIA, N.A.
as Bank
By: \s\ Henry G. Montgomery
Its: Vice President
U.S. BANK NATIONAL ASSOCIATION
as Bank
By: \s\ Janice T. Thede
Its: Vice President
WELLS FARGO BANK, N.A.
as Bank
By: \s\ Julie Wilson
Its: Vice President
SCHEDULE 2.01
COMMITMENTS
AND PRO RATA SHARES
Pro Rata
Bank Commitment Share
Bank of America National
Trust and Savings
Association $50,000,000 19.2307692%
ABN AMRO Bank N.V. $35,000,000 13.4615385%
The Bank of Nova Scotia $35,000,000 13.4615385%
First Union National Bank $35,000,000 13.4615385%
Union Bank of California, N.A. $35,000,000 13.4615385%
U.S. Bank
National Association $35,000,000 13.4615385%
Wells Fargo Bank, N.A. $35,000,000 13.4615385%
TOTAL $260,000,000 100.0000000%
SCHEDULE 2.08
APPLICABLE MARGIN AND FACILITY FEE
The Applicable Margin to be used in calculating the interest
rate applicable to Offshore Rate Loans pursuant to Sections 2.08
and 2.10, and the applicable per annum rate to be used in
calculating the Facility Fees to be paid pursuant to
Section 2.09(b), shall each be adjusted quarterly and computed in
accordance with the following chart:
Pricing Applicable Margin Facility
Level for Offshore Rate Fee
I 0.250% 0.125%
II 0.325% 0.175%
III 0.425% 0.200%
IV 0.500% 0.250%
V 0.600% 0.275%
Rates expressed in the foregoing chart are set forth on a per
annum basis.
From the date of the Agreement through the first Pricing Level
Adjustment Date (as hereinafter defined) occurring after April
30, 1998, Pricing Level IV shall apply. At all times thereafter,
the appropriate pricing level shall be determined in accordance
with the following.
Pricing levels shall be adjusted once each fiscal quarter on a
date seven (7) days after the earlier of (a) the date on which
the Company is obligated to deliver to Agent its financial
statements for the preceding fiscal quarter pursuant to Section
6.01 (or in the case of the fourth fiscal quarter, its financial
statements for the preceding fiscal year) and (b) the date on
which the Company actually delivers such financial statements to
Agent (each such date of adjustment, a "Pricing Level Adjustment
Date").
If on any Pricing Level Adjustment Date the Company has failed to
deliver the financial statements required pursuant to Section
6.01(a) or (b) for the preceding fiscal quarter or fiscal year,
as applicable, the Pricing Level shall be set at Pricing Level V
until such financial statements are delivered. Once such
delinquent financial statements are delivered the
Pricing Level shall be determined in accordance with the
following paragraph.
In all other cases, the Pricing Level shall be determined in
accordance with the following chart based upon the Capitalization
Ratio calculated as of the last day of the immediately preceding
fiscal quarter.
Capitalization Ratio Pricing Level
Less than or equal to
.425 to 1.0 I
Greater than .425 to 1.0
but less than or equal to
.475 to 1.0 II
Greater than .475 to 1.0
but less than or equal to
.525 to 1.0 III
Greater than .525 to 1.0
but less than or equal to
.575 to 1.0 IV
Greater than .575 to 1.0 V
Applicable Margins and Facility Fee percentages shall be adjusted
effective as of each Pricing Level Adjustment Date and shall
continue in effect until the next Pricing Level Adjustment Date.
SCHEDULE 10.02
OFFSHORE AND DOMESTIC LENDING OFFICES,
ADDRESSES FOR NOTICES
IF TO THE AGENT:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, dba
SEAFIRST BANK
SEAFIRST AGENCY SERVICES
701 Fifth Avenue, CSC 16
Seattle, WA 98104
Attention: Dora Brown, Vice President
FAX: (206) 358-0971
IF TO THE BANKS:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, dba
SEAFIRST BANK,
701 Fifth Avenue, CSC 11
Seattle, WA 98104
Attention: Robert M. Ingram, Vice President
FAX: (206) 358-3124
ABN AMRO BANK N.V.
