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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
SCHEDULE TO
(Amendment No. 63)
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
WILLAMETTE INDUSTRIES, INC.
(Name of Subject Company (Issuer))
COMPANY HOLDINGS, INC.
WEYERHAEUSER COMPANY
(Names of Filing Persons -- Offerors)
COMMON STOCK, PAR VALUE $0.50 PER SHARE
(Title of Class of Securities)
969133107
(CUSIP Number of Class of Securities)
Robert A. Dowdy, Esq.
Weyerhaeuser Company
Federal Way, Washington 98063
Telephone: (253) 924-2345
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of Filing Persons)
Copy to:
Richard Hall, Esq.
Cravath, Swaine & Moore
825 Eighth Avenue
New York, New York 10019
Telephone: (212) 474-1000
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SCHEDULE TO
This Statement amends and supplements the Tender Offer Statement on
Schedule TO filed with the Securities and Exchange Commission on November 29,
2000 (as previously amended, the "Schedule TO"), relating to the offer by
Company Holdings, Inc., a Washington corporation (the "Purchaser") and a
wholly owned subsidiary of Weyerhaeuser Company, a Washington corporation
("Weyerhaeuser" or "Parent"), to purchase (1) all outstanding shares
("Shares") of common stock, par value $0.50 per share, of Willamette
Industries, Inc., an Oregon corporation ("Willamette" or the "Company"), and
(2) unless and until validly redeemed by the Board of Directors of Willamette,
the related rights to purchase shares of Series B Junior Participating
Preferred Stock, $0.50 par value per share, of Willamette (the "Rights")
issued pursuant to the Rights Agreement, dated as of February 25, 2000 by and
between Willamette and Mellon Investor Services LLC (f/k/a ChaseMellon
Shareholder Services, L.L.C.), as Rights Agent, at a price of $55.00 per
Share, net to the seller in cash, without interest, upon the terms and subject
to the conditions set forth in the Offer to Purchase (the "Offer to
Purchase"), dated November 29, 2000, the Supplement thereto dated May 7, 2001
(the "Supplement") and in the related revised Letter of Transmittal (which,
together with any supplements or amendments, collectively constitute the
"Offer"). Unless the context otherwise requires, all references to the Shares
shall be deemed to include the associated Rights, and all references to the
Rights shall be deemed to include the benefits that may inure to holders of
Rights pursuant to the Rights Agreement.
Capitalized terms used herein and not defined herein have the
respective meanings assigned such terms in the Offer to Purchase, the
Supplement and the Schedule TO.
Item 7. Source and Amount of Funds or Other Consideration
Weyerhaeuser has obtained an amended and restated commitment letter
(as amended, the "Commitment Letter") from Morgan Stanley Senior Funding,
Inc., J.P. Morgan Securities Inc. and JPMorgan Chase Bank (formerly known as
The Chase Manhattan Bank). The Proposed Credit Facilities in the aggregate
amount of $6.3 billion will now be comprised of:
- a 364-day revolving credit facility in the aggregate amount of $1.55
billion which Weyerhaeuser may, at its option, renew for an
additional 12 months provided no default has occurred;
- a 5-year revolving credit facility in the aggregate amount of $1.55
billion; and
- 1 -
- a bridge revolving credit facility in the aggregate amount of $3.2
billion which will mature 18 months after the closing date of the
Proposed Credit Facilities.
Other than to increase the borrowing amounts of the Proposed Credit
Facilities, the terms and conditions of the Commitment Letter and the Proposed
Credit Facilities remain substantially unchanged.
The foregoing descriptions of the Commitment Letter and the Proposed
Credit Facilities are qualified in their entirety by reference to the
Commitment Letter, a copy of which is filed as Exhibit (b)(4) hereto.
Item 12. Exhibits.
(b)(4) Amended and Restated Commitment Letter, dated as of December 13,
2001, among Weyerhaeuser Company, Morgan Stanley Senior Funding,
Inc., J.P. Morgan Securities Inc. and JPMorgan Chase Bank
(formerly known as The Chase Manhattan Bank).
- 2 -
SIGNATURES
After due inquiry and to the best of their knowledge and belief, the
undersigned hereby certify that the information set forth in this statement is
true, complete and correct.
COMPANY HOLDINGS, INC.,
by
/s/ STEVEN R. ROGEL
--------------------------
Name: Steven R. Rogel
Title: President
WEYERHAEUSER COMPANY,
by
/s/ STEVEN R. ROGEL
--------------------------
Name: Steven R. Rogel
Title: President and Chief
Executive Officer
Dated: December 14, 2001
- 3 -
Exhibit Index
Exhibit No. Description
----------- -----------
(b)(4) Amended and Restated Commitment Letter, dated as
of December 13, 2001, among Weyerhaeuser Company,
Morgan Stanley Senior Funding, Inc., J.P. Morgan
Securities Inc. and JPMorgan Chase Bank (formerly
known as The Chase Manhattan Bank).
