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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
SCHEDULE TO
(Amendment No. 73)
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 $55.50 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 "First Supplement"), the Second Supplement
thereto dated January 28, 2002 (the "Second 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 First
Supplement, the Second Supplement and the Schedule TO.
Items 4 and 8. Terms of the Offer; Interest in
Willamette Securities
The initial offering period of the Offer expired at 12:00 midnight,
New York City time on Friday, February 8, 2002. Weyerhaeuser's preliminary
calculations indicate that approximately 106.5 million Shares had been validly
tendered and not withdrawn as of the Expiration Date, representing approximately
97% of the outstanding Shares. The preliminary calculations include
approximately 10.8 million Shares with respect to which Notices of Guaranteed
Delivery were submitted. The Purchaser has accepted for
2
payment all Shares that were validly tendered and not withdrawn as of the
Expiration Date.
The Purchaser is providing a subsequent offering period, commencing
Monday, February 11, 2002 and expiring at 12:00 midnight, New York City time on
Wednesday, February 13, 2002. During the subsequent offering period, the
Purchaser will accept for payment and promptly pay for any Shares as they are
tendered. Shareholders who tender Shares during such period will be paid the
same $55.50 per share Offer Price paid during the initial offering period.
Shares tendered during the subsequent offering period may not be withdrawn. The
Purchaser may extend the subsequent offering period. If the subsequent offering
period is extended, the Purchaser will notify the Depositary and issue a press
release prior to 9:00 a.m. New York City time on the first business day
following the date the subsequent offering period was scheduled to expire.
The text of two press releases issued by Weyerhaeuser on February 11,
2002, are filed as Exhibits (a)(5)(TTT) and (UUU) hereto, respectively.
Item 6. Purposes of the Offer and the Merger; Plans for
Willamette
Weyerhaeuser intends to complete the Merger of the Purchaser with and
into Willamette as soon as practicable. In the Merger, each Share, other than
Shares owned by Willamette, Weyerhaeuser or the Purchaser, will be converted
into the right to receive $55.50 in cash without interest. Weyerhaeuser expects
the Merger to occur on or about March 14, 2002.
Item 7. Source and Amount of Funds.
In connection with the Offer and the Merger, Weyerhaeuser has obtained
unsecured senior debt financing (the "Credit Facilities") from a syndicate of
lenders led by J.P. Morgan Securities Inc. and Morgan Stanley Senior Funding,
Inc.
The Credit Facilities are in the aggregate amount of $8.0 billion and
are comprised of:
o a 364-day revolving credit facility (the "364-day Facility") in an
aggregate amount of $2.0 billion, under which Weyerhaeuser and
Weyerhaeuser Real Estate Company may, at their option, convert
outstanding revolving loans into a loan maturing no later than February 7,
2004;
o a bridge revolving credit facility (the "18-month Facility") in an
aggregate amount of $4.0 billion maturing on August 8, 2003; and
3
o a competitive advance and revolving credit facility (the "5-year Facility")
in an aggregate amount of $2.0 billion maturing on February 8, 2007.
The interest rates on loans varies depending on the type of loan, the
length of interest rate period chosen and the prevailing market rate for certain
types of loans. Each facility also provides that Weyerhaeuser will pay annually
(a) a facility fee based on the long-term unsecured debt rating of Weyerhaeuser,
(b) a utilization fee based on amounts outstanding under such facility, and (c)
letter of credit fees based on aggregate amounts outstanding under letters of
credit in connection with the 5-year Facility.
In addition to providing financing for the Offer and the Merger,
amounts borrowed under the Credit Facilities may be used by Weyerhaeuser to pay
related costs and expenses, to repay certain existing indebtedness of
Weyerhaeuser, Willamette and their respective subsidiaries, to provide for the
issuance of letters of credit and for general corporate purposes.
Borrowings under each of the facilities are subject to customary
conditions. The facilities also contain customary representations and
warranties, covenants, mandatory prepayment provisions and events of default.
Copies of the 364-day Facility, the 18-month Facility and the 5-year
Facility are filed as Exhibits (b)(5), (6) and (7) hereto, respectively.
4
Item 12. Exhibits.
(a)(5)(TTT) Press release issued by Weyerhaeuser Company, dated February 11,
2002.
(a)(5)(UUU) Press release issued by Weyerhaeuser Company, dated February 11,
2002.
(a)(5)(VVV) Form of letter to Willamette employees dated February 11, 2002.
(b)(5) 364-Day Revolving Credit Facility Agreement, dated as of
February 8, 2002, among Weyerhaeuser Company, Weyerhaeuser Real
Estate Company, the Lenders named therein, JPMorgan Chase Bank,
as administrative agent, Morgan Stanley Senior Funding, Inc., as
syndication agent, and The Bank of Tokyo-Mitsubishi, Ltd. and
Deutsche Banc Alex. Brown Inc., as co-documentation agents.
(b)(6) Bridge Revolving Credit Facility Agreement, dated as of February
8, 2002, among Weyerhaeuser Company, the Lenders named therein,
JPMorgan Chase Bank, as administrative agent, Morgan Stanley
Senior Funding, Inc., as syndication agent, and The Bank of
Tokyo-Mitsubishi, Ltd. and Deutsche Banc Alex. Brown Inc., as
co-documentation agents.
(b)(7) Competitive Advance and Revolving Credit Facility Agreement,
dated as of February 8, 2002, among Weyerhaeuser Company, the
Lenders named therein, JPMorgan Chase Bank, as administrative
agent, Morgan Stanley Senior Funding, Inc., as syndication
agent, and The Bank of Tokyo-Mitsubishi, Ltd. and Deutsche Banc
Alex. Brown Inc., as co-documentation agents.
5
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: February 11, 2002
6
Exhibit Index
Exhibit No. Description
----------- -----------
(a)(5)(TTT) Press release issued by Weyerhaeuser Company, dated February 11,
2002.
(a)(5)(UUU) Press release issued by Weyerhaeuser Company, dated February 11,
2002.
(a)(5)(VVV) Form of letter to Willamette employees dated February 11, 2002.
(b)(5) 364-Day Revolving Credit Facility Agreement, dated as of
February 8, 2002, among Weyerhaeuser Company, Weyerhaeuser Real
Estate Company, the Lenders named therein, JPMorgan Chase Bank,
as administrative agent, Morgan Stanley Senior Funding, Inc., as
syndication agent, and The Bank of Tokyo-Mitsubishi, Ltd. and
Deutsche Banc Alex. Brown Inc., as co-documentation agents.
(b)(6) Bridge Revolving Credit Facility Agreement, dated as of February
8, 2002, among Weyerhaeuser Company, the Lenders named therein,
JPMorgan Chase Bank, as administrative agent, Morgan Stanley
Senior Funding, Inc., as syndication agent, and The Bank of
Tokyo-Mitsubishi, Ltd. and Deutsche Banc Alex. Brown Inc., as
co-documentation agents.
(b)(7) Competitive Advance and Revolving Credit Facility Agreement,
dated as of February 8, 2002, among Weyerhaeuser Company, the
Lenders named therein, JPMorgan Chase Bank, as administrative
agent, Morgan Stanley Senior Funding, Inc., as syndication
agent, and The Bank of Tokyo-Mitsubishi, Ltd. and Deutsche Banc
Alex. Brown Inc., as co-documentation agents.
7
Exhibit (a)(5)(TTT)
[WEYERHAEUSER LOGO]
NEWS RELEASE
FOR IMMEDIATE RELEASE
WEYERHAEUSER ANNOUNCES ACCEPTANCE FOR PAYMENT
OF SHARES IN WILLAMETTE TENDER OFFER
Subsequent Offering Period Commenced
FEDERAL WAY, Wash., February 11, 2002--Weyerhaeuser Company (NYSE: WY) today
announced that the initial offering period of the tender offer by its wholly
owned subsidiary, Common Holdings, Inc. ("CHI"), to purchase all of the
outstanding shares of common stock of Willamette Industries, Inc. (NYSE: WLL)
expired at 12:00 midnight, New York City time, on Friday, February 8, 2002.
Weyerhaeuser's preliminary calculations indicate that as of the expiration
date, Willamette shareholders had tendered and not withdrawn approximately
106.5 million shares (including approximately 10.8 million shares with respect
to which notices of guaranteed delivery were submitted), representing
approximately 97% of the outstanding shares of Willamette common stock.
Weyerhaeuser has accepted for payment all Willamette shares that were validly
tendered and not withdrawn as of the expiration date. As previously announced,
Weyerhaeuser intends to complete a second-step merger as soon as practicable in
which all remaining Willamette shares will be converted into the right to
receive the same cash price paid in the tender offer. Weyerhaeuser expects that
the second-step merger will occur on March 14, 2002.
Weyerhaeuser also announced that CHI is providing a subsequent offering period,
commencing on Monday, February 11, 2002 and expiring on Wednesday, February 13,
2002 at 5:00 p.m., New York City time. The subsequent offering period is
intended to permit Willamette shareholders whose shares were not tendered to
obtain the offer price for their shares prior to consummation of the second-
step merger.
During the subsequent offering period, CHI will accept for payment and promptly
pay for any Willamette shares as they are tendered. Shareholders who tender
shares during such period will be paid the same $55.50 per share cash
consideration paid during the initial offering period. Shares tendered during
the subsequent offering period may not be withdrawn. CHI may extend the
subsequent offering period. If the subsequent offering period is extended, CHI
will notify the depositary for the offer and issue a press release prior to
9:00 a.m. New York City time on the first business day following the date the
subsequent offering period was scheduled to expire.
-more-
-2-
Willamette Industries is an integrated forest products company with 106 plants,
located in the U.S., France, Ireland and Mexico. The Company owns 1.7 million
acres of forestland in the U.S. and manages sustainably to produce building
materials, composite wood panels, fine paper, office paper products, and
corrugated packaging and grocery bags.
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 (a)(5)(UUU)
[WEYERHAEUSER LOGO]
NEWS RELEASE
FOR IMMEDIATE RELEASE
WEYERHAEUSER ANNOUNCES REVISED EXPIRATION TIME
FOR WILLAMETTE SUBSEQUENT OFFERING PERIOD
FEDERAL WAY, Wash., February 11, 2002--Weyerhaeuser Company (NYSE: WY) today
announced that the subsequent offering period in connection with the tender
offer by its wholly owned subsidiary, Company Holdings, Inc. ("CHI"), to
purchase all of the outstanding shares of common stock of Willamette
Industries, Inc. (NYSE: WLL) will expire on Wednesday, February 13, 2002 at
12:00 midnight, New York City time. The subsequent offering period is intended
to permit Willamette shareholders whose shares were not tendered to obtain the
offer price for their shares prior to consummation of the second-step merger.
During the subsequent offering period, CHI will accept for payment and
promptly pay for any Willamette shares as they are tendered. Shareholders who
tender shares during such period will be paid the same $55.50 per share cash
consideration paid during the initial offering period. Shares tendered during
the subsequent offering period may not be withdrawn. CHI may extend the
subsequent offering period. If the subsequent offering period is extended, CHI
will notify the depositary for the offer and issue a press release prior to
9:00 a.m. New York City time on the first business day following the date the
subsequent offering period was scheduled to expire.
Willamette Industries is an integrated forest products company with 106
plants, located in the U.S., France, Ireland and Mexico. The Company owns 1.7
million acres of forestland in the U.S. and manages it sustainably to produce
building materials, composite wood panels, fine paper, office paper products,
and corrugated packaging and grocery bags.
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 (a)(5)(VVV)
[WEYERHAEUSER LOGO]
February 11, 2002
To: All Willamette Employees
From: Weyerhaeuser Company
We understand that many of you have experienced difficulties tendering your
shares into the Weyerhaeuser tender offer. Because Willamette and Weyerhaeuser
recognize that you would like to receive your money promptly, Weyerhaeuser is
making available a subsequent offering period.
The subsequent offering period is intended to permit Willamette shareholders
whose shares were not tendered to obtain the offer price for their shares
prior to consummation of the second-step merger. Shareholders who tender
shares during this subsequent offering period will be paid the same $55.50 per
share cash consideration paid during the initial offering period.
We are amending the Willamette Industries Stock Purchase Plan (the 401K Plan)
so that any Willamette shares for which the 401K Plan trustee, Wells Fargo
Bank, N.A., has not received instructions prior to the deadline set forth
below will be tendered into the Weyerhaeuser offer. Accordingly, if you are a
participant in the Plan, you do not need to deliver instructions to the 401K
Plan trustee unless (1) you do not want your Willamette shares to be tendered
or (2) you previously instructed the 401K Plan trustee not to tender your
shares and you now want to tender. If you have already instructed the Plan
trustee to tender your shares, no further action is required. However, if you
previously instructed the 401K Plan trustee not to tender your shares, you
must deliver new instructions to the trustee if you want your shares tendered.
The new deadline to instruct the Plan trustee is tomorrow, Tuesday, Feb. 12th,
at 9:00 AM PST (12:00 noon EST). Your tender instructions will only be
followed if you return properly completed instructions to Wells Fargo Bank,
N.A. by that time. Completed tender instruction forms may be returned to the
401K Plan trustee by fax at (212) 645-8046. If you have any questions about
the tender process or whether your tender instructions have been received,
please contact the 401K Plan information agent, D.F. King & Co., toll-free at
(800) 290-6430.
For all shares held outside of the 401K Plan, the new deadline to tender is
Wednesday, Feb. 13th, at 9:00 PM PST (12:00 midnight EST). If you hold your
shares in your own name, you must complete the letter of transmittal and
return it, along with any other required documents, to the Depositary prior to
the expiration of the offer. If you hold your Willamette shares at a brokerage
firm or bank, only they can tender your shares and only upon receipt of your
specific instructions. You may contact the person who is responsible for your
account and instruct them to tender your shares today. If you have any
questions or require assistance in tendering your shares, please call
Innisfree M&A Incorporated, at: 1-877-750-5838 (toll-free).
If you have already tendered your shares and not withdrawn them you need take
no further action in order to receive the offer price of $55.50 per share.
Important Information
During the subsequent offering period, Weyerhaeuser's subsidiary, Company
Holdings, Inc. (CHI), will accept for payment and promptly pay for any
Willamette shares as they are tendered. Shareholders who
tender shares during
such period will be paid the same $55.50 per share cash consideration paid
during the initial offering period. Shares tendered during the subsequent
offering period may not be withdrawn. CHI may extend the subsequent offering
period. If the subsequent offering period is extended, CHI will notify the
depositary for the offer and issue a press release prior to 9:00 a.m. New York
City time on the first business day following the date the subsequent offering
period was scheduled to expire.
Exhibit (b)(5)
EXECUTION COPY
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$2,000,000,000
364-DAY REVOLVING CREDIT FACILITY AGREEMENT
Dated as of February 8, 2002
among
WEYERHAEUSER COMPANY, and
WEYERHAEUSER REAL ESTATE COMPANY, as Borrowers
THE LENDERS NAMED HEREIN,
JPMORGAN CHASE BANK, as Administrative Agent,
MORGAN STANLEY SENIOR FUNDING, INC., as Syndication Agent,
and
THE BANK OF TOKYO-MITSUBISHI, LTD., and
DEUTSCHE BANC ALEX. BROWN INC.,
as Co-Documentation Agents
================================================================================
J.P. MORGAN SECURITIES INC. and MORGAN STANLEY SENIOR FUNDING, INC.,
as Lead Arrangers and Joint Book Runners
364-DAY REVOLVING CREDIT FACILITY AGREEMENT dated as of February 8,
2002 among WEYERHAEUSER COMPANY, a Washington corporation ("Weyerhaeuser"),
WEYERHAEUSER REAL ESTATE COMPANY, a Washington corporation ("WRECO," together
with Weyerhaeuser, the "Borrowers" and each, individually, a "Borrower"), the
lenders listed in Schedule 2.01 (together with each assignee that becomes a
party hereto pursuant to Section 9.04, a "Lender," and collectively, the
"Lenders"), JPMORGAN CHASE BANK, a New York banking corporation, as
administrative agent for the Lenders (in such capacity, and its successors in
such capacity, the "Administrative Agent"), MORGAN STANLEY SENIOR FUNDING,
INC., as syndication agent (in such capacity, the "Syndication Agent"), and
THE BANK OF TOKYO-MITSUBISHI, LTD. and DEUTSCHE BANC ALEX. BROWN INC., as
co-documentation agents (each, individually, a "Co-Documentation Agent," and
collectively, the "Co-Documentation Agents").
W I T N E S S E T H:
WHEREAS, the Borrowers have requested that the Lenders extend credit
to the Borrowers to enable them (a) to finance the acquisition (the
"Acquisition") by Weyerhaeuser of the outstanding shares of common stock,
including the related preferred stock purchase rights, of Willamette
Industries, Inc., an Oregon corporation (the "Company"), (b) to pay costs and
expenses related to such Acquisition and the financing thereof, (c) to
refinance certain existing indebtedness of Weyerhaeuser, the Company and their
respective subsidiaries (as hereinafter defined) and (d) to provide the
Borrowers and their Subsidiaries (as hereinafter defined) with financing for
general corporate purposes.
WHEREAS, the Lenders are willing to extend such credit on the terms
and subject to the conditions herein set forth.
WHEREAS, Weyerhaeuser Real Estate Company, a Washington corporation
and a wholly owned subsidiary of Weyerhaeuser, will derive a substantial
benefit from the credit extended to Weyerhaeuser.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms. As used in this Agreement, the following
terms shall have the meanings specified below:
"Acquisition" shall have the meaning given such term in the
preliminary statements hereto.
"Adjusted Net Worth" shall mean, as of the date of any computation
thereof, the aggregate amount of capital stock (less treasury stock), surplus
and retained earnings of WRECO and its Restricted Subsidiaries, after
deducting (i) goodwill, patents, trade names, trademarks, unamortized debt
discount and expense, deferred assets (other than prepaid taxes and
insurance), experimental or organizational expense, any reappraisal,
revaluation or write-up assets, and such other assets as are properly
classified as "intangible assets" of WRECO and its Restricted Subsidiaries in
accordance with GAAP, (ii) all minority interests in the capital stock and
surplus of the Restricted Subsidiaries of WRECO, (iii) all Investments in
Unrestricted Subsidiaries of WRECO, and (iv) all Investments of WRECO and its
Restricted Subsidiaries in any joint venture, partnership or similar entity
(not including any Investments in any Restricted Subsidiary of WRECO) entered
into for the purpose of acquiring, developing, constructing, owning,
operating, selling or leasing any Real Estate Assets.
"Administrative Agent Fees" shall have the meaning given such term
in Section 2.04(b).
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit B hereto.
"Affiliate" shall mean, when used with respect to a specified
person, another person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with
the person specified.
"Aggregate Credit Exposure" shall mean the aggregate amounts of the
Lenders' Credit Exposures.
"Agreement" shall mean this 364-Day Revolving Credit Facility
Agreement, together with all amendments, supplements and modifications hereof.
"Applicable Margin" shall have the meaning given such term in
Section 2.06(d).
"Applicable Percentage" of any Lender at any time shall mean the
percentage of the Total Commitment represented by such Lender's Commitment. In
the event the Commitments shall have expired or been terminated, the
Applicable Percentage shall be determined on the basis of the Commitments most
recently in effect, but giving effect to assignments pursuant to Section 9.04.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative
Agent, which acceptance shall be governed by the terms of Section 9.04, in the
form of Exhibit C.
"Base Rate" shall mean, for any day, a rate per annum equal to the
higher of (i) the Prime Rate and (ii) 1/2 of 1% plus the Federal Funds Rate,
each as in effect from time to time. If for any reason the Administrative
Agent shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Federal Funds Rate,
including the inability or failure of the Administrative Agent to obtain
sufficient quotations in
2
accordance with the terms thereof, the Base Rate shall be determined without
regard to clause (ii) of the first sentence of this definition, until the
circumstances giving rise to such inability no longer exist. Any change in the
Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be
effective on the effective date of such change in the Prime Rate or the
Federal Funds Rate, respectively.
"Base Rate Borrowing" shall mean a Borrowing comprised of Base Rate
Loans.
"Base Rate Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Base Rate in accordance with the provisions of
Article II.
"Board" shall mean the Board of Governors of the Federal Reserve
System of the United States.
"Borrower" and "Borrowers" shall have the respective meanings given
such terms in the introductory paragraph hereto.
"Borrowing" shall mean a group of Loans of a single Type made by the
Lenders on a single date and as to which a single Interest Period is in
effect.
"Bridge Facility" shall mean the Bridge Revolving Credit Facility
Agreement dated as of even date herewith, entered into by and among
Weyerhaeuser, the lenders party thereto from time to time, the Syndication
Agent, the Administrative Agent and the Co-Documentation Agents, as such
agreement may be amended, restated, supplemented or otherwise modified from
time to time.
"Business Day" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York) on which banks are
open for business in New York City; provided, however, that, when used in
connection with a Eurodollar Loan, the term "Business Day" shall also exclude
any day on which banks are not open for dealings in dollar deposits in the
London interbank market.
"Capital Base" shall mean, as of the date of any computation
thereof, the sum of (i) Adjusted Net Worth plus (ii) the amount of
WRECO/Weyerhaeuser Subordinated Debt then outstanding not to exceed Adjusted
Net Worth.
"Capital Lease Obligations" of any person shall mean the obligations
of such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP
and, for purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
A "Change in Control" shall be deemed to have occurred with respect
to (a) Weyerhaeuser if, (i) any person or group (within the meaning of Rule
13d-5 of the SEC as in effect on the date hereof) shall own directly or
indirectly, beneficially or of record, shares representing more than 20% of
the aggregate ordinary voting power represented by the issued
3
and outstanding capital stock of Weyerhaeuser; (ii) a majority of the seats
(other than vacant seats) on the board of directors of Weyerhaeuser shall at
any time have been occupied by persons who were neither (A) nominated by the
management of Weyerhaeuser in accordance with its charter and by-laws, nor (B)
appointed by directors so nominated; or (iii) any person or group shall
otherwise directly or indirectly Control Weyerhaeuser, and (b) WRECO if
Weyerhaeuser shall fail to own directly or indirectly, beneficially or of
record, shares representing at least 79% of the aggregate ordinary voting
power represented by the issued and outstanding capital stock of WRECO.
"Closing Date" shall mean the first date on which the conditions set
forth in Sections 4.01 and 4.02 shall have been satisfied.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of
this Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Commitment" shall mean, with respect to each Lender, the commitment
of such Lender hereunder as set forth in Schedule 2.01 or in the Assignment
and Acceptance pursuant to which such Lender shall have assumed its
Commitment, as applicable, as such Lender's Commitment may be permanently
reduced, increased or terminated from time to time pursuant to Section 2.09,
Section 2.18, Article VII or Section 9.04. Each Lender's unused Commitment
shall automatically and permanently terminate on the Revolver Termination
Date, and, if the Term Loan Conversion is elected, each Lender's remaining
Commitment shall automatically and permanently terminate on the Termination
Date.
"Commitment Letter" shall mean that commitment letter and term sheet
dated as of December 13, 2001 from JPMorgan Chase Bank, J.P. Morgan Securities
Inc. and Morgan Stanley Senior Funding, Inc. to Weyerhaeuser.
"Company" shall have the meaning given such term in the preliminary
statements hereto.
"Confidential Information Memorandum" shall mean the confidential
information memorandum dated February 2002 and used by the Administrative
Agent and the Lead Arrangers in connection with the syndication of the
Commitments.
"Control" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities or by contract, and
"Controlling" and "Controlled" shall have meanings correlative thereto.
"Control Date" shall mean the date on which both (i) persons
designated or approved by Weyerhaeuser or the Purchaser shall constitute a
majority of the board of directors of the Company and (ii) securities or other
ownership interests representing more than 50% of the equity or more than 50%
of the ordinary voting power of the Company are owned, controlled or held by
the Purchaser, Weyerhaeuser and/or one of its wholly owned subsidiaries.
4
"Credit Exposure" shall mean, with respect to each Lender, at any
time, the aggregate principal amount at such time of all outstanding Loans of
such Lender to the Borrowers.
"Default" shall mean any event or condition which upon notice, lapse
of time or both would constitute an Event of Default.
"Disclosure Letter" shall mean the Company Disclosure Letter of the
Company to Weyerhaeuser and Company Holdings, Inc. ("Holdings"), as
contemplated by the Agreement and Plan of Merger dated as of January 28, 2002,
among Weyerhaeuser, Holdings and the Company.
"Dollars," "dollars" or "$" shall mean lawful money of the United
States of America.
"Domestic Subsidiary" shall mean any subsidiary organized under the
laws of any State of the United States of America, substantially all the
assets of which are located, and substantially all the business of which is
conducted, in the United States of America.
"Environmental Claims" shall mean any and all administrative,
regulatory, or judicial actions, suits, demand letters, claims, liens, notices
of noncompliance or violation, investigations, or proceedings relating in any
way to any Environmental Law (hereinafter referred to as "claims") or any
permit issued under any such Environmental Law, including without limitation
(a) any and all claims by Governmental Authorities for enforcement, cleanup,
removal, response, remedial, or other actions or damages pursuant to any
applicable Environmental Law, and (b) any and all claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation,
or injunctive relief resulting from Hazardous Materials or arising from
alleged injury or threat of injury to health, safety, or the environment.
"Environmental Laws" shall mean any and all Federal, state, local
and foreign statutes, laws, regulations, ordinances, codes, rules (including
rules of common law), judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or other governmental restrictions
now or hereafter in effect relating to the environment, health, safety,
Hazardous Materials (including, without limitation, the manufacture,
processing, distribution, use, treatment, storage, Release, and transportation
thereof) or to industrial hygiene or the environmental conditions on, under or
about real property, including, without limitation, soil, groundwater, and
indoor and outdoor ambient air conditions.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that, together with Weyerhaeuser or WRECO, is treated as a
single employer under Section 414(b) or (c) of the Code or, solely for
purposes of Section 302 of ERISA and
5
Section 412 of the Code, is treated as a single employer under Section 414(b),
(c), (m) or (o) of the Code.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Eurodollar Rate in accordance with the
provisions of Article II.
"Eurodollar Rate" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, the rate appearing on Page 3750 of the
Telerate Service (or on any successor or substitute page of such Service, or
any successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for the purpose of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as the rate
for dollar deposits with a maturity comparable to such Interest Period. In the
event that such rate is not available at such time for any reason, then the
"Eurodollar Rate" with respect to such Eurodollar Borrowing for such Interest
Period shall be the rate at which dollar deposits of $5,000,000 and for a
maturity comparable to such Interest Period are offered by the principal
London office of the Administrative Agent in immediately available funds in
the London interbank market at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period.
"Event of Default" shall have the meaning given such term in Article
VII.
"Excluded Sales" shall mean (a) the sale by Weyerhaeuser or any of
its Subsidiaries in the ordinary course of its business of inventory and
timberlands, (b) sales of accounts, receivables or other payment intangibles
as part of a securitization transaction and (c) sales to Weyerhaeuser or any
of its subsidiaries.
"Existing Senior Credit Facilities" shall mean (i) material senior
funded Indebtedness of Weyerhaeuser and its subsidiaries and (ii) publicly
disclosed, material senior funded Indebtedness of the Company and its
subsidiaries, in each case outstanding immediately before giving effect to the
consummation of the Transactions. For purposes of this definition, no single
loan shall be considered material unless the aggregate principal amount
outstanding exceeds $15,000,000.
"Facility Fees" shall have the meaning given such term in Section
2.04(a).
"Federal Funds Rate" shall mean, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the quotations for the day
of such transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
6
"Fees" shall mean the Facility Fees and the Administrative Agent
Fees.
"Financial Officer" of any corporation shall mean the chief
financial officer, principal accounting officer, treasurer or controller of
such corporation.
"Five-Year Revolving Credit Facility Agreement" shall mean the
Competitive Advance and Revolving Credit Facility Agreement dated as of even
date herewith, entered into by and among Weyerhaeuser, the lenders party
thereto from time to time, the Syndication Agent, the Administrative Agent and
the Co-Documentation Agents, as such agreement may be amended, restated,
supplemented or otherwise modified from time to time.
"GAAP" shall mean generally accepted accounting principles, applied
on a consistent basis.
"Governmental Authority" shall mean the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any person shall mean any obligation,
contingent or otherwise, of such person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
obligation of such person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
to purchase (or to advance or supply funds for the purchase of) any security
for the payment of such Indebtedness, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such
Indebtedness of the payment of such Indebtedness, (c) to maintain working
capital, equity capital or other financial statement condition or liquidity of
the primary obligor so as to enable the primary obligor to pay such
Indebtedness or (d) as an account party in respect of any letter of credit or
letter of guaranty issued to support such Indebtedness or obligation;
provided, however, that the term Guarantee shall not include endorsements for
collection or deposit, in either case in the ordinary course of business.
"Hazardous Materials" shall mean (a) any petroleum or petroleum
products, flammable substances, explosives, radioactive materials, hazardous
wastes, substances or contaminants, toxic wastes, substances or contaminants,
or any other wastes, substances, contaminants or pollutants prohibited,
limited or regulated by any Governmental Authority; (b) asbestos in any form
that is or could become friable, urea formaldehyde foam insulation,
transformers or other equipment that contains dielectric fluid containing
levels of polychlorinated biphenyls or radon gas; (c) any chemicals, materials
or substances defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
wastes," "restricted hazardous wastes," "toxic substances," "toxic
pollutants," "contaminants," or "pollutants," or words of similar import,
under any applicable Environmental Law; and (d) any other chemical, material,
or substance, exposure to which is prohibited, limited, or regulated by any
Governmental Authority.
7
"Indebtedness" of any person shall mean, without duplication, (a)
all obligations of such person for borrowed money or with respect to deposits
or advances of any kind, (b) all obligations of such person evidenced by
bonds, debentures, notes or similar instruments, (c) all obligations of such
person upon which interest charges are customarily paid, (d) all obligations
of such person under conditional sale or other title retention agreements
relating to property or assets purchased by such person, (e) all obligations
of such person issued or assumed as the deferred purchase price of property or
services (excluding current accounts payable incurred in the ordinary course
of business), (f) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien on property owned or acquired by such person, whether
or not the obligations secured thereby have been assumed, (g) all Guarantees
by such person of Indebtedness of others, (h) all Capital Lease Obligations of
such person, and (i) all obligations of such person as an account party in
respect of letters of credit, letters of guaranty and bankers' acceptances.
The Indebtedness of any person shall include the Indebtedness of any
partnership in which such person is a general partner.
"Interest Period" shall mean, as to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing or on the date of conversion
of a Borrowing of a different Type to a Eurodollar Borrowing or on the last
day of the immediately preceding Interest Period applicable to such Borrowing
or conversion thereof, as the case may be, and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the
last day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the
applicable Borrower may elect; provided, however, that if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless, in the case of Eurodollar
Loans, such next succeeding Business Day would fall in the next calendar
month, in which case such Interest Period shall end on the next preceding
Business Day; provided further that no Interest Period for any Loan shall
extend beyond the Termination Date; provided even further that for a period of
three months after the Closing Date a Borrower shall only be entitled to
select an Interest Period of one month. Interest shall accrue from and
including the first day of an Interest Period to but excluding the last day of
such Interest Period.
"Investments" shall mean all investments in any Person, computed in
accordance with GAAP, made by stock purchase, capital contribution, loan,
advance, extension of credit, or creation or assumption of any other
contingent liability or Guarantee in respect of any obligation of such Person,
or otherwise; provided, however, that in computing any investment in any
Person (i) all expenditures for such investment shall be taken into account at
the actual amounts thereof in the case of expenditures of cash and at the fair
value thereof (as determined in good faith by the Board of Directors of WRECO)
or depreciated cost thereof (in accordance with GAAP), whichever is greater,
in the case of expenditures of property, (ii) there shall not be included any
Real Estate Assets, or any account or note receivable from such other Person
arising from transactions in the ordinary course of business, and (iii) a
Guarantee or other contingent liability of any kind in respect of any
Indebtedness or other obligation of such Person shall be deemed an Investment
equal to the amount of such Indebtedness or obligation.
"Lead Arrangers" shall mean, collectively, Morgan Stanley Senior
Funding, Inc., and J.P. Morgan Securities Inc.
8
"Lender" and "Lenders" shall have the respective meanings given such
terms in the introductory paragraph hereto.
"Lender Affiliate" shall mean, (a) with respect to any Lender, (i)
an Affiliate of such Lender or (ii) any entity (whether a corporation,
partnership, trust or otherwise) that is engaged in making, purchasing,
holding or otherwise investing in bank loans and similar extensions of credit
in the ordinary course of its business and is administered or managed by a
Lender or an Affiliate of such Lender and (b) with respect to any Lender that
is a fund which invests in bank loans and similar extensions of credit, any
other fund that invests in bank loans and similar extensions of credit and is
managed by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset
and (c) in the case of securities, any purchase option, call or similar right
of a third party with respect to such securities.
"Loan" shall mean a Revolving Loan made by a Lender to a Borrower
pursuant to Section 2.01 and a Term Loan made by a Lender to a Borrower
pursuant to Section 2.19. Each Loan shall be a Eurodollar Loan or a Base Rate
Loan.
"Loan Documents" shall mean this Agreement, the OCBM Agreement, any
notes issued in accordance with Section 2.05 and any Guarantee entered into by
the Company in accordance with Section 5.13.
"Margin Stock" shall have the meaning given such term under
Regulation U.
"Material Adverse Effect" shall mean (a) a materially adverse effect
on the business, financial condition, operations or properties of (1) when
used on the Closing Date, the Company and its subsidiaries, taken as a whole,
or (2) Weyerhaeuser and its Subsidiaries, taken as a whole, (b) a materially
adverse effect on the ability of Weyerhaeuser or any of its Subsidiaries to
perform its obligations under any Loan Documents to which it is or will be a
party, (c) a materially adverse effect on the rights and remedies available to
the Administrative Agent and the Lenders under the Loan Documents or (d) a
materially adverse effect on the Transactions.
"Merger" shall mean the merger of the Purchaser, Weyerhaeuser or one
of its wholly owned Restricted Subsidiaries with the Company, contemplated to
occur as soon as practicable after the closing of the Tender Offer.
"Moody's" shall mean Moody's Investors Service, Inc., a corporation
organized and existing under the laws of the State of Delaware, and its
successors and assigns, and if such corporation shall for any reason no longer
perform the functions of a securities rating agency, "Moody's" shall be deemed
to refer to any other nationally recognized rating agency designated by
Weyerhaeuser and the Required Lenders.
9
"Net Cash Proceeds" shall mean, with respect to any sale, lease,
transfer or other disposition of any asset by any Person, the aggregate amount
of cash received from time to time (whether as initial consideration or
through payment or disposition of deferred consideration) by or on behalf of
such Person in connection with such transaction after deducting therefrom only
(without duplication) (a) the costs associated with such transaction
(including reasonable and customary brokerage fees and commissions, legal fees
and other similar fees and commissions), (b) the amount of taxes payable in
connection with or as a result of such transaction, (c) the amount of any
Indebtedness secured by a Lien on such asset that, by the terms of the
agreement or instrument governing such Indebtedness, is required to be repaid
upon disposition and (d) reserves for purchase price adjustments and retained
fixed liabilities that are payable by such Person in cash to the extent
required under GAAP in connection with such sale, lease, transfer or
disposition (it being understood that immediately upon expiration of the
retention period for such reserves, amounts held as reserves must be paid as a
mandatory prepayment pursuant to Section 2.10(b)), in each case to the extent,
but only to the extent, that the amounts so deducted are, (in the cases of (a)
and (c) above, at the time of receipt of such cash), actually paid to a Person
that is not an Affiliate of such Person or Weyerhaeuser or any of its
Subsidiaries or any Affiliate of Weyerhaeuser or any of its Subsidiaries and
are properly attributable to such transaction or to the asset that is the
subject thereof; provided, however, that Net Cash Proceeds shall not include,
(i) with respect to any sale, lease, transfer or other disposition of any
asset by any Person, any cash receipts received from the sale of worn,
damaged, or obsolete equipment, (ii) any cash receipts received from proceeds
of insurance, condemnation awards (or payments in lieu thereof) or indemnity
payments to the extent that such proceeds, awards or payments in respect of
loss or damage to the assets are applied (or in respect of which expenditures
were previously incurred) to replace or repair the assets in respect of which
such proceeds were received, so long as such application is made within 180
days after the occurrence of such damage or loss and (iii) any rental payments
received in connection with the lease of an asset in the ordinary course of
business. In addition, no proceeds realized in a single transaction or series
of related transactions shall constitute Net Cash Proceeds except for the
portion (if any) of such proceeds in excess of $25,000,000.
"Non-Material Loans" shall mean any senior obligations for borrowed
money of any Person outstanding in an amount not in excess of $15,000,000.
"OCBM Agreement" shall mean the Ownership and Capital Base
Maintenance Agreement, dated as of the date hereof, and entered into by
Weyerhaeuser.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Person" shall mean any natural person, corporation, business trust,
joint venture, joint stock company, trust, unincorporated organization,
association, company, partnership or government, or any agency or political
subdivision thereof.
"Plan" shall mean any multiemployer or single-employer plan as
defined in Section 4001 of ERISA covered by Title IV of ERISA, which is
maintained or contributed to by (or to which there is an obligation to
contribute of), or at any time during the five calendar years
10
preceding the date of this Agreement was maintained or contributed to by (or
to which there was an obligation to contribute of), Weyerhaeuser or an ERISA
Affiliate.
"Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by the Administrative Agent as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate
shall be effective on the date such change is publicly announced as effective.
The Prime Rate is a reference rate and does not necessarily represent the
lowest or best rate actually charged to any customer.
"Purchaser" shall mean Company Holdings, Inc., a Washington
corporation and a wholly owned subsidiary of Weyerhaeuser.
"Rating" shall mean, as of any date, the rating by Moody's and S&P
in effect on such date, of the Senior Unsecured Long-Term Debt of
Weyerhaeuser, provided that such ratings shall take into effect (a) the Tender
Offer, (b) the Acquisition, (c) the Merger and (d) the incurrence by
Weyerhaeuser and its Subsidiaries of the Indebtedness under the Senior Bank
Financing, including, without limitation, any refinancing of existing
Indebtedness of Weyerhaeuser, the Company and their respective subsidiaries.
"Real Estate Assets" shall mean all assets of WRECO and its
Restricted Subsidiaries (determined, unless the context otherwise requires, on
a consolidated basis for WRECO and its Restricted Subsidiaries) of the types
described below, acquired and held for the purpose of, and arising out of, the
development and/or sale or rental thereof in the ordinary course of business:
(i) improved and unimproved land, buildings and other structures and
improvements and fixtures located thereon, and (ii) contracts, mortgages,
notes receivables and other choses in action.
"Reduction Amount" shall have the meaning given such term in Section
2.09(c).
"Register" shall have the meaning given such term in Section
9.04(d).
"Regulation D" shall mean Regulation D of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation T" shall mean Regulation T of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Reinvestment Proceeds" shall have the meaning given such term in
Section 2.10(b).
11
"Related Parties" shall mean, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"Release" shall mean disposing, discharging, injecting, spilling,
leaking, dumping, emitting, escaping, emptying, seeping, placing, and the
like, into or upon any land or water or air, or otherwise entering into the
environment.
"Reportable Event" shall mean an event described in Section 4043(c)
of ERISA with respect to a Plan as to which the 30-day notice requirement has
not been waived by statute, regulation or otherwise.
"Required Lenders" shall mean, at any time, Lenders having Credit
Exposures and unused Commitments representing more than 50% of the sum of the
Aggregate Credit Exposure and unused Commitments at such time; provided that
if either Borrower elects the Term Loan Conversion, then on or after the
Revolver Termination Date, "Required Lenders" shall mean those Lenders having
Term Loans representing more than 50% of the aggregate principal amount of all
Term Loans outstanding at such time.
"Restricted Subsidiary" shall mean, (i) with respect to
Weyerhaeuser, each Subsidiary that has not been designated as an Unrestricted
Subsidiary on Schedule 3.08 Part I and thereafter not designated by a
Financial Officer of Weyerhaeuser as an Unrestricted Subsidiary after the
Closing Date pursuant to Section 9.17 and (ii) with respect to WRECO, each
Subsidiary that has not been designated as an Unrestricted Subsidiary on
Schedule 3.08 Part II or thereafter designated by a Financial Officer of WRECO
as an Unrestricted Subsidiary after the Closing Date pursuant to Section 9.17;
provided that, until the Control Date has occurred, neither the Company nor
any of its subsidiaries shall be considered a Restricted Subsidiary. Upon the
occurrence of the Control Date, the Company and its subsidiaries shall be
deemed Restricted Subsidiaries unless a Financial Officer of Weyerhaeuser
shall have designated any of such entities as an Unrestricted Subsidiary after
the Closing Date pursuant to Section 9.17.
"Revolver Termination Date" shall mean February 7, 2003.
"Revolving Borrowing" shall mean a Borrowing consisting of
Revolving Loans.
"Revolving Borrowing Request" shall mean a request made pursuant to
Section 2.02(e) in the form of Exhibit A.
"Revolving Loan" shall mean a Loan made by the Lenders to a Borrower
pursuant to Section 2.01.
"S&P" shall mean Standard & Poor's Corporation, a corporation
organized and existing under the laws of the State of New York, and its
successors and assigns, and if such corporation shall for any reason no longer
perform the functions of a securities rating agency, "S&P" shall be deemed to
refer to any other nationally recognized rating agency designated by
Weyerhaeuser and the Required Lenders.
12
"SEC" shall mean the Securities and Exchange Commission or any
successor.
"Senior Bank Financing" shall mean the credit facilities
contemplated by (a) this Agreement, (b) the Bridge Facility and (c) the
Five-Year Revolving Credit Facility Agreement.
"Senior Debt" shall mean all Indebtedness of any Person (other than
WRECO) which is not expressed to be subordinate and junior in right of payment
to any other Indebtedness of such Person, and, with respect to WRECO, shall
mean all Indebtedness of WRECO other than Subordinated Debt.
"Senior Unsecured Long-Term Debt" shall mean the unsecured bonds,
debentures, notes or other Indebtedness of Weyerhaeuser, designated on its
financial statements as senior long-term indebtedness. In the event more than
one issue of Senior Unsecured Long-Term Debt shall be outstanding at any
relevant time and different credit ratings shall have been issued by S&P or
Moody's for such issues, Senior Unsecured Long-Term Debt shall be deemed to
refer to the lowest rated issue.
"Specified Indebtedness" shall mean the Indebtedness set forth in
Schedule 7.01.
"Statutory Reserves" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one, and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including
any marginal, special, emergency or supplemental reserves) expressed as a
decimal established by the Board and any other banking authority to which the
Administrative Agent is subject with respect to the Eurodollar Rate, for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those
imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D or any
comparable regulation. The Statutory Reserves shall be adjusted automatically
on and as of the effective date of any change in any reserve percentage.
"Subordinated Debt" shall mean and include (i) Subordinated
Promissory Notes of WRECO, in substantially the form annexed as Exhibit E
hereto, and (ii) any other Indebtedness of WRECO now or hereafter created,
issued or assumed which at all times is evidenced by a written instrument or
instruments containing or having applicable thereto subordination provisions
substantially the same as those in said Exhibit E hereto, providing for the
subordination of such Indebtedness to such other Indebtedness of WRECO as
shall be specified or characterized in such subordination provisions.
"subsidiary" shall mean, with respect to any Person (herein referred
to as the "parent"), any corporation, partnership, association or other
business entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary
voting power to elect a majority of the board of directors or more than 50% of
the general partnership interests are, at the time any determination is being
made, owned, controlled or held, or (b) which is, at the time any
determination is made, otherwise Controlled,
13
by the parent or one or more subsidiaries of the parent or by the parent and
one or more subsidiaries of the parent.
"Subsidiary" shall mean any subsidiary of Weyerhaeuser or WRECO,
provided that neither the Company nor any of its subsidiaries shall be
considered a Subsidiary until the Control Date has occurred, and provided
further that there shall be excluded from this definition (i) Nelson Forests
Joint Venture, a joint venture formed under the laws of New Zealand, (ii)
Wapawekka Lumber Ltd., a limited partnership formed under the laws of
Saskatchewan, and (iii) Monterra Lumber Mills Limited, a limited partnership
formed under the laws of Ontario, for so long as such business entities shall
not be Controlled by Weyerhaeuser or any of its subsidiaries.
"Surviving Senior Credit Facilities" shall mean the Existing Senior
Credit Facilities outstanding immediately before and after giving effect to
the consummation of the Transactions.
"Tender Offer" shall mean the offer by Purchaser to acquire through
a tender offer for cash all of the outstanding shares of common stock of the
Company, including the related preferred stock purchase rights of the Company,
as more specifically set forth in the Tender Offer Statement.
"Tender Offer Statement" shall mean the offering memorandum dated
November 29, 2000 setting forth the terms and conditions of the Tender Offer,
as such offering memorandum may be amended, supplemented or otherwise modified
from time to time.
"Termination Date" shall mean the later to occur of (a) the Revolver
Termination Date or (b) if the Term Loan Conversion has been effected pursuant
to Section 2.19, the first anniversary of the Revolver Termination Date.
"Term Borrowing" shall mean a Borrowing consisting of Term Loans.
"Term Loan" shall have the meaning given such term in Section 2.19.
"Term Loan Conversion" shall have the meaning given such term in
Section 2.19.
"Total Adjusted Shareholders' Interest" shall mean, at any time, the
amount of the preferred, preference and common shares accounts plus (or minus
in the case of a deficit) the amount of other capital and retained earnings,
in accordance with GAAP, of Weyerhaeuser and its consolidated Subsidiaries,
less treasury common shares and the aggregate net book value (after deducting
any reserves applicable thereto) of all items of the following character which
are included in the consolidated assets of Weyerhaeuser and its consolidated
Subsidiaries:
(a) investments in Unrestricted Subsidiaries; and
(b) without duplication, investments by Weyerhaeuser and its
consolidated Subsidiaries in WRECO and its consolidated Subsidiaries.
No effect shall be given for any increases or decreases attributable to
unrealized foreign exchange gains or losses resulting from the application of
FASB Statement 52.
14
"Total Commitment" shall mean at any time the aggregate amount of
the Commitments as in effect at such time, and on the date hereof shall mean
$2,000,000,000.
"Total Funded Indebtedness" with respect to Weyerhaeuser shall mean,
at any time, the aggregate principal amount of all Indebtedness (other than
Guarantees by such Person of Indebtedness of others) for borrowed money or for
the deferred purchase price of property and Capital Lease Obligations of
Weyerhaeuser and its consolidated Subsidiaries, excluding (a) the Indebtedness
of Unrestricted Subsidiaries, and (b) without duplication, the Indebtedness of
WRECO and its consolidated Subsidiaries.
"Transaction-Related Event of Default" shall mean any default or
event of default under any indentures, agreements or other documentation
evidencing the Specified Indebtedness, provided that such default or event of
default shall have occurred or be continuing solely by reason of the
consummation by the Borrower or any of its Subsidiaries of any of the
Transactions.
"Transactions" shall have the meaning given such term in Section
3.02. "Transferee" shall have the meaning given such term in Section 2.17.
"Type," when used in respect of any Loan or Borrowing, shall refer
to the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, "Rate" shall
include the Eurodollar Rate and the Base Rate.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the present value of the accrued benefits under the Plan as of
the close of its most recent plan year, determined in accordance with
Statement of Financial Accounting Standards No. 35, based upon the actuarial
assumptions used by the Plan's actuary in the most recent annual valuation of
the Plan, exceeds the fair market value of the assets allocable thereto,
determined in accordance with Section 412 of the Code.
"Unrestricted Subsidiary" shall mean, (i) with respect to
Weyerhaeuser, each Subsidiary that has been designated as an Unrestricted
Subsidiary on Schedule 3.08 Part I and any Subsidiary which has been
designated by a Financial Officer of Weyerhaeuser as an Unrestricted
Subsidiary after the Closing Date pursuant to Section 9.17, and (ii) with
respect to WRECO, each Subsidiary that has been designated as an Unrestricted
Subsidiary on Schedule 3.08 Part II and any Subsidiary which has been
designated by a Financial Officer of WRECO as an Unrestricted Subsidiary after
the Closing Date pursuant to Section 9.17.
"Utilization Fee" shall have the meaning given such term in Section
2.06(e).
"Weyerhaeuser" shall have the meaning given such term in the
introductory paragraph hereto.
"WRECO" shall have the meaning given such term in the introductory
paragraph hereto.
15
"WRECO/Weyerhaeuser Subordinated Debt" shall mean the Subordinated
Promissory Notes issued by WRECO to Weyerhaeuser described in clause (i) of
the definition of "Subordinated Debt."
Section 1.02 Terms Generally. The definitions in Section 1.01 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include," "includes" and
"including" shall be deemed to be followed by the phrase "without limitation."
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require.
Section 1.03 Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if either Borrower notifies the Administrative Agent that such Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof
on the operation of such provision (or if the Administrative Agent notifies
either Borrower that the Required Lenders request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith.
ARTICLE II
THE CREDITS
Section 2.01 Commitments. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, to make Loans to each Borrower requesting a
Borrowing, at any time and from time to time on and after the date hereof and
until the earlier of the Revolver Termination Date and the termination of the
Commitments of such Lender, for such Lender in an aggregate principal amount
at any time outstanding not to exceed such Lender's Commitment at such time,
subject, however, to the conditions that:
(a) at no time shall the outstanding aggregate principal amount of
all Loans (including, if the Term Loan Conversion has been elected, Term
Loans) made by all Lenders exceed the Total Commitment;
(b) at no time shall the outstanding aggregate principal amount of
all Loans (including, if the Term Loan Conversion has been elected, Term
Loans) made by all Lenders to WRECO exceed $900,000,000; and
(c) at all times the outstanding aggregate principal amount of all
Loans made by each Lender shall equal the product of (i) the Applicable
Percentage times (ii) the
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outstanding aggregate principal amount of all Loans made pursuant to
Section 2.02 or 2.19.
Each Lender's Commitments are set forth opposite its name in
Schedule 2.01, or in the case of each assignee that becomes a party hereto
pursuant to Section 9.04, on the Register maintained by the Administrative
Agent pursuant to Section 9.04(c).
Within the foregoing limits, each Borrower may borrow, pay or prepay
and reborrow hereunder, on and after the Closing Date and prior to the
Revolver Termination Date, subject to the terms, conditions and limitations
set forth herein, on a several and not joint basis.
Section 2.02 Loans. (a) Each Revolving Loan and each Term Loan shall
be made as part of a Borrowing consisting of Revolving Loans and Term Loans,
respectively, made by the Lenders ratably in accordance with their respective
Commitments; provided, however, that the failure of any Lender to make any
Loan shall not in and of itself relieve any other Lender of its obligation to
lend hereunder (it being understood, however, that no Lender shall be
responsible for the failure of any other Lender to make any Loan required to
be made by such other Lender). The Loans comprising any Borrowing shall be in
an aggregate principal amount which is an integral multiple of $1,000,000 and
not less than $25,000,000 (or an aggregate principal amount equal to the
remaining balance of the available Commitments).
(b) Each Revolving Borrowing and each Term Borrowing shall be
comprised entirely of Eurodollar Loans or Base Rate Loans, as the applicable
Borrower may request pursuant to paragraph (e) hereof. Each Lender may at its
option make any Eurodollar Loan by causing any domestic or foreign branch or
Affiliate of such Lender to make such Loan; provided that any exercise of such
option shall not (i) affect the obligation of the applicable Borrower to repay
such Loan in accordance with the terms of this Agreement and (ii) entitle such
Lender to any amounts related to Sections 2.11 or 2.12 to which amounts such
Lender would not be entitled if such Lender had made such Loan itself through
its domestic branch. Borrowings of more than one Type may be outstanding at
the same time; provided, however, that neither Borrower shall be entitled to
request any Borrowing which, if made, would result in an aggregate of more
than twenty (20) separate Loans from any Lender being outstanding hereunder at
any one time. For purposes of the foregoing, Loans (other than Base Rate
Loans) having different Interest Periods, regardless of whether they commence
on the same date, shall be considered separate Loans.
(c) Each Lender shall make each Loan to be made by it hereunder on
the proposed date thereof by wire transfer of immediately available funds to
the Administrative Agent in New York, New York, not later than 12:00 noon (or
in the case of Base Rate Loans, 2:00 p.m.), New York City time, and the
Administrative Agent shall by 3:00 p.m., New York City time, credit the
amounts so received to the general deposit account of the applicable Borrower
maintained with the Administrative Agent or, if a Borrowing shall not occur on
such date because any condition precedent herein specified shall not have been
met, return the amounts so received to the respective Lenders. Unless the
Administrative Agent shall have received notice from a Lender prior to the
date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender's portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with this paragraph (c) and the Administrative Agent may, in
reliance upon such assumption, make available to the applicable Borrower on
such date a corresponding amount. If and to the extent that such Lender shall
not have made such portion available to the
17
Administrative Agent, such Lender and the applicable Borrower severally agree
to repay to the Administrative Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date such amount
is made available to the applicable Borrower until the date such amount is
repaid to the Administrative Agent at (i) in the case of the applicable
Borrower, the interest rate applicable at the time to the Loans comprising
such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If
such Lender shall repay to the Administrative Agent such corresponding amount,
such amount shall constitute such Lender's Loan as part of such Borrowing for
purposes of this Agreement.
(d) Notwithstanding any other provision of this Agreement, no
Borrower shall be entitled to request any Borrowing with an Interest Period
ending after the Termination Date; provided that no Revolving Borrowing shall
have an Interest Period ending after the Revolver Termination Date.
(e) In order to request a Revolving Borrowing, the Borrower
requesting such Borrowing shall hand deliver or telecopy to the Administrative
Agent a Revolving Borrowing Request in the form of Exhibit A (a) in the case
of a Eurodollar Borrowing, not later than 12:00 noon, New York City time,
three Business Days before a proposed borrowing and (b) in the case of a Base
Rate Borrowing, not later than 12:00 noon, New York City time, on the day of a
proposed borrowing. Such notice shall be irrevocable and shall in each case
specify (i) whether the Revolving Borrowing then being requested is to be a
Eurodollar Borrowing or a Base Rate Borrowing; (ii) the date of such Revolving
Borrowing (which shall be a Business Day) and the amount thereof; and (iii) if
such Revolving Borrowing is to be a Eurodollar Borrowing, the Interest Period
with respect thereto. If no election as to the Type of Revolving Borrowing is
specified in any such notice, then the requested Revolving Borrowing shall be
a Base Rate Borrowing. If no Interest Period with respect to any Eurodollar
Borrowing is specified in any such notice, then the applicable Borrower shall
be deemed to have selected an Interest Period of one month's duration. The
Administrative Agent shall promptly advise the Lenders of any notice given
pursuant to this Section 2.02(e) and of each Lender's portion of the requested
Borrowing.
Section 2.03 Conversion and Continuation of Loans. (a) Each Borrower
shall, with respect to its respective Borrowings, have the right at any time,
upon prior irrevocable written notice to the Administrative Agent given in the
manner and at the times specified in Section 2.02(d) and 2.19, respectively,
with respect to the Type of Borrowing into which conversion or continuation is
to be made, to convert any of its Borrowings into a Borrowing of a different
Type and to continue any of its Eurodollar Borrowings into a subsequent
Interest Period of any permissible duration, subject to the terms and
conditions of this Agreement and to the following:
(i) each conversion or continuation shall be made pro rata among the
Lenders in accordance with the respective principal amounts of Loans
comprising the converted or continued Borrowing;
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(ii) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, the aggregate principal amount
of such Borrowing converted and/or continued shall in each case not be
less than the minimum amount set forth in Section 2.02;
(iii) if a Eurodollar Borrowing is converted at any time other than
on the last day of the Interest Period applicable thereto, the applicable
Borrower shall pay any amount due pursuant to Section 2.13;
(iv) with respect to a Revolving Borrowing, if such Revolving
Borrowing is to be converted into a Eurodollar Borrowing or if a
Eurodollar Borrowing is to be continued, no Interest Period selected
shall extend beyond the Revolver Termination Date;
(v) with respect to a Term Borrowing, if such Term Borrowing is to
be converted into a Eurodollar Borrowing or if a Eurodollar Borrowing is
to be continued, no Interest Period selected shall extend beyond the
Termination Date; and
(vi) interest accrued to the day immediately preceding each date of
conversion or continuation shall be payable on each Borrowing (or part
thereof) that is converted or continued concurrently with such conversion
or continuation.
(b) Each notice given pursuant to Section 2.03(a) shall be
irrevocable and shall refer to this Agreement and specify (i) the identity and
the amount of the Borrowing that the applicable Borrower requests to be
converted or continued; (ii) whether such Borrowing (or any part thereof) is
to be converted or continued as a Base Rate Borrowing or a Eurodollar
Borrowing; (iii) if such notice requests a conversion, the date of such
conversion (which shall be a Business Day); and (iv) if such Borrowing (or any
part thereof) is to be converted into or continued as a Eurodollar Borrowing,
the Interest Period with respect thereto. If no Interest Period is specified
in any such notice with respect to any conversion to or continuation as a
Eurodollar Borrowing, then the applicable Borrower shall be deemed to have
selected an Interest Period of one month's duration, in the case of a
Eurodollar Borrowing. The Administrative Agent shall advise the Lenders of any
notice given pursuant to Section 2.03(a) and of each Lender's portion of any
converted or continued Borrowing.
(c) If the applicable Borrower shall not have given notice in
accordance with this Section 2.03 to continue any Eurodollar Borrowing into a
subsequent Interest Period (and shall not otherwise have given notice in
accordance with this Section 2.03 to convert such Eurodollar Borrowing), such
Eurodollar Borrowing shall automatically be converted into a Base Rate
Borrowing. In the event of the occurrence and continuation of a Default or an
Event of Default (i) all Eurodollar Borrowings of each Borrower shall be
converted into Base Rate Borrowings on the last day of the Interest Period
then in effect, and (ii) no Base Rate Borrowing may be converted into a
Borrowing of another Type so long as a Default or Event of Default continues
to exist.
Section 2.04 Fees. (a) The Borrowers jointly and severally agree to
pay to each Lender, through the Administrative Agent, on each March 31, June
30, September 30 and
19
December 31 and on the date on which the Commitment of such Lender shall be
terminated as provided herein, a facility fee (each, a "Facility Fee," and
collectively, the "Facility Fees"), calculated as specified below, on the
amount of the Commitment of such Lender, whether used or unused, during the
preceding quarter (or shorter period commencing with the Closing Date or
ending with the Termination Date applicable to such Lender or any date on
which the Commitment of such Lender shall be terminated). All facility fees
shall be computed on the basis of a year of 365 or 366 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day). The Facility Fee due to each Lender shall commence to
accrue on the Closing Date and shall cease to accrue on the earlier of the
Termination Date applicable to such Lender and the termination of the
Commitment of such Lender as provided herein.
The Facility Fee for each Lender shall be calculated as a per annum
rate in an amount equal to the product of such Lender's Commitment hereunder
and the applicable percentage specified in the table below, to be determined
based upon the Ratings received from S&P and Moody's by Weyerhaeuser:
Level 1 Level 2 Level 3 Level 4 Level 5
------- ------- ------- ------- -------
S&P: A- or better BBB+ BBB BBB- Below BBB-
Moody's: A3 or better Baa1 Baa2 Baa3 Below Baa3
_________________________________________________________________________________________________________________
0.1000% 0.1250% 0.1500% 0.2000% 0.2500%
The Facility Fees shall change effective as of the date on which the
applicable rating agency announces any change in its Ratings. In the event
either S&P or Moody's shall withdraw or suspend its Ratings, the remaining
Rating announced by either S&P or Moody's, as the case may be, shall apply. In
the event neither agency shall provide a Rating, the Facility Fees shall be
based on the lowest rating provided above. If the Ratings by S&P and Moody's
are split so that two consecutive Levels (as defined in the table above)
apply, the higher of those Ratings shall determine the applicable percentage
to calculate the Facility Fee. If the Ratings by S&P and Moody's are split so
that the applicable Levels in the table above are separated by only one
intermediate Level, then such intermediate Level shall determine the
applicable percentage to calculate the Facility Fee. If the Ratings by S&P and
Moody's are split so that the applicable Levels in the table above are
separated by two intermediate Levels, then the intermediate Level representing
the lowest Rating shall determine the applicable percentage to calculate the
Facility Fee. The Facility Fees shall be calculated by the Administrative
Agent, which calculation absent manifest error shall be final and binding on
all parties.
(b) Weyerhaeuser agrees to pay the Administrative Agent, for its own
account, the administration fees (the "Administrative Agent Fees") at the
times and in the amounts agreed upon in the letter agreement dated as of
December 13, 2001, among Weyerhaeuser, Morgan Stanley Senior Funding, Inc.,
J.P. Morgan Securities Inc. and the Administrative Agent.
(c) All Fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for prompt distribution, if and
as appropriate, among the Lenders. Once paid, none of the Fees shall be
refundable under any circumstances.
Section 2.05 Repayment of Loans; Evidence of Debt. (a) The
outstanding principal balance of (i) each Revolving Loan shall, unless the
Borrowers elect the Term Loan Conversion, be payable on the Revolver
Termination Date and (ii) each Term Loan shall be payable on the Termination
Date. Each Loan shall bear interest from the date thereof on the outstanding
principal balance thereof as set forth in Section 2.06.
(b) Each Lender shall, and is hereby authorized by the Borrowers to,
maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of each Borrower to such Lender resulting from
each Loan made by such Lender, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Type thereof and
the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from each Borrower to
each Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of each
Borrower to repay its Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note, substantially in the form of Exhibit F attached hereto. In
such event, the applicable Borrower shall promptly, and in no event more than
ten (10) Business Days after a request therefor, prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns).
Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 9.04) be
represented by one or more promissory notes in such form payable to the order
of the payee named therein (or, if such promissory note is a registered note,
to such payee and its registered assigns).
Section 2.06 Interest on Loans. (a) Subject to the provisions of
Section 2.07, the Loans comprising each Eurodollar Borrowing shall bear
interest (computed on the basis of the actual number of days elapsed over a
year of 360 days) at a rate per annum equal to the Eurodollar Rate for the
Interest Period in effect for such Borrowing plus the Applicable Margin,
determined pursuant to paragraph (d) below.
(b) Subject to the provisions of Section 2.07 the Loans comprising
each Base Rate Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as the case may
be) at a rate per annum equal to the Base Rate plus the Applicable Margin.
(c) Interest on each Eurodollar Loan shall, except as otherwise
provided in this Agreement, be payable on the last day of the Interest Period
applicable thereto and, in case of a
21
Eurodollar Loan with an Interest Period
of more than three months' duration, each day that would have been an Interest
Payment Date for such Loan had successive Interest Periods of three months'
duration been applicable to such Loan. Interest on each Base Rate Loan shall
be payable quarterly in arrears on the last Business Day of each March, June,
September and December, except as otherwise provided in this Agreement. The
applicable Eurodollar Rate or Base Rate for each Interest Period or day within
an Interest Period, as the case may be, shall be determined by the
Administrative Agent, and such determination shall be conclusive absent
manifest error.
(d) As used herein, "Applicable Margin" shall mean the sum of (i) the applicable
percentage per annum specified in the table below, to be determined based upon
the Ratings received from S&P and Moody's by Weyerhaeuser, and (ii) the
Utilization Fee. The applicable percentage referred to in Clause (i) of the
immediately preceding sentence shall be determined based upon the Ratings, as
follows:
Level 1 Level 2 Level 3 Level 4 Level 5
------- ------- ------- ------- -------
S&P: A- or better BBB+ BBB BBB- Below BBB-
Moody's: A3 or better Baa1 Baa2 Baa3 Below Baa3
___________________________________________________________________________________________________________________
Eurodollar Loan: 0.5250% 0.6250% 0.8500% 1.0500% 1.5000%
___________________________________________________________________________________________________________________
Base Rate Loan: 0.0000% 0.0000% 0.0000% 0.0500% 0.5000%
The Applicable Margin shall change effective as of the date on which
the applicable rating agency announces any change in its Ratings. In the event
either S&P or Moody's shall withdraw or suspend its Ratings, the remaining
Rating announced by either S&P or Moody's, as the case may be, shall apply. In
the event neither agency shall provide a Rating, the Applicable Margin shall
be based on the lowest rating provided above. If the Ratings by S&P and
Moody's are split so that two consecutive Levels (as defined in the table
above) apply, the higher of those Ratings shall determine the Applicable
Margin. If the Ratings by S&P and Moody's are split so that the applicable
Levels in the table above are separated by only one intermediate Level, then
such intermediate Level shall determine the Applicable Margin. If the Ratings
by S&P and Moody's are split so that the applicable Levels in the table above
are separated by two intermediate Levels, then the intermediate Level
representing the lowest Rating shall determine the Applicable Margin. The
Applicable Margin shall be calculated by the Administrative Agent, which
calculation absent manifest error shall be final and binding on all parties.
(e) As used herein, "Utilization Fee" shall mean (i) a percentage
per annum equal to 0.250% for any date on which the sum of (A) the Aggregate
Credit Exposure plus (B) the "Aggregate Credit Exposure," as defined under the
Five-Year Revolving Credit Facility Agreement, plus (C) the aggregate
principal amount of outstanding Competitive Loans under the Five-Year
Revolving Credit Facility Agreement, is equal to or exceeds 33% of the sum of
(X) the Total Commitment and (Y) the "Total Commitment" as defined under the
Five-Year Revolving Credit Facility Agreement, and (ii) a percentage per annum
equal to 0.000% for any other date.
22
Section 2.07 Default Interest. If a Borrower shall default in the
payment of the principal of or interest on any of its Loans or any other
amount becoming due hereunder, whether by scheduled maturity, notice of
prepayment, acceleration or otherwise, such Borrower shall on demand from time
to time from the Administrative Agent pay interest, to the extent permitted by
law, on such defaulted amount up to (but not including) the date of actual
payment (after as well as before judgment) at a rate per annum equal to the
rate of interest applicable thereto at maturity or due date plus 2%.
Section 2.08 Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
determined in good faith that dollar deposits in the principal amounts of the
Eurodollar Loans comprising such Borrowing are not generally available in the
London interbank market, or that the rates at which such dollar deposits are
being offered will not adequately and fairly reflect the cost to the Required
Lenders of making or maintaining their Eurodollar Loans during such Interest
Period, or that reasonable means do not exist for ascertaining the Eurodollar
Rate, the Administrative Agent shall, as soon as practicable thereafter, give
written notice of such determination to the Borrowers and the Lenders. In the
event of any such determination, until the Administrative Agent shall have
advised the Borrowers and the Lenders that the circumstances giving rise to
such notice no longer exist, (i) any request by the Borrowers for a Eurodollar
Borrowing pursuant to Section 2.02 shall be deemed to be a request for a Base
Rate Borrowing, and (ii) any request by the Borrowers for a conversion to or a
continuation of a Eurodollar Borrowing pursuant to Section 2.03 shall be
deemed to be a request for a conversion to a Base Rate Borrowing. Each
determination by the Administrative Agent hereunder shall be conclusive absent
manifest error.
Section 2.09 Termination, Reduction and Extension of Commitments.
(a) The unused Commitments of each Lender shall be automatically terminated on
the Revolver Termination Date, and, if the Term Loan Conversion is elected,
the remaining Commitments of each Lender shall be automatically terminated on
the Termination Date.
(b) Subject to Section 2.10(b), upon at least three Business Days'
prior irrevocable written notice to the Administrative Agent, the Borrowers
may at any time in whole permanently terminate, or from time to time in part
permanently reduce, the Total Commitment; provided, however, that (i) each
partial reduction shall be in an integral multiple of $1,000,000 and in a
minimum principal amount of $25,000,000 and (ii) no such termination or
reduction shall be made which would reduce the Total Commitment to an amount
less than the sum of the aggregate outstanding principal amount of Loans.
(c) The Total Commitment shall be automatically and permanently
reduced on each date on which prepayment thereof is required to be made
pursuant to Section 2.10(b)(i) in the amount of such prepayment. In addition,
the Total Commitment shall be automatically and permanently reduced on each
date on which prepayment thereof is required to be made pursuant to Section
2.10(b)(i) in an amount equal to the applicable Reduction Amount. "Reduction
Amount" shall mean, with respect to any sale, lease, transfer or other
disposition of any assets of Weyerhaeuser or any of its Subsidiaries (other
than Excluded Sales), on any date, the Net Cash Proceeds received with respect
thereto on such date less (i) any amounts applied with respect thereto to
prepay any outstanding amounts under the Senior Bank Financing pursuant to
23
Section 2.10(b) (including the amounts required to be cash collateralized
pursuant to Section 2.04(i) of the Five-Year Revolving Credit Facility
Agreement), (ii) any amounts applied to reduce Commitments under the Bridge
Facility or the Five-Year Revolving Credit Facility Agreement, and (iii) the
portion of such Net Cash Proceeds that constitutes Reinvestment Proceeds.
(d) Subject to Section 2.18, each reduction in the Total Commitment
hereunder shall be made ratably among the Lenders in accordance with their
respective Commitments. The Borrowers jointly and severally agree to pay to
the Administrative Agent for the account of the Lenders, on the date of each
termination or reduction, the Facility Fees on the amount of the Commitments
so terminated or reduced accrued through the date of such termination or
reduction.
Section 2.10 Prepayment. (a) Voluntary Prepayments. Each of the
Borrowers shall have the right at any time and from time to time to prepay any
of its respective Revolving Borrowings or Term Borrowings, in whole or in
part, upon giving written notice (or telephone notice promptly confirmed by
written notice) to the Administrative Agent: (i) before 12:00 noon, New York
City time, three Business Days prior to prepayment, in the case of Eurodollar
Loans and (ii) before 12:00 noon, New York City time, one Business Day prior
to prepayment, in the case of Base Rate Loans; provided, however, that each
partial prepayment shall be in an amount which is an integral multiple of
$1,000,000 and not less than $25,000,000.
(b) Mandatory Prepayments. (i) The Borrowers shall, within three
Business Days of the date of receipt of the Net Cash Proceeds by Weyerhaeuser
or any of its Domestic Subsidiaries from the sale, lease, transfer or other
disposition of any assets of Weyerhaeuser or any of its Subsidiaries (other
than any Excluded Sales), prepay any amounts outstanding under the Senior Bank
Financing in an amount equal to the lesser of the amount of such Net Cash
Proceeds and the amount so outstanding (including the amounts required to be
cash collateralized pursuant to Section 2.04(i) of the Five-Year Revolving
Credit Facility Agreement). Each such prepayment shall be applied first to any
principal amounts outstanding pursuant to the Bridge Facility in accordance
with the terms and conditions for prepayment set forth therein, second to any
amounts outstanding or to be cash collateralized pursuant to the Five-Year
Revolving Credit Facility Agreement in accordance with the terms and
conditions set forth therein, and third to any principal amounts outstanding
pursuant to this Agreement in accordance with the terms and conditions for
prepayment set forth herein; provided that neither Borrower shall be required
to make any prepayments pursuant to this Section 2.10(b)(i) if Weyerhaeuser or
any of its Subsidiaries shall apply any of the Net Cash Proceeds it received
from the sale, lease, transfer or other disposition of its assets for
reinvestment in its business within 180 days after receipt thereof by
Weyerhaeuser or any of its Subsidiaries (any such Net Cash Proceeds so
reinvested, the "Reinvestment Proceeds"); provided further that Weyerhaeuser
shall have notified the Administrative Agent of its intent to so reinvest such
Net Cash Proceeds.