135 S. LaSalle St., Suite 2805
Chicago, IL 60603
Attention: Credit Administration
FAX: (312) 904-8840
With A Copy To:
ABN AMRO BANK N.V.
One Union Square
600 University Street, Suite 2323
Seattle, WA 98101
Attention: James J. Rice, Vice President
FAX: (206) 682-5641
THE BANK OF NOVA SCOTIA
888 SW Fifth Avenue, Suite 750
Portland, OR 97204
Attention: Patrik Norris, Relationship Manager
FAX: (503) 222-5502
FIRST UNION NATIONAL BANK
One First Union Center
301 South College Street, TW-5
Charlotte, NC 28288-0735
Attention: Andrew Payne, Esq.
FAX: (704) 383-6670
UNION BANK OF CALIFORNIA, N.A.
350 California Street, Floor 6
San Francisco, CA 94104
Attention: Buddy Montgomery, Vice President
FAX: (415) 705-5093
U.S. BANK NATIONAL ASSOCIATION
555 SW Oak Street, Suite 400
Portland, OR 97204
Attention: Janice T. Thede, Vice President
FAX: (503) 275-4942
WELLS FARGO BANK, N.A.
Portland RCBO
1300 SW Fifth Avenue, MAC 6101-133
Portland, OR 97201
Attention: Julie Wilson, Vice President
FAX: (503) 225-2039
EXHIBIT A
NOTICE OF BORROWING
Date: , 199
To:
Bank of America National Trust and Savings Association as Agent
for the Banks parties to the Credit Agreement dated as of
February, ___, 1998 (as extended, renewed, amended or restated
from time to time, the "Credit Agreement") among Longview Fibre
Company, certain Banks which are signatories thereto and Bank of
America National Trust and Savings Association, as Agent
Ladies and Gentlemen:
The undersigned, Longview Fibre Company (the "Company"), refers
to the Credit Agreement, the terms defined therein being used
herein as therein defined, and hereby gives you notice
irrevocably, pursuant to Section 2.03 of the Credit Agreement, of
the Borrowing specified below:
1. The Business Day of the proposed Borrowing is
, 19 .
2. The aggregate amount of the proposed Borrowing is
$ .
3. The Borrowing is to be comprised of $ of [Base
Rate] [Offshore Rate] Loans.
4. The duration of the Interest Period for the [Offshore Rate
Loans] included in the Borrowing, if any, shall be [_____
months].
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the
proposed Borrowing, before and after giving effect thereto and to
the application of the proceeds therefrom:
(a) the representations and warranties of the Company contained
in Article V of the Credit Agreement are true and correct as
though made on and as of such date (except to the extent such
representations and warranties relate to an earlier date, in
which case they are true and correct as of such date);
(b) no Default or Event of Default has occurred and is
continuing, or would result from such proposed Borrowing.
LONGVIEW FIBRE COMPANY
By:
Title:
EXHIBIT B
NOTICE OF CONVERSION/CONTINUATION
Date: , 199
To:Bank of America National Trust and Savings Association as
Agent for the Banks parties to the Credit Agreement dated as of
February, ___, 1998 (as extended, renewed, amended or restated
from time to time, the "Credit Agreement") among Longview Fibre
Company, certain Banks which are signatories thereto and Bank of
America National Trust and Savings Association, as Agent
Ladies and Gentlemen:
The undersigned, Longview Fibre Company (the "Company"), refers
to the Credit Agreement, the terms defined therein being used
herein as therein defined, and hereby gives you notice
irrevocably, pursuant to Section 2.04 of the Credit Agreement, of
the [conversion] [continuation] of the Loans specified herein,
that:
1. The Conversion/Continuation Date is , 19 .
2. The aggregate amount of the Loans to be [converted]
[continued] is $ .
3. The Loans are to be [converted into] [continued as]
[Offshore Rate] [Base Rate] Loans.