Exhibit (b)(4)
As of December 13, 2001
Weyerhaeuser Company
33663 Weyerhaeuser Way South
Federal Way, Washington
Attention: Mr. William Stivers
Ladies and Gentlemen:
Reference is hereby made to that certain amended and restated
commitment letter dated as of October 16, 2001 (the "EXISTING COMMITMENT
LETTER") entered into by and among you, Morgan Stanley Senior Funding, Inc.,
J.P. Morgan Securities Inc. and JPMorgan Chase Bank (formerly known as The
Chase Manhattan Bank). This letter amends and restates the Existing Commitment
Letter in full. As of the date first above written, each reference to the
"Commitment Letter," shall mean and be a reference to the Existing Commitment
Letter, as amended and restated hereby.
You have advised Morgan Stanley Senior Funding, Inc. ("MORGAN
STANLEY"), J.P. Morgan Securities Inc. ("JPMORGAN") and JPMorgan Chase Bank
("JPMORGAN CHASE BANK") regarding your proposed acquisition (the
"ACQUISITION") of Willamette Industries, Inc. (the "COMPANY"). In this
connection, you have requested that (a) each of Morgan Stanley and JPMorgan
Chase Bank provide you with its financing commitment for 50% of the $6.3
billion of Senior Bank Financing (as hereinafter defined) described in this
letter and in the summary of terms and conditions attached as Exhibit A (the
"SUMMARY OF TERMS" and, together with this letter, this "COMMITMENT LETTER")
and (b) each of Morgan Stanley and JPMorgan provide you with its best efforts
undertaking to arrange a syndicate (in such capacity, the "LEAD ARRANGERS") of
Lenders (as defined under the section "LENDERS" in the Summary of Terms) for
the Senior Bank Financing.
As we understand the transaction, Weyerhaeuser Company (the
"BORROWER") has organized a single-purpose, wholly owned subsidiary (the
"PURCHASER") that will offer to acquire through a tender offer (the "TENDER
OFFER") for $55 in cash per share all of the shares of the Company's
outstanding common stock (the "COMPANY STOCK"), but in any event not less than
sufficient shares of Company Stock to enable the Purchaser, voting without any
other shareholder of the Company, to approve a Merger of the Purchaser, the
Borrower or one of its wholly owned subsidiaries with the Company. As soon as
practicable after the closing of the Tender Offer, the Purchaser, the Borrower
or one of its wholly owned subsidiaries will consummate a merger (the
"MERGER") with the Company. The Acquisition, the Tender Offer, the Merger, the
refinancing of certain existing debt of the Borrower and the Company and the
debt financings contemplated by the foregoing are collectively referred to as
the "TRANSACTION".
We understand that the funding required to effect the Acquisition
shall be provided solely from the incurrence by the Borrower of the Senior
Bank Financing.
We further understand that the senior bank financing (the "SENIOR
BANK FINANCING") will be in the form of (i) a 364-day revolving credit
facility (the "364-DAY FACILITY"), (ii) a 5-year revolving credit facility
(the "5-YEAR FACILITY") and (iii) a bridge revolving credit facility (the
"BRIDGE REVOLVING CREDIT FACILITY", together with the 364- Day Facility and
the 5-Year Facility, the "CREDIT FACILITIES").
Each of Morgan Stanley and JPMorgan Chase Bank commits to provide,
severally and not jointly, 50% of the Senior Bank Financing on the terms and
conditions set forth herein and in the Summary of Terms. Morgan Stanley and
JPMorgan shall act as exclusive joint lead arrangers and as joint book
runners, Morgan Stanley shall act as syndication agent and JPMorgan Chase Bank
shall act as administrative agent for the Senior Bank Financing. It is
understood that the Lead Arrangers shall be permitted to designate one or more
Lenders as agents, managing agents or co-agents, as the case may be, with
respect to the Senior Bank Financing in their sole discretion, and that no
titles may be given, or compensation paid, to Lenders without the Lead
Arrangers' consent. Fees payable to the syndicate shall be payable from the
respective amounts payable to the Lead Arrangers and any other co-arrangers as
described in the fee letter (the "FEE LETTER") executed simultaneously
herewith.
