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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
SCHEDULE TO
(Amendment No. 56)
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 $50.00 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.
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 The Chase Manhattan Bank. The Proposed
Credit Facilities in the aggregate amount of $5.7 billion will now be
comprised of:
- a 364-day revolving credit facility in the aggregate amount of
$1.4 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
$1.4 billion; and
- a bridge revolving credit facility in the aggregate amount of
$2.9 billion which will mature 18 months after the closing date
of the Proposed Credit Facilities.
2
Each Lead Lender's commitment under the Commitment Letter will now
terminate on October 31, 2002, unless on or before that date: (i) Weyerhaeuser
publicly announces that it is abandoning the acquisition of Willamette or (ii)
Weyerhaeuser completes the acquisition of Willamette.
Other than as described above, the terms and conditions described in
the Offer to Purchase with respect to 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)(3) hereto.
ITEM 11. ADDITIONAL INFORMATION.
On October 18, 2001, Weyerhaeuser extended the Offer until 12:00
midnight New York City time on Wednesday, December 5, 2001. The text of a
press release issued by Weyerhaeuser on October 18, 2001, announcing the
extension of the Offer is filed as Exhibit (a)(5)(FFF) hereto.
ITEM 12. EXHIBITS.
(a)(5)(FFF) Press release dated October 18, 2001, issued by Weyerhaeuser
Company.
(b)(3) Amended and Restated Commitment Letter, dated as of October 16,
2001, among Weyerhaeuser Company, Morgan Stanley Senior
Funding, Inc., J.P. Morgan Securities Inc. and The Chase
Manhattan Bank.
3
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: October 18, 2001
EXHIBIT INDEX
Exhibit Description
------- -----------
(a)(5)(FFF) Press release dated October 18, 2001, issued by Weyerhaeuser
Company.
(b)(3) Amended and Restated Commitment Letter, dated as of October 16,
2001, among Weyerhaeuser Company, Morgan Stanley Senior
Funding, Inc., J.P. Morgan Securities Inc. and The Chase
Manhattan Bank.
Exhibit (a)(5)(FFF)
NEWS RELEASE [Weyerhaeuser Company Logo]
FOR IMMEDIATE RELEASE
WEYERHAEUSER TENDER OFFER FOR WILLAMETTE INDUSTRIES
EXTENDED TO DECEMBER 5, 2001
FEDERAL WAY, Wash., October 18, 2001 - Weyerhaeuser Company (NYSE: WY)
today announced that is has extended its $50 per share cash tender offer
for all of the outstanding common stock of Willamette Industries, Inc.
(NYSE: WLL) until midnight, New York City time, on December 5, 2001.
As of midnight, New York City time, on October 17, 2001, Willamette
shareholders had tendered and not withdrawn approximately 51.7 million shares
pursuant to Weyerhaeuser's tender offer.
IMPORTANT INFORMATION
Company Holdings, Inc. ("CHI"), a wholly owned subsidiary of Weyerhaeuser
Company, has commenced a tender offer for all the outstanding shares of common
stock of Willamette Industries, Inc. at $50.00 per share, net to the seller in
cash, without interest. The offer currently is scheduled to expire at 12:00
midnight, New York City time, on Wednesday, December 5, 2001. CHI may extend the
offer. If the offer is extended, CHI will notify the depositary for the offer
and issue a press release announcing the extension on or before 9:00 a.m. New
York City time on the first business day following the date the offer was
scheduled to expire.
Weyerhaeuser Company, one of the world's largest integrated forest products
companies, was incorporated in 1900. In 2000, sales were $16 billion. It has
offices or operations in 17 countries, with customers worldwide. Weyerhaeuser
is principally engaged in the growing and harvesting of timber; the
manufacture, distribution and sale of forest products; and real estate
construction, development and related activities. Additional information about
Weyerhaeuser's businesses, products and practices is available at
www.weyerhaeuser.com.
Today's news release, along with other news about Weyerhaeuser, is available
on the Internet at www.weyerhaeuser.com.
Weyerhaeuser contacts:
ANALYSTS MEDIA
Kathryn McAuley Joele Frank/Jeremy Zweig Bruce Amundson
Weyerhaeuser Joele Frank, Wilkinson Weyerhaeuser
(253) 924-2058 Brimmer Katcher (253)924-3047
(212) 355-4449
Exhibit (b)(3)
As of October 16, 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 November 13, 2000 (the "NOVEMBER 13 COMMITMENT
LETTER"), as amended and restated as of May 4, 2001 (such November 13
Commitment Letter, as so amended and restated being hereinafter referred to as
the "EXISTING COMMITMENT LETTER") entered into by and among you, Morgan
Stanley Senior Funding, Inc., J.P. Morgan Securities Inc. and 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 The Chase Manhattan
Bank ("CHASE") 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 Chase provide you with its
financing commitment for 50% of the $5.7 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 $50 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.
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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 Chase 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 Chase 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 Chase, 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
3
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 July 1, 2001 or (B) the
Company and its subsidiaries, taken as a whole, since June 30, 2001, or as
described in the written information with respect to the Borrower and its
subsidiaries delivered to the Lead Arrangers and Chase 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 Chase 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 Chase 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 Chase 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, Chase 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
Chase) 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
4
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, Chase
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 Chase, 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 Chase 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 Chase 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
5
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 Chase 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 Chase 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 Chase, 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 Chase 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 Vanucci
----------------------------
Title: EXECUTIVE DIRECTOR
J.P. MORGAN SECURITIES INC.
By /s/ Pierre Maman
----------------------------
Title: V.P.
THE CHASE MANHATTAN BANK
By /s/ Joe Lillis
----------------------------
Title:
Agreed to and Accepted as of the
16th day of October, 2001
WEYERHAEUSER COMPANY
By /s/ Jeffrey Nitta
-------------------------------------
Title: VICE PRESIDENT + TREASURER
EXHIBIT A
---------
SUMMARY OF CERTAIN TERMS AND CONDITIONS*
THE PARTIES
BORROWER: Weyerhaeuser Company.
LEAD ARRANGERS AND JOINT
BOOK-RUNNERS: Morgan Stanley and JPMorgan.
SYNDICATION AGENT: Morgan Stanley.
ADMINISTRATIVE AGENT: Chase.
LENDERS: Morgan Stanley, Chase 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 $1.4 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 $1.4 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
----------------------
* 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.
2
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 $2.9 billion.
MATURITY: The final maturity of the Bridge Facility shall
be the date which occurs 18 months after the
Closing Date. Loans made 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%.
3
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
4
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 Chase
will be subject to the negotiation, execution
and delivery of definitive financing
5
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.
6
(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 June 30, 2001, or
(B) the Borrower and its subsidiaries,
taken as a whole, since July 1, 2001.
(iv) Except as otherwise publicly disclosed
prior to the date of the Commitment
Letter, 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
7
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.
8
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
9
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.