4. [If applicable:] The duration of the Interest Period for the
Loans included in the [conversion] [continuation] shall be [
months].
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the proposed
Conversion/Continuation Date, before and after giving effect
thereto and to the application of the proceeds therefrom:
(a) the representations and warranties of the Company contained
in Article V of the Credit Agreement are true and correct as
though made on and as of such date (except to the extent such
representations and warranties relate to an earlier date, in
which case they are true and correct as of such date);
(b) no Default or Event of Default has occurred and is
continuing, or would result from such proposed [conversion]
[continuation].
LONGVIEW FIBRE COMPANY
By:
Title:
EXHIBIT C
LONGVIEW FIBRE COMPANY
COMPLIANCE CERTIFICATE
Financial Statement Date: , 199__
Reference is made to that certain Credit Agreement dated as
of February ___, 1998 (as extended, renewed, amended or restated
from time to time, the "Credit Agreement") among Longview Fibre
Company (the "Company"), the several financial institutions from
time to time parties to the Credit Agreement (the "Banks") and
Bank of America National Trust and Savings Association, as agent
for the Banks (in such capacity, the "Agent"). Unless otherwise
defined herein, capitalized terms used herein have the respective
meanings assigned to them in the Credit Agreement.
The undersigned Responsible Officer of Longview Fibre
Company, hereby certifies as of the date hereof that he/she is
the___________________ of the Company, and that, as such, he/she
is authorized to execute and deliver this Certificate to the
Banks and the Agent on the behalf of the Company and its
consolidated Subsidiaries, and that:
[Use the following paragraph if this Certificate is delivered in
connection with the financial statements required by subsection
[6.01(a)] of the Credit Agreement.]
1. Attached as Schedule 1 hereto are (a) a true and
correct copy of the audited consolidated balance sheet
of the Company and its consolidated Subsidiaries as at
the end of the fiscal year ended _______________, 199__
and (b) the related consolidated statements of income
or operations, shareholders' equity and cash flows for
such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal
year, and accompanied by the opinion of
_________________ (the "Independent Auditor") which
report states that such consolidated financial
statements are complete and correct and have been
prepared in accordance with GAAP, and fairly present,
in all material respects, the financial position of the
Company and its consolidated Subsidiaries for the
periods indicated and on a basis consistent with prior
periods. or
[Use the following paragraph if this Certificate is delivered in
connection with the financial statements required by subsection
[6.01(b)] of the Credit Agreement.]
1. Attached as Schedule 1 hereto are (a) a true and
correct copy of the unaudited consolidated balance sheet of the
Company and its consolidated Subsidiaries as of the end of the
fiscal quarter ended __________, 199__, and (b) the related
unaudited consolidated statements of income, shareholders'
equity, and cash flows for the period commencing on the first day
and ending on the last day of such quarter. The undersigned
hereby certifies that such financial statements were prepared in
accordance with GAAP (subject only to ordinary, good faith year-
end audit adjustments and the absence of footnotes) and fairly
present, in all material respects, the financial position and the
results of operations of the Company and its consolidated
Subsidiaries.
or
[Use the following paragraph if this Certificate is delivered in
connection with the financial statements required by subsection
[6.01(c)] of the Credit Agreement.]
1. Attached as Schedule 1 hereto are (a) a true and
correct copy of the unaudited consolidating balance sheets of the
Company and its consolidated Subsidiaries as of the end of the
fiscal [quarter] [year] ended ______________, 199__ and (b) the
related consolidating statements of income, shareholders' equity
and cash flows for such period. The undersigned hereby certifies
that such financial statements were prepared in accordance with
GAAP (subject only to ordinary, good-faith year-end audit
adjustments and the absence of footnotes) and fairly present, in
all material respects, the financial position and results of
operations of the Company and its consolidated Subsidiaries and
that such financial statements were developed and used in
connection with the preparation of the financial statements
referred to in subsection 6.01(a) or (b).