Each of the Lead Arrangers reserves the right, prior to or after
execution of the definitive credit documentation for the Senior Bank
Financing, to syndicate all or part of its commitment for the Senior Bank
Financing to one or more lending institutions that will become parties to such
definitive credit documentation pursuant to a syndication to be managed by the
Lead Arrangers, and the commitment of Morgan Stanley and JPMorgan Chase Bank,
respectively, hereunder shall be reduced ratably as and when commitments are
received from the Lenders. The Lead Arrangers shall commence syndication
efforts after the execution of this letter by you at a time the Lead Arrangers
determine to be appropriate, and you agree actively to assist the Lead
Arrangers in achieving a syndication that is satisfactory to the Lead
Arrangers and the Borrower. Such syndication will be accomplished by a variety
of means, including direct contact during the syndication between senior
management and advisors of the Borrower and the proposed syndicate members. To
assist the Lead Arrangers in their syndication efforts, you hereby agree (a)
to provide and cause your advisors to provide the Lead Arrangers and the other
syndicate members upon request with all information reasonably deemed
necessary by the Lead Arrangers to complete syndication, including but not
limited to information and evaluations prepared by you and your advisors or on
your behalf relating to the transactions contemplated hereby, (b) to assist
the Lead Arrangers upon request in the preparation of an Information
Memorandum to be used in connection with the syndication of the Senior Bank
Financing and (c) to make available your senior officers and representatives,
in each case from time to time and to attend and make presentations regarding
the business and prospects of the Borrower at a meeting or meetings of lenders
or prospective lenders. In addition, you agree that no financing for the
Borrower, you or any of your respective subsidiaries or affiliates shall be
syndicated, privately placed or publicly offered to the extent that such
financing would have an adverse effect on the syndication of the Senior Bank
Financing.
Please note that the terms and conditions of the Credit Facilities
are not limited to those set forth in this Commitment Letter. Those matters
that are not covered or made clear
herein or in the attached Summary of Terms are subject to mutual agreement of
the parties. The terms and conditions of this commitment may be modified only
in writing. In addition, this commitment is subject to (a) the preparation,
execution and delivery of mutually acceptable loan documentation, including a
credit agreement incorporating substantially the terms and conditions outlined
herein and in the Summary of Terms, (b) the absence of a material adverse
change in the business, financial condition, operations or properties of (A)
you and your subsidiaries, taken as a whole since September 30, 2001 or (B)
the Company and its subsidiaries, taken as a whole, since September 30, 2001,
or as described in the written information with respect to the Borrower and
its subsidiaries delivered to the Lead Arrangers and JPMorgan Chase Bank prior
to the date hereof, (c) the condition that there shall not have occurred and
be continuing any material adverse change in loan syndication or financial or
capital market conditions generally from those currently in effect that
adversely affects the syndication of the Credit Facilities, (d) the completion
by each of the Lead Arrangers and JPMorgan Chase Bank of their limited
confirmatory due diligence with respect to the assets and businesses of the
Borrower, the Company and their subsidiaries with results reasonably
satisfactory to them (it being understood that the Lead Arrangers have
completed substantial due diligence to date (including, without limitation, a
review of all publicly available information, with respect to the Company as
of the date hereof), and that, such results have been satisfactory to the Lead
Arrangers, provided that such limited confirmatory due diligence with respect
to the Company and its subsidiaries shall be limited to publicly available
information unless and until the Borrower shall be able to conduct a more
inclusive due diligence investigation of the Company and its subsidiaries),
and (e) the accuracy and completeness in all material respects of all
representations that you make to us taken as a whole and all information that
you furnish to us in connection with this commitment and your compliance with
the terms of this Commitment Letter. The commitments of Morgan Stanley and
JPMorgan Chase Bank set forth in this Commitment Letter will terminate on the
earlier of (i) the date on which the Borrower publicly announces that it is
abandoning the Acquisition and (ii) October 31, 2002, unless the Transaction
closes on or before such date.
To induce the Lead Arrangers and JPMorgan Chase Bank to issue this
letter and to continue with their due diligence efforts, you hereby agree that
all reasonable out-of-pocket fees and expenses (including the reasonable fees
and expenses of counsel and consultants) of the Lead Arrangers, JPMorgan Chase
Bank and their respective affiliates arising in connection with this letter
(and their due diligence and syndication efforts in connection herewith) and
in connection with the Senior Bank Financing and the other transactions
described herein shall be for your account, whether or not the Transaction is
consummated, the Senior Bank Financing is made available or definitive credit
documents are executed. In addition, you hereby agree to pay when and as due
the fees described in the Fee Letter. You further agree to indemnify and hold
harmless each of the Lenders (including, in any event, each of Morgan Stanley
and JPMorgan Chase Bank) and each director, officer, employee and affiliate
thereof (each an "INDEMNIFIED PERSON") from and against any and all actions,
suits, proceedings (including any investigations or inquiries), claims,
losses, damages, liabilities or expenses of any kind or nature whatsoever
which may be incurred by or asserted against or involve any such Indemnified
Person as a result of or arising out of or in any way related to or resulting
from this letter, the Transaction or the extension or syndication of the
Senior Bank Financing
contemplated by this letter, or in any way arise from any use or intended use
of this letter or the proceeds of the Senior Bank Financing contemplated by
this letter, and you agree to reimburse each Indemnified Person upon demand
for any legal or other out-of-pocket expenses incurred in connection with
investigating, defending or preparing to defend any such action, suit,
proceeding (including any inquiry or investigation) or claim (whether or not
Morgan Stanley, JPMorgan Chase Bank or any such other Indemnified Person is a
party to any action or proceeding out of which any such expenses arise)
(collectively, an "ACTION"); provided, however, that you shall not have to
indemnify any Indemnified Person against any loss, claim, damage, expense or
liability to the extent resulting from the gross negligence or willful
misconduct of such Indemnified Person or that are in the nature of personal
injury or damage to property. It is understood and agreed that, to the extent
not precluded by a conflict of interest, the Indemnified Persons and you shall
endeavor to work cooperatively with a view to minimizing the legal and other
expenses associated with any defense and any potential settlement or judgment.