(ii) On the date of any termination or reduction of the Commitments
pursuant to Section 2.09, the Borrowers shall pay or prepay so much of their
respective Borrowings as shall be necessary in order that the aggregate
principal amount of Loans outstanding not exceed the Total Commitment, after
giving effect to such termination or reduction.
24
(iii) The amount remaining (if any) after the prepayment in full of
the Loans may be retained by the Borrowers to the extent not required to be
applied in accordance with clause (i) above, and the Commitments shall be
permanently reduced in accordance with Section 2.09(c).
(c) Each notice of prepayment under paragraph (a) above shall
specify the prepayment date and the principal amount of each Borrowing (or
portion thereof) to be prepaid, shall be irrevocable and shall commit the
applicable Borrower to prepay such Borrowing (or portion thereof) by the
amount stated therein on the date stated therein. All prepayments under this
Section 2.10 shall be subject to Section 2.13 but otherwise without premium or
penalty. All prepayments under this Section 2.10 shall be accompanied by
accrued interest on the principal amount being prepaid to the date of payment.
Section 2.11 Reserve Requirements; Change in Circumstances. (a) It
is understood that the cost to each Lender (including the Administrative
Agent) of making or maintaining any of the Eurodollar Loans may fluctuate as a
result of the applicability of reserve requirements imposed by the Board at
the ratios provided for in Regulation D on the date hereof. Each Borrower
agrees to pay to each of such Lenders from time to time, as provided in
paragraph (d) below, such amounts as shall be necessary to compensate such
Lender for the portion of the cost of making or maintaining Eurodollar Loans
to such Borrower resulting from any such reserve requirements provided for in
Regulation D as in effect on the date hereof, it being understood that the
rates of interest applicable to Eurodollar Loans have been determined on the
assumption that no such reserve requirements exist or will exist and that such
rates do not reflect costs imposed on the Lenders in connection with such
reserve requirements. It is agreed that for purposes of this paragraph (a) the
Eurodollar Loans made hereunder shall be deemed to constitute Eurocurrency
Liabilities as defined in Regulation D and to be subject to the reserve
requirements of Regulation D without the benefit of or credit for proration,
exemptions or offsets which might otherwise be available to the Lenders from
time to time under Regulation D.
(b) Notwithstanding any other provision herein, if after the date of
this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof (whether or not having the
force of law) shall change the basis of taxation of any payments to any Lender
(including the Administrative Agent) of the principal of or interest on any
Eurodollar Loan made by such Lender, or any Fees or other amounts payable
hereunder (other than changes in respect of taxes imposed on the overall net
income of such Lender by the jurisdiction in which such Lender has its
principal office or by any political subdivision or taxing authority therein),
or shall impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of or
credit extended by such Lender, or shall impose on such Lender or the London
interbank market any other condition affecting this Agreement, any Eurodollar
Loan made by such Lender hereunder, and the result of any of the foregoing
shall be to increase the cost to such Lender of making or maintaining any
Eurodollar Loan or to reduce the amount of any sum received or receivable by
such Lender hereunder (whether of principal, interest or otherwise) in respect
thereof by an amount deemed by such Lender to be material, then the applicable
Borrower will pay to such Lender upon demand such additional
25
amount or amounts as will compensate such Lender for such additional costs
actually incurred or reduction actually suffered.
(c) If after the date hereof any Lender (including the
Administrative Agent) shall have determined that the general applicability of
any law, rule, regulation or guideline adopted pursuant to or arising out of
the July 1988 report of the Basle Committee on Banking Regulations and
Supervisory Practices entitled "International Convergence of Capital
Measurement and Capital Standards," or the adoption after the date hereof of
any other generally applicable law, rule, regulation or guideline regarding
capital adequacy, or any change in any of the foregoing or in the
interpretation or administration of any of the foregoing by any governmental
authority, central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by any Lender (or any lending office
of such Lender) or any Lender's holding company with any request or directive
regarding capital adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's capital or on the
capital of such Lender's holding company, if any, as a consequence of this
Agreement, the Loans made by such Lender pursuant hereto to a level below that
which such Lender or such Lender's holding company could have achieved but for
such adoption, change or compliance (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time, the applicable Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or such Lender's holding
company for any such reduction suffered.
(d) A certificate of a Lender (including the Administrative Agent)
setting forth a reasonably detailed explanation of such amount or amounts as
shall be necessary to compensate such Lender (or participating banks or other
entities pursuant to Section 9.04) as specified in paragraph (a), (b) or (c)
above, as the case may be, shall be delivered to the Borrowers and shall be
conclusive absent manifest error. The Borrowers shall pay each Lender the
amount shown as due on any such certificate delivered by it within 10 days
after the receipt of the same.
(e) Failure on the part of any Lender to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital with respect to any period shall not constitute a waiver of
such Lender's right to demand compensation with respect to such period or any
other period; provided that the Borrowers shall not be required to compensate
a Lender pursuant to this Section 2.11 for any increased costs or reductions
incurred more than 180 days prior to the date that such Lender notifies the
Borrowers of such increased costs or reductions in accordance with paragraph
(d) above and of such Lender's intention to claim compensation thereof;
provided further that, if the circumstances giving rise to such increased
costs or reductions is retroactive, then the 180-day period referred to above
shall be extended to include the period of retroactive effect thereof.
Notwithstanding any other provision of this Section 2.11, no Lender
shall demand compensation for any increased costs or reduction referred to
above if it shall not be the general policy or practice of such Lender to
demand such compensation in similar circumstances under comparable provisions
of other credit agreements, if any (it being understood that this sentence
shall not in any way limit the discretion of any Lender to waive the right to
demand such compensation in any given case).
26
Section 2.12 Change in Legality. (a) Notwithstanding any other
provision herein contained, if any change in any law or regulation or in the
interpretation thereof by any governmental authority charged with the
administration or interpretation thereof shall make it unlawful for any Lender
(including the Administrative Agent) to make or maintain any Eurodollar Loan
or to give effect to its obligations as contemplated hereby with respect to
any Eurodollar Loan, then, by written notice to the Borrowers and to the
Administrative Agent, such Lender may:
(i) declare that Eurodollar Loans will not thereafter be made by
such Lender hereunder and any request by either Borrower for or a
conversion to or continuation of a Eurodollar Borrowing shall, as to such
Lender only, be deemed a request for a Base Rate Loan unless such
declaration shall be subsequently withdrawn; and
(ii) require that all outstanding Eurodollar Loans made by it be
converted into Base Rate Loans, in which event all such Eurodollar Loans
shall be automatically converted into Base Rate Loans as of the effective
date of such notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
Base Rate Loans made by such Lender in lieu of, or resulting from the conversion
of, such Eurodollar Loans.
(b) For purposes of this Section 2.12, a notice to a Borrower by any
Lender shall be effective as to each Eurodollar Loan, if lawful, on the last
day of the Interest Period currently applicable to such Eurodollar Loan; in
all other cases such notice shall be effective on the date of receipt by such
Borrower.
Section 2.13 Indemnity. Each Borrower shall indemnify each Lender
against any loss or expense which such Lender sustains or incurs as a
consequence of (a) any failure by such Borrower to fulfill on the date of any
borrowing hereunder the applicable conditions set forth in Article IV, (b) any
failure by such Borrower to borrow or continue any Loan hereunder after
irrevocable notice of such borrowing or continuation has been given pursuant
to Section 2.02 or 2.03, as applicable, (c) any payment, prepayment or
conversion of a Eurodollar Loan required by any other provision of this
Agreement or otherwise made or deemed made to or by such Borrower on a date
other than the last day of the Interest Period applicable thereto; provided
that such Borrower shall not be required to indemnify a Lender pursuant to
this clause (c) for any loss or expense to the extent any such loss or expense
shall have been incurred pursuant to (i) Section 2.11, 2.12 or 2.17 or (ii)
Section 2.10(a) more than six months prior to the date that the applicable
Lender shall have notified such Borrower of its intention to claim
compensation therefor, (d) any default in payment or prepayment of the
principal amount of any Loan to such Borrower or any part thereof or interest
accrued thereon, as and when due and payable (at the due date thereof, whether
by scheduled maturity, acceleration, irrevocable notice of prepayment or
otherwise), or (e) the occurrence of any Event of Default on the part of such
Borrower, including, in each such case, any loss or reasonable expense
sustained or incurred or to be sustained or incurred in liquidating or
employing deposits from third parties acquired to effect or
27
maintain such Loan or any part thereof as a Eurodollar Loan. Such loss or
reasonable expense shall include an amount equal to the excess, if any, as
reasonably determined by such Lender, of (i) its cost of obtaining the funds
for the Loan being paid, prepaid, converted or not borrowed (based on the
Eurodollar Rate) for the period from the date of such payment, prepayment or
conversion or failure to borrow to the last day of the Interest Period for
such Loan (or, in the case of a failure to borrow, the Interest Period for
such Loan which would have commenced on the date of such failure) over (ii)
the amount of interest (as reasonably determined by such Lender) that would be
realized by such Lender in reemploying the funds so paid, prepaid or converted
or not borrowed for such period or Interest Period, as the case may be. A
certificate of any Lender setting forth a reasonably detailed explanation of
any amount or amounts which such Lender is entitled to receive pursuant to
this Section shall be delivered to such Borrower and shall be conclusive
absent manifest error.
Section 2.14 Pro Rata Treatment. Except as required under Sections
2.12 or 2.18, each Revolving Borrowing, each payment or prepayment of
principal of any Revolving Borrowing, each payment of interest on the
Revolving Loans, each payment of the Facility Fees, each reduction of the
Commitments and each conversion of any Revolving Borrowing to a Borrowing of
any Type, shall be allocated pro rata among the Lenders in accordance with
their respective Commitments (or, if such Commitments shall have expired or
been terminated, in accordance with the respective principal amounts of their
outstanding Revolving Loans). Each payment of principal of any Term Borrowing
shall be allocated pro rata among the Lenders participating in such Borrowing
in accordance with the respective principal amounts of their outstanding Term
Loans comprising such Borrowing. Each payment of interest on any Term
Borrowing shall be allocated pro rata among the Lenders participating in such
Borrowing in accordance with the respective amounts of accrued and unpaid
interest on their outstanding Term Loans comprising such Borrowing. Each
Lender agrees that in computing such Lender's portion of any Borrowing to be
made hereunder, the Administrative Agent may, in its discretion, round each
Lender's percentage of such Borrowing to the next higher or lower whole dollar
amount.
Section 2.15 Sharing of Setoffs. Each Lender agrees that if it
shall, through the exercise of a right of banker's lien, setoff or
counterclaim against a Borrower, or pursuant to a secured claim under Section
506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, obtain payment (voluntary or involuntary) in respect of any
Loans (other than pursuant to Sections 2.09, 2.11 and 2.12) as a result of
which the unpaid principal portion of its Loans shall be proportionately less
than the unpaid principal portion of the Loans of any other Lender, it shall
be deemed simultaneously to have purchased from such other Lender at face
value, and shall promptly pay to such other Lender the purchase price for, a
participation in the Loans of such other Lender, so that the aggregate unpaid
principal amount of the Loans and participations in the Loans held by each
Lender shall be in the same proportion to the aggregate unpaid principal
amount of all Loans then outstanding as the principal amount of its Loans
prior to such exercise of banker's lien, setoff or counterclaim or other event
was to the principal amount of all Loans outstanding prior to such exercise of
banker's lien, setoff or counterclaim or other event; provided, however, that,
if any such purchase or purchases or adjustments shall be made pursuant to
this Section 2.15 and the payment giving rise thereto shall thereafter be
recovered,
28
such purchase or purchases or adjustments shall be rescinded to the
extent of such recovery and the purchase price or prices or adjustment
restored without interest. Each Borrower expressly consents to the foregoing
arrangements and agrees that any Lender holding a participation in a Loan
deemed to have been so purchased may exercise any and all rights of banker's
lien, setoff or counterclaim with respect to any and all moneys owing by such
Borrower to such Lender by reason thereof as fully as if such Lender had made
a Loan directly to such Borrower in the amount of such participation.
Section 2.16 Payments. (a) The Borrowers shall make each payment
(including principal of or interest on any Borrowing or any Fees or other
amounts payable) hereunder and under any other Loan Document without setoff,
counterclaim or deduction of any kind not later than 12:00 (noon), New York
City time, on the date when due in dollars to the Administrative Agent at its
offices at 270 Park Avenue, New York, New York, in immediately available
funds.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts payable) hereunder or under any other
Loan Document shall become due, or otherwise would occur, on a day that is not
a Business Day, such payment may be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation
of interest or Fees, if applicable.
Section 2.17 Taxes. (a) Any and all payments by a Borrower hereunder
shall be made, in accordance with Section 2.17, free and clear of and without
deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding any income, franchise, branch profits or similar tax imposed on or
measured by the net income or net profits of the Administrative Agent or any
Lender (or any transferee or assignee that acquires a Loan (any such entity a
"Transferee")) by the United States or any jurisdiction under the laws of
which it is organized or doing business or any political subdivision thereof
(all such nonexcluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). If
either Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to the Lenders (or any Transferee) or the
Administrative Agent, (i) the sum payable shall be increased by the amount
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.17) such Lender (or
Transferee) or the Administrative Agent (as the case may be) shall receive an
amount equal to the sum it would have received had no such deductions been
made, (ii) such Borrower shall make such deductions and (iii) such Borrower
shall pay the full amount deducted to the relevant taxing authority or other
Governmental Authority in accordance with applicable law.
(b) In addition, each Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made by such Borrower hereunder or
under any other Loan Document or from the execution, delivery or registration
of or performance under this Agreement or any other Loan Document, or
otherwise with respect to such Borrower's role in this Agreement or any other
Loan Document (hereinafter referred to as "Other Taxes").
(c) Each Borrower will indemnify each Lender (or Transferee) and the
Administrative Agent for the full amount of Taxes and Other Taxes (including
any Taxes or
29
Other Taxes imposed by any jurisdiction on amounts payable by such Borrower
under this Section 2.17) paid by such Lender (or Transferee) or the
Administrative Agent, as the case may be, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted by
the relevant taxing authority or other Governmental Authority. Each Borrower
shall also indemnify each Lender (or any Transferee) and the Administrative
Agent for the full amount of taxes imposed on or measured by the net income or
receipts of such Lender (or any Transferee) or the Administrative Agent as the
case may be, as such Lender (or Transferee) or the Administrative Agent shall
determine are payable in respect of amounts paid by such Borrower to or on
behalf of such Lender (or any Transferee) or the Administrative Agent, as the
case may be, pursuant to this Section 2.17. Such indemnification shall be made
within 30 days after the date any Lender (or Transferee) or the Administrative
Agent, as the case may be, makes written demand therefor. If any Lender (or
Transferee) or the Administrative Agent becomes entitled to a refund of Taxes
or Other Taxes for which such Lender (or Transferee) or the Administrative
Agent has received payment from a Borrower hereunder, such Lender (a
Transferee) or Administrative Agent, as the case may be, shall, at the expense
of such Borrower, use its reasonable efforts (consistent with internal policy,
and legal and regulatory restrictions) to obtain such refund. If a Lender (or
Transferee) or the Administrative Agent receives a refund or is entitled to
claim a tax credit in respect of any Taxes or Other Taxes for which such
Lender (or Transferee) or the Administrative Agent has received payment from a
Borrower hereunder it shall promptly notify such Borrower of such refund or
credit and shall, within 30 days after receipt of a request by such Borrower
(or promptly upon receipt, if such Borrower has requested application for such
refund or credit pursuant hereto), repay such refund or amount of credit to
such Borrower, net of all out-of-pocket expenses of such Lender and without
interest; provided that each Borrower, upon the request of such Lender (or
Transferee) or the Administrative Agent, agrees to return such refund or
amount of credit (plus penalties, interest or other charges) to such Lender
(or Transferee) or the Administrative Agent in the event such Lender (or
Transferee) or the Administrative Agent is required to repay such refund or
such credit is denied or subsequently determined to be unavailable.
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes withheld by either Borrower in respect of any payment to any Lender (or
Transferee) or the Administrative Agent, such Borrower will furnish to the
Administrative Agent, at its address referred to in Section 9.01, the original
or a certified copy of a receipt evidencing payment thereof to the proper
Governmental Authority.
(e) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section
2.17 shall survive the payment in full of the principal of and interest on all
Loans made hereunder.
(f) Each Lender (or Transferee), which is organized under the laws
of a jurisdiction outside the United States shall, on or prior to the date of
its execution and delivery of this Agreement or, in the case of a Transferee,
on the date on which it becomes a Lender, and in the case of any Lender, on or
prior to the date such Lender changes its funding office, and from time to
time thereafter as requested in writing by either Borrower (but only so long
thereafter as such Lender remains lawfully able to do so), shall deliver to
the Borrowers and the
30
Administrative Agent such certificates, documents or other evidence, as
required by the Code or Treasury Regulations issued pursuant thereto,
including Internal Revenue Service Form W-8BEN or Form W-8ECI and any other
certificate or statement of exemption required by Treasury Regulation Section
1.1441-4(a) or 1.1441-6(c) or any subsequent version thereof, properly
completed and duly executed by such Lender (or Transferee) establishing that
any payment under the Loan Documents is (i) not subject to withholding under
the Code because such payment is effectively connected with the conduct by
such Lender (or Transferee) of a trade or business in the United States, or
(ii) fully or partially exempt from United States tax under a provision of an
applicable tax treaty, or (iii) not subject to withholding under the portfolio
interest exception under Section 881(c) of the Code (and, if such Lender (or
Transferee) delivers a Form W-8BEN claiming the benefits of exemption from
United States withholding tax under Section 881(c), a certificate representing
that such Lender (or Transferee) is not a "bank" for purposes of Section
881(c) of the Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of either Borrower and is not a controlled
foreign corporation related to either Borrower (within the meaning of Section
864(d)(4) of the Code). Unless the Borrowers and the Administrative Agent have
received forms or other documents reasonably satisfactory to them indicating
that payments hereunder are not subject to United States withholding tax or
are subject to such tax at a rate reduced by an applicable tax treaty, each
applicable Borrower or the Administrative Agent shall withhold taxes from such
payments at the applicable statutory rate in the case of payments to or for
any Lender (or Transferee) organized under the laws of a jurisdiction outside
the United States. If a Lender (or Transferee) is unable to deliver one of
these forms or if the forms provided by a Lender (or Transferee), at the time
such Lender (or Transferee), first becomes a party to this Agreement or at the
time a Lender (or Transferee), changes its funding office (other than at the
request of a Borrower) indicate a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered excluded
from Taxes unless and until such Lender (or Transferee), provides the
appropriate forms certifying that a lesser rate applies, whereupon withholding
tax at such lesser rate only shall be considered excluded from Taxes for
periods governed by such appropriate forms; provided, however, that if, at the
effective date of a transfer pursuant to which a Lender (or Transferee)
becomes a party to this Agreement, the Lender (or Transferee) assignor was
entitled to payments under Section 2.17(a) in respect of United States
withholding tax with respect to interest paid at such date, then, to such
extent, the term Taxes shall include (in addition to withholding taxes that
may be imposed in the future or other amounts otherwise includable in Taxes)
United States withholding tax, if any, applicable with respect to the Lender
(or Transferee), assignee on such date.
(g) The Borrowers shall not be required to pay any additional
amounts to any Lender (or Transferee) in respect of United States withholding
tax pursuant to paragraph (a) above for any period in respect of which the
obligation to pay such additional amounts would not have arisen but for a
failure by such Lender (or Transferee), to comply with the provisions of
paragraph (f) above unless such failure results from (i) a change in
applicable law, regulation or official interpretation thereof or (ii) an
amendment, modification or revocation of any applicable tax treaty or a change
in official position regarding the application or interpretation thereof, in
each case after the Closing Date (and, in the case of a Transferee, after the
date of assignment or transfer).
31
(h) Any Lender (or Transferee) claiming any additional amounts
payable pursuant to this Section 2.17 shall use reasonable efforts (consistent
with internal policy, and legal and regulatory restrictions) to file any
certificate or document requested by the Borrowers or to change the
jurisdiction of its applicable lending office if the making of such a filing
or change would avoid the need for or reduce the amount of any such additional
amounts which may thereafter accrue and would not, in the reasonable
determination of such Lender (or Transferee) be materially disadvantageous to
such Lender (or Transferee) or require the disclosure of information that the
Lender (or Transferee) reasonably considers to be confidential.
Section 2.18 Mitigation Obligations; Replacement of Lenders. (a) If
any Lender (including the Administrative Agent) requests compensation under
Section 2.11, or if it becomes unlawful for any Lender (including the
Administrative Agent) to make or maintain Eurodollar Loans under Section 2.12,
or if a Borrower is required to pay any additional amount to any Lender, the
Administrative Agent or any Governmental Authority for the account of any
Lender or the Administrative Agent pursuant to Section 2.17, then such Lender
or the Administrative Agent shall, at the request of such Borrower, use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder
to another of its offices, branches or affiliates, if, in the judgment of such
Lender or the Administrative Agent, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.11 or 2.17 or no
longer make it unlawful for such Lender or the Administrative Agent to make or
maintain Eurodollar Loans under Section 2.12, as the case may be, in the
future and (ii) would not subject such Lender or the Administrative Agent to
any unreimbursed cost or expense and would not otherwise be disadvantageous to
such Lender or the Administrative Agent. The Borrowers hereby agree, jointly
and severally, to pay all reasonable costs and expenses incurred by any Lender
or the Administrative Agent in connection with any such designation or
assignment.
(b) If any Lender requests compensation under Section 2.11, or if it
becomes unlawful for any Lender to make or maintain Eurodollar Loans under
Section 2.12, or if a Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 2.17, or if any Lender defaults in its obligation to fund Loans
hereunder, then the Borrowers may, at their sole expense and effort, upon
notice to such Lender and the Administrative Agent, (i) require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 9.04), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (x) the Borrowers shall have received the prior
written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (y) such assigning Lender shall have received
payment of an amount equal to the outstanding principal of its Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrowers (in the case of all other amounts) and (z)
in the case of any such assignment resulting from a claim for compensation
under Section 2.11 or payments required to be made pursuant to Section 2.17,
such assignment will result in a reduction in such compensation or payments or
(ii) terminate the Commitment of such Lender upon notice given to such Lender
within forty-five (45) days of receipt of the notice given by the Lender;
provided that such notice shall be
32
accompanied by prepayment in full of all Loans from such Lender, including
accrued interest thereon and any breakage costs, accrued fees and all other
amounts payable to such Lender, without extension, conversion or continuation.
A Lender shall not be required to make any such assignment and delegation
under clause (i) above or terminate its Commitment under clause (ii) above if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrowers to require such assignment and
delegation or termination of Commitment cease to apply.
Section 2.19 Term Loan Conversion. (a) Not less than five days and
not more than thirty days prior to the Revolver Termination Date, and subject
to the conditions set forth in Section 4.03, each Borrower may elect to
convert all or a portion of its respective Revolving Borrowings outstanding as
of the Revolver Termination Date into Term Borrowings (the "Term Loan
Conversion") by delivery of a written notice to that effect to the
Administrative Agent, who shall forward a copy of such notice to each of the
Lenders. If such notice is given, each Lender severally agrees, on the terms
and conditions hereinafter set forth, that each of its outstanding Revolving
Loans that are part of the Borrowings subject to the election to convert will
be converted into a term loan (each, a "Term Loan" and collectively, the "Term
Loans") having the same terms as the converted loan on the Revolver
Termination Date. Any amount of any Lender's Term Loans repaid may not be
reborrowed, and the Term Loans so elected shall commence on the Revolver
Termination Date and shall be payable on the Termination Date.
(b) In order to elect the Term Loan Conversion, and in addition to
the notice set forth in Section 2.19(a) above, the Borrower electing the Term
Loan Conversion shall hand deliver or telecopy to the Administrative Agent a
request (i) in the case of a Term Borrowing consisting of a Eurodollar
Borrowing, not later than 11:00 a.m., New York City time, three Business Days
before the Revolver Termination Date, (ii) in the case of a Term Borrowing
consisting of a Base Rate Borrowing, not later than 12:00 noon, New York City
time, on the day of the Revolver Termination Date, which request shall be
irrevocable and shall in each case specify (x) whether the Term Borrowing then
being requested is to consist of a Eurodollar Borrowing or a Base Rate
Borrowing; (y) the date of such Borrowing (which shall be the Revolver
Termination Date) and the amount thereof (which shall be the amount of
Revolving Borrowings of such Borrower outstanding on the Revolver Termination
Date); and (z) if such Borrowing is to be a Eurodollar Borrowing, the Interest
Period with respect thereto. If no election as to the Type of Borrowing is
specified in any such notice, then the requested Borrowing shall be a Base
Rate Borrowing. If no Interest Period with respect to any Eurodollar Borrowing
is specified in any such notice, then such Borrower shall be deemed to have
selected an Interest Period of one month's duration. The Administrative Agent
shall promptly advise the Lenders of any notice given pursuant to this Section
2.19 and of each Lender's portion of the requested Borrowing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of the Borrowers represents and warrants to each of the Lenders
that (it being understood and agreed that the representations and warranties
made by the Borrowers on
33
the Closing Date, including, without limitation, for purposes of Sections
4.01(b) and 4.02(d), shall not cover the Company or any of its Subsidiaries,
except to the extent the Company or any of its Subsidiaries are expressly
referred to in the representations and warranties set forth in this Article
III):
Section 3.01 Organization; Powers. Such Borrower and each of its
Restricted Subsidiaries (a) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization,
(b) has all requisite power and authority to own its property and assets and
to carry on its business as now conducted and as proposed to be conducted, (c)
is qualified to do business in every jurisdiction where such qualification is
required, except where the failure so to qualify would not result in a
Material Adverse Effect, and (d) in the case of such Borrower, has the
corporate power and authority to execute, deliver and perform its obligations
under each of the Loan Documents and each other agreement or instrument
contemplated thereby to which it is or will be a party and to borrow
hereunder.
Section 3.02 Authorization. The execution, delivery and performance
by such Borrower of each of the Loan Documents and the borrowings hereunder,
and the consummation of the Tender Offer, the Acquisition and the Merger and
the other transactions contemplated hereby and thereby (collectively, the
"Transactions") (a) have been duly authorized by all requisite corporate and,
if required, stockholder action and (b) (i) will not violate (A) any provision
of law, statute, rule or regulation, (B) of the certificate or articles of
incorporation or other constitutive documents or by-laws of such Borrower or
any of its Restricted Subsidiaries, (C) any order of any Governmental
Authority or (D) any provision of any indenture, agreement or other instrument
to which such Borrower or any of its Restricted Subsidiaries is a party or by
which any of them or any of their property is or may be bound, (ii) will not
be in conflict with, result in a breach of or constitute (alone or with notice
or lapse of time or both) a default under any such indenture, agreement or
other instrument or (iii) will not result in the creation or imposition of any
Lien upon or with respect to any property or assets now owned or hereafter
acquired by such Borrower or any of its Restricted Subsidiaries except, in
each case other than (i)(B), as could not reasonably be expected to have a
Material Adverse Effect.
Section 3.03 Enforceability. This Agreement has been duly executed
and delivered by such Borrower and constitutes, and each other Loan Document
when executed and delivered by such Borrower will constitute, a legal, valid
and binding obligation of such Borrower enforceable against such Borrower in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
and subject to general principles of equity, regardless of whether considered
in a proceeding in equity or at law.
Section 3.04 Consents and Approvals. No action, consent or approval
of, registration or filing with, or any other action by any Governmental
Authority or any other third party is or will be required in connection with
the Transactions, except as have been made or obtained (without the imposition
of any conditions that are not acceptable to the Lenders) and are in full
force and effect (other than any action, consent, approval, registration or
filing the absence of which could not reasonably be expected, either
individually or in the aggregate with any such other consents, approvals,
registrations or filings, to result in a Material Adverse Effect). All
applicable waiting periods in connection with the Transactions have expired
without any action
34
having been taken by any competent authority, and no law or regulation shall
be applicable, restraining, preventing or imposing materially adverse
conditions upon the Transactions or the rights of the Borrowers, the Company
and their respective subsidiaries freely to transfer or otherwise dispose of,
or to create any Lien on, any properties now owned or hereafter acquired by
any of them except, in each case, as could not reasonably be expected to have
a Material Adverse Effect.
Section 3.05 Financial Statements. (a) Weyerhaeuser has heretofore
furnished to the Lenders (i) its consolidated balance sheets and statements of
earnings and statements of cash flows, together with the notes thereto, as of
and for the fiscal year ended December 31, 2000, audited by and accompanied by
the opinion of Arthur Andersen LLP, independent public accountants, and (ii)
its unaudited consolidated balance sheets and statements of earnings and
statements of cash flows, together with the notes thereto, as of and for the
nine month period ended September 30, 2001.
(b) Weyerhaeuser has heretofore furnished to the Lenders the
consolidated pro forma balance sheet of Weyerhaeuser as of the Closing Date,
certified by the chief financial officer of Weyerhaeuser, giving effect to the
Transactions and such pro forma balance sheet fairly presents the consolidated
pro forma financial condition of Weyerhaeuser and its Subsidiaries as at such
date, giving effect to the Transactions.
(c) WRECO has heretofore furnished to the Lenders (i) its
consolidated balance sheets and statements of earnings and statements of cash
flows, together with the notes thereto, as of and for the fiscal year ended
December 31, 2000, audited by and accompanied by the opinion of Arthur
Andersen LLP, independent public accountants, and (ii) its unaudited
consolidated balance sheets and statements of earnings and statements of cash
flows, together with the notes thereto, as of and for the nine month period
ended September 30, 2001.
(d) Such financial statements referred to in Section 3.05(a) and (c)
present fairly in all material respects the financial position and results of
operations of Weyerhaeuser, WRECO and their respective consolidated
subsidiaries as of such dates and for such periods. Such balance sheets and
the notes thereto disclose all material liabilities, direct or contingent, of
Weyerhaeuser, WRECO and their respective consolidated subsidiaries as of the
dates thereof. Such financial statements were prepared in accordance with GAAP
applied on a consistent basis.
Section 3.06 No Material Adverse Change. Other than changes in
operating results arising in the ordinary course of business and except as
otherwise disclosed publicly or to the Lenders prior to the date hereof, there
has been no material adverse change in the business, financial condition,
operations or properties of Weyerhaeuser and its subsidiaries, taken as a
whole, since September 30, 2001.
Section 3.07 Title to Properties; Possession Under Leases. (a) Each
of such Borrowers and its Restricted Subsidiaries has good and marketable
title to, or valid leasehold interests in, all of its material properties and
assets, except for defects in title that do not interfere with its ability to
conduct its business as currently conducted or to utilize such properties and
assets for their intended purposes.
35
(b) Each of such Borrowers and its Restricted Subsidiaries (i) has
complied with all obligations under all leases to which it is a party, and
(ii) enjoys peaceful and undisturbed possession under all such leases, except
where such non-compliance or lack of peaceful and undisturbed possession would
not result in a Material Adverse Effect. All leases to which the Borrowers and
their respective Restricted Subsidiaries are a party are in full force and
effect, except where such lack of force and effect would not result in a
Material Adverse Effect.
Section 3.08 Subsidiaries. Schedule 3.08 Part I for Weyerhaeuser,
Schedule 3.08 Part II for WRECO and Schedule 3.08 Part III for the Company (i)
set forth as of the Closing Date a list of all subsidiaries of Weyerhaeuser,
WRECO and the Company and the percentage ownership interest of Weyerhaeuser,
WRECO or the Company therein, as applicable, and (ii) for Weyerhaeuser and
WRECO, designate those Subsidiaries which are Unrestricted Subsidiaries;
provided that Schedule 3.08 Part III shall have been prepared by Weyerhaeuser
in reliance on information provided by the Company in the Disclosure Letter.
Section 3.09 Litigation; Compliance with Laws. (a) Except as
otherwise disclosed publicly prior to December 13, 2001, there are no actions,
suits, investigations, litigations or proceedings pending or, to the knowledge
of the Borrowers, threatened against or affecting the Borrowers or any of
their Restricted Subsidiaries in any court or before any arbitrator or
Governmental Authority that could reasonably be expected to have a Material
Adverse Effect.
(b) Except as disclosed in Weyerhaeuser's Report on Form 10-Q for
the fiscal quarter ended September 30, 2001, neither such Borrower nor any of
its Restricted Subsidiaries is in violation of any law, rule or regulation, or
in default with respect to any judgment, writ, injunction or decree of any
Governmental Authority, where such violation or default could reasonably be
expected to result in a Material Adverse Effect.
(c) Based on the information provided by the Company in the
Disclosure Letter and except as disclosed in the Company's Report on Form 10-K
for the fiscal year ended December 31, 2000, or in the Disclosure Letter,
there are no actions, suits, investigations or proceedings pending or
threatened against or affecting the Company or any of its subsidiaries in any
court or before any arbitrator or Governmental Authority that could reasonably
be expected to have a Material Adverse Effect.
(d) Based on the information provided by the Company in the
Disclosure Letter and except as disclosed in the Company's Report on Form 10-K
for the fiscal year ended December 31, 2000, or in the Disclosure Letter,
neither the Company nor any of its subsidiaries is in violation of any law,
rule or regulation, or in default with respect to any judgment, writ,
injunction or decree of any Governmental Authority, where such violation or
default could reasonably be expected to result in a Material Adverse Effect.
Section 3.10 Agreements. (a) Neither such Borrower nor any of its
Restricted Subsidiaries is a party to any agreement or instrument or subject
to any corporate restriction that has resulted in a Material Adverse Effect.
36
(b) Neither such Borrower nor any of its Restricted Subsidiaries is
in default in any manner under any material agreement or instrument (except
for any indenture or other agreement or instrument evidencing Indebtedness) to
which it is a party or by which it or any of its properties or assets are or
may be bound, where such default could reasonably be expected to result in a
Material Adverse Effect.
Section 3.11 Federal Reserve Regulations. (a) Neither such Borrower
nor any of its Restricted Subsidiaries is engaged principally, or as one of
its important activities, in the business of extending credit for the purpose
of purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used, whether
directly or indirectly, whether immediately, incidentally or ultimately, for
any purpose which entails a violation of, or which is inconsistent with, the
provisions of the Regulations of the Board, including Regulation T, U or X.
Section 3.12 Investment Company Act; Public Utility Holding Company
Act. Neither such Borrower nor any of its Restricted Subsidiaries is (a) an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
Section 3.13 Tax Returns. Each of such Borrower and its Subsidiaries
has filed or caused to be filed all material Federal, state and local tax
returns required to have been filed by it and has paid or caused to be paid
all material taxes shown to be due and payable on such returns or on any
assessments received by it, except taxes that are being contested in good
faith by appropriate proceedings and for which such Borrower or Subsidiary, as
the case may be, shall have set aside on its books appropriate reserves.
Section 3.14 No Material Misstatements. Neither the Confidential
Information Memorandum, nor any information, report, financial statement,
exhibit or schedule furnished by or on behalf of such Borrower to the
Administrative Agent or any Lender in connection with the negotiation of any
Loan Document or included therein or delivered pursuant thereto, when taken
together with the reports and other filings with the SEC, contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
Section 3.15 Compliance with ERISA. Except as would not have a
Material Adverse Effect, subject to the following sentences of this Section
3.15, each Plan subject to ERISA or the Code, as applicable, is in compliance
with ERISA and the Code; no Reportable Event has occurred with respect to a
Plan, no Plan is insolvent or in reorganization; no Plan has an Unfunded
Current Liability in excess of $40,000,000, and all Plans collectively do not
have Unfunded Current Liabilities in excess of $91,000,000 in the aggregate,
and no Plan subject to ERISA or the Code, as applicable, has an accumulated or
waived funding deficiency, has permitted decreases in its funding standard
account or has applied for an extension of any amortization period within the
meaning of Section 412 of the Code; neither such Borrower nor any ERISA
Affiliate has incurred any liability to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of
ERISA or Section 4975 of the Code
37
or expects to incur any material liability under any of the foregoing Sections
with respect to any such Plan; no condition exists which presents a risk to
such Borrower or any ERISA Affiliate of incurring a liability to or on account
of a Plan pursuant to the foregoing provisions of ERISA and the Code; no
proceedings have been instituted to terminate any Plan; no lien imposed under
the Code or ERISA on the assets of such Borrower or any ERISA Affiliate exists
or is likely to arise on account of any Plan; such Borrower and its
Subsidiaries do not maintain or contribute to any "welfare plan" (within the
meaning of Section 3(1) of ERISA) which provides life insurance or health
benefits to retirees (other than as required by Section 601 of ERISA) the
obligations with respect to which could reasonably be expected to have a
Material Adverse Effect.
Section 3.16 Environmental Matters. (a) Except as disclosed in
Weyerhaeuser's Report on Form 10-K for the fiscal year ended December 31,
2000, filed with the SEC, (a) neither Borrower nor any of its Subsidiaries has
failed to comply with any Federal, state, local and other statutes,
ordinances, orders, judgments, rulings and regulations relating to
environmental pollution or to environmental regulation or control, where any
such failure to comply, alone or together with any other such noncompliance,
could result in a Material Adverse Effect; (b) neither Borrower nor any of its
Subsidiaries has received notice of any failure so to comply which alone or
together with any other such failure could result in a Material Adverse
Effect; and (c) the Borrowers' and their respective Subsidiaries' plants have
not managed any hazardous wastes, hazardous substances, hazardous materials,
toxic substances or toxic pollutants, as those terms are used in the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response
Compensation and Liability Act, the Hazardous Materials Transportation Act,
the Toxic Substance Control Act, the Clean Air Act, the Clean Water Act or any
other Environmental Law, in violation of any regulations promulgated pursuant
thereto or in any other applicable law where such violation could reasonably
result, individually or together with other violations, in a Material Adverse
Effect.
(b) Except as disclosed in the Company's Report on Form 10-K for the
fiscal year ended December 31, 2000, filed with the Securities and Exchange
Commission, (a) neither the Company nor any of its subsidiaries has failed to
comply with any Federal, state, local and other statutes, ordinances, orders,
judgments, rulings and regulations relating to environmental pollution or to
environmental regulation or control, where any such failure to comply, alone
or together with any other such noncompliance, could result in a Material
Adverse Effect; (b) neither the Company nor any of its subsidiaries has
received notice of any failure so to comply which alone or together with any
other such failure could result in a Material Adverse Effect; and (c) the
Company's and its subsidiaries' plants have not managed any hazardous wastes,
hazardous substances, hazardous materials, toxic substances or toxic
pollutants, as those terms are used in the Resource Conservation and Recovery
Act, the Comprehensive Environmental Response Compensation and Liability Act,
the Hazardous Materials Transportation Act, the Toxic Substance Control Act,
the Clean Air Act, the Clean Water Act or any other Environmental Law, in
violation of any regulations promulgated pursuant thereto or in any other
applicable law where such violation could reasonably be expected to result,
individually or together with other violations, in a Material Adverse Effect.
Section 3.17 Maintenance of Insurance. Such Borrower and each of its
Restricted Subsidiaries maintains insurance (which may be self insurance) for
all of its insurable
38
properties: (a) by financially sound and reputable insurers to the extent of
insurance obtained from third party insurers; (b) to such extent and against
such risks, including fire and other risks insured against by extended
coverage, as is customary with companies in the same or similar businesses,
including public liability insurance against claims for personal injury or
death or property damage occurring upon, in, about or in connection with the
use of any properties owned, occupied or controlled by such Borrower or such
Restricted Subsidiaries; and (c) as may be required by law.
Section 3.18 Existing Senior Credit Facilities. Schedule 3.18 sets
forth, as of the Closing Date, a complete and accurate list of the Existing
Senior Credit Facilities of each Borrower, the Company and their respective
subsidiaries (other than the Surviving Senior Credit Facilities), showing as
of the Closing Date the obligor and the principal amount outstanding
thereunder.
Section 3.19 Surviving Senior Credit Facilities. Schedule 3.19 sets
forth, as of the Closing Date, a complete and accurate list of the Surviving
Senior Credit Facilities of each Borrower, the Company and their respective
subsidiaries, showing as of the Closing Date the obligor and the principal
amount outstanding thereunder.
Section 3.20 Non-Material Loans. Except as disclosed on Schedule
3.19, there shall not be more than $50,000,000 of Non-Material Loans of
Weyerhaeuser and its Restricted Subsidiaries and the Company and its
Subsidiaries in the aggregate outstanding as of the Closing Date.
ARTICLE IV
CONDITIONS OF LENDING
The obligations of the Lenders to make Loans hereunder are subject
to the satisfaction of the following conditions:
Section 4.01 All Borrowings and Issuances. On the date of each
Borrowing:
(a) Notice. The Administrative Agent shall have received from the
applicable Borrower a notice of such Borrowing as required by Section 2.02 or
2.03, as applicable.
(b) Representations. The representations and warranties of the
Borrowers set forth in Sections 3.01, 3.02, 3.03, 3.04, 3.07, 3.10(b), 3.11
and 3.12 shall be true and correct in all material respects on and as of such
date with the same effect as though made on and as of such date at the time of
and immediately after such Borrowing.
(c) Compliance, etc. The Borrowers shall be in compliance with all
the terms and provisions set forth herein and in each other Loan Document on
their part to be observed or performed, and, as applicable, at the time of and
immediately after such Borrowing, no Event of Default or Default shall have
occurred and be continuing (it being understood and agreed that, for the
purpose of determining the satisfaction of the conditions set forth
39
in this Section 4.01(c) and Section 4.02(d) on the Closing Date, the
affirmative and negative covenants and the Events of Default set forth in this
Agreement shall not cover the Company or any of its Subsidiaries).
Each Borrowing shall be deemed to constitute a representation and
warranty by the Borrowers on the date of such Borrowing, as to the matters
specified in paragraphs (b) and (c) of this Section 4.01.
Section 4.02 Closing Date. On the date of the initial Borrowing:
(a) Opinions. The Administrative Agent shall have received a
favorable written opinion of (i) Cravath, Swaine & Moore, special counsel
for the Borrowers, dated the Closing Date and addressed to the Lenders,
in form and substance reasonably satisfactory to the Administrative Agent
and (ii) Lorrie Scott, Esq., Senior Legal Counsel to Weyerhaeuser, as
counsel for Weyerhaeuser, dated the Closing Date and addressed to the
Lenders, in form and substance reasonably satisfactory to the
Administrative Agent.
(b) Legal Matters. All legal matters (including any documentation)
related to this Agreement and the Transactions shall be satisfactory to
the Lenders and to Shearman & Sterling, special counsel for the
Administrative Agent. In addition, the Acquisition and the Tender Offer
shall have been consummated or shall be consummated on or before the
Closing Date in accordance in all material respects with the terms and
conditions of the Tender Offer Statement, without any waiver or amendment
not consented to by the Lenders of any material term, condition or
provision set forth therein, and in compliance in all material respects
with all applicable laws, and Weyerhaeuser shall have acquired sufficient
shares of capital stock of the Company, to enable the Purchaser, voting
without any other shareholder of the Company, to approve the Merger.
(c) Articles, etc. The Administrative Agent shall have received (i)
a copy of the certificate or articles of incorporation, including all
amendments thereto, of each of the Borrowers, certified as of a recent
date by the Secretary of State of their respective States of
incorporation, and certificates as to the good standing of each of the
Borrowers, as of a recent date, from each such Secretary of State; (ii) a
certificate from each of the Borrowers of their respective Secretary or
Assistant Secretary dated the Closing Date and certifying (A) that
attached thereto is a true and complete copy of the by-laws of such
Borrower as in effect on the Closing Date and at all times since a date
prior to the date of the resolutions described in clause (B) below, (B)
that attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of such Borrower authorizing the
execution, delivery and performance of such Borrower of any and all
documents and agreements to be entered into with respect to the
Transactions, including, without limitation, as to each such Borrower,
the Loan Documents and the borrowings to be made thereunder, and that
such resolutions have not been modified, rescinded or amended and are in
full force and effect, (C) that the certificate or articles of
incorporation of such Borrower have not been amended since the date of
the last amendment thereto shown on the certificates of good standing
furnished pursuant to clause (i) above, and (D) as to the incumbency and
specimen signature of each officer executing any Loan Document or any
other document or agreement delivered in
40
connection with the Transactions on behalf of such Borrower; (iii) a
certification of another officer as to the incumbency and specimen signature
of the Secretary or Assistant Secretary executing the certificate pursuant to
(ii) above; and (iv) such other documents as the Lenders or Shearman &
Sterling, special counsel for the Administrative Agent, may reasonably
request.
(d) Officers' Certificates. The Administrative Agent shall have
received a certificate from each Borrower, dated the Closing Date and signed
by a Financial Officer of such Borrower, confirming (i) compliance with the
condition precedent set forth in paragraph (c) of Section 4.01, and (ii) that
the representations and warranties of such Borrower set forth herein are true
and correct in all material respects on and as of the Closing Date (except for
representations and warranties expressly stated to relate to a specific
earlier date, in which case such representations and warranties are true and
correct in all material respects as of such earlier date), immediately prior
to, and after giving effect to, the initial Borrowing.
(e) Fees. The Administrative Agent and the Lenders shall have
received all Fees and other amounts due and payable on or prior to the Closing
Date.
(f) Loan Documents. The Administrative Agent shall have received a
fully executed counterpart of this Agreement, and an executed copy of each
Loan Document (other than this Agreement).
(g) Termination of Existing Senior Credit Facilities. On the Closing
Date the Administrative Agent shall have received written evidence reasonably
satisfactory to it that either (i) all Existing Senior Credit Facilities,
other than the Surviving Senior Credit Facilities, have been prepaid, redeemed
or defeased in full or otherwise satisfied and extinguished or (ii)
arrangements reasonably satisfactory to the Administrative Agent and the
Lenders for such prepayment, redemption, defeasance, satisfaction or
extinguishment have been made; and all Surviving Senior Credit Facilities
shall be on terms and conditions reasonably satisfactory to the Administrative
Agent and the Lenders.
(h) Documentation. The Administrative Agent and 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 the Company's outstanding
common stock (including the related preferred stock purchase rights) to enable
the Purchaser, voting without any other shareholder of the Company, to
consummate a Merger of the Purchaser, Weyerhaeuser 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 Administrative Agent and 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's outstanding
common stock (including the related preferred stock purchase rights) and the
Merger Agreement, if any, and the
41
Disclosure Letter, shall be in form and substance reasonably satisfactory to
the Administrative Agent and the Lenders.
(i) Rating. The Rating of Weyerhaeuser's Senior Unsecured Long-Term
Debt shall be at least Baa3 by Moody's and at least BBB- by S&P and, if
Weyerhaeuser is rated in the above referenced lowest categories 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.
(j) Regulation U. The Administrative Agent shall have received the
Federal Reserve Forms U-1 provided for in Regulation U, the statements
made in which shall be such as to permit the Transactions contemplated
hereby in accordance with Regulation U.
(k) No Material Adverse Change. Other than changes in operating
results arising in the ordinary course of business and except as
otherwise disclosed publicly or to the Lenders prior to the date hereof,
there has been no material adverse change in the business, financial
condition, operations or properties of the Company and its subsidiaries,
taken as a whole, since September 30, 2001.
Section 4.03 Term Loan Conversion Conditions. On the date any Term
Loan Conversion is effective:
(a) Representations. The representations and warranties of the
Borrower electing such Term Loan Conversion shall be true and correct in all
material respects on and as of such date with the same effect as though made
on and as of such date (except for representations and warranties expressly
stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date).
(b) Compliance, etc. The Borrower electing such Term Loan Conversion
shall be in compliance with all the terms and provisions set forth herein and
in each other Loan Document on its part to be observed or performed, and at
the time of and immediately after the Term Loan Conversion, no Event of
Default or Default shall have occurred and be continuing.
ARTICLE V
AFFIRMATIVE COVENANTS
Each Borrower covenants and agrees with each Lender and the
Administrative Agent that, so long as this Agreement shall remain in effect or
the principal of or interest on any Loan, any Fees or any other expenses or
amounts payable under any Loan Document shall be unpaid, unless the Required
Lenders (or, where indicated, the Lenders) shall otherwise consent in writing,
each Borrower will, and will cause each of its Restricted Subsidiaries (except
in the case of Sections 5.03 (which applies to Weyerhaeuser), 5.06 (which
applies to Weyerhaeuser, WRECO and their respective ERISA Affiliates) and 5.09
(which applies to Weyerhaeuser, WRECO and all of their respective
Subsidiaries)) to:
42
Section 5.01 Existence; Businesses and Properties. (a) Do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect its legal existence, except as otherwise expressly permitted under
Section 6.01(c) (with respect to Weyerhaeuser) and Section 6.02(d) (with
respect to WRECO) and, with respect to Restricted Subsidiaries, where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect, provided, however, that such Borrower may liquidate or dissolve any of
its Subsidiaries to the extent the assets of such Subsidiary are transferred
to Weyerhaeuser or any of its Restricted Subsidiaries.
(b) Except in each case where the failure to do so could not
reasonably be expected to result in a Material Adverse Effect, (i) do or cause
to be done all things necessary to obtain, preserve, renew, extend and keep in
full force and effect the rights, licenses, permits, franchises,
authorizations, patents, copyrights, trademarks and trade names necessary in
the conduct of its business; (ii) maintain and operate such business in
substantially the manner in which it is presently conducted and operated;
(iii) comply with all applicable laws, rules, regulations and orders of any
Governmental Authority, whether now in effect or hereafter enacted; and (iv)
at all times maintain and preserve all property necessary in the conduct of
such business and keep such property in good repair, working order and
condition and from time to time make, or cause to be made, all necessary and
proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times.
(c) Maintain compliance with each of its loans, contracts, leases
and other obligations (other than Indebtedness) except such as are being
contested in good faith by appropriate proceedings and for which appropriate
reserves have been established, and except for such noncompliance as could not
reasonably be expected to have, in any case or in the aggregate, a Material
Adverse Effect.
Section 5.02 Insurance. (a) Keep such of its insurable properties as
are insured with third-party insurers insured at all times by financially
sound and reputable insurers; and (b) maintain (i) insurance (which may
include self insurance), to such extent and against such risks, including fire
and other risks insured against by extended coverage, as is customary with
companies in the same or similar businesses, including public liability
insurance against claims for personal injury or death or property damage
occurring upon, in, about or in connection with the use of any properties
owned, occupied or controlled by it; and (ii) such insurance as may be
required by law.
Section 5.03 Obligations and Taxes. Pay its obligations (other than
Indebtedness) promptly and in accordance with their terms and pay and
discharge promptly when due all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or in respect of its
property, before the same shall become delinquent or in default, as well as
all lawful claims for labor, materials and supplies or otherwise which, if
unpaid, might give rise to a Lien upon such properties or any part thereof;
provided, however, that such payment and discharge shall not be required (i)
with respect to any such tax, assessment, charge, levy or claim so long as the
validity or amount thereof shall be contested in good faith by appropriate
proceedings and such Borrower or such Subsidiary shall have set aside on its
books appropriate reserves with respect thereto or (ii) if the failure to make
such payments
43
or to discharge such Liens is not, in any case or in the aggregate, reasonably
likely to have a Material Adverse Effect.
Section 5.04 Financial Statements, Reports, etc. In the case of each
Borrower, furnish to the Administrative Agent (which shall promptly furnish to
each Lender):
(a) within 95 days after the end of each fiscal year, its
consolidated balance sheets and related statements of earnings and
statements of cash flows, together with the notes thereto, showing the
financial position of such Borrower and its consolidated Subsidiaries as
of the close of such fiscal year and the results of their operations and
the operations of such subsidiaries during such year, all audited by
Arthur Andersen LLP or other independent public accountants of recognized
national standing acceptable to the Required Lenders and accompanied by
an opinion of such accountants (which shall not be qualified in any
material respect) to the effect that such consolidated financial
statements fairly present the financial position and results of
operations of each such Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, except
as therein noted;
(b) within 50 days after the end of each of the first three fiscal
quarters of each fiscal year, its consolidated balance sheets and related
statements of earnings and, with respect to Weyerhaeuser, statements of
cash flows, showing the financial position of Weyerhaeuser and its
consolidated Subsidiaries as of the close of such fiscal quarter and the
results of its operations and the operations of such consolidated
Subsidiaries during such fiscal quarter and the then elapsed portion of
the fiscal year, all certified (in the form of Exhibits D-1 and D-2, with
respect to Weyerhaeuser and WRECO, respectively) by one of its Financial
Officers as fairly presenting the financial position and results of
operations of each such Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, except
as therein noted, subject to appropriate year-end audit adjustments;
(c) concurrently with any delivery of financial statements under (a)
or (b) above, a certificate (in the form of Exhibits D-3 and D-4, with
respect to Weyerhaeuser and WRECO, respectively) of the accounting firm
or Financial Officer of such Borrower opining on or certifying such
statements (which certificate, when furnished by an accounting firm, may
be limited to accounting matters and disclaim responsibility for legal
interpretations) (i) certifying that no Event of Default or Default has
occurred or, if such an Event of Default or Default has occurred,
specifying the nature and extent thereof and any corrective action taken
or proposed to be taken with respect thereto, (ii) in the case of
Weyerhaeuser setting forth computations in reasonable detail satisfactory
to the Administrative Agent demonstrating compliance with the covenants
contained in Sections 6.01(d) and 6.01(e) and (iii) including a
reconciliation setting forth adjustments made to such financial
statements in order to make the calculations set forth in clause (ii)
above;
(d) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
it or any of its Subsidiaries
44
with the SEC, or with any national securities exchange, or distributed to its
shareholders, as the case may be;
(e) as soon as practicable, copies of such further financial
statements and reports as such Borrower shall send to banks with which it
has lines of credit, and all such financial statements and reports as
such Borrower shall send to its shareholders (unless all of the
outstanding shares of capital stock of such Borrower are held by one
Person);
(f) promptly, from time to time, such other information regarding
the operations, business affairs and financial condition of such Borrower
or any of its Subsidiaries, or compliance with the terms of any Loan
Document, as the Administrative Agent or any Lender may reasonably
request (it being understood that neither Borrower shall be required to
provide any information or documents which are subject to confidentiality
provisions the nature of which prohibit such disclosure);
(g) promptly, and in any event within 2 days, upon becoming aware
thereof, notice of any proposed or actual down-grade, suspension or
withdrawal of the rating provided by S&P or Moody's to Weyerhaeuser in
respect of its Senior Unsecured Long-Term Debt; and
(h) information required to be delivered pursuant to paragraphs (a),
(b), (d) and (e) shall be deemed to have been delivered on the date on
which Weyerhaeuser provides notice to the Administrative Agent that such
information has been posted on Weyerhaeuser 's website on the internet at
the website address listed on the signature pages thereof, at www.sec.gov
or at another website identified in such notice and accessible by the
Lenders without charge; provided that Weyerhaeuser shall deliver paper
copies of the reports and financial statements referred to in paragraphs
(a), (b), (d) and (e) of this Section 5.04 to the Administrative Agent or
any Lender who requests Weyerhaeuser to deliver such paper copies until
written notice to cease delivering paper copies is given by such
Administrative Agent or Lender to Weyerhaeuser.
Section 5.05 Litigation and Other Notices. Furnish to the
Administrative Agent (which shall promptly furnish to each Lender) prompt
written notice of the following:
(a) any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) proposed to be taken
with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any Governmental
Authority, against Weyerhaeuser, WRECO or any of their respective
Affiliates which, if adversely determined, could reasonably be expected
to result in a Material Adverse Effect;
(c) any development that has resulted in a Material Adverse Effect;
and
(d) the issuance by any Governmental Authority of any injunction,
order, decision or other restraint prohibiting, or having the effect of
prohibiting, the making of the Loans
45
or the initiation of any litigation or similar proceeding seeking any such
injunction, order or other restraint;
provided that in each case no Borrower shall be required to provide separate
notice of any event disclosed in any report promptly filed with the SEC.
Section 5.06 ERISA. As soon as possible and, in any event, within 10
Business Days after Weyerhaeuser knows of the occurrence of any of the
following events which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect, Weyerhaeuser will deliver to the
Administrative Agent a certificate of the Financial Officer of Weyerhaeuser
setting forth details as to such occurrence and such action, if any, which
Weyerhaeuser or an ERISA Affiliate is required or proposes to take, together
with any notices required or proposed to be given to or filed with or by
Weyerhaeuser or such ERISA Affiliate, the PBGC, a Plan participant or the Plan
administrator with respect thereto: (a) that a Reportable Event has occurred,
(b) that an accumulated funding deficiency has been incurred or an application
has been made to the Secretary of the Treasury for a waiver or modification of
the minimum funding standard (including any required installment payments) or
an extension of any amortization period under Section 412 of the Code with
respect to a Plan, (c) that a Plan has been or is in the process of being
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA, (d) that a Plan has an Unfunded Current Liability, (e) that proceedings
have been instituted to terminate a Plan, (f) that a proceeding has been
instituted pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Plan, or (g) that Weyerhaeuser or any ERISA Affiliate will
or is reasonably likely to incur any liability (including any contingent or
secondary liability) to or on account of the termination of or withdrawal from
a Plan under Section 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or with
respect to a Plan under Section 4975 of the Code or Section 409, 502(i) or
502(l) of ERISA. Weyerhaeuser will, upon written request, deliver to the
Administrative Agent a complete copy of the annual report (Form 5500) of each
Plan required to be filed with the Internal Revenue Service. In addition to
any certificates or notices delivered to the Administrative Agent pursuant to
the first sentence hereof, copies of annual reports and any other notices
received by Weyerhaeuser or any ERISA Affiliate required to be delivered to
the Administrative Agent hereunder shall be delivered to the Administrative
Agent no later than 10 Business Days after the later of the date such report
or notice has been filed with the Internal Revenue Service or the PBGC, given
to Plan participants, received by Weyerhaeuser or such ERISA Affiliate or
requested in writing by the Administrative Agent.
Section 5.07 Maintaining Records; Access to Properties and
Inspections. Maintain appropriate, accurate and complete financial records and
permit any representatives designated by the Administrative Agent to visit and
inspect the financial records and the properties of each such Borrower or any
of its Restricted Subsidiaries at reasonable times and, with reasonable prior
notice given to Weyerhaeuser, as often as requested and until a Default has
occurred at the expense of the Administrative Agent and to make extracts from
and copies of such financial records, and permit any representatives
designated by any Lender or the Administrative Agent to discuss the affairs,
finances and condition of Weyerhaeuser, WRECO or any such Restricted
Subsidiary with the officers thereof and independent accountants (so long as a
representative of Weyerhaeuser is present, or Weyerhaeuser has consented to
the absence of
46
such a representative) therefor (in each case subject to Weyerhaeuser's
obligations under applicable confidentiality provisions).
Section 5.08 Use of Proceeds. Use the proceeds of the Loans only for
the purposes set forth in the recitals to this Agreement.
Section 5.09 Environmental Matters. (a) (i) Comply in all material
respects with all Environmental Laws applicable to the ownership or use of any
real property owned or leased by such Borrower or any of its Subsidiaries,
except where such noncompliance is not, in any case or in the aggregate,
reasonably likely to have a Material Adverse Effect, (ii) include in all
material contracts with tenants and other persons occupying such real property
provisions to ensure such tenants' compliance in all material respects with
all such Environmental Laws, and diligently enforce and prosecute its rights
with respect to such provisions, (iii) pay or cause to be paid in the case of
sole liability, or, in the case of joint liability, to seek contribution or
compensation in respect of, all costs and expenses incurred in connection with
such compliance, except in respect to costs and expenses that are being
contested in good faith and for which such Borrower or such Subsidiary, as the
case may be, shall have set aside on its books appropriate reserves, and
except where failures to make such payments are not, in any case or in the
aggregate, reasonably likely to have a Material Adverse Effect, and (iv) use
its best efforts to keep or cause to be kept all such real property free and
clear of any liens imposed pursuant to any Environmental Laws, except in
respect to liens that are being contested in good faith, and except in respect
to liens the existence of which is not, in any case or in the aggregate,
reasonably likely to have a Material Adverse Effect.
(b) Neither such Borrower, nor any of its Subsidiaries will
generate, use, treat, store, Release, or permit the generation, use,
treatment, storage or Release of Hazardous Materials on any real property
owned or leased by such Borrower or any of its Subsidiaries, or transport or
permit the transportation of Hazardous Materials to or from any such real
property, except for quantities generated, used, treated, stored, or Released
on, or transported to or from, such real property in the ordinary course of
business in material compliance with all applicable Environmental Laws and,
except for such generation, use, treatment or storage on, or transportation to
or from, any such real property of Hazardous Materials as is not, in any case
or in the aggregate, reasonably likely to have a Material Adverse Effect.
(c) If the Administrative Agent receives any notice from such
Borrower pursuant to subsection (d) of this Section 5.09 or if the
Administrative Agent otherwise acquires knowledge of any Environmental Claim
which in the sole determination of the Required Lenders would have a Material
Adverse Effect with respect to such Borrower then upon the written request of
the Required Lenders, such Borrower will provide, at its sole cost and
expense, an environmental site assessment report concerning any real property
owned or leased by such Borrower or an affected Subsidiary prepared by an
environmental consulting firm approved by the Required Lenders, indicating the
presence or absence of Hazardous Materials and the potential costs of any
removal or remedial action in connection with any Hazardous Materials on any
real property owned or leased by such Borrower or any of its Subsidiaries.
(d) Such Borrower will immediately advise the Administrative Agent
in writing of any of the following:
47
(i) Any pending or threatened Environmental Claim against such
Borrower or any of its Subsidiaries or any real property owned or leased
by such Borrower or any of its Subsidiaries which if determined adversely
to such Borrower or any of its Subsidiaries would be reasonably likely to
have a Material Adverse Effect;
(ii) Any condition or occurrence on any real property owned or
leased by such Borrower or any of its Subsidiaries that (A) results in
noncompliance by such Borrower or any of its Subsidiaries with any
applicable Environmental Law which noncompliance is reasonably likely to
have a Material Adverse Effect, or (B) could reasonably be anticipated to
form the basis of an Environmental Claim against such Borrower or any of
its Subsidiaries or any real property owned or leased by such Borrower or
any of its Subsidiaries and which if determined adversely to such
Borrower or any of its Subsidiaries would be reasonably likely to have a
Material Adverse Effect;
(iii) Any condition or occurrence on any real property owned or
leased by such Borrower or any of its Subsidiaries or, to the actual
knowledge of such Borrower or any of its Subsidiaries, any property
adjoining or in the vicinity thereof that could reasonably be anticipated
to cause such real property to be subject to any restrictions on the
ownership, occupancy, use, or transferability thereof under any
Environmental Law which restrictions, in any case or in the aggregate,
are reasonably likely to have a Material Adverse Effect; and
(iv) The taking of any removal or remedial action in response to the
actual or alleged presence of any Hazardous Materials on any real
property owned or leased by such Borrower or any of its Subsidiaries the
taking of which, in any case or in the aggregate, is reasonably likely to
have a Material Adverse Effect.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence, or removal or remedial action and the
action which such Borrower or any of its Subsidiaries proposes to take in
response thereto.
Section 5.10 Performance of Transaction Agreements. Perform and
observe all of the material terms and provisions of the agreements to be
performed or observed by it with respect to the Transactions.
Section 5.11 OCBM Agreement. With respect to Weyerhaeuser, perform,
observe and comply with each of its covenants and agreements in the OCBM
Agreement, and do or cause to be done all things necessary to keep the OCBM
Agreement in full force and effect.
Section 5.12 Further Assurances. Promptly cause to be taken,
executed, acknowledged or delivered, at the sole expense of such Borrower, all
such further acts, documents and assurances as the Required Lenders may from
time to time reasonably request in order for such Borrower to carry out its
obligations hereunder and under the other Loan Documents.
Section 5.13 Guarantee. On or prior to March 31, 2003, cause the
Company either (i) to merge with and into Weyerhaeuser (with Weyerhaeuser
being the surviving
48
corporation) or (ii) to execute for the benefit of the Administrative Agent
and the Lenders a Guarantee, in form and substance reasonably satisfactory to
the Administrative Agent, pursuant to which the Company shall guarantee the
obligations of Weyerhaeuser arising under this Agreement and the other Loan
Documents; provided that the obligations of the Company under such Guarantee
shall rank in right of payment at least pari passu with all other unsecured
senior Indebtedness of the Company; and provided, further, that such Guarantee
shall be limited to an amount that would not render the Company insolvent. In
addition, to the extent the Company guarantees any obligations of Weyerhaeuser
with respect to an issuance by Weyerhaeuser of Indebtedness pursuant to a
public offering registered with the SEC, a Rule 144A or Regulation S private
placement or any other similar offering on an underwritten or placement-agent
basis, Weyerhaeuser shall cause the Company to execute, promptly but in any
case no later than forty-five days after the date of such issuance, for the
benefit of the Administrative Agent and the Lenders, a Guarantee, in form and
substance reasonably satisfactory to the Administrative Agent, pursuant to
which the Company shall equally and ratably guarantee the obligations of
Weyerhaeuser arising under this Agreement and the other Loan Documents;
provided that such Guarantee shall be limited to an amount that would not
render the Company insolvent.
ARTICLE VI
NEGATIVE COVENANTS
Section 6.01 Covenants of Weyerhaeuser. Weyerhaeuser covenants and
agrees with each Lender and the Administrative Agent that, so long as this
Agreement shall remain in effect or the principal of or interest on any Loan,
any Fees or any other expenses or amounts payable under any Loan Document
shall be unpaid, unless the Required Lenders shall otherwise consent in
writing, it will not, either directly or indirectly:
(a) Secured Indebtedness. (i) Issue, assume or guarantee, or permit
any of its Restricted Subsidiaries to issue, assume or guarantee, any
indebtedness for money borrowed (hereinafter in this Section 6.01(a)
referred to as "debt"), if such debt is secured by a deed of trust,
mortgage, pledge, security interest or other lien or encumbrance (any
deed of trust, mortgage, pledge, security interest or other lien or
encumbrance being hereinafter in this Section 6.01(a) referred to as a
"mortgage" or collectively "mortgages") upon or with respect to any
timber or timberlands of Weyerhaeuser or such Restricted Subsidiary
located in the States of Washington, Oregon, Arkansas, Oklahoma,
Mississippi or North Carolina, or upon or with respect to any principal
manufacturing plant of Weyerhaeuser or such Restricted Subsidiary located
anywhere in the United States of America, in either case now owned or
hereafter acquired, without in any such case effectively providing,
concurrently with the issuance, assumption or guarantee of any such debt,
that the Loans (together with, if Weyerhaeuser shall so determine, any
other indebtedness of or guarantee by Weyerhaeuser or such Restricted
Subsidiary ranking equally with the Loans and then existing or thereafter
created) shall be secured equally and ratably with (or prior to) such
debt; provided, however, that the foregoing restrictions shall not be
applicable to:
49
(1) mortgages upon or with respect to any property of any of
its Restricted Subsidiaries securing debt of such Restricted
Subsidiary to Weyerhaeuser or another Restricted Subsidiary of
Weyerhaeuser;
(2) mortgages upon or with respect to any property acquired,
constructed or improved by Weyerhaeuser or any of its Restricted
Subsidiaries after the date of this Agreement which are created,
incurred or assumed contemporaneously with, or within 90 days after,
such acquisition, construction or improvement, to secure or provide
for the payment of any part of the purchase price of such property
or the cost of such construction or improvement, or mortgages upon
or with respect to any property existing at the time of acquisition
thereof; provided, however, that in the case of any such
construction or improvement the mortgage shall not apply to any
property theretofore owned by Weyerhaeuser or any of its Restricted
Subsidiaries other than any theretofore unimproved real property on
which the property so constructed, or the improvement, is located;
(3) any extension, renewal or replacement of any mortgage
referred to in clause (2) above or clause (4) below; provided,
however, that the principal amount of indebtedness secured thereby
shall not exceed the principal amount of indebtedness so secured at
the time of such extension, renewal or replacement, and that such
extension, renewal or replacement shall be limited to all or part of
the same property which secured the mortgage so extended, renewed or
replaced; and
(4) any mortgage existing on any timber or timberlands of any
Person or upon or with respect to any principal manufacturing plant
of any Person at the time of acquisition by the Borrower or any of
its Restricted Subsidiaries of such Person.
(ii) Notwithstanding the provisions of paragraph (a)(i) of this
Section 6.01, Weyerhaeuser or any of its Restricted Subsidiaries may
issue, assume or guarantee secured debt which would otherwise be
subject to the foregoing restrictions in an aggregate amount which,
together with all other such debt of Weyerhaeuser and its Restricted
Subsidiaries and the Attributable Debt in respect of Sale and
Lease-Back Transactions (as defined in Section 6.01(b)) existing at
such time (other than Sale and Lease-Back Transactions permitted
because Weyerhaeuser would be entitled to incur debt secured by a
mortgage on the property to be leased without equally and ratably
securing the Loans pursuant to paragraph (a)(i) of this Section
6.01, and other than Sale and Lease-Back Transactions the proceeds
of which have been applied in accordance with clause (ii) of Section
6.01(b)), does not at the time exceed five percent (5%) of
Shareholders' Interest in Weyerhaeuser and its Restricted
Subsidiaries (as hereinafter defined). The term "Attributable Debt"
as used in this paragraph shall mean, as of any particular time, the
present value of the obligation of the lessee for rental payments
during the remaining term of any lease (including any period for
which such lease has been extended or may, at the option of the
lessor, be extended).
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(iii) For purposes of this Section 6.01(a), (A) the term
"principal manufacturing plant" shall not include any manufacturing
plant which, in the reasonable opinion of the Board of Directors of
Weyerhaeuser, is not a principal manufacturing plant of Weyerhaeuser
and its Restricted Subsidiaries; (B) the following types of
transactions shall not be deemed to create debt secured by a
mortgage: (1) the sale, mortgage or other transfer of timber in
connection with an arrangement under which Weyerhaeuser or any of
its Restricted Subsidiaries is obligated to cut such timber or a
portion thereof in order to provide the transferee with a specified
amount of money however determined; (2) the mortgage of any property
of Weyerhaeuser or any of its Restricted Subsidiaries in favor of
the United States, or any State, or any department, agency or
instrumentality of either, to secure partial, progress, advance or
other payments to Weyerhaeuser or any of its Restricted Subsidiaries
pursuant to the provisions of any contract or statute and (3) liens
existing on property at the time of acquisition of such property;
and (C) the term "Shareholders' Interest in Weyerhaeuser and its
Restricted Subsidiaries" shall mean the aggregate of capital and
surplus, including surplus resulting from the March 1, 1913
revaluation of timber and timberlands, of Weyerhaeuser and its
Restricted Subsidiaries, after deducting the cost of shares of
Weyerhaeuser held in treasury.