2. The undersigned has reviewed and is familiar with the
terms of the Credit Agreement and has made, or has caused to be
made under his/her supervision, a detailed review of the
transactions and conditions (financial or otherwise) of the
Company during the accounting period covered by the attached
financial statements.
3. To the best of the undersigned's knowledge, the
Company, during such period, has observed, performed or satisfied
all of its covenants and other agreements, and satisfied every
condition in the Credit
Agreement to be observed, performed or satisfied by the Company,
and the undersigned has no knowledge of any Default or Event of
Default.
4. The following financial covenant analyses and
information set forth on Schedule 2 attached hereto are
true and accurate on and as of the date of this
Certificate.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of , 199 .
LONGVIEW FIBRE COMPANY
By:
Title:
SCHEDULE 2
to the Compliance Certificate
($ in 000's)
6.13 Tangible Net Worth
Tangible Net Worth may not be less than $380,000,000.
Current Tangible Net Worth _______________
6.14 Maximum Capitalization Ratio
The Capitalization Ratio may not be more than 0.60 to 1.0
(I) Funded Debt
Credit Agreement ______________
Seafirst Bank ______________
Wells Fargo Bank ______________
Bank of America ______________
Long-term Debt ________________
______________
divided by
(II) Funded Debt ______________
Shareholders' Equity ______________
________________
______________
Current Capitalization Ratio ______________
6.15 Interest Coverage Ratio
The Interest Coverage Ratio May Not Be Less Than 3.0 to 1.0
(I) EBITDDA
Net Income ______________
(a) Interest expense ______________
(b) Income tax expense ______________
(c) Depreciation expense ______________
(d&e) Depletion & Amortization______________
________________
______________
(II) Interest expense ______________
Capitalized interest ______________
________________
______________
Current Interest Coverage Ratio ______________
EXHIBIT D
[FORM OF] OPINION OF BORROWER'S COUNSEL
EXHIBIT E
[FORM OF] ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and
Acceptance") dated as of __________, 199__ is made between
______________________________ (the "Assignor") and
__________________________ (the "Assignee").
RECITALS
WHEREAS, the Assignor is party to that certain
Credit Agreement dated as of _____________, 199__ (as amended,
amended and restated, modified, supplemented or renewed, the
"Credit Agreement") among Longview Fibre Company (the "Company"),
the several financial institutions from time to time party
thereto (including the Assignor, the "Banks"), and Bank of
America National Trust and Savings Association, as agent for the
Banks (the "Agent"). Any terms defined in the Credit Agreement
and not defined in this Assignment and Acceptance are used herein
as defined in the Credit Agreement;
WHEREAS, as provided under the Credit Agreement, the
Assignor has committed to making Loans (the "Committed Loans") to
the Company in an aggregate amount not to exceed $__________ (the
"Commitment");
WHEREAS, [the Assignor has made Committed Loans in the
aggregate principal amount of $__________ to the Company] [no
Committed Loans are outstanding under the Credit Agreement];
WHEREAS, the Assignor wishes to assign to the Assignee [part
of the] [all] rights and obligations of the Assignor under the
Credit Agreement in respect of its Commitment, [together with a
corresponding portion of each of its outstanding Committed
Loans,] in an amount equal to $__________ (the "Assigned Amount")
on the terms and subject to the conditions set forth herein and
the Assignee wishes to accept assignment of such rights and to
assume such obligations from the Assignor on such terms and
subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements contained herein, the parties hereto agree as
follows:
1. Assignment and Acceptance.
(a) Subject to the terms and conditions of this Assignment
and Acceptance, (i) the Assignor hereby sells, transfers and
assigns to the Assignee, and (ii) the Assignee hereby purchases,
assumes and undertakes from the Assignor, without recourse and
without representation or warranty (except as provided in this
Assignment and Acceptance) __% (the "Assignee's Percentage
Share") of (A) the Commitment [and the Committed Loans] of the
Assignor and (B) all related rights, benefits, obligations,
liabilities and indemnities of the Assignor under and in
connection with the Credit Agreement and the Loan Documents.