To the extent reasonably practicable and not disadvantageous to any party, it
is anticipated that a single counsel may be used. Settlement of any claim or
litigation involving any material indemnified amount will require your
approval, not to be unreasonably withheld. This letter is issued for your
benefit only and no other person or entity may rely hereon. Neither Morgan
Stanley, nor JPMorgan Chase Bank, nor any other Lender shall be responsible or
liable to you, the Company, the Borrower or any other person for consequential
damages which may be alleged as a result of this letter.
Each Lead Arranger reserves the right to employ the services of its
affiliates in providing services contemplated by this letter and to allocate,
in whole or in part, to such affiliates certain fees payable to such Lead
Arranger in such manner as such Lead Arranger and such affiliates may agree in
their sole discretion. You acknowledge that each Lead Arranger may share with
any of its affiliates, and such affiliates may share with such Lead Arranger,
any information related to the Transaction, the Borrower, any of the
Borrower's subsidiaries, the Company, any of the Company's subsidiaries or any
of the matters contemplated hereby in connection with the Transaction, subject
to an express agreement to keep such information confidential.
The provisions of the immediately preceding two paragraphs shall
survive any termination of this letter.
You represent and warrant that (a) all information that has been or
will hereafter be made available by or on behalf of you or by any of your
representatives in connection with the Transaction and the other transactions
contemplated hereby to the Lead Arrangers and JPMorgan Chase Bank or any of
their respective affiliates or representatives or to any Lender or any
potential Lender is and will be complete and correct in all material respects
and does not and will not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
contained therein not misleading in light of the circumstances under which
such statements were or are made considered as a whole, together with publicly
available information, and (b) all financial projections, if any, that have
been or will be prepared by you on your behalf or by any of your
representatives and made available to the Lead Arrangers and JPMorgan Chase
Bank or any of their respective affiliates or representatives or to any Lender
or any potential Lender in connection with the Transaction and the other
transactions contemplated hereby have been or will be prepared in good faith
based upon reasonable assumptions (it being
understood that such projections are subject to significant uncertainties and
contingencies, many of which are beyond your control, and that no assurance
can be given that any particular projections will be realized). You agree to
supplement the information and projections from time to time so that the
representations and warranties contained in this paragraph remain complete and
correct.
In issuing this commitment, each Lead Arranger and JPMorgan Chase
Bank is relying on the accuracy of the information furnished to it by you or
on your behalf (collectively, the "PRE-COMMITMENT INFORMATION"). The
obligations of the Lead Arrangers and JPMorgan Chase Bank under this
Commitment Letter and of any Lender that issues a commitment for the Senior
Bank Financing are made solely for your benefit and may not be relied upon or
enforced by any other person or entity.
You acknowledge that each of the Lead Arrangers and JPMorgan Chase
Bank, and their respective affiliates (each a "BANK" and, collectively, the
"BANKS") may be providing debt financing, equity capital or other services
(including financial advisory services) to other companies in respect of which
you may have conflicting interests regarding the transactions described herein
and otherwise, provided that, prior to the date on which the Borrower abandons
the Tender Offer, neither the Lead Arrangers nor JPMorgan Chase Bank will,
without the consent of the Borrower, provide any debt financing, equity
capital or other services (including financial advisory services) for a
competing bid for the acquisition of the Company (other than through any
financing commitment existing on November 13, 2000). The Banks expressly agree
to maintain non-public information received from you confidential. None of the
Banks will use confidential information obtained from you by virtue of the
transactions contemplated by this Commitment Letter or its other relationships
with you in connection with the performance by such Banks of services for
other companies, and none of the Banks will furnish any such information to
other companies. You also acknowledge that none of the Banks has an obligation
to use in connection with the transactions contemplated by this Commitment
Letter, or to furnish to you, confidential information obtained from other
companies.