(b) Sale and Lease-Back. Enter into any arrangement, or permit
any Restricted Subsidiary to enter into any arrangement, with any
Person providing for the leasing by Weyerhaeuser or any of its
Restricted Subsidiaries of any real property in the United States
(except for temporary leases for a term of not more than three
years), which property has been or is to be sold or transferred by
Weyerhaeuser or such Restricted Subsidiary to such Person (herein
referred to as a "Sale and Lease-Back Transaction"), unless (i)
Weyerhaeuser or such Restricted Subsidiary would be entitled to
incur debt secured by a mortgage on the property to be leased
without equally or ratably securing the Loans pursuant to Section
6.01(a), or (ii) Weyerhaeuser applies an amount equal to the fair
value (as determined by the Board of Directors of Weyerhaeuser) of
the property so leased to the retirement (other than any mandatory
retirement), within 90 days of the effective date of any such Sale
and Lease-Back Transaction, of indebtedness for borrowed money
incurred or assumed by Weyerhaeuser which by its terms matures at,
or is extendible or renewable at the option of the obligor to, a
date more than 12 months after the date of the creation of such
debt.
(c) Merger, Consolidation, etc. Be a party to a merger or
consolidation or sell, transfer or otherwise dispose of all or
substantially all of its properties or assets in a single
transaction or in a series of related transactions unless (i) such
merger, consolidation, sale, transfer or disposition is made with
respect to another corporation incorporated and doing business
primarily within the United States of America which shall expressly
assume, in form and substance reasonably satisfactory to the
Required Lenders, the obligations of Weyerhaeuser under the Loan
Documents and Weyerhaeuser's Loans, and (ii) immediately after
giving effect to such merger, consolidation, sale, transfer or
disposition, no Default or Event of Default hereunder shall have
occurred and be continuing.
51
(d) Debt Ratio. Permit Total Funded Indebtedness to exceed (i)
on or after the Closing Date, 72% of the sum of Weyerhaeuser's Total
Adjusted Shareholders' Interest and Total Funded Indebtedness, (ii)
on or after December 31, 2003, 69% of such sum and (iii) on or after
June 30, 2005, 65% of such sum.
(e) Net Worth. At any time permit Weyerhaeuser's Total Adjusted
Shareholders' Interest to be less than $4,955,000,000.
(f) Change in Business. Engage in, or permit any Restricted
Subsidiary to engage in, any material business activities or
operations substantially different from, or unrelated to, the
business activities and operations conducted by it as of the date
hereof, except for reasonable extensions, developments and
modifications thereof.
Section 6.02 Covenants with respect to WRECO. WRECO covenants and
agrees with each Lender and the Administrative Agent that, so long as this
Agreement shall remain in effect or the principal of or interest on any Loan,
any Fees or any other expenses or amounts payable under any Loan Document
shall be unpaid, unless the Required Lenders shall otherwise consent in
writing, it will not, either directly or indirectly:
(a) Capital Base. Have a Capital Base less than $100,000,000.
(b) Limitation on Indebtedness. Create, issue, guarantee, assume or
otherwise become liable, directly or indirectly, or permit any of its
Restricted Subsidiaries to create, issue, guarantee, assume or otherwise
become liable, directly or indirectly, in respect of any (i) Senior Debt of
WRECO or Indebtedness of any of its Restricted Subsidiaries if, immediately
after giving effect to the incurrence thereof and to the application of the
proceeds thereof, the aggregate principal amount of all consolidated Senior
Debt of WRECO and its Restricted Subsidiaries then outstanding would exceed
80% of the sum of (x) the Capital Base plus (y) the aggregate principal amount
of Senior Debt of WRECO and its Restricted Subsidiaries then outstanding; or
(ii) Subordinated Debt of WRECO if, immediately after giving effect to the
incurrence thereof and to the application of the proceeds thereof, the
aggregate principal amount of Subordinated Debt of WRECO then outstanding
would exceed 100% of Adjusted Net Worth. For purposes of this Section and
Section 6.02(c), Indebtedness of a Person which becomes a Restricted
Subsidiary on any date shall be deemed to have been issued or incurred as of
such date.
(c) Limitation on Mortgages and Liens. Create, incur or permit to
exist any mortgage, pledge, encumbrance, lien, security interest or charge of
any kind (including liens or charges upon properties acquired or to be
acquired under conditional sales agreements or other title retention devices)
on its property or assets, whether now owned or hereafter acquired, or upon
any income or profits thereof, or permit any of its Restricted Subsidiaries to
do any of the foregoing, except:
(i) liens, charges, encumbrances and priority claims incidental
to the conduct of the business or the ownership of properties and
assets (including warehousemen's, attorneys' and statutory
landlords' liens) and liens, pledges or deposits in connection with
workmen's compensation, unemployment insurance,
52
old age benefit or social security obligations, taxes, assessments,
statutory obligations or other similar charges, liens of
contractors, mechanics and materialmen, good faith deposits in
connection with tenders, contracts or leases to which WRECO or any
of its Restricted Subsidiaries is a party or other deposits required
to be made in the ordinary course of business and not in connection
with the borrowing of money, easements, rights of way, restrictions
and other similar encumbrances that, in the aggregate, are not
substantial in amount and that do not in any case materially detract
from the value of the property subject thereto or substantially
interfere with the ordinary conduct of WRECO's business; provided in
each case the obligation secured is not overdue or, if overdue, is
being contested in good faith by appropriate proceedings;
(ii) provided that no Default or Event of Default has occurred
and is continuing, the pledge of assets for the purpose of securing
any appeal or stay or discharge in the course of any legal
proceeding and liens on or resulting from judgments or awards in
respect of which WRECO or any of its Restricted Subsidiaries shall
in good faith be prosecuting an appeal or proceeding for review;
(iii) mortgages, liens or security interests existing as of the
date of this Agreement securing obligations of WRECO or any of its
Restricted Subsidiaries outstanding on such date and all renewals,
extensions or refundings thereof (without increase in the principal
amount remaining unpaid at the time of any such renewal, extension
or refunding);
(iv) mortgages, liens or security interests securing
Indebtedness of a Restricted Subsidiary of WRECO to another
Restricted Subsidiary of WRECO or to WRECO;
(v) mortgages, conditional sale contracts, security interests
or other arrangements for the retention of title (including
financing leases), in addition to those permitted under
subparagraphs (iii), (iv), (vi) and (vii) hereof, given to secure
the payment of the purchase price incurred in connection with the
acquisition of property useful and intended to be used in carrying
on the business of WRECO or any of its Restricted Subsidiaries, and
liens existing on such property at the time of acquisition thereof
or at the time of acquisition by WRECO or a Restricted Subsidiary of
any Person then owning such property whether or not such existing
liens were given to secure the payment of the purchase price of the
property to which they attach; provided that the lien or charge
shall attach solely to the property acquired or purchased and any
improvements then or thereafter placed thereon;
(vi) mortgages, security interests and other encumbrances or
liens on Real Estate Assets, incurred or created in the ordinary
course of the business of WRECO and its Restricted Subsidiaries;
provided that the aggregate principal amount of all Indebtedness so
secured and at any one time outstanding shall not exceed 10% of the
Capital Base at such time; and
53
(vii) mortgages, conditional sale contracts, security interests
or other arrangements for the retention of title (including
financing leases), in addition to those specifically permitted by
foregoing subparagraphs (i) through (vi) hereof, given to secure the
payment of Senior Debt of WRECO or any of its Restricted
Subsidiaries, and any renewal, extension or refunding of any such
Senior Debt; provided that the aggregate principal amount of all
Senior Debt of WRECO and its Restricted Subsidiaries so secured and
at any one time outstanding shall not exceed 10% of the Capital Base
at such time.
In the event that any property is subjected to a lien or other
encumbrance in violation of this Section 6.02(c), WRECO will make or
cause to be made effective provision whereby the Loans shall be secured
equally and ratably with all other obligations secured thereby (provided,
however, that such violation shall constitute a default under this
Agreement whether or not such provision is made) and, if such provision
is not made, an equitable lien, so equally and ratably securing the
Loans, shall (to the extent permitted by law) exist on such property.
(d) Limitation on Mergers and Consolidations. Be a party to any
merger or consolidation unless (i) WRECO or a Weyerhaeuser Subsidiary (as
defined below) having substantially all of its assets and doing business
primarily in the United States of America shall be the surviving or
resulting corporation of any such merger or consolidation and immediately
after giving effect to any such merger or consolidation such successor
corporation, whether or not WRECO, shall be entitled to incur at least $1
of additional Senior Debt under Section 6.02(b); (ii) if the surviving or
resulting corporation is not WRECO, the surviving or resulting
corporation shall be a Weyerhaeuser Subsidiary incorporated within the
United States of America and shall expressly assume the obligations of
WRECO under this Agreement and the other Loan Documents to which it is a
party by supplemental agreement reasonably satisfactory to the
Administrative Agent; (iii) immediately after giving effect to any such
merger or consolidation, no Default or Event of Default shall have
occurred and be continuing; and (d) WRECO shall have delivered to the
Administrative Agent a certificate signed by two of WRECO's officers
stating that such merger or consolidation and, if a supplemental
agreement is required in connection therewith as aforesaid, such
supplemental agreement comply with the provisions described in this
paragraph. Upon the consummation of any merger or consolidation in which
the surviving or resulting corporation is not WRECO in accordance with
the foregoing provisions, the surviving or resulting corporation shall
succeed to and be substituted for, and may exercise every right and power
of and shall be subject to all of the obligations of, WRECO under this
Agreement and the other Loan Documents to which it is a party, with the
same effect as if it had been named as WRECO therein. As used in this
paragraph, the term "Weyerhaeuser Subsidiary" means a corporation at
least 79% of whose issued and outstanding shares of capital stock at the
time outstanding and having ordinary voting power for the election of a
majority of the directors of such corporation shall be owned and
controlled by Weyerhaeuser or a wholly owned Subsidiary of Weyerhaeuser.
54
(e) Limitation on Sale of Assets. Sell, transfer or otherwise
dispose of all or substantially all of its properties and assets in a
single transaction or in a series of related transactions unless (i) the
consideration received therefor shall consist of cash, securities or
other properties having an aggregate fair value (as determined in good
faith by the Board of Directors of WRECO) equal to not less than the
aggregate fair value (as determined in good faith by the Board of
Directors of WRECO) of the properties and assets so sold, transferred or
otherwise disposed of; (ii) immediately after giving effect thereto WRECO
shall be entitled to incur at least $1 of additional Senior Debt under
Section 6.02(b); (iii) immediately after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing; and
(iv) WRECO shall have delivered to the Administrative Agent a certificate
signed by two of WRECO's officers stating that such transaction complies
with the provisions described in this paragraph.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01 Events of Default. In case of the happening of any of
the events under Sections 7.01(a) through 7.01(l) below (an "Event of
Default"):
(a) default shall be made in the payment by a Borrower of any
principal of any Loan, when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for prepayment thereof
or by acceleration thereof or otherwise;
(b) default shall be made in the payment by a Borrower of any
interest on any Loan or any Fee or any other amount (other than an amount
referred to in Section 7.01(a) above) due under any Loan Document, when
and as the same shall become due and payable, and such default shall
continue unremedied for a period of five days;
(c) any representation or warranty made or deemed made by a Borrower
in or in connection with any Loan Document or the Borrowings hereunder,
or any representation, warranty, statement or information contained in
any report, certificate, financial statement or other instrument
furnished in connection with or pursuant to any Loan Document, shall
prove to have been false or misleading in any material respect when so
made, deemed made or furnished;
(d) default shall be made in the due observance or performance by a
Borrower or any of its Subsidiaries (or its respective Restricted
Subsidiaries, if such covenant, condition or agreement applies only to
Restricted Subsidiaries) of any covenant, condition or agreement
contained in Section 5.01(a), Section 5.05(a), Section 5.13 or in Article
VI;
(e) default shall be made in the due observance or performance by a
Borrower or any of its Subsidiaries (or its Restricted Subsidiaries, if
such covenant, condition or agreement applies only to Restricted
Subsidiaries) of any covenant, condition or agreement contained in any
Loan Document (other than those specified
55
in Sections 7.01(a), 7.01(b), 7.01(c) or 7.01(d)) and such default shall
continue unremedied for a period of thirty days after notice thereof from
the Administrative Agent or any Lender to such Borrower;
(f) a Borrower or any of its Restricted Subsidiaries shall (i) fail
to pay, when and as the same shall become due and payable (and such
failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument related to such Indebtedness)
any principal or interest, regardless of amount, due in respect of
Indebtedness in an aggregate principal amount in excess of $100,000,000,
or (ii) fail to observe or perform any other terms, covenants, conditions
or agreements contained in any agreements or instruments evidencing or
governing Indebtedness in an aggregate principal amount in excess of
$100,000,000 (and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument related to such
Indebtedness), if the effect of any failure or failures referred to in
this Section 7.01(f)(ii) is to cause or permit the holder or holders of
such Indebtedness or a trustee on its or their behalf (with or without
the giving of notice) to cause, such Indebtedness to become due prior to
its stated; provided that any Transaction-Related Event of Default that,
but for this proviso, would be a Default or an Event of Default pursuant
to this Section 7.01(f) prior to November 11, 2002, shall be deemed to be
neither a Default nor an Event of Default;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of a Borrower or any of its Restricted Subsidiaries, or
of a substantial part of the property or assets of such Borrower or any
of its Restricted Subsidiaries, under Title 11 of the United States Code,
as now constituted or hereafter amended, or any other Federal or state
bankruptcy, insolvency, receivership or similar law, (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar
official for such Borrower or any of its Restricted Subsidiaries or for a
substantial part of the property or assets of such Borrower or any of its
Restricted Subsidiaries or (iii) the winding-up or liquidation of such
Borrower or any of its Restricted Subsidiaries; and such proceeding or
petition shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered;
(h) a Borrower or any of its Restricted Subsidiaries shall (i)
voluntarily commence any proceeding or file any petition seeking relief
under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other Federal or state bankruptcy, insolvency,
receivership or similar law, (ii) consent to the institution of, or fail
to contest in a timely and appropriate manner, any proceeding or the
filing of any petition described in Section 7.01(g) above, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for such Borrower or any of
its Restricted Subsidiaries or for a substantial part of the property or
assets of such Borrower or any of its Restricted Subsidiaries, (iv) file
an answer admitting the material allegations of a petition filed against
it in any such proceeding, (v) make a general assignment for the benefit
of creditors, (vi) become unable, admit in writing its
56
inability or fail generally to pay its debts as they become due or (vii)
take any action for the purpose of effecting any of the foregoing;
(i) one or more judgments for the payment of money in an aggregate
amount in excess of $100,000,000 shall be rendered against a Borrower or
any of its Restricted Subsidiaries or any combination thereof and the
same shall remain undischarged for a period of 30 consecutive days during
which execution shall not be effectively stayed, or any action shall be
legally taken by a judgment creditor to levy upon assets or properties of
such Borrower or any of its Restricted Subsidiaries to enforce any such
judgment;
(j) any Plan shall fail to satisfy the minimum funding standard
required for any plan year or a waiver of such standard or extension of
any amortization period is sought or granted under Section 412 of the
Code, any Plan is, shall have been or is likely to be terminated or the
subject of termination proceedings under ERISA, any Plan shall have an
Unfunded Current Liability, or Weyerhaeuser has incurred or is likely to
incur a liability to or on account of a Plan under Sections 409, 502(i),
502(l), or 515 of ERISA or Section 4975 of the Code, or Weyerhaeuser or
any ERISA Affiliate has incurred or is likely to incur a liability to or
on account of a Plan under Sections 4062, 4063, 4064, 4069, 4201 or 4204
of ERISA; and there shall result from any such event or events referred
to in this Section 7.01(j) the imposition of a lien upon the assets of
Weyerhaeuser or any ERISA Affiliate, the granting of a security interest,
a liability or a material risk of incurring a liability to the PBGC or
the Internal Revenue Service or a Plan or a trustee appointed under ERISA
or a liability or a material risk of incurring a liability under Sections
409, 502(i) or 502(l) of ERISA or under Sections 4971 or 4975 of the
Code; which, in the good faith determination of the Required Lenders,
will have a Material Adverse Effect;
(k) there shall have occurred a Change in Control of a Borrower; or
(l) the OCBM Agreement shall cease, for any reason, to be in full
force and effect, or Weyerhaeuser shall contest the validity or
enforceability thereof or otherwise fail to comply with its obligations
thereunder;
then, and in every such event (other than an event with respect to a Borrower
described in Section 7.01(g) or 7.01(h) above), and at any time thereafter
during the continuance of such event, the Administrative Agent, at the request
of the Required Lenders, shall, by notice to the Borrowers, take any or all of
the following actions, at the same or different times: (i) terminate forthwith
the Commitments of the Lenders, (ii) declare the Loans then outstanding to the
Borrowers to be forthwith due and payable in whole or in part, whereupon the
principal of the Loans so declared to be due and payable, together with
accrued interest thereon and any unpaid accrued Fees and all other liabilities
of the Borrowers accrued hereunder and under any other Loan Document, shall
become forthwith due and payable, without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived by the
Borrowers, anything contained herein or in any other Loan Document to the
contrary notwithstanding; and in any event with respect to a Borrower
described in Sections 7.01(g) or 7.01(h) above, the Commitments of the Lenders
shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and any unpaid accrued Fees and all
other
57
liabilities of the Borrowers accrued hereunder and under any other Loan
Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrowers, anything contained herein or in any other
Loan Document to the contrary notwithstanding.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
Section 8.01 The Administrative Agent. In order to expedite the
transactions contemplated by this Agreement, JPMorgan Chase Bank is hereby
appointed to act as Administrative Agent on behalf of the Lenders. Each of the
Lenders, and each assignee thereof, hereby irrevocably authorizes the
Administrative Agent to take such actions on behalf of such Lender and to
exercise such powers as are specifically delegated to the Administrative Agent
by the terms and provisions hereof, together with such actions and powers as
are reasonably incidental thereto.
The Administrative Agent is hereby expressly authorized by the
Lenders, without hereby limiting any implied authority, (a) to receive on
behalf of the Lenders, all payments of principal of and interest on the Loans
and all other amounts due to the Lenders hereunder, and promptly to distribute
to each Lender its proper share of each payment so received; (b) to give
prompt notice on behalf of each of the Lenders to the Borrowers of any Event
of Default specified in this Agreement of which the Administrative Agent has
actual knowledge acquired in connection with its agency hereunder; and (c) to
distribute promptly to each Lender copies of all notices, financial statements
and other materials delivered by the Borrowers pursuant to this Agreement as
received by the Administrative Agent.
Neither the Administrative Agent nor any of its directors, officers,
employees or agents shall be liable as such to any Lender for any action taken
or omitted by any of them except for its or his own gross negligence or
willful misconduct, or be responsible for any statement, warranty or
representation herein or the contents of any document delivered in connection
herewith, or be required to ascertain or to make any inquiry concerning the
performance or observance by the Borrowers of any of the terms, conditions,
covenants or agreements contained in any Loan Document. The Administrative
Agent shall not be responsible to the Lenders for (i) the due execution,
genuineness, validity, enforceability or effectiveness of this Agreement or
any other Loan Documents or other instruments or agreements or (ii) the
satisfaction of any condition set forth in any Loan Document, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent. The duties of the Administrative Agent shall be
mechanical and administrative in nature; the Administrative Agent shall not
have by reason of this Agreement or any other Loan Document a fiduciary
relationship in respect of any Lender. The Administrative Agent shall in all
cases be fully protected in acting, or refraining from acting, in accordance
with written instructions signed by the Required Lenders or the Lenders, as
the case may be, and, except as otherwise specifically provided herein, such
instructions and any action or inaction pursuant thereto shall be binding on
all of the Lenders. The Administrative Agent shall, in the absence of
knowledge to the contrary, be entitled to rely on any instrument or document
believed by it to be genuine and correct and to
58
have been signed or sent by the proper person or persons. The Administrative
Agent may also rely upon any statement made to it orally or by telephone and
believed to be made by the proper Person, and shall not incur any liability
for relying thereon.
Neither the Administrative Agent nor any of its directors, officers,
employees or agents shall have any responsibility to the Borrowers on account
of the failure of or delay in performance or breach by any Lender of any of
its obligations hereunder or to any Lender on account of the failure of or
delay in performance or breach by any other Lender or the Borrowers of any of
their respective obligations hereunder or under any other Loan Document or in
connection herewith or therewith. The foregoing shall not limit the
obligations of JPMorgan Chase Bank (or its successors and assigns) in its
capacity as Lender hereunder. The Administrative Agent may execute any and all
duties hereunder by or through agents or employees and shall be entitled to
rely upon the advice of legal counsel (who may be counsel for a Borrower),
independent accountants and other experts selected by it with respect to all
matters arising hereunder and shall not be liable for any action taken or
suffered in good faith by it in accordance with the advice of such counsel.
The exculpatory provisions of this Article VIII shall apply to any such agent
or employee, and shall apply to their respective activities in connection with
the syndication of the credit facilities provided for herein as well as
activities as Administrative Agent.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting the generality of
the foregoing, the Lenders hereby acknowledge that (a) the Administrative
Agent shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default or Event of Default has occurred and is
continuing, (b) the Administrative Agent shall be under no duty to take any
discretionary action permitted to be taken by it pursuant to the provisions of
this Agreement unless it shall be requested in writing to do so by the
Required Lenders or the Lenders, as the case may be, and (c) except as
expressly set forth herein, the Administrative Agent shall not have any duty
to disclose, and shall not be liable for the failure to disclose, any
information relating to the Borrowers or any of their respective Subsidiaries
that is communicated to or obtained by the Administrative Agent or any of its
Affiliates in any capacity.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent may resign at
any time by notifying the Lenders and the Borrowers. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor.
If no successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent which shall be a bank with an office in New York, New
York, having a combined capital and surplus of at least $500,000,000 or an
Affiliate of any such bank. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor bank, such successor shall
succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. After the
Administrative Agent's resignation hereunder, the provisions of this Article
and Section 9.05 shall continue in effect for
59
its benefit in respect of any actions taken or omitted to be taken by it while
it was acting as Administrative Agent.
With respect to the Loans made by it hereunder, the Administrative
Agent in its individual capacity and not as Administrative Agent shall have
the same rights and powers as any other Lender and may exercise the same as
though it were not the Administrative Agent, and the Administrative Agent and
its Affiliates may accept deposits from, lend money to and generally engage in
any kind of business with the Borrowers or any of their respective
Subsidiaries or other Affiliate thereof as if it were not the Administrative
Agent.
Each of the Lenders agrees (i) to reimburse the Administrative
Agent, on demand, in the amount of its pro rata share (based on its Commitment
hereunder) of any expenses incurred for the benefit of the Lenders by the
Administrative Agent, including counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Lenders, which shall not
have been reimbursed by the Borrowers and (ii) to indemnify and hold harmless
the Administrative Agent and any of its directors, officers, employees or
agents, on demand, in the amount of such pro rata share, from and against any
and all liabilities, taxes, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against it in its
capacity as the Administrative Agent or any of them in any way relating to or
arising out of this Agreement or any other Loan Document or any action taken
or omitted by it or any of them under this Agreement or any other Loan
Document, to the extent the same shall not have been reimbursed by the
Borrowers; provided that no Lender shall be liable to the Administrative Agent
for any portion of such liabilities, taxes, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or willful misconduct of the
Administrative Agent or any of its directors, officers, employees, or agents.
Each of the Lenders acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each of the Lenders
also acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make
its own decisions in taking or not taking action under or based upon this
Agreement or any other Loan Document, any related agreement or any document
furnished hereunder or thereunder.
Section 8.02 Other Agents. Each of the Lenders and each of the
Borrowers acknowledges (A) that each of the Lead Arrangers, the Joint Book
Runners, the Syndication Agent and the Co-Documentation Agents, in their
capacity as, respectively, Lead Arranger, Joint Book Runner, Syndication Agent
and the Co-Documentation Agent, do not have any responsibility or liability
hereunder, and (B) that the titles "Lead Arranger," "Joint Book Runner,"
"Syndication Agent" and "Co-Documentation Agent" are purely honorary in
nature.
ARTICLE IX
MISCELLANEOUS
60
Section 9.01 Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed or sent by telecopy to the address specified below, or such
other address as such party shall hereafter have specified by written notice
to the Administrative Agent and the Borrowers:
(a) if to a Borrower by hand or courier service, to such Borrower at
33663 Weyerhaeuser Way South, Federal Way, Washington, or by facsimile to
(253) 924-3543, in each case to the Attention of Vice President and
Treasurer with a copy to Secretary;
(b) if to the Administrative Agent or a Lender, to it at its address
(or telecopy number) set forth in Schedule 9.01 or in the Assignment and
Acceptance pursuant to which such Lender became a party hereto.
All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier service
or sent by telecopy or other telegraphic communications equipment of the
sender, in each case delivered, sent or mailed (properly addressed) to such
party as provided in this Section 9.01 or in accordance with the latest
unrevoked direction from such party given in accordance with this Section
9.01.
Section 9.02 Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrowers herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and shall survive the making of the Loans
regardless of any investigation made by the Lenders or on their behalf, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any Fee or any other amount payable under this
Agreement or any other Loan Document is outstanding and unpaid and so long as
the Commitments hereunder have not been terminated. The Commitment Letter
shall terminate on the Closing Date.
Section 9.03 Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrowers and the Administrative Agent
and when the Administrative Agent shall have received copies hereof which,
when taken together, bear the signatures of each Lender and thereafter shall
be binding upon and inure to the benefit of the Borrowers, the Administrative
Agent, each Lender, and their respective successors and assigns, except that,
other than as provided in Section 6.01(c) and Section 6.02(d), neither
Borrower shall have the right to assign or delegate its rights or obligations
hereunder or any interest herein without the prior consent of all the Lenders.
Section 9.04 Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that,
other than as provided in Section 6.01(c) and Section 6.02(d), neither
Borrower may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by a Borrower without such consent shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby and, to the extent expressly
61
contemplated hereby, the Related Parties of each of the Administrative Agent
and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans at the time owing to it); provided that (i)
except in the case of an assignment to a Lender or a Lender Affiliate, each of
the Borrowers and the Administrative Agent must give their prior written
consent to such assignment (which consent shall not be unreasonably withheld
or delayed), (ii) except in the case of an assignment to a Lender or a Lender
Affiliate or an assignment of the entire remaining amount of the assigning
Lender's Commitment, the amount of the Commitment of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Administrative
Agent) shall not be less than $5,000,000 unless each of the Borrowers and the
Administrative Agent otherwise consent, (iii) each partial assignment shall be
made as an assignment of a proportionate part of all the assigning Lender's
rights and obligations under this Agreement, (iv) the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Acceptance, together with a processing and recordation fee of $3,500, and
(v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; and provided further
that any consent of a Borrower otherwise required under this paragraph shall
not be required if a Default or Event of Default has occurred and is
continuing. Subject to acceptance and recording thereof pursuant to paragraph
(d) of this Section, from and after the effective date specified in each
Assignment and Acceptance the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of
the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to
the benefits of Sections 2.11, 2.13, 2.17 and 9.05). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does
not comply with this paragraph shall be treated for purposes of this Agreement
as a sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrowers, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall
be conclusive, and the Borrowers, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrowers and any Lender, at any reasonable time and from
time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire
62
(unless the assignee shall already be a Lender hereunder), the processing and
recordation fee referred to in paragraph (b) of this Section and any written
consent to such assignment required by paragraph (b) of this Section, if any,
the Administrative Agent shall accept such Assignment and Acceptance and
record the information contained therein in the Register. No assignment shall
be effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrowers, sell
participations to one or more banks or other entities (a "Participant") in all
or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the
Borrowers, the Administrative Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve
any amendment, modification or waiver of any provision of this Agreement;
provided that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.08(b) that
affects such Participant. Subject to paragraph (f) of this Section, the
Borrowers agree that each Participant shall be entitled to the benefits of
Sections 2.11, 2.13 and 2.17 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.06 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.15 as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.11 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrowers' prior written consent.
(g) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement and the other Loan
Documents (including, without limitation, any notes held by it pursuant to
Section 2.05(e)) to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank, without notice to,
or consent of the Borrower or the Administrative Agent, and this Section shall
not apply to any such pledge or assignment of a security interest; provided
that no such pledge or assignment of a security interest shall release a
Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.
(h) Weyerhaeuser authorizes each Lender to disclose to any
Participant or assignee and any prospective Participant or assignee any and
all financial information in such Lender's possession concerning Weyerhaeuser
or any Subsidiary of Weyerhaeuser which has been delivered to such Lender by a
Borrower in connection with such Lender's credit evaluation of a Borrower
prior to entering into this Agreement; provided that such Participant or
assignee
63
or prospective Participant or assignee agrees to treat any such information
which is not public as confidential in accordance with the terms of the
Agreement.
Section 9.05 Expenses; Indemnity. (a) The Borrowers jointly and
severally agree to pay all reasonable out-of-pocket expenses incurred by the
Administrative Agent in connection with the preparation of this Agreement and
the other Loan Documents or in connection with any amendments, modifications
or waivers of the provisions hereof or thereof (whether or not the
transactions hereby contemplated shall be consummated) or incurred by the
Administrative Agent or any Lender in connection with the enforcement or
protection of their rights in connection with this Agreement and the other
Loan Documents or in connection with the Loans made, including the fees and
disbursements of Shearman & Sterling, special counsel for the Administrative
Agent, and, in connection with any such amendment, modification or waiver made
in connection with any such enforcement or protection, the fees and
disbursements of any other counsel for the Administrative Agent or any Lender.
The Borrowers further agree jointly and severally that they shall indemnify
the Lenders from and hold them harmless against any documentary taxes,
assessments or charges made by any Governmental Authority by reason of the
execution and delivery of this Agreement or any of the other Loan Documents.
(b) Each Borrower will indemnify the Administrative Agent, each
Lender, and its directors, officers, employees and agents (each such person
being called an "Indemnitee") against, and to hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including reasonable counsel fees and expenses, incurred by or asserted
against any Indemnitee arising out of, in any way connected with, or as a
result of (i) the execution or delivery by such Borrower of this Agreement or
any other Loan Document or any agreement or instrument contemplated hereby or
thereby, the performance by the parties thereto of their respective
obligations thereunder or the consummation of the Transactions and the other
transactions contemplated hereby and thereby, (ii) the use of the proceeds of
the Loans by such Borrower or (iii) any claim, litigation, investigation or
proceeding relating to any of the foregoing, whether or not any Indemnitee is
a party thereto; provided that such indemnity shall not, as to any Indemnitee,
be available to the extent that such losses, claims, damages, liabilities or
related expenses have resulted from the gross negligence or willful misconduct
of such Indemnitee.
(c) It is understood and agreed that, to the extent not precluded by
a conflict of interest, each Indemnitee shall endeavor to work cooperatively
with Weyerhaeuser with a view toward 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 Indemnitee, it is
anticipated that a single counsel selected by Weyerhaeuser may be used.
Settlement of any claim or litigation involving any material indemnified
amount will require the approval of Weyerhaeuser (not to be unreasonably
withheld).
(d) The provisions of this Section 9.05 shall remain operative and
in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any term
or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent or any Lender.
All amounts due under this Section 9.05 shall be payable on written demand
therefor.
64
Section 9.06 Right of Setoff. If any Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, without notice to such Borrower (any such notice being
expressly waived by such Borrower), 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 and other indebtedness at any time
owing by such Lender or any of its respective Affiliates to or for the credit
or the account of such Borrower against any of and all the obligations of such
Borrower now or hereafter existing under this Agreement and any other Loan
Documents held by such Lender, irrespective of whether or not such Lender
shall have made any demand under this Agreement or such other Loan Document
and although such obligations may be unmatured. The rights of each Lender
under this Section 9.06 are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
Section 9.07 Applicable Law. THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS AND THE RIGHTS AND OBLIGATIONS THEREUNDER OF THE PARTIES THERETO
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK.
Section 9.08 Waivers; Amendment. (a) No failure or delay of the
Administrative Agent or any Lender in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof
or the exercise of any other right or power. The rights and remedies of the
Administrative Agent and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies which
they would otherwise have. No waiver of any provision of this Agreement or any
other Loan Document or consent to any departure by the Borrowers therefrom
shall in any event be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver or consent shall be effective only
in the specific instance and for the purpose for which given. No notice or
demand on the Borrowers in any case shall entitle the Borrowers to any other
or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrowers and the Required Lenders; provided, however,
that no such agreement shall (i) change the principal amount of, or extend or
advance the maturity of or any date for the scheduled payment of any principal
of or interest on, any Loan, or waive or excuse any such scheduled payment or
any part thereof, or decrease the rate of interest on any Loan, without the
prior written consent of each Lender affected thereby, (ii) change the
Commitment or decrease or extend any date for the payment of the Facility Fees
of any Lender without the prior written consent of such Lender, or (iii) amend
or modify the provisions of Section 2.14, the provisions of Section 2.19, the
provisions of this Section 9.08 or the definition of "Termination Date" or
"Required Lenders," without the prior written consent of each Lender; provided
further that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent hereunder without the prior
written consent of the Administrative Agent. Each Lender shall be bound by any
waiver, amendment or modification authorized by this Section 9.08, and
65
any consent by any Lender pursuant to this Section 9.08 shall bind any person
subsequently acquiring a Loan from it.
Section 9.09 Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the applicable interest rate, together
with all fees and charges which are treated as interest under applicable law
(collectively the "Charges"), as provided for herein or in any other Loan
Document, or otherwise contracted for, charged, received, taken or reserved by
any Lender, shall exceed the maximum lawful rate (the "Maximum Rate") which
may be contracted for, charged, taken, received or reserved by such Lender in
accordance with applicable law, the rate of interest payable with respect to
each Loan owing to each Lender, together with all Charges payable to such
Lender, shall be limited to the Maximum Rate.
Section 9.10 Entire Agreement. This Agreement and the other Loan
Documents and the letter agreements referred to in Section 2.04(b) (with
respect to the payment of fees only) constitute the entire contract between
the parties relative to the subject matter hereof. Any previous agreement
among the parties with respect to the subject matter hereof is superseded by
this Agreement and the other Loan Documents. Nothing in this Agreement or in
the other Loan Documents, expressed or implied, is intended to confer upon any
party other than the parties hereto and thereto any rights, remedies,
obligations or liabilities under or by reason of this Agreement or the other
Loan Documents.
Section 9.11 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS,
AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION 9.11.
Section 9.12 Severability. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby. The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
Section 9.13 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract, and shall become
effective as provided in Section 9.03.
66
Section 9.14 Headings. The cover page, the Article and Section
headings and the Table of Contents used herein are for convenience of
reference only, are not part of this Agreement and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Agreement.
Section 9.15 Jurisdiction; Consent to Service of Process. (a) Each
of the Borrowers hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any New York State court
or Federal court of the United States of America sitting in New York City, and
any appellate court from any thereof, in any action or proceeding arising out
of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of
any such action or proceeding may be heard and determined in such New York
State or, to the extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement
shall affect any right that any Lender or the Administrative Agent may
otherwise have to bring any action or proceeding relating to this Agreement or
the other Loan Documents against either Borrower or its properties in the
courts of any jurisdiction.
(b) Each of the Borrowers hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement or the
other Loan Documents in any New York State or Federal court located in New
York City. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(c) Each of the Borrowers hereby irrevocably designates, appoints
and empowers CT Corporation System, Inc. presently located at 111 Eighth
Avenue, New York, New York 10011, as its designee, appointee and
attorney-in-fact to receive, accept and acknowledge for and on its behalf, and
in respect of its property, service of any and all legal process, summons,
notices and documents which may be served in any such action or proceeding. If
for any reason such designee, appointee and attorney-in-fact shall cease to be
available to act as such, each Borrower agrees to designate a new designee,
appointee and attorney-in-fact in New York City on the terms and for purposes
of this provision satisfactory to the Administrative Agent. Each party to this
Agreement irrevocably consents to service of process in the manner provided
for notices in Section 9.01. Nothing in this Agreement will affect the right
of any party to this Agreement to serve process in any other manner permitted
by law.
Section 9.16 Domicile of Loans. Each Lender may transfer and carry
its Loans at, to or for the account of any office, subsidiary or Affiliate of
such Lender.
Section 9.17 Restricted and Unrestricted Subsidiaries. (a) Set forth
on Schedule 3.08 Part I is a list of all of the Restricted Subsidiaries and
Unrestricted Subsidiaries of Weyerhaeuser as of the Closing Date.
67
(b) Set forth on Schedule 3.08 Part II is a list of all of the
Restricted Subsidiaries and Unrestricted Subsidiaries of WRECO as of the
Closing Date.
(c) After the Closing Date, a Financial Officer of Weyerhaeuser may,
provided that no Default or Event of Default has occurred and is continuing,
designate a Restricted Subsidiary as an Unrestricted Subsidiary by notice sent
to all of the Lenders, provided that (i) no such designation shall be
effective unless immediately after giving effect thereto there would exist no
Default or Event of Default; (ii) any such designation shall be effective not
less than five Business Days after written notice thereof shall have been
provided to each Lender; and (iii) upon such designation, Schedule 3.08 Part I
shall be deemed to be amended to reflect such designation. Any Person that
becomes a Subsidiary (by formation, acquisition, merger or otherwise) after
the Closing Date shall automatically be deemed to be a Restricted Subsidiary
of Weyerhaeuser as of the date it becomes a Subsidiary unless designated as an
Unrestricted Subsidiary pursuant to the terms hereof.
(d) After the Closing Date, a Financial Officer of Weyerhaeuser may,
provided that no Default or Event of Default has occurred and is continuing,
designate an Unrestricted Subsidiary as a Restricted Subsidiary by notice sent
to all of the Lenders, provided that (w) no such designation shall be
effective unless immediately after giving effect thereto there would exist no
Default or Event of Default; (x) no such designation shall be effective unless
immediately after giving effect thereto Weyerhaeuser is in compliance with
Sections 6.01(d) and 6.01(e); (y) any such designation shall be effective not
less than five Business Days after written notice thereof shall have been
provided to each Lender; and (z) upon such designation, Schedule 3.08 Part I
shall be deemed to be amended to reflect such designation.
(e) After the Closing Date, any Subsidiary of WRECO (i) which is
organized and existing under the laws of the United States or any state of the
United States, Puerto Rico or the Dominion of Canada or any province thereof
and (ii) of which substantially all of the physical properties are located,
and substantially all of the business is carried on, in the United States of
America, Puerto Rico or Canada may, provided that no Default or Event of
Default has occurred and is continuing, be designated as a Restricted
Subsidiary by WRECO, subject to the limitations described in Subsection
9.17(f) below. Any Person that becomes a Subsidiary of WRECO (by formation,
acquisition, merger or otherwise) after the Closing Date shall automatically
be deemed to be an Unrestricted Subsidiary of WRECO as of the date it becomes
a Subsidiary unless designated as a Restricted Subsidiary pursuant to the
terms hereof.
(f) After the Closing Date, Weyerhaeuser may, provided that no
Default or Event of Default has occurred and is continuing, cause a Financial
Officer of WRECO to designate an Unrestricted Subsidiary as a Restricted
Subsidiary by notice sent to all of the Lenders, provided that (v) such
Subsidiary satisfies the requirements of Subsection 9.17(e) above; (w) no such
designation shall be effective unless immediately after giving effect thereto
there would exist no Default or Event of Default; (x) WRECO could incur at
least $1 of additional Senior Debt under Subsection 6.02(b); (y) any such
designation shall be effective not less than five Business Days after written
notice thereof shall have been provided to each Lender; and (z) upon such
designation, Schedule 3.08 Part II shall be deemed to be amended to reflect
such designation.
68
(g) After the Closing Date, Weyerhaeuser may, provided that no
Default or Event of Default has occurred and is continuing, cause a Financial
Officer of WRECO to designate a Restricted Subsidiary as an Unrestricted
Subsidiary by notice sent to all of the Lenders, provided that (v) no such
designation shall be effective unless immediately after giving effect thereto
there would exist no Default or Event of Default; (w) WRECO could incur at
least $1 of additional Senior Debt under Subsection 6.02(b); (x) the aggregate
amount of Real Estate Assets owned by all Subsidiaries of WRECO, determined on
a consolidated basis, which have been or are to be, as the case may be,
designated as Unrestricted Subsidiaries during the 365 consecutive days ending
on and including the effective date of such proposed designation, shall not
exceed 15% of the aggregate amount of Real Estate Assets owned by WRECO and
its Restricted Subsidiaries as of the beginning of such 365 day period; (y)
any such designation shall be effective not less than five Business Days after
written notice thereof shall have been provided to each Lender; and (z) upon
such designation, Schedule 3.08 Part II shall be deemed to be amended to
reflect such designation.
[Remainder of page intentionally left blank.]
69
IN WITNESS WHEREOF, the Borrowers, the Administrative Agent, the
Syndication Agent, the Co-Documentation Agents and the Lenders have caused
this Agreement to be duly executed by their respective authorized officers as
of the day and year first above written.
WEYERHAEUSER COMPANY, as Borrower,
By: /s/ JEFFREY W. NITTA
---------------------------
Name: Jeffrey W. Nitta
Title: Vice President and
Treasurer
WEYERHAEUSER REAL ESTATE COMPANY,
as Borrower,
By: /s/ JEFFREY W. NITTA
---------------------------
Name: Jeffrey W. Nitta
Title: Vice President and
Treasurer
70
JPMORGAN CHASE BANK,
individually and as Administrative
Agent,
By: /s/ WILLIAM P. RINDFUSS
---------------------------
Name: William P. Rindfuss
Title: Vice President
71
MORGAN STANLEY SENIOR FUNDING, INC.,
individually and as Syndication
Agent,
By: /s/ LUCY K. GALBRAITH
---------------------------
Name: Lucy K. Galbraith
Title: Vice President
72
THE BANK OF TOKYO-MITSUBISHI, LTD.,
PORTLAND BRANCH,
individually and as Co-Documentation
Agent,
By: /s/ JUNJI BAN
---------------------------
Name: Junji Ban
Title: General Manager
73
DEUTSCHE BANC ALEX. BROWN INC.,
as Co-Documentation Agent,
By: /s/ CHRISTIAN DALLWITZ
---------------------------
Name: Christian Dallwitz
Title: Vice President
By: /s/ STEPHAN G PEETZEN
---------------------------
Name: Stephan G Peetzen
Title: Director
DEUTSCHE BANK AG NEW YORK BRANCH,
as Lender,
By: /s/ CHRISTIAN DALLWITZ
---------------------------
Name: Christian Dallwitz
Title: Vice President
By: /s/ STEPHAN G PEETZEN
---------------------------
Name: Stephan G Peetzen
Title: Director
74
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms..................................................1
Section 1.02 Terms Generally...............................................16
Section 1.03 Accounting Terms; GAAP........................................16
ARTICLE II
THE CREDITS
Section 2.01 Commitments...................................................16
Section 2.02 Loans.........................................................17
Section 2.03 Conversion and Continuation of Loans..........................18
Section 2.04 Fees..........................................................20
Section 2.05 Repayment of Loans; Evidence of Debt..........................21
Section 2.06 Interest on Loans.............................................22
Section 2.07 Default Interest..............................................23
Section 2.08 Alternate Rate of Interest....................................23
Section 2.09 Termination, Reduction and Extension of Commitments...........23
Section 2.10 Prepayment....................................................24
Section 2.11 Reserve Requirements; Change in Circumstances.................25
Section 2.12 Change in Legality............................................27
Section 2.13 Indemnity.....................................................28
Section 2.14 Pro Rata Treatment............................................28
Section 2.15 Sharing of Setoffs............................................29
Section 2.16 Payments......................................................29
Section 2.17 Taxes.........................................................30
Section 2.18 Mitigation Obligations; Replacement of Lenders................32
Section 2.19 Term Loan Conversion..........................................33
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Organization; Powers..........................................34
Section 3.02 Authorization.................................................35
Section 3.03 Enforceability................................................35
Section 3.04 Consents and Approvals........................................35
Section 3.05 Financial Statements..........................................36
Section 3.06 No Material Adverse Change....................................36
Section 3.07 Title to Properties; Possession Under Leases..................36
Section 3.08 Subsidiaries..................................................37
i
Section 3.09 Litigation; Compliance with Laws..............................37
Section 3.10 Agreements....................................................37
Section 3.11 Federal Reserve Regulations...................................38
Section 3.12 Investment Company Act; Public Utility Holding Company Act....38
Section 3.13 Tax Returns...................................................38
Section 3.14 No Material Misstatements.....................................38
Section 3.15 Compliance with ERISA.........................................38
Section 3.16 Environmental Matters.........................................39
Section 3.17 Maintenance of Insurance......................................40
Section 3.18 Existing Senior Credit Facilities.............................40
Section 3.19 Surviving Senior Credit Facilities............................40
Section 3.20 Non-Material Loans............................................40
ARTICLE IV
CONDITIONS OF LENDING
Section 4.01 All Borrowings and Issuances..................................41
Section 4.02 Closing Date..................................................41
Section 4.03 Term Loan Conversion Conditions...............................43
ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.01 Existence; Businesses and Properties..........................44
Section 5.02 Insurance.....................................................45
Section 5.03 Obligations and Taxes.........................................45
Section 5.04 Financial Statements, Reports, etc............................45
Section 5.05 Litigation and Other Notices..................................47
Section 5.06 ERISA.........................................................47
Section 5.07 Maintaining Records; Access to Properties and Inspections.....48
Section 5.08 Use of Proceeds...............................................48
Section 5.09 Environmental Matters.........................................48
Section 5.10 Performance of Transaction Agreements.........................50
Section 5.11 OCBM Agreement................................................50
Section 5.12 Further Assurances............................................50
Section 5.13 Guarantee.....................................................50
ARTICLE VI
NEGATIVE COVENANTS
Section 6.01 Covenants of Weyerhaeuser.....................................51
Section 6.02 Covenants with respect to WRECO...............................54
ii
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01 Events of Default.............................................57
ARTICLE VIII
THE ADMINISTRATIVE AGENT
Section 8.01 The Administrative Agent......................................60
Section 8.02 Other Agents..................................................62
ARTICLE IX
MISCELLANEOUS
Section 9.01 Notices.......................................................63
Section 9.02 Survival of Agreement.........................................63
Section 9.03 Binding Effect................................................63
Section 9.04 Successors and Assigns........................................63
Section 9.05 Expenses; Indemnity...........................................66
Section 9.06 Right of Setoff...............................................67
Section 9.07 Applicable Law................................................67
Section 9.08 Waivers; Amendment............................................67
Section 9.09 Interest Rate Limitation......................................68
Section 9.10 Entire Agreement..............................................68
Section 9.11 WAIVER OF JURY TRIAL..........................................68
Section 9.12 Severability..................................................69
Section 9.13 Counterparts..................................................69
Section 9.14 Headings......................................................69
Section 9.15 Jurisdiction; Consent to Service of Process...................69
Section 9.16 Domicile of Loans.............................................70
Section 9.17 Restricted and Unrestricted Subsidiaries......................70
EXHIBITS
Exhibit A Form of Revolving Borrowing Request
Exhibit B Administrative Questionnaire
Exhibit C Form of Assignment and Acceptance
Exhibit D-1 Form of Certification of Financial Statements for Weyerhaeuser
Exhibit D-2 Form of Certification of Financial Statements for WRECO
Exhibit D-3 Form of Compliance Certificate for Weyerhaeuser Exhibit
D-4 Form of Compliance Certificate for WRECO
Exhibit E Form of Subordinated Debt
iii
Exhibit F Form of Promissory Note
SCHEDULES
Schedule 2.01 Commitments
Schedule 3.08 Subsidiaries of Weyerhaeuser, WRECO and the Company
Schedule 3.18 Existing Senior Credit Facilities
Schedule 3.19 Surviving Senior Credit Facilities
Schedule 7.01 Specified Indebtedness
Schedule 9.01 Notices
Exhibit (b)(6)
EXECUTION COPY
============================================================================
$4,000,000,000
BRIDGE REVOLVING CREDIT FACILITY AGREEMENT
Dated as of February 8, 2002
among
WEYERHAEUSER COMPANY, as Borrower,
THE LENDERS NAMED HEREIN,
JPMORGAN CHASE BANK, as Administrative Agent,
MORGAN STANLEY SENIOR FUNDING, INC., as Syndication Agent,
and
THE BANK OF TOKYO-MITSUBISHI, LTD., and
DEUTSCHE BANC ALEX. BROWN INC.,
as Co-Documentation Agents
============================================================================
J.P. MORGAN SECURITIES INC. and MORGAN STANLEY SENIOR FUNDING, INC.,
as Lead Arrangers and Joint Book Runners
BRIDGE REVOLVING CREDIT FACILITY AGREEMENT dated as of February8,
2002, among WEYERHAEUSER COMPANY, a Washington corporation (the "Borrower"),
the lenders listed in Schedule 2.01 (together with each assignee that becomes
a party hereto pursuant to Section 9.04, a "Lender," and collectively, the
"Lenders"), JPMORGAN CHASE BANK, a New York banking corporation, as
administrative agent for the Lenders (in such capacity, and its successors in
such capacity, the "Administrative Agent"), MORGAN STANLEY SENIOR FUNDING,
INC., as syndication agent (in such capacity, the "Syndication Agent"), and
THE BANK OF TOKYO-MITSUBISHI, LTD. and DEUTSCHE BANC ALEX. BROWN INC. as
co-documentation agents (each, individually, a "Co-Documentation Agent," and
collectively, the "Co-Documentation Agents").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lenders extend credit
to the Borrower to enable it (a) to finance the acquisition (the
"Acquisition") by the Borrower of the outstanding shares of common stock,
including the related preferred stock purchase rights, of Willamette
Industries, Inc., an Oregon corporation (the "Company"), (b) to pay costs and
expenses related to such Acquisition and the financing thereof, (c) to
refinance certain existing indebtedness of the Borrower, the Company and their
respective subsidiaries (as hereinafter defined), and (d) to provide the
Borrower and its Subsidiaries (as hereinafter defined) with financing for
general corporate purposes.
WHEREAS, the Lenders are willing to extend such credit on the terms
and subject to the conditions herein set forth.
WHEREAS, Weyerhaeuser Real Estate Company, a Washington corporation
and a wholly owned subsidiary of the Borrower will derive a substantial
benefit from the credit extended to the Borrower.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms. As used in this Agreement, the following
terms shall have the meanings specified below:
"Acquisition" shall have the meaning given such term in the
preliminary statements hereto.
"Adjusted Net Worth" shall mean, as of the date of any computation
thereof, the aggregate amount of capital stock (less treasury stock), surplus
and retained earnings of WRECO and its Restricted Subsidiaries, after
deducting (i) goodwill, patents, trade names, trademarks, unamortized debt
discount and expense, deferred assets (other than prepaid taxes and
insurance), experimental or organizational expense, any reappraisal,
revaluation or write-up assets, and such
2
other assets as are properly classified as "intangible assets" of WRECO and
its Restricted Subsidiaries in accordance with GAAP, (ii) all minority
interests in the capital stock and surplus of the Restricted Subsidiaries of
WRECO, (iii) all Investments in Unrestricted Subsidiaries of WRECO, and (iv)
all Investments of WRECO and its Restricted Subsidiaries in any joint venture,
partnership or similar entity (not including any Investments in any Restricted
Subsidiary of WRECO) entered into for the purpose of acquiring, developing,
constructing, owning, operating, selling or leasing any Real Estate Assets.
"Administrative Agent Fees" shall have the meaning given such term
in Section 2.04(b).
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit B hereto.
"Affiliate" shall mean, when used with respect to a specified
person, another person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with
the person specified.
"Aggregate Credit Exposure" shall mean the aggregate amounts of the
Lenders' Credit Exposures.
"Agreement" shall mean this Bridge Revolving Credit Facility
Agreement, together with all amendments, supplements and modifications hereof.
"Applicable Margin" shall have the meaning given such term in
Section 2.06(d).
"Applicable Percentage" of any Lender at any time shall mean the
percentage of the Total Commitment represented by such Lender's Commitment. In
the event the Commitments shall have expired or been terminated, the
Applicable Percentage shall be determined on the basis of the Commitments most
recently in effect, but giving effect to assignments pursuant to Section 9.04.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative
Agent, which acceptance shall be governed by the terms of Section 9.04, in the
form of Exhibit C.
"Base Rate" shall mean, for any day, a rate per annum equal to the
higher of (i) the Prime Rate and (ii) 1/2 of 1% plus the Federal Funds Rate,
each as in effect from time to time. If for any reason the Administrative
Agent shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Federal Funds Rate,
including the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the terms thereof, the Base Rate
shall be determined without regard to clause (ii) of the first sentence of
this definition, until the circumstances giving rise to such inability no
longer exist. Any change in the Base Rate due to a change in the Prime Rate or
the Federal Funds Rate shall be effective on the effective date of such change
in the Prime Rate or the Federal Funds Rate, respectively.
3
"Base Rate Borrowing" shall mean a Borrowing comprised of Base Rate
Loans.
"Base Rate Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Base Rate in accordance with the provisions of
Article II.
"Board" shall mean the Board of Governors of the Federal Reserve
System of the United States.
"Borrower" shall have the meaning given such term in the
introductory paragraph hereto.
"Borrowing" shall mean a group of Loans of a single Type made by the
Lenders on a single date and as to which a single Interest Period is in
effect.
"Business Day" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York) on which banks are
open for business in New York City; provided, however, that, when used in
connection with a Eurodollar Loan, the term "Business Day" shall also exclude
any day on which banks are not open for dealings in dollar deposits in the
London interbank market.
"Capital Base" shall mean, as of the date of any computation
thereof, the sum of (i) Adjusted Net Worth plus (ii) the amount of
WRECO/Weyerhaeuser Subordinated Debt then outstanding not to exceed Adjusted
Net Worth.
"Capital Lease Obligations" of any person shall mean the obligations
of such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP
and, for purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
A "Change in Control" shall be deemed to have occurred with respect
to (a) the Borrower if, (i) any person or group (within the meaning of
Rule 13d-5 of the SEC as in effect on the date hereof) shall own directly or
indirectly, beneficially or of record, shares representing more than 20% of
the aggregate ordinary voting power represented by the issued and outstanding
capital stock of the Borrower; (ii) a majority of the seats (other than vacant
seats) on the board of directors of the Borrower shall at any time have been
occupied by persons who were neither (A) nominated by the management of the
Borrower in accordance with its charter and by-laws, nor (B) appointed by
directors so nominated; or (iii) any person or group shall otherwise directly
or indirectly Control the Borrower, and (b) WRECO if the Borrower shall fail
to own directly or indirectly, beneficially or of record, shares representing
at least 79% of the aggregate ordinary voting power represented by the issued
and outstanding capital stock of WRECO.
"Closing Date" shall mean the first date on which the conditions set
forth in Article IV shall have been satisfied.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the
4
Code are to the Code, as in effect at the date of this Agreement and any
subsequent provisions of the Code, amendatory thereof, supplemental thereto or
substituted therefor.
"Commitment" shall mean, with respect to each Lender, the commitment
of such Lender hereunder as set forth in Schedule 2.01 or in the Assignment
and Acceptance pursuant to which such Lender shall have assumed its
Commitment, as applicable, as such Lender's Commitment may be permanently
reduced, increased or terminated from time to time pursuant to Section 2.09,
Section 2.18, Article VII or Section 9.04.
"Commitment Letter" shall mean that commitment letter and term sheet
dated December 13, 2001 from JPMorgan Chase Bank, J.P. Morgan Securities Inc.
and Morgan Stanley Senior Funding, Inc. to the Borrower.
"Company" shall have the meaning given such term in the preliminary
statements hereto.
"Confidential Information Memorandum" shall mean, the confidential
information memorandum dated February 2002 and used by the Administrative
Agent and the Lead Arrangers in connection with the syndication of the
Commitments.
"Control" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities or by contract, and
"Controlling" and "Controlled" shall have meanings correlative thereto.
"Control Date" shall mean the date on which both (i) persons
designated or approved by the Borrower or the Purchaser shall constitute a
majority of the board of directors of the Company and (ii) securities or other
ownership interests representing more than 50% of the equity or more than 50%
of the ordinary voting power of the Company are owned, controlled or held by
the Purchaser, the Borrower and/or one of its wholly owned subsidiaries.
"Credit Exposure" shall mean, with respect to each Lender, at any
time, the aggregate principal amount at such time of all outstanding Loans of
such Lender to the Borrower.
"Default" shall mean any event or condition which upon notice, lapse
of time or both would constitute an Event of Default.
"Disclosure Letter" shall mean the Company Disclosure Letter of the
Company to the Borrower and Company Holdings, Inc. ("Holdings"), as
contemplated by the Agreement and Plan of Merger dated as of January 28, 2002,
among the Borrower, Holdings and the Company.
"Dollars," "dollars" or "$" shall mean lawful money of the United
States of America.
"Domestic Subsidiary" shall mean any subsidiary organized under the
laws of any State of the United States of America, substantially all the
assets of which are located, and substantially all the business of which is
conducted, in the United States of America.
5
"Environmental Claims" shall mean any and all administrative,
regulatory, or judicial actions, suits, demand letters, claims, liens, notices
of noncompliance or violation, investigations, or proceedings relating in any
way to any Environmental Law (hereinafter referred to as "claims") or any
permit issued under any such Environmental Law, including without limitation
(a) any and all claims by Governmental Authorities for enforcement, cleanup,
removal, response, remedial, or other actions or damages pursuant to any
applicable Environmental Law, and (b) any and all claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation,
or injunctive relief resulting from Hazardous Materials or arising from
alleged injury or threat of injury to health, safety, or the environment.
"Environmental Laws" shall mean any and all Federal, state, local
and foreign statutes, laws, regulations, ordinances, codes, rules (including
rules of common law), judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or other governmental restrictions
now or hereafter in effect relating to the environment, health, safety,
Hazardous Materials (including, without limitation, the manufacture,
processing, distribution, use, treatment, storage, Release, and transportation
thereof) or to industrial hygiene or the environmental conditions on, under or
about real property, including, without limitation, soil, groundwater, and
indoor and outdoor ambient air conditions.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor. "ERISA
Affiliate" shall mean any trade or business (whether or not incorporated)
that, together with the Borrower or WRECO, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414(b), (c), (m) or (o) of the Code.
"Equity Interests" shall mean shares of capital stock, partnership
interests, membership interests in a limited liability company or other equity
ownership interests in a Person.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Eurodollar Rate in accordance with the
provisions of Article II.
"Eurodollar Rate" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, the rate appearing on Page 3750 of the
Telerate Service (or on any successor or substitute page of such Service, or
any successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as the rate
6
for dollar deposits with a maturity comparable to such Interest Period. In the
event that such rate is not available at such time for any reason, then the
"Eurodollar Rate" with respect to such Eurodollar Borrowing for such Interest
Period shall be the rate at which dollar deposits of $5,000,000 and for a
maturity comparable to such Interest Period are offered by the principal
London office of the Administrative Agent in immediately available funds in
the London interbank market at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period.
"Event of Default" shall have the meaning given such term in
Article VII.
"Excluded Sales" shall mean (a) the sale by the Borrower or any of
its Subsidiaries in the ordinary course of its business of inventory and
timberlands, (b) sales of accounts, receivables or other payment intangibles
as part of a securitization transaction and (c) sales to the Borrower or any
of its subsidiaries.
"Existing Senior Credit Facilities" shall mean (i) material senior
funded Indebtedness of the Borrower and its subsidiaries and (ii) publicly
disclosed material senior funded Indebtedness of the Company and its
subsidiaries, in each case outstanding immediately before giving effect to the
consummation of the Transactions. For purposes of this definition, no single
loan shall be considered material unless the aggregate principal amount
outstanding exceeds $15,000,000.
"Facility Fees" shall have the meaning given such term in
Section 2.04(a).
"Federal Funds Rate" shall mean, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the quotations for the day
of such transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"Fees" shall mean the Facility Fees and the Administrative Agent
Fees.
"Financial Officer" of any corporation shall mean the chief
financial officer, principal accounting officer, treasurer or controller of
such corporation.
"Five-Year Revolving Credit Facility Agreement" shall mean the
Competitive Advance and Revolving Credit Facility Agreement dated as of even
date herewith, entered into by and among the Borrower, the lenders, the swing
line bank and the fronting bank party thereto from time to time, the
Syndication Agent, the Administrative Agent and the Co-Documentation Agents,
as such agreement may be amended, restated, supplemented or otherwise modified
from time to time.
"GAAP" shall mean generally accepted accounting principles, applied
on a consistent basis.
7
"Governmental Authority" shall mean the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any person shall mean any obligation,
contingent or otherwise, of such person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
obligation of such person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
to purchase (or to advance or supply funds for the purchase of) any security
for the payment of such Indebtedness, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such
Indebtedness of the payment of such Indebtedness, (c) to maintain working
capital, equity capital or other financial statement condition or liquidity of
the primary obligor so as to enable the primary obligor to pay such
Indebtedness or (d) as an account party in respect of any letter of credit or
letter of guaranty issued to support such Indebtedness or obligation;
provided, however, that the term Guarantee shall not include endorsements for
collection or deposit, in either case in the ordinary course of business.
"Hazardous Materials" shall mean (a) any petroleum or petroleum
products, flammable substances, explosives, radioactive materials, hazardous
wastes, substances or contaminants, toxic wastes, substances or contaminants,
or any other wastes, substances, contaminants or pollutants prohibited,
limited or regulated by any Governmental Authority; (b) asbestos in any form
that is or could become friable, urea formaldehyde foam insulation,
transformers or other equipment that contains dielectric fluid containing
levels of polychlorinated biphenyls or radon gas; (c) any chemicals, materials
or substances defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
wastes," "restricted hazardous wastes," "toxic substances," "toxic
pollutants," "contaminants," or "pollutants," or words of similar import,
under any applicable Environmental Law; and (d) any other chemical, material,
or substance, exposure to which is prohibited, limited, or regulated by any
Governmental Authority.
"Indebtedness" of any person shall mean, without duplication,
(a) all obligations of such person for borrowed money or with respect to
deposits or advances of any kind, (b) all obligations of such person evidenced
by bonds, debentures, notes or similar instruments, (c) all obligations of
such person upon which interest charges are customarily paid, (d) all
obligations of such person under conditional sale or other title retention
agreements relating to property or assets purchased by such person, (e) all
obligations of such person issued or assumed as the deferred purchase price of
property or services (excluding current accounts payable incurred in the
ordinary course of business), (f) all Indebtedness of others secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
person, whether or not the obligations secured thereby have been assumed,
(g) all Guarantees by such person of Indebtedness of others, (h) all Capital
Lease Obligations of such person, and (i) all obligations of such person as an
account party in respect of letters of credit, letters of guaranty and
bankers' acceptances. The
8
Indebtedness of any person shall include the Indebtedness of any partnership in
which such person is a general partner.
"Interest Period" shall mean, as to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing or on the date of conversion
of a Borrowing of a different Type to a Eurodollar Borrowing or on the last
day of the immediately preceding Interest Period applicable to such Borrowing
or conversion thereof, as the case may be, and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the
last day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the
Borrower may elect; provided, however, that if any Interest Period would end
on a day other than a Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless, in the case of Eurodollar Loans, such
next succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day;
provided further that no Interest Period for any Loan shall extend beyond the
Termination Date; provided, even further, that for a period of three months
after the Closing Date the Borrower shall only be entitled to select an
Interest Period of one month. Interest shall accrue from and including the
first day of an Interest Period to but excluding the last day of such Interest
Period.
"Investments" shall mean all investments in any Person, computed in
accordance with GAAP, made by stock purchase, capital contribution, loan,
advance, extension of credit, or creation or assumption of any other
contingent liability or Guarantee in respect of any obligation of such Person,
or otherwise; provided, however, that in computing any investment in any
Person (i) all expenditures for such investment shall be taken into account at
the actual amounts thereof in the case of expenditures of cash and at the fair
value thereof (as determined in good faith by the Board of Directors of WRECO)
or depreciated cost thereof (in accordance with GAAP), whichever is greater,
in the case of expenditures of property, (ii) there shall not be included any
Real Estate Assets, or any account or note receivable from such other Person
arising from transactions in the ordinary course of business, and (iii) a
Guarantee or other contingent liability of any kind in respect of any
Indebtedness or other obligation of such Person shall be deemed an Investment
equal to the amount of such Indebtedness or obligation.
"Lead Arrangers" shall mean, collectively, Morgan Stanley Senior
Funding, Inc., and J.P. Morgan Securities Inc.
"Lender" and "Lenders" shall have the respective meanings given such
terms in the introductory paragraph hereto.
"Lender Affiliate" shall mean, (a) with respect to any Lender, (i)
an Affiliate of such Lender or (ii) any entity (whether a corporation,
partnership, trust or otherwise) that is engaged in making, purchasing,
holding or otherwise investing in bank loans and similar extensions of credit
in the ordinary course of its business and is administered or managed by a
Lender or an Affiliate of such Lender and (b) with respect to any Lender that
is a fund which invests in bank loans and similar extensions of credit, any
other fund that invests in bank loans and similar extensions of credit and is
managed by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.
9
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset
and (c) in the case of securities, any purchase option, call or similar right
of a third party with respect to such securities.
"Loan" shall mean a Revolving Loan.
"Loan Documents" shall mean this Agreement, the OCBM Agreement and
any notes issued in accordance with Section 2.05 and any Guarantee entered
into by the Company in accordance with Section 5.13.
"Margin Stock" shall have the meaning given such term under
Regulation U.
"Material Adverse Effect" shall mean (a) a materially adverse effect
on the business, financial condition, operations or properties of (1) when
used on the Closing Date, the Company and its subsidiaries, taken as a whole,
or (2) the Borrower and its Subsidiaries, taken as a whole, (b) a materially
adverse effect on the ability of the Borrower or any of its Subsidiaries to
perform its obligations under any Loan Documents to which it is or will be a
party, (c) a materially adverse effect on the rights and remedies available to
the Administrative Agent and the Lenders under the Loan Documents or (d) a
materially adverse effect on the Transactions.
"Merger" shall mean the merger of the Purchaser, the Borrower or one
of its wholly owned Restricted Subsidiaries with the Company, contemplated to
occur as soon as practicable after the closing of the Tender Offer.
"Moody's" shall mean Moody's Investors Service, Inc., a corporation
organized and existing under the laws of the State of Delaware, and its
successors and assigns, and if such corporation shall for any reason no longer
perform the functions of a securities rating agency, "Moody's" shall be deemed
to refer to any other nationally recognized rating agency designated by the
Borrower and the Required Lenders.
"Net Cash Proceeds" shall mean, with respect to any sale, lease,
transfer or other disposition of any asset by any Person or the incurrence or
issuance of any Indebtedness or the sale or issuance of any Equity Interest
(including, without limitation, any capital contribution) by any Person, the
aggregate amount of cash received from time to time (whether as initial
consideration or through payment or disposition of deferred consideration) by
or on behalf of such Person in connection with such transaction after
deducting therefrom only (without duplication) (a) the costs associated with
such transaction (including reasonable and customary brokerage fees and
commissions, underwriting discounts and commissions, placement fees,
accountants' fees, legal fees and other similar fees and commissions), (b) the
amount of taxes payable in connection with or as a result of such transaction,
(c) with regard to any sale, lease, transfer or other disposition of any asset
by any Person, the amount of any Indebtedness secured by a Lien on such asset
that, by the terms of the agreement or instrument governing such Indebtedness,
is required to be repaid upon disposition and (d) reserves for purchase price
adjustments and retained fixed liabilities that are payable by such Person in
cash to the extent required under GAAP in connection with such sale, lease,
transfer or disposition (it being
10
understood that immediately upon expiration of the retention period for such
reserves, amounts held as reserves must be paid as a mandatory prepayment
pursuant to Section 2.10(b)), in each case to the extent, but only to the
extent, that the amounts so deducted are (in the cases of (a) and (c) above,
at the time of receipt of such cash), actually paid to a Person that is not an
Affiliate of such Person or the Borrower or any of its Subsidiaries or any
Affiliate of the Borrower or any of its Subsidiaries and are properly
attributable to such transaction or to the asset that is the subject thereof;
provided, however, that Net Cash Proceeds shall not include, (i) with respect
to any sale, lease, transfer or other disposition of any asset by any Person,
any cash receipts received from the sale of worn, damaged, or obsolete
equipment, (ii) any cash receipts received from proceeds of insurance,
condemnation awards (or payments in lieu thereof) or indemnity payments to the
extent that such proceeds, awards or payments in respect of loss or damage to
the assets are applied (or in respect of which expenditures were previously
incurred) to replace or repair the assets in respect of which such proceeds
were received, so long as such application is made within 180 days after the
occurrence of such damage or loss and (iii) any rental payments received in
connection with the lease of an asset in the ordinary course of business. In
addition, no proceeds realized with regard to any sale, lease, transfer or
other disposition of any asset by any Person in a single transaction or series
of related transactions shall constitute Net Cash Proceeds except for the
portion (if any) of such proceeds in excess of $25,000,000. "Non-Material
Loans" shall mean any senior obligations for borrowed money of any Person
outstanding in an amount not in excess of $15,000,000.
"OCBM Agreement" shall mean the Ownership and Capital Base
Maintenance Agreement, dated as of the date hereof, and entered into by the
Borrower.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Person" shall mean any natural person, corporation, business trust, joint
venture, joint stock company, trust, unincorporated organization, association,
company, partnership or government, or any agency or political subdivision
thereof. "Plan" shall mean any multiemployer or single-employer plan as
defined in Section 4001 of ERISA covered by Title IV of ERISA, which is
maintained or contributed to by (or to which there is an obligation to
contribute of), or at any time during the five calendar years preceding the
date of this Agreement was maintained or contributed to by (or to which there
was an obligation to contribute of), the Borrower or an ERISA Affiliate.
"Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by the Administrative Agent as its prime in effect
at its principal office in New York City; each change in the Prime Rate shall
be effective on the date such change is publicly announced as effective. The
Prime Rate is a reference rate and does not necessarily represent the lowest
or best rate actually charged to any customer.
"Purchaser" shall mean Company Holdings, Inc., a Washington
corporation and a wholly owned subsidiary of the Borrower.