[If appropriate, add paragraph specifying payment to
Assignor by Assignee of outstanding principal of, accrued
interest on, and fees with respect to, Committed Loans assigned.]
(b) With effect on and after the Effective Date (as defined
in Section 5 hereof), the Assignee shall be a party to the Credit
Agreement and succeed to all of the rights and be obligated to
perform all of the obligations of a Bank under the Credit
Agreement, including the requirements concerning confidentiality
and the payment of indemnification, with a Commitment in an
amount equal to the Assigned Amount. The Assignee agrees that it
will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are
required to be performed by it as a Bank. It is the intent of
the parties hereto that the Commitment of the Assignor shall, as
of the Effective Date, be reduced by an amount equal to the
Assigned Amount and the Assignor shall relinquish its rights and
be released from its obligations under the Credit Agreement to
the extent such obligations have been assumed by the Assignee;
provided, however, the Assignor shall not relinquish its rights
under Sections __ and __ of the Credit Agreement to the extent
such rights relate to the time prior to the Effective Date.
(c) After giving effect to the assignment and assumption
set forth herein, on the Effective Date the Assignee's Commitment
will be $__________.
(d) After giving effect to the assignment and assumption
set forth herein, on the Effective Date the Assignor's Commitment
will be $__________.
2. Payments.
(a) As consideration for the sale, assignment and
transfer contemplated in Section 1 hereof, the Assignee shall pay
to the Assignor on the Effective Date in immediately available
funds an amount equal to $__________, representing the Assignee's
Pro Rata Share of the principal amount of all Committed Loans.
(b) The [Assignor] [Assignee] further agrees to pay to the
Agent a processing fee in the amount specified in
Section 10.08(a) of the Credit Agreement.
3. Reallocation of Payments.
Any interest, fees and other payments accrued to the
Effective Date with respect to the Commitment[,] [and] Committed
Loans shall be for the account of the Assignor. Any interest,
fees and other payments accrued on and after the Effective Date
with respect to the Assigned Amount shall be for the account of
the Assignee. Each of the Assignor and the Assignee agrees that
it will hold in trust for the other party any interest, fees and
other amounts which it may receive to which the other party is
entitled pursuant to the preceding sentence and pay to the other
party any such amounts which it may receive promptly upon
receipt.
4. Independent Credit Decision.
The Assignee (a) acknowledges that it has received a copy of
the Credit Agreement and the Schedules and Exhibits thereto,
together with copies of the most recent financial statements
referred to in Section 6.01 of the Credit Agreement, and such
other documents and information as it has deemed appropriate to
make its own credit and legal analysis and decision to enter into
this Assignment and Acceptance; and (b) agrees that it will,
independently and without reliance upon the Assignor, 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 and legal decisions in taking or not taking action under
the Credit Agreement.
5. Effective Date; Notices.
(a) As between the Assignor and the Assignee, the effective
date for this Assignment and Acceptance shall be __________,
199__ (the "Effective Date"); provided that the following
conditions precedent have been satisfied on or before the
Effective Date:
(i) this Assignment and Acceptance shall be executed
and delivered by the Assignor and the
Assignee;
(ii) the consent of the Company and the Agent required
for an effective assignment of the Assigned Amount by the
Assignor to the Assignee under Section 10.08 of the Credit
Agreement shall have been duly obtained and shall be in full
force and effect as of the Effective Date;
(iii) the Assignee shall pay to the Assignor all
amounts due to the Assignor under this Assignment and Acceptance;
[(iv) the Assignee shall have complied with Section [
](__) of the Credit Agreement (if applicable);
(v) the processing fee referred to in Section 2(b)
hereof and in Section 10.08(a) of the Credit Agreement shall have
been paid to the Agent; and
(vi) the Assignor shall have assigned and the Assignee
shall have assumed a percentage equal to the Assignee's
Percentage Share of the rights and obligations of the Assignor
under the Credit Agreement (if such agreement exists).