You are not authorized to show or circulate this letter to any other
person or entity (other than your legal and financial advisors in connection
with your evaluation hereof and except as required by law or stock exchange
requirements) until such time as you have accepted this letter as provided in
the immediately succeeding paragraph. If the letter is not accepted by you as
provided in the immediately succeeding paragraph, you are to immediately
return this letter (and any copies hereof) to the undersigned. This letter may
be executed in any number of counterparts, and by the different parties hereto
on separate counterparts, each of which counterpart shall be an original, but
all of which shall together constitute one and the same instrument.
This letter and the Fee Letter shall be governed by, and construed in
accordance with the laws of the state of New York, and any right to trial by
jury with respect to any claim, action, suit or proceeding arising out of or
contemplated by this letter and/or the related Fee Letter is hereby waived.
The parties hereto hereby submit to the non-exclusive jurisdiction of the
federal and New York State courts located in the City of New York in
connection with any dispute related to this letter or the Fee Letter or any
matters contemplated hereby or thereby. Delivery of an executed counterpart of
this Commitment Letter by telecopier shall be effective as delivery of a
manually executed counterpart of this Commitment Letter.
Very truly yours,
MORGAN STANLEY SENIOR
FUNDING, INC.
By /s/ Todd Vannucci
-----------------------
Title: Executive Director
J.P. MORGAN SECURITIES INC.
By /s/ Michael McGovern
-----------------------
Title: Managing Director
JPMORGAN CHASE BANK
By /s/ B. Joseph Lillis
-----------------------
Title: Managing Director
Agreed to and Accepted as of the
13th day of December, 2001
WEYERHAEUSER COMPANY
By /s/ Jeffrey W. Nitta
-----------------------------------
Title: Vice President and Treasurer
EXHIBIT A
SUMMARY OF CERTAIN TERMS AND CONDITIONS*
THE PARTIES
BORROWER: Weyerhaeuser Company.
LEAD ARRANGERS AND JOINT Morgan Stanley and JPMorgan.
BOOK-RUNNERS:
SYNDICATION AGENT: Morgan Stanley.
ADMINISTRATIVE AGENT: JPMorgan Chase Bank.
LENDERS: Morgan Stanley, JPMorgan Chase Bank and a
syndicate of financial institutions and
institutional lenders arranged by the Lead
Arrangers in consultation with the Borrower.
DESCRIPTION OF CREDIT FACILITIES COMPRISING THE SENIOR BANK FINANCING
364-DAY FACILITY: 364-day Revolving Credit Facility in the amount
of $1.55 billion. Weyerhaeuser Real Estate
Company ("WRECO") shall be entitled to borrow up
to $900 million under the 364- Day Facility and
shall be severally but not jointly liable with
the Borrower for any amounts so borrowed.
MATURITY AND AMORTIZATION: The final maturity of the 364-Day Facility shall
be the date which occurs 364 days after the
Closing Date, provided, however, that the date
of the final maturity may be extended by 12
months at the option of the Borrower and WRECO
so long as, both before and after giving effect
to such extension, no default shall have
occurred and be continuing. Loans made pursuant
to the 364-Day Facility (the "364-DAY LOANS")
shall be repaid in full on the final maturity
date.
5-YEAR FACILITY: 5-Year Revolving Credit Facility in the amount
of $1.55 billion, with letter of credit and
swing line sublimits to be agreed upon.
MATURITY AND AMORTIZATION: The final maturity of the 5-Year Facility shall
be the date which occurs five years after the
Closing Date. The loans made pursuant to the
5-Year Facility (the "5-Year Loans") shall be
repaid in full on the final maturity date, and
all letters of credit issued thereunder shall
terminate prior to such time.
BRIDGE
FACILITY: Bridge Revolving Credit Facility in the amount
of $3.2 billion.
MATURITY: The final maturity of the Bridge Facility shall
be the date which occurs 18 months after the
Closing Date. Loans made
--------
* Capitalized terms used herein and not defined herein shall have the meanings
provided in the commitment letter (the "COMMITMENT LETTER") to which this
summary is attached.
pursuant to the Bridge Facility (the "Bridge
Loans", and together with the 364-Day Loans and
the 5-Year Loans, the "Loans") shall be repaid
in full on the final maturity date.
USE OF PROCEEDS: The Loans shall be utilized solely to finance
the Acquisition.
AVAILABILITY: Loans may be borrowed, repaid and reborrowed on
and after the Closing Date until the final
maturity date (without taking into account any
extension of the 364-Day Facility) for the
applicable Credit Facility.
TERMS APPLICABLE TO THE ENTIRE SENIOR BANK FINANCING
CLOSING DATE: On or before October 31, 2002.