11
"Rating" shall mean, as of any date, the rating by Moody's and S&P
in effect on such date, of the Senior Unsecured Long-Term Debt of the
Borrower, provided that such ratings shall take into effect (a) the Tender
Offer, (b) the Acquisition, (c) the Merger and (d) the incurrence by the
Borrower and its Subsidiaries of the Indebtedness under the Senior Bank
Financing, including, without limitation, any refinancing of existing
Indebtedness of the Borrower, the Company, and their respective subsidiaries.
"Real Estate Assets" shall mean all assets of WRECO and its
Restricted Subsidiaries (determined, unless the context otherwise requires, on
a consolidated basis for WRECO and its Restricted Subsidiaries) of the types
described below, acquired and held for the purpose of, and arising out of, the
development and/or sale or rental thereof in the ordinary course of business:
(i) improved and unimproved land, buildings and other structures and
improvements and fixtures located thereon, and (ii) contracts, mortgages,
notes receivables and other choses in action.
"Reduction Amount" shall have the meaning given such term in
Section 2.09(c).
"Register" shall have the meaning given such term in
Section 9.04(d). "Regulation D" shall mean Regulation D of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation T" shall mean Regulation T of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Reinvestment Proceeds" shall have the meaning given such term in
Section 2.10(b).
"Related Parties" shall mean, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"Release" shall mean disposing, discharging, injecting, spilling,
leaking, dumping, emitting, escaping, emptying, seeping, placing, and the
like, into or upon any land or water or air, or otherwise entering into the
environment.
"Reportable Event" shall mean an event described in Section 4043(c)
of ERISA with respect to a Plan as to which the 30-day notice requirement has
not been waived by statute, regulation or otherwise.
12
"Required Lenders" shall mean, at any time, Lenders having Credit
Exposures and unused Commitments representing more than 50% of the sum of the
Aggregate Credit Exposure and unused Commitments at such time.
"Restricted Subsidiary" shall mean, (i) with respect to the
Borrower, each Subsidiary that has not been designated as an Unrestricted
Subsidiary on Schedule 3.08 Part I and thereafter not designated by a
Financial Officer of the Borrower as an Unrestricted Subsidiary after the
Closing Date pursuant to Section 9.17 and (ii) with respect to WRECO, each
Subsidiary that has not been designated as an Unrestricted Subsidiary on
Schedule 3.08 Part II or thereafter designated by a Financial Officer of WRECO
as an Unrestricted Subsidiary after the Closing Date pursuant to Section 9.17;
provided that, until the Control Date has occurred, neither the Company nor
any of its subsidiaries shall be considered a Restricted Subsidiary. Upon the
occurrence of the Control Date, the Company and its subsidiaries shall be
deemed Restricted Subsidiaries unless a Financial Officer of the Borrower
shall have designated any of such entities as an Unrestricted Subsidiary after
the Closing Date pursuant to Section 9.17.
"Revolving Borrowing" shall mean a Borrowing consisting of Revolving
Loans.
"Revolving Borrowing Request" shall mean a request made pursuant to
Section 2.02(e) in the form of Exhibit A.
"Revolving Loan" shall mean a Loan made by the Lenders to the
Borrower pursuant to Section 2.02.
"S&P" shall mean Standard & Poor's Corporation, a corporation
organized and existing under the laws of the State of New York, and its
successors and assigns, and if such corporation shall for any reason no longer
perform the functions of a securities rating agency, "S&P" shall be deemed to
refer to any other nationally recognized rating agency designated by the
Borrower and the Required Lenders.
"SEC" shall mean the Securities and Exchange Commission or any
successor.
"Senior Bank Financing" shall mean the credit facilities
contemplated by (a) this Agreement, (b) the Five-Year Revolving Credit
Facility Agreement and (c) the 364-Day Revolving Credit Facility Agreement.
"Senior Debt" shall mean all Indebtedness of any Person (other than
WRECO) which is not expressed to be subordinate and junior in right of payment
to any other Indebtedness of such Person, and, with respect to WRECO, shall
mean all Indebtedness of WRECO other than Subordinated Debt.
"Senior Unsecured Long-Term Debt" shall mean the unsecured bonds,
debentures, notes or other Indebtedness of the Borrower, designated on its
financial statements as senior long-term indebtedness. In the event more than
one issue of Senior Unsecured Long-Term Debt shall be outstanding at any
relevant time and different credit ratings shall have been issued by S&P or
Moody's for such issues, Senior Unsecured Long-Term Debt shall be deemed to
refer to the lowest rated issue.
13
"Specified Indebtedness" shall mean the Indebtedness set forth in
Schedule 7.01 hereto.
"Specified Issuance" shall have the meaning given such term in
Section 2.10(b)(ii).
"Statutory Reserves" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one, and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including
any marginal, special, emergency or supplemental reserves) expressed as a
decimal established by the Board and any other banking authority to which the
Administrative Agent is subject with respect to the Eurodollar Rate, for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those
imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D or any
comparable regulation. The Statutory Reserves shall be adjusted automatically
on and as of the effective date of any change in any reserve percentage.
"Subordinated Debt" shall mean and include (i) Subordinated
Promissory Notes of WRECO, in substantially the form annexed as Exhibit E
hereto, and (ii) any other Indebtedness of WRECO now or hereafter created,
issued or assumed which at all times is evidenced by a written instrument or
instruments containing or having applicable thereto subordination provisions
substantially the same as those in said Exhibit E hereto, providing for the
subordination of such Indebtedness to such other Indebtedness of WRECO as
shall be specified or characterized in such subordination provisions.
"subsidiary" shall mean, with respect to any Person (herein referred
to as the "parent"), any corporation, partnership, association or other
business entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary
voting power to elect a majority of the board of directors or more than 50% of
the general partnership interests are, at the time any determination is being
made, owned, controlled or held, or (b) which is, at the time any
determination is made, otherwise Controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent.
"Subsidiary" shall mean any subsidiary of the Borrower or WRECO,
provided that neither the Company nor any of its subsidiaries shall be
considered a Subsidiary until the Control Date has occurred, and provided
further that there shall be excluded from this definition (i) Nelson Forests
Joint Venture, a joint venture formed under the laws of New Zealand, (ii)
Wapawekka Lumber Ltd., a limited partnership formed under the laws of
Saskatchewan, and (iii) Monterra Lumber Mills Limited, a limited partnership
formed under the laws of Ontario, for so long as such business entities shall
not be Controlled by the Borrower or any of its subsidiaries.
"Surviving Senior Credit Facilities" shall mean the Existing Senior
Credit Facilities outstanding immediately before and after giving effect to
the consummation of the Transactions.
14
"Tender Offer" shall mean the offer by Purchaser to acquire through
a tender offer for cash all of the outstanding shares of common stock of the
Company, including the related preferred stock purchase rights of the Company,
as more specifically set forth in the Tender Offer Statement.
"Tender Offer Statement" shall mean the offering memorandum dated
November 29, 2000 setting forth the terms and conditions of the Tender Offer,
as such offering memorandum may be amended, supplemented or otherwise modified
from time to time.
"Termination Date" shall mean the date which occurs 18 months after
the Closing Date.
"364-Day Revolving Credit Facility Agreement" shall mean the 364-Day
Revolving Credit Facility Agreement dated as of even date herewith, entered
into by and among the Borrower, WRECO, the lenders party thereto from time to
time, the Syndication Agent, the Administrative Agent and the Co-Documentation
Agents, as such agreement may be amended, restated, supplemented or otherwise
modified from time to time.
"Total Adjusted Shareholders' Interest" shall mean, at any time, the
amount of the preferred, preference and common shares accounts plus (or minus
in the case of a deficit) the amount of other capital and retained earnings,
in accordance with GAAP, of the Borrower and its consolidated Subsidiaries,
less treasury common shares and the aggregate net book value (after deducting
any reserves applicable thereto) of all items of the following character which
are included in the consolidated assets of the Borrower and its consolidated
Subsidiaries:
(a) investments in Unrestricted Subsidiaries; and
(b) without duplication, investments by the Borrower and its
consolidated Subsidiaries in WRECO and its consolidated Subsidiaries.
No effect shall be given for any increases or decreases attributable to
unrealized foreign exchange gains or losses resulting from the application of
FASB Statement 52.
"Total Commitment" shall mean at any time the aggregate amount of
the Commitments as in effect at such time, and on the date hereof shall mean
$4,000,000,000.
"Total Funded Indebtedness" with respect to the Borrower shall mean,
at any time, the aggregate principal amount of all Indebtedness (other than
Guarantees by such Person of Indebtedness of others) for borrowed money or for
the deferred purchase price of property and Capital Lease Obligations of the
Borrower and its consolidated Subsidiaries, excluding (a) the Indebtedness of
Unrestricted Subsidiaries, and (b) without duplication, the Indebtedness of
WRECO and its consolidated Subsidiaries.
"Transaction-Related Event of Default" shall mean any default or
event of default under any indentures, agreements or other documentation
evidencing the Specified Indebtedness, provided that such default or event of
default shall have occurred or be continuing solely by reason of the
consummation by the Borrower or any of its Subsidiaries of any of the
Transactions.
15
"Transactions" shall have the meaning given such term in
Section 3.02.
"Transferee" shall have the meaning given such term in Section 2.17.
"Type," when used in respect of any Loan or Borrowing, shall refer
to the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, "Rate" shall
include the Eurodollar Rate and the Base Rate.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the present value of the accrued benefits under the Plan as of
the close of its most recent plan year, determined in accordance with
Statement of Financial Accounting Standards No. 35, based upon the actuarial
assumptions used by the Plan's actuary in the most recent annual valuation of
the Plan, exceeds the fair market value of the assets allocable thereto,
determined in accordance with Section 412 of the Code.
"Unrestricted Subsidiary" shall mean, (i) with respect to the
Borrower, each Subsidiary that has been designated as an Unrestricted
Subsidiary on Schedule 3.08 Part I and any Subsidiary which has been
designated by a Financial Officer of the Borrower as an Unrestricted
Subsidiary after the Closing Date pursuant to Section 9.17, and (ii) with
respect to WRECO, each Subsidiary that has been designated as an Unrestricted
Subsidiary on Schedule 3.08 Part II and any Subsidiary which has been
designated by a Financial Officer of WRECO as an Unrestricted Subsidiary after
the Closing Date pursuant to Section 9.17.
"Utilization Fee" shall have the meaning given such term in Section
2.06(e).
"WRECO shall mean Weyerhaeuser Real Estate Company, a Washington
corporation.
"WRECO/Weyerhaeuser Subordinated Debt" shall mean the Subordinated
Promissory Notes issued by WRECO to Weyerhaeuser described in clause (i) of
the definition of "Subordinated Debt."
Section 1.02 Terms Generally. The definitions in Section 1.01 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include," "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require.
Section 1.03 Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof
on the operation of such provision (or if the Administrative Agent notifies
the Borrower that the Required Lenders request an amendment to any provision
hereof for such purpose), regardless of whether any such notice is given
before or after such change in GAAP or in the application
16 thereof, then such provision shall be interpreted on the basis of GAAP as
in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision
amended in accordance herewith.
ARTICLE II
THE CREDITS
Section 2.01 Commitments. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, to make Loans to the Borrower upon request,
at any time and from time to time on and after the date hereof and until the
earlier of the Termination Date and the termination of the Commitments of such
Lender, for such Lender in an aggregate principal amount at any time
outstanding not to exceed such Lender's Commitment at such time, subject,
however, to the conditions that:
(a) at no time shall the outstanding aggregate principal amount of
all Loans made by all Lenders exceed the Total Commitment; and
(b) at all times the outstanding aggregate principal amount of all
Revolving Loans made by each Lender shall equal the product of (i) the
Applicable Percentage times (ii) the outstanding aggregate principal
amount of all Revolving Loans made pursuant to Section 2.02.
Each Lender's Commitments are set forth opposite its name in
Schedule 2.01, or in the case of each assignee that becomes a party hereto
pursuant to Section 9.04, on the Register maintained by the Administrative
Agent pursuant to Section 9.04(c).
Within the foregoing limits, the Borrower may borrow, pay or prepay
and reborrow hereunder, on and after the Closing Date and prior to the
Termination Date, subject to the terms, conditions and limitations set forth
herein.
Section 2.02 Revolving Loans. (a) Each Revolving Loan shall be made
as part of a Revolving Borrowing consisting of Revolving Loans made by the
Lenders ratably in accordance with their respective Commitments; provided,
however, that the failure of any Lender to make any Revolving Loan shall not
in and of itself relieve any other Lender of its obligation to lend hereunder
(it being understood, however, that no Lender shall be responsible for the
failure of any other Lender to make any Revolving Loan required to be made by
such other Lender). The Revolving Loans comprising any Revolving Borrowing
shall be in an aggregate principal amount which is an integral multiple of
$1,000,000 and not less than $25,000,000 (or an aggregate principal amount
equal to the remaining balance of the available Revolving Commitments).
(b) Each Revolving Borrowing shall be comprised entirely of
Eurodollar Loans or Base Rate Loans, as the Borrower may request pursuant to
paragraph (f) hereof. Each Lender may at its option make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; provided that any exercise of such option shall not
(i) affect the obligation of the Borrower to repay such Loan in accordance
with the terms of this Agreement and (ii) entitle such Lender to any amounts
related to Sections 2.11 or 2.12 to which amounts such Lender would not be
entitled if such Lender had made such Loan itself through its domestic branch.
Revolving Borrowings of more than one Type may be outstanding at the same
time; provided, however, that the Borrower shall not be entitled to request
any Revolving Borrowing which, if made, would result in an aggregate of more
than twenty (20) separate Revolving Loans from any Lender being outstanding
hereunder at any one time. For purposes of the foregoing, Revolving Loans
(other than Base Rate Loans) having different Interest Periods, regardless of
whether they commence on the same date, shall be considered separate Revolving
Loans.
(c) Each Lender shall make each Revolving Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately
available funds to the Administrative Agent in New York, New York, not later
than 12:00 noon (or in the case of Base Rate Loans, 2:00 p.m.), New York City
time, and the Administrative Agent shall by 3:00 p.m., New York City time,
credit the amounts so received to the general deposit account of the Borrower
maintained with the Administrative Agent or, if a Revolving Borrowing shall
not occur on such date because any condition precedent herein specified shall
not have been met, return the amounts so received to the respective Lenders.
Unless the Administrative Agent shall have received notice from a Lender prior
to the date of any Revolving Borrowing that such Lender will not make
available to the Administrative Agent such Lender's portion of such Borrowing,
the Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Revolving Borrowing
in accordance with this paragraph (c) and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have
made such portion available to the Administrative Agent, such Lender and the
Borrower agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the
date such amount is made available to the Borrower until the date such amount
is repaid to the Administrative Agent at (i) in the case of the Borrower, the
interest rate applicable at the time to the Revolving Loans comprising such
Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such
Lender shall repay to the Administrative Agent such corresponding amount, such
amount shall constitute such Lender's Revolving Loan as part of such Revolving
Borrowing for purposes of this Agreement.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request any Revolving Borrowing with an
Interest Period ending after the Termination Date.
(e) In order to request a Revolving Borrowing, the Borrower shall
hand deliver or telecopy to the Administrative Agent a Revolving Borrowing
Request in the form of Exhibit A (a) in the case of a Eurodollar Borrowing,
not later than 12:00 noon, New York City time, three Business Days before a
proposed borrowing and (b) in the case of a Base Rate Borrowing, not later
than 12:00 noon, New York City time, on the day of a proposed borrowing. Such
notice shall be irrevocable and shall in each case specify (i) whether the
Revolving Borrowing then being requested is to be a Eurodollar Borrowing or a
Base Rate Borrowing; (ii) the date of such Revolving Borrowing (which shall be
a Business Day) and the amount thereof; and (iii) if such
18
Revolving Borrowing is to be a Eurodollar Borrowing, the Interest Period with
respect thereto. If no election as to the Type of Revolving Borrowing is
specified in any such notice, then the requested Revolving Borrowing shall be
a Base Rate Borrowing. If no Interest Period with respect to any Eurodollar
Borrowing is specified in any such notice, then the Borrower shall be deemed
to have selected an Interest Period of one month's duration. The
Administrative Agent shall promptly advise the Lenders of any notice given
pursuant to this Section 2.02(e) and of each Lender's portion of the requested
Borrowing.
Section 2.03 Conversion and Continuation of Revolving Loans.
(a) The Borrower shall, with respect to its Revolving Borrowings, have the
right at any time, upon prior irrevocable written notice to the Administrative
Agent given in the manner and at the times specified in Section 2.02(e), with
respect to the Type of Revolving Borrowing into which conversion or
continuation is to be made, to convert any of its Revolving Borrowings into a
Revolving Borrowing of a different Type and to continue any of its Eurodollar
Borrowings into a subsequent Interest Period of any permissible duration,
subject to the terms and conditions of this Agreement and to the following:
(i) each conversion or continuation shall be made pro rata among the
Lenders in accordance with the respective principal amounts of Revolving
Loans comprising the converted or continued Revolving Borrowing;
(ii) if less than all the outstanding principal amount of any
Revolving Borrowing shall be converted or continued, the aggregate
principal amount of such Revolving Borrowing converted and/or continued
shall in each case not be less than the minimum amount set forth in
Section 2.02;
(iii) if a Eurodollar Borrowing is converted at any time other than
on the last day of the Interest Period applicable thereto, the Borrower
shall pay any amount due pursuant to Section 2.13;
(iv) with respect to a Revolving Borrowing, if such Revolving
Borrowing is to be converted into a Eurodollar Borrowing or if a
Eurodollar Borrowing is to be continued, no Interest Period selected
shall extend beyond the Termination Date; and
(v) interest accrued to the day immediately preceding each date of
conversion or continuation shall be payable on each Revolving Borrowing
that is converted or continued concurrently with such conversion or
continuation.
(b) Each notice given pursuant to Section 2.03(a) shall be
irrevocable and shall refer to this Agreement and specify (i) the identity and
the amount of the Revolving Borrowing that the Borrower requests to be
converted or continued; (ii) whether such Borrowing (or any part thereof) is
to be converted or continued as a Base Rate Borrowing or a Eurodollar
Borrowing; (iii) if such notice requests a conversion, the date of such
conversion (which shall be a Business Day); and (iv) if such Borrowing (or any
part thereof) is to be converted into or continued as a Eurodollar Borrowing,
the Interest Period with respect thereto. If no Interest Period is specified
in any such notice with respect to any conversion to or continuation as a
Eurodollar Borrowing, then the Borrower shall be deemed to have selected an
Interest Period of
19
one month's duration, in the case of a Eurodollar Borrowing. The
Administrative Agent shall advise the Lenders of any notice given pursuant to
Section 2.03(a) and of each Lender's portion of any converted or continued
Borrowing.
(c) If the Borrower shall not have given notice in accordance with
this Section 2.03 to continue any Eurodollar Borrowing into a subsequent
Interest Period (and shall not otherwise have given notice in accordance with
this Section 2.03 to convert such Eurodollar Borrowing), such Eurodollar
Borrowing shall automatically be converted into a Base Rate Borrowing. In the
event of the occurrence and continuation of a Default or an Event of Default
(i) all Eurodollar Borrowings of the Borrower shall be converted into Base
Rate Borrowings on the last day of the Interest Period then in effect, and
(ii) no Base Rate Borrowing may be converted into a Borrowing of another Type
so long as a Default or Event of Default continues to exist.
Section 2.04 Fees. (a) The Borrower agrees to pay to each Lender,
through the Administrative Agent, on each March 31, June 30, September 30 and
December 31 and on the date on which the Commitment of such Lender shall be
terminated as provided herein, a facility fee (each, a "Facility Fee," and
collectively, the "Facility Fees"), calculated as specified below, on the
amount of the Commitment of such Lender, whether used or unused, during the
preceding quarter (or shorter period commencing with the Closing Date or
ending with the Termination Date applicable to such Lender or any date on
which the Commitment of such Lender shall be terminated). All facility fees
shall be computed on the basis of a year of 365 or 366 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day). The Facility Fee due to each Lender shall commence to
accrue on the Closing Date and shall cease to accrue on the earlier of the
Termination Date applicable to such Lender and the termination of the
Commitment of such Lender as provided herein.
The Facility Fee for each Lender shall be calculated as a per annum
rate in an amount equal to the product of such Lender's Commitment hereunder
and the applicable percentage specified in the table below, to be determined
based upon the Ratings received from S&P and Moody's by the Borrower:
------- --------------- -------------- ------------- --------------- ------------
Level 1 Level 2 Level 3 Level 4 Level 5
S&P: A- or better BBB+ BBB BBB- Below BBB-
Moody's: A3 or better Baa1 Baa2 Baa3 Below Baa3
--------- ------------- ------------- ------------- --------------- ------------
--------- ------------- ------------- ------------- --------------- ------------
0.1000% 0.1250% 0.1500% 0.2000% 0.2500%
--------- ------------- -------------- -------------- --------------- ------------
The Facility Fees shall change effective as of the date on which the
applicable rating agency announces any change in its Ratings. In the event
either S&P or Moody's shall withdraw or suspend its Ratings, the remaining
Rating announced by either S&P or Moody's, as the case may be, shall apply. In
the event neither agency shall provide a Rating, the Facility Fees shall be
based on the lowest rating provided above. If the Ratings by S&P and Moody's
are split so that two consecutive Levels (as defined in the table above)
apply, the higher of those Ratings shall determine the applicable percentage
to
20
calculate the Facility Fee. If the Ratings by S&P and Moody's are split so
that the applicable Levels in the table above are separated by only one
intermediate Level, then such intermediate Level shall determine the
applicable percentage to calculate the Facility Fee. If the Ratings by S&P and
Moody's are split so that the applicable Levels in the table above are
separated by two intermediate Levels, then the intermediate Level representing
the lowest Rating shall determine the applicable percentage to calculate the
Facility Fee. The Facility Fees shall be calculated by the Administrative
Agent, which calculation absent manifest error shall be final and binding on
all parties.
(b) The Borrower agrees to pay the Administrative Agent, for its own
account, the administration fees (the "Administrative Agent Fees") at the
times and in the amounts agreed upon in the letter agreement dated as of
December 13, 2001, among the Borrower, Morgan Stanley Senior Funding, Inc.,
J.P. Morgan Securities Inc. and the Administrative Agent.
(c) All Fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for prompt distribution, if and
as appropriate, among the Lenders. Once paid, none of the Fees shall be
refundable under any circumstances.
Section 2.05 Repayment of Loans; Evidence of Debt. (a) The
outstanding principal balance of each Revolving Loan shall be payable on the
Termination Date. Each Loan shall bear interest from the date thereof on the
outstanding principal balance thereof as set forth in Section 2.06.
(b) Each Lender shall, and is hereby authorized by the Borrower to,
maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each
Loan made by such Lender, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Type thereof and
the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to
each Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the
Borrower to repay its Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note, substantially in the form of Exhibit E attached hereto. In
such event, the Borrower shall promptly, and in no event more than ten (10)
Business Days after a request therefor, prepare, execute and deliver to such
Lender a promissory note payable to the order of such Lender (or, if requested
by such Lender, to such Lender and its registered assigns). Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all
times (including after assignment pursuant to Section 9.04) be represented by
one or more promissory notes in such form payable to the order of the payee
named therein (or, if such promissory note is a registered note, to such payee
and its registered assigns).
21
Section 2.06 Interest on Loans. (a) Subject to the provisions of
Section 2.07, the Loans comprising each Eurodollar Borrowing shall bear
interest (computed on the basis of the actual number of days elapsed over a
year of 360 days) at a rate per annum equal to the Eurodollar Rate for the
Interest Period in effect for such Borrowing plus the Applicable Margin,
determined pursuant to paragraph (d) below.
(b) Subject to the provisions of Section 2.07 the Loans comprising
each Base Rate Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as the case may
be) at a rate per annum equal to the Base Rate plus the Applicable Margin.
(c) Interest on each Eurodollar Loan shall, except as otherwise
provided in this Agreement, be payable on the last day of the Interest Period
applicable thereto and, in case of a Eurodollar Loan with an Interest Period
of more than three months' duration, each day that would have been an Interest
Payment Date for such Loan had successive Interest Periods of three months'
duration been applicable to such Loan. Interest on each Base Rate Loan shall
be payable quarterly in arrears on the last Business Day of each March, June,
September and December, except as otherwise provided in this Agreement. The
applicable Eurodollar Rate or Base Rate for each Interest Period or day within
an Interest Period, as the case may be, shall be determined by the
Administrative Agent, and such determination shall be conclusive absent
manifest error.
(d) As used herein, "Applicable Margin" shall mean the sum of (i)
the applicable percentage per annum specified in the table below, to be
determined based upon the Ratings received from S&P and Moody's by the
Borrower, and (ii) the Utilization Fee. The applicable percentage referred to
in clause (i) of the immediately preceding sentence shall be determined based
upon the Ratings, as follows:
---------------------- ---------------- ------------------- ----------------- ------------------ -------------------
Level 1 Level 2 Level 3 Level 4 Level 5
------- ------- ------- ------- -------
S&P: A- or better BBB+ BBB BBB- Below BBB-
Moody's: A3 or better Baa1 Baa2 Baa3 Below Baa3
---------------------- ---------------- ------------------- ----------------- ------------------ -------------------
Eurodollar Loan: 0.5250% 0.6250% 0.8500% 1.0500% 1.5000%
---------------------- ---------------- ------------------- ----------------- ------------------ -------------------
Base Rate Loan: 0.0000% 0.0000% 0.0000% 0.0500% 0.5000%
---------------------- ---------------- ------------------- ----------------- ------------------ -------------------
The Applicable Margin shall change effective as of the date on which
the applicable rating agency announces any change in its Ratings. In the event
either S&P or Moody's shall withdraw or suspend its Ratings, the remaining
Rating announced by either S&P or Moody's, as the case may be, shall apply. In
the event neither agency shall provide a Rating, the Applicable Margin shall
be based on the lowest rating provided above. If the Ratings by S&P and
Moody's are split so that two consecutive Levels (as defined in the table
above) apply, the higher of those Ratings shall determine the Applicable
Margin. If the Ratings by S&P and Moody's are split so that the applicable
Levels in the table above are separated by only one intermediate Level, then
such intermediate Level shall determine the Applicable Margin. If the Ratings
by S&P and Moody's are split so that the applicable Levels in the table above
are separated by two intermediate Levels, then the intermediate Level
representing the lowest Rating
22
shall determine the Applicable Margin. The Applicable Margin shall be
calculated by the Administrative Agent, which calculation absent manifest
error shall be final and binding on all parties.
(e) As used herein, "Utilization Fee" shall mean (i) a percentage
per annum equal to 0.250% for any date on which the Aggregate Credit Exposure
is equal to or exceeds 33% of the Total Commitment and (ii) a percentage per
annum equal to 0.000% for any other date.
Section 2.07 Default Interest. If the Borrower shall default in the
payment of the principal of or interest on any of its Loans or any other
amount becoming due hereunder, whether by scheduled maturity, notice of
prepayment, acceleration or otherwise, the Borrower shall on demand from time
to time from the Administrative Agent pay interest, to the extent permitted by
law, on such defaulted amount up to (but not including) the date of actual
payment (after as well as before judgment) at a rate per annum equal to the
rate of interest applicable thereto at maturity or due date plus 2%.
Section 2.08 Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
determined in good faith that dollar deposits in the principal amounts of the
Eurodollar Loans comprising such Borrowing are not generally available in the
London interbank market, or that the rates at which such dollar deposits are
being offered will not adequately and fairly reflect the cost to the Required
Lenders of making or maintaining their Eurodollar Loans during such Interest
Period, or that reasonable means do not exist for ascertaining the Eurodollar
Rate, the Administrative Agent shall, as soon as practicable thereafter, give
written notice of such determination to the Borrower and the Lenders. In the
event of any such determination, until the Administrative Agent shall have
advised the Borrower and the Lenders that the circumstances giving rise to
such notice no longer exist, (i) any request by the Borrower for a Eurodollar
Borrowing pursuant to Section 2.02 shall be deemed to be a request for a Base
Rate Borrowing, and (ii) any request by the Borrower for a conversion to or a
continuation of a Eurodollar Borrowing pursuant to Section 2.03 shall be
deemed to be a request for a conversion to a Base Rate Borrowing. Each
determination by the Administrative Agent hereunder shall be conclusive absent
manifest error.
Section 2.09 Termination, Reduction and Extension of Commitments.
(a) The unused Commitments of each Lender shall be automatically terminated on
the Termination Date.
(b) Subject to Section 2.10(b), upon at least three Business Days'
prior irrevocable written notice to the Administrative Agent, the Borrower may
at any time in whole permanently terminate, or from time to time in part
permanently reduce, the Total Commitment; provided, however, that (i) each
partial reduction shall be in an integral multiple of $1,000,000 and in a
minimum principal amount of $25,000,000 and (ii) no such termination or
reduction shall be made which would reduce the Total Commitment to an amount
less than the sum of the aggregate outstanding principal amount of Loans.
(c) The Total Commitment shall be automatically and permanently
reduced on each date on which prepayment thereof is required to be made
pursuant to Section 2.10(b)(i) or (ii) in the amount of such prepayment. In
addition, the Total Commitment shall be automatically
23
and permanently reduced on each date on which prepayment thereof is required
to be made pursuant to Section 2.10(b)(i) in an amount equal to the applicable
Reduction Amount. "Reduction Amount" shall mean, with respect to any sale,
lease, transfer or other disposition of any assets of the Borrower or any of
its Subsidiaries (other than Excluded Sales), on any date, the Net Cash
Proceeds received with respect thereto on such date less (i) any amounts
applied with respect thereto to prepay any outstanding amounts under the
Senior Bank Financing pursuant to Section 2.10(b) (including the amounts
required to be cash collateralized pursuant to Section 2.04(i) of the
Five-Year Revolving Credit Agreement), (ii) any amounts applied to reduce
Commitments under the Five-Year Revolving Credit Facility Agreement or the
364-Day Revolving Credit Facility Agreement, and (iii) the portion of such Net
Cash Proceeds that constitutes Reinvestment Proceeds.
(d) Subject to Section 2.18, each reduction in the Total Commitment
hereunder shall be made ratably among the Lenders in accordance with their
respective Commitments. The Borrower agrees to pay to the Administrative Agent
for the account of the Lenders, on the date of each termination or reduction,
the Facility Fees on the amount of the Commitments so terminated or reduced
accrued through the date of such termination or reduction.
Section 2.10 Prepayment. (a) Voluntary Prepayments. The Borrower
shall have the right at any time and from time to time to prepay any of its
Borrowings, in whole or in part, upon giving written notice (or telephone
notice promptly confirmed by written notice) to the Administrative Agent: (i)
before 12:00 noon, New York City time, three Business Days prior to
prepayment, in the case of Eurodollar Loans and (ii) before 12:00 noon, New
York City time, one Business Day prior to prepayment, in the case of Base Rate
Loans; provided, however, that each partial prepayment shall be in an amount
which is an integral multiple of $1,000,000 and not less than $25,000,000.
(b) Mandatory Prepayments. (i) The Borrower shall, within three
Business Days of the date of receipt of the Net Cash Proceeds by the Borrower
or any of its Domestic Subsidiaries from the sale, lease, transfer or other
disposition of any assets of the Borrower or any of its Subsidiaries (other
than any Excluded Sales), prepay any amounts outstanding under the Senior Bank
Financing in an amount equal to the lesser of the amount of such Net Cash
Proceeds and the amount so outstanding (including the amounts required to be
cash collateralized pursuant to Section 2.04(i) of the Five-Year Revolving
Credit Facility Agreement). Each such prepayment shall be applied first to any
principal amounts outstanding pursuant to this Agreement in accordance with
the terms and conditions for prepayment set forth herein, second to any
principal amounts outstanding or to be cash collateralized pursuant to the
Five-Year Revolving Credit Facility Agreement in accordance with the terms and
conditions for prepayment set forth therein, and third to any principal
amounts outstanding pursuant to the 364-Day Revolving Credit Facility
Agreement in accordance with the terms and conditions for prepayment set forth
therein; provided that the Borrower shall not be required to make any
prepayments pursuant to this Section 2.10(b)(i) if the Borrower or any of its
Subsidiaries shall apply any of the Net Cash Proceeds it received from the
sale, lease, transfer or other disposition of its assets for reinvestment in
its business within 180 days after receipt thereof by the Borrower or any of
its Subsidiaries (any such Net Cash Proceeds so reinvested, the "Reinvestment
Proceeds"); provided, further, that the Borrower shall have notified the
Administrative Agent of its intent to so reinvest such Net Cash Proceeds.
24
(ii) The Borrower shall, within three Business Days of receipt of
the Net Cash Proceeds by the Borrower or any of its Domestic Subsidiaries from
any Specified Issuance, prepay an aggregate principal amount of the Loans
comprising part of the same Borrowing in an amount equal to the amount of such
Net Cash Proceeds. "Specified Issuance" shall mean (A) any issuance by the
Borrower or any of its Domestic Subsidiaries of any Equity Interest pursuant
to a public offering registered with the SEC, a Rule 144A or Regulation S
private placement or any other similar offering on an underwritten or
placement-agent basis, other than (1) issuances to, and capital contributions
from, the Borrower or any of its Subsidiaries and (2) issuances to present or
former employees, officers or directors of the Borrower or any of its
Subsidiaries, including, without limitation, upon the exercise of stock
options, and (B) any issuance by the Borrower or any of its Domestic
Subsidiaries of any Indebtedness (other than commercial paper) referred to in
clause (a) or (b) of the definition of the term "Indebtedness" pursuant to (x)
a public offering registered with the SEC, a Rule 144A or Regulation S private
placement or any other similar offering on an underwritten or placement-agent
basis, or (y) a syndicated bank loan facility, other than issuances to the
Borrower or any of its Subsidiaries.
(iii) On the date of any termination or reduction of the Commitments
pursuant to Section 2.09, the Borrower shall pay or prepay so much of its
Borrowings as shall be necessary in order that the aggregate principal amount
of Loans outstanding not exceed the Total Commitment, after giving effect to
such termination or reduction.
(iv) Prepayments required to be made pursuant to clause (i) or (ii)
above to amounts due hereunder shall be applied to prepay Revolving Loans then
outstanding until such Loans are paid in full. The amount remaining (if any)
after the prepayment in full of the Loans may be retained by the Borrower to
the extent not required to be applied in accordance with clause (i) or (ii)
above, and the Commitments shall be permanently reduced in accordance with
Section 2.09(c).
(c) Each notice of prepayment under paragraph (a) above shall
specify the prepayment date and the principal amount of each Borrowing (or
portion thereof) to be prepaid, shall be irrevocable and shall commit the
Borrower to prepay such Borrowing (or portion thereof) by the amount stated
therein on the date stated therein. All prepayments under this Section 2.10
shall be subject to Section 2.13 but otherwise without premium or penalty. All
prepayments under this Section 2.10 shall be accompanied by accrued interest
on the principal amount being prepaid to the date of payment.
Section 2.11 Reserve Requirements; Change in Circumstances. (a) It
is understood that the cost to each Lender (including the Administrative
Agent) of making or maintaining any of the Eurodollar Loans may fluctuate as a
result of the applicability of reserve requirements imposed by the Board at
the ratios provided for in Regulation D on the date hereof. The Borrower
agrees to pay to each of such Lenders from time to time, as provided in
paragraph (d) below, such amounts as shall be necessary to compensate such
Lender for the portion of the cost of making or maintaining Eurodollar Loans
to the Borrower resulting from any such reserve requirements provided for in
Regulation D as in effect on the date hereof, it being understood that the
rates of interest applicable to Eurodollar Loans have been determined on the
assumption that no such reserve requirements exist or will exist and that such
rates do not reflect costs imposed on the Lenders in connection with such
reserve requirements. It is agreed
25
that for purposes of this paragraph (a) the Eurodollar Loans made hereunder
shall be deemed to constitute Eurocurrency Liabilities as defined in
Regulation D and to be subject to the reserve requirements of Regulation D
without the benefit of or credit for proration, exemptions or offsets which
might otherwise be available to the Lenders from time to time under Regulation
D.
(b) Notwithstanding any other provision herein, if after the date of
this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof (whether or not having the
force of law) shall change the basis of taxation of any payments to any Lender
(including the Administrative Agent) of the principal of or interest on any
Eurodollar Loan made by such Lender, or of any payments related to any Fees or
other amounts payable hereunder (other than changes in respect of taxes
imposed on the overall net income of such Lender by the jurisdiction in which
such Lender has its principal office or by any political subdivision or taxing
authority therein), or shall impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with or for
the account of or credit extended by such Lender, or shall impose on such
Lender or the London interbank market any other condition affecting this
Agreement, any Eurodollar Loan made by such Lender, and the result of any of
the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or
otherwise) in respect thereof by an amount deemed by such Lender to be
material, then the Borrower will pay to such Lender upon demand such
additional amount or amounts as will compensate such Lender for such
additional costs actually incurred or reduction actually suffered.
(c) If after the date hereof any Lender (including the
Administrative Agent) shall have determined that the general applicability of
any law, rule, regulation or guideline adopted pursuant to or arising out of
the July 1988 report of the Basle Committee on Banking Regulations and
Supervisory Practices entitled "International Convergence of Capital
Measurement and Capital Standards," or the adoption after the date hereof of
any other generally applicable law, rule, regulation or guideline regarding
capital adequacy, or any change in any of the foregoing or in the
interpretation or administration of any of the foregoing by any governmental
authority, central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by any Lender (or any lending office
of such Lender) or any Lender's holding company with any request or directive
regarding capital adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's capital or on the
capital of such Lender's holding company, if any, as a consequence of this
Agreement, the Loans made by such Lender pursuant hereto to a level below that
which such Lender or such Lender's holding company could have achieved but for
such adoption, change or compliance (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time, the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such Lender's holding company for
any such reduction suffered.
(d) A certificate of a Lender (including the Administrative Agent)
setting forth a reasonably detailed explanation of such amount or amounts as
shall be necessary to compensate such Lender (or participating banks or other
entities pursuant to Section 9.04) as specified in
26
paragraph (a), (b) or (c) above, as the case may be, shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
each Lender the amount shown as due on any such certificate delivered by it
within 10 days after the receipt of the same.
(e) Failure on the part of any Lender to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital with respect to any period shall not constitute a waiver of
such Lender's right to demand compensation with respect to such period or any
other period; provided that the Borrower shall not be required to compensate a
Lender pursuant to this Section for any increased costs or reductions incurred
more than 180 days prior to the date that such Lender notifies the Borrower of
such increased costs or reductions in accordance with paragraph (d) above and
of such Lender's intention to claim compensation thereof; provided further
that, if the circumstances giving rise to such increased costs or reductions
is retroactive, then the 180-day period referred to above shall be extended to
include the period of retroactive effect thereof.
(f) Notwithstanding any other provision of this Section 2.11, no
Lender shall demand compensation for any increased costs or reduction referred
to above if it shall not be the general policy or practice of such Lender to
demand such compensation in similar circumstances under comparable provisions
of other credit agreements, if any (it being understood that this sentence
shall not in any way limit the discretion of any Lender to waive the right to
demand such compensation in any given case).
Section 2.12 Change in Legality. (a) Notwithstanding any other
provision herein contained, if any change in any law or regulation or in the
interpretation thereof by any governmental authority charged with the
administration or interpretation thereof shall make it unlawful for any Lender
(including the Administrative Agent) to make or maintain any Eurodollar Loan
or to give effect to its obligations as contemplated hereby with respect to
any Eurodollar Loan, then, by written notice to the Borrower and to the
Administrative Agent, such Lender may:
(i) declare that Eurodollar Loans will not thereafter be made
by such Lender hereunder and any request by the Borrower for or a
conversion to or continuation of a Eurodollar Borrowing shall, as to
such Lender only, be deemed a request for a Base Rate Loan unless
such declaration shall be subsequently withdrawn; and
(ii) require that all outstanding Eurodollar Loans made by it
be converted into Base Rate Loans, in which event all such
Eurodollar Loans shall be automatically converted into Base Rate
Loans as of the effective date of such notice as provided in
paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been applied
to repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay
the Base Rate Loans made by such Lender in lieu of, or resulting from the
conversion of, such Eurodollar Loans.
27
(b) For purposes of this Section 2.12, a notice to the Borrower by
any Lender shall be effective as to each Eurodollar Loan, if lawful, on the
last day of the Interest Period currently applicable to such Eurodollar Loan;
in all other cases such notice shall be effective on the date of receipt by
the Borrower.
Section 2.13 Indemnity. The Borrower shall indemnify each Lender
against any loss or expense which such Lender sustains or incurs as a
consequence of (a) any failure by the Borrower to fulfill on the date of any
borrowing hereunder the applicable conditions set forth in Article IV, (b) any
failure by the Borrower to borrow or continue any Loan hereunder after
irrevocable notice of such borrowing or continuation has been given pursuant
to Section 2.02 or 2.03, as applicable, (c) any payment, prepayment or
conversion of a Eurodollar Loan required by any other provision of this
Agreement or otherwise made or deemed made to or by the Borrower on a date
other than the last day of the Interest Period applicable thereto; provided
that the Borrower shall not be required to indemnify a Lender pursuant to this
clause (c) for any loss or expense to the extent any such loss or expense
shall have been incurred pursuant to (i) Section 2.11, 2.12 or 2.17 or (ii)
Section 2.10(a) more than six months prior to the date that the applicable
Lender shall have notified the Borrower of its intention to claim compensation
therefor, (d) any default in payment or prepayment of the principal amount of
any Loan to the Borrower or any part thereof or interest accrued thereon, as
and when due and payable (at the due date thereof, whether by scheduled
maturity, acceleration, irrevocable notice of prepayment or otherwise), or (e)
the occurrence of any Event of Default on the part of the Borrower, including,
in each such case, any loss or reasonable expense sustained or incurred or to
be sustained or incurred in liquidating or employing deposits from third
parties acquired to effect or maintain such Loan or any part thereof as a
Eurodollar Loan. Such loss or reasonable expense shall include an amount equal
to the excess, if any, as reasonably determined by such Lender, of (i) its
cost of obtaining the funds for the Loan being paid, prepaid, converted or not
borrowed (based on the Eurodollar Rate) for the period from the date of such
payment, prepayment or conversion or failure to borrow to the last day of the
Interest Period for such Loan (or, in the case of a failure to borrow, the
Interest Period for such Loan which would have commenced on the date of such
failure) over (ii) the amount of interest (as reasonably determined by such
Lender) that would be realized by such Lender in reemploying the funds so
paid, prepaid or converted or not borrowed for such period or Interest Period,
as the case may be. A certificate of any Lender setting forth a reasonably
detailed explanation of any amount or amounts which such Lender is entitled to
receive pursuant to this Section shall be delivered to the Borrower and shall
be conclusive absent manifest error.
Section 2.14 Pro Rata Treatment. Except as required under Sections
2.12 or 2.18, each Borrowing, each payment or prepayment of principal of any
Borrowing, each payment of interest on the Loans, each payment of the Facility
Fees, each reduction of the Commitments and each conversion of any Borrowing
to a Borrowing of any Type, shall be allocated pro rata among the Lenders in
accordance with their respective Commitments (or, if such Commitments shall
have expired or been terminated, in accordance with the respective principal
amounts of their outstanding Loans). Each Lender agrees that in computing such
Lender's portion of any Borrowing to be made hereunder, the Administrative
Agent may, in its discretion, round each Lender's percentage of such Borrowing
to the next higher or lower whole dollar amount.
28
Section 2.15 Sharing of Setoffs. Each Lender agrees that if it
shall, through the exercise of a right of banker's lien, setoff or
counterclaim against the Borrower, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or
interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, obtain payment (voluntary or involuntary) in
respect of any Loans (other than pursuant to Sections 2.09, 2.11 and 2.12) as
a result of which the unpaid principal portion of its Loans shall be
proportionately less than the unpaid principal portion of the Loans of any
other Lender, it shall be deemed simultaneously to have purchased from such
other Lender at face value, and shall promptly pay to such other Lender the
purchase price for, a participation in the Loans of such other Lender, so that
the aggregate unpaid principal amount of the Loans and participations in the
Loans held by each Lender shall be in the same proportion to the aggregate
unpaid principal amount of all Loans then outstanding as the principal amount
of its Loans prior to such exercise of banker's lien, setoff or counterclaim
or other event was to the principal amount of all Loans outstanding prior to
such exercise of banker's lien, setoff or counterclaim or other event;
provided, however, that, if any such purchase or purchases or adjustments
shall be made pursuant to this Section 2.15 and the payment giving rise
thereto shall thereafter be recovered, such purchase or purchases or
adjustments shall be rescinded to the extent of such recovery and the purchase
price or prices or adjustment restored without interest. The Borrower
expressly consents to the foregoing arrangements and agrees that any Lender
holding a participation in a Loan deemed to have been so purchased may
exercise any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing by the Borrower to such Lender by reason
thereof as fully as if such Lender had made a Loan directly to the Borrower in
the amount of such participation.
Section 2.16 Payments. (a) The Borrower shall make each payment
(including principal of or interest on any Borrowing or any Fees or other
amounts payable) hereunder and under any other Loan Document without setoff,
counterclaim or deduction of any kind not later than 12:00 (noon), New York
City time, on the date when due in dollars to the Administrative Agent at its
offices at 270 Park Avenue, New York, New York, in immediately available
funds.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation
of interest or Fees, if applicable.
Section 2.17 Taxes. (a) Any and all payments by the Borrower
hereunder shall be made, in accordance with Section 2.16, free and clear of
and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding any income, franchise, branch profits or similar tax
imposed on or measured by the net income or net profits of the Administrative
Agent or any Lender (or any transferee or assignee that acquires a Loan (any
such entity a "Transferee")) by the United States or any jurisdiction under
the laws of which it is organized or doing business or any political
subdivision thereof (all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as
"Taxes"). If the Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder to the
29
Lenders (or any Transferee) or the Administrative Agent, (i) the sum payable
shall be increased by the amount necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.17) such Lender (or Transferee) or the Administrative Agent (as
the case may be) shall receive an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant taxing authority or other Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made by the Borrower hereunder or
under any other Loan Document or from the execution, delivery or registration
of or performance under this Agreement or any other Loan Document, or
otherwise with respect to the Borrower's role in this Agreement or any other
Loan Document (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender (or Transferee) and the
Administrative Agent for the full amount of Taxes and Other Taxes (including
any Taxes or Other Taxes imposed by any jurisdiction on amounts payable by the
Borrower under this Section 2.17) paid by such Lender (or Transferee) or the
Administrative Agent, as the case may be, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted by
the relevant taxing authority or other Governmental Authority. The Borrower
shall also indemnify each Lender (or any Transferee) and the Administrative
Agent for the full amount of taxes imposed on or measured by the net income or
receipts of such Lender (or any Transferee) or the Administrative Agent, as
the case may be, as such Lender (or Transferee) or the Administrative Agent
shall determine are payable in respect of amounts paid by the Borrower to or
on behalf of such Lender (or any Transferee) or the Administrative Agent, as
the case may be, pursuant to this Section 2.17. Such indemnification shall be
made within 30 days after the date any Lender (or Transferee) or the
Administrative Agent, as the case may be, makes written demand therefor. If
any Lender (or Transferee) or the Administrative Agent becomes entitled to a
refund of Taxes or Other Taxes for which such Lender (or Transferee) or the
Administrative Agent has received payment from the Borrower hereunder, such
Lender (or Transferee) or Administrative Agent, as the case may be, shall, at
the expense of the Borrower, use its reasonable efforts (consistent with
internal policy, and legal and regulatory restrictions) to obtain such refund.
If a Lender (or Transferee) or the Administrative Agent receives a refund or
is entitled to claim a tax credit in respect of any Taxes or Other Taxes for
which such Lender (or Transferee) or the Administrative Agent has received
payment from the Borrower hereunder it shall promptly notify the Borrower of
such refund or credit and shall, within 30 days after receipt of a request by
the Borrower (or promptly upon receipt, if the Borrower has requested
application for such refund or credit pursuant hereto), repay such refund or
amount of credit to the Borrower, net of all out-of-pocket expenses of such
Lender and without interest; provided that the Borrower, upon the request of
such Lender (or Transferee) or the Administrative Agent, agrees to return such
refund or amount of credit (plus penalties, interest or other charges) to such
Lender (or Transferee) or the Administrative Agent in the event such Lender
(or Transferee) or the Administrative Agent is required to repay such refund
or such credit is denied or subsequently determined to be unavailable.
30
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes withheld by the Borrower in respect of any payment to any Lender (or
Transferee) or the Administrative Agent, the Borrower will furnish to the
Administrative Agent, at its address referred to in Section 9.01, the original
or a certified copy of a receipt evidencing payment thereof to the proper
Governmental Authority.
(e) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section
2.17 shall survive the payment in full of the principal of and interest on all
Loans made hereunder.
(f) Each Lender (or Transferee) which is organized under the laws of
a jurisdiction outside the United States shall, on or prior to the date of its
execution and delivery of this Agreement or, in the case of a Transferee, on
the date on which it becomes a Lender, and in the case of any Lender, on or
prior to the date such Lender changes its funding office, and from time to
time thereafter as requested in writing by the Borrower (but only so long
thereafter as such Lender remains lawfully able to do so), shall deliver to
the Borrower and the Administrative Agent such certificates, documents or
other evidence, as required by the Code or Treasury Regulations issued
pursuant thereto, including Internal Revenue Service Form W-8BEN or Form
W-8ECI and any other certificate or statement of exemption required by
Treasury Regulation Section 1.1441-4(a) or Section 1.1441-6(c) or any
subsequent version thereof, properly completed and duly executed by such
Lender (or Transferee) establishing that any payment under the Loan Documents
is (i) not subject to withholding under the Code because such payment is
effectively connected with the conduct by such Lender (or Transferee) of a
trade or business in the United States, or (ii) fully or partially exempt from
United States tax under a provision of an applicable tax treaty, or (iii) not
subject to withholding under the portfolio interest exception under Section
881(c) of the Code (and, if such Lender (or Transferee) delivers a Form W-8BEN
claiming the benefits of exemption from United States withholding tax under
Section 881(c), a certificate representing that such Lender (or Transferee) is
not a "bank" for purposes of Section 881(c) of the Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the
Borrower and is not a controlled foreign corporation related to the Borrower
(within the meaning of Section 864(d)(4) of the Code). Unless the Borrower and
the Administrative Agent have received forms or other documents reasonably
satisfactory to them indicating that payments hereunder are not subject to
United States withholding tax or are subject to such tax at a rate reduced by
an applicable tax treaty, the Borrower or the Administrative Agent shall
withhold taxes from such payments at the applicable statutory rate in the case
of payments to or for any Lender (or Transferee) organized under the laws of a
jurisdiction outside the United States. If a Lender (or Transferee) is unable
to deliver one of these forms or if the forms provided by a Lender (or
Transferee) at the time such Lender (or Transferee) first becomes a party to
this Agreement or at the time a Lender (or Transferee) changes its funding
office (other than at the request of the Borrower) indicate a United States
interest withholding tax rate in excess of zero, withholding tax at such rate
shall be considered excluded from Taxes unless and until such Lender (or
Transferee) provides the appropriate forms certifying that a lesser rate
applies, whereupon withholding tax at such lesser rate only shall be
considered excluded from Taxes for periods governed by such appropriate forms;
provided, however, that if, at the effective date of a transfer pursuant to
which a Lender (or Transferee) becomes a party to this Agreement, the Lender
(or Transferee) assignor was entitled to payments under Section 2.17(a) in
respect of United States withholding tax with respect to interest paid at
31
such date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts otherwise
includable in Taxes) United States withholding tax, if any, applicable with
respect to the Lender (or Transferee) assignee on such date.
(g) The Borrower shall not be required to pay any additional amounts
to any Lender (or Transferee) in respect of United States withholding tax
pursuant to paragraph (a) above for any period in respect of which the
obligation to pay such additional amounts would not have arisen but for a
failure by such Lender (or Transferee) to comply with the provisions of
paragraph (f) above unless such failure results from (i) a change in
applicable law, regulation or official interpretation thereof or (ii) an
amendment, modification or revocation of any applicable tax treaty or a change
in official position regarding the application or interpretation thereof, in
each case after the Closing Date (and, in the case of a Transferee, after the
date of assignment or transfer).
(h) Any Lender (or Transferee) claiming any additional amounts
payable pursuant to this Section 2.17 shall use reasonable efforts (consistent
with internal policy, and legal and regulatory restrictions) to file any
certificate or document requested by the Borrower or to change the
jurisdiction of its applicable lending office if the making of such a filing
or change would avoid the need for or reduce the amount of any such additional
amounts which may thereafter accrue and would not, in the reasonable
determination of such Lender (or Transferee) be materially disadvantageous to
such Lender (or Transferee) or require the disclosure of information that the
Lender (or Transferee) reasonably considers to be confidential.
Section 2.18 Mitigation Obligations; Replacement of Lenders. (a) If
any Lender (including the Administrative Agent) requests compensation under
Section 2.11, or if it becomes unlawful for any Lender (including the
Administrative) to make or maintain Eurodollar Loans under Section 2.12, or if
the Borrower is required to pay any additional amount to any Lender, the
Administrative Agent or any Governmental Authority for the account of any
Lender or the Administrative Agent pursuant to Section 2.17, then such Lender
or the Administrative Agent shall, at the request of the Borrower, use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder
to another of its offices, branches or affiliates, if, in the judgment of such
Lender or the Administrative Agent, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.11 or 2.17 or no
longer make it unlawful for such Lender or the Administrative Agent to make or
maintain Eurodollar Loans under Section 2.12, as the case may be, in the
future and (ii) would not subject such Lender or the Administrative Agent to
any unreimbursed cost or expense and would not otherwise be disadvantageous to
such Lender or the Administrative Agent. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender or the Administrative
Agent in connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.11, or if it
becomes unlawful for any Lender to make or maintain Eurodollar Loans under
Section 2.12, or if the Borrower is required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.17, or if any Lender defaults in its obligation to fund
Loans hereunder, then the Borrower may, at its sole expense and effort, upon
notice to
32
such Lender and the Administrative Agent, (i) require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 9.04), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (x) the Borrower shall have received the prior
written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (y) such assigning Lender shall have received
payment of an amount equal to the outstanding principal of its Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and (z)
in the case of any such assignment resulting from a claim for compensation
under Section 2.11 or payments required to be made pursuant to Section 2.17,
such assignment will result in a reduction in such compensation or payments or
(ii) terminate the Commitment of such Lender upon notice given to such Lender
within forty-five (45) days of receipt of the notice given by the Lender;
provided that such notice shall be accompanied by prepayment in full of all
Loans from such Lender, including accrued interest thereon and any breakage
costs, accrued fees and all other amounts payable to such Lender, without
extension, conversion or continuation. A Lender shall not be required to make
any such assignment and delegation under clause (i) above or terminate its
Commitment under clause (ii) above if, prior thereto, as a result of a waiver
by such Lender or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation or termination of Commitment cease to
apply.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the Lenders that (it
being understood and agreed that the representations and warranties made by
the Borrower on the Closing Date, including, without limitation, for purposes
of Sections 4.01(b) and 4.02(d), shall not cover the Company or any of its
Subsidiaries, except to the extent the Company or any of its Subsidiaries are
expressly referred to in the representations and warranties set forth in this
Article III):
Section 3.01 Organization; Powers. The Borrower and each of its
Restricted Subsidiaries (a) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization,
(b) has all requisite power and authority to own its property and assets and
to carry on its business as now conducted and as proposed to be conducted, (c)
is qualified to do business in every jurisdiction where such qualification is
required, except where the failure so to qualify would not result in a
Material Adverse Effect, and (d) in the case of the Borrower, has the
corporate power and authority to execute, deliver and perform its obligations
under each of the Loan Documents and each other agreement or instrument
contemplated thereby to which it is or will be a party and to borrow
hereunder.
Section 3.02 Authorization. The execution, delivery and performance
by the Borrower of each of the Loan Documents and the borrowings hereunder,
and the consummation of the Tender Offer, the Acquisition and the Merger and
the other transactions contemplated
33
hereby and thereby (collectively, the "Transactions") (a) have been duly
authorized by all requisite corporate and, if required, stockholder action and
(b) (i) will not violate (A) any provision of law, statute, rule or
regulation, (B) the certificate or articles of incorporation or other
constitutive documents or by-laws of the Borrower or any of its Restricted
Subsidiaries, (C) any order of any Governmental Authority or (D) any provision
of any indenture, agreement or other instrument to which the Borrower or any
of its Restricted Subsidiaries is a party or by which any of them or any of
their property is or may be bound, (ii) will not be in conflict with, result
in a breach of or constitute (alone or with notice or lapse of time or both) a
default under any such indenture, agreement or other instrument or (iii) will
not result in the creation or imposition of any Lien upon or with respect to
any property or assets now owned or hereafter acquired by the Borrower or any
of its Restricted Subsidiaries except, in each case other than (i)(B), as
could not reasonably be expected to have a Material Adverse Effect.
Section 3.03 Enforceability. This Agreement has been duly executed
and delivered by the Borrower and constitutes, and each other Loan Document
when executed and delivered by the Borrower will constitute, a legal, valid
and binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
and subject to general principles of equity, regardless of whether considered
in a proceeding in equity or at law.
Section 3.04 Consents and Approvals. No action, consent or approval
of, registration or filing with, or any other action by any Governmental
Authority or any other third party is or will be required in connection with
the Transactions, except as have been made or obtained (without the imposition
of any conditions that are not acceptable to the Lenders) and are in full
force and effect (other than any action, consent, approval, registration or
filing the absence of which could not reasonably be expected, either
individually or in the aggregate with any such other consents, approvals,
registrations or filings, to result in a Material Adverse Effect). All
applicable waiting periods in connection with the Transactions have expired
without any action having been taken by any competent authority, and no law or
regulation shall be applicable, restraining, preventing or imposing materially
adverse conditions upon the Transactions or the rights of the Borrower, the
Company and their respective subsidiaries freely to transfer or otherwise
dispose of, or to create any Lien on, any properties now owned or hereafter
acquired by any of them except, in each case, as could not reasonably be
expected to have a Material Adverse Effect.
Section 3.05 Financial Statements. (a) The Borrower has heretofore
furnished to the Lenders (i) its consolidated balance sheets and statements of
earnings and statements of cash flows, together with the notes thereto, as of
and for the fiscal year ended December 31, 2000, audited by and accompanied by
the opinion of Arthur Andersen LLP, independent public accountants, and (ii)
its unaudited consolidated balance sheets and statements of earnings and
statements of cash flows, together with the notes thereto, as of and for the
nine month period ended September 30, 2001.
(b) The Borrower has heretofore furnished to the Lenders the
consolidated pro forma balance sheet of the Borrower as of the Closing Date,
certified by the chief financial officer of the Borrower, giving effect to the
Transactions and such pro forma balance sheet fairly
34
presents the consolidated pro forma financial condition of the Borrower and
its Subsidiaries as at such date, giving effect to the Transactions.
(c) WRECO has heretofore furnished to the Lenders (i) its
consolidated balance sheets and statements of earnings and statements of cash
flows, together with the notes thereto, as of and for the fiscal year ended
December 31, 2000, audited by and accompanied by the opinion of Arthur
Andersen LLP, independent public accountants, and (ii) its unaudited
consolidated balance sheets and statements of earnings and statements of cash
flows, together with the notes thereto, as of and for the nine month period
ended September 30, 2001.
(d) Such financial statements referred to in Section 3.05 (a) and
(c) present fairly in all material respects the financial position and results
of operations of the Borrower, WRECO and their respective consolidated
subsidiaries as of such dates and for such periods. Such balance sheets and
the notes thereto disclose all material liabilities, direct or contingent, of
the Borrower, WRECO and their respective consolidated subsidiaries as of the
dates thereof. Such financial statements were prepared in accordance with GAAP
applied on a consistent basis.
Section 3.06 No Material Adverse Change. Other than changes in
operating results arising in the ordinary course of business and except as
otherwise disclosed publicly or to the Lenders prior to the date hereof, there
has been no material adverse change in the business, financial condition,
operations or properties of the Borrower and its subsidiaries, taken as a
whole, since September 30, 2001.
Section 3.07 Title to Properties; Possession Under Leases. (a) Each
of the Borrower and its Restricted Subsidiaries has good and marketable title
to, or valid leasehold interests in, all of its material properties and
assets, except for defects in title that do not interfere with its ability to
conduct its business as currently conducted or to utilize such properties and
assets for their intended purposes.
(b) Each of the Borrower and its Restricted Subsidiaries (i) has
complied with all obligations under all leases to which it is a party, and
(ii) enjoys peaceful and undisturbed possession under all such leases, except
where such non-compliance or lack of peaceful and undisturbed possession would
not result in a Material Adverse Effect. All leases to which the Borrower and
its Restricted Subsidiaries is a party are in full force and effect, except
where such lack of force and effect would not result in a Material Adverse
Effect.
Section 3.08 Subsidiaries. Schedule 3.08 Part I for the Borrower,
Schedule 3.08 Part II for WRECO and Schedule 3.08 Part III for the Company (i)
set forth as of the Closing Date a list of all subsidiaries of the Borrower,
WRECO and the Company and the percentage ownership interest of the Borrower,
WRECO or the Company therein, as applicable, and (ii) for the Borrower and
WRECO, designate those Subsidiaries which are Unrestricted Subsidiaries;
provided, that Schedule 3.08 Part III shall have been prepared by the Borrower
in reliance on information provided by the Company in the Disclosure Letter.
Section 3.09 Litigation; Compliance with Laws. (a) Except as
otherwise disclosed publicly prior to December 13, 2001, there are no actions,
suits, investigations, litigations or proceedings pending or, to the knowledge
of the Borrower, threatened against or
35
affecting the Borrower or any of its Restricted Subsidiaries in any court or
before any arbitrator or Governmental Authority that could reasonably be
expected to have a Material Adverse Effect.
(b) Except as disclosed in the Borrower's Report on Form 10-Q for
the fiscal quarter ended September 30, 2001, neither the Borrower nor any of
its Restricted Subsidiaries is in violation of any law, rule or regulation, or
in default with respect to any judgment, writ, injunction or decree of any
Governmental Authority, where such violation or default could reasonably be
expected to result in a Material Adverse Effect.
(c) Based on the information provided by the Company in the
Disclosure Letter and except as disclosed in the Company's Report on Form 10-K
for the fiscal year ended December 31, 2000, or in the Disclosure Letter,
there are no actions, suits, investigations, litigations or proceedings
pending or threatened against or affecting the Company or any of its
Restricted Subsidiaries in any court or before any arbitrator or Governmental
Authority that could reasonably be expected to be have a Material Adverse
Effect.
(d) Based on the information provided by the Company in the
Disclosure Letter and except as disclosed in the Company's Report on Form 10-K
for the fiscal year ended December 31, 2000, or in the Disclosure Letter,
neither the Company nor any of its subsidiaries is in violation of any law,
rule or regulation, or in default with respect to any judgment, writ,
injunction or decree of any Governmental Authority, where such violation or
default could reasonably be expected to result in a Material Adverse Effect.
Section 3.10 Agreements. (a) Neither the Borrower nor any of its
Restricted Subsidiaries is a party to any agreement or instrument or subject
to any corporate restriction that has resulted in a Material Adverse Effect.
(b) Neither the Borrower nor any of its Restricted Subsidiaries is
in default in any manner under any material agreement or instrument (except
for any indenture or other agreement or instrument evidencing Indebtedness) to
which it is a party or by which it or any of its properties or assets are or
may be bound, where such default could reasonably be expected to result in a
Material Adverse Effect.
Section 3.11 Federal Reserve Regulations. (a) Neither the Borrower
nor any of its Restricted Subsidiaries is engaged principally, or as one of
its important activities, in the business of extending credit for the purpose
of purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used, whether
directly or indirectly, whether immediately, incidentally or ultimately, for
any purpose which entails a violation of, or which is inconsistent with, the
provisions of the Regulations of the Board, including Regulation T, U or X.
Section 3.12 Investment Company Act; Public Utility Holding Company
Act. Neither the Borrower nor any of its Restricted Subsidiaries is (a) an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
36
Section 3.13 Tax Returns. Each of the Borrower and its Subsidiaries
has filed or caused to be filed all material Federal, state and local tax
returns required to have been filed by it and has paid or caused to be paid
all material taxes shown to be due and payable on such returns or on any
assessments received by it, except taxes that are being contested in good
faith by appropriate proceedings and for which such Borrower or Subsidiary, as
the case may be, shall have set aside on its books appropriate reserves.
Section 3.14 No Material Misstatements. Neither the Confidential
Information Memorandum, nor any information, report, financial statement,
exhibit or schedule furnished by or on behalf of the Borrower to the
Administrative Agent or any Lender in connection with the negotiation of any
Loan Document or included therein or delivered pursuant thereto, when taken
together with the reports and other filings with the SEC, contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
Section 3.15 Compliance with ERISA. Except as would not have a
Material Adverse Effect, subject to the following sentences of this Section
3.15, each Plan subject to ERISA or the Code, as applicable, is in compliance
with ERISA and the Code; no Reportable Event has occurred with respect to a
Plan, no Plan is insolvent or in reorganization; no Plan has an Unfunded
Current Liability in excess of $40,000,000, and all Plans collectively do not
have Unfunded Current Liabilities in excess of $91,000,000 in the aggregate,
and no Plan subject to ERISA or the Code, as applicable, has an accumulated or
waived funding deficiency, has permitted decreases in its funding standard
account or has applied for an extension of any amortization period within the
meaning of Section 412 of the Code; neither the Borrower nor any ERISA
Affiliate has incurred any liability to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of
ERISA or Section 4975 of the Code or expects to incur any material liability
under any of the foregoing Sections with respect to any such Plan; no
condition exists which presents a risk to the Borrower or any ERISA Affiliate
of incurring a liability to or on account of a Plan pursuant to the foregoing
provisions of ERISA and the Code; no proceedings have been instituted to
terminate any Plan; no lien imposed under the Code or ERISA on the assets of
the Borrower or any ERISA Affiliate exists or is likely to arise on account of
any Plan; the Borrower and its Subsidiaries do not maintain or contribute to
any "welfare plan" (within the meaning of Section 3(1) of ERISA) which
provides life insurance or health benefits to retirees (other than as required
by Section 601 of ERISA) the obligations with respect to which could
reasonably be expected to have a Material Adverse Effect.
Section 3.16 Environmental Matters. (a) Except as disclosed in the
Borrower's Report on Form 10-K for the fiscal year ended December 31, 2000,
filed with the SEC, (a) neither the Borrower nor any of its Subsidiaries has
failed to comply with any Federal, state, local and other statutes,
ordinances, orders, judgments, rulings and regulations relating to
environmental pollution or to environmental regulation or control, where any
such failure to comply, alone or together with any other such noncompliance,
could result in a Material Adverse Effect; (b) neither the Borrower nor any of
its Subsidiaries has received notice of any failure so to comply which alone
or together with any other such failure could result in a Material Adverse
Effect; and (c) the Borrower's and its Subsidiaries' plants have not managed
any hazardous wastes, hazardous substances, hazardous materials, toxic
substances or toxic pollutants, as those terms are used in the Resource
Conservation and Recovery Act, the Comprehensive
37
Environmental Response Compensation and Liability Act, the Hazardous Materials
Transportation Act, the Toxic Substance Control Act, the Clean Air Act, the
Clean Water Act or any other Environmental Law, in violation of any
regulations promulgated pursuant thereto or in any other applicable law where
such violation could reasonably result, individually or together with other
violations, in a Material Adverse Effect.
(b) Except as disclosed in the Company's Report on Form 10-K for the
fiscal year ended December 31, 2000, filed with the Securities and Exchange
Commission, (a) neither the Company nor any of its subsidiaries has failed to
comply with any Federal, state, local and other statutes, ordinances, orders,
judgments, rulings and regulations relating to environmental pollution or to
environmental regulation or control, where any such failure to comply, alone
or together with any other such noncompliance, could result in a Material
Adverse Effect; (b) neither the Company nor any of its subsidiaries has
received notice of any failure so to comply which alone or together with any
other such failure could result in a Material Adverse Effect; and (c) the
Company's and its subsidiaries' plants have not managed any hazardous wastes,
hazardous substances, hazardous materials, toxic substances or toxic
pollutants, as those terms are used in the Resource Conservation and Recovery
Act, the Comprehensive Environmental Response Compensation and Liability Act,
the Hazardous Materials Transportation Act, the Toxic Substance Control Act,
the Clean Air Act, the Clean Water Act or any other Environmental Law, in
violation of any regulations promulgated pursuant thereto or in any other
applicable law where such violation could reasonably be expected to result,
individually or together with other violations, in a Material Adverse Effect.
Section 3.17 Maintenance of Insurance. The Borrower and each of its
Restricted Subsidiaries maintains insurance (which may be self insurance) for
all of its insurable properties: (a) by financially sound and reputable
insurers to the extent of insurance obtained from third party insurers; (b) to
such extent and against such risks, including fire and other risks insured
against by extended coverage, as is customary with companies in the same or
similar businesses, including public liability insurance against claims for
personal injury or death or property damage occurring upon, in, about or in
connection with the use of any properties owned, occupied or controlled by the
Borrower or such Restricted Subsidiaries; and (c) as may be required by law.
Section 3.18 Existing Senior Credit Facilities. Schedule 3.18 sets
forth, as of the Closing Date, a complete and accurate list of the Existing
Senior Credit Facilities of the Borrower, the Company and their respective
subsidiaries (other than the Surviving Senior Credit Facilities), showing as
of the Closing Date the obligor and the principal amount outstanding
thereunder.
Section 3.19 Surviving Senior Credit Facilities. Schedule 3.19 sets
forth, as of the Closing Date, a complete and accurate list of the Surviving
Senior Credit Facilities of the Borrower, the Company and their respective
subsidiaries, showing as of the Closing Date the obligor and the principal
amount outstanding thereunder.
Section 3.20 Non-Material Loans. Except as disclosed on Schedule
3.19, there shall not be more than $50,000,000 of Non-Material Loans of the
Borrower and its Restricted
39
Subsidiaries and the Company and its Subsidiaries in the aggregate outstanding
as of the Closing Date.
ARTICLE IV
CONDITIONS OF LENDING
The obligations of the Lenders to make Loans hereunder are subject
to the satisfaction of the following conditions:
Section 4.01 All Borrowings. On the date of each Borrowing:
(a) Notice. The Administrative Agent shall have received from
the Borrower a notice of such Borrowing as required by Section 2.02.
(b) Representations. The representations and warranties of the
Borrower set forth in Sections 3.01, 3.02, 3.03, 3.04, 3.07,
3.10(b), 3.11 and 3.12 shall be true and correct in all material
respects on and as of such date with the same effect as though made
on and as of such date at the time of and immediately after such
Borrowing.