(b) Promptly following the execution of this Assignment and
Acceptance, the Assignor shall deliver to the Company and the
Agent for acknowledgement by the Agent, a Notice of Assignment
substantially in the form attached hereto as Schedule 1.
6. Agent.
(a) The Assignee hereby appoints and authorizes the Agent
to take such action as agent on its behalf and to exercise such
powers under the Credit Agreement as are delegated to the Agent
by the Banks pursuant to the terms of the Credit Agreement.
[(b) The Assignee shall assume no duties or obligations held
by the Assignor in its capacity as Agent under the Credit
Agreement.] [INCLUDE ONLY IF ASSIGNOR IS AGENT]
7. Withholding Tax.
The Assignee (a) represents and warrants to the Banks, the
Agent and the Company that under applicable law and treaties no
tax will be required to be withheld by the Agent with respect to
any payments to be made to the Assignee hereunder, (b) agrees to
furnish (if it is organized under the laws of any jurisdiction
other than
the United States or any State thereof) to the Agent and the
Company prior to the time that the Agent or Company is required
to make any payment of principal, interest or fees hereunder,
duplicate executed originals of either U.S. Internal Revenue
Service Form 4224 or U.S. Internal Revenue Service Form 1001
(wherein the Assignee claims entitlement to the benefits of a tax
treaty that provides for a complete exemption from U.S. federal
income withholding tax on all payments hereunder) and agrees to
provide new Forms 4224 or 1001 upon the expiration of any
previously delivered form or comparable statements in accordance
with applicable U.S. law and regulations and amendments thereto,
duly executed and completed by the Assignee, and (c) agrees to
comply with all applicable U.S. laws and regulations with regard
to such withholding tax exemption.
8. Representations and Warranties.
(a) The Assignor represents and warrants that (i) it is the
legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any Lien or
other adverse claim; (ii) it is duly organized and existing and
it has the full power and authority to take, and has taken, all
action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be
executed or delivered by it in connection with this Assignment
and Acceptance and to fulfill its obligations hereunder; (iii) no
notices to, or consents, authorizations or approvals of, any
Person are required (other than any already given or obtained)
for its due execution, delivery and performance of this
Assignment and Acceptance, and apart from any agreements or
undertakings or filings required by the Credit Agreement, no
further action by, or notice to, or filing with, any Person is
required of it for such execution, delivery or performance; and
(iv) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid and binding
obligation of the Assignor, enforceable against the Assignor in
accordance with the terms hereof, subject, as to enforcement, to
bankruptcy, insolvency, moratorium, reorganization and other laws
of general application relating to or affecting creditors' rights
and to general equitable principles.
(b) The Assignor makes no representation or warranty and
assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the
Credit Agreement or the
execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement or any other
instrument or document furnished pursuant thereto. The Assignor
makes no representation or warranty in connection with, and
assumes no responsibility with respect to, the solvency,
financial condition or statements of the Company, or the
performance or observance by the Company, of any of its
respective obligations under the Credit Agreement or any other
instrument or document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is
duly organized and existing and it has full power and authority
to take, and has taken, all action necessary to execute and
deliver this Assignment and Acceptance and any other documents
required or permitted to be executed or delivered by it in
connection with this Assignment and Acceptance, and to fulfill
its obligations hereunder; (ii) no notices to, or consents,
authorizations or approvals of, any Person are required (other
than any already given or obtained) for its due execution,
delivery and performance of this Assignment and Acceptance; and
apart from any agreements or undertakings or filings required by
the Credit Agreement, no further action by, or notice to, or
filing with, any Person is required of it for such execution,
delivery or performance; (iii) this Assignment and Acceptance has
been duly executed and delivered by it and constitutes the legal,
valid and binding obligation of the Assignee, enforceable against
the Assignee in accordance with the terms hereof, subject, as to
enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to
or affecting creditors' rights and to general equitable
principles; and (iv) it is an Eligible Assignee.