INTEREST RATES: At the option of the Borrower, Loans may
be maintained from time to time as (x) Base Rate
Loans which shall bear interest at the
Applicable Margin in excess of the Base Rate in
effect from time to time or (y) Eurodollar Loans
which shall bear interest at the Applicable
Margin in excess of the Eurodollar Rate
(adjusted for reserves to the extent incurred)
as determined by the Administrative Agent for
the respective interest period.
"BASE RATE" shall mean the higher of (x) 1/2 of
1% in excess of the federal funds rate and (y)
the rate that the Administrative Agent announces
from time to time as its prime or base
commercial lending rate, as in effect from time
to time.
The "APPLICABLE MARGIN" means at any time for
each Credit Facility, the applicable percentage
determined based on the long-term unsecured debt
rating of the Borrower (the "Rating") in effect
from time to time, provided that (x) the
Applicable Margin for Eurodollar Loans shall not
be less than 0.525% and shall not exceed 1.500%,
and (y) the Applicable Margin for Base Rate
Loans shall be equal to or greater than 0.00%
and shall not exceed 0.500%. During the
continuance of any payment default under the
loan documentation, the Applicable Margin on all
such defaulted obligations owing under the loan
documentation shall increase by 2% per annum.
Interest periods of 1, 2, 3 and 6 months shall
be available in the case of Eurodollar Loans.
Interest in respect of Base Rate Loans shall be
payable quarterly in arrears on the last
business day of each quarter. Interest in
respect of Eurodollar Loans shall be payable in
arrears at the end of the applicable interest
period and every three months in the case of
interest periods in excess of three months.
Interest will also be payable at the time of
repayment of any Loans, and at maturity.
Interest in respect of Eurodollar Loans shall be
based on a 360-day year. Interest in respect of
Base Rate Loans and all commitment fee and other
fee calculations shall be based on a 365-day
year.
LEAD ARRANGER AND
ADMINISTRATIVE
AGENT FEES: The Lead Arrangers and the Administrative Agent
shall receive such fees as have been separately
agreed upon with the Borrower.
LETTER OF CREDIT FEES: Applicable Margin for Eurodollar Loans which are
5-Year Loans on the aggregate outstanding stated
amounts of letters of credit plus an additional
1/8 of 1% on the aggregate outstanding stated
amounts of letters of credit to be paid as a
fronting fee to the issuing bank.
FACILITY FEES: In respect of each Credit Facility a per annum
percentage determined based on the Rating in
effect from time to time, on each Lender's share
of the Senior Bank Financing from the Closing
Date, payable (a) quarterly in arrears and (b)
on the date of termination or expiration of the
commitments, provided that the Facility Fee
shall not be less than 0.100% and shall not
exceed 0.250%.
UTILIZATION FEES: In respect of each Credit Facility, a per annum
percentage equal to 0.250%. The Utilization Fee
with respect to the Bridge Facility will be
added to the Applicable Margin for any date on
which the outstanding Bridge Loans are equal to
or greater than 33% of the commitments of the
Lenders under the Bridge Facility. The
Utilization Fee with respect to the 5-Year
Facility and the 364-Day Facility (collectively,
the "Permanent Facilities") will be added to the
Applicable Margin for any date on which the sum
of the outstanding 5-Year Loans and outstanding
364-Day Loans is equal to or greater than 33% of
the aggregate commitments of the Lenders under
the Permanent Facilities.
VOLUNTARY COMMITMENT
REDUCTIONS: Voluntary reductions to the unutilized portion
of any Credit Facility may be made from time to
time by the Borrower or WRECO, as applicable,
without premium or penalty.
VOLUNTARY PREPAYMENT: The Borrower or WRECO, as applicable, may, upon
at least one business day's notice in the case
of Base Rate Loans and three business days'
notice in the case of Eurodollar Loans, prepay,
in full or in part, the Senior Bank Financing
without premium or penalty; provided, however,
that each partial prepayment shall be in an
amount of $25,000,000 or an integral multiple of
$1,000,000 in excess thereof; provided further
that any such prepayment of Eurodollar Loans
shall be made together with reimbursement for
any funding losses of the Lenders resulting
therefrom to the extent such funding losses
shall have been claimed within 6 months after
the occurrence thereof.
MANDATORY PREPAYMENT
AND COMMITMENT
REDUCTION: All net cash proceeds from sales of property and
assets of the Borrower and its subsidiaries
(excluding (i) sales of inventory and
timberlands in the ordinary course of business,
(ii) other exceptions to be mutually agreed and
(iii) any casualty and condemnation proceeds and
sales proceeds to the extent reinvested in the
business of the Borrower and it subsidiaries or
applied to repair or replace the lost asset
within a certain period of time to be mutually
agreed) shall be applied to prepay the Bridge
Facility. All such prepayments made shall result
in a permanent reduction of the commitments
under the Bridge Facility.