(c) Compliance, etc. The Borrower shall be in compliance with
all the terms and provisions set forth herein and in each other Loan
Document on their part to be observed or performed, and, as
applicable, at the time of and immediately after such Borrowing, no
Event of Default or Default shall have occurred and be continuing
(it being understood and agreed that, for the purposes of
determining the satisfaction of the conditions set forth in this
Section 4.01(c) and Section 4.02(d) on the Closing Date, the
affirmative and negative covenants and the Events of Default set
forth in this Agreement shall not cover the Company or any of its
Subsidiaries).
Each Borrowing shall be deemed to constitute a representation and
warranty by the Borrower on the date of such Borrowing as to the matters
specified in paragraphs (b) and (c) of this Section 4.01.
Section 4.02 Closing Date. On the date of the initial Borrowing:
(a) Opinions. The Administrative Agent shall have received a
favorable written opinion of (i) Cravath, Swaine & Moore, special
counsel for the Borrower, dated the Closing Date and addressed to
the Lenders, in form and substance reasonably satisfactory to the
Administrative Agent and (ii) Lorrie Scott, Esq., Senior Legal
Counsel to the Borrower, as counsel for the Borrower, dated the
Closing Date and addressed to the Lenders, in form and substance
reasonably satisfactory to the Administrative Agent.
(b) Legal Matters. All legal matters (including any
documentation) related to this Agreement and the Transactions shall
be satisfactory to the Lenders and to Shearman & Sterling, special
counsel for the Administrative Agent. In addition, the Acquisition
and the Tender Offer shall have been consummated or shall be
consummated on or before
39
the Closing Date in accordance in all material respects with the
terms and conditions of the Tender Offer Statement, without any
waiver or amendment not consented to by the Lenders of any material
term, condition or provision set forth therein, and in compliance in
all material respects with all applicable laws, and the Borrower
shall have acquired sufficient shares of capital stock of the
Company, to enable the Purchaser, voting without any other
shareholder of the Company, to approve the Merger.
(c) Articles, etc. The Administrative Agent shall have received
(i) a copy of the certificate or articles of incorporation,
including all amendments thereto, of the Borrower, certified as of a
recent date by the Secretary of State of its State of incorporation,
and a certificate as to the good standing of the Borrower, as of a
recent date, from such Secretary of State; (ii) a certificate from
the Borrower of its Secretary or Assistant Secretary dated the
Closing Date and certifying (A) that attached thereto is a true and
complete copy of the by-laws of the Borrower as in effect on the
Closing Date and at all times since a date prior to the date of the
resolutions described in clause (B) below, (B) that attached thereto
is a true and complete copy of resolutions duly adopted by the Board
of Directors of the Borrower authorizing the execution, delivery and
performance of the Borrower of any and all documents and agreements
to be entered into with respect to the Transactions, including
without limitation, the Loan Documents and the borrowings to be made
thereunder, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect, (C) that the
certificate or articles of incorporation of the Borrower have not
been amended since the date of the last amendment thereto shown on
the certificate of good standing furnished pursuant to clause (i)
above, and (D) as to the incumbency and specimen signature of each
officer executing any Loan Document or any other document or
agreement delivered in connection with the Transactions on behalf of
the Borrower; (iii) certification of another officer as to the
incumbency and specimen signature of the Secretary or Assistant
Secretary executing the certificate pursuant to (ii) above; and (iv)
such other documents as the Lenders or Shearman & Sterling, special
counsel for the Administrative Agent, may reasonably request.
(d) Officers' Certificates. The Administrative Agent shall have
received a certificate from the Borrower, dated the Closing Date and
signed by a Financial Officer of the Borrower, confirming (i)
compliance with the condition precedent set forth in paragraph (c)
of Section 4.01, and (ii) that the representations and warranties of
the Borrower set forth herein are true and correct in all material
respects on and as of the Closing Date (except for representations
and warranties expressly stated to relate to a specific earlier
date, in which case such representations and warranties are true and
correct in all material respects as of such earlier date),
immediately prior to, and after giving effect to, the initial
Borrowing hereunder.
(e) Fees. The Administrative Agent and the Lenders shall have
received all Fees and other amounts due and payable on or prior to
the Closing Date.
(f) Loan Documents. The Administrative Agent shall have
received a fully executed counterpart of this Agreement, and an
executed copy of each Loan Document (other than this Agreement).
40
(g) Termination of Existing Senior Credit Facilities. On the
Closing Date the Administrative Agent shall have received written
evidence reasonably satisfactory to it that either (i) all Existing
Senior Credit Facilities, other than the Surviving Senior Credit
Facilities, have been prepaid, redeemed or defeased in full or
otherwise satisfied and extinguished or (ii) arrangements reasonably
satisfactory to the Administrative Agent and the Lenders for such
prepayment, redemption, defeasance, satisfaction or extinguishment
have been made; and all Surviving Senior Credit Facilities shall be
on terms and conditions reasonably satisfactory to the
Administrative Agent and the Lenders.
(h) Documentation. The Administrative Agent and 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 the Company's outstanding common stock
(including the related preferred stock purchase rights) to enable
the Purchaser, voting without any other shareholder of the Company
to consummate 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 Administrative Agent and
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's
outstanding common stock (including the related preferred stock
purchase rights), the Merger Agreement, if any, and the Disclosure
Letter, shall be in form and substance reasonably satisfactory to
the Administrative Agent and the Lenders.
(i) Rating. The Rating of the Borrower's Senior Unsecured
Long-Term Debt, shall be at least Baa3 by Moody's and at least BBB-
by S&P and, if the Borrower is rated in the above referenced lowest
categories 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.
(j) Regulation U. The Administrative Agent shall have received
the Federal Reserve Forms U-1 provided for in Regulation U, the
statements made in which shall be such as to permit the Transactions
contemplated hereby in accordance with Regulation U.
(k) No Material Adverse Change. Other than changes in operating
results arising in the ordinary course of business and except as
otherwise disclosed publicly or to the Lenders prior to the date
hereof, there has been no material adverse change in the business,
financial condition, operations or properties of the Company and its
subsidiaries, taken as a whole since September 30, 2001.
41
ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees with each Lender and the
Administrative Agent that, so long as this Agreement shall remain in effect or
the principal of or interest on any Loan, any Fees or any other expenses or
amounts payable under any Loan Document shall be unpaid, unless the Required
Lenders (or, where indicated, the Lenders) shall otherwise consent in writing,
the Borrower will, and will cause each of its Restricted Subsidiaries and
WRECO and each of the Restricted Subsidiaries of WRECO (except in the case of
Sections 5.03 (which applies to the Borrower), 5.06 (which applies to the
Borrower, WRECO and their respective ERISA Affiliates) and 5.09 (which applies
to the Borrower, WRECO and all of their respective Subsidiaries)) to:
Section 5.01 Existence; Businesses and Properties. (a) Do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect its legal existence, except as otherwise expressly permitted under
Section 6.01(c) (with respect to the Borrower) and Section 6.02(d) (with
respect to WRECO) and, with respect to Restricted Subsidiaries, where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect, provided, however, that the Borrower may liquidate or dissolve any of
its Subsidiaries to the extent the assets of such Subsidiary are transferred
to the Borrower or any of its Restricted Subsidiaries.
(b) Except in each case where the failure to do so could not
reasonably be expected to result in a Material Adverse Effect, (i) do or cause
to be done all things necessary to obtain, preserve, renew, extend and keep in
full force and effect the rights, licenses, permits, franchises,
authorizations, patents, copyrights, trademarks and trade names necessary in
the conduct of its business; (ii) maintain and operate such business in
substantially the manner in which it is presently conducted and operated;
(iii) comply with all applicable laws, rules, regulations and orders of any
Governmental Authority, whether now in effect or hereafter enacted; and (iv)
at all times maintain and preserve all property necessary in the conduct of
such business and keep such property in good repair, working order and
condition and from time to time make, or cause to be made, all necessary and
proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times.
(c) Maintain compliance with each of its loans, contracts, leases
and other obligations (other than Indebtedness) except such as are being
contested in good faith by appropriate proceedings and for which appropriate
reserves have been established, and except for such noncompliance as could not
reasonably be expected to have, in any case or in the aggregate, a Material
Adverse Effect.
Section 5.02 Insurance. (a) Keep such of its insurable properties as
are insured with third-party insurers insured at all times by financially
sound and reputable insurers; and (b) maintain (i) insurance (which may
include self insurance), to such extent and against such risks, including fire
and other risks insured against by extended coverage, as is customary with
companies in the same or similar businesses, including public liability
insurance against claims for personal injury or death or property damage
occurring upon, in, about or in connection with
42
the use of any properties owned, occupied or controlled by it; and (ii) such
insurance as may be required by law.
Section 5.03 Obligations and Taxes. Pay its obligations (other than
Indebtedness) promptly and in accordance with their terms and pay and
discharge promptly when due all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or in respect of its
property, before the same shall become delinquent or in default, as well as
all lawful claims for labor, materials and supplies or otherwise which, if
unpaid, might give rise to a Lien upon such properties or any part thereof;
provided, however, that such payment and discharge shall not be required (i)
with respect to any such tax, assessment, charge, levy or claim so long as the
validity or amount thereof shall be contested in good faith by appropriate
proceedings and the Borrower, WRECO or such Subsidiary shall have set aside on
its books appropriate reserves with respect thereto or (ii) if the failure to
make such payments or to discharge such Liens is not, in any case or in the
aggregate, reasonably likely to have a Material Adverse Effect.
Section 5.04 Financial Statements, Reports, Etc. In the case of the
Borrower or WRECO, furnish to the Administrative Agent (which shall promptly
furnish to each Lender):
(a) within 95 days after the end of each fiscal year, its
consolidated balance sheets and related statements of earnings and
statements of cash flows, together with the notes thereto, showing
the financial position of the Borrower, WRECO and their respective
consolidated Subsidiaries as of the close of such fiscal year and
the results of their operations and the operations of such
subsidiaries during such year, all audited by Arthur Andersen LLP or
other independent public accountants of recognized national standing
acceptable to the Required Lenders and accompanied by an opinion of
such accountants (which shall not be qualified in any material
respect) to the effect that such consolidated financial statements
fairly present the financial position and results of operations of
the Borrower, WRECO and their respective consolidated Subsidiaries
on a consolidated basis in accordance with GAAP consistently
applied, except as therein noted;
(b) within 50 days after the end of each of the first three
fiscal quarters of each fiscal year, its consolidated balance sheets
and related statements of earnings and, with respect to the
Borrower, statements of cash flows, showing the financial position
of the Borrower and its consolidated Subsidiaries as of the close of
such fiscal quarter and the results of its operations and the
operations of such consolidated Subsidiaries during such fiscal
quarter and the then elapsed portion of the fiscal year, all
certified (in the form of Exhibits D-1 and D-2, with respect to the
Borrower and WRECO, respectively) by one of its Financial Officers
as fairly presenting the financial position and results of
operations of the Borrower, WRECO and their respective consolidated
Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, except as therein noted, subject to
appropriate year-end audit adjustments;
(c) concurrently with any delivery of financial statements
under (a) or (b) above, a certificate (in the form of Exhibits D-3
and D-4, with respect to the Borrower and WRECO, respectively) of
the accounting firm or Financial Officer of the Borrower
43
or WRECO opining on or certifying such statements (which
certificate, when furnished by an accounting firm, may be limited to
accounting matters and disclaim responsibility for legal
interpretations) (i) certifying that no Event of Default or Default
has occurred or, if such an Event of Default or Default has
occurred, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect
thereto, (ii) in the case of the Borrower, setting forth
computations in reasonable detail satisfactory to the Administrative
Agent demonstrating compliance with the covenants contained in
Sections 6.01(d) and 6.01(e) and (iii) including a reconciliation
setting forth adjustments made to such financial statements in order
to make the calculations set forth in clause (ii) above;
(d) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials
filed by it or any of its Subsidiaries with the SEC, or with any
national securities exchange, or distributed to its shareholders, as
the case may be;
(e) as soon as practicable, copies of such further financial
statements and reports as the Borrower or WRECO shall send to banks
with which it has lines of credit, and all such financial statements
and reports as the Borrower or WRECO shall send to its shareholders
(unless all of the outstanding shares of capital stock of the
Borrower or WRECO are held by one Person);
(f) promptly, from time to time, such other information regarding
the operations, business affairs and financial condition of the
Borrower or WRECO or any of their respective Subsidiaries, or
compliance with the terms of any Loan Document, as the
Administrative Agent or any Lender may reasonably request (it being
understood that the Borrower shall not be required to provide any
information or documents which are subject to confidentiality
provisions the nature of which prohibit such disclosure);
(g) promptly, and in any event within 2 days, upon becoming aware
thereof, notice of any proposed or actual down-grade, suspension or
withdrawal of the rating provided by S&P or Moody's to the Borrower
in respect of its Senior Unsecured Long-Term Debt; and
(h) information required to be delivered pursuant to paragraphs (a),
(b), (d) and (e) shall be deemed to have been delivered on the date
on which the Borrower provides notice to the Administrative Agent
that such information has been posted on the Borrower's website on
the internet at the website address listed on the signature pages
thereof, at www.sec.gov or at another website identified in such
notice and accessible by the Lenders without charge; provided that
the Borrower shall deliver paper copies of the reports and financial
statements referred to in paragraphs (a), (b), (d) and (e) of this
Section 5.04 to the Administrative Agent or any Lender who requests
the Borrower to deliver such paper copies until written notice to
cease delivering paper copies is given by such Administrative Agent
or Lender to the Borrower.
Section 5.05 Litigation and Other Notices. Furnish to the
Administrative Agent (which shall promptly furnish to each Lender) prompt
written notice of the following:
44
(a) any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) proposed to be
taken with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any
Governmental Authority, against the Borrower, WRECO or any of their
respective Affiliates which, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) any development that has resulted in a Material Adverse
Effect; and
(d) the issuance by any Governmental Authority of any
injunction, order, decision or other restraint prohibiting, or
having the effect of prohibiting, the making of the Loans or the
initiation of any litigation or similar proceeding seeking any such
injunction, order or other restraint;
provided, that in each case the Borrower shall not be required to provide
separate notice of any event disclosed in any report promptly filed with the
SEC.
Section 5.06 ERISA. As soon as possible and, in any event, within 10
Business Days after the Borrower knows of the occurrence of any of the
following events which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect, the Borrower will deliver to the
Administrative Agent a certificate of the Financial Officer of the Borrower
setting forth details as to such occurrence and such action, if any, which the
Borrower or an ERISA Affiliate is required or proposes to take, together with
any notices required or proposed to be given to or filed with or by the
Borrower or such ERISA Affiliate, the PBGC, a Plan participant or the Plan
administrator with respect thereto: (a) that a Reportable Event has occurred,
(b) that an accumulated funding deficiency has been incurred or an application
has been made to the Secretary of the Treasury for a waiver or modification of
the minimum funding standard (including any required installment payments) or
an extension of any amortization period under Section 412 of the Code with
respect to a Plan, (c) that a Plan has been or is in the process of being
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA, (d) that a Plan has an Unfunded Current Liability, (e) that proceedings
have been instituted to terminate a Plan, (f) that a proceeding has been
instituted pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Plan, or (g) that the Borrower or any ERISA Affiliate will
or is reasonably likely to incur any liability (including any contingent or
secondary liability) to or on account of the termination of or withdrawal from
a Plan under Section 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or with
respect to a Plan under Section 4975 of the Code or Section 409, 502(i) or
502(l) of ERISA. The Borrower will, upon written request, deliver to the
Administrative Agent a complete copy of the annual report (Form 5500) of each
Plan required to be filed with the Internal Revenue Service. In addition to
any certificates or notices delivered to the Administrative Agent pursuant to
the first sentence hereof, copies of annual reports and any other notices
received by the Borrower or any ERISA Affiliate required to be delivered to
the Administrative Agent hereunder shall be delivered to the Administrative
Agent no later than 10 Business Days after the later of the date such report
or notice has been filed with the Internal Revenue Service or the PBGC, given
to Plan participants, received by the Borrower or such ERISA Affiliate or
requested in writing by the Administrative Agent.
45
Section 5.07 Maintaining Records; Access to Properties and
Inspections. Maintain appropriate, accurate and complete financial records and
permit any representatives designated by the Administrative Agent to visit and
inspect the financial records and the properties of the Borrower, WRECO or any
of their Restricted Subsidiaries at reasonable times, with reasonable prior
notice given to the Borrower, as often as requested and until a Default has
occurred at the expense of the Administrative Agent, and to make extracts from
and copies of such financial records, and permit any representatives
designated by any Lender or the Administrative Agent to discuss the affairs,
finances and condition of the Borrower, WRECO or any such Restricted
Subsidiary with the officers thereof and independent accountants (so long as a
representative of the Borrower is present, or the Borrower has consented to
the absence of such a representative) therefor (in each case subject to the
Borrower's obligations under applicable confidentiality provisions).
Section 5.08 Use of Proceeds. Use the proceeds of the Loans only for
the purposes set forth in the recitals to this Agreement.
Section 5.09 Environmental Matters. (a) (i) Comply in all material
respects with all Environmental Laws applicable to the ownership or use of any
real property owned or leased by the Borrower, WRECO or any of their
respective Subsidiaries, except where such noncompliance is not, in any case
or in the aggregate, reasonably likely to have a Material Adverse Effect, (ii)
include in all material contracts with tenants and other persons occupying
such real property provisions to ensure such tenants' compliance in all
material respects with all such Environmental Laws, and diligently enforce and
prosecute its rights with respect to such provisions, (iii) pay or cause to be
paid in the case of sole liability, or, in the case of joint liability, to
seek contribution or compensation in respect of, all costs and expenses
incurred in connection with such compliance, except in respect to costs and
expenses that are being contested in good faith and for which the Borrower,
WRECO or such Subsidiary, as the case may be, shall have set aside on its
books appropriate reserves, and except where failures to make such payments
are not, in any case or in the aggregate, reasonably likely to have a Material
Adverse Effect, and (iv) use its best efforts to keep or cause to be kept all
such real property free and clear of any liens imposed pursuant to any
Environmental Laws, except in respect to liens that are being contested in
good faith, and except in respect to liens the existence of which is not, in
any case or in the aggregate, reasonably likely to have a Material Adverse
Effect.
(b) None of the Borrowers, WRECO or any of their respective
Subsidiaries will generate, use, treat, store, Release, or permit the
generation, use, treatment, storage or Release of Hazardous Materials on any
real property owned or leased by the Borrower, WRECO or any of their
respective Subsidiaries, or transport or permit the transportation of
Hazardous Materials to or from any such real property, except for quantities
generated, used, treated, stored, or Released on, or transported to or from,
such real property in the ordinary course of business in material compliance
with all applicable Environmental Laws and, except for such generation, use,
treatment or storage on, or transportation to or from, any such real property
of Hazardous Materials as is not, in any case or in the aggregate, reasonably
likely to have a Material Adverse Effect.
(c) If the Administrative Agent receives any notice from the
Borrower or WRECO pursuant to subsection (d) of this Section 5.09 or if the
Administrative Agent otherwise
46
acquires knowledge of any Environmental Claim which in the sole determination
of the Required Lenders would have a Material Adverse Effect with respect to
the Borrower or WRECO, then upon the written request of the Required Lenders,
the Borrower or WRECO, as applicable, will provide, at its sole cost and
expense, an environmental site assessment report concerning any real property
owned or leased by the Borrower, WRECO or an affected Subsidiary prepared by
an environmental consulting firm approved by the Required Lenders, indicating
the presence or absence of Hazardous Materials and the potential costs of any
removal or remedial action in connection with any Hazardous Materials on any
real property owned or leased by the Borrower, WRECO or any of their
respective Subsidiaries.
(d) The Borrower or WRECO, as applicable, will immediately advise
the Administrative Agent in writing of any of the following:
(i) Any pending or threatened Environmental Claim against the
Borrower, WRECO or any of their respective Subsidiaries or any real
property owned or leased by the Borrower, WRECO or any of their
respective Subsidiaries which if determined adversely to the
Borrower, WRECO or any of their respective Subsidiaries would be
reasonably likely to have a Material Adverse Effect;
(ii) Any condition or occurrence on any real property owned or
leased by the Borrower, WRECO or any of their respective
Subsidiaries that (A) results in noncompliance by the Borrower,
WRECO or any of their respective Subsidiaries with any applicable
Environmental Law which noncompliance is reasonably likely to have a
Material Adverse Effect, or (B) could reasonably be anticipated to
form the basis of an Environmental Claim against the Borrower, WRECO
or any of their respective Subsidiaries or any real property owned
or leased by the Borrower, WRECO or any of their respective
Subsidiaries and which if determined adversely to the Borrower,
WRECO or any of their respective Subsidiaries would be reasonably
likely to have a Material Adverse Effect;
(iii) Any condition or occurrence on any real property owned or
leased by the Borrower, WRECO or any of their respective
Subsidiaries or, to the actual knowledge of the Borrower, WRECO or
any of their respective Subsidiaries, any property adjoining or in
the vicinity thereof that could reasonably be anticipated to cause
such real property to be subject to any restrictions on the
ownership, occupancy, use, or transferability thereof under any
Environmental Law which restrictions, in any case or in the
aggregate, are reasonably likely to have a Material Adverse Effect;
and
(iv) The taking of any removal or remedial action in response
to the actual or alleged presence of any Hazardous Materials on any
real property owned or leased by the Borrower, WRECO or any of their
respective Subsidiaries the taking of which, in any case or in the
aggregate, is reasonably likely to have a Material Adverse Effect.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence, or removal or remedial action and the
action which the Borrower, WRECO or any of their respective Subsidiaries
proposes to take in response thereto.
47
Section 5.10 Performance of Transaction Agreements. Perform and
observe all of the material terms and provisions of the agreements to be
performed or observed by it with respect to the Transactions.
Section 5.11 OCBM Agreement. With respect to the Borrower, perform,
observe and comply with each of its covenants and agreements in the OCBM
Agreement, and do or cause to be done all things necessary to keep the OCBM
Agreement in full force and effect.
Section 5.12 Further Assurances. Promptly cause to be taken,
executed, acknowledged or delivered, at the sole expense of the Borrower or
WRECO, as applicable, all such further acts, documents and assurances as the
Required Lenders may from time to time reasonably request in order for the
Borrower or WRECO to carry out its obligations hereunder and under the other
Loan Documents.
Section 5.13 Guarantee. On or prior to March 31, 2003, cause the
Company either (i) to merge with and into the Borrower (with the Borrower
being the surviving corporation) or (ii) to execute for the benefit of the
Administrative Agent and the Lenders a Guarantee, in form and substance
reasonably satisfactory to the Administrative Agent, pursuant to which the
Company shall guarantee the obligations of the Borrower arising under this
Agreement and the other Loan Documents; provided that the obligations of the
Company under such Guarantee shall rank in right of payment at least pari
passu with all other unsecured senior Indebtedness of the Company; and
provided, further, that such Guarantee shall be limited to an amount that
would not render the Company insolvent. In addition, to the extent the Company
guarantees any obligations of the Borrower with respect to an issuance by the
Borrower of Indebtedness pursuant to a public offering registered with the
SEC, a Rule 144A or Regulation S private placement or any other similar
offering on an underwritten or placement-agent basis, the Borrower shall cause
the Company to execute, promptly but in any case no later than forty-five days
after the date of such issuance, for the benefit of the Administrative Agent
and the Lenders, a Guarantee, in form and substance reasonably satisfactory to
the Administrative Agent, pursuant to which the Company shall equally and
ratably guarantee the obligations of the Borrower arising under this Agreement
and the other Loan Documents; provided that such Guarantee shall be limited to
an amount that would not render the Company insolvent.
ARTICLE VI
NEGATIVE COVENANTS
Section 6.01 Covenants of the Borrower. The Borrower covenants and
agrees with each Lender and the Administrative Agent that, so long as this
Agreement shall remain in effect or the principal of or interest on any Loan,
any Fees or any other expenses or amounts payable under any Loan Document
shall be unpaid, unless the Required Lenders shall otherwise consent in
writing, it will not, either directly or indirectly:
(a) Secured Indebtedness. (i) Issue, assume or guarantee, or
permit any of its Restricted Subsidiaries to issue, assume or
guarantee, any indebtedness for money borrowed (hereinafter in this
Section 6.01(a) referred to as "debt"), if such debt is secured
48
by a deed of trust, mortgage, pledge, security interest or other lien or
encumbrance (any deed of trust, mortgage, pledge, security interest or other
lien or encumbrance being hereinafter in this Section 6.01(a) referred to as a
"mortgage" or collectively "mortgages") upon or with respect to any timber or
timberlands of the Borrower or such Restricted Subsidiary located in the
States of Washington, Oregon, Arkansas, Oklahoma, Mississippi or North
Carolina, or upon or with respect to any principal manufacturing plant of the
Borrower or such Restricted Subsidiary located anywhere in the United States
of America, in either case now owned or hereafter acquired, without in any
such case effectively providing, concurrently with the issuance, assumption or
guarantee of any such debt, that the Loans (together with, if the Borrower
shall so determine, any other indebtedness of or guarantee by the Borrower or
such Restricted Subsidiary ranking equally with the Loans and then existing or
thereafter created) shall be secured equally and ratably with (or prior to)
such debt; provided, however, that the foregoing restrictions shall not be
applicable to:
(1) mortgages upon or with respect to any property of any of
its Restricted Subsidiaries securing debt of such Restricted
Subsidiary to the Borrower or another Restricted Subsidiary of the
Borrower;
(2) mortgages upon or with respect to any property acquired,
constructed or improved by the Borrower or any of its Restricted
Subsidiaries after the date of this Agreement which are created,
incurred or assumed contemporaneously with, or within 90 days after,
such acquisition, construction or improvement, to secure or provide
for the payment of any part of the purchase price of such property
or the cost of such construction or improvement, or mortgages upon
or with respect to any property existing at the time of acquisition
thereof; provided, however, that in the case of any such
construction or improvement the mortgage shall not apply to any
property theretofore owned by the Borrower or any of its Restricted
Subsidiaries other than any theretofore unimproved real property on
which the property so constructed, or the improvement, is located;
(3) any extension, renewal or replacement of any mortgage
referred to in clause (2) above or clause (4) below; provided,
however, that the principal amount of indebtedness secured thereby
shall not exceed the principal amount of indebtedness so secured at
the time of such extension, renewal or replacement, and that such
extension, renewal or replacement shall be limited to all or part of
the same property which secured the mortgage so extended, renewed or
replaced; and
(4) any mortgage existing on any timber or timberlands of any
Person or upon or with respect to any principal manufacturing plant
of any Person at the time of acquisition by the Borrower or any of
its Restricted Subsidiaries of such Person.
(ii) Notwithstanding the provisions of paragraph (a)(i) of this
Section 6.01, the Borrower or any of its Restricted Subsidiaries may issue,
assume or guarantee secured
49
debt which would otherwise be subject to the foregoing restrictions in an
aggregate amount which, together with all other such debt of the Borrower and
its Restricted Subsidiaries and the Attributable Debt in respect of Sale and
Lease-Back Transactions (as defined in Section 6.01(b)) existing at such time
(other than Sale and Lease-Back Transactions permitted because the Borrower
would be entitled to incur debt secured by a mortgage on the property to be
leased without equally and ratably securing the Loans pursuant to paragraph
(a)(i) of this Section 6.01, and other than Sale and Lease-Back Transactions
the proceeds of which have been applied in accordance with clause (ii) of
Section 6.01(b)), does not at the time exceed five percent (5%) of
Shareholders' Interest in the Borrower and its Restricted Subsidiaries (as
hereinafter defined). The term "Attributable Debt" as used in this paragraph
shall mean, as of any particular time, the present value of the obligation of
the lessee for rental payments during the remaining term of any lease
(including any period for which such lease has been extended or may, at the
option of the lessor, be extended).
(iii) For the purposes of this Section 6.01(a), (A) the term
"principal manufacturing plant" shall not include any manufacturing plant
which, in the reasonable opinion of the Board of Directors of the Borrower, is
not a principal manufacturing plant of the Borrower and its Restricted
Subsidiaries; (B) the following types of transactions shall not be deemed to
create debt secured by a mortgage: (1) the sale, mortgage or other transfer of
timber in connection with an arrangement under which the Borrower or any of
its Restricted Subsidiaries is obligated to cut such timber or a portion
thereof in order to provide the transferee with a specified amount of money
however determined; (2) the mortgage of any property of the Borrower or any of
its Restricted Subsidiaries in favor of the United States, or any State, or
any department, agency or instrumentality of either, to secure partial,
progress, advance or other payments to the Borrower or any of its Restricted
Subsidiaries pursuant to the provisions of any contract or statute and (3)
liens existing on property at the time of acquisition of such property; and
(C) the term "Shareholders' Interest in the Borrower and its Restricted
Subsidiaries" shall mean the aggregate of capital and surplus, including
surplus resulting from the March 1, 1913 revaluation of timber and
timberlands, of the Borrower and its Restricted Subsidiaries, after deducting
the cost of shares of the Borrower held in treasury.
(b) Sale and Lease-Back. Enter into any arrangement, or permit
any Restricted Subsidiary to enter into any arrangement, with any
Person providing for the leasing by the Borrower or any of its
Restricted Subsidiaries of any real property in the United States
(except for temporary leases for a term of not more than three
years), which property has been or is to be sold or transferred by
the Borrower or such Restricted Subsidiary to such Person (herein
referred to as a "Sale and Lease-Back Transaction"), unless (i) the
Borrower or such Restricted Subsidiary would be entitled to incur
debt secured by a mortgage on the property to be leased without
equally or ratably securing the Loans pursuant to Section 6.01(a),
or (ii) the Borrower applies an amount equal to the fair value (as
determined by the Board of Directors of the Borrower) of the
property so leased to the retirement (other than any mandatory
retirement), within 90 days of the effective date of any such Sale
and Lease-Back Transaction, of indebtedness for borrowed money
incurred or assumed by the Borrower which by its terms matures at,
or
23
is extendible or renewable at the option of the obligor to, a date more than
12 months after the date of the creation of such debt.
(c) Merger, Consolidation, etc. Be a party to a merger or
consolidation or sell, transfer or otherwise dispose of all or
substantially all of its properties or assets in a single
transaction or in a series of related transactions unless (i) such
merger, consolidation, sale, transfer or disposition is made with
respect to another corporation incorporated and doing business
primarily within the United States of America which shall expressly
assume, in form and substance reasonably satisfactory to the
Required Lenders, the obligations of the Borrower under the Loan
Documents and the Borrower's Loans, and (ii) immediately after
giving effect to such merger, consolidation, sale, transfer or
disposition no Default or Event of Default hereunder shall have
occurred and be continuing.
(d) Debt Ratio. Permit Total Funded Indebtedness to exceed (i)
on or after the Closing Date, 72% of the sum of the Borrower's Total
Adjusted Shareholders' Interest and Total Funded Indebtedness, (ii)
on or after December 31, 2003, 69% of such sum and (iii) on or after
June 30, 2005, 65% of such sum.
(e) Net Worth. At any time permit the Borrower's Total Adjusted
Shareholders' Interest to be less than $4,955,000,000.
(f) Change in Business. Engage in, or permit any Restricted
Subsidiary to engage in, any material business activities or
operations substantially different from, or unrelated to, the
business activities and operations conducted by it as of the date
hereof, except for reasonable extensions, developments and
modifications thereof.
Section 6.02 Covenants with respect to WRECO. The Borrower covenants
and agrees with each Lender and the Administrative Agent that, so long as this
Agreement shall remain in effect or the principal of or interest on any Loan,
any Fees or any other expenses or amounts payable under any Loan Document
shall be unpaid, unless the Required Lenders shall otherwise consent in
writing, the Borrower will not, either directly or indirectly, permit WRECO
to:
(a) Capital Base. Have a Capital Base less than $100,000,000.
(b) Limitation on Indebtedness. Create, issue, guarantee,
assume or otherwise become liable, directly or indirectly, or permit
any Restricted Subsidiary of WRECO to create, issue, guarantee,
assume or otherwise become liable, directly or indirectly, in
respect of any (i) Senior Debt of WRECO or Indebtedness of any
Restricted Subsidiary of WRECO if, immediately after giving effect
to the incurrence thereof and to the application of the proceeds
thereof, the aggregate principal amount of all consolidated Senior
Debt of WRECO and its Restricted Subsidiaries then outstanding would
exceed 80% of the sum of (x) the Capital Base plus (y) the aggregate
principal amount of Senior Debt of WRECO and its Restricted
Subsidiaries then outstanding; or (ii) Subordinated Debt of WRECO
if, immediately after giving effect to the incurrence thereof and to
the application of the proceeds thereof, the aggregate principal
amount of Subordinated Debt
51
of WRECO then outstanding would exceed 100% of Adjusted Net Worth.
For purposes of this Section and Section 6.02(c), Indebtedness of a
Person which becomes a Restricted Subsidiary on any date shall be
deemed to have been issued or incurred as of such date.
(c) Limitation on Mortgages and Liens. Create, incur or permit
to exist any mortgage, pledge, encumbrance, lien, security interest
or charge of any kind (including liens or charges upon properties
acquired or to be acquired under conditional sales agreements or
other title retention devices) on its property or assets, whether
now owned or hereafter acquired, or upon any income or profits
thereof, or permit any of its Restricted Subsidiaries to do any of
the foregoing, except:
(i) liens, charges, encumbrances and priority claims
incidental to the conduct of the business or the ownership of
properties and assets (including warehousemen's, attorneys' and
statutory landlords' liens) and liens, pledges or deposits in
connection with workmen's compensation, unemployment insurance,
old age benefit or social security obligations, taxes,
assessments, statutory obligations or other similar charges,
liens of contractors, mechanics and materialmen, good faith
deposits in connection with tenders, contracts or leases to
which WRECO or any of its Restricted Subsidiaries is a party or
other deposits required to be made in the ordinary course of
business and not in connection with the borrowing of money
easements, rights of way, restrictions and other similar
encumbrances that, in the aggregate, are not substantial in
amount and that do not in any case materially detract from the
value of the property subject thereto or substantially
interfere with the ordinary conduct of WRECO's business;
provided in each case the obligation secured is not overdue or,
if overdue, is being contested in good faith by appropriate
proceedings;
(ii) provided that no Default or Event of Default has
occurred and is continuing, the pledge of assets for the
purpose of securing any appeal or stay or discharge in the
course of any legal proceeding and liens on or resulting from
judgments or awards in respect of which WRECO or any of its
Restricted Subsidiaries shall in good faith be prosecuting an
appeal or proceeding for review;
(iii) mortgages, liens or security interests existing as
of the date of this Agreement securing obligations of WRECO or
any of its Restricted Subsidiaries outstanding on such date and
all renewals, extensions or refundings thereof (without
increase in the principal amount remaining unpaid at the time
of any such renewal, extension or refunding);
(iv) mortgages, liens or security interests securing
Indebtedness of a Restricted Subsidiary of WRECO to another
Restricted Subsidiary of WRECO or to WRECO;
(v) mortgages, conditional sale contracts, security
interests or other arrangements for the retention of title
(including financing leases), in addition to those permitted
under subparagraphs (iii), (iv), (vi) and (vii) hereof, given
to secure the payment of the purchase price incurred in
connection with the
52
acquisition of property useful and intended to be used in
carrying on the business of WRECO or a Restricted
Subsidiary of WRECO, and liens existing on such property
at the time of acquisition thereof or at the time of
acquisition by WRECO or a Restricted Subsidiary of any
Person then owning such property whether or not such
existing liens were given to secure the payment of the
purchase price of the property to which they attach;
provided that the lien or charge shall attach solely to
the property acquired or purchased and any improvements
then or thereafter placed thereon;
(vi) mortgages, security interests and other encumbrances or
liens on Real Estate Assets, incurred or created in the
ordinary course of the business of WRECO and its
Restricted Subsidiaries; provided that the aggregate
principal amount of all Indebtedness so secured and at any
one time outstanding shall not exceed 10% of the Capital
Base at such time; and
(vii) mortgages, conditional sale contracts, security interests
or other arrangements for the retention of title
(including financing leases), in addition to those
specifically permitted by foregoing subparagraphs (i)
through (vi) hereof, given to secure the payment of Senior
Debt of WRECO or any of its Restricted Subsidiaries, and
any renewal, extension or refunding of any such Senior
Debt; provided that the aggregate principal amount of all
Senior Debt of WRECO and its Restricted Subsidiaries so
secured and at any one time outstanding shall not exceed
10% of the Capital Base at such time.
In the event that any property is subjected to a lien or other
encumbrance in violation of this Section 6.02(c), WRECO will make or
cause to be made effective provision whereby the Loans shall be
secured equally and ratably with all other obligations secured
thereby (provided, however, that such violation shall constitute a
default under this Agreement whether or not such provision is made)
and, if such provision is not made, an equitable lien, so equally
and ratably securing the Loans, shall (to the extent permitted by
law) exist on such property.
(d) Limitation on Mergers and Consolidations. Be a party to any
merger or consolidation unless (i) WRECO or a Weyerhaeuser
Subsidiary (as defined below) having substantially all of its assets
and doing business primarily in the United States of America shall
be the surviving or resulting corporation of any such merger or
consolidation and immediately after giving effect to any such merger
or consolidation such successor corporation, whether or not WRECO,
shall be entitled to incur at least $1 of additional Senior Debt
under Section 6.02(b); (ii) if the surviving or resulting
corporation is not WRECO, the surviving or resulting corporation
shall be a Weyerhaeuser Subsidiary incorporated within the United
States of America and shall expressly assume the obligations of
WRECO under this Agreement and the other Loan Documents to which it
is a party by supplemental agreement reasonably satisfactory to the
Administrative Agent; (iii) immediately after giving effect to any
such merger or consolidation, no Default or Event of Default shall
have occurred and be continuing; and (iv) WRECO shall have delivered
to the Administrative Agent a certificate signed by two of WRECO's
officers stating that such merger or consolidation and, if a
supplemental
53
agreement is required in connection therewith as aforesaid, such
supplemental agreement comply with the provisions described in this
paragraph. Upon the consummation of any merger or consolidation in
which the surviving or resulting corporation is not WRECO in
accordance with the foregoing provisions, the surviving or resulting
corporation shall succeed to and be substituted for, and may
exercise every right and power of and shall be subject to all of the
obligations of, WRECO under this Agreement and the other Loan
Documents to which it is a party, with the same effect as if it had
been named as WRECO therein. As used in this paragraph, the term
"Weyerhaeuser Subsidiary" means a corporation at least 79% of whose
issued and outstanding shares of capital stock at the time
outstanding and having ordinary voting power for the election of a
majority of the directors of such corporation shall be owned and
controlled by the Borrower or a wholly owned Subsidiary of the
Borrower.
(e) Limitation on Sale of Assets. Sell, transfer or otherwise
dispose of all or substantially all of its properties and assets in
a single transaction or in a series of related transactions unless
(i) the consideration received therefor shall consist of cash,
securities or other properties having an aggregate fair value (as
determined in good faith by the Board of Directors of WRECO) equal
to not less than the aggregate fair value (as determined in good
faith by the Board of Directors of WRECO) of the properties and
assets so sold, transferred or otherwise disposed of; (ii)
immediately after giving effect thereto WRECO shall be entitled to
incur at least $1 of additional Senior Debt under Section 6.02(b);
(iii) immediately after giving effect thereto, no Default or Event
of Default shall have occurred and be continuing; and (iv) WRECO
shall have delivered to the Administrative Agent a certificate
signed by two of WRECO's officers stating that such transaction
complies with the provisions described in this paragraph.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01 Events of Default. In case of the happening of any of
the events under Sections 7.01(a) through 7.01(l) below (an "Event of
Default"):
(a) default shall be made in the payment by the Borrower of any
principal of any Loan, when and as the same shall become due and
payable, whether at the due date thereof or at a date fixed for
prepayment thereof or by acceleration thereof or otherwise;
(b) default shall be made in the payment by the Borrower of any
interest on any Loan or any Fee or any other amount (other than an
amount referred to in Section 7.01(a) above) due under any Loan
Document, when and as the same shall become due and payable, and
such default shall continue unremedied for a period of five days;
(c) any representation or warranty made or deemed made by the
Borrower in or in connection with any Loan Document or the
borrowings hereunder, or any representation, warranty, statement or
information contained in any report, certificate, financial
statement or other instrument furnished in connection with or
pursuant to any
23
Loan Document, shall prove to have been false or misleading in any
material respect when so made, deemed made or furnished;
(d) default shall be made in the due observance or performance
by the Borrower, WRECO or any of their respective Subsidiaries (or
their respective Restricted Subsidiaries, if such covenant,
condition or agreement applies only to Restricted Subsidiaries) of
any covenant, condition or agreement contained in Section 5.01(a),
Section 5.05(a), Section 5.13 or in Article VI;
(e) default shall be made in the due observance or performance
by the Borrower, WRECO or any of their respective Subsidiaries (or
their respective Restricted Subsidiaries, if such covenant,
condition or agreement applies only to Restricted Subsidiaries) of
any covenant, condition or agreement contained in any Loan Document
(other than those specified in Sections 7.01(a), 7.01(b), 7.01(c) or
7.01(d)) and such default shall continue unremedied for a period of
thirty days after notice thereof from the Administrative Agent or
any Lender to the Borrower or WRECO;
(f) the Borrower, WRECO or any of their respective Restricted
Subsidiaries shall (i) fail to pay, when and as the same shall
become due and payable (and such failure shall continue after the
applicable grace period, if any, specified in the agreement or
instrument related to such Indebtedness) any principal or interest,
regardless of amount, due in respect of Indebtedness in an aggregate
principal amount in excess of $100,000,000, or (ii) fail to observe
or perform any other terms, covenants, conditions or agreements
contained in any agreements or instruments evidencing or governing
Indebtedness in an aggregate principal amount in excess of
100,000,000 (and such failure shall continue after the applicable
grace period, if any, specified in the agreement or instrument
related to such Indebtedness), if the effect of any failure or
failures referred to in this Section 7.01(f)(ii) is to cause or
permit the holder or holders of such Indebtedness or a trustee on
its or their behalf (with or without the giving of notice) to cause
such Indebtedness to become due prior to its stated maturity;
provided that any Transaction-Related Event of Default that, but for
this proviso, would be a Default or an Event of Default pursuant to
this Section 7.01 (f) prior to November 11, 2002, shall be deemed to
be neither a Default nor an Event of Default;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of the Borrower, WRECO or
any of their respective Restricted Subsidiaries, or of a substantial
part of the property or assets of the Borrower, WRECO or any of
their respective Restricted Subsidiaries, under Title 11 of the
United States Code, as now constituted or hereafter amended, or any
other Federal or state bankruptcy, insolvency, receivership or
similar law, (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower,
WRECO or any of their respective Restricted Subsidiaries or for a
substantial part of the property or assets of the Borrower, WRECO or
any of their respective Restricted Subsidiaries or (iii) the
winding-up or liquidation of the Borrower, WRECO or any of their
respective Restricted Subsidiaries; and such proceeding or petition
shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered;
55
(h) the Borrower, WRECO or any of their respective Restricted
Subsidiaries shall (i) voluntarily commence any proceeding or file
any petition seeking relief under Title 11 of the United States
Code, as now constituted or hereafter amended, or any other Federal
or state bankruptcy, insolvency, receivership or similar law, (ii)
consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition
described in Section 7.01(g) above, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower, WRECO or any of
their respective Restricted Subsidiaries or for a substantial part
of the property or assets of the Borrower, WRECO or any of their
respective Restricted Subsidiaries, (iv) file an answer admitting
the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of
creditors, (vi) become unable, admit in writing its inability or
fail generally to pay its debts as they become due or (vii) take any
action for the purpose of effecting any of the foregoing;
(i) one or more judgments for the payment of money in an
aggregate amount in excess of $100,000,000 shall be rendered against
the Borrower, WRECO, any of their respective Restricted Subsidiaries
or any combination thereof and the same shall remain undischarged
for a period of 30 consecutive days during which execution shall not
be effectively stayed, or any action shall be legally taken by a
judgment creditor to levy upon assets or properties of the Borrower,
WRECO or any of their respective Restricted Subsidiaries to enforce
any such judgment;
(j) any Plan shall fail to satisfy the minimum funding standard
required for any plan year or a waiver of such standard or extension
of any amortization period is sought or granted under Section 412 of
the Code, any Plan is, shall have been or is likely to be terminated
or the subject of termination proceedings under ERISA, any Plan
shall have an Unfunded Current Liability, or the Borrower has
incurred or is likely to incur a liability to or on account of a
Plan under Sections 409, 502(i), 502(l), or 515 of ERISA or Section
4975 of the Code, or the Borrower or any ERISA Affiliate has
incurred or is likely to incur a liability to or on account of a
Plan under Sections 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA;
and there shall result from any such event or events referred to in
this Section 7.01(j) the imposition of a lien upon the assets of the
Borrower or any ERISA Affiliate, the granting of a security
interest, a liability or a material risk of incurring a liability to
the PBGC or the Internal Revenue Service or a Plan or a trustee
appointed under ERISA or a liability or a material risk of incurring
a liability under Sections 409, 502(i) or 502(l) of ERISA or under
Sections 4971 or 4975 of the Code; which, in the good faith
determination of the Required Lenders, will have a Material Adverse
Effect;
(k) there shall have occurred a Change in Control of the
Borrower or WRECO; or
(l) the OCBM Agreement shall cease, for any reason, to be in
full force and effect, or the Borrower shall contest the validity or
enforceability thereof or otherwise fail to comply with its
obligations thereunder;
56
then, and in every such event (other than an event with respect to the
Borrower or WRECO described in Section 7.01(g) or 7.01(h) above), and at any
time thereafter during the continuance of such event, the Administrative
Agent, at the request of the Required Lenders, shall, by notice to the
Borrower, take any or all of the following actions, at the same or different
times: (i) terminate forthwith the Commitments of the Lenders, (ii) declare
the Loans then outstanding to the Borrower to be forthwith due and payable in
whole or in part, whereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and any unpaid accrued
Fees and all other liabilities of the Borrower accrued hereunder and under any
other Loan Document, shall become forthwith due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived by the Borrower, anything contained herein or in any
other Loan Document to the contrary notwithstanding; and in any event with
respect to the Borrower described in Sections 7.01(g) or 7.01(h) above, the
Commitments of the Lenders shall automatically terminate and the principal of
the Loans then outstanding, together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities of the Borrower accrued
hereunder and under any other Loan Document, shall automatically become due
and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by the Borrower, anything
contained herein or in any other Loan Document to the contrary
notwithstanding.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
Section 8.01 The Administrative Agent. In order to expedite the
transactions contemplated by this Agreement, JPMorgan Chase Bank is hereby
appointed to act as Administrative Agent on behalf of the Lenders. Each of the
Lenders, and each assignee thereof, hereby irrevocably authorizes the
Administrative Agent to take such actions on behalf of such Lender and to
exercise such powers as are specifically delegated to the Administrative Agent
by the terms and provisions hereof, together with such actions and powers as
are reasonably incidental thereto.
The Administrative Agent is hereby expressly authorized by the
Lenders, without hereby limiting any implied authority, (a) to receive on
behalf of the Lenders, all payments of principal of and interest on the Loans
and all other amounts due to the Lenders hereunder, and promptly to distribute
to each Lender its proper share of each payment so received; (b) to give
prompt notice on behalf of each of the Lenders to the Borrower of any Event of
Default specified in this Agreement of which the Administrative Agent has
actual knowledge acquired in connection with its agency hereunder; and (c) to
distribute promptly to each Lender copies of all notices, financial statements
and other materials delivered by the Borrower and WRECO pursuant to this
Agreement as received by the Administrative Agent.
Neither the Administrative Agent nor any of its directors, officers,
employees or agents shall be liable as such to any Lender for any action taken
or omitted by any of them except for its or his own gross negligence or
willful misconduct, or be responsible for any statement, warranty or
representation herein or the contents of any document delivered in connection
herewith, or be required to ascertain or to make any inquiry concerning the
57
performance or observance by the Borrower or WRECO of any of the terms,
conditions, covenants or agreements contained in any Loan Document. The
Administrative Agent shall not be responsible to the Lenders for (i) the due
execution, genuineness, validity, enforceability or effectiveness of this
Agreement or any other Loan Documents or other instruments or agreements or
(ii) the satisfaction of any condition set forth in any Loan Document, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent. The duties of the Administrative Agent shall be
mechanical and administrative in nature; the Administrative Agent shall not
have by reason of this Agreement or any other Loan Document a fiduciary
relationship in respect of any Lender. The Administrative Agent shall in all
cases be fully protected in acting, or refraining from acting, in accordance
with written instructions signed by the Required Lenders or the Lenders, as
the case may be, and, except as otherwise specifically provided herein, such
instructions and any action or inaction pursuant thereto shall be binding on
all of the Lenders. The Administrative Agent shall, in the absence of
knowledge to the contrary, be entitled to rely on any instrument or document
believed by it to be genuine and correct and to have been signed or sent by
the proper person or persons. The Administrative Agent may also rely upon any
statement made to it orally or by telephone and believed to be made by the
proper Person, and shall not incur any liability for relying thereon.
Neither the Administrative Agent nor any of its directors, officers,
employees or agents shall have any responsibility to the Borrower or WRECO on
account of the failure of or delay in performance or breach by any Lender of
any of its obligations hereunder or to any Lender on account of the failure of
or delay in performance or breach by any other Lender or the Borrower or WRECO
of any of their respective obligations hereunder or under any other Loan
Document or in connection herewith or therewith. The foregoing shall not limit
the obligations of JPMorgan Chase Bank (or its successors and assigns) in its
capacity as Lender hereunder. The Administrative Agent may execute any and all
duties hereunder by or through agents or employees and shall be entitled to
rely upon the advice of legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it with respect to all
matters arising hereunder and shall not be liable for any action taken or
suffered in good faith by it in accordance with the advice of such counsel.
The exculpatory provisions of this Article VIII shall apply to any such agent
or employee, and shall apply to their respective activities in connection with
the syndication of the credit facilities provided for herein as well as
activities as Administrative Agent.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting the generality of
the foregoing, the Lenders hereby acknowledge that (a) the Administrative
Agent shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default or Event of Default has occurred and is
continuing, (b) the Administrative Agent shall be under no duty to take any
discretionary action permitted to be taken by it pursuant to the provisions of
this Agreement unless it shall be requested in writing to do so by the
Required Lenders or the Lenders, as the case may be, and (c) except as
expressly set forth herein, the Administrative Agent shall not have any duty
to disclose, and shall not be liable for the failure to disclose, any
information relating to the Borrower, WRECO or any of their respective
Subsidiaries that is communicated to or obtained by the Administrative Agent
or any of its Affiliates in any capacity.
58
Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent may resign at
any time by notifying the Lenders and the Borrower. Upon any such resignation,
the Required Lenders shall have the right to appoint a successor. If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation, then the retiring Administrative Agent
may, on behalf of the Lenders, appoint a successor Administrative Agent which
shall be a bank with an office in New York, New York, having a combined
capital and surplus of at least $500,000,000 or an Affiliate of any such bank.
Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor bank, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After the Administrative Agent's resignation hereunder,
the provisions of this Article and Section 9.05 shall continue in effect for
its benefit in respect of any actions taken or omitted to be taken by it while
it was acting as Administrative Agent.
With respect to the Loans made by it hereunder, the Administrative
Agent in its individual capacity and not as Administrative Agent shall have
the same rights and powers as any other Lender and may exercise the same as
though it were not the Administrative Agent, and the Administrative Agent and
its Affiliates may accept deposits from, lend money to and generally engage in
any kind of business with the Borrower, WRECO or any of their respective
Subsidiaries or other Affiliate thereof as if it were not the Administrative
Agent.
Each of the Lenders agrees (i) to reimburse the Administrative
Agent, on demand, in the amount of its pro rata share (based on its Commitment
hereunder) of any expenses incurred for the benefit of the Lenders by the
Administrative Agent, including counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Lenders, which shall not
have been reimbursed by the Borrower and (ii) to indemnify and hold harmless
the Administrative Agent and any of its directors, officers, employees or
agents, on demand, in the amount of such pro rata share, from and against any
and all liabilities, taxes, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against it in its
capacity as the Administrative Agent or any of them in any way relating to or
arising out of this Agreement or any other Loan Document or any action taken
or omitted by it or any of them under this Agreement or any other Loan
Document, to the extent the same shall not have been reimbursed by the
Borrower; provided that no Lender shall be liable to the Administrative Agent
for any portion of such liabilities, taxes, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or willful misconduct of the
Administrative Agent or any of its directors, officers, employees, or agents.
Each of the Lenders acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each of the Lenders
also acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make
its own decisions in
59
taking or not taking action under or based upon this Agreement or any other
Loan Document, any related agreement or any document furnished hereunder or
thereunder.
Section 8.02 Other Agents. Each of the Lenders and the Borrower
acknowledges that (A) each of the Lead Arrangers, the Joint Book Runners, the
Syndication Agent and the Co-Documentation Agents, in their capacity as,
respectively, Lead Arranger, Joint Book Runner, Syndication Agent and
Co-Documentation Agent, do not have any responsibility or liability hereunder,
and (B) the titles "Lead Arranger," "Joint Book Runner," "Syndication Agent"
and "Co-Documentation Agent" are purely honorary in nature.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed or sent by telecopy to the address specified below, or such
other address as such party shall hereafter have specified by written notice
to the Administrative Agent and the Borrower:
(a) if to the Borrower by hand or courier service, to it at
33663 Weyerhaeuser Way South, Federal Way, Washington, or by
facsimile to (253) 924-3543, in each case to the Attention of Vice
President and Treasurer with a copy to Secretary;
(b) if to the Administrative Agent or a Lender, to it at its
address (or telecopy number) set forth in Schedule 9.01 or in the
Assignment and Acceptance pursuant to which such Lender became a
party hereto.
All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier service
or sent by telecopy or other telegraphic communications equipment of the
sender, in each case delivered, sent or mailed (properly addressed) to such
party as provided in this Section 9.01 or in accordance with the latest
unrevoked direction from such party given in accordance with this Section
9.01.
Section 9.02 Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and shall survive the making of the Loans
regardless of any investigation made by the Lenders or on their behalf, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any Fee or any other amount payable under this
Agreement or any other Loan Document is outstanding and unpaid and so long as
the Commitments hereunder have not been terminated. The Commitment Letter
shall terminate on the Closing Date.
Section 9.03 Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower and the Administrative Agent
and when the Administrative Agent shall have received copies hereof which,
when taken together, bear the
60
signatures of each Lender and thereafter shall be binding upon and inure to
the benefit of the Borrower, the Administrative Agent and each Lender and
their respective successors and assigns, except that other than as provided in
Section 6.01(c), the Borrower shall not have the right to assign or delegate
its rights or obligations hereunder or any interest herein without the prior
consent of all the Lenders.
Section 9.04 Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that,
other than as provided in Section 6.01(c), the Borrower may not assign or
otherwise transfer any of its rights or obligations hereunder without the
prior written consent of each Lender (and any attempted assignment or transfer
by the Borrower without such consent shall be null and void). Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans at the time owing to it); provided that (i)
except in the case of an assignment to a Lender or a Lender Affiliate, the
Borrower and the Administrative Agent must give their prior written consent to
such assignment (which consent shall not be unreasonably withheld or delayed),
(ii) except in the case of an assignment to a Lender or a Lender Affiliate or
an assignment of the entire remaining amount of the assigning Lender's
Commitment, the amount of the Commitment of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative Agent)
shall not be less than $5,000,000 unless each of the Borrower and the
Administrative Agent otherwise consent, (iii) each partial assignment shall be
made as an assignment of a proportionate part of all the assigning Lender's
rights and obligations under this Agreement, (iv) the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Acceptance, together with a processing and recordation fee of $3,500, and
(v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; and provided further
that any consent of the Borrower otherwise required under this paragraph shall
not be required if a Default or Event of Default has occurred and is
continuing. Subject to acceptance and recording thereof pursuant to paragraph
(d) of this Section, from and after the effective date specified in each
Assignment and Acceptance the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of
the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to
the benefits of Sections 2.11, 2.13, 2.17 and 9.05). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does
not comply with this paragraph shall be treated for purposes of this Agreement
as a sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (e) of this Section.
61
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall
be conclusive, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from
time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section, if any, and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement
unless it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower, sell
participations to one or more banks or other entities (a "Participant") in all
or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Borrower,
the Administrative Agent and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender shall
retain the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.08(b) that affects such
Participant. Subject to paragraph (f) of this Section, the Borrower agrees
that each Participant shall be entitled to the benefits of Sections 2.11, 2.13
and 2.17 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section. To the
extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.06 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.15 as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.11 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower's prior written consent.
(g) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement and the other Loan
Documents (including, without
62
limitation, any notes held by it pursuant to Section 2.05(e)) to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, without notice to, or consent of, the
Borrower or the Administrative Agent, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.
(h) The Borrower authorizes each Lender to disclose to any
Participant or assignee and any prospective Participant or assignee any and
all financial information in such Lender's possession concerning the Borrower
or any Subsidiary of the Borrower which has been delivered to such Lender by
the Borrower pursuant to this Agreement or which has been delivered to such
Lender by the Borrower in connection with such Lender's credit evaluation of
the Borrower prior to entering into this Agreement; provided that such
Participant or assignee or prospective Participant or assignee agrees to treat
any such information which is not public as confidential in accordance with
the terms of is Agreement.
Section 9.05 Expenses; Indemnity. (a) The Borrower agrees to pay all
reasonable out-of-pocket expenses incurred by the Administrative Agent in
connection with the preparation of this Agreement and the other Loan Documents
or in connection with any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions hereby
contemplated shall be consummated) or incurred by the Administrative Agent or
any Lender in connection with the enforcement or protection of their rights in
connection with this Agreement and the other Loan Documents or in connection
with the Loans made, including the fees and disbursements of Shearman &
Sterling, special counsel for the Administrative Agent, and, in connection
with any such amendment, modification or waiver made in connection with any
such enforcement or protection, the fees and disbursements of any other
counsel for the Administrative Agent or any Lender. The Borrower further
agrees that it shall indemnify the Lenders from and hold them harmless against
any documentary taxes, assessments or charges made by any Governmental
Authority by reason of the execution and delivery of this Agreement or any of
the other Loan Documents.
(b) The Borrower will indemnify the Administrative Agent and each
Lender and its directors, officers, employees and agents (each such person
being called an "Indemnitee") against, and to hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including reasonable counsel fees and expenses, incurred by or asserted
against any Indemnitee arising out of, in any way connected with, or as a
result of (i) the execution or delivery by the Borrower of this Agreement or
any other Loan Document or any agreement or instrument contemplated hereby or
thereby, the performance by the parties thereto of their respective
obligations thereunder or the consummation of the Transactions and the other
transactions contemplated hereby and thereby, (ii) the use of the proceeds of
the Loans by the Borrower or (iii) any claim, litigation, investigation or
proceeding relating to any of the foregoing, whether or not any Indemnitee is
a party thereto; provided that such indemnity shall not, as to any Indemnitee,
be available to the extent that such losses, claims, damages, liabilities or
related expenses have resulted from the gross negligence or willful misconduct
of such Indemnitee.
63
(c) It is understood and agreed that, to the extent not precluded by
a conflict of interest, each Indemnitee shall endeavor to work cooperatively
with the Borrower with a view toward 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 Indemnitee, it is
anticipated that a single counsel selected by the Borrower may be used.
Settlement of any claim or litigation involving any material indemnified
amount will require the approval of the Borrower (not to be unreasonably
withheld).
(d) The provisions of this Section 9.05 shall remain operative and
in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any term
or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent or any Lender.
All amounts due under this Section 9.05 shall be payable on written demand
therefor.
Section 9.06 Right of Setoff. If any Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, without notice to the Borrower (any such notice being
expressly waived by the Borrower), 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 and other indebtedness at any time
owing by such Lender or any of its Affiliates to or for the credit or the
account of the Borrower against any of and all the obligations of the Borrower
now or hereafter existing under this Agreement and any other Loan Documents
held by such Lender, irrespective of whether or not such Lender shall have
made any demand under this Agreement or such other Loan Document and although
such obligations may be unmatured. The rights of each Lender under this
Section 9.06 are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.
Section 9.07 Applicable Law. THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS AND THE RIGHTS AND OBLIGATIONS THEREUNDER OF THE PARTIES THERETO
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK.
Section 9.08 Waivers; Amendment. (a) No failure or delay of the
Administrative Agent or any Lender in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof
or the exercise of any other right or power. The rights and remedies of the
Administrative Agent and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies which
they would otherwise have. No waiver of any provision of this Agreement or any
other Loan Document or consent to any departure by the Borrower therefrom
shall in any event be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver or consent shall be effective only
in the specific instance and for the purpose for which given. No notice or
demand on the Borrower in any case shall entitle the Borrower to any other or
further notice or demand in similar or other circumstances.
64
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders; provided, however, that
no such agreement shall (i) change the principal amount of, or extend or
advance the maturity of or any date for the payment of any scheduled principal
of or interest on, any Loan, or waive or excuse any such scheduled payment or
any part thereof, or decrease the rate of interest on any Loan, without the
prior written consent of each Lender affected thereby, (ii) change the
Commitment or decrease or extend any date for the payment of the Facility Fees
of any Lender without the prior written consent of such Lender, or (iii) amend
or modify the provisions of Section 2.14, the provisions of this Section 9.08
or the definition of "Termination Date" or "Required Lenders," without the
prior written consent of each Lender; provided further that no such agreement
shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent hereunder without the prior written consent of the
Administrative Agent. Each Lender shall be bound by any waiver, amendment or
modification authorized by this Section 9.08, and any consent by any Lender
pursuant to this Section 9.08 shall bind any person subsequently acquiring a
Loan from it.
Section 9.09 Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the applicable interest rate, together
with all fees and charges which are treated as interest under applicable law
(collectively the "Charges"), as provided for herein or in any other Loan
Document, or otherwise contracted for, charged, received, taken or reserved by
any Lender, shall exceed the maximum lawful rate (the "Maximum Rate") which
may be contracted for, charged, taken, received or reserved by such Lender in
accordance with applicable law, the rate of interest payable with respect to
each Loan owing to each Lender, together with all Charges payable to such
Lender, shall be limited to the Maximum Rate.
Section 9.10 Entire Agreement. This Agreement and the other Loan
Documents and the letter agreements referred to in Section 2.04(b) (with
respect to the payment of fees only) constitute the entire contract between
the parties relative to the subject matter hereof. Any previous agreement
among the parties with respect to the subject matter hereof is superseded by
this Agreement and the other Loan Documents. Nothing in this Agreement or in
the other Loan Documents, expressed or implied, is intended to confer upon any
party other than the parties hereto and thereto any rights, remedies,
obligations or liabilities under or by reason of this Agreement or the other
Loan Documents.
Section 9.11 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS,
AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION 9.11.
65
Section 9.12 Severability. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby. The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
Section 9.13 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract, and shall become
effective as provided in Section 9.03.
Section 9.14 Headings. The cover page, the Article and Section
headings and the Table of Contents used herein are for convenience of
reference only, are not part of this Agreement and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Agreement.
Section 9.15 Jurisdiction; Consent to Service of Process. (a) The
Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and
any appellate court from any thereof, in any action or proceeding arising out
of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of
any such action or proceeding may be heard and determined in such New York
State or, to the extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement
shall affect any right that any Lender or the Administrative Agent may
otherwise have to bring any action or proceeding relating to this Agreement or
the other Loan Documents against the Borrower or its properties in the courts
of any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents in any New York State or Federal court located in New York City.
Each of the parties hereto hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.
(c) The Borrower hereby irrevocably designates, appoints and
empowers CT Corporation System, Inc. presently located at 111 Eighth Avenue,
New York, New York 10011, as its designee, appointee and attorney-in-fact to
receive, accept and acknowledge for and on its behalf, and in respect of its
property, service of any and all legal process, summons, notices and documents
which may be served in any such action or proceeding. If for any reason such
designee, appointee and attorney-in-fact shall cease to be available to act as
such, the Borrower agrees to designate a new designee, appointee and
attorney-in-fact in New York City on the
66
terms and for purposes of this provision satisfactory to the Administrative
Agent. Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 9.01. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law. Section 9.16 Domicile of Loans. Each Lender may
transfer and carry its Loans at, to or for the account of any office,
subsidiary or Affiliate of such Lender.
Section 9.17 Restricted and Unrestricted Subsidiaries. (a) Set forth
on Schedule 3.08 Part I is a list of all of the Restricted Subsidiaries and
Unrestricted Subsidiaries of the Borrower as of the Closing Date.
(b) Set forth on Schedule 3.08 Part II is a list of all of the
Restricted Subsidiaries and Unrestricted Subsidiaries of WRECO as of the
Closing Date.
(c) After the Closing Date, a Financial Officer of the Borrower may,
provided that no Default or Event of Default has occurred and is continuing,
designate a Restricted Subsidiary as an Unrestricted Subsidiary by notice sent
to all of the Lenders, provided that (i) no such designation shall be
effective unless immediately after giving effect thereto there would exist no
Default or Event of Default; (ii) any such designation shall be effective not
less than five Business Days after written notice thereof shall have been
provided to each Lender; and (iii) upon such designation, Schedule 3.08 Part I
shall be deemed to be amended to reflect such designation. Any Person that
becomes a Subsidiary (by formation, acquisition, merger or otherwise) after
the Closing Date shall automatically be deemed to be a Restricted Subsidiary
of the Borrower as of the date it becomes a Subsidiary unless designated as an
Unrestricted Subsidiary pursuant to the terms hereof.
(d) After the Closing Date, a Financial Officer of the Borrower may,
provided that no Default or Event of Default has occurred and is continuing,
designate an Unrestricted Subsidiary as a Restricted Subsidiary by notice sent
to all of the Lenders, provided that (w) no such designation shall be
effective unless immediately after giving effect thereto there would exist no
Default or Event of Default; (x) no such designation shall be effective unless
immediately after giving effect thereto the Borrower is in compliance with
Sections 6.01(d) and 6.01(e); (y) any such designation shall be effective not
less than five Business Days after written notice thereof shall have been
provided to each Lender; and (z) upon such designation, Schedule 3.08 Part I
shall be deemed to be amended to reflect such designation.
(e) After the Closing Date, any Subsidiary of WRECO (i) which is
organized and existing under the laws of the United States or any state of the
United States, Puerto Rico or the Dominion of Canada or any province thereof
and (ii) of which substantially all of the physical properties are located,
and substantially all of the business is carried on, in the United States of
America, Puerto Rico or Canada may, provided that no Default or Event of
Default has occurred and is continuing, be designated as a Restricted
Subsidiary by WRECO, subject to the limitations described in Subsection
9.17(f) below. Any Person that becomes a Subsidiary of WRECO (by formation,
acquisition, merger or otherwise) after the Closing Date shall automatically
be deemed to be an Unrestricted Subsidiary of WRECO as of the date it becomes
a Subsidiary unless designated as a Restricted Subsidiary pursuant to the
terms hereof.
(f) After the Closing Date, the Borrower may, provided that no
Default or Event of Default has occurred and is continuing, cause a Financial
Officer of WRECO to designate an Unrestricted Subsidiary as a Restricted
Subsidiary by notice sent to all of the Lenders, provided that (v) such
Subsidiary satisfies the requirements of Subsection 9.17(e) above; (w) no such
designation shall be effective unless immediately after giving effect thereto
there would exist no Default or Event of Default; (x) WRECO could incur at
least $1 of additional Senior Debt under Subsection 6.02(b); (y) any such
designation shall be effective not less than five Business Days after written
notice thereof shall have been provided to each Lender; and (z) upon such
designation, Schedule 3.08 Part II shall be deemed to be amended to reflect
such designation.
(g) After the Closing Date, the Borrower may, provided that no
Default or Event of Default has occurred and is continuing, cause a Financial
Officer of WRECO to designate a Restricted Subsidiary as an Unrestricted
Subsidiary by notice sent to all of the Lenders, provided that (v) no such
designation shall be effective unless immediately after giving effect thereto
there would exist no Default or Event of Default; (w) WRECO could incur at
least $1 of additional Senior Debt under Subsection 6.02(b); (x) the aggregate
amount of Real Estate Assets owned by all Subsidiaries of WRECO, determined on
a consolidated basis, which have been or are to be, as the case may be,
designated as Unrestricted Subsidiaries during the 365 consecutive days ending
on and including the effective date of such proposed designation, shall not
exceed 15% of the aggregate amount of Real Estate Assets owned by WRECO and
its Restricted Subsidiaries as of the beginning of such 365 day period; (y)
any such designation shall be effective not less than five Business Days after
written notice thereof shall have been provided to each Lender; and (z) upon
such designation, Schedule 3.08 Part II shall be deemed to be amended to
reflect such designation.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the Borrower, the Administrative Agent, the
Syndication Agent, the Co-Documentation Agents and the Lenders have caused
this Agreement to be duly executed by their respective authorized officers as
of the day and year first above written.