9. Further Assurances.
The Assignor and the Assignee each hereby agree to execute
and deliver such other instruments, and take such other action,
as either party may reasonably request in connection with the
transactions contemplated by this Assignment and Acceptance,
including the delivery of any notices or other documents or
instruments to the Company or the Agent, which may be required in
connection with the assignment and assumption contemplated
hereby.
10. Miscellaneous.
(a) Any amendment or waiver of any provision of
this Assignment and Acceptance shall be in writing and signed by
the parties hereto. No failure or delay by either party hereto
in exercising any right, power or privilege hereunder shall
operate as a waiver thereof and any waiver of any breach of the
provisions of this Assignment and Acceptance shall be without
prejudice to any rights with respect to any other or further
breach thereof.
(b) All payments made hereunder shall be made without any
set-off or counterclaim.
(c) The Assignor and the Assignee shall each pay its own
costs and expenses incurred in connection with the negotiation,
preparation, execution and performance of this Assignment and
Acceptance.
(d) This Assignment and Acceptance may be executed in any
number of counterparts and all of such counterparts taken
together shall be deemed to constitute one and the same
instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF WASHINGTON
[Note: confirm choice of law]. The Assignor and the Assignee
each irrevocably submits to the non-exclusive jurisdiction of any
State or Federal court sitting in [Washington] over any suit,
action or proceeding arising out of or relating to this
Assignment and Acceptance and irrevocably agrees that all claims
in respect of such action or proceeding may be heard and
determined in such [Washington] State or Federal court. Each
party to this Assignment and Acceptance hereby irrevocably
waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of such
action or proceeding.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS ASSIGNMENT AND
ACCEPTANCE, THE CREDIT AGREEMENT, ANY RELATED DOCUMENTS AND
AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR
STATEMENTS (WHETHER ORAL OR WRITTEN).
[Other provisions to be added as may be negotiated between
the Assignor and the Assignee, provided that such provisions are
not inconsistent with the Credit Agreement.]
IN WITNESS WHEREOF, the Assignor and the Assignee have
caused this Assignment and Acceptance to be executed and
delivered by their duly authorized officers as of the date first
above written.
[ASSIGNOR]
By:
Title:
By:
Title:
Address:
[ASSIGNEE]
By:
Title:
By:
Title:
Address:
SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE
_______________, 19__
Bank of America National Trust
and Savings Association, as Agent
______________________________
______________________________
Attn: _______________________
Longview Fibre Company
______________________________
______________________________
Attn: ________________________
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of February, ___,
1998 (as amended, amended and restated, modified, supplemented or
renewed from time to time the "Credit Agreement") among Longview
Fibre Company (the "Company"), the Banks referred to therein and
Bank of America National Trust and Savings Association as agent
for the Banks (the "Agent"). Terms defined in the Credit
Agreement are used herein as therein defined.
1. We hereby give you notice of, and request your consent
to, the assignment by __________________ (the "Assignor") to
_______________ (the "Assignee") of _____% of the right, title
and interest of the Assignor in and to the Credit Agreement
(including, without limitation, the right, title and interest of
the Assignor in and to the Commitments of the Assignor[,] [and]
all outstanding Loans made by the Assignor) pursuant to the
Assignment and Acceptance Agreement attached hereto (the
"Assignment and Acceptance"). Before giving effect to such
assignment the Assignor's Commitment is $ ___________[,] [and]
the aggregate amount of its outstanding Loans is $_____________.
2. The Assignee agrees that, upon receiving the consent of
the Agent and, if applicable, Longview Fibre Company to such
assignment, the Assignee will be bound by the terms of the Credit
Agreement as fully and to the same extent as if the Assignee were
the Bank originally holding such interest in the Credit
Agreement.