All net cash proceeds from the issuance after
the Closing Date of additional debt and equity
of the Borrower and its subsidiaries otherwise
permitted under the loan documentation, except
for certain net cash proceeds from specific
issuances to be agreed upon, shall be applied to
prepay the Bridge Facility. All such prepayments
made with respect to the Bridge Facility shall
result in a permanent reduction of the
commitments under the Bridge Facility.
DOCUMENTATION: The commitments of the Lead Arrangers and
JPMorgan Chase Bank will be subject to the
negotiation, execution and delivery of
definitive financing agreements consistent with
the terms of this letter and on other terms
substantially similar to those contained in the
Borrower's or WRECO's existing senior credit
facilities, in each case prepared by counsel to
the Lead Arrangers. The definitive financing
agreement shall provide that the covenants and
representations and warranties shall include the
Company and its subsidiaries only on and after
the date on which the Borrower directly or
indirectly effectively controls the Company.
CONDITIONS PRECEDENT
TO INITIAL EXTENSION
OF CREDIT: Those customarily found in credit agreements for
similar financings and other provisions
customary for financings of this type,
including, without limitation, the following:
(i) The Lenders shall be reasonably
satisfied with the final terms and
conditions (including any modifications
made thereto from time to time) of the
Tender Offer, including, without
limitation, the price per share and
number of shares to be acquired (unless
it consists of at least sufficient
shares of Company Stock to enable the
Purchaser, voting without any other
shareholder of the Company, to approve a
Merger of the Purchaser, the Borrower or
one of its wholly owned subsidiaries
with the Company), and with the proposed
terms and conditions (including any
modifications made thereto from time to
time) of the Merger, if any; the Lenders
shall be reasonably satisfied with all
legal and tax aspects of the Tender
Offer and the Merger, if any; and all
documentation relating to the Tender
Offer and the Merger, if any, including,
without limitation, the offer to
purchase the Company Stock and the
Merger Agreement, if any, shall be in
form and substance satisfactory to the
Lenders. The Lenders shall be satisfied
that all of the existing senior bank
credit facilities of the Borrower and
WRECO have been repaid in full and the
commitments thereunder terminated, other
than certain limited senior credit
facilities mutually agreed to by the
Lenders and the Borrower.
Contemporaneously with a merger of the
Company, the senior bank credit
facilities of the Company shall be
repaid.
(ii) All documentation relating to the Senior
Bank Financing, including a credit
agreement incorporating substantially
the terms and conditions outlined
herein, and the other parts of the
Transaction shall be in form and
substance reasonably satisfactory to the
Lenders.
(iii) Except as otherwise disclosed publicly
or to the Lead Arrangers prior to the
date of the Credit Agreement, there
shall not have occurred (i) a material
adverse change in the business,
financial condition, operations, or
properties of (A) the Company and its
subsidiaries, taken as a whole, since
September 30, 2001, or (B) the Borrower
and its subsidiaries, taken as a whole,
since September 30, 2001.
(iv) Except as otherwise publicly disclosed
prior to December 13, 2001, there shall
exist no action, suit, investigation,
litigation or proceeding pending or
threatened in any court or before any
arbitrator or governmental or regulatory
agency or authority that (i) could
reasonably be expected to (A) have a
material adverse effect on the business,
financial condition, operations, or
properties of (1) the Company and its
subsidiaries, taken as a whole, or (2)
the Borrower and its subsidiaries, taken
as a whole, (B) materially adversely
affect the ability of the Borrower or
any of its subsidiaries to perform its
obligations under the loan documentation
or (C) materially adversely affect the
rights and remedies of the
Administrative Agent and the Lenders
under the loan documentation or (ii)
could reasonably be expected to have a
material adverse effect on the
Transaction or the Senior Bank Financing
(collectively, a "MATERIAL ADVERSE
EFFECT").
(v) All governmental and third party
consents and approvals necessary in
connection with the Transaction and the
Senior Bank Financing shall have been
obtained (without the imposition of any
conditions that are not acceptable to
the Lenders) and shall remain in effect,
except where the failure to have
obtained such consent or approval,
individually or in the aggregate with
any other consents or approvals, would
not reasonably be expected to result in
a Material Adverse Effect; all
applicable waiting periods shall have
expired without any material adverse
action being taken by any competent
authority; and no law or regulation
shall be applicable that restrains,
prevents or imposes materially adverse
conditions upon the Transaction or the
Senior Bank Financing.
(vi) The Lenders shall have received (i)
reasonably satisfactory opinions of
counsel for the Borrower as to the
transactions contemplated hereby
(including, without limitation, the tax
aspects thereof and compliance with all
applicable securities laws) and (ii)
such corporate resolutions, certificates
and other documents as the Lenders shall
reasonably request.
(vii) There shall exist no default under any
of the loan documentation, and the
representations and warranties of the
Borrower or WRECO, as applicable, set
forth therein shall be true and correct
in all material respects immediately
prior to, and after giving effect to,
the initial extension of credit under
the loan documentation.