WEYERHAEUSER COMPANY, as Borrower,
By: /s/ JEFFREY W. NITTA
---------------------------
Name: Jeffrey W. Nitta
Title: Vice President and
Treasurer
JPMORGAN CHASE BANK,
individually and as Administrative Agent,
By: /s/ WILLIAM P. RINDFUSS
-----------------------------
Name: William P. Rindfuss
Title: Vice President
MORGAN STANLEY SENIOR FUNDING, INC.,
individually and as Syndication Agent,
By: /s/ LUCY K. GALBRAITH
-----------------------------
Name: Lucy K. Galbraith
Title: Vice President
THE BANK OF TOKYO-MITSUBISHI, LTD.,
PORTLAND BRANCH,
individually and as Co-Documentation Agent,
By: /s/ JUNJI BAN
---------------------------
Name: Junji Ban
Title: General Manager
DEUTSCHE BANC ALEX. BROWN INC.,
as Co-Documentation Agent,
By: /s/ CHRISTIAN DALLWITZ
---------------------------
Name: Christian Dallwitz
Title: Vice President
By: /s/ STEPHAN G PEETZEN
---------------------------
Name: Stephan G Peetzen
Title: Director
DEUTSCHE BANK AG NEW YORK BRANCH,
as Lender,
By: /s/ CHRISTIAN DALLWITZ
---------------------------
Name: Christian Dallwitz
Title: Vice President
By: /s/ STEPHAN G PEETZEN
---------------------------
Name: Stephan G Peetzen
Title: Director
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms...............................................1
Section 1.02 Terms Generally............................................15
Section 1.03 Accounting Terms; GAAP.....................................15
ARTICLE II
THE CREDITS
Section 2.01 Commitments................................................16
Section 2.02 Revolving Loans............................................16
Section 2.03 Conversion and Continuation of Revolving Loans.............18
Section 2.04 Fees.......................................................19
Section 2.05 Repayment of Loans; Evidence of Debt.......................20
Section 2.06 Interest on Loans..........................................21
Section 2.07 Default Interest...........................................22
Section 2.08 Alternate Rate of Interest.................................22
Section 2.09 Termination, Reduction and Extension of Commitments........23
Section 2.10 Prepayment.................................................23
Section 2.11 Reserve Requirements; Change in Circumstances..............25
Section 2.12 Change in Legality.........................................26
Section 2.13 Indemnity..................................................27
Section 2.14 Pro Rata Treatment.........................................28
Section 2.15 Sharing of Setoffs.........................................28
Section 2.16 Payments...................................................29
Section 2.17 Taxes......................................................29
Section 2.18 Mitigation Obligations; Replacement of Lenders.............32
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Organization; Powers.......................................33
Section 3.02 Authorization..............................................33
Section 3.03 Enforceability.............................................34
Section 3.04 Consents and Approvals.....................................34
Section 3.05 Financial Statements.......................................34
Section 3.06 No Material Adverse Change.................................35
Section 3.07 Title to Properties; Possession Under Leases...............35
Section 3.08 Subsidiaries...............................................35
Section 3.09 Litigation; Compliance with Laws...........................35
i
Section 3.10 Agreements.................................................36
Section 3.11 Federal Reserve Regulations................................36
Section 3.12 Investment Company Act; Public Utility Holding Company Act.36
Section 3.13 Tax Returns................................................37
Section 3.14 No Material Misstatements..................................37
Section 3.15 Compliance with ERISA......................................37
Section 3.16 Environmental Matters......................................37
Section 3.17 Maintenance of Insurance...................................38
Section 3.18 Existing Senior Credit Facilities..........................38
Section 3.19 Surviving Senior Credit Facilities.........................39
Section 3.20 Non-Material Loans.........................................39
ARTICLE IV
CONDITIONS OF LENDING
Section 4.01 All Borrowings.............................................39
Section 4.02 Closing Date...............................................40
ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.01 Existence; Businesses and Properties.......................42
Section 5.02 Insurance..................................................43
Section 5.03 Obligations and Taxes......................................43
Section 5.04 Financial Statements, Reports, Etc.........................43
Section 5.05 Litigation and Other Notices...............................45
Section 5.06 ERISA......................................................45
Section 5.07 Maintaining Records; Access to Properties and Inspections..46
Section 5.08 Use of Proceeds............................................46
Section 5.09 Environmental Matters......................................46
Section 5.10 Performance of Transaction Agreements......................48
Section 5.11 OCBM Agreement.............................................48
Section 5.12 Further Assurances.........................................48
Section 5.13 Guarantee..................................................49
ARTICLE VI
NEGATIVE COVENANTS
Section 6.01 Covenants of the Borrower..................................49
Section 6.02 Covenants with respect to WRECO............................52
ii
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01 Events of Default..........................................55
ARTICLE VIII
THE ADMINISTRATIVE AGENT
Section 8.01 The Administrative Agent...................................58
Section 8.02 Other Agents...............................................60
ARTICLE IX
MISCELLANEOUS
Section 9.01 Notices....................................................61
Section 9.02 Survival of Agreement......................................61
Section 9.03 Binding Effect.............................................61
Section 9.04 Successors and Assigns.....................................62
Section 9.05 Expenses; Indemnity........................................64
Section 9.06 Right of Setoff............................................65
Section 9.07 Applicable Law.............................................65
Section 9.08 Waivers; Amendment.........................................65
Section 9.09 Interest Rate Limitation...................................66
Section 9.10 Entire Agreement...........................................66
Section 9.11 WAIVER OF JURY TRIAL.......................................66
Section 9.12 Severability...............................................67
Section 9.13 Counterparts...............................................67
Section 9.14 Headings...................................................67
Section 9.15 Jurisdiction; Consent to Service of Process................67
Section 9.16 Domicile of Loans..........................................68
Section 9.17 Restricted and Unrestricted Subsidiaries...................68
EXHIBITS
Exhibit A Form of Revolving Borrowing Request
Exhibit B Form of Administrative Questionnaire
Exhibit C Form of Assignment and Acceptance
Exhibit D-1 Form of Certification of Financial Statements for Weyerhaeuser
Exhibit D-2 Form of Certification of Financial Statements for WRECO
Exhibit D-3 Form of Compliance Certificate for Weyerhaeuser
Exhibit D-4 Form of Compliance Certificate for WRECO
Exhibit E Form of Subordinated Debt
Exhibit F Form of Promissory Note
iii
SCHEDULES
Schedule 2.01 Commitments
Schedule 3.08 Subsidiaries of Weyerhaeuser, WRECO and the Company
Schedule 3.18 Existing Senior Credit Facilities
Schedule 3.19 Surviving Senior Credit Facilities
Schedule 7.01 Specified Indebtedness
Schedule 9.01 Notices
Exhibit (b)(7)
EXECUTION COPY
==============================================================================
$2,000,000,000
COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT
Dated as of February 8, 2002
among
WEYERHAEUSER COMPANY, as Borrower,
THE LENDERS, SWING LINE BANK and FRONTING BANK NAMED HEREIN,
JPMORGAN CHASE BANK, as Administrative Agent,
MORGAN STANLEY SENIOR FUNDING, INC., as Syndication Agent,
and
THE BANK OF TOKYO-MITSUBISHI, LTD., and
DEUTSCHE BANC ALEX. BROWN INC.,
as Co-Documentation Agents
===============================================================================
J.P. MORGAN SECURITIES INC. and MORGAN STANLEY SENIOR FUNDING, INC.,
as Lead Arrangers and Joint Book Runners
COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT dated
as of February 8, 2002 among WEYERHAEUSER COMPANY, a Washington corporation
(the "Borrower"), the lenders listed in Schedule 2.01 (together with each
assignee that becomes a party hereto pursuant to Section 9.04, a "Lender",
and collectively, the "Lenders"), JPMORGAN CHASE BANK, a New York banking
corporation,as swing line bank (in such capacity, the "Swing Line Bank"),
JPMORGAN CHASE BANK, as fronting bank (in such capacity, the "Fronting
Bank"), JPMORGAN CHASE BANK, as administrative agent for the Lenders (in
such capacity, and its successors in such capacity, the "Administrative
Agent"), MORGAN STANLEY SENIOR FUNDING, INC., as syndication agent (in such
capacity, the "Syndication Agent"), and THE BANK OF TOKYO-MITSUBISHI, LTD.
and DEUTSCHE BANC ALEX. BROWN INC., as co-documentation agents (each,
individually, a "Co-Documentation Agent," and collectively, the
"Co-Documentation Agents").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower has requested that the Lenders, the Swing
Line Bank and the Fronting Bank extend credit to the Borrower to enable it
(a) to finance the acquisition (the "Acquisition") by the Borrower of the
outstanding shares of common stock, including the related preferred stock
purchase rights, of Willamette Industries, Inc., an Oregon corporation (the
"Company"), (b) to pay costs and expenses related to such Acquisition and
the financing thereof, (c) to refinance certain existing indebtedness of
the Borrower, the Company and their respective subsidiaries (as hereinafter
defined), (d) to provide the Borrower and its Subsidiaries (as hereinafter
defined) with financing for general corporate purposes and (e) to provide
for the issuance of Letters of Credit (as hereinafter defined) for the
account of the Borrower.
WHEREAS, the Lenders are willing to extend such credit on the
terms and subject to the conditions herein set forth.
WHEREAS, Weyerhaeuser Real Estate Company, a Washington
corporation and a wholly-owned subsidiary of the Borrower will derive a
substantial benefit from the credit extended to the Borrower.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms. As used in this Agreement, the
following terms shall have the meanings specified below:
"Acquisition" shall have the meaning given such term in the
preliminary statements hereto.
"Adjusted Net Worth" shall mean, as of the date of any
computation thereof, the aggregate amount of capital stock (less treasury
stock), surplus and retained earnings of WRECO and its Restricted
Subsidiaries, after deducting (i) goodwill, patents, trade names,
trademarks, unamortized debt discount and expense, deferred assets (other
than prepaid taxes and insurance), experimental or organizational expense,
any reappraisal, revaluation or write-up assets, and such other assets as
are properly classified as "intangible assets" of WRECO and its Restricted
Subsidiaries in accordance with GAAP, (ii) all minority interests in the
capital stock and surplus of the Restricted Subsidiaries of WRECO, (iii)
all Investments in Unrestricted Subsidiaries of WRECO, and (iv) all
Investments of WRECO and its Restricted Subsidiaries in any joint venture,
partnership or similar entity (not including any Investments in any
Restricted Subsidiary of WRECO) entered into for the purpose of acquiring,
developing, constructing, owning, operating, selling or leasing any Real
Estate Assets.
"Administrative Agent Fees" shall have the meaning given
such term in Section 2.07(b).
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit C hereto.
"Affiliate" shall mean, when used with respect to a specified
person, another person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control
with the person specified.
"Aggregate Credit Exposure" shall mean the aggregate amounts of
the Lenders' Credit Exposures.
"Agreement" shall mean this Competitive Advance and Revolving
Credit Facility Agreement, together with all amendments, supplements and
modifications hereof.
"Applicable Margin" shall have the meaning given such term in
Section 2.09(d).
"Applicable Percentage" of any Lender at any time shall mean the
percentage of the Total Commitment represented by such Lender's Commitment.
In the event the Commitments shall have expired or been terminated, the
Applicable Percentage shall be determined on the basis of the Commitments
most recently in effect, but giving effect to assignments pursuant to
Section 9.04.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee (with the consent of
any party whose consent is required by Section 9.04), and accepted by the
Administrative Agent, which acceptance shall be governed by the terms of
Section 9.04, in the form of Exhibit D.
"Base Rate" shall mean, for any day, a rate per annum equal to
the higher of (i) the Prime Rate and (ii) 1/2 of 1% plus the Federal Funds
Rate, each as in effect from time to time. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the
Federal Funds Rate, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms thereof, the Base Rate shall be determined without regard to clause
(ii)
2
of the first sentence of this definition, until the circumstances
giving rise to such inability no longer exist. Any change in the Base Rate
due to a change in the Prime Rate or the Federal Funds Rate shall be
effective on the effective date of such change in the Prime Rate or the
Federal Funds Rate, respectively.
"Base Rate Borrowing" shall mean a Borrowing comprised of Base
Rate Loans.
"Base Rate Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Base Rate in accordance with the provisions
of Article II.
"Board" shall mean the Board of Governors of the Federal Reserve
System of the United States.
"Borrower" shall have the meaning given such term in the
introductory paragraph hereto.
"Borrowing" shall mean a group of Loans of a single Type made by
the Lenders (or, in the case of a Competitive Borrowing, by the Lender or
Lenders whose Competitive Bids have been accepted pursuant to Section 2.05)
on a single date and as to which a single Interest Period is in effect.
"Borrowing Request" shall mean a Revolving Borrowing Request and
a Swing Line Borrowing Request.
"Bridge Facility" shall mean the Bridge Revolving Credit Facility
Agreement dated as of even date herewith, entered into by and among the
Borrower, the lenders party thereto from time to time, the Syndication
Agent, the Administrative Agent and the Co-Documentation Agents, as such
agreement may be amended, restated, supplemented or otherwise modified from
time to time.
"Business Day" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York) on which banks
are open for business in New York City; provided, however, that, when used
in connection with a Eurodollar Loan, the term "Business Day" shall also
exclude any day on which banks are not open for dealings in dollar deposits
in the London interbank market.
"Capital Base" shall mean, as of the date of any computation
thereof, the sum of (i) Adjusted Net Worth plus (ii) the amount of
WRECO/Weyerhaeuser Subordinated Debt then outstanding not to exceed
Adjusted Net Worth.
"Capital Lease Obligations" of any person shall mean the
obligations of such person to pay rent or other amounts under any lease of
(or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such
person under GAAP and, for purposes of this Agreement, the amount of such
obligations at any time shall be the capitalized amount thereof at such
time determined in accordance with GAAP.
3
A "Change in Control" shall be deemed to have occurred with
respect to (a) the Borrower if, (i) any person or group (within the meaning
of Rule 13d-5 of the SEC as in effect on the date hereof) shall own
directly or indirectly, beneficially or of record, shares representing more
than 20% of the aggregate ordinary voting power represented by the issued
and outstanding capital stock of the Borrower; (ii) a majority of the seats
(other than vacant seats) on the board of directors of the Borrower shall
at any time have been occupied by persons who were neither (A) nominated by
the management of the Borrower in accordance with its charter and by-laws,
nor (B) appointed by directors so nominated; or (iii) any person or group
shall otherwise directly or indirectly Control the Borrower, and (b) WRECO
if the Borrower shall fail to own directly or indirectly, beneficially or
of record, shares representing at least 79% of the aggregate ordinary
voting power represented by the issued and outstanding capital stock of
WRECO.
"Class", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, is a
Revolving Loan or a Competitive Loan.
"Closing Date" shall mean the first date on which the conditions
set forth in Article IV shall have been satisfied.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to the Code are to the Code, as in effect at
the date of this Agreement and any subsequent provisions of the Code,
amendatory thereof, supplemental thereto or substituted therefor.
"Commitment" shall mean, with respect to each Lender, the
commitment of such Lender hereunder as set forth in Schedule 2.01 or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed
its Commitment, as applicable, as such Lender's Commitment may be
permanently reduced, increased or terminated from time to time pursuant to
Section 2.12, Section 2.21, Article VII or Section 9.04.
"Commitment Letter" shall mean that commitment letter and term
sheet dated as of December 13, 2001 from JPMorgan Chase Bank, J.P. Morgan
Securities Inc. and Morgan Stanley Senior Funding, Inc. to the Borrower.
"Company" shall have the meaning given such term in the
preliminary statements hereto.
"Competitive Bid" shall mean an offer by a Lender to make a
Competitive Loan in accordance with Section 2.05.
"Competitive Bid Rate" shall mean, with respect to any
Competitive Bid, the Margin or the Fixed Rate, as applicable, offered by
the Lender making such Competitive Bid.
"Competitive Bid Request" shall mean a request by the Borrower
for Competitive Bids in accordance with Section 2.05.
"Competitive Borrowing" shall mean a Borrowing consisting of
Competitive Loans or concurrent Competitive Loans from the Lender or
Lenders whose Competitive Bids for
4
such Borrowing have been accepted by the Borrower under the bidding
procedure described in Section 2.05.
"Competitive Loan" shall mean a Loan made pursuant to Section
2.05.
"Confidential Information Memorandum" shall mean, the
confidential information memorandum dated February 2002 and used by the
Administrative Agent and the Lead Arrangers in connection with the
syndication of the Commitments.
"Control" shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of
a person, whether through the ownership of voting securities or by
contract, and "Controlling" and "Controlled" shall have meanings
correlative thereto.
"Control Date" shall mean the date on which both (i) persons
designated or approved by the Borrower or the Purchaser shall constitute a
majority of the board of directors of the Company and (ii) securities or
other ownership interests representing more than 50% of the equity or more
than 50% of the ordinary voting power of the Company are owned, controlled
or held by the Purchaser, the Borrower and/or one of its wholly owned
subsidiaries.
"Credit Exposure" shall mean, with respect to each Lender, at any
time, the aggregate principal amount at such time of all outstanding
Revolving Loans of such Lender to the Borrower, plus the aggregate amount
at such time of such Lender's L/C Exposure, plus the aggregate amount at
such time of such Lender's Swing Line Exposure.
"Default" shall mean any event or condition which upon notice,
lapse of time or both would constitute an Event of Default.
"Disclosure Letter" shall mean the Company Disclosure Letter of
the Company to the Borrower and Company Holdings, Inc. ("Holdings"), as
contemplated by the Agreement and Plan of Merger Dated as of January 28,
2002, among the Borrower, Holdings and the Company.
"Dollars", "dollars" or "$" shall mean lawful money of the United
States of America.
"Domestic Subsidiary" shall mean any subsidiary organized under
the laws of any State of the United States of America, substantially all of
the assets of which are located, and substantially all of the business of
which is conducted, in the United States of America.
"Environmental Claims" shall mean any and all administrative,
regulatory, or judicial actions, suits, demand letters, claims, liens,
notices of noncompliance or violation, investigations, or proceedings
relating in any way to any Environmental Law (hereinafter referred to as
"claims") or any permit issued under any such Environmental Law, including
without limitation (a) any and all claims by Governmental Authorities for
enforcement, cleanup, removal, response, remedial, or other actions or
damages pursuant to any applicable Environmental Law, and (b) any and all
claims by any third party seeking damages, contribution, indemnification,
cost recovery, compensation, or injunctive relief resulting from Hazardous
Materials or arising from alleged injury or threat of injury to health,
safety, or the environment.
5
"Environmental Laws" shall mean any and all Federal, state, local
and foreign statutes, laws, regulations, ordinances, codes, rules
(including rules of common law), judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or other governmental
restrictions now or hereafter in effect relating to the environment,
health, safety, Hazardous Materials (including, without limitation, the
manufacture, processing, distribution, use, treatment, storage, Release,
and transportation thereof) or to industrial hygiene or the environmental
conditions on, under or about real property, including, without limitation,
soil, groundwater, and indoor and outdoor ambient air conditions.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of
ERISA, amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean any trade or business (whether or
not incorporated) that, together with the Borrower or WRECO, is treated as
a single employer under Section 414(b) or (c) of the Code or, solely for
purposes of Section 302 of ERISA and Section 412 of the Code, is treated as
a single employer under Section 414(b), (c), (m) or (o) of the Code.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Eurodollar Rate in accordance with the
provisions of Article II.
"Eurodollar Rate" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, the rate appearing on Page 3750 of the
Telerate Service (or on any successor or substitute page of such Service,
or any successor to or substitute for such Service, providing rate
quotations comparable to those currently provided on such page of such
Service, as determined by the Administrative Agent from time to time for
purposes of providing quotations of interest rates applicable to dollar
deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period. In the event that such rate is not available at such time
for any reason, then the "Eurodollar Rate" with respect to such Eurodollar
Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest
Period are offered by the principal London office of the Administrative
Agent in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Event of Default" shall have the meaning given such term in
Article VII.
"Excluded Sales" shall mean (a) the sale by the Borrower or any
of its Subsidiaries in the ordinary course of its business of inventory and
timberlands, (b) sales of accounts, receivables or other payment
intangibles as part of a securitization transaction and (c) sales to the
Borrower or any of its subsidiaries.
6
"Existing Senior Credit Facilities" shall mean (i) material
senior funded Indebtedness of the Borrower and its subsidiaries and (ii)
publicly disclosed, material senior funded Indebtedness of the Company and
its subsidiaries, in each case outstanding immediately before giving effect
to the consummation of the Transactions. For purposes of this definition,
no single loan shall be considered material unless the aggregate principal
amount outstanding exceeds $15,000,000.
"Facility Fees" shall have the meaning given such term in Section
2.07(a).
"Federal Funds Rate" shall mean, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
quotations for the day of such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by
it.
"Fees" shall mean the Facility Fees, the Fronting Fee, the L/C
Participation Fee and the Administrative Agent Fees.
"Financial Officer" of any corporation shall mean the chief
financial officer, principal accounting officer, treasurer or controller of
such corporation.
"Fixed Rate" shall mean, with respect to any Competitive Loan
(other than a Eurodollar Competitive Loan), the fixed rate of interest per
annum specified by the Lender making such Competitive Loan in its related
Competitive Bid.
"Fixed Rate Borrowing" shall mean a Borrowing comprised of Fixed
Rate Loans.
"Fixed Rate Loan" shall mean a Competitive Loan bearing interest
at a Fixed Rate.
"Fronting Fee" shall have the meaning given such term in Section
2.06(c).
"GAAP" shall mean generally accepted accounting principles,
applied on a consistent basis.
"Governmental Authority" shall mean the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.
"Guarantee" of or by any person shall mean any obligation,
contingent or otherwise, of such person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
obligation of such person, direct or indirect, (a) to purchase or pay
7
(or advance or supply funds for the purchase or payment of) such
Indebtedness or to purchase (or to advance or supply funds for the purchase
of) any security for the payment of such Indebtedness, (b) to purchase or
lease property, securities or services for the purpose of assuring the
owner of such Indebtedness of the payment of such Indebtedness, (c) to
maintain working capital, equity capital or other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or (d) as an account party in respect of
any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, however, that the term Guarantee
shall not include endorsements for collection or deposit, in either case in
the ordinary course of business.
"Hazardous Materials" shall mean (a) any petroleum or petroleum
products, flammable substances, explosives, radioactive materials,
hazardous wastes, substances or contaminants, toxic wastes, substances or
contaminants, or any other wastes, substances, contaminants or pollutants
prohibited, limited or regulated by any Governmental Authority; (b)
asbestos in any form that is or could become friable, urea formaldehyde
foam insulation, transformers or other equipment that contains dielectric
fluid containing levels of polychlorinated biphenyls or radon gas; (c) any
chemicals, materials or substances defined as or included in the definition
of "hazardous substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous wastes," "restricted hazardous wastes," "toxic
substances," "toxic pollutants," "contaminants," or "pollutants," or words
of similar import, under any applicable Environmental Law; and (d) any
other chemical, material, or substance, exposure to which is prohibited,
limited, or regulated by any Governmental Authority.
"Indebtedness" of any person shall mean, without duplication, (a)
all obligations of such person for borrowed money or with respect to
deposits or advances of any kind, (b) all obligations of such person
evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such person upon which interest charges are customarily
paid, (d) all obligations of such person under conditional sale or other
title retention agreements relating to property or assets purchased by such
person, (e) all obligations of such person issued or assumed as the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (f) all Indebtedness
of others secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such person, whether or not the obligations
secured thereby have been assumed, (g) all Guarantees by such person of
Indebtedness of others, (h) all Capital Lease Obligations of such person,
and (i) all obligations of such person as an account party in respect of
letters of credit, letters of guaranty and bankers' acceptances. The
Indebtedness of any person shall include the Indebtedness of any
partnership in which such person is a general partner.
"Initial Extension of Credit" shall mean the earlier to occur of
the initial Borrowing and the initial issuance of a Letter of Credit
hereunder.
"Interest Period" shall mean, (a) as to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing or on the date of
conversion of a Borrowing of a different Type to a Eurodollar Borrowing or
on the last day of the immediately preceding Interest Period applicable to
such Borrowing or conversion thereof, as the case may be, and ending on the
numerically corresponding day (or, if there is no numerically corresponding
day, on the last
8
day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the
Borrower may elect and (b) with respect to any Fixed Rate Borrowing, the
period (which shall not be less than seven days or more than 360 days)
commencing on the date specified in the applicable Competitive Bid Request;
provided, however, that if any Interest Period would end on a day other
than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, in the case of Eurodollar Loans, such next
succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day;
provided, further, that no Interest Period for any Loan shall extend beyond
the Termination Date; provided, even further, that for a period of three
months after the Closing Date the Borrower shall only be entitled to select
an Interest Period of one month. Interest shall accrue from and including
the first day of an Interest Period to but excluding the last day of such
Interest Period.
"Investments" shall mean all investments in any Person, computed
in accordance with GAAP, made by stock purchase, capital contribution,
loan, advance, extension of credit, or creation or assumption of any other
contingent liability or Guarantee in respect of any obligation of such
Person, or otherwise; provided, however, that in computing any investment
in any Person (i) all expenditures for such investment shall be taken into
account at the actual amounts thereof in the case of expenditures of cash
and at the fair value thereof (as determined in good faith by the Board of
Directors of WRECO) or depreciated cost thereof (in accordance with GAAP),
whichever is greater, in the case of expenditures of property, (ii) there
shall not be included any Real Estate Assets, or any account or note
receivable from such other Person arising from transactions in the ordinary
course of business, and (iii) a Guarantee or other contingent liability of
any kind in respect of any Indebtedness or other obligation of such Person
shall be deemed an Investment equal to the amount of such Indebtedness or
obligation.
"L/C Disbursement" shall mean a payment or disbursement made by
the Fronting Bank pursuant to a Letter of Credit.
"L/C Exposure" shall mean, at any time, the sum of (a) the
aggregate undrawn amount of all outstanding Letters of Credit at such time
(assuming compliance at such time with all conditions to drawing) plus (b)
the aggregate principal amount of all L/C Disbursements that have not yet
been reimbursed by the Borrower at such time. The L/C Exposure of any
Lender at any time shall mean its Applicable Percentage of the aggregate
L/C Exposure at such time.
"L/C Participation Fee" shall have the meaning given such term in
Section 2.07(c).
"Lead Arrangers" shall mean, collectively, Morgan Stanley Senior
Funding, Inc., and J.P. Morgan Securities Inc.
"Lender" and "Lenders" shall have the respective meanings given
to such terms in the introductory paragraph hereto.
"Lender Affiliate" means, (a) with respect to any Lender, (i) an
Affiliate of such Lender or (ii) any entity (whether a corporation,
partnership, trust or otherwise) that is engaged in making, purchasing,
holding or otherwise investing in bank loans and similar extensions of
credit in the ordinary course of its business and is administered or
managed by a Lender or an
9
Affiliate of such Lender and (b) with respect to any Lender that is a fund
which invests in bank loans and similar extensions of credit, any other
fund that invests in bank loans and similar extensions of credit and is
managed by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.
"Letter of Credit" shall mean any letter of credit issued
pursuant to Section 2.04.
"Lien" shall mean, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, encumbrance, charge or security interest in or
on such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement
relating to such asset and (c) in the case of securities, any purchase
option, call or similar right of a third party with respect to such
securities.
"Loan" shall mean a Revolving Loan, a Swing Line Loan or a
Competitive Loan.
"Loan Documents" shall mean this Agreement, the OCBM Agreement,
any notes issued in accordance with Section 2.08 and any Guarantee entered
into by the Company in accordance with Section 5.13.
"Margin" means, with respect to any Competitive Loan bearing
interest at a rate based on the Eurodollar Rate, the marginal rate of
interest, if any, to be added to or subtracted from the Eurodollar Rate to
determine the rate of interest applicable to such Loan, and specified by
the Lender making such Loan in its related Competitive Bid.
"Margin Stock" shall have the meaning given such term under
Regulation U.
"Material Adverse Effect" shall mean (a) a materially adverse
effect on the business, financial condition, operations or properties of
(1) when used on the Closing Date, the Company and its subsidiaries, taken
as a whole, or (2) the Borrower and its Subsidiaries, taken as a whole, (b)
a materially adverse effect on the ability of the Borrower or any of its
Subsidiaries to perform its obligations under any Loan Documents to which
it is or will be a party, (c) a materially adverse effect on the rights and
remedies available to the Administrative Agent and the Lenders under the
Loan Documents or (d) a materially adverse effect on the Transactions.
"Merger" shall mean the merger of the Purchaser, the Borrower or
one of its wholly owned Restricted Subsidiaries with the Company,
contemplated to occur as soon as practicable after the closing of the
Tender Offer.
"Moody's" shall mean Moody's Investors Service, Inc., a
corporation organized and existing under the laws of the State of Delaware,
and its successors and assigns, and if such corporation shall for any
reason no longer perform the functions of a securities rating agency,
"Moody's" shall be deemed to refer to any other nationally recognized
rating agency designated by the Borrower and the Required Lenders.
"Net Cash Proceeds" shall mean, with respect to any sale, lease,
transfer or other disposition of any asset by any Person, the aggregate
amount of cash received from time to time (whether as initial consideration
or through payment or disposition of deferred consideration) by or on
behalf of such Person in connection with such transaction after deducting
therefrom only
10
(without duplication) (a) the costs associated with such transaction
(including reasonable and customary brokerage fees and commissions, legal
fees and other similar fees and commissions), (b) the amount of taxes
payable in connection with or as a result of such transaction, (c) the
amount of any Indebtedness secured by a Lien on such asset that, by the
terms of the agreement or instrument governing such Indebtedness, is
required to be repaid upon disposition and (d) reserves for purchase price
adjustments and retained fixed liabilities that are payable by such Person
in cash to the extent required under GAAP in connection with such sale,
lease, transfer or disposition (it being understood that immediately upon
expiration of the retention period for such reserves, amounts held as
reserves must be paid as a mandatory prepayment pursuant to Section
2.13(b)), in each case to the extent, but only to the extent, that the
amounts so deducted are (in the cases of (a) and (c) above, at the time of
receipt of such cash), actually paid to a Person that is not an Affiliate
of such Person or the Borrower or any of its Subsidiaries or any Affiliate
of the Borrower or any of its Subsidiaries and are properly attributable to
such transaction or to the asset that is the subject thereof; provided,
however, that Net Cash Proceeds shall not include, (i) with respect to any
sale, lease, transfer or other disposition of any asset by any Person, any
cash receipts received from the sale of worn, damaged, or obsolete
equipment, (ii) any cash receipts received from proceeds of insurance,
condemnation awards (or payments in lieu thereof) or indemnity payments to
the extent that such proceeds, awards or payments in respect of loss or
damage to the assets are applied (or in respect of which expenditures were
previously incurred) to replace or repair the assets in respect of which
such proceeds were received, so long as such application is made within 180
days after the occurrence of such damage or loss and (iii) any rental
payments received in connection with the lease of an asset in the ordinary
course of business. In addition, no proceeds realized in a single
transaction or series of related transactions shall constitute Net Cash
Proceeds except for the portion (if any) of such proceeds in excess of
$25,000,000.
"Non-Material Loans" shall mean any senior obligations for
borrowed money of any Person outstanding in an amount not in excess of
$15,000,000.
"OCBM Agreement" shall mean the Ownership and Capital Base
Maintenance Agreement, dated as of the date hereof, and entered into by the
Borrower.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Person" shall mean any natural person, corporation, business
trust, joint venture, joint stock company, trust, unincorporated
organization, association, company, partnership or government, or any
agency or political subdivision thereof.
"Plan" shall mean any multiemployer or single-employer plan as
defined in Section 4001 of ERISA covered by Title IV of ERISA, which is
maintained or contributed to by (or to which there is an obligation to
contribute of), or at any time during the five calendar years preceding the
date of this Agreement was maintained or contributed to by (or to which
there was an obligation to contribute of), the Borrower or an ERISA
Affiliate.
"Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by the Administrative Agent as its prime rate
in effect at its principal office in New
11
York City; each change in the Prime Rate shall be effective on the date
such change is publicly announced as effective. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer.
"Purchaser" shall mean Company Holdings, Inc., a Washington
corporation and a wholly owned subsidiary of the Borrower.
"Rating" shall mean, as of any date, the rating by Moody's and
S&P in effect on such date, of the Senior Unsecured Long-Term Debt of the
Borrower, provided that such ratings shall take into effect (a) the Tender
Offer, (b) the Acquisition, (c) the Merger and (d) the incurrence by the
Borrower and its Subsidiaries of the Indebtedness under the Senior Bank
Financing, including, without limitation, any refinancing of existing
Indebtedness of the Borrower, the Company, and their respective
subsidiaries.
"Real Estate Assets" shall mean all assets of WRECO and its
Restricted Subsidiaries (determined, unless the context otherwise requires,
on a consolidated basis for WRECO and its Restricted Subsidiaries) of the
types described below, acquired and held for the purpose of, and arising
out of, the development and/or sale or rental thereof in the ordinary
course of business: (i) improved and unimproved land, buildings and other
structures and improvements and fixtures located thereon, and (ii)
contracts, mortgages, notes receivables and other choses in action.
"Reduction Amount" shall have the meaning given such term in
Section 2.12(c).
"Register" shall have the meaning given such term in Section
9.04(d).
"Regulation D" shall mean Regulation D of the Board as from time
to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation T" shall mean Regulation T of the Board as from time
to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation U" shall mean Regulation U of the Board as from time
to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation X" shall mean Regulation X of the Board as from time
to time in effect and all official rulings and interpretations thereunder
or thereof.
"Reinvestment Proceeds" shall have the meaning given such term in
Section 2.13(b).
"Related Parties" shall mean, with respect to any specified
Person, such Person's Affiliates and the respective directors, officers,
employees, agents and advisors of such Person and such Person's Affiliates.
"Release" shall mean disposing, discharging, injecting, spilling,
leaking, dumping, emitting, escaping, emptying, seeping, placing, and the
like, into or upon any land or water or air, or otherwise entering into the
environment.
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"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan as to which the 30-day notice
requirement has not been waived by statute, regulation or otherwise.
"Required Lenders" shall mean, at any time, Lenders having Credit
Exposures and unused Commitments representing more than 50% of the sum of
the Aggregate Credit Exposure and unused Commitments at such time, provided
that, for the purpose of declaring the Loans to be due and payable pursuant
to Article VII, and for all purposes after the Loans become due and payable
pursuant to Article VII or the Commitments expire or terminate, (i) the
outstanding Competitive Loans of the Lenders shall be added to their
respective Credit Exposures and to the Aggregate Credit Exposure and (ii)
notwithstanding Section 2.17, the entire amount of Competitive Loans of
each Lender shall reduce the unused Commitment of such Lender and shall not
reduce the unused Commitment of any other Lender in determining the
Required Lenders.
"Restricted Subsidiary" shall mean, (i) with respect to the
Borrower, each Subsidiary that has not been designated as an Unrestricted
Subsidiary on Schedule 3.08 Part I and thereafter not designated by a
Financial Officer of the Borrower as an Unrestricted Subsidiary after the
Closing Date pursuant to Section 9.17 and (ii) with respect to WRECO, each
Subsidiary that has not been designated as an Unrestricted Subsidiary on
Schedule 3.08 Part II or thereafter designated by a Financial Officer of
WRECO as an Unrestricted Subsidiary after the Closing Date pursuant to
Section 9.17; provided that, until the Control Date has occurred, neither
the Company nor any of its subsidiaries shall be considered a Restricted
Subsidiary. Upon the occurrence of the Control Date, the Company and its
subsidiaries shall be deemed Restricted Subsidiaries unless a Financial
Officer of the Borrower shall have designated any of such entities as an
Unrestricted Subsidiary after the Closing Date pursuant to Section 9.17.
"Revolving Borrowing" shall mean a Borrowing consisting of
Revolving Loans.
"Revolving Borrowing Request" shall mean a request made pursuant
to Section 2.02(f) in the form of Exhibit A.
"Revolving Loan" shall mean a Loan made by the Lenders to the
Borrower pursuant to Section 2.01.
"S&P" shall mean Standard & Poor's Corporation, a corporation
organized and existing under the laws of the State of New York, and its
successors and assigns, and if such corporation shall for any reason no
longer perform the functions of a securities rating agency, "S&P" shall be
deemed to refer to any other nationally recognized rating agency designated
by the Borrower and the Required Lenders.
"SEC" shall mean the Securities and Exchange Commission or any
successor.
"Senior Bank Financing" shall mean the credit facilities
contemplated by (a) this Agreement, (b) the Bridge Facility and (c) the
364-Day Revolving Credit Facility Agreement.
"Senior Debt" shall mean all Indebtedness of any Person (other
than WRECO) which is not expressed to be subordinate and junior in right of
payment to any other Indebtedness
13
of such Person, and, with respect to WRECO, shall mean all Indebtedness of
WRECO other than Subordinated Debt.
"Senior Unsecured Long-Term Debt" shall mean the unsecured bonds,
debentures, notes or other Indebtedness of the Borrower, designated on its
financial statements as senior long-term indebtedness. In the event more
than one issue of Senior Unsecured Long-Term Debt shall be outstanding at
any relevant time and different credit ratings shall have been issued by
S&P or Moody's for such issues, Senior Unsecured Long-Term Debt shall be
deemed to refer to the lowest rated issue.
"Specified Indebtedness" shall mean the Indebtedness set forth in
Schedule 7.01.
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one, and the denominator of
which is the number one minus the aggregate of the maximum reserve
percentages (including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the Board and any other
banking authority to which the Administrative Agent is subject with respect
to the Eurodollar Rate, for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to
be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to
any Lender under such Regulation D or any comparable regulation. The
Statutory Reserves shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"Subordinated Debt" shall mean and include (i) Subordinated
Promissory Notes of WRECO, in substantially the form annexed as Exhibit F
hereto, and (ii) any other Indebtedness of WRECO now or hereafter created,
issued or assumed which at all times is evidenced by a written instrument
or instruments containing or having applicable thereto subordination
provisions substantially the same as those in said Exhibit F hereto,
providing for the subordination of such Indebtedness to such other
Indebtedness of WRECO as shall be specified or characterized in such
subordination provisions.
"subsidiary" shall mean, with respect to any Person (herein
referred to as the "parent"), any corporation, partnership, association or
other business entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary
voting power to elect a majority of the board of directors or more than 50%
of the general partnership interests are, at the time any determination is
being made, owned, controlled or held, or (b) which is, at the time any
determination is made, otherwise Controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent.
"Subsidiary" shall mean any subsidiary of the Borrower or WRECO,
provided that neither the Company nor any of its subsidiaries shall be
considered a Subsidiary until the Control Date has occurred, and provided
further that there shall be excluded from this definition (i) Nelson
Forests Joint Venture, a joint venture formed under the laws of New
Zealand, (ii) Wapawekka Lumber Ltd., a limited partnership formed under the
laws of Saskatchewan, and (iii)
14
Monterra Lumber Mills Limited, a limited partnership formed under the laws
of Ontario, for so long as such business entities shall not be Controlled
by the Borrower or any of its subsidiaries.
"Surviving Senior Credit Facilities" shall mean the Existing
Senior Credit Facilities outstanding immediately before and after giving
effect to the consummation of the Transactions. "Swing Line Borrowing"
shall mean a Borrowing consisting of Swing Line Loans.
"Swing Line Borrowing Request" shall mean a request made pursuant
to Section 2.03(b) in the form of Exhibit B.
"Swing Line Exposure" shall mean, at any time, the aggregate
principal amount of all Swing Line Loans outstanding at such time made by
the Swing Line Bank. The Swing Line Exposure of any Lender at any time
shall mean its Applicable Percentage of the aggregate Swing Line Exposure
at such time.
"Swing Line Loan" shall mean a Loan made by (i) the Swing Line
Bank pursuant to Section 2.03(a), or (ii) any Lender pursuant to Section
2.03(c).
"Tender Offer" shall mean the offer by Purchaser to acquire
through a tender offer for cash all of the outstanding shares of common
stock of the Company, including the related preferred stock purchase rights
of the Company, as more specifically set forth in the Tender Offer
Statement.
"Tender Offer Statement" shall mean the offering memorandum dated
November 29, 2000 setting forth the terms and conditions of the Tender
Offer, as such offering memorandum may be amended, supplemented or
otherwise modified from time to time.
"Termination Date" shall mean February 8, 2007.
"364-Day Revolving Credit Facility Agreement" shall mean the
364-Day Revolving Credit Facility Agreement dated as of even date herewith,
entered into by and among the Borrower, WRECO, the lenders party thereto
from time to time, the Syndication Agent, the Administrative Agent and the
Co-Documentation Agents, as such agreement may be amended, restated,
supplemented or otherwise modified from time to time.
"Total Adjusted Shareholders' Interest" shall mean, at any time,
the amount of the preferred, preference and common shares accounts plus (or
minus in the case of a deficit) the amount of other capital and retained
earnings, in accordance with GAAP, of the Borrower and its consolidated
Subsidiaries, less treasury common shares and the aggregate net book value
(after deducting any reserves applicable thereto) of all items of the
following character which are included in the consolidated assets of the
Borrower and its consolidated Subsidiaries:
(a) investments in Unrestricted Subsidiaries; and
15
(b) without duplication, investments by the Borrower and its
consolidated Subsidiaries in WRECO and its consolidated Subsidiaries.
No effect shall be given for any increases or decreases attributable to
unrealized foreign exchange gains or losses resulting from the application
of FASB Statement 52.
"Total Commitment" shall mean at any time the aggregate amount of
the Commitments as in effect at such time, and on the date hereof shall
mean $2,000,000,000.
"Total Funded Indebtedness" with respect to the Borrower shall
mean, at any time, the aggregate principal amount of all Indebtedness
(other than Guarantees by such Person of Indebtedness of others) for
borrowed money or for the deferred purchase price of property and Capital
Lease Obligations of the Borrower and its consolidated Subsidiaries,
excluding (a) the Indebtedness of Unrestricted Subsidiaries, and (b)
without duplication, the Indebtedness of WRECO and its consolidated
Subsidiaries.
"Transaction-Related Event of Default" shall mean any default or
event of default under any indentures, agreements or other documentation
evidencing the Specified Indebtedness, provided that such default or event
of default shall have occurred or be continuing solely by reason of the
consummation by the Borrower or any of its Subsidiaries of any of the
Transactions.
"Transactions" shall have the meaning given such term in Section
3.02.
"Transferee" shall have the meaning given such term in Section
2.20.
"Type" when used in respect of any Loan or Borrowing, shall refer
to the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, "Rate" shall
include the Eurodollar Rate, the Base Rate and the Competitive Bid Rate.
"Unfunded Current Liability" of any Plan shall mean the amount,
if any, by which the present value of the accrued benefits under the Plan
as of the close of its most recent plan year, determined in accordance with
Statement of Financial Accounting Standards No. 35, based upon the
actuarial assumptions used by the Plan's actuary in the most recent annual
valuation of the Plan, exceeds the fair market value of the assets
allocable thereto, determined in accordance with Section 412 of the Code.
"Unrestricted Subsidiary" shall mean, (i) with respect to the
Borrower, each Subsidiary that has been designated as an Unrestricted
Subsidiary on Schedule 3.08 Part I and any Subsidiary which has been
designated by a Financial Officer of the Borrower as an Unrestricted
Subsidiary after the Closing Date pursuant to Section 9.17, and (ii) with
respect to WRECO, each Subsidiary that has been designated as an
Unrestricted Subsidiary on Schedule 3.08 Part II and any Subsidiary which
has been designated by a Financial Officer of WRECO as an Unrestricted
Subsidiary after the Closing Date pursuant to Section 9.17.
"Utilization Fee" shall have the meaning given such term in
Section 2.09(e).
16
"WRECO" shall mean Weyerhaeuser Real Estate Company, a Washington
corporation.
"WRECO/Weyerhaeuser Subordinated Debt" shall mean the
Subordinated Promissory Notes issued by WRECO to Weyerhaeuser described in
clause (i) of the definition of "Subordinated Debt."
Section 1.02 Terms Generally. The definitions in Section 1.01
shall apply equally to both the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase
"without limitation". All references herein to Articles, Sections, Exhibits
and Schedules shall be deemed references to Articles and Sections of, and
Exhibits and Schedules to, this Agreement unless the context shall
otherwise require.
Section 1.03 Accounting Terms; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature
shall be construed in accordance with GAAP, as in effect from time to time;
provided that, if the Borrower notifies the Administrative Agent that the
Borrower requests an amendment to any provision hereof to eliminate the
effect of any change occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrower that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless
of whether any such notice is given before or after such change in GAAP or
in the application thereof, then such provision shall be interpreted on the
basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith.
ARTICLE II
THE CREDITS
Section 2.01 Commitments. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each
Lender agrees, severally and not jointly, to make Revolving Loans to the
Borrower upon request, at any time and from time to time on and after the
date hereof and until the earlier of the Termination Date and the
termination of the Commitments of such Lender, for such Lender in an
aggregate principal amount at any time outstanding not to exceed such
Lender's Commitment at such time, minus, in each case, the amount by which
the Competitive Loans outstanding at such time shall be deemed pursuant to
Section 2.17 to have utilized such Lender's Commitment, subject, however,
to the conditions that:
(a) at no time shall the outstanding aggregate principal amount
of all Loans made by all Lenders and the Swing Line Bank plus the L/C
Exposure of such Lenders at such time exceed the Total Commitment; and
(b) at all times the outstanding aggregate principal amount of
all Revolving Loans made by each Lender shall equal the product of (i)
the Applicable Percentage
17
times (ii) the outstanding aggregate principal amount of all Revolving
Loans made pursuant to Section 2.02.
Each Lender's Commitments are set forth opposite its name in
Schedule 2.01, or in the case of each assignee that becomes a party hereto
pursuant to Section 9.04, on the Register maintained by the Administrative
Agent pursuant to Section 9.04(c).
Within the foregoing limits, the Borrower may borrow, pay or
prepay and reborrow hereunder, on and after the Closing Date and prior to
the Termination Date, subject to the terms, conditions and limitations set
forth herein.
Section 2.02 Loans. (a) Each Revolving Loan shall be made as part
of a Revolving Borrowing consisting of Revolving Loans made by the Lenders
ratably in accordance with their respective Commitments; provided, however,
that the failure of any Lender to make any Revolving Loan shall not in and
of itself relieve any other Lender of its obligation to lend hereunder (it
being understood, however, that no Lender shall be responsible for the
failure of any other Lender to make any Revolving Loan required to be made
by such other Lender). Each Competitive Loan shall be made in accordance
with the procedures set forth in Section 2.05. The Loans (other than Swing
Line Loans) comprising any Borrowing (other than a Swing Line Borrowing)
shall be in an aggregate principal amount which is an integral multiple of
$1,000,000 and not less than $25,000,000 (or an aggregate principal amount
equal to the remaining balance of the available Commitments).
(b) Each Revolving Borrowing shall be comprised entirely of
Eurodollar Loans or Base Rate Loans, as the Borrower may request pursuant
to paragraph (f) hereof and each Competitive Borrowing shall be comprised
entirely of Eurodollar Loans or Fixed Rate Loans as the Borrower may
request in accordance with Section 2.05. Each Lender may at its option make
any Eurodollar Loan by causing any domestic or foreign branch or Affiliate
of such Lender to make such Loan; provided that any exercise of such option
shall not (i) affect the obligation of the Borrower to repay such Loan in
accordance with the terms of this Agreement and (ii) entitle such Lender to
any amounts related to Sections 2.14 or 2.15 to which amounts such Lender
would not be entitled if such Lender had made such Loan itself through its
domestic branch. Borrowings of more than one Type may be outstanding at the
same time; provided, however, that the Borrower shall not be entitled to
request any Revolving Borrowing which, if made, would result in an
aggregate of more than twenty (20) separate Revolving Loans from any Lender
being outstanding hereunder at any one time. For purposes of the foregoing,
Revolving Loans (other than Base Rate Loans) having different Interest
Periods, regardless of whether they commence on the same date, shall be
considered separate Revolving Loans.
(c) Each Lender shall make each Loan (other than a Swing Line
Loan) to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds to the Administrative Agent in New
York, New York, not later than 12:00 noon (or in the case of Base Rate
Loans, 2:00 p.m.), New York City time, and the Administrative Agent shall
by 3:00 p.m., New York City time, credit the amounts so received to the
general deposit account of the Borrower maintained with the Administrative
Agent or, if a Borrowing (other than a Swing Line Borrowing) shall not
occur on such date because any condition precedent herein specified shall
not have been met, return the amounts so received to the respective
Lenders. Competitive
18
Loans shall be made by the Lender or Lenders whose Competitive Bids
therefor are accepted pursuant to Section 2.05 in the amount so accepted,
and Revolving Loans shall be made by the Lenders pro rata in accordance
with Section 2.17. Unless the Administrative Agent shall have received
notice from a Lender prior to the date of any Revolving Borrowing that such
Lender will not make available to the Administrative Agent such Lender's
portion of such Borrowing, the Administrative Agent may assume that such
Lender has made such portion available to the Administrative Agent on the
date of such Revolving Borrowing in accordance with this paragraph (c) and
the Administrative Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If and to
the extent that such Lender shall not have made such portion available to
the Administrative Agent, such Lender and the Borrower agree to repay to
the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is
made available to the Borrower until the date such amount is repaid to the
Administrative Agent at (i) in the case of the Borrower, the interest rate
applicable at the time to the Revolving Loans comprising such Borrowing and
(ii) in the case of such Lender, the Federal Funds Rate. If such Lender
shall repay to the Administrative Agent such corresponding amount, such
amount shall constitute such Lender's Revolving Loan as part of such
Revolving Borrowing for purposes of this Agreement.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request any Revolving Borrowing with an
Interest Period ending after the Termination Date.
(e) If the Fronting Bank shall not have received the payment
required to be made by the Borrower pursuant to Section 2.04(e) within the
time specified in such Section, the Fronting Bank will promptly notify the
Administrative Agent of the L/C Disbursement and the Administrative Agent
will promptly notify each Lender of such L/C Disbursement and its
Applicable Percentage thereof. Not later than 2:00 p.m., New York City
time, on such date (or, if such Lender shall have received such notice
later than 12:00 noon, New York City time, on any day, no later than 10:00
a.m., New York City time, on the immediately following Business Day), each
Lender will make available the amount of its Applicable Percentage of such
L/C Disbursement (it being understood that such amount shall be deemed to
constitute a Base Rate Loan of such Lender and such payment shall be deemed
to have reduced the L/C Exposure) in immediately available funds, to the
Administrative Agent in New York, New York, and the Administrative Agent
will promptly pay to the Fronting Bank amounts so received by it from the
Lenders. The Administrative Agent will promptly pay to the Fronting Bank
any amounts received by it from such Borrower pursuant to Section 2.04(e)
prior to the time that any Lender makes any payment pursuant to this
paragraph (e), and any such amounts received by the Administrative Agent
thereafter will be promptly remitted by the Administrative Agent to the
Lenders that shall have made such payments and to the Fronting Bank, as
their interests may appear. If any Lender shall not have made its
Applicable Percentage of such L/C Disbursement available to the
Administrative Agent as provided above, such Lender agrees to pay interest
on such amount, for each day from and including the date such amount is
required to be paid in accordance with this paragraph to but excluding the
date such amount is paid, to the Administrative Agent for the account of
the Fronting Bank at, for the first such day, the Federal Funds Rate, and
for each day thereafter, the Base Rate.
19
(f) In order to request a Revolving Borrowing, the Borrower shall
hand deliver or telecopy to the Administrative Agent a Revolving Borrowing
Request in the form of Exhibit A (a) in the case of a Eurodollar Borrowing,
not later than 12:00 noon, New York City time, three Business Days before a
proposed borrowing and (b) in the case of a Base Rate Borrowing, not later
than 12:00 noon, New York City time, on the day of a proposed borrowing.
Such notice shall be irrevocable and shall in each case specify (i) whether
the Revolving Borrowing then being requested is to be a Eurodollar
Borrowing or a Base Rate Borrowing; (ii) the date of such Revolving
Borrowing (which shall be a Business Day) and the amount thereof; and (iii)
if such Revolving Borrowing is to be a Eurodollar Borrowing, the Interest
Period with respect thereto. If no election as to the Type of Revolving
Borrowing is specified in any such notice, then the requested Revolving
Borrowing shall be a Base Rate Borrowing. If no Interest Period with
respect to any Eurodollar Borrowing is specified in any such notice, then
the Borrower shall be deemed to have selected an Interest Period of one
month's duration. The Administrative Agent shall promptly advise the
Lenders of any notice given pursuant to this Section 2.02(f) and of each
Lender's portion of the requested Borrowing.
Section 2.03 Swing Line Loans. (a) The Borrower may request the
Swing Line Bank to make, and the Swing Line Bank shall make, on the terms
and conditions hereinafter set forth, Swing Line Loans to the Borrower from
time to time on any Business Day during the period from the date hereof
until the Termination Date in an aggregate amount not to exceed at any time
outstanding $20,000,000; subject, however, to the condition that at no time
shall the outstanding aggregate principal amount of all Loans made by all
Lenders and the Swing Line Bank plus the L/C Exposure of such Lenders at
such time exceed the Total Commitment. No Swing Line Loan shall be used for
the purpose of funding the payment of principal of any other Swing Line
Loan. Each Swing Line Borrowing shall be in an amount of $1,000,000 or an
integral multiple of $100,000 in excess thereof and shall be made as a Base
Rate Loan.
(b) In order to request a Swing Line Borrowing, the Borrower
shall hand deliver or telecopy to the Swing Line Bank and the
Administrative Agent a Swing Line Borrowing Request in the form of Exhibit
B not later than 3:00 p.m., New York City time, on the day of a proposed
borrowing. Such notice shall be irrevocable and shall in each case specify
(i) the date of such Swing Line Borrowing (which shall be a Business Day)
and the amount thereof; and (ii) the maturity of such Swing Line Borrowing
(which maturity shall be no later than the seventh day after the requested
date of such Swing Line Borrowing). The Swing Line Bank will make the
amount thereof available to the Administrative Agent on the proposed date
thereof by wire transfer of immediately available funds to the
Administrative Agent in New York, New York, not later than 4:00 p.m., New
York City time, and the Administrative Agent shall by 5:00 p.m., New York
City time, credit the amount so received to the general deposit account of
the Borrower maintained with the Administrative Agent or, if a Swing Line
Borrowing shall not occur on such date because any condition precedent
herein specified shall not have been met, return the amount so received to
the Swing Line Bank.
(c) Upon written demand by the Swing Line Bank, with a copy of
such demand to the Administrative Agent, each other Lender shall purchase
from the Swing Line Bank, and the Swing Line Bank shall sell and assign to
each such other Lender, such other Lender's Applicable Percentage of such
Swing Line Loan as of the date of such demand, by making available to the
Administrative Agent in New York, New York for the account of the Swing
Line Bank by wire
20
transfer of immediately available funds, an amount equal to the portion of
the outstanding principal amount of such Swing Line Loan to be purchased by
such Lender. The Borrower hereby agrees to each such sale and assignment.
Each Lender agrees to purchase its Applicable Percentage of an outstanding
Swing Line Loan on (i) the Business Day on which demand therefor is made by
the Swing Line Bank, provided that notice of such demand is given not later
than 12:00 noon, New York City time, on such Business Day or (ii) the first
Business Day next succeeding such demand if notice of such demand is given
after such time. If and to the extent that any Lender shall not have so
made the amount of such Swing Line Loan available to the Administrative
Agent, such Lender agrees to pay to the Administrative Agent forthwith on
demand such amount together with interest thereon, for each day from the
date of demand by the Swing Line Bank until the date such amount is paid to
the Administrative Agent, at the Federal Funds Rate. If such Lender shall
pay to the Administrative Agent such amount for the account of the Swing
Line Bank on any Business Day, such amount so paid in respect of principal
shall constitute a Swing Line Loan made by such Lender on such Business Day
for purposes of this Agreement, and the outstanding principal amount of the
Swing Line Loan made by the Swing Line Bank shall be reduced by such amount
on such Business Day.
Section 2.04 Letters of Credit. (a) General. The Borrower may
from time to time request the issuance of Letters of Credit for its own
account (for obligations of such Borrower or any of its Subsidiaries),
denominated in dollars, in form reasonably acceptable to the Administrative
Agent and the Fronting Bank, at any time and from time to time while the
Commitments remain in effect. This Section shall not be construed to impose
an obligation upon the Fronting Bank to issue any Letter of Credit that is
inconsistent with the terms and conditions of this Agreement.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. In order to request the issuance of a Letter of Credit (or to
amend, renew or extend an existing Letter of Credit), the Borrower shall
hand deliver or telecopy to the Fronting Bank and the Administrative Agent
(reasonably in advance of the requested date of issuance, amendment,
renewal or extension) a notice requesting the issuance of a Letter of
Credit, or identifying the Letter of Credit to be amended, renewed or
extended, the date of issuance, amendment, renewal or extension, the date
on which such Letter of Credit is to expire (which shall comply with
paragraph (c) below), the amount of such Letter of Credit, the name and
address of the beneficiary thereof and such other information as shall be
necessary to prepare such Letter of Credit. A Letter of Credit shall be
issued, amended, renewed or extended only if, and upon issuance, amendment,
renewal or extension of each Letter of Credit the Borrower shall be deemed
to represent and warrant that, after giving effect to such issuance,
amendment, renewal or extension (A) the L/C Exposure shall not exceed
$200,000,000 and (B) the sum of (i) the Aggregate Credit Exposure and (ii)
the aggregate principal amount of outstanding Competitive Loans shall not
exceed the Total Commitment.
(c) Expiration Date. Each Letter of Credit shall expire at the
close of business on the date that is five Business Days prior to the
Termination Date, unless such Letter of Credit expires by its terms on an
earlier date.
(d) Participations. By the issuance of a Letter of Credit and
without any further action on the part of the Fronting Bank or the Lenders,
the Fronting Bank hereby grants to each
21
Lender, and each such Lender hereby acquires from the Fronting Bank, a
participation in such Letter of Credit equal to such Bank's Applicable
Percentage from time to time of the aggregate amount available to be drawn
under such Letter of Credit, effective upon the issuance of such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender
hereby absolutely and unconditionally agrees to pay to the Administrative
Agent, for the account of the Fronting Bank, such Lender's proportionate
share of each L/C Disbursement made by the Fronting Bank and not reimbursed
by the Borrower forthwith on the date due as provided in Section 2.02(e).
Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit
is absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default or an
Event of Default or the termination of the Commitments, and that each such
payment shall be made without any offset, abatement, withholding or
reduction whatsoever.
(e) Reimbursement. If the Fronting Bank shall make any L/C
Disbursement in respect of a Letter of Credit, the Borrower shall pay to
the Administrative Agent an amount equal to such L/C Disbursement not later
than the Business Day after the Borrower shall have received notice from
the Fronting Bank that payment of such draft has been made.
(f) Obligations Absolute. The Borrower's obligations to reimburse
L/C Disbursements as provided in paragraph (e) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement, under any and all
circumstances whatsoever, and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit or
any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from all
or any of the provisions of any Letter of Credit or any Loan
Document;
(iii) the existence of any claim, setoff, defense or other right that
the Borrower, any other party guaranteeing, or otherwise
obligated with, the Borrower or any subsidiary or other affiliate
thereof or any other person may at any time have against the
beneficiary under any Letter of Credit, the Fronting Bank, the
Administrative Agent or any Lender or any other person, whether
in connection with this Agreement, any other Loan Document or any
other related or unrelated agreement or transaction;
(iv) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in
any respect;
(v) payment by the Fronting Bank under a Letter of Credit against
presentation of a draft or other document that does not comply
with the terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of the
Fronting Bank, the Lenders, the Administrative Agent or any other
person or any other event or circumstance whatsoever, whether or
not similar to any of the foregoing, that might, but
22
for the provisions of this Section, constitute a legal or
equitable discharge of the Borrower's obligations hereunder.
provided, however, that the foregoing shall not be construed to excuse the
Fronting Bank from liability to the Borrower to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are
hereby waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by the Fronting Bank's gross
negligence or willful misconduct in determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof.
It is understood that the Fronting Bank may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary and,
in making any payment under any Letter of Credit (i) the Fronting Bank's
exclusive reliance on the documents presented to it under such Letter of
Credit as to any and all matters set forth therein, including reliance on
the amount of any draft presented under such Letter of Credit, whether or
not the amount due to the beneficiary thereunder equals the amount of such
draft and whether or not any document presented pursuant to such Letter of
Credit proves to be insufficient in any respect, if such document on its
face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be
forged or invalid or any statement therein proves to be inaccurate or
untrue in any respect whatsoever and (ii) any noncompliance in any
immaterial respect of the documents presented under such Letter of Credit
with the terms thereof shall, in each case, be deemed not to constitute
willful misconduct or gross negligence of the Fronting Bank.
(g) Disbursement Procedures. The Fronting Bank shall, promptly
following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit. The Fronting Bank
shall as promptly as possible give telephonic notification, confirmed by
telecopy, to the Administrative Agent and the Borrower of such demand for
payment and whether the Fronting Bank has made or will make an L/C
Disbursement thereunder; provided that any failure to give or delay in
giving such notice shall not relieve the Borrower of its obligation to
reimburse the Fronting Bank and the Lenders with respect to any such L/C
Disbursement. The Administrative Agent shall promptly give each Lender
notice thereof.
(h) Interim Interest. If the Fronting Bank shall make any L/C
Disbursement in respect of a Letter of Credit, then, unless the Borrower
shall reimburse such L/C Disbursement in full on the date thereof, the
unpaid amount thereof shall bear interest for the account of the Fronting
Bank, for each day from and including the date of such L/C Disbursement, to
but excluding the earlier of the date of payment by the Borrower or the
date on which interest shall commence to accrue on the Base Rate Loans
resulting from such L/C Disbursement as provided in Section 2.02(e), at the
rate per annum that would apply to such amount if such amount were a Base
Rate Loan.
(i) Cash Collateralization. If any Event of Default shall occur
and be continuing, the Borrower shall, on the Business Day it receives
notice from the Administrative Agent or the Required Lenders thereof and of
the amount to be deposited, deposit in an account with the Administrative
Agent, for the benefit of the Lenders, an amount in cash equal to the
portion of
23
the L/C Exposure attributable to Letters of Credit issued for the account
of the Borrower and outstanding as of such date. Such deposit shall be held
by the Administrative Agent as collateral for the payment and performance
of the obligations under this Agreement. The Administrative Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Such deposits shall not bear interest.
Moneys in such account shall automatically be applied by the Administrative
Agent to reimburse the Fronting Bank for L/C Disbursements attributable to
Letters of Credit issued for the account of the Borrower depositing such
moneys for which the Fronting Bank has not been reimbursed, and any
remaining amounts will either (i) be held for the satisfaction of the
reimbursement obligations of the Borrower for the L/C Exposure at such time
or (ii) if the maturity of the Loans of the Borrower has been accelerated,
be applied to satisfy the obligations of such Borrower under this
Agreement. If the Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default,
such amount (to the extent not applied as aforesaid) shall be returned to
the Borrower within three Business Days after all Events of Default have
been cured or waived.
Section 2.05 Competitive Bid Procedure. (a) Subject to the terms
and conditions set forth herein, from time to time during the period from
and including the Closing Date to but excluding the Termination Date, the
Borrower may request Competitive Bids and may (but shall not have any
obligation to) accept Competitive Bids and borrow Competitive Loans;
provided that the sum of (i) the Aggregate Credit Exposure and (ii) the
aggregate principal amount of outstanding Competitive Loans at any time
shall not exceed the Total Commitment. To request Competitive Bids, the
applicable Borrower shall notify the Administrative Agent of such request
by telephone, in the case of a Eurodollar Borrowing, not later than 11:00
a.m., New York City time, four Business Days before the date of the
proposed Borrowing and, in the case of a Fixed Rate Borrowing, not later
than 10:00 a.m., New York City time, one Business Day before the date of
the proposed Borrowing. Each such telephonic Competitive Bid Request shall
be confirmed promptly by hand delivery or telecopy to the Administrative
Agent of a written Competitive Bid Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such telephonic and
written Competitive Bid Request shall specify the following information in
compliance with Section 2.02:
(iii) the aggregate amount of the requested Borrowing;
(iv) the date of such Borrowing, which shall be a Business Day;
(v) whether such Borrowing is to be a Eurodollar Borrowing or a
Fixed Rate Borrowing;
(vi) the Interest Period to be applicable to such Borrowing,
which shall be a period contemplated by the definition of
the term "Interest Period"; and
(vii) the location and number of the Borrower's account to which
funds are to be disbursed.
24
Promptly following receipt of a Competitive Bid Request in accordance with
this Section, the Administrative Agent shall notify the Lenders of the
details thereof by telecopy, inviting the Lenders to submit Competitive
Bids.
(b) Each Lender may (but shall not have any obligation to) make
one or more Competitive Bids to the applicable Borrower in response to a
Competitive Bid Request. Each Competitive Bid by a Lender must be in a form
approved by the Administrative Agent and must be received by the
Administrative Agent by telecopy, in the case of a Eurodollar Competitive
Borrowing, not later than 12:00 noon, New York City time, three Business
Days before the proposed date of such Competitive Borrowing, and in the
case of a Fixed Rate Borrowing, not later than 12:00 noon, New York City
time, on the proposed date of such Competitive Borrowing. Competitive Bids
that do not conform substantially to the form approved by the
Administrative Agent may be rejected by the Administrative Agent, and the
Administrative Agent shall notify the applicable Lender as promptly as
practicable. Each Competitive Bid shall specify (i) the principal amount
(which shall be a minimum of $5,000,000 and an integral multiple of
$1,000,000 and which may equal the entire principal amount of the
Competitive Borrowing requested by the Borrower) of the Competitive Loan or
Loans that the Lender is willing to make, (ii) the Competitive Bid Rate or
Rates at which the Lender is prepared to make such Loan or Loans (expressed
as a percentage rate per annum in the form of a decimal to no more than
four decimal places) and (iii) the Interest Period applicable to each such
Loan and the last day thereof.
(c) The Administrative Agent shall promptly notify the Borrower
by telecopy of the Competitive Bid Rate and the principal amount specified
in each Competitive Bid and the identity of the Lender that shall have made
such Competitive Bid.
(d) Subject only to the provisions of this paragraph, the
Borrower may accept or reject any Competitive Bid. The Borrower shall
notify the Administrative Agent by telephone, confirmed by telecopy in a
form approved by the Administrative Agent, whether and to what extent it
has decided to accept or reject each Competitive Bid, in the case of a
Eurodollar Competitive Borrowing, not later than 1:00 p.m., New York City
time, three Business Days before the date of the proposed Competitive
Borrowing, and in the case of a Fixed Rate Borrowing, not later than 1:00
p.m., New York City time, on the proposed date of the Competitive
Borrowing; provided that (i) the failure of the Borrower to give such
notice shall be deemed to be a rejection of each Competitive Bid, (ii) the
Borrower shall not accept a Competitive Bid made at a particular
Competitive Bid Rate if the Borrower rejects a Competitive Bid made at a
lower Competitive Bid Rate, (iii) the aggregate amount of the Competitive
Bids accepted by the Borrower shall not exceed the aggregate amount of the
requested Competitive Borrowing specified in the related Competitive Bid
Request, (iv) to the extent necessary to comply with clause (iii) above,
the Borrower may accept Competitive Bids at the same Competitive Bid Rate
in part, which acceptance, in the case of multiple Competitive Bids at such
Competitive Bid Rate, shall be made pro rata in accordance with the amount
of each such Competitive Bid, and (v) except pursuant to clause (iv) above,
no Competitive Bid shall be accepted for a Competitive Loan unless such
Competitive Loan is in a minimum principal amount of $5,000,000 and an
integral multiple of $1,000,000; provided further that if a Competitive
Loan must be in an amount less than $5,000,000 because of the provisions of
clause (iv) above, such Competitive Loan may be for a minimum of $1,000,000
or any integral multiple
25
thereof, and in calculating the pro rata allocation of acceptances of
portions of multiple Competitive Bids at a particular Competitive Bid Rate
pursuant to clause (iv) the amounts shall be rounded to integral multiples
of $1,000,000 in a manner determined by the Borrower. A notice given by the
Borrower pursuant to this paragraph shall be irrevocable.
(e) The Administrative Agent shall promptly notify each bidding
Lender by telecopy whether or not its Competitive Bid has been accepted
(and, if so, the amount and Competitive Bid Rate so accepted), and each
successful bidder will thereupon become bound, subject to the terms and
conditions hereof, to make the Competitive Loan in respect of which its
Competitive Bid has been accepted.
(f) If the Administrative Agent shall elect to submit a
Competitive Bid in its capacity as a Lender, it shall submit such
Competitive Bid directly to the Borrower at least one quarter of an hour
earlier than the time by which the other Lenders are required to submit
their Competitive Bids to the Administrative Agent pursuant to paragraph
(b) of this Section.
(g) The Borrower shall pay, for each Competitive Bid Request
submitted pursuant to Section 2.05(a), an auction fee to the Administrative
Agent in an amount to be agreed by and between the Borrower and the
Administrative Agent. Such auction fee shall be due and owing irrespective
of whether any Lender submits a Competitive Bid pursuant to such
Competitive Bid Request.
Section 2.06 Conversion and Continuation of Revolving Loans. (a)
The Borrower shall, with respect to its Revolving Borrowings, have the
right at any time, upon prior irrevocable written notice to the
Administrative Agent given in the manner and at the times specified in
Section 2.02(f), with respect to the Type of Revolving Borrowing into which
conversion or continuation is to be made, to convert any of its Revolving
Borrowings into a Revolving Borrowing of a different Type and to continue
any of its Eurodollar Borrowings into a subsequent Interest Period of any
permissible duration, subject to the terms and conditions of this Agreement
and to the following:
(i) each conversion or continuation shall be made pro rata among
the Lenders in accordance with the respective principal amounts of
Revolving Loans comprising the converted or continued Revolving
Borrowing;
(ii) if less than all the outstanding principal amount of any
Revolving Borrowing shall be converted or continued, the aggregate
principal amount of such Revolving Borrowing converted and/or
continued shall in each case not be less than the minimum amount set
forth in Section 2.02;
(iii) if a Eurodollar Borrowing is converted at any time other
than on the last day of the Interest Period applicable thereto, the
Borrower shall pay any amount due pursuant to Section 2.16;
(iv) with respect to a Revolving Borrowing, if such Revolving
Borrowing is to be converted into a Eurodollar Borrowing or if a
Eurodollar Borrowing is to be continued, no Interest Period selected
shall extend beyond the Termination Date;
26
(v) interest accrued to the day immediately preceding each date
of conversion or continuation shall be payable on each Revolving
Borrowing that is converted or continued concurrently with such
conversion or continuation; and
(vi) Competitive Borrowings may not be converted or continued.
(b) Each notice given pursuant to Section 2.06(a) shall be
irrevocable and shall refer to this Agreement and specify (i) the identity
and the amount of the Revolving Borrowing that the Borrower requests to be
converted or continued; (ii) whether such Borrowing (or any part thereof)
is to be converted or continued as a Base Rate Borrowing or a Eurodollar
Borrowing; (iii) if such notice requests a conversion, the date of such
conversion (which shall be a Business Day); and (iv) if such Borrowing (or
any part thereof) is to be converted to or continued as a Eurodollar
Borrowing, the Interest Period with respect thereto. If no Interest Period
is specified in any such notice with respect to any conversion to or
continuation as a Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month's duration, in the case of
a Eurodollar Borrowing. The Administrative Agent shall advise the Lenders
of any notice given pursuant to Section 2.06(a) and of each Lender's
portion of any converted or continued Borrowing.
(c) If the Borrower shall not have given notice in accordance
with this Section 2.06 to continue any Eurodollar Borrowing into a
subsequent Interest Period (and shall not otherwise have given notice in
accordance with this Section 2.06 to convert such Eurodollar Borrowing),
such Eurodollar Borrowing shall automatically be converted into a Base Rate
Borrowing. In the event of the occurrence and continuation of a Default or
an Event of Default (i) all Eurodollar Borrowings of the Borrower shall be
converted into Base Rate Borrowings on the last day of the Interest Period
then in effect, and (ii) no Base Rate Borrowing may be converted into a
Borrowing of another Type so long as a Default or Event of Default
continues to exist.