3. The following administrative details apply to the
Assignee:
(A) Notice Address:
Assignee name: _________________________
Address: ______________________________
_______________________________
_______________________________
Attention: ____________________________
Telephone: (___)_______________________
Telecopier: (___)______________________
Telex (Answerback): ____________________
(B) Payment Instructions:
Account No.: __________________________
At: __________________________
__________________________
__________________________
Reference: __________________________
Attention: __________________________
4. You are entitled to rely upon the representations,
warranties and covenants of each of the Assignor and Assignee
contained in the Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have
caused this Notice of Assignment and Acceptance to be executed by
their respective duly authorized officials, officers or agents as
of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By:
Title:
By:
Title:
[NAME OF ASSIGNEE]
By:
Title:
By:
Title:
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
LONGVIEW FIBRE COMPANY
By:
Title: __________________________
By:
Title: __________________________
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By: __________________________
Its: _________________________
EXHIBIT F
[FORM OF] PROMISSORY NOTE
$ _____________, 199_
FOR VALUE RECEIVED, the undersigned, Longview Fibre
Company, a Washington corporation (the "Company"), hereby
promises to pay to the order of (the "Bank")
the principal sum of Dollars ($ ) or, if
less, the aggregate unpaid principal amount of all Loans made by
the Bank to the Company pursuant to that certain Credit
Agreement, dated as of February ___, 1998, (such Credit
Agreement, as it may be amended, restated, supplemented or
otherwise modified from time to time, being hereinafter called
the "Credit Agreement"), among the Company, the Bank, the other
banks parties thereto, and Bank of America National Trust and
Savings Association, as Agent for the Banks, on the dates and in
the amounts provided in the Credit Agreement. The Company
further promises to pay interest on the unpaid principal amount
of the Loans evidenced hereby from time to time at the rates, on
the dates, and otherwise as provided in the Credit Agreement.
The Bank is authorized to endorse the amount and the
date on which each Loan is made, the maturity date therefor and
each payment of principal with respect thereto on the schedules
annexed hereto and made a part hereof, or on continuations
thereof which shall be attached hereto and made a part hereof;
provided, that any failure to endorse such information on such
schedule or continuation thereof shall not in any manner affect
any obligation of the Company under the Credit Agreement or this
Promissory Note (the "Note").
This Note is one of the Notes referred to in, and is
entitled to the benefits of, the Credit Agreement, which Credit
Agreement, among other things, contains provisions for
acceleration of the maturity hereof upon the happening of
certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and
conditions therein specified.
Terms defined in the Credit Agreement are
used herein with their defined meanings therein unless
otherwise defined herein. This Note shall be governed by, and
construed and interpreted in accordance with, the laws of the
State of Washington applicable to contracts made and to be
performed entirely within such State.
LONGVIEW FIBRE COMPANY
By:
Title:
By:
Title:
Schedule A to Note
BASE RATE LOANS AND REPAYMENT OF BASE RATE LOANS
(2) (3) (4)
Amount Maturity Amount of
of Date of Base (5)
(1) Base Base Rate Loan Notation
Date Rate Loan Rate Loan Repaid Made By
Schedule B to Note
OFFSHORE RATE LOANS AND REPAYMENT OF OFFSHORE
RATE LOANS
(2) (3) (4)
Amount Maturity Amount of
of Date of Offshore (5)
(1) Offshore Offshore Rate Loan Notation
Date Rate Loan Rate Loan Repaid Made By
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM PART I OF THIS FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-30-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 85,802
<ALLOWANCES> 1,100
<INVENTORY> 92,857
<CURRENT-ASSETS> 185,876
<PP&E> 1,839,129
<DEPRECIATION> 813,392
<TOTAL-ASSETS> 1,268,641
<CURRENT-LIABILITIES> 148,462
<BONDS> 547,137
0
0
<COMMON> 77,515
<OTHER-SE> 343,792
<TOTAL-LIABILITY-AND-EQUITY> 1,268,641
<SALES> 362,155
<TOTAL-REVENUES> 362,155
<CGS> 329,748
<TOTAL-COSTS> 329,748
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19,014
<INCOME-PRETAX> (17,942)
<INCOME-TAX> (6,280)
<INCOME-CONTINUING> (11,662)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (11,662)
<EPS-PRIMARY> (0.23)
<EPS-DILUTED> (0.23)
</TABLE>