(viii) All accrued fees and expenses of the
Administrative Agent, the Lead Arrangers
and the Lenders (including the fees and
expenses of counsel for the Lead
Arrangers) shall have been paid.
(ix) The Borrower's long-term unsecured debt,
after giving effect to the Transaction,
shall have been rated "investment grade"
by both Moody's Investors Service, Inc.
("MOODY'S") and Standard & Poor's
Ratings Services ("S&P") and, if the
Borrower is rated in the lowest
investment grade category by both
Moody's and S&P, shall not have been
placed on credit watch by either Moody's
or S&P with negative implications, as of
the Closing Date.
CONDITIONS PRECEDENT
TO SUBSEQUENT
EXTENSIONS OF CREDIT: There shall exist no default under any of the
loan documentation, and the representations and
warranties of the Borrower or WRECO, as
applicable (other than the representation set
forth in item (iii) under Conditions Precedent
to Initial Extension of Credit) set forth
therein shall be true and correct in all
material respects immediately prior to, and
after giving effect to, such extension of
credit.
REPRESENTATIONS AND
WARRANTIES: Representations and warranties substantially
similar to those contained in the Borrower's and
WRECO's existing senior credit agreements and
others customary for transactions of this type.
COVENANTS: Affirmative and negative covenants substantially
similar to those contained in the Borrower's and
WRECO's existing senior credit agreements and
others customary for transactions of this type.
FINANCIAL COVENANTS: A total debt to capitalization ratio and a
minimum net worth covenant to be determined.
EVENTS OF DEFAULT: Events of Default substantially similar to those
contained in the Borrower's and WRECO's existing
senior credit agreements and others customary
for transactions of this type.
EXPENSES: The Borrower shall pay all of the Administrative
Agent's and the Lead Arrangers' due diligence,
syndication (including printing, distribution
and bank meetings) and all other out-of-pocket
expenses incurred by the Administrative Agent or
the Lead Arrangers (including the fees and
expenses of counsel for the Lead Arranger),
whether or not any of the transactions
contemplated hereby are consummated. The
Borrower shall also pay the expenses of the
Administrative Agent, the Lead Arrangers and the
Lenders in connection with the enforcement of
any of the loan documentation.
INDEMNITY: The Borrower and to the extent applicable, WRECO
will indemnify and hold harmless the
Administrative Agent, the Lead Arrangers, each
Lender and each of their affiliates and their
officers, directors, employees, agents and
advisors from claims and losses relating to the
Transaction or the Senior Bank Financing,
subject to customary exceptions.
REQUIRED LENDERS: Lenders holding loans and commitments
representing more than 50% of the aggregate
amount of loans and commitments under the Senior
Bank Financing.
WAIVERS &
AMENDMENTS: Amendments and waivers of the provisions of the
loan agreement and other definitive credit
documentation will require the approval of the
Required Lenders, except that the consent of all
affected Lenders will be required with respect
to (i) increases in commitment amounts, (ii)
reductions of principal, interest, or fees and
(iii) extensions of scheduled maturities.
ASSIGNMENTS AND
PARTICIPATIONS: Assignments may be non-pro rata and must be to
Eligible Assignees and, in each case other than
an assignment to a Lender or an assignment of
the entirety of a Lender's interest in the
Senior Bank Financing, in a minimum amount to be
agreed. Each Lender will also have the right,
without consent of the Borrower or the
Administrative Agent, to assign (i) as security
all or part of its rights under the loan
documentation to any Federal Reserve Bank and
(ii) all or part of its rights or obligations
under the loan documentation to any of its
affiliates. No participation shall include
voting rights, other than for reductions or
postponements of regularly scheduled amounts
payable.
TAXES: All payments to be free and clear of any present
or future taxes, withholdings or other
deductions whatsoever (other than income taxes
in the jurisdiction of the Lender's applicable
lending office). The Lenders will use reasonable
efforts (consistent with their respective
internal policies and legal and regulatory
restrictions and so long as such efforts would
not otherwise be disadvantageous to such
Lenders) to minimize to the extent possible any
applicable taxes and the Borrower will indemnify
the Lenders and the Administrative Agent for
such taxes paid by the Lenders or the
Administrative Agent; provided that the Borrower
shall have the right to replace any Lender that
shall have claimed such indemnification.
MISCELLANEOUS: Standard yield protection (including compliance
with risk-based capital guidelines, increased
costs, payments free and clear of withholding
taxes and interest period breakage indemnities),
eurodollar illegality and similar provisions,
defaulting lender provisions, waiver of jury
trial and submission to jurisdiction.
GOVERNING LAW: New York.
COUNSEL FOR THE
LEAD ARRANGERS: Shearman & Sterling.