Section 2.07 Fees. (a) The Borrower agrees to pay to each Lender,
through the Administrative Agent, on each March 31, June 30, September 30
and December 31 and on the date on which the Commitment of such Lender
shall be terminated as provided herein, a facility fee (each, a "Facility
Fee," and collectively, the "Facility Fees"), calculated as specified
below, on the amount of the Commitment of such Lender, whether used or
unused, during the preceding quarter (or shorter period commencing with the
Closing Date or ending with the Termination Date applicable to such Lender
or any date on which the Commitment of such Lender shall be terminated).
All facility fees shall be computed on the basis of a year of 365 or 366
days and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The Facility Fee due to each
Lender shall commence to accrue on the Closing Date and shall cease to
accrue on the earlier of the Termination Date applicable to such Lender and
the termination of the Commitment of such Lender as provided herein.
The Facility Fee for each Lender shall be calculated as a per
annum rate in an amount equal to the product of such Lender's Commitment
hereunder and the applicable percentage specified in the table below, to be
determined based upon the Ratings received from S&P and Moody's by the
Borrower:
-------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Level 4 Level 5
------- ------- ------- ------- -------
S&P: A- or better BBB+ BBB BBB- Below BBB-
Moody's: A3 or better Baa1 Baa2 Baa3 Below Baa3
-------------------------------------------------------------------------------
0.1000% 0.1250% 0.1500% 0.2000% 0.2500%
-------------------------------------------------------------------------------
The Facility Fees shall change effective as of the date on which
the applicable rating agency announces any change in its Ratings. In the
event either S&P or Moody's shall withdraw or suspend its Ratings, the
remaining Rating announced by either S&P or Moody's, as the case may be,
shall apply. In the event neither agency shall provide a Rating, the
Facility Fees shall be based on the lowest rating provided above. If the
Ratings by S&P and Moody's are split so that two consecutive Levels (as
defined in the table above) apply, the higher of those Ratings shall
determine the applicable percentage to calculate the Facility Fee. If the
Ratings by S&P and Moody's are split so that the applicable Levels in the
table above are separated by only one intermediate Level, then such
intermediate Level shall determine the applicable percentage to calculate
the Facility Fee. If the Ratings by S&P and Moody's are split so that the
applicable Levels in the table above are separated by two intermediate
Levels, then the intermediate Level representing the lowest Rating shall
determine the applicable percentage to calculate the Facility Fee. The
Facility Fees shall be calculated by the Administrative Agent, which
calculation absent manifest error shall be final and binding on all
parties.
(b) The Borrower agrees to pay the Administrative Agent, for its
own account, the administration fees (the "Administrative Agent Fees") at
the times and in the amounts agreed upon in the letter agreement dated as
of December 13, 2001, among the Borrower, Morgan Stanley Senior Funding,
Inc., J.P. Morgan Securities Inc. and the Administrative Agent.
(c) The Borrower agrees to pay (i) to the Administrative Agent
for pro rata distribution to each Lender a fee (an "L/C Participation
Fee"), for the period from the Closing Date until the Termination Date (or
such earlier date as all Letters of Credit shall be canceled or expire and
the Total Commitment shall be terminated), on that portion of the average
daily L/C Exposure attributable to Letters of Credit issued for the account
of the Borrower (excluding the portion thereof attributable to unreimbursed
L/C Disbursements), at the rate per annum equal to the Applicable Margin
for Eurodollar Loans from time to time in effect for the Borrower and (ii)
to the Fronting Bank a fronting fee (a "Fronting Fee"), which shall accrue
at the rate of .125% per annum on the average daily amount of the L/C
Exposure attributable to Letters of Credit issued for the account of such
Borrower (excluding any portion thereof attributable to unreimbursed L/C
Disbursements) during the period from and including the Closing Date to but
excluding the later of the date of termination of the Revolving Commitments
and the date on which there ceases to be any L/C Exposure attributable to
Letters of Credit issued for the account of such Borrower, as well as the
Fronting Bank's standard fees with respect to the issuance, amendment,
renewal or extension of any Letter of Credit or processing of drawings
thereunder. L/C Participation Fees and Fronting Fees accrued under this
paragraph are payable quarterly in arrears on the last day of each calendar
quarter and on the date on which the Total Commitment shall be terminated
as provided herein. All L/C Participation Fees and Fronting Fees payable
under this paragraph shall be computed on the basis of the number of days
actually elapsed over a year of 365 or 366 days.
28
(d) All Fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for prompt distribution, if
and as appropriate, among the Lenders. Once paid, none of the Fees shall be
refundable under any circumstances.
Section 2.08 Repayment of Loans; Evidence of Debt. (a) The
outstanding principal balance of (i) each Revolving Loan shall be payable
on the Termination Date, (ii) each Swing Line Loan shall be payable on the
earlier of the maturity date specified in the applicable Swing Line
Borrowing Request (which maturity shall be not later than the seventh day
after the requested date of such Borrowing) and the Termination Date and
(iii) each Competitive Loan shall be payable on the last day of the
Interest Period applicable to such Competitive Loan and on the Termination
Date. Each Loan shall bear interest from the date thereof on the
outstanding principal balance thereof as set forth in Section 2.09.
(b) Each Lender shall, and is hereby authorized by the Borrower
to, maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from
each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received
by the Administrative Agent hereunder for the account of the Lenders and
each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that
the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligation
of the Borrower to repay its Loans in accordance with the terms of this
Agreement.
(e) Any Lender may request that Loans made by it be evidenced by
a promissory note, substantially in the form of Exhibit G attached hereto.
In such event, the Borrower shall promptly, and in no event more than ten
(10) Business Days after a request therefor, prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or,
if requested by such Lender, to such Lender and its registered assigns).
Thereafter, the Loans evidenced by such promissory note and interest
thereon shall at all times (including after assignment pursuant to Section
9.04) be represented by one or more promissory notes in such form payable
to the order of the payee named therein (or, if such promissory note is a
registered note, to such payee and its registered assigns).
Section 2.09 Interest on Loans. (a) Subject to the provisions of
Section 2.10, the Loans comprising each (i) Eurodollar Borrowing shall bear
interest (computed on the basis of the actual number of days elapsed over a
year of 360 days) at a rate per annum equal to the Eurodollar Rate for the
Interest Period in effect for such Borrowing plus the Applicable Margin,
determined pursuant to paragraph (d) below, and (ii) Eurodollar Competitive
Loan, at the
29
Eurodollar Rate for the Interest Period in effect for such Borrowing plus
(or minus, as applicable) the Margin applicable to such Loan.
(b) Subject to the provisions of Section 2.10, the Loans
comprising each Base Rate Borrowing shall bear interest (computed on the
basis of the actual number of days elapsed over a year of 365 or 366 days,
as the case may be) at a rate per annum equal to the Base Rate plus the
Applicable Margin.
(c) Interest on each Eurodollar Loan shall, except as otherwise
provided in this Agreement, be payable on the last day of the Interest
Period applicable thereto and, in case of a Eurodollar Loan with an
Interest Period of more than three months' duration, each day that would
have been an Interest Payment Date for such Loan had successive Interest
Periods of three months' duration been applicable to such Loan. Interest on
each Base Rate Loan shall be payable quarterly in arrears on the last
Business Day of each March, June, September and December, except as
otherwise provided in this Agreement. The applicable Eurodollar Rate or
Base Rate for each Interest Period or day within an Interest Period, as the
case may be, shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error. Interest on each
Fixed Rate Loan shall be payable on the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case
of a Fixed Rate Borrowing with an Interest Period of more than three
months' duration (unless otherwise specified in the applicable Competitive
Bid Request), each day prior to the last day of such Interest Period that
occurs at intervals of three months' duration after the first day of such
Interest Period, and any other dates that are specified in the applicable
Competitive Bid Request as interest payment dates with respect to such
Borrowing.
(d) As used herein, "Applicable Margin" shall mean the sum of (i)
the applicable percentage per annum specified in the table below, to be
determined based upon the Ratings received from S&P and Moody's by the
Borrower, and (ii) the Utilization Fee. The applicable percentage referred
to in clause (i) of the immediately preceding sentence shall be determined
based upon the Ratings, as follows:
-------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Level 4 Level 5
------- ------- ------- ------- -------
S&P: A- or better BBB+ BBB BBB- Below BBB-
Moody's: A3 or better Baa1 Baa2 Baa3 Below Baa3
-------------------------------------------------------------------------------
Eurodollar Loan: 0.5250% 0.6250% 0.8500% 1.0500% 1.5000%
-------------------------------------------------------------------------------
Base Rate Loan: 0.0000% 0.0000% 0.0000% 0.0500% 0.5000%
-------------------------------------------------------------------------------
The Applicable Margin shall change effective as of the date on
which the applicable rating agency announces any change in its Ratings. In
the event either S&P or Moody's shall withdraw or suspend its Ratings, the
remaining Rating announced by either S&P or Moody's, as the case may be,
shall apply. In the event neither agency shall provide a Rating, the
Applicable Margin shall be based on the lowest rating provided above. If
the Ratings by S&P and Moody's are split so that two consecutive Levels (as
defined in the table above) apply, the higher of those Ratings shall
determine the Applicable Margin. If the Ratings by S&P and Moody's are
split so that the applicable Levels in the table above are separated by
only one
30
intermediate Level, then such intermediate Level shall determine the
Applicable Margin. If the Ratings by S&P and Moody's are split so that the
applicable Levels in the table above are separated by two intermediate
Levels, then the intermediate Level representing the lowest Rating shall
determine the Applicable Margin. The Applicable Margin shall be calculated
by the Administrative Agent, which calculation absent manifest error shall
be final and binding on all parties.
(e) As used herein, "Utilization Fee" shall mean (i) a percentage
per annum equal to 0.250% for any date on which the sum of (A) the
Aggregate Credit Exposure, plus (B) the aggregate principal amount of
outstanding Competitive Loans, plus (C) the "Aggregate Credit Exposure" as
defined under the 364-Day Revolving Credit Facility Agreement, is equal to
or exceeds 33% of the sum of (X) the Total Commitment and (Y) the "Total
Commitment" as defined under the 364-Day Revolving Credit Facility
Agreement, and (ii) a percentage per annum equal to 0.000% for any other
date.
(f) Subject to the provisions of Section 2.10, the Loans
comprising each Fixed Rate Borrowing shall bear interest at the Fixed Rate
applicable to such Loans.
Section 2.10 Default Interest. If the Borrower shall default in
the payment of the principal of or interest on any of its Loans or any
other amount becoming due hereunder (other than any L/C Disbursement that
has been made by the Fronting Bank and not yet due pursuant to the terms of
Section 2.04(e)), whether by scheduled maturity, notice of prepayment,
acceleration or otherwise, the Borrower shall on demand from time to time
from the Administrative Agent pay interest, to the extent permitted by law,
on such defaulted amount up to (but not including) the date of actual
payment (after as well as before judgment) at a rate per annum equal to the
rate of interest applicable thereto at maturity or due date plus 2%.
Section 2.11 Alternate Rate of Interest. In the event, and on
each occasion, that on the day two Business Days prior to the commencement
of any Interest Period for a Eurodollar Borrowing the Administrative Agent
(or, in the case of a Eurodollar Competitive Loan, the Lender that is
required to make such Loan) shall have determined in good faith that dollar
deposits in the principal amounts of the Eurodollar Loans comprising such
Borrowing are not generally available in the London interbank market, or
that the rates at which such dollar deposits are being offered will not
adequately and fairly reflect the cost to the Required Lenders of making or
maintaining their Eurodollar Loans during such Interest Period, or that
reasonable means do not exist for ascertaining the Eurodollar Rate, the
Administrative Agent (or, in the case of a Eurodollar Competitive Loan, the
Lender that is required to make such Loan) shall, as soon as practicable
thereafter, give written notice of such determination to the Borrower and
the Lenders. In the event of any such determination, until the
Administrative Agent shall have advised the Borrower and the Lenders that
the circumstances giving rise to such notice no longer exist, (i) any
request by the Borrower for a Eurodollar Revolving Borrowing pursuant to
Section 2.02 shall be deemed to be a request for a Base Rate Borrowing,
(ii) any request by the Borrower for a conversion to or a continuation of a
Eurodollar Revolving Borrowing pursuant to Section 2.06 shall be deemed to
be a request for a conversion to a Base Rate Borrowing and (iii) any
request for a Eurodollar Competitive Borrowing shall be ineffective;
provided that if the circumstances giving rise to such notice do not affect
all the Lenders, then requests for
31
Eurodollar Competitive Borrowings may be made to Lenders that are not
affected thereby. Each determination by the Administrative Agent hereunder
shall be conclusive absent manifest error.
Section 2.12 Termination, Reduction and Extension of Commitments.
(a) The unused Commitments of each Lender shall be automatically terminated
on the Termination Date.
(b) Subject to Section 2.13(b), upon at least three Business
Days' prior irrevocable written notice to the Administrative Agent, the
Borrower may at any time in whole permanently terminate, or from time to
time in part permanently reduce, the Total Commitment; provided, however,
that (i) each partial reduction shall be in an integral multiple of
$1,000,000 and in a minimum principal amount of $25,000,000 and (ii) no
such termination or reduction shall be made which would reduce the Total
Commitment to an amount less than the sum of the aggregate outstanding
principal amount of Loans and the aggregate L/C Exposure.
(c) The Total Commitment shall be automatically and permanently
reduced on each date on which prepayment thereof is required to be made
pursuant to Section 2.13(b)(i) in the amount of such prepayment. In
addition, the Total Commitment shall be automatically and permanently
reduced on each date on which prepayment thereof is required to be made
pursuant to Section 2.13(b)(i) in an amount equal to the applicable
Reduction Amount. "Reduction Amount" shall mean, with respect to any sale,
lease, transfer or other disposition of any assets of the Borrower or any
of its Subsidiaries (other than Excluded Sales), on any date, the Net Cash
Proceeds received with respect thereto on such date less (i) any amounts
applied with respect thereto to prepay any outstanding amounts under the
Senior Bank Financing pursuant to Section 2.13(b) (including the amounts
required to be cash collateralized pursuant to Section 2.04(i)), (ii) any
amounts applied to reduce Commitments under the Bridge Facility or the
364-Day Revolving Credit Facility Agreement, and (iii) the portion of such
Net Cash Proceeds that constitutes Reinvestment Proceeds.
(d) Subject to Section 2.21, each reduction in the Total
Commitment hereunder shall be made ratably among the Lenders in accordance
with their respective Commitments. The Borrower agrees to pay to the
Administrative Agent for the account of the Lenders, on the date of each
termination or reduction, the Facility Fees on the amount of the
Commitments so terminated or reduced accrued through the date of such
termination or reduction.
Section 2.13 Prepayment. (a) Voluntary Prepayments. Except as
provided in the next sentence below, the Borrower shall have the right at
any time and from time to time to prepay any of its Borrowings, in whole or
in part, upon giving written notice (or telephone notice promptly confirmed
by written notice) to the Administrative Agent: (i) before 12:00 noon, New
York City time, three Business Days prior to prepayment, in the case of
Eurodollar Loans and (ii) before 12:00 noon, New York City time, one
Business Day prior to prepayment, in the case of Base Rate Loans; provided,
however, that each partial prepayment shall be in an amount which is an
integral multiple of $1,000,000 and not less than $25,000,000. The Borrower
shall not have the right to prepay any Competitive Loan without the prior
consent of the Lender thereof.
(b) Mandatory Prepayments. (i) The Borrower shall, within three
Business Days of the date of receipt of the Net Cash Proceeds by the
Borrower or any of its Domestic
32
Subsidiaries from the sale, lease, transfer or other disposition of any
assets of the Borrower or any of its Subsidiaries (other than any Excluded
Sales), prepay any amounts outstanding under the Senior Bank Financing in
an amount equal to the lesser of the amount of such Net Cash Proceeds and
the amount so outstanding (including the amounts required to be cash
collateralized pursuant to Section 2.04(i) hereof). Each such prepayment
shall be applied first to any principal amounts outstanding pursuant to the
Bridge Facility in accordance with the terms and conditions for prepayment
set forth therein, second to any Loans, L/C Disbursements or cash
collateralizations under this Agreement as set forth in clause (iii) below,
and third to any principal amounts outstanding pursuant to the 364-Day
Revolving Credit Facility Agreement in accordance with the terms and
conditions for prepayment set forth therein; provided that the Borrower
shall not be required to make any prepayments pursuant to this Section
2.13(b)(i) if the Borrower or any of its Subsidiaries shall apply any of
the Net Cash Proceeds it received from the sale, lease, transfer or other
disposition of its assets for reinvestment in its business within 180 days
after receipt thereof by the Borrower or any of its Subsidiaries (any such
Net Cash Proceeds so reinvested, the "Reinvestment Proceeds"); provided,
further, that the Borrower shall have notified the Administrative Agent of
its intent to so reinvest such Net Cash Proceeds.
(ii) On the date of any termination or reduction of the
Commitments pursuant to Section 2.12, the Borrower shall pay or prepay so
much of its Borrowings as shall be necessary in order that the sum of the
aggregate principal amount of Loans outstanding and the aggregate L/C
Exposure not exceed the Total Commitment, after giving effect to such
termination or reduction.
(iii) Prepayments required to be made pursuant to clause (i)
above to amounts due hereunder shall be first applied to prepay L/C
Disbursements then outstanding until such L/C Disbursements are paid in
full, second applied to prepay Swing Line Loans then outstanding until such
Loans are paid in full, third, applied to prepay Revolving Loans then
outstanding until such Loans are paid in full, fourth, applied to prepay
ratably Competitive Loans then outstanding until such Loans are paid in
full, and fifth, to the extent required, applied to cash collateralize any
outstanding Letters of Credit in accordance with Section 2.04(i). The
amount remaining (if any) after the prepayment in full of the L/C
Disbursements and Loans, and the 100% cash collateralization of the Letters
of Credit then outstanding pursuant to Section 2.04(i), may be retained by
the Borrower to the extent not required to be applied in accordance with
clause (i) above, and the Commitments shall be permanently reduced in
accordance with Section 2.12(c).
(c) Each notice of prepayment under paragraph (a) above shall
specify the prepayment date and the principal amount of each Borrowing (or
portion thereof) to be prepaid, shall be irrevocable and shall commit the
Borrower to prepay such Borrowing (or portion thereof) by the amount stated
therein on the date stated therein. All prepayments under this Section 2.13
shall be subject to Section 2.16 but otherwise without premium or penalty.
All prepayments under this Section 2.13 shall be accompanied by accrued
interest on the principal amount being prepaid to the date of payment.
Section 2.14 Reserve Requirements; Change in Circumstances. (a)
It is understood that the cost to each Lender (including the Administrative
Agent, the Swing Line Bank and the Fronting Bank) of making or maintaining
any of the Eurodollar Loans or Letters of Credit may fluctuate as a result
of the applicability of reserve requirements imposed by the
33
Board at the ratios provided for in Regulation D on the date hereof. The
Borrower agrees to pay to each of such Lenders from time to time, as
provided in paragraph (d) below, such amounts as shall be necessary to
compensate such Lender for the portion of the cost of making or maintaining
Eurodollar Loans to (or issuing Letters of Credit for the account of) the
Borrower resulting from any such reserve requirements provided for in
Regulation D as in effect on the date hereof, it being understood that the
rates of interest applicable to Eurodollar Loans have been determined on
the assumption that no such reserve requirements exist or will exist and
that such rates do not reflect costs imposed on the Lenders in connection
with such reserve requirements. It is agreed that for purposes of this
paragraph (a) the Eurodollar Loans made hereunder shall be deemed to
constitute Eurocurrency Liabilities as defined in Regulation D and to be
subject to the reserve requirements of Regulation D without the benefit of
or credit for proration, exemptions or offsets which might otherwise be
available to the Lenders from time to time under Regulation D.
(b) Notwithstanding any other provision herein, if after the date
of this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof (whether or not
having the force of law) shall change the basis of taxation of any payments
to any Lender (including the Administrative Agent, the Swing Line Bank and
the Fronting Bank) of the principal of or interest on any Eurodollar Loan
or Fixed Rate Loan made by such Lender, of any payments related to the
Letters of Credit or any Fees or other amounts payable hereunder (other
than changes in respect of taxes imposed on the overall net income of such
Lender by the jurisdiction in which such Lender has its principal office or
by any political subdivision or taxing authority therein), or shall impose,
modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of or
credit extended by such Lender, or shall impose on such Lender or the
London interbank market any other condition affecting this Agreement, any
Eurodollar Loan or Fixed Rate Loan made by such Lender or any Letter of
Credit hereunder, and the result of any of the foregoing shall be to
increase the cost to such Lender of making or maintaining any Eurodollar
Loan or Fixed Rate Loan (or issuing any Letter of Credit) or to reduce the
amount of any sum received or receivable by such Lender hereunder (whether
of principal, interest or otherwise) in respect thereof by an amount deemed
by such Lender to be material, then the Borrower will pay to such Lender
upon demand such additional amount or amounts as will compensate such
Lender for such additional costs actually incurred or reduction actually
suffered.
(c) If after the date hereof any Lender (including the
Administrative Agent, the Swing Line Bank and the Fronting Bank) shall have
determined that the general applicability of any law, rule, regulation or
guideline adopted pursuant to or arising out of the July 1988 report of the
Basle Committee on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital Standards",
or the adoption after the date hereof of any other generally applicable
law, rule, regulation or guideline regarding capital adequacy, or any
change in any of the foregoing or in the interpretation or administration
of any of the foregoing by any governmental authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or any lending office of such Lender)
or any Lender's holding company with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect
of reducing the rate of return on such Lender's
34
capital or on the capital of such Lender's holding company, if any, as a
consequence of this Agreement, the Loans made by such Lender pursuant
hereto (or the Letters of Credit issued hereunder) to a level below that
which such Lender or such Lender's holding company could have achieved but
for such adoption, change or compliance (taking into consideration such
Lender's policies and the policies of such Lender's holding company with
respect to capital adequacy) by an amount deemed by such Lender to be
material, then from time to time, the Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(d) A certificate of a Lender (including the Administrative
Agent, the Swing Line Bank and the Fronting Bank) setting forth a
reasonably detailed explanation of such amount or amounts as shall be
necessary to compensate such Lender (or participating banks or other
entities pursuant to Section 9.04) as specified in paragraph (a), (b) or
(c) above, as the case may be, shall be delivered to the Borrower and shall
be conclusive absent manifest error. The Borrower shall pay each Lender the
amount shown as due on any such certificate delivered by it within 10 days
after the receipt of the same.
(e) Failure on the part of any Lender to demand compensation for
any increased costs or reduction in amounts received or receivable or
reduction in return on capital with respect to any period shall not
constitute a waiver of such Lender's right to demand compensation with
respect to such period or any other period; provided that the Borrower
shall not be required to compensate a Lender pursuant to this Section for
any increased costs or reductions incurred more than 180 days prior to the
date that such Lender notifies the Borrower of such increased costs or
reductions in accordance with paragraph (d) above and of such Lender's
intention to claim compensation thereof; provided further that, if the
circumstances giving rise to such increased costs or reductions is
retroactive, then the 180-day period referred to above shall be extended to
include the period of retroactive effect thereof.
(f) Notwithstanding any other provision of this Section 2.14, no
Lender shall demand compensation for any increased costs or reduction
referred to above if it shall not be the general policy or practice of such
Lender to demand such compensation in similar circumstances under
comparable provisions of other credit agreements, if any (it being
understood that this sentence shall not in any way limit the discretion of
any Lender to waive the right to demand such compensation in any given
case).
Section 2.15 Change in Legality. (a) Notwithstanding any other
provision herein contained, if any change in any law or regulation or in
the interpretation thereof by any governmental authority charged with the
administration or interpretation thereof shall make it unlawful for any
Lender (including the Administrative Agent, the Swing Line Bank and the
Fronting Bank) to make or maintain any Eurodollar Loan or to give effect to
its obligations as contemplated hereby with respect to any Eurodollar Loan,
then, by written notice to the Borrower and to the Administrative Agent,
such Lender may:
(i) declare that Eurodollar Loans will not thereafter be made by
such Lender hereunder and any request by the Borrower for or a
conversion to or continuation of a Eurodollar Borrowing shall, as to
such Lender only, be deemed a request for a Base Rate Loan unless such
declaration shall be subsequently withdrawn; and
35
(ii) require that all outstanding Eurodollar Loans made by it be
converted into Base Rate Loans, in which event all such Eurodollar
Loans shall be automatically converted to Base Rate Loans as of the
effective date of such notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above,
all payments and prepayments of principal which would otherwise have been
applied to repay the Eurodollar Loans that would have been made by such
Lender or the converted Eurodollar Loans of such Lender shall instead be
applied to repay the Base Rate Loans made by such Lender in lieu of, or
resulting from the conversion of, such Eurodollar Loans.
(b) For purposes of this Section 2.15, a notice to the Borrower
by any Lender shall be effective as to each Eurodollar Loan, if lawful, on
the last day of the Interest Period currently applicable to such Eurodollar
Loan; in all other cases such notice shall be effective on the date of
receipt by the Borrower.
Section 2.16 Indemnity. The Borrower shall indemnify each Lender
against any loss or expense which such Lender sustains or incurs as a
consequence of (a) any failure by the Borrower to fulfill on the date of
any borrowing or any issuance of Letters of Credit hereunder the applicable
conditions set forth in Article IV, (b) any failure by the Borrower to
borrow or continue any Loan hereunder or to proceed with the issuance of a
Letter of Credit hereunder after irrevocable notice of such borrowing,
continuation or issuance has been given pursuant to Section 2.02, 2.03,
2.04, 2.05 or 2.06, as applicable, (c) any payment, prepayment or
conversion of a Eurodollar Loan or Fixed Rate Loan required by any other
provision of this Agreement or otherwise made or deemed made to or by the
Borrower on a date other than the last day of the Interest Period
applicable thereto; provided that the Borrower shall not be required to
indemnify a Lender pursuant to this clause (c) for any loss or expense to
the extent any such loss or expense shall have been incurred pursuant to
(i) Section 2.14, 2.15 or 2.20 or (ii) Section 2.13(a) more than six months
prior to the date that the applicable Lender shall have notified the
Borrower of its intention to claim compensation therefor, (d) any default
in payment or prepayment of the principal amount of any Loan to the
Borrower or any part thereof or interest accrued thereon, as and when due
and payable (at the due date thereof, whether by scheduled maturity,
acceleration, irrevocable notice of prepayment or otherwise), (e) the
failure by the Borrower to borrow any Competitive Loan after accepting the
Competitive Bid to make such Loan, or (f) the occurrence of any Event of
Default on the part of the Borrower, including, in each such case, any loss
or reasonable expense sustained or incurred or to be sustained or incurred
in liquidating or employing deposits from third parties acquired to effect
or maintain such Loan or any part thereof as a Eurodollar Loan. Such loss
or reasonable expense shall include an amount equal to the excess, if any,
as reasonably determined by such Lender, of (i) its cost of obtaining the
funds for the Loan being paid, prepaid, converted or not borrowed (based,
in the case of a Eurodollar Loan, on the Eurodollar Rate) for the period
from the date of such payment, prepayment or conversion or failure to
borrow to the last day of the Interest Period for such Loan (or, in the
case of a failure to borrow, the Interest Period for such Loan which would
have commenced on the date of such failure) over (ii) the amount of
interest (as reasonably determined by such Lender) that would be realized
by such Lender in reemploying the funds so paid, prepaid or converted or
not borrowed for such period or Interest Period, as the case may be. A
certificate of any Lender setting forth a reasonably detailed explanation
of any amount or amounts which such Lender is
36
entitled to receive pursuant to this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error.
Section 2.17 Pro Rata Treatment. Except in the case of any
Competitive Borrowing or as required under Sections 2.15 or 2.21, each
Borrowing, each payment or prepayment of principal of any Borrowing, each
payment of interest on the Loans, each payment of the Facility Fees, each
reduction of the Commitments and each conversion of any Borrowing to a
Borrowing of any Type, shall be allocated pro rata among the Lenders in
accordance with their respective Commitments (or, if such Commitments shall
have expired or been terminated, in accordance with the respective
principal amounts of their outstanding Loans). Each payment of interest on
any Competitive Borrowing shall be allocated pro rata among the Lenders
participating in such Borrowing in accordance with the respective amounts
of accrued and unpaid interest on their outstanding Competitive Loans
comprising such Borrowing. For the purpose of determining the available
Commitments of the Lenders at any time, each outstanding Competitive
Borrowing shall be deemed to have utilized the Commitments of the Lenders
(including those Lenders that have not made Loans as part of such
Competitive Borrowing) pro rata in accordance with such respective
Commitments. Each Lender agrees that in computing such Lender's portion of
any Borrowing to be made hereunder, the Administrative Agent may, in its
discretion, round each Lender's percentage of such Borrowing to the next
higher or lower whole dollar amount.
Section 2.18 Sharing of Setoffs. Each Lender agrees that if it
shall, through the exercise of a right of banker's lien, setoff or
counterclaim against the Borrower, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or
interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, obtain payment (voluntary or involuntary)
in respect of any Loans (other than pursuant to Sections 2.12, 2.14 and
2.15) as a result of which the unpaid principal portion of its Loans shall
be proportionately less than the unpaid principal portion of the Loans of
any other Lender, it shall be deemed simultaneously to have purchased from
such other Lender at face value, and shall promptly pay to such other
Lender the purchase price for, a participation in the Loans of such other
Lender, so that the aggregate unpaid principal amount of the Loans and
participations in the Loans held by each Lender shall be in the same
proportion to the aggregate unpaid principal amount of all Loans then
outstanding as the principal amount of its Loans prior to such exercise of
banker's lien, setoff or counterclaim or other event was to the principal
amount of all Loans outstanding prior to such exercise of banker's lien,
setoff or counterclaim or other event; provided, however, that, if any such
purchase or purchases or adjustments shall be made pursuant to this Section
2.18 and the payment giving rise thereto shall thereafter be recovered,
such purchase or purchases or adjustments shall be rescinded to the extent
of such recovery and the purchase price or prices or adjustment restored
without interest. The Borrower expressly consents to the foregoing
arrangements and agrees that any Lender holding a participation in a Loan
deemed to have been so purchased may exercise any and all rights of
banker's lien, setoff or counterclaim with respect to any and all moneys
owing by the Borrower to such Lender by reason thereof as fully as if such
Lender had made a Loan directly to the Borrower in the amount of such
participation.
37
Section 2.19 Payments. (a) The Borrower shall make each payment
(including principal of or interest on any Borrowing or any Fees or other
amounts payable with respect to the Letters of Credit or otherwise)
hereunder and under any other Loan Document without setoff, counterclaim or
deduction of any kind not later than 12:00 noon, New York City time, on the
date when due in dollars to the Administrative Agent at its offices at 270
Park Avenue, New York, New York, in immediately available funds.
(b) Whenever any payment (including principal of or interest on
any Borrowing or any Fees or other amounts with respect to the Letters of
Credit or otherwise) hereunder or under any other Loan Document shall
become due, or otherwise would occur, on a day that is not a Business Day,
such payment may be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of
interest or Fees, if applicable.
Section 2.20 Taxes. (a) Any and all payments by the Borrower
hereunder shall be made, in accordance with Section 2.19, free and clear of
and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding any income, franchise, branch profits or similar
tax imposed on or measured by the net income or net profits of the
Administrative Agent, the Swing Line Bank, the Fronting Bank or any Lender
(or any transferee or assignee that acquires a Loan (any such entity a
"Transferee")) by the United States or any jurisdiction under the laws of
which it is organized or doing business or any political subdivision
thereof (all such nonexcluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). If
the Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to the Lenders (or any Transferee),
the Swing Line Bank, the Fronting Bank or the Administrative Agent, (i) the
sum payable shall be increased by the amount necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 2.20) such Lender (or Transferee), the Swing
Line Bank, the Fronting Bank or the Administrative Agent (as the case may
be) shall receive an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant
taxing authority or other Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made by the Borrower
hereunder or under any other Loan Document or from the execution, delivery
or registration of or performance under this Agreement or any other Loan
Document, or otherwise with respect to the Borrower's role in this
Agreement or any other Loan Document (hereinafter referred to as "Other
Taxes").
(c) The Borrower will indemnify each Lender (or Transferee), the
Swing Line Bank, the Fronting Bank and the Administrative Agent for the
full amount of Taxes and Other Taxes (including any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable by the Borrower under this
Section 2.20) paid by such Lender (or Transferee), the Swing Line Bank, the
Fronting Bank or the Administrative Agent, as the case may be, and any
liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such
38
Taxes or Other Taxes were correctly or legally asserted by the relevant
taxing authority or other Governmental Authority. The Borrower shall also
indemnify each Lender (or any Transferee), the Swing Line Bank, the
Fronting Bank and the Administrative Agent for the full amount of taxes
imposed on or measured by the net income or receipts of such Lender (or any
Transferee), the Swing Line Bank, the Fronting Bank or the Administrative
Agent as the case may be, as such Lender (or Transferee), the Swing Line
Bank, the Fronting Bank or the Administrative Agent shall determine are
payable in respect of amounts paid by the Borrower to or on behalf of such
Lender (or any Transferee), the Swing Line Bank, the Fronting Bank or the
Administrative Agent, as the case may be, pursuant to this Section 2.20.
Such indemnification shall be made within 30 days after the date any Lender
(or Transferee), the Swing Line Bank, the Fronting Bank or the
Administrative Agent, as the case may be, makes written demand therefor. If
any Lender (or Transferee), the Swing Line Bank, the Fronting Bank or the
Administrative Agent becomes entitled to a refund of Taxes or Other Taxes
for which such Lender (or Transferee), the Swingline Bank, the Fronting
Bank or the Administrative Agent has received payment from the Borrower
hereunder, such Lender (or Transferee), Swingline Bank, Fronting Bank or
Administrative Agent, as the case may be, shall, at the expense of the
Borrower, use its reasonable efforts (consistent with internal policy, and
legal and regulatory restrictions) to obtain such refund. If a Lender (or
Transferee), the Swingline Bank, the Fronting Bank or the Administrative
Agent receives a refund or is entitled to claim a tax credit in respect of
any Taxes or Other Taxes for which such Lender (or Transferee), the Swing
Line Bank, the Fronting Bank or the Administrative Agent has received
payment from the Borrower hereunder it shall promptly notify the Borrower
of such refund or credit and shall, within 30 days after receipt of a
request by the Borrower (or promptly upon receipt, if the Borrower has
requested application for such refund or credit pursuant hereto), repay
such refund or amount of credit to the Borrower, net of all out-of-pocket
expenses of such Lender and without interest; provided that the Borrower,
upon the request of such Lender (or Transferee), the Swing Line Bank, the
Fronting Bank or the Administrative Agent, agrees to return such refund or
amount of credit (plus penalties, interest or other charges) to such Lender
(or Transferee), the Swing Line Bank, the Fronting Bank or the
Administrative Agent in the event such Lender (or Transferee), the Swing
Line Bank, the Fronting Bank or the Administrative Agent is required to
repay such refund or such credit is denied or subsequently determined to be
unavailable.
(d) Within 30 days after the date of any payment of Taxes or
Other Taxes withheld by the Borrower in respect of any payment to any
Lender (or Transferee), the Swing Line Bank, the Fronting Bank or the
Administrative Agent, the Borrower will furnish to the Administrative
Agent, at its address referred to in Section 9.01, the original or a
certified copy of a receipt evidencing payment thereof to the proper
Governmental Authority.
(e) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section
2.20 shall survive the payment in full of the principal of and interest on
all Loans made hereunder.
(f) Each Lender (or Transferee), the Swing Line Bank or the
Fronting Bank which is organized under the laws of a jurisdiction outside
the United States shall, on or prior to the date of its execution and
delivery of this Agreement or, in the case of a Transferee, on the date on
which it becomes a Lender, and in the case of any Lender, the Swing Line
Bank or the Fronting Bank, on or prior to the date such Lender, the Swing
Line Bank or the Fronting Bank
39
changes its funding office, and from time to time thereafter as requested
in writing by the Borrower (but only so long thereafter as such Lender, the
Swing Line Bank or the Fronting Bank remains lawfully able to do so), shall
deliver to the Borrower and the Administrative Agent such certificates,
documents or other evidence, as required by the Code or Treasury
Regulations issued pursuant thereto, including Internal Revenue Service
Form W-8BEN or Form W-8ECI and any other certificate or statement of
exemption required by Treasury Regulation Section 1.1441-4(a) or Section
1.1441-6(c) or any subsequent version thereof, properly completed and duly
executed by such Lender (or Transferee), the Swing Line Bank or the
Fronting Bank establishing that any payment under the Loan Documents is (i)
not subject to withholding under the Code because such payment is
effectively connected with the conduct by such Lender (or Transferee), the
Swing Line Bank or the Fronting Bank of a trade or business in the United
States, or (ii) fully or partially exempt from United States tax under a
provision of an applicable tax treaty, or (iii) not subject to withholding
under the portfolio interest exception under Section 881(c) of the Code
(and, if such Lender (or Transferee), the Swing Line Bank or the Fronting
Bank delivers a Form W-8BEN claiming the benefits of exemption from United
States withholding tax under Section 881(c), a certificate representing
that such Lender (or Transferee), the Swing Line Bank or the Fronting Bank
is not a "bank" for purposes of Section 881(c) of the Code, is not a
10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the
Code) of the Borrower and is not a controlled foreign corporation related
to the Borrower (within the meaning of Section 864(d)(4) of the Code).
Unless the Borrower and the Administrative Agent have received forms or
other documents reasonably satisfactory to them indicating that payments
hereunder are not subject to United States withholding tax or are subject
to such tax at a rate reduced by an applicable tax treaty, the Borrower or
the Administrative Agent shall withhold taxes from such payments at the
applicable statutory rate in the case of payments to or for any Lender (or
Transferee), the Swing Line Bank or the Fronting Bank organized under the
laws of a jurisdiction outside the United States. If a Lender (or
Transferee), the Swing Line Bank or the Fronting Bank is unable to deliver
one of these forms or if the forms provided by a Lender (or Transferee),
the Swing Line Bank or the Fronting Bank at the time such Lender (or
Transferee), the Swing Line Bank or the Fronting Bank first becomes a party
to this Agreement or at the time a Lender (or Transferee), the Swing Line
Bank or the Fronting Bank changes its funding office (other than at the
request of the Borrower) indicate a United States interest withholding tax
rate in excess of zero, withholding tax at such rate shall be considered
excluded from Taxes unless and until such Lender (or Transferee), the Swing
Line Bank or the Fronting Bank provides the appropriate forms certifying
that a lesser rate applies, whereupon withholding tax at such lesser rate
only shall be considered excluded from Taxes for periods governed by such
appropriate forms; provided, however, that if, at the effective date of a
transfer pursuant to which a Lender (or Transferee), the Swing Line Bank or
the Fronting Bank becomes a party to this Agreement, the Lender (or
Transferee), the Swing Line Bank or the Fronting Bank assignor was entitled
to payments under Section 2.20(a) in respect of United States withholding
tax with respect to interest paid at such date, then, to such extent, the
term Taxes shall include (in addition to withholding taxes that may be
imposed in the future or other amounts otherwise includable in Taxes)
United States withholding tax, if any, applicable with respect to the
Lender (or Transferee), the Swing Line Bank or the Fronting Bank assignee
on such date.
(g) The Borrower shall not be required to pay any additional
amounts to any Lender (or Transferee), the Swing Line Bank or the Fronting
Bank in respect of United States
40
withholding tax pursuant to paragraph (a) above for any period in respect
of which the obligation to pay such additional amounts would not have
arisen but for a failure by such Lender (or Transferee), the Swing Line
Bank or the Fronting Bank to comply with the provisions of paragraph (f)
above unless such failure results from (i) a change in applicable law,
regulation or official interpretation thereof or (ii) an amendment,
modification or revocation of any applicable tax treaty or a change in
official position regarding the application or interpretation thereof, in
each case after the Closing Date (and, in the case of a Transferee, after
the date of assignment or transfer).
(h) Any Lender (or Transferee), the Swing Line Bank or the
Fronting Bank claiming any additional amounts payable pursuant to this
Section 2.20 shall use reasonable efforts (consistent with internal policy,
and legal and regulatory restrictions) to file any certificate or document
requested by the Borrower or to change the jurisdiction of its applicable
lending office if the making of such a filing or change would avoid the
need for or reduce the amount of any such additional amounts which may
thereafter accrue and would not, in the reasonable determination of such
Lender (or Transferee), the Swing Line Bank or the Fronting Bank be
materially disadvantageous to such Lender (or Transferee), the Swing Line
Bank or the Fronting Bank or require the disclosure of information that the
Lender (or Transferee), the Swing Line Bank or the Fronting Bank reasonably
considers to be confidential.
Section 2.21 Mitigation Obligations; Replacement of Lenders. (a)
If any Lender (including the Administrative Agent, the Swing Line Bank and
the Fronting Bank) requests compensation under Section 2.14, or if it
becomes unlawful for any Lender (including the Administrative Agent, the
Swing Line Bank and the Fronting Bank) to make or maintain Eurodollar Loans
under Section 2.15, or if the Borrower is required to pay any additional
amount to any Lender, the Administrative Agent, the Swing Line Bank or the
Fronting Bank or any Governmental Authority for the account of any Lender,
the Administrative Agent, the Swing Line Bank or the Fronting Bank pursuant
to Section 2.20, then such Lender, the Administrative Agent, the Swing Line
Bank or the Fronting Bank shall, at the request of the Borrower, use
reasonable efforts to designate a different lending office for funding or
booking its Loans or for the issuance of Letters of Credit hereunder or to
assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, the
Administrative Agent, the Swing Line Bank or the Fronting Bank, such
designation or assignment (i) would eliminate or reduce amounts payable
pursuant to Section 2.14 or 2.20 or no longer make it unlawful for such
Lender, the Administrative Agent, the Swing Line Bank or the Fronting Bank
to make or maintain Eurodollar Loans under Section 2.15, as the case may
be, in the future and (ii) would not subject such Lender, the
Administrative Agent, the Swing Line Bank or the Fronting Bank to any
unreimbursed cost or expense and would not otherwise be disadvantageous to
such Lender, the Administrative Agent, the Swing Line Bank or the Fronting
Bank. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender, the Administrative Agent, the Swing Line Bank or
the Fronting Bank in connection with any such designation or assignment.
(b) If any Lender, the Swing Line Bank or the Fronting Bank
requests compensation under Section 2.14, or if it becomes unlawful for any
Lender, the Swing Line Bank or the Fronting Bank to make or maintain
Eurodollar Loans under Section 2.15, or if the Borrower is required to pay
any additional amount to any Lender, the Swing Line Bank or the
41
Fronting Bank or any Governmental Authority for the account of any Lender,
the Swing Line Bank or the Fronting Bank pursuant to Section 2.20, or if
any Lender, the Swing Line Bank or the Fronting Bank defaults in its
obligation to fund Loans or issue Letters of Credit hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender,
the Swing Line Bank or the Fronting Bank and the Administrative Agent, (i)
require such Lender, the Swing Line Bank or the Fronting Bank to assign and
delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 9.04), all its interests, rights and
obligations under this Agreement (other than any outstanding Competitive
Loans held by it) to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment);
provided that (x) the Borrower shall have received the prior written
consent of the Administrative Agent, which consent shall not unreasonably
be withheld, (y) such assigning Lender, the Swing Line Bank or the Fronting
Bank shall have received payment of an amount equal to the outstanding
principal of its Loans (other than Competitive Loans), accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from
the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and
(z) in the case of any such assignment resulting from a claim for
compensation under Section 2.14 or payments required to be made pursuant to
Section 2.20, such assignment will result in a reduction in such
compensation or payments or (ii) terminate the Commitment of such Lender
upon notice given to such Lender within forty-five (45) days of receipt of
the notice given by the Lender; provided that such notice shall be
accompanied by prepayment in full of all Loans from such Lender, including
accrued interest thereon and any breakage costs, accrued fees and all other
amounts payable to such Lender, without extension, conversion or
continuation. A Lender, the Swing Line Bank or the Fronting Bank shall not
be required to make any such assignment and delegation under clause (i)
above or terminate its Commitment under clause (ii) above if, prior
thereto, as a result of a waiver by such Lender, the Swing Line Bank or the
Fronting Bank or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation or termination of Commitment cease
to apply.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the Lenders, the
Swing Line Bank and the Fronting Bank that (it being understood and agreed
that the representations and warranties made by the Borrower on the Closing
Date, including, without limitation, for purposes of Sections 4.01(b) and
4.02(d), shall not cover the Company or any of its Subsidiaries, except to
the extent the Company or any of its Subsidiaries are expressly referred to
in the representations and warranties set forth in this Article III):
Section 3.01 Organization; Powers. The Borrower and each of its
Restricted Subsidiaries (a) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (b) has all requisite power and authority to own its property
and assets and to carry on its business as now conducted and as proposed to
be conducted, (c) is qualified to do business in every jurisdiction where
such qualification is required, except where the failure so to qualify
would not result in a Material Adverse Effect,
42
and (d) in the case of the Borrower, has the corporate power and authority
to execute, deliver and perform its obligations under each of the Loan
Documents and each other agreement or instrument contemplated thereby to
which it is or will be a party and to borrow hereunder.
Section 3.02 Authorization. The execution, delivery and
performance by the Borrower of each of the Loan Documents and the
borrowings and issuances of Letters of Credit hereunder, and the
consummation of the Tender Offer, the Acquisition and the Merger and the
other transactions contemplated hereby and thereby (collectively, the
"Transactions") (a) have been duly authorized by all requisite corporate
and, if required, stockholder action and (b) (i) will not violate (A) any
provision of law, statute, rule or regulation, (B) the certificate or
articles of incorporation or other constitutive documents or by-laws of the
Borrower or any of its Restricted Subsidiaries, (C) any order of any
Governmental Authority or (D) any provision of any indenture, agreement or
other instrument to which the Borrower or any of its Restricted
Subsidiaries is a party or by which any of them or any of their property is
or may be bound, (ii) will not be in conflict with, result in a breach of
or constitute (alone or with notice or lapse of time or both) a default
under any such indenture, agreement or other instrument or (iii) will not
result in the creation or imposition of any Lien upon or with respect to
any property or assets now owned or hereafter acquired by the Borrower or
any of its Restricted Subsidiaries except, in each case other than (i)(B),
as could not reasonably be expected to have a Material Adverse Effect.
Section 3.03 Enforceability. This Agreement has been duly
executed and delivered by the Borrower and constitutes, and each other Loan
Document when executed and delivered by the Borrower will constitute, a
legal, valid and binding obligation of the Borrower enforceable against the
Borrower in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors'
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
Section 3.04 Consents and Approvals. No action, consent or
approval of, registration or filing with, or any other action by any
Governmental Authority or any other third party is or will be required in
connection with the Transactions, except as have been made or obtained
(without the imposition of any conditions that are not acceptable to the
Lenders) and are in full force and effect (other than any action, consent,
approval, registration or filing the absence of which could not reasonably
be expected, either individually or in the aggregate with any such other
consents, approvals, registrations or filings, to result in a Material
Adverse Effect). All applicable waiting periods in connection with the
Transactions have expired without any action having been taken by any
competent authority, and no law or regulation shall be applicable,
restraining, preventing or imposing materially adverse conditions upon the
Transactions or the rights of the Borrower, the Company and their
respective subsidiaries freely to transfer or otherwise dispose of, or to
create any Lien on, any properties now owned or hereafter acquired by any
of them except, in each case, as could not reasonably be expected to have a
Material Adverse Effect.
Section 3.05 Financial Statements. (a) The Borrower has
heretofore furnished to the Lenders (i) its consolidated balance sheets and
statements of earnings and statements of cash flows, together with the
notes thereto, as of and for the fiscal year ended December 31, 2000,
43
audited by and accompanied by the opinion of Arthur Andersen LLP,
independent public accountants, and (ii) its unaudited consolidated balance
sheets and statements of earnings and statements of cash flows, together
with the notes thereto, as of and for the nine month period ended September
30, 2001.
(b) The Borrower has heretofore furnished to the Lenders the
consolidated pro forma balance sheet of the Borrower as of the Closing
Date, certified by the chief financial officer of the Borrower, giving
effect to the Transactions and such pro forma balance sheet fairly presents
the consolidated pro forma financial condition of the Borrower and its
Subsidiaries as at such date, giving effect to the Transactions.
(c) WRECO has heretofore furnished to the Lenders (i) its
consolidated balance sheets and statements of earnings and statements of
cash flows, together with the notes thereto, as of and for the fiscal year
ended December 31, 2000, audited by and accompanied by the opinion of
Arthur Andersen LLP, independent public accountants, and (ii) its unaudited
consolidated balance sheets and statements of earnings and statements of
cash flows, together with the notes thereto, as of and for the nine month
period ended September 30, 2001.
(d) Such financial statements referred to in Section 3.05(a) and
(c) present fairly in all material respects the financial position and
results of operations of the Borrower, WRECO and their respective
consolidated subsidiaries as of such dates and for such periods. Such
balance sheets and the notes thereto disclose all material liabilities,
direct or contingent, of the Borrower, WRECO and their respective
consolidated subsidiaries as of the dates thereof. Such financial
statements were prepared in accordance with GAAP applied on a consistent
basis.
Section 3.06 No Material Adverse Change. Other than changes in
operating results arising in the ordinary course of business and except as
otherwise disclosed publicly or to the Lenders prior to the date hereof,
there has been no material adverse change in the business, financial
condition, operations or properties of the Borrower and its subsidiaries,
taken as a whole, since September 30, 2001.
Section 3.07 Title to Properties; Possession Under Leases. (a)
Each of the Borrower and its Restricted Subsidiaries has good and
marketable title to, or valid leasehold interests in, all of its material
properties and assets, except for defects in title that do not interfere
with its ability to conduct its business as currently conducted or to
utilize such properties and assets for their intended purposes.
(b) Each of the Borrower and its Restricted Subsidiaries (i) has
complied with all obligations under all leases to which it is a party, and
(ii) enjoys peaceful and undisturbed possession under all such leases,
except where such non-compliance or lack of peaceful and undisturbed
possession would not result in a Material Adverse Effect. All leases to
which the Borrower and its Restricted Subsidiaries is a party are in full
force and effect, except where such lack of force and effect would not
result in a Material Adverse Effect.
Section 3.08 Subsidiaries. Schedule 3.08 Part I for the Borrower,
Schedule 3.08 Part II for WRECO and Schedule 3.08 Part III for the Company
(i) set forth as of the Closing Date a list of all subsidiaries of the
Borrower, WRECO and the Company and the percentage
44
ownership interest of the Borrower, WRECO or the Company therein, as
applicable, and (ii) for the Borrower and WRECO, designate those
Subsidiaries which are Unrestricted Subsidiaries; provided, that Schedule
3.08 Part III shall have been prepared by the Borrower in reliance on
information provided by the Company in the Disclosure Letter.
Section 3.09 Litigation; Compliance with Laws. (a) Except as
otherwise disclosed publicly prior to December 13, 2001, there has been no
action, suit, investigation, litigation or proceeding pending or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or
any of its Restricted Subsidiaries in any court or before any arbitrator or
Governmental Authority that could reasonably be expected to have a Material
Adverse Effect.
(b) Except as disclosed in the Borrower's Report on Form 10-Q for
the fiscal quarter ended September 30, 2001, neither the Borrower nor any
of its Restricted Subsidiaries is in violation of any law, rule or
regulation, or in default with respect to any judgment, writ, injunction or
decree of any Governmental Authority, where such violation or default could
reasonably be expected to result in a Material Adverse Effect.
(c) Based on the information provided by the Company in the
Disclosure Letter and except as disclosed in the Company's Report on Form
10-K for the fiscal year ended December 31, 2000, or in the Disclosure
Letter, there are no actions, suits, investigations, litigations or
proceedings pending or threatened against or affecting the Company or any
of its subsidiaries in any court or before any arbitrator or Governmental
Authority that could reasonably be expected to have a Material Adverse
Effect.
(d) Based on the information provided by the Company in the
Disclosure Letter and except as disclosed in the Company's Report on Form
10-K for the fiscal year ended December 31, 2000, or in the Disclosure
Letter, neither the Company nor any of its subsidiaries is in violation of
any law, rule or regulation, or in default with respect to any judgment,
writ, injunction or decree of any Governmental Authority, where such
violation or default could reasonably be expected to result in a Material
Adverse Effect.
Section 3.10 Agreements. (a) Neither the Borrower nor any of its
Restricted Subsidiaries is a party to any agreement or instrument or
subject to any corporate restriction that has resulted in a Material
Adverse Effect. (b) Neither the Borrower nor any of its Restricted
Subsidiaries is in default in any manner under any material agreement or
instrument (except for any indenture or other agreement or instrument
evidencing Indebtedness) to which it is a party or by which it or any of
its properties or assets are or may be bound, where such default could
reasonably be expected to result in a Material Adverse Effect.
Section 3.11 Federal Reserve Regulations. (a) Neither the
Borrower nor any of its Restricted Subsidiaries is engaged principally, or
as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used, whether
directly or indirectly, whether immediately, incidentally or ultimately,
for any purpose which entails a
45
violation of, or which is inconsistent with, the provisions of the
Regulations of the Board, including Regulation T, U or X.
Section 3.12 Investment Company Act; Public Utility Holding
Company Act. Neither the Borrower nor any of its Restricted Subsidiaries is
(a) an "investment company" as defined in, or subject to regulation under,
the Investment Company Act of 1940 or (b) a "holding company" as defined
in, or subject to regulation under, the Public Utility Holding Company Act
of 1935.
Section 3.13 Tax Returns. Each of the Borrower and its
Subsidiaries has filed or caused to be filed all material Federal, state
and local tax returns required to have been filed by it and has paid or
caused to be paid all material taxes shown to be due and payable on such
returns or on any assessments received by it, except taxes that are being
contested in good faith by appropriate proceedings and for which such
Borrower or Subsidiary, as the case may be, shall have set aside on its
books appropriate reserves.
Section 3.14 No Material Misstatements. Neither the Confidential
Information Memorandum, nor any information, report, financial statement,
exhibit or schedule furnished by or on behalf of the Borrower to the
Administrative Agent or any Lender in connection with the negotiation of
any Loan Document or included therein or delivered pursuant thereto, when
taken together with the reports and other filings with the SEC, contains
any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
Section 3.15 Compliance with ERISA. Except as would not have a
Material Adverse Effect, subject to the following sentences of this Section
3.15, each Plan subject to ERISA or the Code, as applicable, is in
compliance with ERISA and the Code; no Reportable Event has occurred with
respect to a Plan, no Plan is insolvent or in reorganization; no Plan has
an Unfunded Current Liability in excess of $40,000,000, and all Plans
collectively do not have Unfunded Current Liabilities in excess of
$91,000,000 in the aggregate, and no Plan subject to ERISA or the Code, as
applicable, has an accumulated or waived funding deficiency, has permitted
decreases in its funding standard account or has applied for an extension
of any amortization period within the meaning of Section 412 of the Code;
neither the Borrower nor any ERISA Affiliate has incurred any liability to
or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062,
4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4975 of the Code or
expects to incur any material liability under any of the foregoing Sections
with respect to any such Plan; no condition exists which presents a risk to
the Borrower or any ERISA Affiliate of incurring a liability to or on
account of a Plan pursuant to the foregoing provisions of ERISA and the
Code; no proceedings have been instituted to terminate any Plan; no lien
imposed under the Code or ERISA on the assets of the Borrower or any ERISA
Affiliate exists or is likely to arise on account of any Plan; the Borrower
and its Subsidiaries do not maintain or contribute to any "welfare plan"
(within the meaning of Section 3(1) of ERISA) which provides life insurance
or health benefits to retirees (other than as required by Section 601 of
ERISA) the obligations with respect to which could reasonably be expected
to have a Material Adverse Effect.
Section 3.16 Environmental Matters. (a) Except as disclosed in
the Borrower's Report on Form 10-K for the fiscal year ended December 31,
2000, filed with the SEC,
46
(a) neither the Borrower nor any of its Subsidiaries has failed to comply
with any Federal, state, local and other statutes, ordinances, orders,
judgments, rulings and regulations relating to environmental pollution or
to environmental regulation or control, where any such failure to comply,
alone or together with any other such noncompliance, could result in a
Material Adverse Effect; (b) neither the Borrower nor any of its
Subsidiaries has received notice of any failure so to comply which alone or
together with any other such failure could result in a Material Adverse
Effect; and (c) the Borrower's and its Subsidiaries' plants have not
managed any hazardous wastes, hazardous substances, hazardous materials,
toxic substances or toxic pollutants, as those terms are used in the
Resource Conservation and Recovery Act, the Comprehensive Environmental
Response Compensation and Liability Act, the Hazardous Materials
Transportation Act, the Toxic Substance Control Act, the Clean Air Act, the
Clean Water Act or any other Environmental Law, in violation of any
regulations promulgated pursuant thereto or in any other applicable law
where such violation could reasonably result, individually or together with
other violations, in a Material Adverse Effect.
(b) Except as disclosed in the Company's Report on Form 10-K for
the fiscal year ended December 31, 2000, filed with the Securities and
Exchange Commission, (a) neither the Company nor any of its subsidiaries
has failed to comply with any Federal, state, local and other statutes,
ordinances, orders, judgments, rulings and regulations relating to
environmental pollution or to environmental regulation or control, where
any such failure to comply, alone or together with any other such
noncompliance, could result in a Material Adverse Effect; (b) neither the
Company nor any of its subsidiaries has received notice of any failure so
to comply which alone or together with any other such failure could result
in a Material Adverse Effect; and (c) the Company's and its subsidiaries'
plants have not managed any hazardous wastes, hazardous substances,
hazardous materials, toxic substances or toxic pollutants, as those terms
are used in the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response Compensation and Liability Act, the Hazardous
Materials Transportation Act, the Toxic Substance Control Act, the Clean
Air Act, the Clean Water Act or any other Environmental Law, in violation
of any regulations promulgated pursuant thereto or in any other applicable
law where such violation could reasonably be expected to result,
individually or together with other violations, in a Material Adverse
Effect.
Section 3.17 Maintenance of Insurance. The Borrower and each of
its Restricted Subsidiaries maintains insurance (which may be self
insurance) for all of its insurable properties: (a) by financially sound
and reputable insurers to the extent of insurance obtained from third party
insurers; (b) to such extent and against such risks, including fire and
other risks insured against by extended coverage, as is customary with
companies in the same or similar businesses, including public liability
insurance against claims for personal injury or death or property damage
occurring upon, in, about or in connection with the use of any properties
owned, occupied or controlled by the Borrower or such Restricted
Subsidiaries; and (c) as may be required by law.
Section 3.18 Existing Senior Credit Facilities. Schedule 3.18
sets forth, as of the Closing Date, a complete and accurate list of the
Existing Senior Credit Facilities of the Borrower, the Company and their
respective subsidiaries (other than the Surviving Senior Credit
Facilities), showing as of the Closing Date the obligor and the principal
amount outstanding thereunder.
47
Section 3.19 Surviving Senior Credit Facilities. Schedule 3.19
sets forth, as of the Closing Date, a complete and accurate list of the
Surviving Senior Credit Facilities of the Borrower, the Company and their
respective subsidiaries, showing as of the Closing Date the obligor and the
principal amount outstanding thereunder.
Section 3.20 Non-Material Loans. Except as disclosed on Schedule
3.19, there shall not be more than $50,000,000 of Non-Material Loans of the
Borrower and its Restricted Subsidiaries and the Company and its
Subsidiaries in the aggregate outstanding as of the Closing Date.
ARTICLE IV
CONDITIONS OF LENDING AND ISSUANCE
OF LETTERS OF CREDIT
The obligations of the Lenders to make Loans hereunder and the
obligation of the Fronting Bank to issue Letters of Credit hereunder (or to
amend, renew or extend an existing Letter of Credit) are subject to the
satisfaction of the following conditions:
Section 4.01 All Borrowings and Issuances. On the date of each
Borrowing and on the date of each issuance of a Letter of Credit (and each
amendment, renewal or extension thereof):
(a) Notice. The Administrative Agent and, as applicable, the
Swing Line Bank or the Fronting Bank shall have received from the
Borrower a notice of such Borrowing or a notice of such issuance,
amendment, renewal or extension as required by Section 2.02, 2.03,
2.04, 2.05 or 2.06, as applicable.
(b) Representations. The representations and warranties of the
Borrower set forth in Sections 3.01, 3.02, 3.03, 3.04, 3.07, 3.10(b),
3.11 and 3.12 shall be true and correct in all material respects on
and as of such date with the same effect as though made on and as of
such date at the time of and immediately after such Borrowing or, at
the time of and immediately after the issuance, amendment, renewal or
extension of a Letter of Credit hereunder.
(c) Compliance, etc. The Borrower shall be in compliance with all
the terms and provisions set forth herein and in each other Loan
Document on their part to be observed or performed, and, as
applicable, at the time of and immediately after such Borrowing or, at
the time of and immediately after such issuance, amendment, renewal or
extension of a Letter of Credit hereunder, no Event of Default or
Default shall have occurred and be continuing (it being understood and
agreed that, for the purpose of determining the satisfaction of the
conditions set forth in this Section 4.01(c) and Section 4.02(d) on
the Closing Date, the affirmative and negative covenants and the
Events of Default set forth in this Agreement shall not cover the
Company or any of its Subsidiaries).
48
Each Borrowing and each issuance of a Letter of Credit hereunder
(or an amendment, renewal or extension thereof) shall be deemed to
constitute a representation and warranty by the Borrower on the date of
such Borrowing, conversion or continuation, on the date of such issuance,
amendment, renewal or extension, as the case may be, as to the matters
specified in paragraphs (b) and (c) of this Section 4.01.
Section 4.02 Closing Date. On the date of the Initial Extension
of Credit:
(a) Opinions. The Administrative Agent shall have received a
favorable written opinion of (i) Cravath, Swaine & Moore, special
counsel for the Borrower, dated the Closing Date and addressed to the
Lenders, in form and substance reasonably satisfactory to the
Administrative Agent and (ii) Lorrie Scott, Esq., Senior Legal Counsel
to the Borrower, as counsel for the Borrower, dated the Closing Date
and addressed to the Lenders, in form and substance reasonably
satisfactory to the Administrative Agent.
(b) Legal Matters. All legal matters (including any
documentation) related to this Agreement and the Transactions shall be
satisfactory to the Lenders and to Shearman & Sterling, special
counsel for the Administrative Agent. In addition, the Acquisition and
the Tender Offer shall have been consummated or shall be consummated
on or before the Closing Date in accordance in all material respects
with the terms and conditions of the Tender Offer Statement, without
any waiver or amendment not consented to by the Lenders of any
material term, condition or provision set forth therein, and in
compliance in all material respects with all applicable laws, and the
Borrower shall have acquired sufficient shares of capital stock of the
Company, to enable the Purchaser, voting without any other shareholder
of the Company, to approve the Merger.
(c) Articles, etc. The Administrative Agent shall have received
(i) a copy of the certificate or articles of incorporation, including
all amendments thereto, of the Borrower, certified as of a recent date
by the Secretary of State of its State of incorporation, and a
certificate as to the good standing of the Borrower, as of a recent
date, from such Secretary of State; (ii) a certificate from the
Borrower of its Secretary or Assistant Secretary dated the Closing
Date and certifying (A) that attached thereto is a true and complete
copy of the by-laws of the Borrower as in effect on the Closing Date
and at all times since a date prior to the date of the resolutions
described in clause (B) below, (B) that attached thereto is a true and
complete copy of resolutions duly adopted by the Board of Directors of
the Borrower authorizing the execution, delivery and performance of
the Borrower of any and all documents and agreements to be entered
into with respect to the Transactions, including, without limitation,
the Loan Documents and the borrowings to be made thereunder, and that
such resolutions have not been modified, rescinded or amended and are
in full force and effect, (C) that the certificate or articles of
incorporation of the Borrower have not been amended since the date of
the last amendment thereto shown on the certificate of good standing
furnished pursuant to clause (i) above, and (D) as to the incumbency
and specimen signature of each officer executing any Loan Document or
any other document or agreement delivered in connection with the
Transactions on behalf of the Borrower; (iii) certification of another
officer as to the incumbency and specimen signature of the Secretary
or Assistant Secretary executing the certificate pursuant to (ii)
above; and (iv) such other documents
49
as the Lenders or Shearman & Sterling, special counsel for the
Administrative Agent, may reasonably request.
(d) Officers' Certificates. The Administrative Agent shall have
received a certificate from the Borrower, dated the Closing Date and
signed by a Financial Officer of the Borrower, confirming (i)
compliance with the condition precedent set forth in paragraph (c) of
Section 4.01 and (ii) that the representations and warranties of the
Borrower set forth herein are true and correct in all material
respects on and as of the Closing Date (except for representations and
warranties expressly stated to relate to a specific earlier date, in
which case such representations and warranties are true and correct in
all material respects as of such earlier date), immediately prior to,
and after giving effect to, the initial Borrowing and/or the initial
issuance of a Letter of Credit hereunder.
(e) Fees. The Administrative Agent and the Lenders shall have
received all Fees and other amounts due and payable on or prior to the
Closing Date.
(f) Loan Documents. The Administrative Agent shall have received
a fully executed counterpart of this Agreement, and an executed copy
of each Loan Document (other than this Agreement).
(g) Termination of Existing Senior Credit Facilities. On the
Closing Date the Administrative Agent shall have received written
evidence reasonably satisfactory to it that either (i) all Existing
Senior Credit Facilities, other than the Surviving Senior Credit
Facilities, have been prepaid, redeemed or defeased in full or
otherwise satisfied and extinguished or (ii) arrangements reasonably
satisfactory to the Administrative Agent and the Lenders for such
prepayment, redemption, defeasance, satisfaction or extinguishment
have been made; and all Surviving Senior Credit Facilities shall be on
terms and conditions reasonably satisfactory to the Administrative
Agent and the Lenders.
(h) Documentation. The Administrative Agent and 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 the Company's outstanding common stock (including the
related preferred stock purchase rights) to enable the Purchaser,
voting without any other shareholder of the Company to consummate 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 Administrative Agent and 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's outstanding common
stock (including the related preferred stock purchase rights), the
Merger Agreement, if any, and the Disclosure Letter, shall be in form
and substance reasonably satisfactory to the Administrative Agent and
the Lenders.
50
(i) Rating. The Rating of the Borrower's Senior Unsecured
Long-Term Debt, shall be at least Baa3 by Moody's and at least BBB- by
S&P and, if the Borrower is rated in the above referenced lowest
categories 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.
(j) Regulation U. The Administrative Agent shall have received
the Federal Reserve Forms U-1 provided for in Regulation U, the
statements made in which shall be such as to permit the Transactions
contemplated hereby in accordance with Regulation U.
(k) No Material Adverse Change. Other than changes in operating
results arising in the ordinary course of business and except as
otherwise disclosed publicly or to the Lenders prior to the date
hereof, there has been no material adverse change in the business,
financial condition, operations or properties of the Company and its
subsidiaries, taken as a whole, since September 30, 2001.
ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees with each Lender, the Swing
Line Bank, the Fronting Bank and the Administrative Agent that, so long as
this Agreement shall remain in effect or the principal of or interest on
any Loan, any Fees or any other expenses or amounts payable under any Loan
Document shall be unpaid, or any Letters of Credit shall remain
outstanding, or any amounts drawn thereunder shall remain unpaid, unless
the Required Lenders (or, where indicated, the Lenders) shall otherwise
consent in writing, the Borrower will, and will cause each of its
Restricted Subsidiaries and WRECO and each of the Restricted Subsidiaries
of WRECO (except in the case of Sections 5.03 (which applies to the
Borrower), 5.06 (which applies to the Borrower, WRECO and their respective
ERISA Affiliates) and 5.09 (which applies to the Borrower, WRECO and all of
their respective Subsidiaries)) to:
Section 5.01 Existence; Businesses and Properties. (a) Do or
cause to be done all things necessary to preserve, renew and keep in full
force and effect its legal existence, except as otherwise expressly
permitted under Section 6.01(c) (with respect to the Borrower) and Section
6.02(d) (with respect to WRECO) and, with respect to Restricted
Subsidiaries, where the failure to do so could not reasonably be expected
to have a Material Adverse Effect, provided, however, that the Borrower may
liquidate or dissolve any of its Subsidiaries to the extent the assets of
such Subsidiary are transferred to the Borrower or any of its Restricted
Subsidiaries.
(b) Except in each case where the failure to do so could not
reasonably be expected to result in a Material Adverse Effect, (i) do or
cause to be done all things necessary to obtain, preserve, renew, extend
and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
necessary in the conduct of its business; (ii) maintain and operate such
business in substantially the manner in which it is presently conducted and
operated; (iii) comply with all applicable laws, rules, regulations and
orders of any Governmental Authority, whether now in effect or hereafter
51
enacted; and (iv) at all times maintain and preserve all property necessary
in the conduct of such business and keep such property in good repair,
working order and condition and from time to time make, or cause to be
made, all necessary and proper repairs, renewals, additions, improvements
and replacements thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times.
(c) Maintain compliance with each of its loans, contracts, leases
and other obligations (other than Indebtedness) except such as are being
contested in good faith by appropriate proceedings and for which appropriate
reserves have been established, and except for such noncompliance as could not
reasonably be expected to have, in any case or in the aggregate, a Material
Adverse Effect.
Section 5.02 Insurance. (a) Keep such of its insurable properties as
are insured with third-party insurers insured at all times by financially
sound and reputable insurers; and (b) maintain (i) insurance (which may
include self insurance), to such extent and against such risks, including fire
and other risks insured against by extended coverage, as is customary with
companies in the same or similar businesses, including public liability
insurance against claims for personal injury or death or property damage
occurring upon, in, about or in connection with the use of any properties
owned, occupied or controlled by it; and (ii) such insurance as may be
required by law.
Section 5.03 Obligations and Taxes. Pay its obligations (other than
Indebtedness) promptly and in accordance with their terms and pay and
discharge promptly when due all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or in respect of its
property, before the same shall become delinquent or in default, as well as
all lawful claims for labor, materials and supplies or otherwise which, if
unpaid, might give rise to a Lien upon such properties or any part thereof;
provided, however, that such payment and discharge shall not be required (i)
with respect to any such tax, assessment, charge, levy or claim so long as the
validity or amount thereof shall be contested in good faith by appropriate
proceedings and the Borrower, WRECO or such Subsidiary shall have set aside on
its books appropriate reserves with respect thereto or (ii) if the failure to
make such payments or to discharge such Liens is not, in any case or in the
aggregate, reasonably likely to have a Material Adverse Effect.
Section 5.04 Financial Statements, Reports, etc. In the case of the
Borrower or WRECO, furnish to the Administrative Agent (which shall promptly
furnish to each Lender):
(a) within 95 days after the end of each fiscal year, its
consolidated balance sheets and related statements of earnings and
statements of cash flows, together with the notes thereto, showing the
financial position of the Borrower, WRECO and their respective
consolidated Subsidiaries as of the close of such fiscal year and the
results of their operations and the operations of such subsidiaries
during such year, all audited by Arthur Andersen LLP or other independent
public accountants of recognized national standing acceptable to the
Required Lenders and accompanied by an opinion of such accountants (which
shall not be qualified in any material respect) to the effect that such
consolidated financial statements fairly present the financial position
and results of operations of the Borrower, WRECO and their respective
consolidated Subsidiaries on a
52
consolidated basis in accordance with GAAP consistently applied, except
as therein noted;
(b) within 50 days after the end of each of the first three fiscal
quarters of each fiscal year, its consolidated balance sheets and related
statements of earnings and, with respect to the Borrower, statements of
cash flows, showing the financial position of the Borrower and its
consolidated Subsidiaries as of the close of such fiscal quarter and the
results of its operations and the operations of such consolidated
Subsidiaries during such fiscal quarter and the then elapsed portion of
the fiscal year, all certified (in the form of Exhibits E-1 and E-2, with
respect to the Borrower and WRECO, respectively) by one of its Financial
Officers as fairly presenting the financial position and results of
operations of the Borrower, WRECO and their respective consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, except as therein noted, subject to appropriate year-end audit
adjustments;
(c) concurrently with any delivery of financial statements under (a)
or (b) above, a certificate (in the form of Exhibits E-3 and E-4, with
respect to the Borrower and WRECO, respectively) of the accounting firm
or Financial Officer of the Borrower or WRECO opining on or certifying
such statements (which certificate, when furnished by an accounting firm,
may be limited to accounting matters and disclaim responsibility for
legal interpretations) (i) certifying that no Event of Default or Default
has occurred or, if such an Event of Default or Default has occurred,
specifying the nature and extent thereof and any corrective action taken
or proposed to be taken with respect thereto, (ii) in the case of the
Borrower, setting forth computations in reasonable detail satisfactory to
the Administrative Agent demonstrating compliance with the covenants
contained in Sections 6.01(d) and 6.01(e) and (iii) including a
reconciliation setting forth adjustments made to such financial
statements in order to make the calculations set forth in clause (ii)
above;
(d) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
it or any of its Subsidiaries with the SEC, or with any national
securities exchange, or distributed to its shareholders, as the case may
be;
(e) as soon as practicable, copies of such further financial
statements and reports as the Borrower or WRECO shall send to banks with
which it has lines of credit, and all such financial statements and
reports as the Borrower or WRECO shall send to its shareholders (unless
all of the outstanding shares of capital stock of the Borrower or WRECO
are held by one Person);
(f) promptly, from time to time, such other information regarding
the operations, business affairs and financial condition of the Borrower
or WRECO or any of their respective Subsidiaries, or compliance with the
terms of any Loan Document, as the Administrative Agent, the Swing Line
Bank, the Fronting Bank or any Lender may reasonably request (it being
understood that the Borrower shall not be required to provide any
information or documents which are subject to confidentiality provisions
the nature of which prohibit such disclosure);
53
(g) promptly, and in any event within 2 days, upon becoming aware
thereof, notice of any proposed or actual down-grade, suspension or
withdrawal of the rating provided by S&P or Moody's to the Borrower in
respect of its Senior Unsecured Long-Term Debt; and
(h) information required to be delivered pursuant to paragraphs (a),
(b), (d) and (e) shall be deemed to have been delivered on the date on
which the Borrower provides notice to the Administrative Agent that such
information has been posted on the Borrower's website on the internet at
the website address listed on the signature pages thereof, at www.sec.gov
or at another website identified in such notice and accessible by the
Lenders without charge; provided that the Borrower shall deliver paper
copies of the reports and financial statements referred to in paragraphs
(a), (b), (d) and (e) of this Section 5.04 to the Administrative Agent,
the Swingline Bank, the Fronting Bank or any Lender who requests the
Borrower to deliver such paper copies until written notice to cease
delivering paper copies is given by such Administrative Agent, Swingline
Bank, Fronting Bank or Lender to the Borrower.
Section 5.05 Litigation and Other Notices. Furnish to the
Administrative Agent (which shall promptly furnish to each Lender) prompt
written notice of the following:
(a) any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) proposed to be taken
with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any Governmental
Authority, against the Borrower, WRECO or any of their respective
Affiliates which, if adversely determined, could reasonably be expected
to result in a Material Adverse Effect;
(c) any development that has resulted in a Material Adverse Effect;
and
(d) the issuance by any Governmental Authority of any injunction,
order, decision or other restraint prohibiting, or having the effect of
prohibiting, the making of the Loans or the initiation of any litigation
or similar proceeding seeking any such injunction, order or other
restraint;
provided, that in each case the Borrower shall not be required to provide
separate notice of any event disclosed in any report promptly filed with
the SEC.
Section 5.06 ERISA. As soon as possible and, in any event, within 10
Business Days after the Borrower knows of the occurrence of any of the
following events which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect, the Borrower will deliver to the
Administrative Agent a certificate of the Financial Officer of the Borrower
setting forth details as to such occurrence and such action, if any, which the
Borrower or an ERISA Affiliate is required or proposes to take, together with
any notices required or proposed to be given to or filed with or by the
Borrower or such ERISA Affiliate, the PBGC, a Plan participant or the Plan
administrator with respect thereto: (a) that a Reportable Event has occurred,
(b) that an accumulated funding deficiency has been incurred or an application
has
54
been made to the Secretary of the Treasury for a waiver or modification of the
minimum funding standard (including any required installment payments) or an
extension of any amortization period under Section 412 of the Code with
respect to a Plan, (c) that a Plan has been or is in the process of being
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA, (d) that a Plan has an Unfunded Current Liability, (e) that proceedings
have been instituted to terminate a Plan, (f) that a proceeding has been
instituted pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Plan, or (g) that the Borrower or any ERISA Affiliate will
or is reasonably likely to incur any liability (including any contingent or
secondary liability) to or on account of the termination of or withdrawal from
a Plan under Section 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or with
respect to a Plan under Section 4975 of the Code or Section 409, 502(i) or
502(l) of ERISA. The Borrower will, upon written request, deliver to the
Administrative Agent a complete copy of the annual report (Form 5500) of each
Plan required to be filed with the Internal Revenue Service. In addition to
any certificates or notices delivered to the Administrative Agent pursuant to
the first sentence hereof, copies of annual reports and any other notices
received by the Borrower or any ERISA Affiliate required to be delivered to
the Administrative Agent hereunder shall be delivered to the Administrative
Agent no later than 10 Business Days after the later of the date such report
or notice has been filed with the Internal Revenue Service or the PBGC, given
to Plan participants, received by the Borrower or such ERISA Affiliate or
requested in writing by the Administrative Agent.
Section 5.07 Maintaining Records; Access to Properties and
Inspections. Maintain appropriate, accurate and complete financial records and
permit any representatives designated by the Administrative Agent to visit and
inspect the financial records and the properties of the Borrower, WRECO or any
of their Restricted Subsidiaries at reasonable times, with reasonable prior
notice given to the Borrower, as often as requested and until a Default has
occurred at the expense of the Administrative Agent, and to make extracts from
and copies of such financial records, and permit any representatives
designated by any Lender, the Administrative Agent, the Swing Line Bank or the
Fronting Bank to discuss the affairs, finances and condition of the Borrower,
WRECO or any such Restricted Subsidiary with the officers thereof and
independent accountants (so long as a representative of the Borrower is
present, or the Borrower has consented to the absence of such a
representative) therefor (in each case subject to the Borrower's obligations
under applicable confidentiality provisions).
Section 5.08 Use of Proceeds. Use the credit extended pursuant to
this Agreement only for the purposes set forth in the recitals to this
Agreement.
Section 5.09 Environmental Matters. (a) (i) Comply in all material
respects with all Environmental Laws applicable to the ownership or use of any
real property owned or leased by the Borrower, WRECO or any of their
respective Subsidiaries, except where such noncompliance is not, in any case
or in the aggregate, reasonably likely to have a Material Adverse Effect, (ii)
include in all material contracts with tenants and other persons occupying
such real property provisions to ensure such tenants' compliance in all
material respects with all such Environmental Laws, and diligently enforce and
prosecute its rights with respect to such provisions, (iii) pay or cause to be
paid in the case of sole liability, or, in the case of joint liability, to
seek contribution or compensation in respect of, all costs and expenses
incurred in connection with such compliance, except in respect to costs and
expenses that are being contested in good faith and for which the Borrower,
WRECO or such Subsidiary, as the case
55
may be, shall have set aside on its books appropriate reserves, and except
where failures to make such payments are not, in any case or in the aggregate,
reasonably likely to have a Material Adverse Effect, and (iv) use its best
efforts to keep or cause to be kept all such real property free and clear of
any liens imposed pursuant to any Environmental Laws, except in respect to
liens that are being contested in good faith, and except in respect to liens
the existence of which is not, in any case or in the aggregate, reasonably
likely to have a Material Adverse Effect.
(b) None of the Borrowers, WRECO or any of their respective
Subsidiaries will generate, use, treat, store, Release, or permit the
generation, use, treatment, storage or Release of Hazardous Materials on any
real property owned or leased by the Borrower, WRECO or any of their
respective Subsidiaries, or transport or permit the transportation of
Hazardous Materials to or from any such real property, except for quantities
generated, used, treated, stored, or Released on, or transported to or from,
such real property in the ordinary course of business in material compliance
with all applicable Environmental Laws and, except for such generation, use,
treatment or storage on, or transportation to or from, any such real property
of Hazardous Materials as is not, in any case or in the aggregate, reasonably
likely to have a Material Adverse Effect.
(c) If the Administrative Agent receives any notice from the
Borrower or WRECO pursuant to subsection (d) of this Section 5.09 or if the
Administrative Agent otherwise acquires knowledge of any Environmental Claim
which in the sole determination of the Required Lenders would have a Material
Adverse Effect with respect to the Borrower or WRECO, then upon the written
request of the Required Lenders, the Borrower or WRECO, as applicable, will
provide, at its sole cost and expense, an environmental site assessment report
concerning any real property owned or leased by the Borrower, WRECO or an
affected Subsidiary prepared by an environmental consulting firm approved by
the Required Lenders, indicating the presence or absence of Hazardous
Materials and the potential costs of any removal or remedial action in
connection with any Hazardous Materials on any real property owned or leased
by the Borrower, WRECO or any of their respective Subsidiaries.
(d) The Borrower or WRECO, as applicable, will immediately advise
the Administrative Agent in writing of any of the following:
(i) Any pending or threatened Environmental Claim against the
Borrower, WRECO or any of their respective Subsidiaries or any real
property owned or leased by the Borrower, WRECO or any of their
respective Subsidiaries which if determined adversely to the Borrower,
WRECO or any of their respective Subsidiaries would be reasonably likely
to have a Material Adverse Effect;
(ii) Any condition or occurrence on any real property owned or
leased by the Borrower, WRECO or any of their respective Subsidiaries
that (A) results in noncompliance by the Borrower, WRECO or any of their
respective Subsidiaries with any applicable Environmental Law which
noncompliance is reasonably likely to have a Material Adverse Effect, or
(B) could reasonably be anticipated to form the basis of an Environmental
Claim against the Borrower, WRECO or any of their respective Subsidiaries
or any real property owned or leased by the Borrower, WRECO or any of
their respective Subsidiaries and which if determined adversely to the
Borrower,
56
WRECO or any of their respective Subsidiaries would be reasonably likely
to have a Material Adverse Effect;
(iii) Any condition or occurrence on any real property owned or
leased by the Borrower, WRECO or any of their respective Subsidiaries or,
to the actual knowledge of the Borrower, WRECO or any of their respective
Subsidiaries, any property adjoining or in the vicinity thereof that
could reasonably be anticipated to cause such real property to be subject
to any restrictions on the ownership, occupancy, use, or transferability
thereof under any Environmental Law which restrictions, in any case or in
the aggregate, are reasonably likely to have a Material Adverse Effect;
and
(iv) The taking of any removal or remedial action in response to the
actual or alleged presence of any Hazardous Materials on any real
property owned or leased by the Borrower, WRECO or any of their
respective Subsidiaries the taking of which, in any case or in the
aggregate, is reasonably likely to have a Material Adverse Effect.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence, or removal or remedial
action and the action which the Borrower, WRECO or any of their
respective Subsidiaries proposes to take in response thereto.
Section 5.10 Performance of Transaction Agreements. Perform and
observe all of the material terms and provisions of the agreements to be
performed or observed by it with respect to the Transactions.
Section 5.11 OCBM Agreement. With respect to the Borrower, perform,
observe and comply with each of its covenants and agreements in the OCBM
Agreement, and do or cause to be done all things necessary to keep the OCBM
Agreement in full force and effect.
Section 5.12 Further Assurances. Promptly cause to be taken,
executed, acknowledged or delivered, at the sole expense of the Borrower or
WRECO, as applicable, all such further acts, documents and assurances as the
Required Lenders may from time to time reasonably request in order for the
Borrower or WRECO to carry out its obligations hereunder and under the other
Loan Documents.
Section 5.13 Guarantee. On or prior to March 31, 2003, cause the
Company either (i) to merge with and into the Borrower (with the Borrower
being the surviving corporation) or (ii) to execute for the benefit of the
Administrative Agent, the Swing Line Bank, the Fronting Bank and the Lenders a
Guarantee, in form and substance reasonably satisfactory to the Administrative
Agent, pursuant to which the Company shall guarantee the obligations of the
Borrower arising under this Agreement and the other Loan Documents; provided
that the obligations of the Company under such Guarantee shall rank in right
of payment at least pari passu with all other unsecured senior Indebtedness of
the Company; and provided further that such Guarantee shall be limited to an
amount that would not render the Company insolvent. In addition, to the extent
the Company guarantees any obligations of the Borrower with respect to an
issuance by the Borrower of Indebtedness pursuant to a public offering
registered with the SEC, a Rule 144A or Regulation S private placement or any
other similar offering on an underwritten or placement-agent basis, the
Borrower shall cause the Company to execute,
57
promptly but in any case no later than forty-five days after the date of such
issuance, for the benefit of the Administrative Agent, the Swing Line Bank,
the Fronting Bank and the Lenders, a Guarantee, in form and substance
reasonably satisfactory to the Administrative Agent, pursuant to which the
Company shall equally and ratably guarantee the obligations of the Borrower
arising under this Agreement and the other Loan Documents; provided that such
Guarantee shall be limited to an amount that would not render the Company
insolvent.
ARTICLE VI
NEGATIVE COVENANTS
Section 6.01 Covenants of the Borrower. The Borrower covenants and
agrees with each Lender, the Swing Line Bank, the Fronting Bank and the
Administrative Agent that, so long as this Agreement shall remain in effect or
the principal of or interest on any Loan, any Fees or any other expenses or
amounts payable under any Loan Document shall be unpaid, or any Letter of
Credit shall remain outstanding or any amounts drawn thereunder shall remain
unpaid, unless the Required Lenders shall otherwise consent in writing, it
will not, either directly or indirectly:
(a) Secured Indebtedness. (i) Issue, assume or guarantee, or permit
any of its Restricted Subsidiaries to issue, assume or guarantee, any
indebtedness for money borrowed (hereinafter in this Section 6.01(a)
referred to as "debt"), if such debt is secured by a deed of trust,
mortgage, pledge, security interest or other lien or encumbrance (any
deed of trust, mortgage, pledge, security interest or other lien or
encumbrance being hereinafter in this Section 6.01(a) referred to as a
"mortgage" or collectively "mortgages") upon or with respect to any
timber or timberlands of the Borrower or such Restricted Subsidiary
located in the States of Washington, Oregon, Arkansas, Oklahoma,
Mississippi or North Carolina, or upon or with respect to any principal
manufacturing plant of the Borrower or such Restricted Subsidiary located
anywhere in the United States of America, in either case now owned or
hereafter acquired, without in any such case effectively providing,
concurrently with the issuance, assumption or guarantee of any such debt,
that the Loans and Letters of Credit (together with, if the Borrower
shall so determine, any other indebtedness of or guarantee by the
Borrower or such Restricted Subsidiary ranking equally with the Loans or
Letters of Credit and then existing or thereafter created) shall be
secured equally and ratably with (or prior to) such debt; provided,
however, that the foregoing restrictions shall not be applicable to:
(1) mortgages upon or with respect to any property of any of
its Restricted Subsidiaries securing debt of such Restricted
Subsidiary to the Borrower or another Restricted Subsidiary of the
Borrower;
(2) mortgages upon or with respect to any property acquired,
constructed or improved by the Borrower or any of its Restricted
Subsidiaries after the date of this Agreement which are created,
incurred or assumed contemporaneously with, or within 90 days after,
such acquisition, construction or improvement, to secure or provide
for the payment of any part of the purchase
58
price of such property or the cost of such construction or
improvement, or mortgages upon or with respect to any property
existing at the time of acquisition thereof; provided, however, that
in the case of any such construction or improvement the mortgage
shall not apply to any property theretofore owned by the Borrower or
any of its Restricted Subsidiaries other than any theretofore
unimproved real property on which the property so constructed, or
the improvement, is located;
(3) any extension, renewal or replacement of any mortgage
referred to in clause (2) above or clause (4) below; provided,
however, that the principal amount of indebtedness secured thereby
shall not exceed the principal amount of indebtedness so secured at
the time of such extension, renewal or replacement, and that such
extension, renewal or replacement shall be limited to all or part of
the same property which secured the mortgage so extended, renewed or
replaced; and
(4) any mortgage existing on any timber or timberlands of any
Person or upon or with respect to any principal manufacturing plant
of any Person at the time of acquisition by the Borrower or any of
its Restricted Subsidiaries of such Person.
(ii) Notwithstanding the provisions of paragraph (a)(i) of this
Section 6.01, the Borrower or any of its Restricted Subsidiaries may
issue, assume or guarantee secured debt which would otherwise be subject
to the foregoing restrictions in an aggregate amount which, together with
all other such debt of the Borrower and its Restricted Subsidiaries and
the Attributable Debt in respect of Sale and Lease-Back Transactions (as
defined in Section 6.01(b)) existing at such time (other than Sale and
Lease-Back Transactions permitted because the Borrower would be entitled
to incur debt secured by a mortgage on the property to be leased without
equally and ratably securing the Loans pursuant to paragraph (a)(i) of
this Section 6.01, and other than Sale and Lease-Back Transactions the
proceeds of which have been applied in accordance with clause (ii) of
Section 6.01(b)), does not at the time exceed five percent (5%) of
Shareholders' Interest in the Borrower and its Restricted Subsidiaries
(as hereinafter defined). The term "Attributable Debt" as used in this
paragraph shall mean, as of any particular time, the present value of the
obligation of the lessee for rental payments during the remaining term of
any lease (including any period for which such lease has been extended or
may, at the option of the lessor, be extended).
(iii) For purposes of this Section 6.01(a), (A) the term "principal
manufacturing plant" shall not include any manufacturing plant which, in
the reasonable opinion of the Board of Directors of the Borrower, is not
a principal manufacturing plant of the Borrower and its Restricted
Subsidiaries; (B) the following types of transactions shall not be deemed
to create debt secured by a mortgage: (1) the sale, mortgage or other
transfer of timber in connection with an arrangement under which the
Borrower or any of its Restricted Subsidiaries is obligated to cut such
timber or a portion thereof in order to provide the transferee with a
specified amount of money however determined; (2) the mortgage of any
property of the Borrower or any of its Restricted Subsidiaries in favor
of
59
the United States, or any State, or any department, agency or
instrumentality of either, to secure partial, progress, advance or other
payments to the Borrower or any of its Restricted Subsidiaries pursuant
to the provisions of any contract or statute and (3) liens existing on
property at the time of acquisition of such property; and (C) the term
"Shareholders' Interest in the Borrower and its Restricted Subsidiaries"
shall mean the aggregate of capital and surplus, including surplus
resulting from the March 1, 1913 revaluation of timber and timberlands,
of the Borrower and its Restricted Subsidiaries, after deducting the cost
of shares of the Borrower held in treasury.
(b) Sale and Lease-Back. Enter into any arrangement, or permit any
Restricted Subsidiary to enter into any arrangement, with any Person
providing for the leasing by the Borrower or any of its Restricted
Subsidiaries of any real property in the United States (except for
temporary leases for a term of not more than three years), which property
has been or is to be sold or transferred by the Borrower or such
Restricted Subsidiary to such Person (herein referred to as a "Sale and
Lease-Back Transaction"), unless (i) the Borrower or such Restricted
Subsidiary would be entitled to incur debt secured by a mortgage on the
property to be leased without equally or ratably securing the Loans
pursuant to Section 6.01(a), or (ii) the Borrower applies an amount equal
to the fair value (as determined by the Board of Directors of the
Borrower) of the property so leased to the retirement (other than any
mandatory retirement), within 90 days of the effective date of any such
Sale and Lease-Back Transaction, of indebtedness for borrowed money
incurred or assumed by the Borrower which by its terms matures at, or is
extendible or renewable at the option of the obligor to, a date more than
12 months after the date of the creation of such debt.
(c) Merger, Consolidation, etc. Be a party to a merger or
consolidation or sell, transfer or otherwise dispose of all or
substantially all of its properties or assets in a single transaction or
in a series of related transactions unless (i) such merger,
consolidation, sale, transfer or disposition is made with respect to
another corporation incorporated and doing business primarily within the
United States of America which shall expressly assume, in form and
substance reasonably satisfactory to the Required Lenders, the
obligations of the Borrower under the Loan Documents and the Borrower's
Loans and Letters of Credit, and (ii) immediately after giving effect to
such merger, consolidation, sale, transfer or disposition, no Default or
Event of Default hereunder shall have occurred and be continuing.
(d) Debt Ratio. Permit Total Funded Indebtedness to exceed (i) on or
after the Closing Date, 72% of the sum of the Borrower's Total Adjusted
Shareholders' Interest and Total Funded Indebtedness, (ii) on or after
December 31, 2003, 69% of such sum and (iii) on or after June 30, 2005,
65% of such sum.
(e) Net Worth. At any time permit the Borrower's Total Adjusted
Shareholders' Interest to be less than $4,955,000,000.
(f) Change in Business. Engage in, or permit any Restricted
Subsidiary to engage in, any material business activities or operations
substantially different from, or
60
unrelated to, the business activities and operations conducted by it as
of the date hereof, except for reasonable extensions, developments and
modifications thereof.
Section 6.02 Covenants with respect to WRECO. The Borrower covenants
and agrees with each Lender, the Swing Line Bank, the Fronting Bank and the
Administrative Agent that, so long as this Agreement shall remain in effect or
the principal of or interest on any Loan, any Fees or any other expenses or
amounts payable under any Loan Document shall be unpaid, or any Letter of
Credit shall remain outstanding or any amounts drawn thereunder shall remain
unpaid, unless the Required Lenders shall otherwise consent in writing, the
Borrower will not, either directly or indirectly, permit WRECO to:
(a) Capital Base. Have a Capital Base less than $100,000,000.
(b) Limitation on Indebtedness. Create, issue, guarantee, assume or
otherwise become liable, directly or indirectly, or permit any Restricted
Subsidiary of WRECO to create, issue, guarantee, assume or otherwise
become liable, directly or indirectly, in respect of any (i) Senior Debt
of WRECO or Indebtedness of any Restricted Subsidiary of WRECO if,
immediately after giving effect to the incurrence thereof and to the
application of the proceeds thereof, the aggregate principal amount of
all consolidated Senior Debt of WRECO and its Restricted Subsidiaries
then outstanding would exceed 80% of the sum of (x) the Capital Base plus
(y) the aggregate principal amount of Senior Debt of WRECO and its
Restricted Subsidiaries then outstanding; or (ii) Subordinated Debt of
WRECO if, immediately after giving effect to the incurrence thereof and
to the application of the proceeds thereof, the aggregate principal
amount of Subordinated Debt of WRECO then outstanding would exceed 100%
of Adjusted Net Worth. For purposes of this Section and Section 6.02(c),
Indebtedness of a Person which becomes a Restricted Subsidiary on any
date shall be deemed to have been issued or incurred as of such date.
(c) Limitation on Mortgages and Liens. Create, incur or permit to
exist any mortgage, pledge, encumbrance, lien, security interest or
charge of any kind (including liens or charges upon properties acquired
or to be acquired under conditional sales agreements or other title
retention devices) on its property or assets, whether now owned or
hereafter acquired, or upon any income or profits thereof, or permit any
of its Restricted Subsidiaries to do any of the foregoing, except:
(i) liens, charges, encumbrances and priority claims incidental
to the conduct of the business or the ownership of properties and
assets (including warehousemen's, attorneys' and statutory
landlords' liens) and liens, pledges or deposits in connection with
workmen's compensation, unemployment insurance, old age benefit or
social security obligations, taxes, assessments, statutory
obligations or other similar charges, liens of contractors,
mechanics and materialmen, good faith deposits in connection with
tenders, contracts or leases to which WRECO or any of its Restricted
Subsidiaries is a party or other deposits required to be made in the
ordinary course of business and not in connection with the borrowing
of money, easements, rights of way, restrictions and other similar
encumbrances that, in the aggregate, are not substantial in amount
and that do not in any case materially detract from the value of the
property subject thereto or
61
substantially interfere with the ordinary conduct of WRECO's
business; provided in each case the obligation secured is not
overdue or, if overdue, is being contested in good faith by
appropriate proceedings;
(ii) provided that no Default or Event of Default has occurred
and is continuing, the pledge of assets for the purpose of securing
any appeal or stay or discharge in the course of any legal
proceeding and liens on or resulting from judgments or awards in
respect of which WRECO or any of its Restricted Subsidiaries shall
in good faith be prosecuting an appeal or proceeding for review;
(iii) mortgages, liens or security interests existing as of the
date of this Agreement securing obligations of WRECO or any of its
Restricted Subsidiaries outstanding on such date and all renewals,
extensions or refundings thereof (without increase in the principal
amount remaining unpaid at the time of any such renewal, extension
or refunding);
(iv) mortgages, liens or security interests securing
Indebtedness of a Restricted Subsidiary of WRECO to another
Restricted Subsidiary of WRECO or to WRECO;
(v) mortgages, conditional sale contracts, security interests
or other arrangements for the retention of title (including
financing leases), in addition to those permitted under
subparagraphs (iii), (iv), (vi) and (vii) hereof, given to secure
the payment of the purchase price incurred in connection with the
acquisition of property useful and intended to be used in carrying
on the business of WRECO or a Restricted Subsidiary of WRECO, and
liens existing on such property at the time of acquisition thereof
or at the time of acquisition by WRECO or a Restricted Subsidiary of
any Person then owning such property whether or not such existing
liens were given to secure the payment of the purchase price of the
property to which they attach; provided that the lien or charge
shall attach solely to the property acquired or purchased and any
improvements then or thereafter placed thereon;
(vi) mortgages, security interests and other encumbrances or
liens on Real Estate Assets, incurred or created in the ordinary
course of the business of WRECO and its Restricted Subsidiaries;
provided that the aggregate principal amount of all Indebtedness so
secured and at any one time outstanding shall not exceed 10% of the
Capital Base at such time; and
(vii) mortgages, conditional sale contracts, security interests
or other arrangements for the retention of title (including
financing leases), in addition to those specifically permitted by
foregoing subparagraphs (i) through (vi) hereof, given to secure the
payment of Senior Debt of WRECO or any of its Restricted
Subsidiaries, and any renewal, extension or refunding of any such
Senior Debt; provided that the aggregate principal amount of all
Senior Debt of WRECO and its Restricted Subsidiaries so secured and
at any one time outstanding shall not exceed 10% of the Capital Base
at such time.
62
In the event that any property is subjected to a lien or other
encumbrance in violation of this Section 6.02(c), WRECO will make or
cause to be made effective provision whereby the Loans shall be
secured equally and ratably with all other obligations secured
thereby (provided, however, that such violation shall constitute a
default under this Agreement whether or not such provision is made)
and, if such provision is not made, an equitable lien, so equally
and ratably securing the Loans, shall (to the extent permitted by
law) exist on such property.
(d) Limitation on Mergers and Consolidations. Be a party to any
merger or consolidation unless (i) WRECO or a Weyerhaeuser
Subsidiary (as defined below) having substantially all of its assets
and doing business primarily in the United States of America shall
be the surviving or resulting corporation of any such merger or
consolidation and immediately after giving effect to any such merger
or consolidation such successor corporation, whether or not WRECO,
shall be entitled to incur at least $1 of additional Senior Debt
under Section 6.02(b); (ii) if the surviving or resulting
corporation is not WRECO, the surviving or resulting corporation
shall be a Weyerhaeuser Subsidiary incorporated within the United
States of America and shall expressly assume the obligations of
WRECO under this Agreement and the other Loan Documents to which it
is a party by supplemental agreement reasonably satisfactory to the
Administrative Agent; (iii) immediately after giving effect to any
such merger or consolidation, no Default or Event of Default shall
have occurred and be continuing; and (iv) WRECO shall have delivered
to the Administrative Agent a certificate signed by two of WRECO's
officers stating that such merger or consolidation and, if a
supplemental agreement is required in connection therewith as
aforesaid, such supplemental agreement comply with the provisions
described in this paragraph. Upon the consummation of any merger or
consolidation in which the surviving or resulting corporation is not
WRECO in accordance with the foregoing provisions, the surviving or
resulting corporation shall succeed to and be substituted for, and
may exercise every right and power of and shall be subject to all of
the obligations of, WRECO under this Agreement and the other Loan
Documents to which it is a party, with the same effect as if it had
been named as WRECO therein. As used in this paragraph, the term
"Weyerhaeuser Subsidiary" means a corporation at least 79% of whose
issued and outstanding shares of capital stock at the time
outstanding and having ordinary voting power for the election of a
majority of the directors of such corporation shall be owned and
controlled by the Borrower or a wholly-owned Subsidiary of the
Borrower.
(e) Limitation on Sale of Assets. Sell, transfer or otherwise
dispose of all or substantially all of its properties and assets in
a single transaction or in a series of related transactions unless
(i) the consideration received therefor shall consist of cash,
securities or other properties having an aggregate fair value (as
determined in good faith by the Board of Directors of WRECO) equal
to not less than the aggregate fair value (as determined in good
faith by the Board of Directors of WRECO) of the properties and
assets so sold, transferred or otherwise disposed of; (ii)
immediately after giving effect thereto, WRECO shall be entitled to
incur at least $1 of additional Senior Debt under Section 6.02(b);
(iii) immediately after giving effect thereto, no Default or Event
of Default shall have occurred and be continuing; and (iv) WRECO
shall have delivered to
63
the Administrative Agent a certificate signed by two of WRECO's
officers stating that such transaction complies with the provisions
described in this paragraph.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01 Events of Default. In case of the happening of any of
the events under Sections 7.01(a) through 7.01(l) below (an "Event of
Default"):
(a) default shall be made in the payment by the Borrower of any
principal of any Loan or any reimbursement of any L/C Disbursement, when
and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise;
(b) default shall be made in the payment by the Borrower of any
interest on any Loan or any Fee or any other amount (other than an amount
referred to in Section 7.01(a) above) due under any Loan Document, when
and as the same shall become due and payable, and such default shall
continue unremedied for a period of five days;
(c) any representation or warranty made or deemed made by the
Borrower in or in connection with any Loan Document or the borrowings or
Letters of Credit hereunder, or any representation, warranty, statement
or information contained in any report, certificate, financial statement
or other instrument furnished in connection with or pursuant to any Loan
Document, shall prove to have been false or misleading in any material
respect when so made, deemed made or furnished;
(d) default shall be made in the due observance or performance by
the Borrower, WRECO or any of their respective Subsidiaries (or their
respective Restricted Subsidiaries, if such covenant, condition or
agreement applies only to Restricted Subsidiaries) of any covenant,
condition or agreement contained in Section 5.01(a), Section 5.05(a),
Section 5.13 or in Article VI;
(e) default shall be made in the due observance or performance by
the Borrower, WRECO or any of their respective Subsidiaries (or their
respective Restricted Subsidiaries, if such covenant, condition or
agreement applies only to Restricted Subsidiaries) of any covenant,
condition or agreement contained in any Loan Document (other than those
specified in Sections 7.01(a), 7.01(b), 7.01(c) or 7.01(d)) and such
default shall continue unremedied for a period of thirty days after
notice thereof from the Administrative Agent, the Swing Line Bank, the
Fronting Bank or any Lender to the Borrower or WRECO;
(f) the Borrower, WRECO or any of their respective Restricted
Subsidiaries shall (i) fail to pay, when and as the same shall become due
and payable (and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument related to such
Indebtedness) any principal or interest, regardless of amount, due in
respect of Indebtedness in an aggregate principal amount in excess of
64
$100,000,000, or (ii) fail to observe or perform any other terms,
covenants, conditions or agreements contained in any agreements or
instruments evidencing or governing Indebtedness in an aggregate
principal amount in excess of $100,000,000 (and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument related to such Indebtedness), if the effect of
any failure or failures referred to in this Section 7.01(f)(ii) is to
cause or permit the holder or holders of such Indebtedness or a trustee
on its or their behalf (with or without the giving of notice) to cause
such Indebtedness to become due prior to its stated maturity; provided
that -------- anyTransaction-Related Event of Default that, but for this
proviso, would be a Default or an Event of Default pursuant to this
Section 7.01(f) prior to November 11, 2002, shall be deemed to be neither
a Default nor an Event of Default;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of the Borrower, WRECO or any of their respective
Restricted Subsidiaries, or of a substantial part of the property or
assets of the Borrower, WRECO or any of their respective Restricted
Subsidiaries, under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other Federal or state
bankruptcy, insolvency, receivership or similar law, (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar
official for the Borrower, WRECO or any of their respective Restricted
Subsidiaries or for a substantial part of the property or assets of the
Borrower, WRECO or any of their respective Restricted Subsidiaries or
(iii) the winding-up or liquidation of the Borrower, WRECO or any of
their respective Restricted Subsidiaries; and such proceeding or petition
shall continue undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered;
(h) the Borrower, WRECO or any of their respective Restricted
Subsidiaries shall (i) voluntarily commence any proceeding or file any
petition seeking relief under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other Federal or state
bankruptcy, insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner,
any proceeding or the filing of any petition described in Section 7.01(g)
above, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the
Borrower, WRECO or any of their respective Restricted Subsidiaries or for
a substantial part of the property or assets of the Borrower, WRECO or
any of their respective Restricted Subsidiaries, (iv) file an answer
admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of
creditors, (vi) become unable, admit in writing its inability or fail
generally to pay its debts as they become due or (vii) take any action
for the purpose of effecting any of the foregoing;
(i) one or more judgments for the payment of money in an aggregate
amount in excess of $100,000,000 shall be rendered against the Borrower,
WRECO, any of their respective Restricted Subsidiaries or any combination
thereof and the same shall remain undischarged for a period of 30
consecutive days during which execution shall not be effectively stayed,
or any action shall be legally taken by a judgment creditor to levy
65
upon assets or properties of the Borrower, WRECO or any of their
respective Restricted Subsidiaries to enforce any such judgment;
(j) any Plan shall fail to satisfy the minimum funding standard
required for any plan year or a waiver of such standard or extension of
any amortization period is sought or granted under Section 412 of the
Code, any Plan is, shall have been or is likely to be terminated or the
subject of termination proceedings under ERISA, any Plan shall have an
Unfunded Current Liability, or the Borrower has incurred or is likely to
incur a liability to or on account of a Plan under Sections 409, 502(i),
502(l), or 515 of ERISA or Section 4975 of the Code, or the Borrower or
any ERISA Affiliate has incurred or is likely to incur a liability to or
on account of a Plan under Sections 4062, 4063, 4064, 4069, 4201 or 4204
of ERISA; and there shall result from any such event or events referred
to in this Section 7.01(j) the imposition of a lien upon the assets of
the Borrower or any ERISA Affiliate, the granting of a security interest,
a liability or a material risk of incurring a liability to the PBGC or
the Internal Revenue Service or a Plan or a trustee appointed under ERISA
or a liability or a material risk of incurring a liability under Sections
409, 502(i) or 502(l) of ERISA or under Sections 4971 or 4975 of the
Code; which, in the good faith determination of the Required Lenders,
will have a Material Adverse Effect;
(k) there shall have occurred a Change in Control of the Borrower or
WRECO; or
(l) the OCBM Agreement shall cease, for any reason, to be in full
force and effect, or the Borrower shall contest the validity or
enforceability thereof or otherwise fail to comply with its obligations
thereunder;
then, and in every such event (other than an event with respect to the
Borrower or WRECO described in Section 7.01(g) or 7.01(h) above), and at any
time thereafter during the continuance of such event, the Administrative
Agent, at the request of the Required Lenders, shall, by notice to the
Borrower, take any or all of the following actions, at the same or different
times: (i) terminate forthwith the Commitments of the Lenders, (ii) terminate
forthwith the obligation of the Fronting Bank to issue Letters of Credit,
(iii) declare the Loans then outstanding to the Borrower to be forthwith due
and payable in whole or in part, whereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities of the Borrower accrued
hereunder and under any other Loan Document, shall become forthwith due and
payable, without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived by the Borrower, anything contained
herein or in any other Loan Document to the contrary notwithstanding; and in
any event with respect to the Borrower described in Sections 7.01(g) or
7.01(h) above, the Commitments of the Lenders and the obligation of the
Fronting Bank to issue Letters of Credit shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest
thereon and any unpaid accrued Fees and all other liabilities of the Borrower
accrued hereunder and under any other Loan Document, shall automatically
become due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by the Borrower,
anything contained herein or in any other Loan Document to the contrary
notwithstanding.
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ARTICLE VIII
THE ADMINISTRATIVE AGENT
Section 8.01 The Administrative Agent. In order to expedite the
transactions contemplated by this Agreement, JPMorgan Chase Bank is hereby
appointed to act as Administrative Agent on behalf of the Lenders, the Swing
Line Bank and the Fronting Bank. Each of the Lenders, the Swing Line Bank and
the Fronting Bank, and each assignee thereof, hereby irrevocably authorizes
the Administrative Agent to take such actions on behalf of such Lender, the
Swing Line Bank and the Fronting Bank and to exercise such powers as are
specifically delegated to the Administrative Agent by the terms and provisions
hereof, together with such actions and powers as are reasonably incidental
thereto.
The Administrative Agent is hereby expressly authorized by the
Lenders, the Swing Line Bank and the Fronting Bank, without hereby limiting
any implied authority, (a) to receive on behalf of the Lenders, the Swing Line
Bank and the Fronting Bank, all payments of principal of and interest on the
Loans, all reimbursements made with respect to L/C Disbursements and all other
amounts due to the Lenders, the Swing Line Bank and the Fronting Bank
hereunder, and promptly to distribute to each Lender, the Swing Line Bank and
the Fronting Bank its proper share of each payment so received; (b) to give
prompt notice on behalf of each of the Lenders, the Swing Line Bank and the
Fronting Bank to the Borrower of any Event of Default specified in this
Agreement of which the Administrative Agent has actual knowledge acquired in
connection with its agency hereunder; and (c) to distribute promptly to each
Lender, the Swing Line Bank and the Fronting Bank copies of all notices,
financial statements and other materials delivered by the Borrower and WRECO
pursuant to this Agreement as received by the Administrative Agent.
Neither the Administrative Agent nor any of its directors, officers,
employees or agents shall be liable as such to any Lender, the Swing Line Bank
or the Fronting Bank for any action taken or omitted by any of them except for
its or his own gross negligence or willful misconduct, or be responsible for
any statement, warranty or representation herein or the contents of any
document delivered in connection herewith, or be required to ascertain or to
make any inquiry concerning the performance or observance by the Borrower or
WRECO of any of the terms, conditions, covenants or agreements contained in
any Loan Document. The Administrative Agent shall not be responsible to the
Lenders, the Swing Line Bank and the Fronting Bank for (i) the due execution,
genuineness, validity, enforceability or effectiveness of this Agreement or
any other Loan Documents or other instruments or agreements or (ii) the
satisfaction of any condition set forth in any Loan Document, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent. The duties of the Administrative Agent shall be
mechanical and administrative in nature; the Administrative Agent shall not
have by reason of this Agreement or any other Loan Document a fiduciary
relationship in respect of any Lender, the Swing Line Bank or the Fronting
Bank. The Administrative Agent shall in all cases be fully protected in
acting, or refraining from acting, in accordance with written instructions
signed by the Required Lenders, the Lenders, the Swing Line Bank or the
Fronting Bank, as the case may be, and, except as otherwise specifically
provided herein, such instructions and any action or inaction pursuant thereto
shall be binding on all of the Lenders, the Swing Line Bank and the Fronting
Bank. The Administrative Agent shall, in the absence of
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knowledge to the contrary, be entitled to rely on any instrument or document
believed by it to be genuine and correct and to have been signed or sent by
the proper person or persons. The Administrative Agent may also rely upon any
statement made to it orally or by telephone and believed to be made by the
proper Person, and shall not incur any liability for relying thereon.
Neither the Administrative Agent nor any of its directors, officers,
employees or agents shall have any responsibility to the Borrower or WRECO on
account of the failure of or delay in performance or breach by any Lender, the
Swing Line Bank or the Fronting Bank of any of its obligations hereunder or to
any Lender, the Swing Line Bank or the Fronting Bank on account of the failure
of or delay in performance or breach by any other Lender, the Swing Line Bank
or the Fronting Bank or the Borrower or WRECO of any of their respective
obligations hereunder or under any other Loan Document or in connection
herewith or therewith. The foregoing shall not limit the obligations of
JPMorgan Chase Bank (or its successors and assigns) in its capacity as Lender
hereunder. The Administrative Agent may execute any and all duties hereunder
by or through agents or employees and shall be entitled to rely upon the
advice of legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it with respect to all matters
arising hereunder and shall not be liable for any action taken or suffered in
good faith by it in accordance with the advice of such counsel. The
exculpatory provisions of this Article VIII shall apply to any such agent or
employee, and shall apply to their respective activities in connection with
the syndication of the credit facilities provided for herein as well as
activities as Administrative Agent.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting the generality of
the foregoing, the Lenders, the Swing Line Bank and the Fronting Bank hereby
acknowledge that (a) the Administrative Agent shall not be subject to any
fiduciary or other implied duties, regardless of whether a Default or Event of
Default has occurred and is continuing, (b) the Administrative Agent shall be
under no duty to take any discretionary action permitted to be taken by it
pursuant to the provisions of this Agreement unless it shall be requested in
writing to do so by the Required Lenders, the Lenders, the Swing Line Bank or
the Fronting Bank, as the case may be and (c) except as expressly set forth
herein, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to
the Borrower, WRECO or any of their respective Subsidiaries that is
communicated to or obtained by the Administrative Agent or any of its
Affiliates in any capacity.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent may resign at
any time by notifying the Lenders, the Swing Line Bank, the Fronting Bank and
the Borrower. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor. If no successor shall have been so appointed by
the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders, the Swing
Line Bank and the Fronting Bank, appoint a successor Administrative Agent
which shall be a bank with an office in New York, New York, having a combined
capital and surplus of at least $500,000,000 or an Affiliate of any such bank.
Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor bank, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent and
the retiring Administrative
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Agent shall be discharged from its duties and obligations hereunder. After the
Administrative Agent's resignation hereunder, the provisions of this Article
and Section 9.05 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as
Administrative Agent.
With respect to the Loans made by it hereunder, the Administrative
Agent in its individual capacity and not as Administrative Agent shall have
the same rights and powers as any other Lender and may exercise the same as
though it were not the Administrative Agent, and the Administrative Agent and
its Affiliates may accept deposits from, lend money to and generally engage in
any kind of business with the Borrower, WRECO or any of their respective
Subsidiaries or other Affiliate thereof as if it were not the Administrative
Agent.
Each of the Lenders, the Swing Line Bank and the Fronting Bank
agrees (i) to reimburse the Administrative Agent, on demand, in the amount of
its pro rata share (based on its Commitment hereunder) of any expenses
incurred for the benefit of the Lenders, the Swing Line Bank and the Fronting
Bank by the Administrative Agent, including counsel fees and compensation of
agents and employees paid for services rendered on behalf of the Lenders, the
Swing Line Bank and the Fronting Bank, which shall not have been reimbursed by
the Borrower and (ii) to indemnify and hold harmless the Administrative Agent
and any of its directors, officers, employees or agents, on demand, in the
amount of such pro rata share, from and against any and all liabilities,
taxes, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against it in its capacity as the
Administrative Agent or any of them in any way relating to or arising out of
this Agreement or any other Loan Document or any action taken or omitted by it
or any of them under this Agreement or any other Loan Document, to the extent
the same shall not have been reimbursed by the Borrower; provided that no
Lender, nor the Swing Line Bank nor the Fronting Bank, shall be liable to the
Administrative Agent for any portion of such liabilities, taxes, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross negligence or willful misconduct of the
Administrative Agent or any of its directors, officers, employees, or agents.
Each of the Lenders, the Swing Line Bank and the Fronting Bank
acknowledges that it has, independently and without reliance upon the
Administrative Agent, any other Lender, the Swing Line Bank or the Fronting
Bank and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each
of the Lenders, the Swing Line Bank and the Fronting Bank also acknowledges
that it will, independently and without reliance upon the Administrative
Agent, any other Lender, the Swing Line Bank or the Fronting Bank and based on
such documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or
based upon this Agreement or any other Loan Document, any related agreement or
any document furnished hereunder or thereunder.
Section 8.02 Other Agents. Each of the Lenders, the Swing Line Bank,
the Fronting Bank and the Borrower acknowledges that (A) each of the Lead
Arrangers, the Joint Book Runners, the Syndication Agent and the
Co-Documentation Agents, in their capacity as, respectively, Lead Arranger,
Joint Book Runner, Syndication Agent and Co-Documentation Agent, do not have
any responsibility or liability hereunder, and (B) the titles "Lead Arranger",
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"Joint Book Runner", "Syndication Agent" and "Co-Documentation Agent" are
purely honorary in nature.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed or sent by telecopy to the address specified below, or such
other address as such party shall hereafter have specified by written notice
to the Administrative Agent and the Borrower:
(a) if to the Borrower by hand or courier service, to it at 33663
Weyerhaeuser Way South, Federal Way, Washington, or by facsimile to (253)
924-3543, in each case to the Attention of Vice President and Treasurer
with a copy to Secretary;
(b) if to the Administrative Agent or a Lender, to it at its address
(or telecopy number) set forth in Schedule 9.01 or in the Assignment and
Acceptance pursuant to which such Lender became a party hereto.
All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier service
or sent by telecopy or other telegraphic communications equipment of the
sender, in each case delivered, sent or mailed (properly addressed) to such
party as provided in this Section 9.01 or in accordance with the latest
unrevoked direction from such party given in accordance with this Section
9.01.
Section 9.02 Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders, the Swing Line Bank and the Fronting
Bank and shall survive the making of the Loans and the issuance of the Letters
of Credit, regardless of any investigation made by the Lenders, the Swing Line
Bank or the Fronting Bank or on their behalf, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any Fee or any L/C Disbursement or any other amount payable under this
Agreement or any other Loan Document is outstanding and unpaid and so long as
the Commitments and all Letters of Credit hereunder have not been terminated.
The Commitment Letter shall terminate on the Closing Date.
Section 9.03 Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower and the Administrative Agent
and when the Administrative Agent shall have received copies hereof which,
when taken together, bear the signatures of each Lender, the Swing Line Bank
and the Fronting Bank and thereafter shall be binding upon and inure to the
benefit of the Borrower, the Administrative Agent, each Lender, the Swing Line
Bank and the Fronting Bank and their respective successors and assigns, except
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that other than as provided in Section 6.01(c), the Borrower shall not have
the right to assign or delegate its rights or obligations hereunder or any
interest herein without the prior consent of all the Lenders, the Swing Line
Bank and the Fronting Bank.
Section 9.04 Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that,
other than as provided in Section 6.01(c), the Borrower may not assign or
otherwise transfer any of its rights or obligations hereunder without the
prior written consent of each Lender (and any attempted assignment or transfer
by the Borrower without such consent shall be null and void). Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans at the time owing to it and the Letters of
Credit issued at such time); provided that (i) except in the case of an
assignment to a Lender or a Lender Affiliate, the Borrower and the
Administrative Agent must give their prior written consent to such assignment
(which consent shall not be unreasonably withheld or delayed), (ii) except in
the case of an assignment to a Lender or a Lender Affiliate or an assignment
of the entire remaining amount of the assigning Lender's Commitment, the
amount of the Commitment of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent) shall not
be less than $5,000,000 unless each of the Borrower and the Administrative
Agent otherwise consent, (iii) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement, except that this clause (iii) shall not
apply to rights in respect of outstanding Competitive Loans, (iv) the parties
to each assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, together with a processing and recordation fee of
$3,500, and (v) the assignee, if it shall not be a Lender, shall deliver to
the Administrative Agent an Administrative Questionnaire; and provided further
that any consent of the Borrower otherwise required under this paragraph shall
not be required if a Default or Event of Default has occurred and is
continuing. Subject to acceptance and recording thereof pursuant to paragraph
(d) of this Section, from and after the effective date specified in each
Assignment and Acceptance the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of
the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to
the benefits of Sections 2.14, 2.16, 2.20 and 9.05). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does
not comply with this paragraph shall be treated for purposes of this Agreement
as a sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (e) of this Section.
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(c) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall
be conclusive, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from
time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section, if any, and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement
unless it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower, sell
participations to one or more banks or other entities (a "Participant") in all
or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment, the Loans owing to it and the
Letters of Credit issued hereunder); provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative
Agent and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument
may provide that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver described in the first proviso
to Section 9.08(b) that affects such Participant. Subject to paragraph (f) of
this Section, the Borrower agrees that each Participant shall be entitled to
the benefits of Sections 2.14, 2.16 and 2.20 to the same extent as if it were
a Lender and had acquired its interest by assignment pursuant to paragraph (b)
of this Section. To the extent permitted by law, each Participant also shall
be entitled to the benefits of Section 9.06 as though it were a Lender,
provided such Participant agrees to be subject to Section 2.18 as though it
were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.14 or 2.20 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower's prior written consent.
(g) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement and the other Loan
Documents (including, without
72
limitation, any notes held by it pursuant to Section 2.08(e)) to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank without notice to, or consent of, the
Borrower or the Administrative Agent, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.
(h) The Borrower authorizes each Lender to disclose to any
Participant or assignee and any prospective Participant or assignee any and
all financial information in such Lender's possession concerning the Borrower
or any Subsidiary of the Borrower which has been delivered to such Lender by
the Borrower pursuant to this Agreement or which has been delivered to such
Lender by the Borrower in connection with such Lender's credit evaluation of
the Borrower prior to entering into this Agreement; provided that such
Participant or assignee or prospective Participant or assignee agrees to treat
any such information which is not public as confidential in accordance with
the terms of this Agreement.
Section 9.05 Expenses; Indemnity. (a) The Borrower agrees to pay all
reasonable out-of-pocket expenses incurred by the Administrative Agent in
connection with the preparation of this Agreement and the other Loan Documents
or in connection with any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions hereby
contemplated shall be consummated) or incurred by the Administrative Agent,
any Lender, the Swing Line Bank or the Fronting Bank in connection with the
enforcement or protection of their rights in connection with this Agreement
and the other Loan Documents or in connection with the Loans made and the
Letters of Credit issued, including the fees and disbursements of Shearman &
Sterling, special counsel for the Administrative Agent, and, in connection
with any such amendment, modification or waiver made in connection with any
such enforcement or protection, the fees and disbursements of any other
counsel for the Administrative Agent, any Lender, the Swing Line Bank or the
Fronting Bank. The Borrower further agrees that it shall indemnify the
Lenders, the Swing Line Bank and the Fronting Bank from and hold them harmless
against any documentary taxes, assessments or charges made by any Governmental
Authority by reason of the execution and delivery of this Agreement, any of
the other Loan Documents or any Letters of Credit.
(b) The Borrower will indemnify the Administrative Agent, each
Lender, the Swing Line Bank and the Fronting Bank and its directors, officers,
employees and agents (each such person being called an "Indemnitee") against,
and to hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including reasonable counsel fees
and expenses, incurred by or asserted against any Indemnitee arising out of,
in any way connected with, or as a result of (i) the execution or delivery by
the Borrower of this Agreement or any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties
thereto of their respective obligations thereunder or the consummation of the
Transactions and the other transactions contemplated hereby and thereby, (ii)
the use of the proceeds of the Loans or of the Letters of Credit by the
Borrower or (iii) any claim, litigation, investigation or proceeding relating
to any of the foregoing, whether or not any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
have resulted from the gross negligence or willful misconduct of such
Indemnitee.
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(c) It is understood and agreed that, to the extent not precluded by
a conflict of interest, each Indemnitee shall endeavor to work cooperatively
with the Borrower with a view toward 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 Indemnitee, it is
anticipated that a single counsel selected by the Borrower may be used.
Settlement of any claim or litigation involving any material indemnified
amount will require the approval of the Borrower (not to be unreasonably
withheld).
(d) The provisions of this Section 9.05 shall remain operative and
in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans or L/C Disbursements, the termination of any
Letters of Credit, the invalidity or unenforceability of any term or provision
of this Agreement or any other Loan Document, or any investigation made by or
on behalf of the Administrative Agent, any Lender, the Swing Line Bank or the
Fronting Bank. All amounts due under this Section 9.05 shall be payable on
written demand therefor.
Section 9.06 Right of Setoff. If any Event of Default shall have
occurred and be continuing, each Lender, the Swing Line Bank and the Fronting
Bank is hereby authorized at any time and from time to time, without notice to
the Borrower (any such notice being expressly waived by the Borrower), 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
and other indebtedness at any time owing by such Lender, the Swing Line Bank
or the Fronting Bank or any of their respective Affiliates to or for the
credit or the account of the Borrower against any of and all the obligations
of the Borrower now or hereafter existing under this Agreement and any other
Loan Documents held by such Lender, the Swing Line Bank or the Fronting Bank,
irrespective of whether or not such Lender, the Swing Line Bank or the
Fronting Bank shall have made any demand under this Agreement or such other
Loan Document and although such obligations may be unmatured. The rights of
each Lender, the Swing Line Bank or the Fronting Bank, under this Section 9.06
are in addition to other rights and remedies (including other rights of
setoff) which such Lender, the Swing Line Bank or any Fronting Bank, may have.
Section 9.07 Applicable Law. THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS AND THE RIGHTS AND OBLIGATIONS THEREUNDER OF THE PARTIES THERETO
(OTHER THAN AS RELATED TO LETTERS OF CREDIT) SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH LETTER OF CREDIT
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE
LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR RULES
ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993
REVISION), INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 500 (THE
"UNIFORM CUSTOMS") AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE
LAWS OF THE STATE OF NEW YORK.
Section 9.08 Waivers; Amendment. (a) No failure or delay of the
Administrative Agent, any Lender, the Swing Line Bank or the Fronting Bank in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise
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of any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof
or the exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Lenders, the Swing Line Bank and the Fronting Bank
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies which they would otherwise have. No waiver
of any provision of this Agreement or any other Loan Document or consent to
any departure by the Borrower therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) below, and then such waiver or
consent shall be effective only in the specific instance and for the purpose
for which given. No notice or demand on the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders; provided, however, that
no such agreement shall (i) change the principal amount of, or extend or
advance the maturity of or any date for the scheduled payment of any principal
of or interest on, any Loan, or extend the stated maturity of any Letter of
Credit beyond the Termination Date (unless such Letter of Credit has been cash
collateralized or the Lenders have been relieved of their participation
obligations pursuant to Section 2.04(d) in respect of such Letter of Credit)
or waive or excuse any such scheduled payment or any part thereof, or decrease
the rate of interest on any Loan, without the prior written consent of each
Lender affected thereby, (ii) change the Commitment or decrease or extend any
date for the payment of the Facility Fees or L/C Participation Fees of any
Lender without the prior written consent of such Lender, or (iii) amend or
modify the provisions of Section 2.17, the provisions of this Section 9.08 or
the definition of "Termination Date" or "Required Lenders", without the prior
written consent of each Lender; provided further that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Administrative
Agent hereunder without the prior written consent of the Administrative Agent.
Each Lender shall be bound by any waiver, amendment or modification authorized
by this Section 9.08, and any consent by any Lender pursuant to this Section
9.08 shall bind any person subsequently acquiring a Loan from it.
Section 9.09 Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the applicable interest rate, together
with all fees and charges which are treated as interest under applicable law
(collectively the "Charges"), as provided for herein or in any other Loan
Document, or otherwise contracted for, charged, received, taken or reserved by
any Lender, shall exceed the maximum lawful rate (the "Maximum Rate") which
may be contracted for, charged, taken, received or reserved by such Lender in
accordance with applicable law, the rate of interest payable with respect to
each Loan owing to each Lender, together with all Charges payable to such
Lender, shall be limited to the Maximum Rate.
Section 9.10 Entire Agreement. This Agreement and the other Loan
Documents and the letter agreements referred to in Section 2.07(b) (with
respect to the payment of fees only) constitute the entire contract between
the parties relative to the subject matter hereof. Any previous agreement
among the parties with respect to the subject matter hereof is superseded by
this Agreement and the other Loan Documents. Nothing in this Agreement or in
the other Loan Documents, expressed or implied, is intended to confer upon any
party other than the parties
75
hereto and thereto any rights, remedies, obligations or liabilities under or
by reason of this Agreement or the other Loan Documents.
Section 9.11 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS,
AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION 9.11.
Section 9.12 Severability. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby. The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
Section 9.13 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract, and shall become
effective as provided in Section 9.03.
Section 9.14 Headings. The cover page, the Article and Section
headings and the Table of Contents used herein are for convenience of
reference only, are not part of this Agreement and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Agreement.
Section 9.15 Jurisdiction; Consent to Service of Process. (a) The
Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and
any appellate court from any thereof, in any action or proceeding arising out
of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of
any such action or proceeding may be heard and determined in such New York
State or, to the extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement
shall affect any right that any Lender, the Administrative Agent, the Swing
Line Bank or the Fronting Bank may otherwise have to bring any action or
proceeding relating to this Agreement or the other Loan Documents against the
Borrower or its properties in the courts of any jurisdiction.
76
(b) The Borrower hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents in any New York State or Federal court located in New York City.
Each of the parties hereto hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.
(c) The Borrower hereby irrevocably designates, appoints and
empowers CT Corporation System, Inc. presently located at 111 Eighth Avenue,
New York, New York 10011, as its designee, appointee and attorney-in-fact to
receive, accept and acknowledge for and on its behalf, and in respect of its
property, service of any and all legal process, summons, notices and documents
which may be served in any such action or proceeding. If for any reason such
designee, appointee and attorney-in-fact shall cease to be available to act as
such, the Borrower agrees to designate a new designee, appointee and
attorney-in-fact in New York City on the terms and for purposes of this
provision satisfactory to the Administrative Agent. Each party to this
Agreement irrevocably consents to service of process in the manner provided
for notices in Section 9.01. Nothing in this Agreement will affect the right
of any party to this Agreement to serve process in any other manner permitted
by law.
Section 9.16 Domicile of Loans. Each Lender may transfer and carry
its Loans at, to or for the account of any office, subsidiary or Affiliate of
such Lender.
Section 9.17 Restricted and Unrestricted Subsidiaries. (a) Set forth
on Schedule 3.08 Part I is a list of all of the Restricted Subsidiaries and
Unrestricted Subsidiaries of the Borrower as of the Closing Date.
(b) Set forth on Schedule 3.08 Part II is a list of all of the
Restricted Subsidiaries and Unrestricted Subsidiaries of WRECO as of the
Closing Date.
(c) After the Closing Date, a Financial Officer of the Borrower may,
provided that no Default or Event of Default has occurred and is continuing,
designate a Restricted Subsidiary as an Unrestricted Subsidiary by notice sent
to all of the Lenders, provided that (i) no such designation shall be
effective unless immediately after giving effect thereto there would exist no
Default or Event of Default; (ii) any such designation shall be effective not
less than five Business Days after written notice thereof shall have been
provided to each Lender; and (iii) upon such designation, Schedule 3.08 Part I
shall be deemed to be amended to reflect such designation. Any Person that
becomes a Subsidiary (by formation, acquisition, merger or otherwise) after
the Closing Date shall automatically be deemed to be a Restricted Subsidiary
of the Borrower as of the date it becomes a Subsidiary unless designated as an
Unrestricted Subsidiary pursuant to the terms hereof.
(d) After the Closing Date, a Financial Officer of the Borrower may,
provided that no Default or Event of Default has occurred and is continuing,
designate an Unrestricted Subsidiary as a Restricted Subsidiary by notice sent
to all of the Lenders, provided that (w) no such designation shall be
effective unless immediately after giving effect thereto there would exist no
Default or Event of Default; (x) no such designation shall be effective unless
77
immediately after giving effect thereto the Borrower is in compliance with
Sections 6.01(d) and 6.01(e); (y) any such designation shall be effective not
less than five Business Days after written notice thereof shall have been
provided to each Lender; and (z) upon such designation, Schedule 3.08 Part I
shall be deemed to be amended to reflect such designation.
(e) After the Closing Date, any Subsidiary of WRECO (i) which is
organized and existing under the laws of the United States or any state of the
United States, Puerto Rico or the Dominion of Canada or any province thereof
and (ii) of which substantially all of the physical properties are located,
and substantially all of the business is carried on, in the United States of
America, Puerto Rico or Canada may, provided that no Default or Event of
Default has occurred and is continuing, be designated as a Restricted
Subsidiary by WRECO, subject to the limitations described in Subsection
9.17(f) below. Any Person that becomes a Subsidiary of WRECO (by formation,
acquisition, merger or otherwise) after the Closing Date shall automatically
be deemed to be an Unrestricted Subsidiary of WRECO as of the date it becomes
a Subsidiary unless designated as a Restricted Subsidiary pursuant to the
terms hereof.
(f) After the Closing Date, the Borrower may, provided that no
Default or Event of Default has occurred and is continuing, cause a Financial
Officer of WRECO to designate an Unrestricted Subsidiary as a Restricted
Subsidiary by notice sent to all of the Lenders, provided that: (v) such
Subsidiary satisfies the requirements of Subsection 9.17(e) above; (w) no such
designation shall be effective unless immediately after giving effect thereto
there would exist no Default or Event of Default; (x) WRECO could incur at
least $1 of additional Senior Debt under Subsection 6.02(b); (y) any such
designation shall be effective not less than five Business Days after written
notice thereof shall have been provided to each Lender; and (z) upon such
designation, Schedule 3.08 Part II shall be deemed to be amended to reflect
such designation.
(g) After the Closing Date, the Borrower may, provided that no
Default or Event of Default has occurred and is continuing, cause a Financial
Officer of WRECO to designate a Restricted Subsidiary as an Unrestricted
Subsidiary by notice sent to all of the Lenders, provided that: (v) no such
designation shall be effective unless immediately after giving effect thereto
there would exist no Default or Event of Default; (w) WRECO could incur at
least $1 of additional Senior Debt under Subsection 6.02(b); (x) the aggregate
amount of Real Estate Assets owned by all Subsidiaries of WRECO, determined on
a consolidated basis, which have been or are to be, as the case may be,
designated as Unrestricted Subsidiaries during the 365 consecutive days ending
on and including the effective date of such proposed designation, shall not
exceed 15% of the aggregate amount of Real Estate Assets owned by WRECO and
its Restricted Subsidiaries as of the beginning of such 365 day period; (y)
any such designation shall be effective not less than five Business Days after
written notice thereof shall have been provided to each Lender; and (z) upon
such designation, Schedule 3.08 Part II shall be deemed to be amended to
reflect such designation.
[Remainder of page intentionally left blank.]
78
IN WITNESS WHEREOF, the Borrower, the Administrative Agent, the
Swing Line Bank, the Fronting Bank, the Syndication Agent, the
Co-Documentation Agents and the Lenders have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
WEYERHAEUSER COMPANY, as Borrower
By: /s/ JEFFREY W. NITTA
--------------------------------
Name: Jeffrey W. Nitta
Title: Vice President and Treasurer
79
JPMORGAN CHASE BANK,
individually and as Swing Line Bank,
Fronting Bank and Administrative
Agent
By: /s/ WILLIAM P. RINDFUSS
--------------------------------
Name: William P. Rindfuss
Title: Vice President
80
MORGAN STANLEY SENIOR FUNDING, INC.,
individually and as Syndication Agent
By: /s/ LUCY K. GALBRAITH
--------------------------------
Name: Lucy K. Galbraith
Title: Vice President
81
THE BANK OF TOKYO-MITSUBISHI, LTD.,
PORTLAND BRANCH,
individually and as Co-Documentation
Agent
By: /s/ JUNJI BAN
--------------------------------
Name: Junji Ban
Title: General Manager
82
DEUTSCHE BANC ALEX. BROWN INC.,
as Co-Documentation Agent,
By: /s/ CHRISTIAN DALLWITZ
---------------------------
Name: Christian Dallwitz
Title: Vice President
By: /s/ STEPHAN G PEETZEN
---------------------------
Name: Stephan G Peetzen
Title: Director
DEUTSCHE BANK AG NEW YORK BRANCH,
as Lender,
By: /s/ CHRISTIAN DALLWITZ
---------------------------
Name: Christian Dallwitz
Title: Vice President
By: /s/ STEPHAN G PEETZEN
---------------------------
Name: Stephan G Peetzen
Title: Director
83
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms...................................................1
Section 1.02 Terms Generally.................................................17
Section 1.03 Accounting Terms; GAAP..........................................17
ARTICLE II
THE CREDITS
Section 2.01 Commitments.....................................................17
Section 2.02 Loans...........................................................18
Section 2.03 Swing Line Loans................................................20
Section 2.04 Letters of Credit...............................................21
Section 2.05 Competitive Bid Procedure.......................................24
Section 2.06 Conversion and Continuation of Revolving Loans..................26
Section 2.07 Fees............................................................27
Section 2.08 Repayment of Loans; Evidence of Debt............................29
Section 2.09 Interest on Loans...............................................29
Section 2.10 Default Interest................................................31
Section 2.11 Alternate Rate of Interest......................................31
Section 2.12 Termination, Reduction and Extension of Commitments.............32
Section 2.13 Prepayment......................................................32
Section 2.14 Reserve Requirements; Change in Circumstances...................33
Section 2.15 Change in Legality..............................................35
Section 2.16 Indemnity.......................................................36
Section 2.17 Pro Rata Treatment..............................................37
Section 2.18 Sharing of Setoffs..............................................37
Section 2.19 Payments........................................................38
Section 2.20 Taxes...........................................................38
Section 2.21 Mitigation Obligations; Replacement of Lenders..................41
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Organization; Powers............................................42
Section 3.02 Authorization...................................................43
Section 3.03 Enforceability..................................................43
Section 3.04 Consents and Approvals..........................................43
Section 3.05 Financial Statements............................................43
Section 3.06 No Material Adverse Change......................................44
i
Section 3.07 Title to Properties; Possession Under Leases....................44
Section 3.08 Subsidiaries....................................................44
Section 3.09 Litigation; Compliance with Laws................................45
Section 3.10 Agreements......................................................45
Section 3.11 Federal Reserve Regulations.....................................45
Section 3.12 Investment Company Act; Public Utility Holding Company Act......46
Section 3.13 Tax Returns.....................................................46
Section 3.14 No Material Misstatements.......................................46
Section 3.15 Compliance with ERISA...........................................46
Section 3.16 Environmental Matters...........................................46
Section 3.17 Maintenance of Insurance........................................47
Section 3.18 Existing Senior Credit Facilities...............................47
Section 3.19 Surviving Senior Credit Facilities..............................48
Section 3.20 Non-Material Loans..............................................48
ARTICLE IV
CONDITIONS OF LENDING AND ISSUANCE
OF LETTERS OF CREDIT
Section 4.01 All Borrowings and Issuances....................................48
Section 4.02 Closing Date....................................................49
ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.01 Existence; Businesses and Properties............................51
Section 5.02 Insurance.......................................................52
Section 5.03 Obligations and Taxes...........................................52
Section 5.04 Financial Statements, Reports, etc..............................52
Section 5.05 Litigation and Other Notices....................................54
Section 5.06 ERISA...........................................................54
Section 5.07 Maintaining Records; Access to Properties and Inspections.......55
Section 5.08 Use of Proceeds.................................................55
Section 5.09 Environmental Matters...........................................55
Section 5.10 Performance of Transaction Agreements...........................57
Section 5.11 OCBM Agreement..................................................57
Section 5.12 Further Assurances..............................................57
Section 5.13 Guarantee.......................................................57
ARTICLE VI
NEGATIVE COVENANTS
Section 6.01 Covenants of the Borrower.......................................58
Section 6.02 Covenants with respect to WRECO.................................61
ii
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01 Events of Default...............................................64
ARTICLE VIII
THE ADMINISTRATIVE AGENT
Section 8.01 The Administrative Agent........................................67
Section 8.02 Other Agents....................................................69
ARTICLE IX
MISCELLANEOUS
Section 9.01 Notices.........................................................70
Section 9.02 Survival of Agreement...........................................70
Section 9.03 Binding Effect..................................................70
Section 9.04 Successors and Assigns..........................................71
Section 9.05 Expenses; Indemnity.............................................73
Section 9.06 Right of Setoff.................................................74
Section 9.07 Applicable Law..................................................74
Section 9.08 Waivers; Amendment..............................................74
Section 9.09 Interest Rate Limitation........................................75
Section 9.10 Entire Agreement................................................75
Section 9.11 WAIVER OF JURY TRIAL............................................76
Section 9.12 Severability....................................................76
Section 9.13 Counterparts....................................................76
Section 9.14 Headings........................................................76
Section 9.15 Jurisdiction; Consent to Service of Process.....................76
Section 9.16 Domicile of Loans...............................................77
Section 9.17 Restricted and Unrestricted Subsidiaries........................77
EXHIBITS
Exhibit A Form of Revolving Borrowing Request
Exhibit B Form of Swing Line Borrowing Request
Exhibit C Administrative Questionnaire
Exhibit D Form of Assignment and Acceptance
Exhibit E-1 Form of Certification of Financial Statements for Weyerhaeuser
Exhibit E-2 Form of Certification of Financial Statements for WRECO
Exhibit E-3 Form of Compliance Certificate for Weyerhaeuser
Exhibit E-4 Form of Compliance Certificate for WRECO
Exhibit F Form of Subordinated Debt
iii
Exhibit G Form of Promissory Note
SCHEDULES
Schedule 2.01 Commitments
Schedule 3.08 Subsidiaries of Weyerhaeuser, WRECO and the Company
Schedule 3.18 Existing Senior Credit Facilities
Schedule 3.19 Surviving Senior Credit Facilities
Schedule 7.01 Specified Indebtedness
Schedule 9.01 Notices
iv